The basics:
- US appeals court declines to block $200M in Gateway funding
- Lower court order requires Trump administration to resume payments
- Construction had been suspended due to federal funding freeze
- Legal battle over Gateway Tunnel Project funding continues
Federal funding for the Gateway Tunnel Project will continue flowing – at least for now – after a federal appeals court declined to block a lower court order requiring the government to release more than $200 million in frozen funds.
That decision came Feb. 12 from the U.S. Court of Appeals for the Second Circuit. As a result, the temporary restraining order issued by a federal district judge remains in effect, and the funds must continue flowing while the appeal proceeds.
As NJBIZ reported, a funding freeze by the Trump administration led to the suspension of project construction last week as well as two lawsuits — one from New Jersey and New York and another from the Gateway Development Commission. The states sought a temporary restraining order warning that prolonged delays could jeopardize construction and cause significant regional harm. That was issued Feb. 6, directing the government to resume payments.
The Trump administration then filed an emergency appeal, asking the U.S. Court of Appeals for the Second Circuit to pause that order while the legal challenge plays out. That led to the Second Circuit declining to grant a stay, which leaves the lower court’s directive in place. And allows funding to continue flowing again, for now.
Just getting started
Next, the case moves to a Second Circuit motions panel, which could still decide to formally stay the district court’s order during the appeal. The panel could convene as soon as the week of Feb. 23. The case that GDC filed against the Trump administration is proceeding on a separate track, with a decision expected next month.
For now, Gateway funding remains intact — but the broader legal fight over the federal freeze is just beginning.
“This is good news for the Hudson Tunnel Project, and we anticipate receiving the $205 million in reimbursement funds from the federal government,” said the GDC. “While this is a positive step, we need consistent, reliable access to the Hudson Tunnel Project’s federal funding moving forward.”
While this is a positive step, we need consistent, reliable access to the Hudson Tunnel Project’s federal funding moving forward.
— Gateway Development Commission
Working with its contractors, the GDC is determining the best deployment of the funds. The organization hopes to resume some construction as soon as possible.
“GDC continues to pursue all avenues to regain access to all the federal funds for this urgent project, including our lawsuit,” the statement continued. “We are confident in our legal position and look forward to resolving this important matter.”
Continued funding delays ‘could be unlawful’
Gov. Mikie Sherrill said, “The 2nd Circuit’s order today means the $200 million owed to the Gateway Tunnel project needs to be released immediately. The 1,000 workers currently out of work because of President [Donald] Trump’s illegal action can’t wait any longer.
“The president must end this reckless fight and keep legally obligated funds flowing to ensure the nation’s most urgent infrastructure project is never stopped again. If they don’t, we’ll continue to see them in court, and continue to win.”
Acting Attorney General Jennifer Davenport echoed those sentiments.
“With the district court’s order now fully in effect, the Trump Administration can no longer continue its unlawful policy of freezing funding for the Gateway project,” said Davenport. “The Trump administration’s funding freeze policy is plainly unlawful, and the Department of Justice has not even tried to defend its legality.
“We expect the Trump administration to swiftly comply with its legal obligations. Continued delays would be unlawful and add costs and time to the nation’s most important infrastructure project.”
The Trump administration did not immediately respond to a request for comment.
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