A multi-state lawsuit challenging the right of people with disabilities to live and receive services in the community is barreling forward even as some states are calling it quits.
Indiana and South Dakota both withdrew this month from the suit known as Texas v. Kennedy.
Still, Texas and six other states are pushing ahead with the litigation that disability advocates warn could undermine the rights of people with disabilities to access services outside of institutions.
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At issue is a 2024 update to U.S. Department of Health and Human Services regulations related to Section 504 of the Rehabilitation Act. The states’ lawsuit argues that the regulation is unconstitutional and takes issue in particular with what’s known as the “integration mandate.”
Under the rule, state and local governments and other entities receiving funding from HHS must serve people with disabilities in the most integrated setting appropriate. In addition, the rule specifies that it can be a violation of Section 504 if people with disabilities are put at serious risk of unnecessary institutionalization. States risk losing out on federal funds if they do not comply.
“The Final Rule exceeds the legitimate scope of Section 504 of the Rehabilitation Act and the Americans with Disabilities Act,” in an amended complaint filed with the U.S. District Court for the Northern District of Texas earlier this year. “The Final Rule’s unlawful provisions regulating institutionalization should be set aside for exceeding the scope of HHS’s authority under Section 504 and the ADA. Neither statute empowers HHS to mandate community-based care or to regard as discriminatory care that involves the mere prospect of institutional care.”
Now, the remaining states involved in the suit are asking a judge to make a decision in the case without a full trial. They argue that the rule encroaches on their “budgetary and policymaking discretion” and creates a “mandate for states to redesign their Medicaid programs.”
The stakes for people with disabilities are huge, said Alison Barkoff, a professor at George Washington University who led HHS’ Administration on Community Living under the Biden administration.
“This lawsuit by Texas puts at risk one of the most fundamental and hard-won rights of people with disabilities — the right to live and participate in their own communities,” she said. “Despite the new Section 504 regulation just codifying the 25 years of interpretations of the integration mandate by the courts, the states now claim that the regulations create new obligations for states that are illegal and beyond their constitutional authority. If a court were to agree, it could greatly narrow the right to community living and restrict the ability to enforce the law.”
Advocates in states that are part of the suit have been working to get that message across to their respective attorneys general with some success.
When the suit was originally filed in 2024, it involved 17 states and sought to declare Section 504 unconstitutional. At that point, the litigation hinged on a mention of gender dysphoria in the preamble of the HHS rule, but after the Trump administration worked to address that concern, eight states dropped out of the suit. The remaining states pivoted to their new argument centering on the integration mandate and continued to press for the rule to be invalidated.
Since then, advocates have been amping up the pressure on other attorneys general to drop out, prompting the withdrawals by Indiana and South Dakota.
“While we remain concerned about federal overreach into traditional state matters, President Trump’s decisive action has resolved the gender dysphoria issue,” Indiana Attorney General Todd Rokita said in explaining his decision this month. “With that core victory secured, we have dismissed our claims.”
Texas Attorney General Ken Paxton — who is leading the suit — did not respond to a request for comment on the matter. The other states that remain involved are Alaska, Florida, Kansas, Louisiana, Missouri and Montana.
Paxton’s office has been flooded with calls and emails in recent months urging him to drop the suit, so much so that his phone line has been intermittently disconnected, according to The Arc.
“For over a year, people with disabilities have been watching this case and wondering what it could mean for their daily lives, including whether they can keep the supports they need to live in the community,” said Shira Wakschlag, senior executive officer for legal advocacy and general counsel at The Arc. “We urge every remaining state to follow the lead of Indiana and South Dakota and withdraw from this lawsuit.”
