The basics:
- Federal judge issued emergency order blocking Hudson Tunnel Project funding freeze
- Ruling allows Hudson Tunnel Project construction to continue
- NJ, NY likely to succeed under federal law
- Nearly 1,000 construction jobs preserved amid legal battle
A federal judge blocked the U.S. Department of Transportation from freezing federal funding for the $16 billion Hudson Tunnel Project, granting emergency relief sought by New Jersey and New York.
In an opinion issued Feb. 6, U.S. District Judge Jeannette Vargas ruled that the states are likely to succeed on their claims under the Administrative Procedure Act and would suffer irreparable harm if construction were forced to halt. The court issued a temporary restraining order preventing DOT from enforcing its Sept. 30, 2025, decision to pause disbursements while the agency reviewed compliance with revised Disadvantaged Business Enterprise rules.
The ruling follows a whirlwind Friday, with the project suspended at the end of Feb. 6 as an impasse continued with the Trump administration. The Gateway Development Commission announced a suspension of construction as of 5 p.m. Friday. Earlier in the day, leaders including Gov. Mikie Sherrill, held a news conference in Weehawken to push back on the funding freeze.
Lawsuits were filed this week by the GDC as well as the action filed by New Jersey and New York.
“As the court correctly recognized, the Trump administration’s attempts to freeze funding for the Gateway Tunnel project are plainly illegal, and they would cause grave harm to New Jersey and New York,” said New Jersey Acting Attorney General Jennifer Davenport. “We are grateful that the court agreed to put a halt to this unlawful freeze on this emergency basis. The order issued this evening should ensure that nearly 1,000 workers will be able to keep their jobs and continue their work on the Tunnel, preserving the investments New Jersey and New York have made in this project and preventing further economic damage to our states, while next steps in the case play out.
“The Trump administration must drop this campaign of political retribution immediately and must allow work on this vital infrastructure project to continue. If not, I pledge to keep fighting in court on behalf of all New Jerseyans.”
Jobs at risk
The funding freeze threatened to immediately stop construction and put nearly 1,000 jobs at risk – with more jobs in jeopardy along with broader economic impacts if delays persisted.
The government argued the case belonged in the Court of Federal Claims under the Tucker Act, but the judge rejected that argument, finding the states are not parties to the underlying funding contracts and may pursue relief under the APA.
Judge Vargas concluded that the balance of equities and the public interest favor keeping the project moving while the litigation proceeds. The order remains in effect pending further proceedings on a preliminary injunction and related jurisdictional issues.
The Trump administration did not immediately respond to a request for comment.
The full order can be found here.
What they’re saying
Sherrill issued a statement, saying, “I am thrilled that the court has granted temporary relief, lifting the freeze of billions of dollars of federal funding for Gateway. President Trump’s arbitrary and politically motivated decision to freeze this funding is plainly illegal, and we will continue to pursue full relief so the nation’s most urgent transportation project can keep moving forward — and workers can keep putting food on the table.”
The GDC also responded, telling NJBIZ: “GDC is pleased with the court’s decision today. We thank our partners in New York and New Jersey for taking action to help us access the federal funding for the Hudson Tunnel Project. We are hopeful this means funding disbursements will resume soon, and we can restart site operations and get our workers back on the job.”
Editor’s note: This story was updated at 9:17 p.m. Feb. 6, 2026, with statements from Gov. Mikie Sherrill and the Gateway Development Commission.
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