Maine has dropped its lawsuit against the Trump administration after the U.S. Department of Agriculture (USDA) agreed to reinstate federal funds for the state’s child nutrition programs, resolving a heated dispute tied to Maine’s policies on transgender athletes in school sports.

The conflict began when the USDA froze approximately $3 million in federal funds, citing Maine’s refusal to comply with President Trump’s executive order banning transgender athletes from girls’ and women’s sports.

Maine officials, led by Attorney General Aaron Frey and Governor Janet Mills, challenged the funding freeze in court, arguing that the USDA’s actions were unlawful and threatened vital nutrition programs for children and vulnerable adults.

A federal judge issued a temporary restraining order last month, siding with Maine and allowing the state to continue accessing funds while the case proceeded. On Friday, the USDA agreed to halt all efforts to freeze the funds, prompting Maine to withdraw its lawsuit.

Attorney General Aaron M. Frey said, “It’s unfortunate that my office had to resort to federal court just to get USDA to comply with the law and its own regulations.  But we are pleased that the lawsuit has now been resolved and that Maine will continue to receive funds as directed by Congress to feed children and vulnerable adults.”

Governor Mills also celebrated the outcome, saying, “We took him to court and we won. These bullying tactics, we will not tolerate them”.

While this settlement ends the immediate funding dispute, the Trump administration continues to pursue separate legal and administrative actions against Maine over its transgender athlete policies, leaving broader questions about Title IX compliance unresolved.