California Sues a Children’s Hospital over Transgender Care: Is Corporate Law the Right Tool?
Anya Dalal
California Attorney General Rob Bonta has taken the unusual step of suing Rady Children’s Health in San Diego over its decision to wind down gender-affirming care for transgender youth. Instead of grounding the case in California’s civil rights statutes, including the Unruh Civil Rights Act, the complaint relies on a 2025 merger agreement. That agreement required Rady to maintain existing services after assuming control of Children’s Hospital of Orange County and Children’s Hospital of Mission. The state argues that closing the Center for Gender Affirming Care violates that contractual obligation.
For families and advocates, the lawsuit signals that California recognizes how essential this care is. In recent months, major providers including Children’s Hospital Los Angeles, Stanford Medicine, and Kaiser have curtailed services under mounting federal pressure. AG Bonta’s action communicates that hospitals cannot quietly eliminate programs for transgender youth without scrutiny.
I had the opportunity to speak with Attorney General Bonta at our inaugural in-person CAYC conference in April, 2025. He is precisely the kind of leadership California needs in a volatile national moment. His decision to act swiftly using a merger agreement the state can clearly enforce reflects an understanding of the current hostile federal climate. Securing an immediate and concrete outcome may be more important than pursuing a sweeping declaration.
Still, the legal framing carries implications. California has some of the strongest anti-discrimination protections in the United States. If transgender youth are guaranteed equal access to medically necessary care under state law, civil rights statutes would naturally appear to provide a direct basis for action. By relying on contract law strategy, California advances a narrower theory. While that may be tactically sound, it does not directly reaffirm the scope of civil rights protections in this context.
The pressure on hospitals is real. Rady’s decision followed federal investigations and public statements from the White House characterizing gender-affirming care as “chemical and surgical mutilation.” Hospitals have warned that Medicare and Medicaid funding could be threatened for providers treating transgender minors. In that environment, institutions may frame retrenchment as risk management. Supporters of the lawsuit argue that the state must use the tools most likely to succeed while federal policy remains unsettled. That argument has force. Preserving services for vulnerable youth is urgent, and AG Bonta deserves credit for acting when others have hesitated.
At the same time, this moment presents a broader opportunity. Gender-affirming care is not simply a service line within a merger contract. It sits within California’s larger civil rights framework. If denial of such care constitutes discrimination under state law, that principle is powerful and worth stating clearly. Corporate law may preserve access in this instance, but civil rights law would affirm that access is not contingent on contract language or shifting federal winds.
This is not a critique of strategy. Sequencing may matter. Immediate protection can come first, followed by doctrinal clarity. But if civil rights claims are consistently sidelined in moments of stress, their strength may diminish over time. A contractual remedy compels compliance; however, a civil rights ruling shapes norms and reinforces equality.
Keeping support available for transgender youth is vital, and achieving that practical result would be significant. The larger question is whether this is also a moment to state plainly that equal access to medically necessary care is not discretionary or political. It is a civil right. As the case moves forward, California has the opportunity not only to win narrowly, but to strengthen the broader architecture of rights it has built over decades.
Image credit: Equality California