The Chicago Transit Authority is in settlement talks with the U.S. Department of Transportation in a lawsuit over federal funding for the agency’s Red Line Extension project, according to court filings.
“The parties now believe that there is a reasonable possibility that they will be able to reach a mutually agreeable resolution of this matter through a settlement,” a joint motion dated Sept. 9 and signed by attorneys for both the CTA and the feds said.
The CTA sued the feds in March after President Donald Trump’s administration froze the CTA’s federal funding for the project last year, imperiling the future of the $5.75 billion endeavor to extend the Red Line to 130th St. on Chicago’s Far South Side.
The Trump administration cited an investigation into racial preferences in contracting when it instituted the funding freeze, which also impacted a much smaller set of funds for the CTA’s Red and Purple Modernization project.
The CTA has argued that the Transportation Department singled it out to retroactively apply new contracting rules in an act of “political retaliation.”
Almost $2 billion of the Red Line Extension’s price tag is expected to be covered with Federal Transit Administration money, which the feds awarded in the waning days of President Joe Biden’s administration.
In a statement, the U.S. Department of Transportation, of which the FTA is a part, said it was “in discussions with CTA to ensure federal tax dollars are not used to further unconstitutional, discriminatory practices.”
CTA spokesperson Catherine Hosinski said the agency does not comment on pending litigation.
After the CTA sued over the funding freeze, federal judge Thomas M. Durkin granted the CTA’s request for a temporary restraining order in the case, unfreezing the funds for the time being.
Durkin said then he believed the CTA was likely to succeed on the merits of its case against the feds.
“This would be a different case,” if the rules had been applied evenly throughout the country, Durkin said in March. “I thought it was still 50 states, treated the same.”
The CTA had warned that without judicial intervention, it would have to start winding the project down. Instead, the agency broke ground on the extension in April.
Last month’s joint filing notes that the CTA and the feds had been encouraged by the court to explore a settlement in the case and that the parties had “engaged in good-faith negotiations.”
“As of several months ago, it was unclear to CTA whether a mutually agreeable resolution of this matter would be possible,” the filing said.
The CTA filed a motion for a preliminary injunction in the case in April, and the feds filed a motion to dismiss the case in June.
In July, the parties jointly filed a request to convert their previous motions into motions for summary judgement, which Durkin granted. He has now paused rulings on those motions to allow settlement negotiations to continue, court records show.
The CTA and the feds plan to file a joint update on settlement proceedings by Nov. 9, unless a settlement is reached before then.
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