A federal judge rejected on Wednesday a bid by President Donald Trump’s administration to throw out a lawsuit filed by a California agency to challenge the cancellation of more than $4 billion in federal grants for the state’s high-speed rail project linking Los Angeles and San Francisco.

Sacramento-based U.S. District Judge Dale Drozd rejected the Justice Department argument that the July lawsuit by the California High Speed-Rail Authority was brought in the wrong legal venue and should have been filed in the U.S. Court of Federal Claims.

The lawsuit by the state agency responsible for developing the high-speed rail system challenged the grant cancellation as an “arbitrary and capricious” abuse of authority.

In August, the Transportation Department canceled another $175 million for four projects that are part of California’s high-speed rail project, following the cancellation of $4 billion in federal grants.

The department did not immediately respond to a request for comment.

California Governor Gavin Newsom, a Democrat, is a prominent critic of the Republican president.

Funding Cuts Are Latest HSR Hurdle

The funding cuts have emerged as the latest hurdle in the 16-year effort to link Los Angeles and San Francisco by a three-hour train ride, a project that would deliver the fastest passenger rail service in the United States.

The rail system, whose first $10 billion bond issue was approved by California voters in 2008, has built more than 50 major railway structures, including bridges, overpasses, under-crossings and viaducts, and completed 70 miles of guideway for the project.

In November, the California High-Speed Rail Authority said it was seeking requests for proposals for a $3.5 billion plan to deliver high-speed rail track and systems.

The route originally was supposed to be completed by 2020 at a cost of $33 billion. But the projected cost has risen to $89 billion to $128 billion, and the start of service is now expected by 2033.

A previous move by Trump in 2019 during his first term as president to revoke $929 million in federal grants was challenged by the state, leading to a settlement in 2021 under Democratic President Joe Biden restoring the full amount.

(Reporting by David Shepardson in Washington, Editing by Franklin Paul and Will Dunham)