California withdraws lawsuit challenging Trump's $4 billion high-speed rail funding cut

Chaewon Chung, The Sacramento Bee on Dec 26, 2025

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SACRAMENTO, Calif. — California this week withdrew its lawsuit against the Trump administration over the termination of about $4 billion in federal funding for its high-speed rail project, citing the federal government’s unreliability as the reason for the decision.

The development follows a lawsuit filed in July, when California sued the U.S. Department of Transportation and the Federal Railroad Administration to restore funding for the project.

“This action reflects the State’s assessment that the federal government is not a reliable, constructive, or trustworthy partner in advancing high-speed rail in California,” a California High-Speed Rail Authority spokesperson said in an email to The Sacramento Bee on Friday.

“The Federal Railroad Administration stated that all work performed by the Authority – whether undertaken as part of cooperative agreements or otherwise – remains ‘at risk’ and may not receive funding.”

The spokesperson added that they see this moment as a new opportunity to streamline project delivery, claiming that federal requirements have at times driven up costs and slowed construction without adding value.

The development also comes after a Dec. 19 request for qualifications issued by the Authority to seek private partners as part of a broader plan to bring in private investors by summer 2026 to help speed up construction and explore new revenue opportunities.

California’s high-speed rail project has seen delays and cost increases over the years, drawing criticism from opponents and renewed scrutiny from federal officials. When it was originally approved by voters in 2008, it was envisioned as a 3-hour bullet train that would take passengers from San Francisco to Los Angeles. Since then, the project has been downsized, with its first segment set to open in part of the Central Valley in 2033.

In July, U.S. Transportation Secretary Sean Duffy referred to the project as a “boondoggle,” blaming California, Gov. Gavin Newsom and Democrats for what he described as “a decade of failures.”

“Federal dollars are not a blank check – they come with a promise to deliver results,” Duffy said in a news release in July.

“After over a decade of failures, CHSRA’s mismanagement and incompetence has proven it cannot build its train to nowhere on time or on budget.”

U.S. Department of Transportation and the Federal Railroad Administration did not immediately respond to The Bee’s request for comment regarding the lawsuit’s withdrawal.

Meanwhile, the Authority said the loss of federal funding would not halt the project or construction thanks to state sources, including a recent extension of the cap-and-trade program by Newsom, which secures $1 billion annually through 2045 for the project.

“Only 18% of program expenditures have come from federal funds,” it described.