Two counts in the Gateway Development Commission’s breach-of-contract lawsuit against the White House remain pending after a federal judge dismissed most of the rest of the suit due to mootness on Thursday.
The GDC, a bi-state agency operating the construction of a $16 billion rail tunnel project between New Jersey and Manhattan, sued in the Court of Federal Claims last month for more than $200 million in funds that the Trump administration had frozen. A ruling in a different lawsuit — this one filed by New Jersey and New York in federal district court — forced the White House to pay up last month, rendering much of the lawsuit moot.
Federal Claims Judge Richard A. Hertling, a Trump nominee, didn’t dismiss the full case, though: In a Thursday afternoon order, Hertling ruled the GDC could continue seeking compensation to cover expenses incurred during the weekslong pause in construction.
GDC argued that a ruling was needed in the case to prevent similar freezes in the future, but Hertling agreed that since the agency had sued for a $205 million sum that had since been delivered, they had fulfilled their obligation, according to the New York Times.
“Today the court found that GDC preliminarily established that the federal government was in breach of multiple contracts in connection with the Hudson Tunnel Project,” a GDC spokesperson said. “However, the court dismissed the first six of eight total claims in GDC’s complaint because the federal government already provided the funds thanks to a separate case brought by the States of New York and New Jersey.”
The White House, Democrats, and reporting have offered varying reasons for the funding freeze, which started last September. The Trump administration said it was investigating “unconstitutional DEI principles” within the project; Trump himself said he was worried about cost overruns; Democrats understood the freeze to be a political maneuver ahead of last fall’s government shutdown; and the president reportedly offered to free up funding if Democrats helped name a train station and airport for him (the president has denied those reports).
Regardless of the reason, bipartisan supporters of the project argue that Gateway would be a boon to the region’s economy and residents. Still, the Trump administration is continuing to argue that it has the legal right to shut off the spigot. In the New Jersey-New York case, a federal judge ordered the White House to resume the funding as lawsuits snaked through the courts; a federal appeals court upheld that ruling yesterday.
“Just yesterday, we won for the fourth time in court, ensuring the Trump Administration keeps funding the project every month, as it is legally obligated to do,” Gov. Mikie Sherrill said Thursday. “We will continue to fight, and continue to win, if Donald Trump tries to illegally stop funding again.”
After the initial freeze, Gateway construction continued on reserves for several months, but when funds finally ran out last month, more than 1,000 workers were laid off. Construction fully resumed earlier this month, according to GDC. But the GDC says lengthy shutdowns cost money and risk violating deals with contractors, potentially harming the project’s timeliness and budget.
“The judge also made it clear that the court would provide expedited review of similar claims if they arise in the future,” the GDC spokesperson said. “There are two remaining claims seeking to recover damages related to the breach and subsequent pause of work on the Hudson Tunnel Project.”
The judge will hold a status conference on March 24th to determine the next steps for the case.
