A federal appeals court has allowed two Virginia school districts to continue fighting the U.S. Department of Education’s decision that their transgender student bathroom policies violate federal law.
The 4th U.S. Circuit Court of Appeals in Richmond ruled 2-1 on Thursday that federal district courts should not have dismissed the lawsuits filed by Arlington and Fairfax County school boards for jurisdictional reasons.
The school districts are challenging the Education Department’s finding that allowing transgender students to use bathrooms, locker rooms and other facilities associated with their gender identity violates Title IX: the federal law against sex discrimination in education programs funded with federal money, per reports.
The appeals court disagreed with the lower court’s finding that only the U.S. Court of Federal Claims could hear the disputes. That court generally hears claims for financial compensation from the federal government. Still, the appeals judges found that school boards sought other remedies, such as injunctions that would prevent the department from enforcing its findings.
The decision allows the district’s legal challenges to proceed in Virginia federal court where they were originally filed. It doesn’t say whether the school policies themselves comply with federal law.
Why Are the School Districts Challenging the Decision?
The Arlington and Fairfax County school boards passed policies allowing transgender students to use facilities that match their gender identity, which many public schools in the U.S. do so.
However, in 2025 the Department of Education determined that the policies violated Title IX of the Education Amendments of 1972. The department classified both districts as high-risk participants in the federal grant system. It required them to receive funding through reimbursements instead of usual payment arrangements until they changed their policies.
The two school boards then filed separate lawsuits to obtain judicial approval that the department’s policies met Title IX requirements; they also claimed the department acted unlawfully.
U.S. District Judge Rossie Alston ruled last year that the cases belonged in the Court of Federal Claims because they were financial claims arising from agreements between school districts and the federal government.
On Thursday, Circuit Judges Alison Rushing, a Donald Trump appointee and Albert Diaz, a Barack Obama appointee, overturned that ruling. Circuit Judge Julius Richardson, again a Trump appointee, disagreed, saying the requests for advance payments were central to their cases.
Decision Comes Amid Broader Federal Policy Changes
The legal fight is happening as the Trump administration pushes for changes to federal policies that affect transgender people, including in schools and other educational settings.
Trump has said the federal government recognizes only two sexes (male and female) and that they are immutable. His administration has ordered agencies to align policies with this position.
Separately, the Education Department has threatened to withhold federal funds from school districts in at least three states over policies that prevent transgender status of students from being disclosed to parents.
In September, the administration also sued a public school district in Kansas City, Kansas, to prevent it from helping transgender students with gender transitions.
The Virginia appeals court ruling concerns where the two school boards are bringing their challenges, not whether their policies are contested.
The cases are Fairfax County School Board v. McMahon and Arlington School Board v. McMahon before the 4th U.S. Circuit Court of Appeals.
