A federal appeals court on Thursday ruled in favor of transgender students.

A three-judge panel of the Third Circuit Court of Appeals upheld a Pennsylvania school district's policy allowing transgender students to use the bathroom of their choice.

The Alliance Defending Freedom (ADF), a Christian conservative group opposed to LGBT rights, challenged the policy. ADF filed its suit on behalf of an anonymous group of students and parents.

The court ruled unanimously in upholding Boyertown Area School District's bathroom policy.

“We agree Plaintiffs have not demonstrated a likelihood of success on the merits and that they have not established that they will be irreparably harmed if their Motion to Enjoin the Boyertown School District's policy is denied,” the court said in an order issued after it heard oral arguments. “A formal Opinion will follow.”

The American Civil Liberties Union (ACLU) intervened in the case on behalf of the Pennsylvania Youth Congress, a coalition of LGBT youth organizations.

“The court saw that treating transgender students equally does not harm any other students in the school,” Ria Tabacco Mar, staff attorney with the ACLU LGBT & HIV Project, said in a statement.

The ruling is the second this week from a federal court involving the rights of transgender students.

(Related: Federal judge declines to dismiss transgender teen Gavin Grimm's Title IX case.)