California sues Trump administration over withholding high-speed rail funds

By David Shepardson
FILE PHOTO - California Governor Jerry Brown's name and others are pictured on a railroad rail after a ceremony for the California High Speed Rail in Fresno, California January 6, 2015. REUTERS/Robert Galbraith

By David Shepardson

WASHINGTON (Reuters) - California on Tuesday sued the Trump administration in U.S. District Court after the U.S. Transportation Department confirmed it would withhold $929 million in high-speed rail funding awarded to the state in 2010.

The state later on Tuesday plans to seek a temporary restraining order request asking a judge to prevent the U.S. Transportation Department from repurposing the money for other transit projects, the governor's office said.

The state argues that the withholding is aimed at punishing California for opposing President Donald Trump's proposed wall along the southern U.S. border. The suit also names Transportation Secretary Elaine Chao, Federal Railroad Administration (FRA)and FRA chief Ron Batory.

The Trump administration moved to end funding after California Governor Gavin Newsom said in February the state would scale back the planned $77.3 billion high-speed rail project after cost hikes, delays and management concerns, but would finish a smaller section.

The FRA said last week it was still considering "all options" on seeking the return of $2.5 billion in federal funds the state has already received for the project.

Trump has repeatedly criticized the project. In a speech last week, Trump called the project a "disaster" and "totally out of control" and recounted that he had said "Elaine, it’s over for them" to Chao about the California project.

The move marked the latest in an ongoing battle between the Trump administration and California over a series of issues including immigration, vehicle emissions standards and internet policy.

The most populous U.S. state has repeatedly sued the Trump administration and federal officials had expected the state would sue over the rail funding.

The Trump administration first said it planned to withhold the money on Feb. 19, which California noted in its suit was one day after it joined 15 other states in suing Trump over his decision to declare an emergency at the southern border.

The U.S. Transportation Department declined to comment on the suit Tuesday.

The FRA, the U.S. railway regulator said last week it had canceled the funding agreement after it said the state failed to make "reasonable" progress on the project.

The state said in its suit the FRA's decision was in "violation of its own procedures and policies was arbitrary and capricious, an abuse of discretion, and contrary to law, and threatens to wreak significant economic damage on the Central Valley and the state"

California high-speed rail authority chairman Lenny Mendonca said on Tuesday that "while this project has long been a political football, our determination to get the work done and bring high-speed rail to California is undaunted."

"This project is the right thing to do from a mobility, environmental and economic standpoint. It’s right for California and the nation," he said.

The traffic-choked state had planned to build a 520-mile (837-km) system in the first phase that would allow trains to travel at up to 220 miles per hour (354 kph) from Los Angeles to San Francisco and begin full operations by 2033.

Newsom said in February the state would instead complete a 119-mile high-speed link between Merced and Bakersfield in the state's Central Valley, what Trump derided last week as "from this tiny little town to another tiny little town."

The Obama administration awarded California $3.5 billion in 2010 and California voters in 2008 approved nearly $10 billion in bond proceeds.

In March 2018, the state forecast project costs had jumped $13 billion to $77 billion and warned costs could be as much as $98.1 billion.

(Reporting by David Shepardson; Editing by James Dalgleish and Meredith Mazzilli)