South Dakota apologizes to transgender advocacy group, will pay $300K over canceled contract

South Dakota will pay $300,000 and has apologized to a transgender advocacy group after the state government canceled a contract with the organization. 

Attorneys for The Transformation Project announced the settlement Monday — more than a year after the group filed a lawsuit against Gov. Kristi Noem (R) and the state health secretary over the terminated contract.

The contract included $136,000 in federal funds for the organization “to hire and train a community health worker to connect LGBTQ community members to healthcare,” according to the attorneys’ press release.

The group alleged that its contract with South Dakota became a “political liability” after a conservative outlet brought it and one of the group’s planned events to Noem’s attention in December 2022, according to its complaint. The group alleged its contract was “abruptly terminated” in December 2022 “based purely on national politics.”

“The Contract was only terminated after a conservative national media outlet contacted state officials. In response to a potentially negative news cycle, the State cancelled TTP’s [The Transformation Project] Contract, issued a statement, and subsequently alleged breaches of contract in an attempt to apply a thin gloss of contract law to the State’s discriminatory actions,” according to the complaint, which was filed in South Dakota federal court.

Brendan Johnson, the lead attorney who represented The Transformation Project, said in a statement that the settlement “marks a significant milestone in our ongoing commitment to civil rights advocacy.”

“We commend the resiliency of the LGBTQ community and remain committed to vigorously upholding their rights,” he said.

South Dakota Department of Health Secretary Melissa Magstadt signed an apology letter to the organization dated Jan. 18. Magstadt was not the secretary when the contract was canceled in 2022, according to The Associated Press.

“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,” the department says in the apology letter.

“I want to emphasize that all South Dakotans are entitled to equal treatment under the law — regardless of their race, color, national origin, religion, disability, age, or sex. South Dakota is committed to ensuring that no person is excluded from participation in, denied the benefits of, or subject to discrimination under any program, activity, or service that it provides,” she wrote.

The Transformation Project’s executive director, Susan Williams, said the organization was “vindicated” by the settlement.

“We are vindicated as the government has acknowledged what we knew the very day we learned of our contract’s cancellation: that we did not break any procedures and we did not fail to meet the terms of the CHW contract in any way,” Williams said in a statement.

The Hill has reached out to the South Dakota Department of Health and Noem’s office for comment.