California is taking the Trump administration to court in a high-stakes fight over transgender student privacy and billions in federal education funding. State Attorney General Rob Bonta has filed a lawsuit against the US Department of Education and the federal government in the U.S.
District Court for the Northern District of California. The suit challenges a federal threat to withhold approximately $4.9 billion in annual education funding tied to California’s law prohibiting the forced outing of transgender students. At the center of the dispute is Assembly Bill 1955, signed into law in 2024. The law bars schools from requiring staff to disclose a student’s gender identity to parents without the student’s consent. California argues that federal officials have misapplied the Family Educational Rights and Privacy Act, or FERPA.
According to the complaint, FERPA does not require schools to affirmatively disclose a student’s gender identity or pronouns to parents unless there is a valid records request. Federal officials demanded several “corrective actions,” including assurances that districts may adopt parental notification policies, warning that failure to comply could result in the loss of all federal funding.
In a recent development, US District Judge Noël Wise granted a temporary restraining order blocking the federal government from withholding funds while the case moves forward. The temporary restraining order will remain in effect until the court decides the case on its merits. California’s lawsuit seeks a declaration that the demanded corrective actions are unlawful, along with preliminary and permanent injunctions.
