Texas v Kennedy: Update

Texas v. Becerra challenges the updated final rules for implementing Section 504 of the Rehabilitation Act, adopted by the U.S. Department of Health and Human Services (HHS) in May 2024. Texas is joined by 16 other states in this challenge, claiming that HHS lacks the authority to make specific changes in the final rule without Congressional approval. 

The case was filed in September 2024 in the U.S. District Court for the Northern District of Texas. On February 19, 2025, both parties filed a Joint Status Report confirming that the case is paused and that no states have withdrawn. The lawsuit remains active but is currently on hold. The Court has not yet set a new schedule.

Background: What is Section 504 of the Rehabilitation Act?

Section 504 of the Rehabilitation Act (Section 504) of 1973 is a federal civil rights law that prohibits discrimination based on disability in programs and activities that receive federal funding. It is enforced primarily by the Departments of Health and Human Services (HHS) and Education (DOE).

Key Provisions:

• Ensures equal access to federally funded programs, including healthcare, education, housing, and transportation.
• Requires reasonable accommodations in education, employment, and public services to prevent discrimination.
• Applies to public schools, universities, hospitals, and government programs that receive federal funding.

Unlike the Americans with Disabilities Act (ADA), Section 504 is directly tied to federal funding, meaning entities must comply or risk losing funding. Enforcement is handled by federal agencies, allowing individuals to file complaints without the need for private lawsuits.

Key Issues in Texas v. Becerra

The lawsuit primarily challenges two main updates in HHS’s final rule:

1. Gender Dysphoria as a Disability

 The HHS final rule clarifies that gender dysphoria may qualify as a disability under Section 504. This means that individuals with gender dysphoria who also meet the definition of a disability criteria:

•   Cannot be discriminated against in federally funded programs (e.g., schools, hospitals, public services).
•  Must have equal access to necessary healthcare, employment, and education.
•  May challenge policies that hinder their access to medical care.

Challenge: Texas and the other states argue that HHS exceeded its authority by expanding the definition of disability under Section 504. They contend that such changes should require Congressional approval, not regulatory action.

2. Expansion of the Integration Mandate

 The new rule strengthens the “integration mandate,” requiring states to provide services in community-based settings instead of institutions (like nursing homes or psychiatric facilities). This rule aligns with the Supreme Court’s decision in *Olmstead v. L.C.* (1999), which prohibits unnecessary segregation of people with disabilities.

Challenge: Texas and the other states argue that the rule pressures them to move individuals out of institutions, even when those individuals need or prefer institutional care. They contend that this imposes new conditions on federal funding without Congressional approval and applies not only to current segregation but also to individuals at “serious risk” of institutionalization, resulting in stricter compliance requirements.

A Broader Legal Challenge: Is Section 504 Unconstitutional?

In addition to challenging the new HHS rule, the states are also disputing Section 504 itself. They argue that:

• Section 504 violates the Spending Clause of the U.S. Constitution because it does not provide states with clear notice of their obligations when accepting federal funds.
• The law is unfair and coercive, compelling states to comply with federal standards without specific approval from Congress.

Potential Outcomes of the Court’s Decision

If the Court finds in favor of Texas (plaintiff):

• One or both of the new rule’s provisions (regarding gender dysphoria protections or the integration mandate) could be blocked.
• Section 504 itself could be weakened or even ruled unconstitutional.
• Federal agencies could lose their current authority, making it harder for those agencies to expand or implement civil rights protections without new laws from Congress.

If the Court finds in favor of Becerra (HHS):

• The new disability protections would remain in place, including protections for gender dysphoria and stronger requirements for community-based services instead of institutional care.
• Federal agencies would retain the authority to interpret and enforce civil rights laws without additional Congressional approval.

Takeaway:  This case could set a major precedent for how much authority federal agencies have in the future.  A decision could also impact the constitutionality of Section 504 of the Rehabilitation Act.

Sources: Civil Rights Litigation Clearinghouse: Case State of Texas v. Becerra 5:24-cv-00225 ; State of Texas v. Becerra District Court ND. Texas -Court Listener ; 17 States Sue to End Protections for Students with Special Needs-Forbes