A federal judge has dismissed a lawsuit filed by 19 states, including New York, that challenged the Trump administration’s Department of Government Efficiency (DOGE) over its access to sensitive Treasury Department payment systems. U.S. District Judge Jeannette Vargas granted the administration’s motion to dismiss on Wednesday and ordered the case, New York v. Trump, closed.
The lawsuit began in February 2025 after members of a Treasury DOGE team were granted access to systems run by the Bureau of the Fiscal Service, which handles federal payments and holds sensitive financial data, including states’ bank account numbers. The states argued the access raised serious privacy and security concerns.
Judge Vargas initially agreed with the states, issuing a preliminary injunction that limited DOGE team members’ access to those systems. She found at the time that the states were likely to succeed on their claim that Treasury acted arbitrarily and capriciously by not adequately addressing privacy and security risks. The injunction was later modified once Treasury added new vetting, training, and security procedures.
The situation changed by July 2026. The executive order that created DOGE had set an expiration date of July 4, 2026, and Treasury told the court the DOGE team had since disbanded, with its reporting structure no longer in existence. Two former team members remain at Treasury but now hold different roles — one as the IRS’s chief financial officer, the other as Treasury’s chief information officer.
Because of that, Judge Vargas ruled the states’ original claims were moot — there was nothing left for the court to stop. She also rejected the states’ argument that the administration had shut down DOGE simply to dodge the lawsuit, noting that the expiration date had been set before the case was even filed.
A second set of claims remained, focused on an automated review process built by the Treasury DOGE team to flag federal payments that might conflict with administration policy. Those claims weren’t moot, since the review process could outlast DOGE itself. But Judge Vargas found the states never claimed the system actually canceled a payment or pointed to any specific payment owed to them that had been frozen because of it. Without that, she ruled there was no final agency action to challenge under the Administrative Procedure Act.
The states’ constitutional claims ran into the same problem. Judge Vargas acknowledged that the executive branch cannot simply withhold funds Congress has already appropriated in order to push its own policy goals. But she found that building a system to flag payments for review is not the same as actually withholding money.
More than a year and a half after it began, the case has ended quietly: DOGE no longer exists, and the states never showed that its payment-review system actually stopped any money from reaching them.
