New Jersey Acting Attorney General Jennifer Davenport announced Tuesday that New Jersey and New York have filed a federal lawsuit against the Trump administration, alleging it illegally withheld billions of dollars in funding for the Gateway Tunnel project.

Speaking at a press conference at Newark Penn Station, Davenport said the states are seeking emergency court action to lift a freeze on approximately $15 billion in federally committed funds for the Hudson River rail crossing between northern New Jersey and New York City.

The lawsuit, filed in the United States District Court for the Southern District of New York, asks for immediate relief to prevent the U.S. Department of Transportation from continuing what officials described as an indefinite funding suspension.

According to the complaint, the freeze threatens ongoing construction, puts thousands of jobs at risk, and could disrupt rail service for hundreds of thousands of commuters.

Gov. Mikie Sherrill said the funding halt could lead to immediate job losses and long-term transportation problems.

“If this project stops, 1,000 workers will immediately lose their jobs and hundreds of thousands of commuters will lose the chance at finally having reliable train service,” Sherrill said.

Davenport said the states were left with no alternative but to pursue legal action.

“The President’s decision to freeze funding jeopardizes safe and reliable infrastructure and puts thousands of jobs at risk,” she said.

The Gateway project, launched in 2019, is designed to build new rail tunnels and rehabilitate existing ones that carry NJ Transit and Amtrak trains between New Jersey and New York. The current tunnel, built in 1910, was heavily damaged during Superstorm Sandy in 2012 and continues to experience deterioration.

State officials said the tunnel serves about 200,000 daily commuters and that, without new infrastructure, capacity could eventually be reduced by up to 75 percent during peak hours, potentially costing the region an estimated $100 million per day in economic losses.

New Jersey and New York have jointly invested more than $500 million in the project, and New Jersey has acquired more than 100 parcels of land for construction, according to court filings.

The states said the DOT announced the funding freeze on Sept. 30, 2025, citing a compliance review. The announcement came shortly before a potential government shutdown and did not include a detailed explanation, officials said.

President Donald Trump has publicly stated that the funding halt was intended to terminate Democratic-backed projects, including the Gateway initiative. He has also linked the decision to opposition from New York officials and Senate Minority Leader Chuck Schumer.

Last week, the Gateway Development Commission notified contractors that active construction must cease by Friday, Feb. 6, due to the funding freeze. The commission filed a separate lawsuit alleging breach of contract by federal authorities.

State officials said their own lawsuit is necessary because New Jersey and New York face independent financial and operational losses, including costs to secure construction sites and prevent public safety hazards if work stops.

The states are seeking a preliminary injunction and other emergency relief by Feb. 6 to prevent layoffs and further disruption to the project.