January 29, 2026 NEW YORK — The legal foundation of the American executive branch faced a grueling stress test in a Manhattan federal courtroom Wednesday. At the heart of the firestorm: Can a sitting president simply tear up a signed contract from a previous administration because they don't like it?

U.S. District Judge Lewis Liman didn't just ask the question—he hammered it home, leaving Trump administration lawyers scrambling to justify what critics call a "monarchial" overreach of power.

The "King Donald" Controversy

The hearing took a theatrical turn when Robbie Kaplan, representing the MTA and New York State, invoked the President’s own social media presence. She pointed to a Truth Social post where Donald Trump shared an image of himself wearing a crown, captioned: "CONGESTION PRICING IS DEAD... LONG LIVE THE KING!"

“We have President Trump, not King Donald,” Kaplan argued, asserting that the U.S. Department of Transportation (USDOT) cannot cancel a multi-billion dollar infrastructure agreement based on the “personal whim” of the executive.

A "Scary" Precedent for U.S. Infrastructure

Outside the courthouse, MTA Chair Janno Lieber was blunt about the stakes. If the federal government can walk away from a deal whenever the wind shifts in Washington, he argued, the very concept of a government contract becomes "worthless."

“The government’s position is they can rescind any agreement, any approval at any time... and that is scary,” Lieber said. “Who knows how you ever do a contract again to build anything in the United States if that’s really what they’re talking about?”

Lieber expressed "guarded optimism," noting the MTA’s "perfect track record" in court so far, including a prior injunction that stopped the feds from stripping state funding as a retaliatory measure.

Legal Contradictions

Judge Liman appeared particularly skeptical of the USDOT’s shifting defense. Federal attorneys argued two conflicting points:

1. The case belongs in a claims court because it’s a contract dispute.

2. There is no contract because the Biden-era approval was "void" from the start.

“How can you take the position that they’re simultaneously suing on a contract and take the position that there is no contract because it’s void?” Liman asked pointedly.

When pressed if this "at-will" termination power extended to ordinary road-fixing agreements, USDOT attorney Eric Hamilton confirmed that it did—a stance that could send shockwaves through every state transportation department in the country.

The Data: Is the Toll Working?

While the lawyers sparred over constitutional limits, the MTA presented the first-year "report card" for the $9 peak-hour toll. According to state data, the program has been a statistical powerhouse:

• Traffic: 27 million fewer vehicles (an 11% drop) entered the zone.

• Speed: Weekday car speeds rose by 4%; bus speeds by 2.3%.

• Environment: A massive 22% drop in air pollution and 17% fewer noise complaints.

• Revenue: The program netted $550 million in its first year, fueling $1.75 billion in transit upgrades, including subway elevators and signal modernizations.

What’s Next?

Despite repeated letters from Transportation Secretary Sean Duffy ordering a shutdown, Governor Kathy Hochul remains defiant. Her administration’s mantra—"The cameras are staying on"—remains the status quo as the city awaits Judge Liman’s summary judgment.

If the judge rules for the MTA, it could provide a permanent shield for the program; if he sides with the feds, it could redefine the power of the presidency over state-federal partnerships forever.