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In February 2015, shortly after the project received environmental clearance from [[California]], the town of [[Atherton, California|Atherton]], which lies on the tracks, sued Caltrain, alleging that the agency's environmental impact review was inadequate and that its collaboration with the CHSRA should be further vetted. On September 2016, [[Contra Costa County Superior Court]] Judge [[Barry Goode]] sided with Caltrain, ruling that the electrification project does not hinge on the high-speed rail project's success, and is thus independent from the latter.<ref>{{citeweb|url=http://www.smdailyjournal.com/articles/lnews/2016-09-27/judge-gives-caltrain-electrification-green-light-atherton-loses-lawsuit-claims-local-project-was-too-closely-tied-to-high-speed-rail/1776425168923.html|title=Judge gives Caltrain electrification green light: Atherton loses lawsuit, claims local project was too closely tied to high-speed rail|publisher=''The Daily Journal''|date=September 27, 2016|author=Weigel, Samantha|accessdate=March 29, 2017}}</ref>
[[File:Elaine Chao large.jpg|thumb|upright|left|Secretary of Transportation [[Elaine Chao]] deferred expected federal funding for the electrification project just before construction was about to commence.]]
By February 2017, the electrification project had secured $1.3 billion in state, local, and regional funding, with the remaining funding gap to be closed by a $647 million grant from the [[Federal Transit Administration]]’s (FTA) Core Capacity program.<ref>{{citeweb|url=http://www.caltrain.com/about/MediaRelations/news/Caltrain_Statement__Electrification_Must_Move_Forward.html|title=Caltrain Statement: Electrification Must Move Forward|publisher=Caltrain|date=February 8, 2017|accessdate=March 29, 2017}}</ref> The grant had undergone a two-year review process under the [[Obama Administration]] and received a "medium-high" rating from the FTA, and was waiting the new [[Trump Administration]]-appointed Secretary of Transportation [[Elaine Chao]]'s signature after a thirty-day review period.<ref name="contractextension">{{citeweb|url=http://www.mercurynews.com/2017/02/28/caltrain-agreement-with-contractors-to-extend-deadline-keeps-electrification-project-alive/|title=Caltrain: Agreement with contractors to extend deadline keeps electrification project alive|publisher=''[[San Jose Mercury News]]''|author=Green, Jason|date=February 28, 2017|accessdate=March 29, 2017}}</ref> However, during the review period, the fourteen [[Republican Party (United States)|Republican party]] [[United States House of Representatives|U.S. House]] representatives from California sent a letter to Secretary Chao, urging her to deny funding due to the project's ties with high-speed rail, which they opposed. They called the high-speed rail project a "boondoggle" and the Caltrain grant as a "waste of taxpayer dollars".<ref name="grant">{{citeweb|url=https://www.nytimes.com/2017/03/06/us/trump-and-republicans-block-caltrain-grant.html|title=In Silicon Valley, Caltrain Upgrade Is Imperiled as Trump Withholds Funds|publisher=''[[The New York Times]]''|date=March 6, 2017|accessdate=March 29, 2017}}</ref>
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