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South Dakota Republican Gov. Kristi Noem listens to Standing Rock Sioux Tribal Chairwoman Janet Alkire, unseen, during a tribal flags ceremony, Wednesday, Jan. 10, 2024, at the state Capitol in Pierre, S.D. (AP Photo/Jack Dura, File)
A transgender advocacy group emerged as the clear winner after a legal battle with South Dakota’s Republican governor over a cancelled commitment to the organization.
The state of South Dakota has issued an apology letter and will pay $300,000 to a transgender advocacy group for abruptly canceling a Department of Health contract in 2022.
The Transformation Project is a non-profit organization that provides resources to the LGBTQ+ community that include social services, healthcare, and suicide prevention. The group entered into a contract with the State of South Dakota in September 2022 for the creation of a Community Health Worker Program; under the terms of that contract, $135,747.92 of a federal grant from the Centers for Disease Control and Prevention would be used to fund the program, which would be housed at the group’s Sioux Falls headquarters. The grant was applied for and received by the advocacy group, and simply meant to be administered by the state health department; grant funds were explicitly earmarked to provide support for underserved communities.
However, Noem — who was recently banished from Sioux tribal lands in the state — canceled the contract on Dec. 16, 2022, shortly after a conservative news outlet began asking Noem questions about the group’s upcoming Gender Identity Summit, and about why Noem chose to contract with the group.
In response to the questions, the governor’s spokesperson, Ian Fury, created distance between Noem and The Transformation Project. Fury said Noem had not known about the contract at all, and provided reporters with a statement in which Noem said, “South Dakota does not support this organization’s efforts, and state government should not be participating in them.”
The statement further said, “We should not be dividing our youth with radical ideologies. We should treat every single individual equally as a human being.” Fury also said that The Transformation Project had not lived up to its end of the contract in that it failed to submit quarterly reports.
Fury’s statements were followed up by an official letter sent by the state to cancel the contract. In it, Lynne Valenti, the Deputy Secretary of Health, wrote that The Transformation Project “failed to perform” its obligations under the contract and was “in material breach.”
The Transformation Project sued in federal court and alleged that Noem only canceled the contract because her involvement with the group “suddenly became a political liability.” Per the complaint, the governor’s office not only knew about the contract, but supported the group’s mission and even told The Transformation Project to request increased funds in its grant application.
Department of Health Secretary Joan Adam also suddenly resigned during the controversy.
In the lawsuit, The Transformation Project alleged that Noem’s statements in context made it clear that the state, in its decision to cancel the contract, intended to discriminate against transgender people. Transgender man Jack Fonder, a community health worker and LGBTQ+ activist, joined the lawsuit as a named plaintiff.
In a major win for the plaintiffs, the lawsuit was voluntarily dismissed Thursday, and the terms of settlement were widely reported.
Melissa Magstadt, the current Department of Health secretary, wrote a letter of apology letter to Fonder and The Transformation Project’s director, Susan Williams. The state must also make a $300,000 payment to The Transformation Project.
Although the state did not specifically admit liability for discrimination, its letter read:
On behalf of the State of South Dakota, I apologize that the Transformation Project’s contract was terminated and for treating the Transformation Project differently than other organizations awarded Community Health Worker contracts.
Fonder said in a statement that the settlement was “an exciting time in history” for the transgender community in South Dakota.
“We are vindicated,” Williams said in a statement. “This settlement sends some clear and strong messages: that discrimination against transgender people will not be tolerated in South Dakota.”
Former U.S. Attorney for South Dakota Brendan V. Johnson, who represented the advocacy group in the lawsuit, said the settlement marks a win for non-discrimination efforts.
“This settlement marks a significant milestone in our ongoing commitment to civil rights advocacy,” said Johnson, of Robins Kaplan LLP. “We commend the resiliency of the LGBTQ+ community and remain committed to vigorously upholding their rights.”
Noem, a possible Donald Trump vice-presidential pick, was officially banned by the Oglala Sioux Tribe from the Pine Ridge Reservation Friday after Noem spoke out about wanting to send additional razor wire and law enforcement personnel to Texas to help border security. It was not the first time Noem and the tribe have battled. In May 2020, during the pandemic, Noem threatened to sue the tribe if leaders did not immediately remove coronavirus checkpoints. Prior to that, Noem signed a bill that requires a sign posted in public school classrooms reading “In God We Trust.”
Noem did not respond to a request for comment.
