CA challenges Trump administration’s threat to withhold $5 billion over gender identity disclosure

California filed a lawsuit this week challenging the U.S. Department of Education’s threat to withhold funding over the state’s policy on gender identity disclosure.

California Attorney General Rob Bonta asked the Northern District of California Court on Wednesday for a temporary restraining order against “an unconstitutional attempt to impose new conditions on $4.9 billion in federal education funding,” according to a statement from Bonta’s office.

“We will not stand by as U.S. ED uses baseless claims to attack crucial education funding,” Bonta said. “We will continue to fight to protect California’s schools and students from unfair attacks and work to ensure a discrimination-free educational environment for all students.”

At issue is whether school staff should notify parents if they believe their child may be transgender or gender-nonconforming. California and LGBTQ+ advocates contend that policies requiring parental notification may forcibly “out” transgender students to their parents against their will. But the Trump administration and conservatives have portrayed the state’s stance as an attack on parents’ rights.

“Parents are the most natural protectors of their children. Yet many states and school districts have enacted policies that imply students need protection from their parents,” said U.S. Secretary of Education Linda McMahon in a statement on Jan. 28.

Last month, McMahon claimed its investigation found that the California Department of Education “abused its authority by pressuring school officials to withhold information about students’ so-called ‘gender transitions’ from their parents.”

Assembly Bill 1955, a 2024 state law, prohibits school boards from passing resolutions that require teachers and school staff to notify parents if they believe a child is transgender or gender-nonconforming. It was passed in the wake of decisions by several school boards to require that parents be notified. In one high-profile incident, State Superintendent Tony Thurmond was ousted from a school board meeting in Chino Valley for speaking against a parental notification policy that the board later passed.

Last March, the U.S. Department of Education’s Student Privacy Policy Office opened an investigation into whether the California Department of Education’s policies violated federal privacy laws. That includes the Family Educational Rights and Privacy Act, known as FERPA, which grants parents the right to request and review their children’s educational records until they turn 18.

The investigation found that California “put districts in a position of having to choose between complying with FERPA or getting sued by the State.” The investigation report noted that CDE “coerces school districts to withhold information about students’ gender identity.”

Bonta disputes this interpretation of FERPA, stating that the law only requires disclosure of education records, not general information. The lawsuit states that CDE has issued guidance to districts clarifying that parents have the right to request their children’s education records under FERPA, even if those records contain information about a student’s sexual orientation, gender identity or gender expression.

The suit states that the Trump administration has “failed to demonstrate even a single violation of FERPA” and that the focus on the investigation appears to be “motivated by discriminatory animus against transgender people, including transgender students.”

“This is a flagrant attempt by the U.S. Department of Education to intimidate the California Department of Education and California’s local education agencies under the guise of enforcing FERPA,” said Bonta in a statement.

The CDE released guidance regarding FERPA on Wednesday in a letter to public school agencies. It outlines the exceptions to what is included in education records, including personal staff notes, law enforcement records, employee records and records by medical or mental health professionals for students at least 18 years old.

This isn’t the only legal battle California is involved in regarding parental notification. Two Escondido Union School District teachers filed a lawsuit in 2023, claiming that state and district policies preventing the “outing” of transgender students violated their constitutional free speech and religious rights. Last month, the U.S. Court of Appeals for the Ninth Circuit blocked the order from a federal judge who sided with the teachers. Plaintiffs asked the U.S. Supreme Court to reinstate the federal judge’s ruling.