Judge Rejects Trump Admin Request to Dismiss California Rail Funding Suit

Federal court greenlights challenge to $4 billion grant cancellation for the state’s high-speed project to move forward.

A drone view of a California High-Speed Rail Bridge where it crosses over Highway 99 in Fresno, Calif., on June 8, 2025. Fred Greaves/Reuters

A federal judge in California on Dec. 10 rejected the Trump administration’s effort to dismiss a lawsuit challenging the rescission of more than $4 billion in federal funding for the state’s high-speed rail initiative linking Los Angeles and San Francisco.

Judge Dale Drozd of the U.S. District Court for the Eastern District of California turned down the Justice Department’s claim that the California High-Speed Rail Authority’s July lawsuit was filed in an improper venue and should have instead been filed in the U.S. Court of Federal Claims.

The state agency in charge of the high-speed rail development argued in the lawsuit that the funding cut was an “arbitrary and capricious” abuse of power.

In August, the Department of Transportation cut an additional $175 million from four elements of California’s high-speed rail effort, following earlier cuts of $4 billion in grants.

These curtailments represent the latest hurdle in the 16-year push to connect Los Angeles and San Francisco with a three-hour rail journey, which would make it the fastest passenger rail in the nation.

California voters approved the project’s initial $10 billion bond in 2008. Fifty key structures—bridges, overpasses, underpasses, viaducts, and 70 miles of guideway—have been completed.

In November, the authority issued a call for proposals on a $3.5 billion project to install high-speed rail tracks and systems.

Price Tag Explodes

The line was initially set at $33 billion for completion in 2020. Costs have skyrocketed to between $89 billion and $128 billion, and service is now expected for 2033.

Trump announced the latest cancellation of funds for the plan on July 16 on Truth Social, writing: “To the Law abiding, Tax paying, Hardworking Citizens of the United States of America, I am thrilled to announce that I have officially freed you from funding California’s disastrously overpriced, ‘HIGH SPEED TRAIN TO NOWHERE.’”

He highlighted ongoing delays, cost overruns, and missed deadlines.

Trump’s decision echoes his 2019 move during his first term to cut $929 million in federal grants, leading to a state challenge that concluded in a 2021 settlement under President Joe Biden, reinstating the full amount. The Biden administration said the project would create jobs.

In September, the Transportation Department moved $2.4 billion from the rail project to higher infrastructure priorities.

“This is the first of many Trump Infrastructure Dividends whereby recompeted federal dollars will be redirected from wasteful boondoggles to real infrastructure projects that benefit the American people,” the Department of Transportation stated at the time.

Reuters contributed to this report.