A federal judge has thrown out a lawsuit brought by New York Attorney General Letitia James and 18 other states challenging the Trump administration’s decision to give staff from the Department of Government Efficiency access to sensitive Treasury Department payment systems.
U.S. District Judge Jeannette Vargas, who was appointed by President Biden, ruled Wednesday that the states’ claims over DOGE-affiliated employees’ access to Treasury systems are moot. She wrote that the Treasury DOGE team has since been disbanded and no DOGE employees remain at the department, leaving nothing left for the court to block.
Vargas also dismissed a separate claim from the states over an automated payment-review system, finding they had not shown that the process actually froze or canceled any specific payment owed to them.
The lawsuit traces back to President Trump’s January 2025 executive order creating DOGE, which directed federal agencies to form their own DOGE teams tasked with rooting out fraud, waste and abuse ahead of the initiative’s scheduled termination on July 4, 2026.
James led the coalition of states in suing the following month after Treasury granted DOGE-affiliated employees access to Bureau of the Fiscal Service systems, which handle federal payments and contain sensitive financial data. The states argued the move was unlawful and put both state financial information and federal payments at risk.
In February 2025, Vargas had sided with the states, issuing a preliminary injunction that barred Treasury’s DOGE team from those payment systems. Over the following months, she modified that order to allow access for personnel who met specific vetting, training, hiring, reporting and mitigation requirements.
James has been one of Trump’s most persistent legal adversaries. She campaigned on investigating his business dealings before filing a civil fraud lawsuit against Trump and the Trump Organization in 2022. That case initially produced more than $450 million in penalties, though an appeals court later upheld Trump’s liability while striking down the financial penalty.
Fox News Digital reported that it reached out to the White House and James’ office for comment on the ruling.
