Federal Judge Pauses Texas Lawsuit Over Transgender Health Rule

A lawsuit from Texas and Montana challenging federal protections for transgender health care should be put on hold, a federal judge ruled Wednesday as the Biden administration pursues an appeal of a stay on the regulation.

Additional proceedings in the case against the US Department of Health and Human Services’ interpretation of Section 1557 of the Affordable Care Act will be stayed until the HHS appeal is resolved, Judge Jeremy D. Kernodle of the US District Court for the Eastern District of Texas said in his order.

Kernodle in July had joined other federal judges in enjoining HHS from enforcing a 2024 final rule saying anti-discrimination protections in HHS-funded programs extend to sexual orientation and gender identity. The HHS in August appealed this ruling to the US Court of Appeals for the Fifth Circuit, as it also filed notices of appeal challenging orders from two other judges.

The Texas case is one of at least five lawsuits filed by state attorneys general and medical provider groups seeking to block the Biden administration’s efforts to use rulemaking to apply civil rights protections to transgender health services. The orders staying enforcement of the HHS rule came on the heels of the US Supreme Court’s Loper Bright Enters. v. Raimondo decision cutting down Chevron deference, a legal concept under which courts deferred to an agency’s interpretations in complex regulatory matters.

Texas and Montana argued in their joint lawsuit filed in June that the HHS rule violates the Administrative Procedure Act because “Congress has not delegated to Defendants the authority to prohibit gender-identity discrimination under Section 1557.” The states also alleged the regulation exceeds federal limits under the spending clause of the US Constitution.

The HHS argued in response that the rule doesn’t violate statutory authority, and that its interpretation of Section 1557 is in line with the Supreme Court’s 2020 decision in Bostock v. Clayton County. Justices said in that case that federal civil rights protections also prohibit discrimination on the basis of sexual orientation and gender identity.

The US Justice Department is representing the HHS in the case. The attorney general’s offices in Texas and Montana are representing the states.

The case is Texas v. Becerra, E.D. Tex., No. 6:24-cv-00211, order 10/2/24.