Judge Hands CAHSR a Win in Fight With Trump Administration

by Sean Jeans-Gail | VP of Gov't Affairs

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A recent federal court decision rejecting the Trump administration’s attempt to dismiss California’s lawsuit over canceled high-speed rail funding marks a win for the California High-Speed Rail Authority. While the ruling does not immediately restore the $4 billion in federal grants, it ensures California’s challenge can proceed, recapturing some momentum for the country’s most ambitious rail project.

In an order filed in the US District Court for the Eastern District of California Judge Dale Drozd denied the Trump Administration’s request to dismiss the state of California’s lawsuit, providing California a path forward to contest the U.S. Department of Transportation’s decision to claw back funds. (You can read the full text of the judge's order by clicking here.)

California has already invested heavily in the project, completing 70 miles of guideway and constructing over 50 major structures. The state is actively seeking proposals for a $3.5 billion contract to install track and systems, signaling continued support at the state level despite federal headwinds. A favorable outcome in this lawsuit could unlock stalled federal funds, accelerating construction and creating thousands of jobs in engineering, manufacturing, and operations.

Beyond California, the case has national implications, highlighting the tension between state-led innovation and shifting federal priorities. If California prevails, it sets a precedent that strengthens legal protections for infrastructure funding agreements, giving states confidence to pursue transformative projects. This stability is essential for attracting private investment and maintaining momentum in sectors like rail, where uncertainty can stall progress.

While the decision does not immediately restore the $4 billion in funding, it keeps the possibility of restoring the funds alive. In a similar case, CAHSRA was able to restore $929 million the first Trump Administration attempted to rescind in 2019.

The USDOT has included some of the funds it’s attempting to claw back from California in a notice of funding of opportunity for the Federal – State Partnership for Intercity Rail Program, and we expect this ruling to affect that round of grantmaking for other rail projects,

Drozd ordered the federal government to "lodge" the administrative record within thirty days. Lodging the administrative record means submitting to a court the complete set of documents that were considered by an agency during its decision-making process, ensuring that the court has all relevant information available for its review. This process helps the court determine if the agency's decision was rational and followed the law. It's not the same as "filing," which means that the documents have been formally accepted into the record, but it can be a first step toward eventually putting those documents into the formal record.