Chicago Transit Authority Sues Federal Government Over Frozen $2B Rail Project

Chicago's transit system filed a federal lawsuit Friday demanding restoration of $2 billion in rail expansion funding that was frozen by the Trump administration last fall. The funding dispute centers on federal objections to race and gender-based contracting requirements for the major public transit projects.

SPRINGFIELD, Ill. — Chicago’s public transit system has taken legal action against the federal government, demanding the restoration of $2 billion in rail expansion funds that were suspended by the Trump administration in the fall.

The federal lawsuit, submitted Friday to U.S. District Court in Chicago, alleges the administration made an arbitrary decision to freeze transit construction funding as part of efforts to eliminate race and gender-based contracting requirements, which officials claim violate constitutional principles. The legal action names both the U.S. Department of Transportation and Federal Transportation Authority as defendants.

Federal transportation officials defended their position, stating they are working to eliminate what they called a “discriminatory” and “illegal” contracting system.

The Chicago legal challenge follows a similar lawsuit filed by New York City officials just days earlier, seeking to recover $60 million in suspended federal transit funding.

The funding freeze has particularly impacted a major 5.3-mile expansion of Chicago’s Red Line elevated rail system, which would add four stations and provide transit access to 100,000 additional residents in underserved and predominantly Black communities. The federal money was also supporting ongoing North Side improvements, including replacing rails that were more than a century old and constructing four new accessible stations.

“We are fully committed to the success of these projects, and we will take every step necessary to ensure that they move forward,” CTA Acting President Nora Leerhsen said in a statement. “The Red Line extension is a historic investment into the far South Side of Chicago that will transform public transit and create new economic opportunity for the communities it will serve.”

According to the lawsuit, the Trump administration implemented new regulations in September eliminating race and gender-based contracting preferences, but only applied these changes retroactively to grants in Chicago and New York. Grant funding was suspended on October 3, 2025, with the CTA submitting requested documentation several weeks afterward.

Transportation officials requested additional records in December, but after the CTA’s response, no further contact has occurred, according to the legal filing, which describes the government’s behavior as “unlawful many times over.”

The lawsuit argues the funding suspension unfairly punishes the CTA for adhering to regulations that were in effect at the time, while failing to “explain why grants to the hundreds of other projects nationwide” operating under identical rules continued receiving uninterrupted funding.

The Transportation Department stated in an email that it will continue opposing “discriminatory, illegal, and wasteful contracting practices.”

“The American people don’t care what race or gender construction workers, pipefitters, or electricians are,” the department said. “They just want these important projects built quickly and efficiently.”