California gives up on federal high-speed rail funding

California has ended a lawsuit challenging the termination of $4 billion in federal grants for its controversial high-speed rail project, ceding its claim to federal funding that the Trump administration has repeatedly tried to withdraw.

California Attorney General Rob Bonta filed a motion last week to dismiss the complaint his office filed in July, after the Federal Railroad Administration nixed $4 billion in Obama- and Biden-era grants.

The California High-Speed Rail Authority said in a statement that the agency has decided to cut ties with the Trump administration, which has also threatened other pots of federal funding tied to the planned rail line connecting Los Angeles to the Bay Area.

“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,” the statement said.

The move represents a major win for President Donald Trump, who has long criticized high-speed rail and issued athreat in February to investigate and kneecap the project.

“Under @POTUS’s leadership, we are protecting billions of American taxpayers' dollars from funding California’s ridiculous train to nowhere,” Transportation Secretary Sean Duffy said in a Saturday post on X. “A great way to ring in the New Year.”

The administration attempted to revoke $1 billion in federal high-speed rail funding during his first term in office, but the Biden administration restored those funds in 2021 before the courts could reach a decision.

The decision also reflects changing priorities under HSRA CEO Ian Choudri, who has focused on securing state funding and private investment since assuming the role in August 2024.

The move to drop the case comes just weeks after a federal judge rejected a Trump administration motion to dismiss the lawsuit.

U.S. District Judge Dale Drozd, of the Eastern District of California, had pushed back on the administration’s argument that the grant cancellation was a contract dispute that should instead be handled in federal claims court.

FRA’s decision to terminate the grants came after the agency issued a scathing report claiming that the project has no viable path forward after missed deadlines, budget shortfalls and overrepresentation of projected ridership.

The project is now estimated to cost up to $128 billion, nearly four times its original $33 billion price tag.

California Gov. Gavin Newsom and Democratic state lawmakers have doubled down on their support for the project, passing a bill this legislative session that guarantees it $1 billion in annual funding from revenues generated through the state’s greenhouse gas trading program.

HSRA also opened a solicitation for private investors earlier this month, with the hope of finalizing partnerships by next summer. Choudri told POLITICO in an October interview that the agency has received interest from dozens of potential investors, including six or seven of the large financiers.

Choudri said he anticipates selecting a private investor by May or June.