A U.S. appeals court on Thursday denied the Trump administration’s request to delay military transgender recruiting that is set to begin on Jan. 1.

The decision in a lawsuit by active-duty transgender service members filed in Maryland means the Pentagon must follow through with plans for the recruiting despite courtroom arguments by the Justice Department that it is not ready and the rush could harm military readiness.

It is the latest legal setback for President Trump’s transgender military service ban that was announced in July and could lead to an appeal to the U.S. Supreme Court. District courts in Washington, D.C., and Washington state have also issued orders halting the president and the Pentagon from rolling back the open service policy of the Obama administration.

“We disagree with the Court’s ruling and are currently evaluating the next steps," DOJ spokeswoman Lauren Ehrsam wrote in an email to the Washington Examiner.

The Justice Department has been seeking similar stays in those cases in an effort to delay the Jan. 1 recruiting deadline.

"We are happy that the court saw through the government’s smokescreen and rejected its request to further delay the policy allowing transgender people to enlist," said Joshua Block, an attorney with the American Civil Liberties Union who is representing plaintiffs in the Stone v. Trump lawsuit. "The military has already developed comprehensive guidance to prepare for a January 1 start date, and the government failed to offer any credible reason why transgender people should be barred from enlisting if they can meat the same rigorous standards that apply to everyone else."

The lawsuit is named after Brock Stone, 34, a Navy petty officer who is assigned to Fort Meade in Maryland and was filed on Aug. 28 after Trump tweeted that transgender troops would no longer be able to serve "in any capacity" and sent orders to Defense Secretary Jim Mattis to abandon the recruiting plans, decide how to handle current transgender troops, and phase out support for gender reassignment surgeries.

The Justice Department has unsuccessfully argued for the cases to be dismissed because Mattis has not finalized any new policy and for the defense secretary to retain the authority to delay transgender recruiting so the issue can be further studied.

Mattis is scheduled to provide a final transgender policy plan to Trump on Feb. 21.

The Stone ruling Thursday by U.S. Fourth Circuit of Appeals, which is based in Richmond, Va., was immediately filed by transgender plaintiffs suing Trump and Mattis in D.C. The Justice Department has requested a similar stay from the U.S. Court of Appeals for the District of Columbia Circuit as part of the Doe v. Trump lawsuit and the decision in the Stone case could influence that upcoming ruling, which is expected at any time.

But the other ongoing lawsuits in D.C., Washington state, and California may now be overshadowed by the decision in the Stone case because the Justice Department could now choose to appeal that to the Supreme Court.

Both the president and defense secretary, along with other top defense officials, are defendants in four separate federal lawsuits filed over the ban.