A federal judge concluded the litigation known as Texas v. Kennedy last week by stripping language from a Section 504 regulation that required states to prioritize community-based care over institutional settings for people with disabilities.
The ruling effectively ends a legal challenge initiated by conservative-led states. The U.S. Department of Health and Human Services joined the coalition of states in late August, seeking to remove provisions they argued restricted state spending and decision-making authority regarding resident care.
Federal Policy Shift
The dispute centers on updates to Section 504 of the Rehabilitation Act made during the Biden administration. Those updates expanded protections to include gender dysphoria as a protected disability and reinforced requirements for community integration.
In June, the Trump administration issued a memorandum arguing that federal law does not mandate states to provide community-based services for disabled individuals. The Justice Department stated that the court’s recent order clarified the scope of Olmstead v. L.C., a 1999 Supreme Court ruling establishing the right for people with disabilities to live in communities rather than institutions.
A Justice Department spokesperson said the order answered an ordinary-course request. A Health and Human Services spokesperson added that the department remains committed to protecting the civil rights of individuals with disabilities.
State Arguments
Plaintiff states argued that the Biden-era updates imposed financial burdens they could not sustain. Officials cited strained budgets, rising costs, workforce shortages, and smaller Medicaid allocations as reasons they cannot always accommodate expensive required services.
Florida joined the lawsuit to check federal power and reclaim state authority for addressing public safety and homelessness. Jae Williams, representing Florida’s interests, stated, “Florida joined this lawsuit to serve as a check on federal power, not to deny care.”
Alaska argued that the resolution preserves historical Section 504 protections while vacating provisions it claimed threatened its Medicaid program and care systems.
Impact on Families
Disability advocates warn the regulatory change could make it harder for disabled people to receive necessary community services and remain out of nursing homes or institutions. Experts noted that states may no longer have a federal monitor ensuring the provision of community services.
Charlotte Cravins, an attorney from Louisiana, highlighted the broad impact of the ruling on families relying on publicly funded therapies. Her son, Landry, was born with Down syndrome and impaired vision. He receives state-funded therapies that allow him to live at home while learning to crawl, stand, and use American Sign Language.
Cravins is currently caring for Landry while working after her husband returned to the workforce. The family had hoped to get Landry assessed for nursing services and daily living aids, which are now at risk of being unavailable under the new regulatory framework.
“This affects children, this affects adults, it affects your elderly parents. It affects everyone,” Cravins said.
Litigation History
The case began in 2024 when 17 Republican-led states sued the Biden administration over the inclusion of gender dysphoria as a protected disability under Section 504. Several states withdrew from the lawsuit after Donald Trump was reelected and his administration indicated it would not enforce the Biden rule.
A handful of states remained in the lawsuit and amended their complaint in January to ask the court to strike specific provisions. The final ruling removes all mentions of community integration from the regulation, marking a significant shift in federal disability rights enforcement.