A federal judge on Monday permanently barred the Trump administration from freezing Gateway tunnel funding again, turning an earlier temporary order into a lasting legal block and keeping the $16 billion project moving. U.S. District Court Judge Jeannette Vargas said the funding halt violated federal law.
The ruling matters now because it closes the immediate court fight over the Hudson River tunnel grants after a freeze that already forced a costly work stoppage earlier this year. Vargas had first stepped in in February, when she granted New Jersey and New York a temporary restraining order after finding the sudden cutoff of money for new tunnels crossing the Hudson River was likely illegal.
Sherrill said 1,000 people are back on the job and construction continues every day, a sign that the money at issue was not an abstraction but payroll, crews and active work on one of the biggest infrastructure projects in the country. She and New Jersey Attorney General Jennifer Davenport also said the Trump Administration’s attempt to halt Gateway funding will not stand.
Vargas said the administration did not dispute that suspending the federal grants flagrantly violated federal law and made no attempt to show the freeze complied with the governing federal regulations. That finding mattered because the court did not just pause the halt; it concluded the government had no legal basis to impose it in the first place.
The administration had argued that New Jersey and New York could not sue in district court because the dispute involved contracts with the federal government, even though the states were not parties to those contracts. It also said the freeze was meant to stop money from flowing to unconstitutional DEI principles, while Donald Trump separately said he froze funding to punish Democrats over a federal spending impasse.
The Gateway Development Commission is overseeing the project, and Monday’s ruling leaves the grants protected for now. What remains unresolved is not whether the freeze can come back, but how the government could justify it at all after the judge said the effort ran afoul of the rules that govern the money.
