Court Dismisses Dems’ Lawsuit Against DOGE’s Treasury Access

A federal judge dismissed a Democrat-led lawsuit on Wednesday challenging the Department of Government Efficiency’s (DOGE) access to the Treasury Department’s payment systems.

In a 17-page order, New York-based District Judge Jeannette Vargas, a Biden appointee, ruled that a legal challenge by the Empire State and other Democrat-led states against DOGE’s Treasury access is moot because the executive order establishing DOGE has since expired. The lawsuit was spearheaded by New York Attorney General Letitia James, who has a history of targeting Donald Trump during his time as an individual citizen and as president.

The lawfare centers around a January 2025 executive order signed by Trump establishing the Elon Musk-led DOGE, which aimed to improve federal efficiency and root out agencies’ waste, fraud, and abuse. The directive called for each department to assemble its own DOGE team to accomplish these objectives and included a termination date of July 4, 2026.

In describing allegations from challengers’ initial complaint, Vargas said that the Treasury granted its DOGE team access to the agency’s Bureau of the Fiscal Services (BFS). The judge noted that BFS “functions as the central payment clearinghouse for all payments to and from federal agencies,” “is responsible for providing reimbursement directly to the States for Congressionally mandated programs,” and “maintains sensitive and confidential financial information, including the States’ banking account numbers.”

James and co-plaintiffs sued over DOGE’s access to BFS in February 2025. They alleged, as described by Vargas, that the Treasury DOGE team’s data access risked “potential . . . disruptions” of BFS’s operations and posed risks to “sensitive data elements” and “sensitive IT systems.” The states also claimed that these actions violated federal law.

Vargas initially granted James and Co.’s request to issue a preliminary injunction blocking the Treasury DOGE team from accessing the BFS system days after the states filed their challenge. The Biden appointee later softened her injunction months later, “permitt[ing]” the DOGE team and related parties to access BFS, “provided that they complied with conditions that tracked the vetting, training, hiring, reporting, and mitigation procedures and protocols that [the administration] had described to the Court.”

In her Wednesday ruling, Vargas determined that the Democrat states’ claims regarding DOGE’s BFS access to be moot because DOGE was dissolved, as specified in Trump’s executive order. The Biden appointee also dismissed the states’ challenge to the DOGE team’s creation of an “automatic system capable of pausing federal funding otherwise due to the States,” as well as their constitutional claims against the administration.

“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 Biden appointee concluded her ruling by ordering that the case be closed.

Shawn Fleetwood is a staff writer for The Federalist and a graduate of the University of Mary Washington. He is a co-recipient of the 2025 Dao Prize for Excellence in Investigative Journalism. His work has been featured in numerous outlets, including RealClearPolitics and RealClearHealth. Follow him on Twitter @ShawnFleetwood