California Sues Trump Administration to Recover $1 Billion for Rail Project

(Bloomberg) -- California sued the Trump administration over the government’s decision to withdraw a grant of almost $1 billion that would have funded a high-speed rail project, suggesting the move was a political response to the state’s challenge of the president’s declaration of an emergency on the southern border.

The Federal Railroad Authority announced it would cancel the grant on Feb. 19, one day after California and 15 other states sued to invalidate President Donald Trump’s emergency declaration. The FRA carried out the threat on May 16 while signaling it planned to reallocate the money to other “inter-city” rail projects.

California claims the FRA’s “sudden decision” violates its own procedures, and has asked a a judge in San Francisco federal court to block the government from transferring the money elsewhere.

The agency’s administrator said in a May letter to his California counterpart that the state had failed to show progress on the project and failed to meet the requirements under funding agreements. California Governor Gavin Newsom had scrapped initial plans for a high-speed line connecting San Francisco to Los Angeles, instead focusing on construction in the Central Valley.

But the state says that’s a red herring.

“The decision was precipitated by President Trump’s overt hostility to California, its challenge to his border wall initiatives, and what he called the “green disaster” high-speed rail project,” the state said in the lawsuit.

State attorney general Xavier Becerra and 15 other states sued Feb. 18 to block Trump from reallocating about $6 billion to a fund for the construction of a border wall.

One day later, Trump tweeted the lawsuit against his wall plan was led by “the state that has wasted billions of dollars on their out of control Fast Train, with no hope of completion,” later adding “failed Fast Train project in California . . . is hundreds of times more expensive than the desperately needed Wall.”

The announcement from Washington also came the same day that a top California environmental regulator threatened to enact tougher pollution rules that could include a ban on vehicles that burn petroleum-based fuels in retaliation against a federal plan to relax vehicle emission standards.

California’s leaders and Trump, who often criticizes the state’s policies in tweets, have fought over issues in court dozens of times. The Trump administration has yet to win any of those court battles.

The case is State of California v. U.S. Department of Transportation, 19-cv-2754, U.S. District Court, Northern District of California (San Francisco)

To contact the reporter on this story: Kartikay Mehrotra in San Francisco at kmehrotra2@bloomberg.net

To contact the editors responsible for this story: Joe Schneider at jschneider5@bloomberg.net;David Glovin at dglovin@bloomberg.net

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