Biden-Appointed Judge Tosses Letitia James’ DOGE Lawsuit Against Trump Administration
New York Attorney General Letitia James suffered a legal setback Wednesday when a federal judge dismissed the lawsuit she and 18 other states brought against the Trump administration over access by Department of Government Efficiency personnel to sensitive U.S. Treasury payment systems. U.S. District Judge Jeannette Vargas concluded that the states’ central claims had become moot because the Treasury’s DOGE team had been disbanded and DOGE-affiliated employees no longer had the access the lawsuit sought to block.
The dispute dated back to the opening weeks of President Donald Trump’s current term. Trump signed an executive order in January 2025 establishing DOGE and directing federal agencies to create their own DOGE teams as part of an effort to identify waste, fraud and abuse throughout the federal government. The order set July 4, 2026, as the termination date for the U.S. DOGE Service Temporary Organization.
James subsequently led New York and 18 other states in a lawsuit after DOGE-linked personnel were granted access to systems operated by the Treasury Department’s Bureau of the Fiscal Service. The bureau functions as a central clearinghouse for federal payments, including funds sent to states, and maintains sensitive financial information.
The states argued that allowing DOGE personnel into those systems created risks to sensitive information and potentially threatened the processing of federal payments. They also contended that the administration had exceeded its legal authority in providing the access.
Vargas, who was appointed to the federal bench by President Joe Biden, initially sided with the states on an interim basis. In February 2025, she issued a preliminary injunction restricting the Treasury DOGE team’s access to the covered systems. The order was subsequently modified to permit access by personnel who met specified requirements involving vetting, training, hiring, reporting and security measures.
But the circumstances underlying the lawsuit had changed significantly by the time Vargas issued her latest ruling. With the Treasury DOGE team disbanded and no DOGE-affiliated personnel remaining at Treasury, the judge concluded that there was no longer an ongoing access policy for the court to prohibit.
Vargas ruled that the “plaintiffs’ claims related to access by DOGE-affiliated employees to sensitive Treasury information are dismissed as moot.”
The states had also challenged an automated Treasury system that they said was capable of pausing federal payments. Vargas rejected that portion of the lawsuit as well, finding that the states had failed to identify a specific federal payment owed to them that had actually been frozen or canceled through the system.
In her 17-page ruling, Vargas dismissed the remaining claims under the federal rules governing failure to state a claim and directed that the case be closed.
“For the reasons stated herein, the Court dismisses the Access Claims as moot. The Court GRANTS the Government’s motion to dismiss the remaining claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure,” Vargas wrote.
The decision brings an end at the district-court level to one of the prominent legal battles that erupted during the early months of Trump’s second term over DOGE’s access to federal government systems.
James has repeatedly clashed with Trump in court over the years. In 2022, her office brought a civil fraud lawsuit against Trump, the Trump Organization and other defendants over the valuation of assets in financial statements. The case ultimately produced a judgment carrying hundreds of millions of dollars in financial penalties, although a New York appeals court later eliminated the monetary penalty while leaving the finding of liability in place.
The latest ruling, however, concerned a separate fight over the Trump administration’s DOGE initiative and Treasury Department systems. In that case, the administration ultimately prevailed in having the remaining lawsuit dismissed after arguing that the challenged DOGE access no longer existed and that the states had failed to establish viable remaining claims.
