California has filed a lawsuit against the Trump administration over what state leaders call the “illegal termination” of about $4 billion in federal grants for its embattled high-speed rail project — the only one of its kind under active construction in the United States.

Governor Gavin Newsom announced the legal action on Thursday, July 17, describing the claw-back of funding as “petty, political retribution, motivated by President Trump’s personal animus toward California and the high-speed rail project, not by facts on the ground.”

The lawsuit targets the decision by the Federal Railroad Administration (FRA) to revoke major grants that were originally secured during the Biden administration to help finance the long-delayed and over-budget rail line meant to eventually connect San Francisco to Los Angeles and Anaheim.

The day before the lawsuit was filed, U.S. Transportation Secretary Sean P. Duffy declared that the FRA had canceled the grants after reviewing whether the California High-Speed Rail Authority (CHSRA) had lived up to the conditions of its funding agreements.

In a sharp rebuke, Duffy said: “The $135 billion projected total cost of the project could buy every San Francisco and LA resident nearly 200 roundtrip flights between the cities.” He added, “This is California’s fault. Governor Newsom and the complicit Democrats have enabled this waste for years. Federal dollars are not a blank check – they come with a promise to deliver results. 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.”

The FRA’s termination comes despite the CHSRA’s claims of recent tangible progress. According to Newsom’s office, the rail authority has completed more than 50 major structures, including bridges, overpasses, and viaducts, and has laid some 60 miles of guideway through the Central Valley — the first section of the larger planned network.

Passenger service is expected to launch in stages between 2030 and 2033, beginning with an initial operating segment between Merced and Bakersfield.

Newsom, a vocal champion of the project, called the funding cancellation an attack on the state’s economic future, especially the Central Valley, which has long been pitched as a key beneficiary of the project’s thousands of union construction jobs and future development.

“Trump’s termination of federal grants for California high-speed rail reeks of politics,” Newsom said. “It’s yet another political stunt to punish California. In reality, this is just a heartless attack on the Central Valley that will put real jobs and livelihoods on the line. We’re suing to stop Trump from derailing America’s only high-speed rail actively under construction.”

The first phase of the planned 494-mile line would connect the Bay Area to Southern California at speeds designed to rival air travel. When approved by voters in 2008, the project carried an estimated price tag of about $33 billion. Since then, the cost has ballooned to more than $100 billion, according to the rail authority’s own projections — with just under a quarter of its funding to date coming from federal sources.

Supporters say the project remains essential for the state’s long-term climate, mobility, and economic goals, but critics, including many Republican leaders, continue to call it an example of poor oversight and wasteful spending.

The outcome of the lawsuit could shape the future of America’s only current large-scale high-speed rail construction project — and whether California’s ambitious plan to reduce highway and air traffic can stay on track.

Originally reported by Rod Sweet in Global Construction Review.