According to the New York Times:
Among the legal issues are whether the statute the admin. is relying on in using the word 'sex' with regard to discrimination can be stretched to include gender preference or transgender people. Another issue is whether the admin. followed the rules for creating the regs. It doesn't look good for the administration at this point. I think the regs should be struck down on the first basis. It MAY be a good policy, but it still must be done in a lawful fashion. Hopefully, the Supreme Court will settle this.