New York and New Jersey Sue to Unfreeze Gateway Project Funding

Legal battle underway in federal court as construction on the railway under the Hudson River winds down.

Feb. 6, 2026 at 3:15pm

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New York and New Jersey have filed a lawsuit to force the Trump administration to release billions in frozen funding for the Gateway Tunnel project before construction is halted. A federal court hearing on the lawsuit began on Friday morning to determine the immediate fate of the funding, as the states seek an emergency order to release the grants before the project is fully suspended.

Why it matters

The Gateway Tunnel project is a critical infrastructure initiative that would build a new rail tunnel beneath the Hudson River and repair damage to the existing 116-year-old tunnel. The project is seen as vital for the regional economy, supporting 20% of the national GDP and carrying 200,000 passengers per day between New York and New Jersey. Suspending the project could have far-reaching economic consequences.

The details

The $16 billion Gateway Tunnel project aims to dig a new rail tunnel under the Hudson River and fix saltwater damage to the existing North River Tunnel that dates back to Superstorm Sandy in 2012. The Trump administration suspended grants for the project in September 2025, citing a review of compliance with civil rights and disadvantaged business regulations. However, the Gateway Development Commission said they addressed those issues but still did not receive a response or funding from the federal government.

  • The federal court hearing on the lawsuit began on Friday, February 6, 2026.
  • Construction on the railway under the Hudson River is scheduled to wind down on Friday, February 6, 2026, unless the project receives emergency funding.

The players

New York and New Jersey

The two states that have filed the lawsuit to force the Trump administration to release billions in frozen funding for the Gateway Tunnel project.

Trump administration

The federal government that suspended grants for the Gateway Tunnel project in September 2025, citing a review of compliance with civil rights and disadvantaged business regulations.

Gateway Development Commission

The group building the Gateway Tunnel project, which said they addressed the compliance issues raised by the federal government but still did not receive a response or funding.

Kirsten Gillibrand

A Democratic U.S. Senator from New York who dismissed reports that the Trump administration would trade the funding for renaming New York City's Penn Station and Washington D.C.'s Dulles International Airport after President Donald Trump.

Letitia James

The New York Attorney General who filed the lawsuit alongside New Jersey, arguing that the corridor can't afford delays because it supports 20% of the national economy.

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What they’re saying

“Our tunnels are already under strain and losing this project could be disastrous for commuters, workers, and our regional economy. We are taking the administration to court to prevent a shutdown that would ripple far beyond New York and New Jersey.”

— Letitia James, New York Attorney General (cnyhomepage.com)

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident (San Francisco Chronicle)

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.