Texas v. Kennedy and the Section 504 Integration Mandate: An Active Federal Case With Decades of Disability Civil Rights on the Line

A coalition of eight states is asking a federal court in the Northern District of Texas to dismantle the regulatory backbone of community living for people with disabilities. The doctrinal terrain stretches from a 1999 Supreme Court ruling to a 2024 administrative law revolution. Here is what is in play.

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In January 2026, nine state attorneys general filed an amended complaint in the Northern District of Texas seeking to invalidate key portions of the U.S. Department of Health and Human Services’ 2024 Section 504 rule [1]. Indiana has since withdrawn, leaving eight plaintiff states: Texas, Alaska, Florida, Kansas, Louisiana, Missouri, Montana, and South Dakota [2]. The case, now styled Texas v. Kennedy after the substitution of HHS Secretary Robert F. Kennedy Jr. as the named defendant, is the latest chapter in a lawsuit originally filed in 2024 as Texas v. Becerra [3].

The states have narrowed their original theory. They are no longer asking the court to declare Section 504 itself unconstitutional on its face [3]. Instead, they are attacking the regulations that implement the statute, the “integration mandate” requiring recipients of federal financial assistance to serve people with disabilities in the most integrated setting appropriate to their needs [4].

That distinction matters legally. As a practical matter, it does not. If the integration mandate falls, the architecture that keeps people with disabilities out of institutions and in their communities loses its enforceable spine.

What the Integration Mandate Is, and Where It Came From

Section 504 of the Rehabilitation Act of 1973 prohibits disability discrimination by any program that receives federal financial assistance [5]. For half a century, that statutory text has done much of the work. But the operational meaning of “discrimination” depends on the implementing regulations.

The Supreme Court anchored the integration mandate in Olmstead v. L.C. (1999) [6]. In a 6-to-3 decision written by Justice Ginsburg, the Court held that unjustified institutional isolation of people with disabilities is itself a form of discrimination under Title II of the Americans with Disabilities Act [6]. The Court grounded that holding in two judgments: that segregation perpetuates assumptions that people with disabilities cannot participate in community life, and that institutional confinement strips them of family, work, education, and social ties [7].

For twenty-five years, Olmstead has driven Department of Justice enforcement, state Olmstead plans, and the gradual expansion of home- and community-based services across nearly every state [8]. On May 9, 2024, HHS published its first comprehensive update of the Section 504 regulations in over five decades, codifying Olmstead case law and extending integration-mandate protection to people at serious risk of institutionalization [9, 10]. It is that 2024 final rule that the plaintiff states now seek to block.

The Three Doctrinal Pressure Points

What makes Texas v. Kennedy significant beyond the immediate parties is that it sits at the intersection of three doctrinal currents, each of which has shifted in the federal government’s disfavor over the past four years.

1. The Spending Clause and the Limits of Conditional Funding

Section 504 is Spending Clause legislation: it conditions federal money on a recipient’s agreement not to discriminate. The plaintiff states argue that the 2024 rule’s integration requirements exceed what Congress authorized in the Rehabilitation Act and impose conditions Congress never approved on funds it did not appropriate for that purpose [3].

That argument lives in a doctrinal world reshaped by National Federation of Independent Business v. Sebelius (2012), which held for the first time that a spending condition — the Affordable Care Act’s Medicaid expansion — could be unconstitutionally coercive [11, 12]. Scholars have spent the decade since debating how broadly NFIB‘s anti-coercion principle reaches [13, 14]. The plaintiff states are essentially betting that the doctrine reaches further than most disability rights lawyers would like to concede.

2. Olmstead‘s Footing in a Post-Loper Bright World

In June 2024, the Supreme Court overruled Chevron deference in Loper Bright Enterprises v. Raimondo [15]. Federal courts no longer defer to a federal agency’s reasonable interpretation of an ambiguous statute; instead, they must exercise independent judgment about a statute’s best reading [15].

That shift matters here because Olmstead itself relied substantially on the Department of Justice’s regulatory interpretation of Title II of the ADA, deferring to the agency’s view that unjustified institutionalization is discrimination [6]. The Loper Bright majority took pains to say it was not disturbing prior cases that had relied on Chevron [16]. But the agency-deference scaffolding around the integration mandate is no longer load-bearing. The plaintiff states’ argument that HHS exceeded statutory authority is precisely the kind of claim that benefits from the post-Chevron landscape.

3. The Administrative Procedure Act Vehicle

The states are proceeding under the Administrative Procedure Act, arguing that the 2024 final rule exceeds statutory authority and is arbitrary and capricious [3]. APA review has been one of the most successful vehicles for challenging Biden-era rulemaking in the Fifth Circuit, and the case sits in a district within that circuit. The procedural posture is not incidental — it is structural.

What Is Actually at Stake

If the integration mandate as codified in the 2024 rule is enjoined or vacated, the consequences are not theoretical. The 2024 rule does not only address community living. It also strengthens protections against discrimination in medical treatment decisions, establishes the first enforceable federal standards for accessible medical diagnostic equipment, and requires WCAG 2.1 Level AA digital accessibility for HHS-funded entities [9, 17]. A ruling that the rule exceeds statutory authority could imperil all of those provisions, not only the most-integrated-setting requirement.

The Arc Minnesota has noted that for much of the twentieth century, hundreds of thousands of people with intellectual and developmental disabilities lived in remote institutions with documented histories of neglect and abuse [18]. The integration mandate, and the Olmstead doctrine it operationalizes, has been the legal instrument that made the slow undoing of that history enforceable rather than aspirational. The current case is, at its core, a question about whether that instrument keeps its edge.

It is also unfolding in a broader policy environment that disability rights advocates have flagged as hostile. Federal staffing standards for nursing facilities have been rescinded, and the long-term care ombudsman program has been targeted for elimination [4]. The integration mandate cannot, by itself, prevent expansion of institutional care. But its absence would make that expansion legally easier.

What to Watch

The case is in active briefing in the Northern District of Texas. Three things are worth tracking closely.

First, how the federal government defends the rule. HHS has already issued a clarification on the gender-dysphoria preamble language [19], signaling that the agency’s defensive posture on the 2024 rule is something other than a full-throated defense. The federal government’s joint status reports indicate it is continuing to evaluate its position in light of Executive Order 14168 [3]. A weak federal defense would be its own news.

Second, whether the court reaches the constitutional Spending Clause argument or resolves the case on narrower APA grounds. A narrower ruling vacating the rule on statutory-authority grounds would leave the underlying integration-mandate doctrine intact under Olmstead and Title II of the ADA. A constitutional ruling would not.

Third, the Fifth Circuit. Whatever the district court does, this case is going up. The doctrinal posture of the appellate panel will shape how much of the integration mandate survives.

A Final Note

Texas v. Kennedy is a technical case about administrative law. It is also a case about whether the structural commitment the country made in Olmstead — that people with disabilities have the right to live in the community rather than in institutions — remains an enforceable promise or becomes a hortatory one. Those two framings are not in tension. The technical doctrine is the substantive commitment. Which is exactly why this case is worth watching with care.

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References

[1] National Health Law Program. (2026, January 28). Texas and eight other states renew attack on Section 504 and the right of disabled people to live in their communities. https://healthlaw.org/news/texas-and-eight-other-states-renew-attack-on-section-504-and-the-right-of-disabled-people-to-live-in-their-communities/

[2] American Council of the Blind. (2026, May). Update to Texas v. Kennedy lawsuit. https://www.acb.org/update-texas-v-kennedy-lawsuit

[3] Civil Rights Litigation Clearinghouse. (2026). State of Texas v. Becerra, 5:24-cv-00225 (N.D. Tex.). University of Michigan Law School. https://clearinghouse.net/case/45899/

[4] Disability Rights Education and Defense Fund. (2026, February 28). Texas v. Kennedy (2026): The renewed attack on Section 504 and Olmstead [Webinar transcript]. https://dredf.org/texas-v-kennedy-2026-webinar/

[5] Rehabilitation Act of 1973, 29 U.S.C. § 794 (1973). https://www.govinfo.gov/content/pkg/USCODE-2022-title29/html/USCODE-2022-title29-chap16-subchapV-sec794.htm

[6] Olmstead v. L.C., 527 U.S. 581 (1999). https://supreme.justia.com/cases/federal/us/527/581/

[7] Center for Public Representation. (n.d.). The right to community participation: Olmstead v. L.C. https://www.centerforpublicrep.org/the-right-to-community-participation-olmstead-v-l-c/

[8] Disability Justice. (2026, January 30). Olmstead v. L.C. https://disabilityjustice.org/olmstead-v-lc/

[9] Nondiscrimination on the Basis of Disability in Programs or Activities Receiving Federal Financial Assistance, 89 Fed. Reg. 40066 (May 9, 2024) (to be codified at 45 C.F.R. pt. 84). https://www.federalregister.gov/documents/2024/05/09/2024-09237/nondiscrimination-on-the-basis-of-disability-in-programs-or-activities-receiving-federal-financial

[10] Administration for Community Living. (2024, May 1). Final rule implementing Section 504 of the Rehabilitation Act of 1973. U.S. Department of Health and Human Services. https://acl.gov/504rule

[11] National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012). https://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf

[12] Congressional Research Service. (2012). Medicaid and federal grant conditions after NFIB v. Sebelius (R42367). https://www.congress.gov/crs_external_products/R/PDF/R42367/R42367.6.pdf

[13] Bagenstos, S. R. (2013). The anti-leveraging principle and the Spending Clause after NFIB. Georgetown Law Journal, 101(4), 861–924. https://repository.law.umich.edu/facarticles/1083/

[14] Pasachoff, E. (2013). Conditional spending after NFIB v. Sebelius: The example of federal education law. American University Law Review, 62(3), 577–646. https://scholarship.law.georgetown.edu/facpub/1112/

[15] Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024). https://www.supremecourt.gov/opinions/23pdf/22-451_7m58.pdf

[16] Congressional Research Service. (2024). Loper Bright Enterprises v. Raimondo and the future of agency interpretations of law (R48320). https://www.congress.gov/crs-product/R48320

[17] Center for American Progress. (2026, February 11). Toolkit: Ensuring state implementation of HHS’ updated Section 504 rule. https://www.americanprogress.org/article/toolkit-ensuring-state-implementation-of-hhs-updated-section-504-rule/

[18] The Arc Minnesota. (2026, March 10). Letter from the CEO: Texas v. Kennedy and the threat to the integration mandate in Section 504. https://arcminnesota.org/letter-from-the-ceo-texas-v-kennedy-and-the-threat-to-the-integration-mandate-in-section-504/

[19] Nondiscrimination on the Basis of Disability in Programs or Activities Receiving Federal Financial Assistance; Clarification, 90 Fed. Reg. 15868 (April 11, 2025). https://www.federalregister.gov/documents/2025/04/11/2025-06127/nondiscrimination-on-the-basis-of-disability-in-programs-or-activities-receiving-federal-financial