Reuters:

The U.S. government's directive, issued in May, said public schools must allow transgender students to use bathrooms that correspond with their gender identity, as opposed to their birth gender, or face federal funding loss.

The policy added fuel to a national debate on transgender rights and enraged social conservatives who say federal civil rights protections encompass biological sex, not gender identity.

"Defendants have conspired to turn workplaces and educational settings across the country into laboratories for a massive social experiment, flouting the democratic process, and running roughshod over commonsense policies protecting children and basic privacy rights," said the complaint.

The other states are Alabama, Wisconsin, West Virginia, Tennessee, Arizona, Maine, Oklahoma, Louisiana, Utah, Georgia, Mississippi and Kentucky.

They say in a court filing the Obama administration, using thinly veiled threats and systematic inspections, has "quietly been in enforcement mode at a micro level, sowing the seeds for macro results."

The states argue they could lose billions of dollars in federal funds for education if they fail to comply. Ten other states have also sued over the guidelines, bringing the total to 23.

The U.S. Education and Justice Departments said in the letter sent to school districts nationwide that while its guidance carried no legal weight, they must not discriminate against students, including based on their gender identity.

"Plaintiffs have identified no enforcement action threatened or taken against them as a result of defendants' interpretations, nor have they established that the guidance documents have any binding legal effect," the U.S. Justice Department said in its filing ahead of Friday's hearing.