A divided three-judge federal appeals court panel on Tuesday cleared the Trump administration to resume discharging transgender service members, issuing a stay that reinstates War Secretary Pete Hegseth's policy while the case heads to full appellate argument next month.
Judges Gregory Katsas and Neomi Rao — both appointees of President Donald Trump — granted the stay in a 2-1 ruling, saying U.S. District Judge Ana Reyes, a Biden appointee, afforded "insufficient deference" to military judgment and substituted her own assessment of medical and readiness data.
The majority concluded that the Pentagon's reliance on studies and internal reviews — ranging from deployability concerns to cost analyses — was enough to show the policy likely passes constitutional review and that the government is likely to win on appeal.
The order revives Hegseth's policy — created in February following a Trump executive order — that bars individuals with a diagnosis, history of, or symptoms "consistent with" gender dysphoria from joining or remaining in the military. Limited waivers exist but exclude anyone who has attempted to transition away from their biological sex.
Trump's Jan. 27 executive order stated, "The medical, surgical, and mental health constraints on individuals with gender dysphoria" is inconsistent with the government's policy of establishing "high standards for troop readiness, lethality, cohesion, honesty, humility, uniformity, and integrity."
Katsas and Rao wrote that courts must give "far more deferential" review to military decisions, particularly on medical standards and force composition.
They noted that accession rules already disqualify hundreds of physical and mental health conditions and said gender dysphoria — defined as involving "clinically significant distress or impairment" — is within the Pentagon's authority to evaluate.
The majority said the current policy rests on several materials, including a 2021 Defense Department study indicating up to 40% of personnel diagnosed with gender dysphoria became nondeployable within two years; a 2025 literature review finding higher rates of psychiatric diagnoses and suicide attempts among transgender individuals; and cost data showing more than $52 million spent on gender dysphoria-related care from 2015 to 2024.
The court also pointed to recent Supreme Court decisions — including U.S. v. Skrmetti and U.S. v. Shilling — as reinforcing the government's likelihood of success.
The panel dismissed Reyes' finding that the ban was motivated by animus, despite pointed language in Trump's executive order and public comments by Hegseth.
Citing Trump v. Hawaii, the majority said courts must focus on whether a policy can be reasonably tied to legitimate government interests.
Because the Pentagon cited readiness, unit cohesion, and cost control, the court said those interests defeated an animus-based constitutional challenge.
Judge Nina Pillard, a Biden appointee, dissented, arguing the administration offered no credible evidence linking transgender service to harm.
She said Hegseth's policy appears designed to remove transgender troops categorically, pointing to a directive requiring administrative separation rather than individualized medical evaluation.
She also cited an Air Force memo requiring transgender service members to appear at separation hearings in the uniform and grooming standards of their biological sex or waive participation.
The lawsuit was filed in January by GLAD Law and the National Center for LGBTQ Rights on behalf of six active-duty service members.
Shannon Minter, legal director of the National Center for LGBTQ Rights, said in a statement to Newsmax that the stay "declined to halt the unjust discharge process now threatening thousands of transgender service members."
He said his team will argue before the full D.C. Circuit Court of Appeals on Jan. 22, contending that Reyes "correctly found that this ban causes irreparable harm and is rooted not in facts, data, or reason — but in animus."
Minter added that the full court "still has the opportunity to protect our troops and their families by upholding Judge Reyes' decision."
A War Department spokesperson told Newsmax, "As a matter of policy, the Department does not comment on ongoing litigation."
Newsmax also reached out to the Department of Justice for comment.
Michael Katz ✉
Michael Katz is a Newsmax reporter with more than 30 years of experience reporting and editing on news, culture, and politics.
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