Twelve U.S. states have filed a federal lawsuit challenging the U.S. Department of Health and Human Services for attaching what they describe as discriminatory gender conditions to hundreds of billions of dollars in federal funding. The complaint argues that the policy unlawfully pressures states to adopt rules that could undermine the civil rights and health care access of transgender and gender-diverse people.
The lawsuit, titled State of New York et al. v. United States Department of Health and Human Services et al., was filed Jan. 13 in the U.S. District Court for the District of Rhode Island. It is led by New York Attorney General Letitia James and joined by Oregon, California, Colorado, Delaware, Illinois, Michigan, Minnesota, Nevada, Rhode Island, Vermont, and Washington.
According to the complaint, HHS has required states and other funding recipients to certify compliance with Title IX “including the requirements” of a 2025 executive order titled Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government. The order directs federal agencies to recognize sex solely on biological definitions and reject gender identity as a protected classification under federal civil rights law.
The states argue that HHS lacks authority to impose these conditions on existing and future grant agreements. They contend the policy violates the Administrative Procedure Act and constitutional limits on federal spending power by coercing states into adopting policies that conflict with state nondiscrimination laws.
Attorney General James said in a statement that the federal government is unlawfully forcing states to choose between protecting transgender residents and maintaining critical funding streams. The complaint states that failure to comply with the certification requirements could expose states to funding termination, clawbacks, and liability under the False Claims Act.
The challenged conditions apply to a wide range of federal programs, including grants for medical education, public health initiatives, maternal and infant care, disease prevention, and community research. Collectively, these programs represent more than $300 billion in annual federal funding distributed to the plaintiff states.
The states warn that enforcement of the policy could disrupt essential public services if funding is withheld. They also argue that redefining Title IX through executive action exceeds agency authority and bypasses Congress and established rulemaking procedures.
At the center of the lawsuit is the claim that HHS is attempting to retroactively impose ideological conditions on funding agreements that were approved under different legal interpretations of federal civil rights protections. The complaint asserts that any major reinterpretation of Title IX must occur through legislative action or formal rulemaking, not executive directive.
The states are asking the court to invalidate the funding conditions and prohibit HHS from enforcing them. They argue that immediate judicial intervention is necessary to prevent irreparable harm to state programs, residents, and transgender individuals who rely on federally supported services.
The case is part of a broader wave of legal challenges from Democratic-led states responding to recent federal policy shifts affecting civil rights enforcement and health care access. Advocacy organizations have warned that the HHS policy could weaken long-standing protections for transgender people across multiple sectors.
