There is an update in the Texas v. Becerra case, a lawsuit challenging the new Section 504 rule issued by the U.S. Department of Health and Human Services (HHS) in May 2024. This lawsuit, joined by 17 states, including Indiana, primarily objects to the mention of gender dysphoria in the rule. However, the relief sought by the plaintiffs has raised significant concerns due to its far-reaching implications.
Section 504 of the Rehabilitation Act of 1973 is a national law that protects qualified individuals from discrimination based on their disability. The nondiscrimination requirements of the law apply to employers and organizations that receive financial assistance from any Federal department or agency, including the U.S. Department of Health and Human Services (DHHS). These organizations and employers include many hospitals, nursing homes, mental health centers and human service programs. Section 504 forbids organizations and employers from excluding or denying individuals with disabilities an equal opportunity to receive program benefits and services. It defines the rights of individuals with disabilities to participate in, and have access to, program benefits and services.
Initially, the language filed with the Court not only aimed to invalidate the new rule but also appeared to seek a declaration that the entire Section 504 statute was unconstitutional. This broad language understandably triggered alarm among disability rights advocates, including The Arc of Indiana.
In a Status Report filed on Wednesday, the plaintiffs clarified their intent:
“Plaintiffs clarify that they have never moved—and do not plan to move—the Court to declare or enjoin Section 504 of the Rehabilitation Act, 29 U.S.C. § 794, as unconstitutional on its face. Plaintiffs have not sought and do not seek to enjoin the disbursement of funds from the Department on the basis that the statute is unconstitutional.”
While this clarification provides some reassurance, The Arc of Indiana will continue to closely monitor the case. As we know, legal language matters, and we must remain vigilant to ensure the protections of Section 504 remain unharmed.
Additionally, the Status Report acknowledged the President’s Executive Order from January 20, 2025, directing that agencies “shall not promote or otherwise inculcate gender ideology,” and stated that the Defendants are evaluating their position in light of this directive.
The Wednesday Status Report also included an interesting and concerning shift in focus. One aspect of the HHS Final Rule from May 2024 was the incorporation of Olmstead protections into regulation—specifically, the “most integrated setting” requirement and protections for people with disabilities “at serious risk of institutionalization.” The Status Report addressed these added protections explicitly by stating:
“The meaning and scope of Count 3 asserting a claim under the Spending Clause—and the declaratory and injunctive relief sought in the demand—is an as-applied challenge to any purported application of Section 504 to funds that are not authorized by the Rehabilitation Act. Such alleged unconstitutional applications include the requirements the Final Rule imposes on recipients to adopt the ‘most integrated setting’ and the ‘at serious risk of institutionalization’ standards of care.”
While it’s reassuring that the parties have clarified they do not intend to argue that the entirety of Section 504 is unconstitutional, it is concerning that they seek to invalidate the new community integration regulatory protections established by the New Rule. It would certainly be beneficial to have these protections included in the Final Rule, but it’s important to note that the Olmstead v. L.C. U.S. Supreme Court case still stands, along with a wealth of lower court case law that has interpreted and expanded those protections for people with disabilities. At the end of the day, if this component is struck from the Final Rule, it is not catastrophic—the core legal protections will remain intact.
The parties have proposed to the Court that they file a Joint Status Report on the 21st of each month going forward. This will provide ongoing insights into how the Trump DOJ and State parties are approaching this matter.
The Arc of Indiana has already expressed our concerns directly to Indiana Attorney General Todd Rokita, emphasizing the potential severe impact on people with disabilities if Section 504 were invalidated. We will continue to advocate for disability rights and provide updates as this case progresses.
Please connect with us to stay tuned for further developments.