UPDATED: CTA granted temporary restraining order against FTA, USDOT over Red Line Extension, Red and Purple Modernization funding

Updated 03/26/26

The Chicago Transit Authority (CTA) was granted a temporary restraining order (TRO) by the U.S. District Court for the Northern District of Illinois in its lawsuit it filed March 20 against the U.S. Department of Transportation (USDOT) and the Federal Transit Administration (FTA).

The CTA filed suit against the FTA and USDOT as the agencies paused access to federal funding dollars for the Red Line Extension (RLE) and the Red and Purple Modernization (RPL) projects back in October. That stoppage, according to the CTA, has threatened progress on the projects and would have required the agency to stop work due to a lack of funds on March 27.

"[T]he CTA secured a major victory for the Red Line Extension and the residents of Chicago’s Far South Side. CTA promised the community that it would fight for RLE, and this ruling is a massive step toward restoration of funding for this historic project. RLE will provide transit access and opportunity for generations to come, and we are fully committed to seeing it move forward," said CTA Acting President Nora Leerhsen.

The ruling disallows the federal agencies from applying the then-newly drafted interim final rule that removes race- and sex-based presumptions of social and economic disadvantage from the Disadvantaged Business Enterprise Program retroactively to the CTA’s existing grants.

The TRO, unless the federal government obtains a stay, forces the agencies to resume the flow of nearly $2 billion in funding by Friday, March 27 at 10:00 a.m.

“Today we celebrate yet another victory in the fight to protect federal dollars promised to Chicagoans from being withheld and used to advance Trump’s campaign of retribution,” said Chicago Mayor Brandon Johnson in a statement posted to X. “While we are encouraged by this ruling, I am redoubling my commitment to protect Chicago from this president’s reckless abuse of power and attacks on our city.”

This likely isn’t the end of the back and forth, as in its filings, the federal government argued that the Northern District of Illinois lacked the jurisdiction to handle the case, stating the lawsuit should be moved to the Court of Federal Claims.

The CTA filed suit seeking the restoration of funding designated to the agency for the RLE and RPM projects against the USDOT and the FTA.

The FTA was supposed to provide nearly $2 billion in funding for the RLE project and funding for the RPM. FTA officials signed the full funding grant agreements for both projects—most recently for RLE on Jan. 10, 2025. In October 2025, the federal government paused all funding for both RLE and RPM.

“We are fully committed to the success of these projects, and we will take every step necessary to ensure that they move forward,” said CTA Acting President Nora Leerhsen. “The Red Line Extension is an 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. Additionally, our work on the Red and Purple Modernization Project, which is ongoing, has resulted in four new, fully accessible and modern stations. These are both meaningful, impactful projects and we are working closely with community leaders, elected officials and other stakeholders to ensure that both are seen through to completion.”

Filed in the federal court in the Northern District of Illinois, CTA says its lawsuit outlines the harm to residents and the risk to the project created by the funding pause. It describes how USDOT and the FTA have not adhered to their own statutory and regulatory requirements regarding funding suspensions.

Timeline of federal action

• Oct. 3, 2025: White House Office of Management and Budget issued a funding pause on $2.1 billion for Chicago infrastructure projects. The same day, the FTA notified the CTA that the agency was reviewing the projects.
• Oct. 21, 2025: CTA says it provided more than 1,000 pages of information requested federally.
• Dec. 1, 2025: USDOT requested additional information. CTA notes that it provided the information and certified its compliance on Dec. 10, 2025.

Since that certification, USDOT has not communicated with CTA regarding this matter, nor has the federal agency resumed funding.

Financial impact

The CTA notes that the prolonged pause threatens continued progress on RLE and RPM. If funding is not restored, CTA says it will be forced to stop work on both projects.

While RPM is nearing substantial completion, the agency notes that initial work for RLE began four years ago. Work crews have been clearing trees, demolishing properties, removing water lines and performing other tasks in preparation for major construction activities.