An Illinois judge stood by his decision Monday to cancel adoption and foster care contracts with Catholic Charities.
The state of Illinois stopped contracting with the agency after it refused to work with gays and lesbians for adoptions and foster care.
Sangamon County Circuit Judge John Schmidt sided with the state in the case. He said that Catholic Charities had no legal right to state contracts and refused to reconsider his ruling.
The organization will appeal at the 4th District Appellate Court in hopes of staying Schmidt's ruling, according to their attorneys.
Catholic Charities said it could lose 50 percent or more of its revenue if the state succeeds in cancelling its contracts. The agency could also face the possible layoff of hundreds of employees.
Lawyers for the state said no child will lose his or her caseworker or supervisor if the state transfers Catholic Charities clients to other agencies, a point disputed by Catholic Charities.
"That claim is almost impossible," Peter Breen, legal counsel for the Thomas More Society, which represents Catholic Charities, told the Springfield State-Journal Register.
"Basically, they would have to recreate Catholic Charities without the Catholic," he said.
"The real damage is when you separate the kids from their caseworker," said Steven Roach, the group's executive director. "It will happen."