Trump Administration Ordered to Resume Chicago Transit Funding

The US Department of Transportation must resume disbursements that are part of roughly $3 billion in grants to the Chicago Transit Authority, a federal judge ruled Tuesday.

The “collateral consequences of this freeze or ultimate termination are going to be catastrophic” to the projects and the city, Judge Thomas M. Durkin said during a hearing at the US District Court for the Northern District of Illinois.

Durkin granted a temporary restraining order barring the administration from applying a final rule retroactively to the transit authority, including by continuing to withhold the funds. The judge rejected the government’s assertion that the claims belonged in the US Court of Federal Claims, concluding the Tucker Act is “inapplicable” here.

If DOT had engaged in the same review of the presumably hundreds of other transit projects it’s funding across the country, “this would be a different case.” But the fact that Chicago’s grants were two of just four paused for review, “I don’t understand how that cannot be something that’s arbitrary and capricious” under the Administrative Procedure Act, Durkin said.

CTA alleged in a complaint filed last week that when it was awarded federal funds to help expand and update its “L” train system, the grant terms required recipients to set goals to include businesses owned by socially and economically disadvantaged individuals.

The Trump administration in September amended the definition of disadvantaged businesses to exclude race- and gender-based preferences.

DOT notified the transit authority in October that it was reviewing its funding, and in December concluded that CTA appeared to have considered race and sex for contract awards in violation of the US Constitution. The transit authority said it certified it was in compliance with the new grant terms less than two weeks later, but DOT didn’t respond and disbursements remain paused.

CTA asserts that its grants, along with two others supporting infrastructure projects in New York and New Jersey, were the only funds paused nationwide after the administration amended the grant terms. The transit authority asserted the federal government paused its funding as political retaliation, and that it violated the US Constitution and regulatory requirements limiting when the government can suspend funding.

US Department of Justice attorney Patrick Johnson argued that DOT’s review of Chicago’s grants isn’t pursuant to the new rule on disadvantaged businesses, and is a separate review to ensure they comply with federal civil rights laws.

But Durkin said “the timing is inescapable.”

The administration issued the new rule and sent two letters to CTA regarding its review in less than a week, one of which references the rule. “It seems like this review, no matter how they want to spin it now, is being done because of a retroactive application,” Durkin said.

In-house counsel and Jenner & Block LLP represent the transit authority.

The case is Chi. Transit Auth. v. US Dep’t of Transp., N.D. Ill., No. 1:26-cv-03140, 3/24/26.