“This is a major life decision that should involve the parents,” Circuit Judge Paul Niemeyer said as the panel heard arguments in the case before it makes a decision.
Steven Fitschen, the group's president, said in an email that he anticipates filing more lawsuits challenging school policies barring the disclosure of students' gender identity.
At least 168 U.S. school districts with more than 3.2 million students have such policies, according to conservative group Parents Defending Education.
Parents have filed lawsuits challenging similar policies adopted by school districts in Massachusetts, Wisconsin, Virginia and Iowa, among other states.
Quattlebaum and Circuit Judge Allison Rushing, who rounded out the panel, are appointees of Republican former President Donald Trump.