A judge for the US District Court for the Middle District of North Carolina on Wednesday rejected state officials’ and universities’ arguments to dismiss a transgender discrimination lawsuit. The lawsuit alleges the North Carolina State Health Plan for Teachers and State Employees (NCSHP) discriminates against transgender employees because it excludes coverage for gender dysphoria.

First, Judge Loretta Biggs rejected the defendants’ claim that plaintiffs lack Article III standing to sue. Biggs explained, “Article III traceability is not so rigid,” and that “traceability merely requires a causal connection between the defendant’s conduct and the plaintiff’s injury.”

Second, Biggs decided parent plaintiffs are within the class of people protected under Title IX of the Education Amendments of 1972. The parent plaintiffs can continue with the claim along with their children.

Third, Biggs denied the defendants’ sovereign immunity argument against plaintiffs’ Affordable Care Act claim. Biggs stated sovereign immunity does not apply because of the Civil Rights Remedies Equalization Act, which provides:

A state shall not be immune … for a violation of section 504 of the Rehabilitation Act of 1973, title IX of the Education Amendments of 1972, the Age Discrimination Act of 1975, title VI of the Civil Rights Act of 1964, or the provisions of any other Federal statute prohibiting discrimination by recipients of Federal financial assistance.

Lastly, Biggs denied the defendants’ motion to dismiss the plaintiffs’ Equal Protection claim under the Fourteenth Amendment. Defendants’ argued the health plan exclusion is based on a medical diagnosis, not gender or sex. Biggs explained the health plan’s exclusion denies coverage for gender dysphoria, which is a diagnosis that only results from a dissonance between gender identity and sex assigned at birth. Biggs stated, “the characteristics of sex and gender are directly implicated; it is impossible to refer to the Exclusion without referring to them.”

Biggs’ ruling allows the case, Kadel v. Folwell, to go forward to trial.