New York Attorney General Letitia James is suing the U.S. Department of Health and Human Services, saying a new federal policy unlawfully threatens billions in funding unless states discriminate against transgender people.
James is leading a coalition of 11 other attorneys general who argue the policy forces states to choose between following their own anti-discrimination laws and keeping critical federal money for health care, education, and research.
Under the HHS policy, states, hospitals, universities, and other institutions must certify compliance with a presidential executive order that redefines sex in a way that excludes transgender people. HHS says it can terminate grants, demand repayment of funds already spent, or pursue civil or criminal penalties if recipients fail to comply.
The policy applies to both new and existing grants. That means programs already underway could lose funding immediately, even though HHS has not clearly explained what compliance requires.
James said the policy puts essential services at risk. “This policy threatens health care for families, life-saving research, and education programs that help young people thrive in favor of denying the dignity and existence of transgender people,” she said.
In New York alone, more than $80 billion in federal grant funding could be affected. That money supports immunization programs, maternal and infant health care, HIV prevention and treatment, mental health and substance use services, and major research initiatives.
The lawsuit argues that HHS has no authority to impose these conditions and is attempting to rewrite Title IX through executive action. The attorneys general say the policy violates the Constitution by bypassing Congress, breaks federal law by attaching vague and retroactive funding conditions, and violates the Administrative Procedure Act by imposing a major policy shift without proper notice.
James and the coalition say the federal policy directly conflicts with state laws that protect transgender people. In New York, state law and the state constitution bar discrimination based on gender identity or expression, including in education and health care.
The lawsuit also points to decades of court rulings and federal guidance recognizing that Title IX protections extend to gender identity.
Attorneys general from California, Colorado, Delaware, Illinois, Michigan, Minnesota, Nevada, Oregon, Rhode Island, Vermont, and Washington joined New York in filing the suit.
They are asking a federal court to block HHS from enforcing the policy so states can continue providing services without being forced to discriminate.
James says the federal government is using funding as leverage to impose discriminatory rules nationwide. The lawsuit aims to stop HHS from conditioning health, education, and research dollars on policies that states say violate their laws and harm transgender residents.
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