A lawsuit filed by Minneapolis residents seeking to block the Southwest light rail line was thrown out by a federal judge on Tuesday, removing a cloud that has lingered over the $1.9 billion project for more than three years.

A local nonprofit group called the Lakes and Parks Alliance (LPA) filed the suit in U.S. District Court in Minneapolis against the Metropolitan Council, which is planning and building the Southwest line — the largest public works project in state history.

The group claimed the regional planning body violated federal law when it chose the current LRT route above all others well before an environmental study was completed. The 14.5-mile line is slated to run between downtown Minneapolis and Eden Prairie, beginning passenger service in 2023.

Plans to squeeze light rail and freight trains along 1.5 miles of the Kenilworth corridor, a popular area for bicyclists and pedestrians in Minneapolis' Chain of Lakes area, spurred neighbors to file suit in September 2014.

In a highly anticipated, 17-page opinion, Judge John Tunheim found the council "did not irreversibly and irretrievably commit itself to a specific light-rail route, despite giving the appearance that it did." His ruling ends an enduring legal challenge facing the project — for now.

Alliance spokeswoman Mary Pattock said the group is "extremely disappointed by the decision" and considering its options regarding an appeal.

But Met Council Chair Alene Tchourumoff said she was "pleased the court ruled with the council, putting to an end this drawn-out challenge to the Southwest LRT project, and acknowledging the council's efforts to balance federal and state laws."

She added, "the council continues to engage residents and businesses as we plan for this project, which will improve mobility and connect people with jobs all across the region."

To date, about $240 million has been spent in local funds planning, designing and engineering the Southwest project. Construction is expected to begin later this year.

The next big challenge facing the project is winning $929 million in matching funds from the Federal Transit Administration (FTA), which was initially named in the case, but later dropped. The Trump administration wants to cut off this kind of transit funding, but Congress could go in a different direction as it crafts the federal budget.

Either way, the ruling removes "a huge, huge question mark" surrounding the Southwest project, said Hennepin County Commissioner and transit advocate Peter McLaughlin.

Routing both LRT and freight trains through the Kenilworth corridor near one of the city's most affluent neighborhoods and along a popular recreation area has long proved controversial. Critics of the project have contended the line should travel through a more densely populated area, such as Uptown.

According to a "memorandum of understanding" hammered out between the council and the city in 2014, existing freight traffic will continue to operate in the corridor at grade. Southwest LRT trains will travel in a shallow tunnel through the southern portion of the corridor, resurfacing on the northern half. A station at West 21st Street was restored at the city's behest, as well.

The pact was reached after the Twin Cities & Western Railroad Co. informed the council that rerouting its freight traffic away from the corridor and through St. Louis Park would "create a risk of train derailment," according to Tunheim's opinion.

Both of these agreements are "promises that can be broken," so there was no predetermined route as a result, Tunheim said.

Pattock said the judge's ruling is "based on the precise question as to whether the Met Council is allowed to break its promises — that is, its legally negotiated memorandums of understanding with the city of Minneapolis and others. The decision says, 'Yes, they can.'

"We think that is shocking," Pattock continued. "The council has a sweet legal status — it's unregulated with a get-out-of-jail-free card."

Another important part of the case involved municipal consent — a state mandate that required Hennepin County and the cities along the route — Minneapolis, St. Louis Park, Hopkins, Minnetonka and Eden Prairie — to approve the project before it could move forward. This process, the alliance argued, "irreversibly and irretrievably" committed the Met Council to the proposed route — before an environmental study was done.

State law regarding municipal consent may be "well intentioned," Tunheim wrote, but it also "severely restricts the council's ability to move light-rail projects forward" because it "gives veto power to every local government along the project's proposed route."

At the same time, federal law requires the council to consider all "reasonable alternatives" up until the final environmental review is complete — a potential conflict, Tunheim added.

The judge acknowledged this duality makes for "a close case," adding that both sides "do not dispute the factual events that took place." But the interpretation of those facts appears to greatly differ.

The Southwest project actually went through two rounds of municipal consent, the second of which resulted in two stations in Eden Prairie being nixed due to a budget crisis in 2015. "Changes were made and municipal consent was reobtained," Tunheim wrote. "Federal law governs procedures, not results."

Janet Moore • 612-673-7752 Twitter: @MooreStrib