Oregon Sues HHS Over New Rule That Could Cut Funding Unless States Follow Anti-Trans Policy

By Diane Megaw On Jan 14, 2026

Gavel in a courtroom — Credit: Joe Gratz

Oregon joined a 12-state coalition yesterday in a lawsuit against the U.S. Department of Health and Human Services (HHS) for unlawfully conditioning hundreds of billions of dollars in federal funding on certifying compliance with a presidential executive order that seeks to deny the existence of transgender people.

Oregon Joins Lawsuit Against HHS For Transgender Discrimination Policy

A new HHS policy requires recipients of federal health, education, and research funding to certify compliance with a presidential executive order that seeks to impose rigid, unscientific definitions of sex, discriminating against transgender people. Oregon Attorney General Dan Rayfield confirmed that the policy uses federal money to interfere with deeply personal medical decisions that belong to patients, families, and their doctors.

Tidings Insight

The certification requirement can force states and universities to sign on to a federal definition of sex to keep grants flowing, which is why the coalition calls it coercion.

AG Rayfield said, “Agencies shouldn’t be forced to take care away from people just to keep their funding.”

HHS’ policy requires states, public universities, health agencies, hospitals, and other recipients of federal funds to certify compliance with Title IX protections, “including the requirements” of the president’s executive order redefining sex in a way that excludes transgender people.

This certification is a condition of funding, and HHS warned that recipients could face termination of grants, repayment of funds, and even civil or criminal liability if they are found to be out of compliance. The policy applies to new grants and existing funding, placing ongoing programs at immediate risk.

The coalition argues that HHS has no authority to impose these conditions and, by violating state laws protecting transgender people from discrimination, the agency is illegally using federal funding to coerce states into discriminating against their residents. They argue that the policy:

It is an unlawful attempt to rewrite Title IX through executive action and agency policy.
Violates the U.S. Constitution by overriding Congress’s power of the purse.
Breaks federal law by attaching vague and retroactive conditions to funding.
Violates the Administrative Procedure Act by imposing a significant policy change without notice or explanation.
Contradicts decades of court opinions and settled federal guidance recognizing that Title IX protects people from discrimination based on gender identity.

The coalition has asked the court to step in and strike down the unlawful funding conditions.

Tidings Context

Under the Administrative Procedure Act, agencies usually must give notice and take public comment before major policy shifts, and courts can block rules adopted without that process.