Trump's transgender military ban dealt legal blow after appeals court ruling

Instead, the appellate court decision leaves in place, for now, a preliminary injunction handed down late last month by U.S. District Judge Benjamin Settle. That decision blocked the Trump administration from identifying and removing transgender service members for the near-term while the case proceeds in lower court.

"The Department of Justice has vigorously defended President Trump's executive actions, including the Prioritizing Military Excellence and Readiness Executive Order, and will continue to do so," a spokesperson for the Justice Department told Fox News Digital. 

In court filings, the government argued that the transgender military policy "furthers the government's important interests in military readiness, unit cohesion, good order and discipline, and avoiding disproportionate costs."

However, the policy has already faced a wave of early legal challenges.

Reyes vehemently contested the government's assertion that being transgender is "not consistent with the humility and selflessness required of a service member." 

Reyes noted in a scathing, 79-page ruling that transgender service members have provided a combined total of "over 130 years of military service," have been deployed around the globe, including currently in an active combat zone, and together have earned more than 80 commendations and medals for their service. 

The three-judge panel for the U.S. Court of Appeals for the D.C. Circuit broke with Reyes's order, however - agreeing to grant the Trump administration an administrative stay.

Still, the judges stressed that the stay "should not be construed in any way as a ruling on the merits" of the case. The panel also said they reserve the right to reconsider the administrative stay if the military is found to have taken adverse action against passenger service members. 

The case is one of many that will likely be kicked up to the Supreme Court.