Powers v. McDonough

FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT JEFFREY POWERS; DEAVIN No. 24-6576 SESSOM; LAURIEANN WRIGHT; D.C. No. JOSEPH FIELDS; LAVON 2:22-cv-08357- JOHNSON; JOSHUA ROBERT DOC-KS PETITT; NATIONAL VETERANS Central District of FOUNDATION, California, Los Angeles Plaintiffs - Appellees, ORDER and SAMUEL CASTELLANOS, SHARDAY ANYADIEGWU, BILLY EDWARDS, JESSICA MILES, GLENN SURRETTE, NARYAN STIBBIE, DOES 1-10, Plaintiffs, BRIDGELAND RESOURCES, LLC, Intervenor-Plaintiff - Appellee, v. DENIS RICHARD MCDONOUGH; STEVEN BRAVERMAN; KEITH HARRIS; MARCIA L. FUDGE, 2 POWERS V. MCDONOUGH Defendants - Appellants, and DOUGLAS GUTHRIE, Defendant - Appellee, ---------------------------------------- BRENTWOOD SCHOOL, Intervenor. Filed September 11, 2026 Before: Consuelo M. Callahan, Roopali H. Desai, and Ana de Alba, Circuit Judges; Order; Dissent by Judge Collins; Dissent by Judge Bumatay.  POWERS V. MCDONOUGH 3 SUMMARY* Veterans Affairs The panel denied rehearing en banc in a case in which the panel affirmed in part, reversed in part, vacated in part, and remanded to the district court to enter judgment in a class action brought by unhoused veterans with severe disabilities and mental illnesses seeking to return the West Los Angeles Veterans Affairs grounds to its intended use of housing disabled veterans. Dissenting from the denial of rehearing en banc, Judge Collins, joined by Judges Bress, Bumatay, and Tung, wrote that the panel’s decision, which upheld the district court’s judgment and injunction requiring the Department of Veterans Affairs to construct housing for the class members based on § 504 of the Rehabilitation Act, disregards the limitations that the Supreme Court has placed on disability discrimination claims asserted under § 504 of the Rehabilitation Act. The district court’s decision was based on a deeply flawed legal foundation, and on an equally flawed certification of a class action. Dissenting from the denial of rehearing en banc, Judge Bumatay, joined by Judges VanDyke and Tung, wrote that while Judge Collins provided a persuasive explanation as to why Plaintiffs-Appellees’ claims should fail on the merits, the panel’s errors were even more fundamental. First, in affirming the district court’s expansive injunction, the panel wrongly took as given that the Rehabilitation Act includes * This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. 4 POWERS V. MCDONOUGH an implied right of action. Second, the panel reduced the class-action commonality requirement under Fed. R. Civ. P. 23(a)(2) to a mere pleading exercise. ORDER The panel unanimously voted to deny Appellants’ petition for rehearing en banc. The full court was advised of the petition for rehearing en banc. A judge requested a vote on whether to rehear the matter en banc. The matter failed to receive a majority of the votes of the nonrecused active judges in favor of en banc consideration. Fed. R. App. P. 40. Judges Gould and Rawlinson did not participate in the deliberations or vote in this case. The petition for rehearing en banc (Dkt. No. 127) is DENIED. Judge Collins’s and Judge Bumatay’s dissents from the denial of rehearing en banc are filed concurrently herewith. No further petitions for rehearing will be entertained. COLLINS, Circuit Judge, joined by BRESS, BUMATAY, and TUNG, Circuit Judges, dissenting from the denial of rehearing en banc: The panel’s decision in this case confirms that sympathetic facts make bad law. By all accounts, the Department of Veterans Affairs (“VA”) has not done a good job of providing for veterans in Los Angeles, particularly homeless veterans. Its failures have drawn the scrutiny of Congress, which has twice passed (in 2016 and 2021) legislation specifically concerning homeless veterans in Los Angeles, as well as the attention of the President, who last  POWERS V. MCDONOUGH 5 year issued an Executive Order that likewise focuses on the VA’s west Los Angeles campus. But the answer to this complex problem does not lie in the remarkable decree upheld by the panel here. That decree is based on the extraordinary theory that the VA’s administration of its statutory program for providing medical care to veterans unlawfully discriminates against disabled veterans in violation of § 504 of the Rehabilitation Act, 29 U.S.C. § 794, unless the VA also affirmatively provides housing for those disabled veterans who are homeless. See Powers v. McDonough, 163 F.4th 1162, 1186–88, 1194–96 (9th Cir. 2025). This attempt to use the Rehabilitation Act to judicially engineer a dramatic expansion in the scope of a federal benefits program violates well-settled Supreme Court and Ninth Circuit precedent. Based on that deeply flawed legal foundation, and on an equally flawed certification of a class action, the district court has decreed that the VA must undertake a judicially micromanaged program of housing construction at the VA’s west Los Angeles campus that (for now) will include 1,800 permanent and 750 temporary housing units for the homeless, at a cost well exceeding $100 million. Id. at 1195. Perhaps such a program should be adopted and funded by Congress to address the suffering of homeless veterans in southern California. But such judgments do not belong to the courts, and disregard of settled law, even in the service of worthy aims, should not be countenanced. We should have reheard this case en banc, and I dissent from our failure to do so. I In its current posture, this case involves a certified class action pursued by six individual plaintiffs and one 6 POWERS V. MCDONOUGH organizational plaintiff (the National Veterans Foundation) on behalf of “[a]ll homeless veterans with Serious Mental Illness [SMI] or Traumatic Brain Injuries [TBI], who reside in Los Angeles County.” Plaintiffs named various defendants, but the only relevant defendants under the panel’s decision are three VA officials who are sued in their official capacities (hereinafter, collectively, the “VA”). 1 Plaintiffs’ core allegation is that, in administering its statutory obligation to “provide a complete medical and hospital service for the medical care and treatment of veterans,” 38 U.S.C. § 7301(b), the VA “do[es] not provide adequate Permanent Supportive Housing to ensure that . . . [Plaintiffs can] access the medical treatment and other services for which they are eligible.” Specifically, Plaintiffs contend that, in order to avoid discriminating against disabled veterans in the provision of VA medical care in violation of § 504 of the Rehabilitation Act,2 the VA must 1 The district court’s judgment had also applied to the Secretary of Housing and Urban Development (“HUD”), but the panel held that, with respect to the relevant claims that remain at issue, there was no legal basis for extending the judgment against the VA to HUD. See Powers, 163 F.4th at 1188. The panel therefore directed that the judgment against HUD be vacated in its entirety. Id. I do not question the correctness of that holding. 2 As relevant here, § 504 of the Rehabilitation Act provides: No otherwise qualified individual with a disability in the United States, . . . shall, solely by reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance or under any program or activity conducted by any Executive agency or by the United States Postal Service.  POWERS V. MCDONOUGH 7 construct both permanent and temporary housing for veterans on the campus that contains the VA’s West Los Angeles Medical Center (respectively, the “Campus” and the “Center”). Plaintiffs asserted two distinct claims under § 504 of the Rehabilitation Act, and these two claims provide the sole basis on which the panel upheld the district court’s housing- construction injunction. First, in what the panel referred to as Plaintiffs’ “meaningful access claim,” Plaintiffs alleged (1) that the VA’s failure to affirmatively provide permanent supportive housing on or near the Campus amounted to unlawful discrimination against the disabled because it deprives Plaintiffs of “meaningful access” to the medical care to which they are entitled; and (2) that providing such housing would be a “reasonable accommodation.” Powers, 163 F.4th at 1186, 1194–95. Second, Plaintiffs alleged that, by failing to provide such housing, the VA administers medical benefits “in a manner that denies veterans the benefits of . . . services, programs, or activities in the most integrated setting appropriate to their needs”; that the VA’s “denial of appropriate integrated services to Plaintiffs is solely because of their disabilities”; and that “Plaintiffs are institutionalized or placed at risk of institutionalization because of [the VA’s] discrimination.” The panel referred to this as an “Olmstead” claim, Powers, 163 F.4th at 1187, referring to Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581 (1999).3 29 U.S.C. § 794(a). 3 In a third claim under § 504 of the Rehabilitation Act, Plaintiffs challenged as discriminatory certain actions that the VA took with respect to the income qualifications for receiving housing that was 8 POWERS V. MCDONOUGH After certifying a class as described earlier, the district court held a bench trial in August 2024. In its post-trial decision, the district court ruled for Plaintiffs on all of their § 504 claims. As a remedy for Plaintiffs’ meaningful access and Olmstead claims, the district court “enjoined [the VA] from failing to provide Plaintiffs and the Class they represent with appropriate permanent supportive housing on or near the [Campus] so they can reasonably access the health care benefits for which they are eligible in the most integrated setting appropriate to their needs.” The district court ordered the VA, “[w]ithin six (6) months of this Court’s order,” to “develop a plan for the construction of an additional 1,800 units of permanent supportive housing . . . to address veteran homelessness,” which “shall be built and operational within six (6) years of this order.” At the time, there were 233 permanent housing units on the West Los Angeles VA Grounds. The panel upheld the district court’s grant of class certification, and it affirmed the judgment and housing injunction against the VA based solely on the meaningful access and Olmstead claims. Powers, 163 F.4th at 1184–86, 1194–96. In holding that Plaintiffs had been discriminatorily denied meaningful access to VA healthcare, the panel relied on the district court’s finding that “Plaintiffs . . . require access to on-site healthcare at the Campus; yet without permanent supportive housing on or near the Campus, Plaintiffs are unable to access such treatment.” Id. at 1186. As to the Olmstead claim, the panel concluded that otherwise being provided by private developers under VA authority. Because this third claim does not undergird the district court’s housing- construction injunction, I do not address whether the panel correctly affirmed any independent relief that the district court ordered with respect to that separate claim. See Powers, 163 F.4th at 1188, 1195–96.  POWERS V. MCDONOUGH 9 “the district court properly held that the VA violated the Rehabilitation Act by not providing class members their disability healthcare benefits” in the “most integrated setting appropriate to their needs, placing unhoused veterans at risk of institutionalization.” Id. at 1187 (simplified). In upholding the certification of a class, the panel rejected the VA’s argument that the merits of the meaningful access and Olmstead claims “turn on each veteran’s individual circumstances”; instead, the panel held, the commonality requirement of Federal Rule of Civil Procedure 23 was satisfied because Plaintiffs sought relief from a “system- wide practice or policy.” Id. at 1185. II The panel’s decision upholding the district court’s judgment and injunction requiring the VA to construct housing for the class members rests solely on the theory that, under § 504 of the Rehabilitation Act, the failure to affirmatively supply such housing constitutes discrimination against disabled persons in the provision of healthcare by the VA. By construing § 504 to require this sort of “fundamental alteration in the nature” of the VA’s healthcare program, Alexander v. Choate, 469 U.S. 287, 300 (1985) (citation omitted), the panel’s decision contravenes the limitations the Supreme Court has established concerning claims under § 504. The panel’s deeply flawed decision warranted rehearing en banc. A Section 504 of the Rehabilitation Act provides, as relevant here, that “[n]o otherwise qualified individual with a disability in the United States . . . shall, solely by reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination 10 POWERS V. MCDONOUGH . . . under any program or activity conducted by any Executive agency.” 29 U.S.C. § 794(a). As the Supreme Court has held, “[a]n otherwise qualified person is one who is able to meet all of a program’s requirements in spite of his [disability].” Southeastern Cmty. Coll. v. Davis, 442 U.S. 397, 406 (1979). The Davis Court also acknowledged, however, that an agency’s structuring of a program may present practical obstacles to participation by otherwise qualified disabled persons and that, in some situations, the agency’s “refusal to modify” such a program to accommodate such persons “might become unreasonable and discriminatory.” Id. at 412–13 (emphasis added). The general scope of § 504’s prohibition on discrimination, and the circumstances in which § 504 might require such accommodating modifications, were subsequently addressed in the Supreme Court’s seminal decision in Choate, and I therefore begin by reviewing that decision at some length before addressing how the panel’s decision contravenes the settled construction of § 504. In Choate, disabled Medicaid recipients sued under the Rehabilitation Act to enjoin a change to a state Medicaid program that “reduc[ed] from 20 to 14 . . . the number of inpatient hospital days per fiscal year that [state] Medicaid would pay hospitals on behalf of a Medicaid recipient.” 469 U.S. at 289. The plaintiffs argued that the “proposed 14-day limitation on inpatient coverage would have a discriminatory effect on the handicapped,” principally because “[s]tatistical evidence . . . indicated that . . . 27.4% of all handicapped users of hospital services who received Medicaid required more than 14 days of care, while only 7.8% of nonhandicapped users required more than 14 days of inpatient care.” Id. at 289–90. The Court unanimously rejected this claim.  POWERS V. MCDONOUGH 11 The Court first addressed the question of “whether proof of discriminatory animus is always required to establish a violation of § 504 and its implementing regulations, or whether federal law also reaches action by a recipient of federal funding that discriminates against the handicapped by effect rather than by design.” Choate, 469 U.S. at 292. In considering these contrasting interpretations of § 504, the Court noted that there were substantial difficulties with both of them. On the one hand, the Court noted that the authorities cited by the defendants did “not support [their] blanket proposition that federal law proscribes only intentional discrimination against the handicapped.” Choate, 469 U.S. at 294. As the Court explained, the defendants’ reading of § 504 was hard to square with what the Court understood to be the objectives of that provision. The Court stated that “[d]iscrimination against the handicapped was perceived by Congress to be most often the product, not of invidious animus, but rather of thoughtlessness and indifference—of benign neglect.” Id. at 295.4 Moreover, the Court noted, “much of the conduct that Congress sought to alter in passing the Rehabilitation Act would be difficult if not impossible to reach were the Act construed to proscribe only conduct fueled by a discriminatory intent.” Id. at 296–97. In particular, the Court noted that “elimination of architectural barriers was one of the central aims of the Act, yet such barriers were clearly not erected with the aim or intent of 4 Although the Court’s analysis on this score was largely based on legislative history, rather than on any purpose declared in, or discernible from, the statutory text, I am bound by “controlling Supreme Court precedent telling us what the purpose of [the statute] is, even if that precedent relies on legislative history.” Rojas v. FAA, 989 F.3d 666, 681 n.6 (9th Cir. 2021) (en banc) (Collins, J., concurring). 12 POWERS V. MCDONOUGH excluding the handicapped.” Id. at 297 (simplified). The same concerns were present, the Court explained, with respect to “discrimination in access to public transportation,” “the discriminatory effect of job qualification procedures,” and discrimination through “the denial of special educational assistance for handicapped children.” Id. (simplified). The Court concluded that Congress’s intention to remedy such discrimination “would ring hollow if the resulting legislation could not rectify the harms resulting from action that discriminated by effect as well as by design.” Id. On the other hand, the Court was also “troubl[ed]” by the competing argument that § 504 should be interpreted “to reach all action disparately affecting the handicapped.” Choate, 469 U.S. at 298. “Because the handicapped typically are not similarly situated to the nonhandicapped,” that position would “in essence require each recipient of federal funds first to evaluate the effect on the handicapped of every proposed action that might touch the interests of the handicapped, and then to consider alternatives for achieving the same objectives with less severe disadvantage.” Id. The Court concluded that there was no statutory evidence that “Congress intended § 504 to be a National Environmental Policy Act for the handicapped, requiring the preparation of ‘Handicapped Impact Statements’ before any action was taken by a grantee that affected the handicapped.” Id. at 298–99. The Court thus concluded that, “just as there is reason to question whether Congress intended § 504 to reach only intentional discrimination, there is similarly reason to question whether Congress intended § 504 to embrace all claims of disparate-impact discrimination.” Id. at 299. The Court accordingly held that “[a]ny interpretation of § 504 must . . . be responsive to two powerful but countervailing considerations—the need to give effect to the  POWERS V. MCDONOUGH 13 statutory objectives and the desire to keep § 504 within manageable bounds.” Choate, 469 U.S. at 299. The Court therefore explicitly “reject[ed] the boundless notion that all disparate-impact showings constitute prima facie cases under § 504.” Id. Although the Court had strongly suggested that the converse position was also wrong, and that § 504 was not limited merely to intentional discrimination, the Court found it unnecessary to address that issue. That was true, the Court stated, because even “assum[ing] without deciding that § 504 reaches at least some conduct that has an unjustifiable disparate impact upon the handicapped,” the § 504 claim asserted in that case failed. Id. On the assumption that § 504 reached some disparate impacts, the Court proceeded to consider “which disparate impacts § 504 might make actionable.” Choate, 469 U.S. at 299. The “proper starting point,” the Court stated, was its prior decision in Davis, where the plaintiff’s Rehabilitation Act claim was properly rejected “because the further modifications [the plaintiff] sought would have compromised the essential nature of the [nursing] program” to which she sought admittance. Id. at 300. This analysis in Davis, the Choate Court explained, established the following governing rule: “[W]hile a [defendant] need not be required to make ‘fundamental’ or ‘substantial’ modifications to accommodate the handicapped, it may be required to make ‘reasonable’ ones.” Id. Put another way, “an otherwise qualified handicapped individual must be provided with meaningful access to the benefit that the [defendant] offers,” and “to assure meaningful access, reasonable accommodations in the grantee’s program or benefit may have to be made.” Id. at 301. But the Court reiterated that the “reasonable accommodations” needed to provide 14 POWERS V. MCDONOUGH “meaningful access” do not require fundamental modifications to the program. Id. at 300–01. Applying these principles, the Court concluded that “[t]he 14-day limitation [did] not deny [the plaintiffs] meaningful access to [state] Medicaid services or exclude them from those services.” Choate, 469 U.S. at 302. As the Court explained, “it cannot be argued that ‘meaningful access’ to state Medicaid services will be denied by the 14- day limitation on inpatient coverage,” because “[t]he reduction in inpatient coverage will leave both handicapped and nonhandicapped Medicaid users with identical and effective hospital services fully available for their use, with both classes of users subject to the same durational limitation.” Id. The Court also regarded as “simply unsound” the plaintiffs’ argument that “their greater need for prolonged inpatient care means that, to provide meaningful access to Medicaid services, [the State] must single out the handicapped for more than 14 days of coverage.” Id. at 302– 03. As the Court put it, “[s]ection 504 does not require the State to alter [the] definition of the benefit being offered simply to meet the reality that the handicapped have greater medical needs.” Id. at 303. At bottom, the plaintiffs sought to “redefine” the program, which went “well beyond the accommodations that are required under Davis.” Id. at 308. Consistent with Choate, this court has recognized that a “meaningful access” claim is simply one form of a “reasonable accommodation” claim and that “[r]easonable accommodation does not require an organization to make fundamental or substantial alterations to its programs.” Mark H. v. Hamamoto, 620 F.3d 1090, 1098 (9th Cir. 2010). “[E]ntities are required only to make reasonable changes in existing policies in order to accommodate individuals’ disabilities” and “are not required to create new programs  POWERS V. MCDONOUGH 15 that provide heretofore unprovided services to assist disabled persons.” Townsend v. Quasim, 328 F.3d 511, 518 (9th Cir. 2003) (emphasis altered). “In no event is the entity required to undertake measures that would impose an undue financial or administrative burden or effect a fundamental alteration in the nature of the service.” Where Do We Go Berkeley v. California Dep’t of Transportation, 32 F.4th 852, 862 (9th Cir. 2022) (simplified) (quoting Tennessee v. Lane, 541 U.S. 509, 532 (2004)). B Under these settled principles, the panel’s upholding of Plaintiffs’ “meaningful access” claim and of the district court’s resulting injunction squarely contravenes Supreme Court and Ninth Circuit precedent. 1 As noted, Plaintiffs’ theory is that the absence of VA housing in the vicinity of the VA Center amounts to a discriminatory failure to accommodate their disabilities in the VA’s provision of medical care, and their requested remedy—which the district court granted—is for the VA to undertake affirmative efforts to construct housing for them. Powers, 163 F.4th at 1180. The panel concluded that this unprecedented decree does not require the VA to “fundamentally alter its programs,” but instead “simply expands—not alters—the program.” Id. at 1195. This holding is legally erroneous and contrary to precedent. “Under the test outlined in Choate,” the court must “first consider the nature of the benefit [the plaintiffs] were allegedly denied.” Doe v. CVS Pharmacy, Inc., 982 F.3d 1204, 1210 (9th Cir. 2020) (emphasis added), cert. dismissed, 142 S. Ct. 480 (2021). The benefit that Plaintiffs 16 POWERS V. MCDONOUGH were allegedly discriminatorily denied here is the “medical care and treatment” provided to them by the VA. 38 U.S.C. § 7301(b); see also 38 C.F.R. § 17.38(a). As the panel correctly noted, see Powers, 163 F.4th at 1183, Plaintiffs expressly concede that the “permanent supportive housing” they seek is not among the “benefits” to which they are entitled under the medical program at issue. As set forth in the applicable regulations, the “medical benefits package” at issue includes “[o]utpatient medical, surgical, and mental healthcare,” “[i]npatient hospital, medical, surgical, and mental healthcare,” “[p]rescription drugs,” and “[e]mergency care in VA facilities,” and it does not include permanent supportive housing. 38 C.F.R. § 17.38(a). 5 Rather, as the panel explained, Plaintiffs’ argument is that “housing is a reasonable accommodation that is necessary for them to access the benefits” to which they are entitled under the VA’s medical program. Powers, 163 F.4th at 1183 (emphasis added). Under Plaintiffs’ and the panel’s own view of the case, Plaintiffs’ “meaningful access” claim is that the VA—in order to avoid discriminating against them in violation of § 504—must not only provide them with the medical care that the program at issue comprises, but also must undertake a more than $100 million project to build permanent supportive housing for them. It is unfathomable how the panel can characterize the requirement to add a completely different ancillary benefit as not “alter[ing]” the medical care program, but “simply expand[ing] it.” Powers, 163 F.4th at 5 The majority correctly did not rely on the view that the permanent supportive housing Plaintiffs seek counts as “domiciliary care” authorized to be provided under 38 U.S.C. § 1710(b); see also id. § 1701(7); 38 C.F.R. §§ 17.30(b), 17.46(b).  POWERS V. MCDONOUGH 17 1195. Under any conceivable standard, the creation of this sort of new ancillary benefit program is a “fundamental or substantial modification[]” of the existing program, and is “far more than the reasonable modifications” required by § 504. Choate, 469 U.S. at 300; see also Townsend, 328 F.3d at 518 (stating that a “fundamental alteration” includes “creat[ing] new programs that provide heretofore unprovided services to assist disabled persons”). If seeking to prevent a “reduction from 20 to 14 in the number of [funded] inpatient hospital days per fiscal year,” Choate, 469 U.S. at 289, amounted to a fundamental alteration of the underlying program in Choate (and therefore could not be required as an accommodation), it follows a fortiori that creating an obligation to provide permanent housing, where no such obligation existed before, likewise cannot properly be considered a reasonable accommodation. See Where Do We Go, 32 F.4th at 862–63 (holding that Caltrans program to clear homeless encampments and connect homeless persons with services would be fundamentally altered, and not merely subject to a “reasonable modification[],” by an injunction that “effectively asked Caltrans to house Plaintiffs on its property until Plaintiffs found new housing”). 2 To the extent that the panel’s “reasonable accommodation” holding implicitly rests on the VA’s management of other programs for veterans, including programs involving the provision of housing, that too is legal error. As the panel noted, the VA has undertaken the construction of supportive housing for veterans on the Campus under other authorities, including the West Los Angeles Leasing Act of 2016 (“WLALA”), Pub. L. No. 114- 18 POWERS V. MCDONOUGH 226, 130 Stat. 926 (2016), as amended by the West Los Angeles VA Campus Improvement Act of 2021, Pub. L. No. 117-18, 135 Stat. 288 (2021). See Powers, 163 F.4th at 1174–75. The panel opinion suggests that, in light of this separate VA housing program, the district court’s judgment is within the range of “reasonable modifications” that may be required by § 504 under Choate, 469 U.S. at 300. See Powers, 163 F.4th at 1195 (holding that the district court’s housing injunction would not “fundamentally change [the VA’s] program”). This contention fails for two main reasons. First, as explained earlier, the relevant program here for purposes of determining whether Plaintiffs are being discriminatorily excluded from “the benefits of . . . any program or activity conducted by” the VA, 29 U.S.C. § 794(a), is the VA’s medical program, not its separate housing program. See supra at 13–14. Plaintiffs do not contend that they are being discriminatorily excluded from any housing program; rather, their contention is that they need “permanent supportive housing on or near the Campus” in order to avoid being discriminatorily excluded from receiving medical care at the Campus. Powers, 163 F.4th at 1183. Indeed, in holding that Plaintiffs’ claims were not barred by the jurisdiction-stripping provisions of the Veterans Judicial Review Act, 38 U.S.C. § 511, the panel placed loadbearing weight on the fact that the relevant “benefits” were medical benefits, and not housing: “Plaintiffs do not argue that housing is a benefit, nor have Plaintiffs requested housing from the [VA] Secretary through an administrative process. Rather, Plaintiffs contend that housing is a reasonable accommodation that is necessary for them to access the benefits the VA has already conferred to them,” i.e., their medical benefits. Powers, 163  POWERS V. MCDONOUGH 19 F.4th at 1183 (emphasis added). On top of that, the panel (correctly) held that the “the Leasing Act and its 2021 Amendment” did not create any “judicially enforceable fiduciary duties on the VA” to build housing. Id. at 1991. Any housing efforts that are separately undertaken by the VA are simply not the relevant “program” for purposes of analyzing Plaintiffs’ claim that, in violation of § 504, they are being discriminatorily excluded from accessing their medical benefits. And given that the relevant program is the medical program, the district court’s injunction obviously effects—in violation of Choate’s limitations—an impermissible “fundamental or substantial modification” of that medical program by adding an ancillary housing benefit to it. Choate, 469 U.S. at 300. Second, even assuming arguendo that the two programs could properly be considered together for purposes of assessing whether the medical program violates § 504, the panel’s decision still upholds a substantial alteration of the housing program that unquestionably counts as a “fundamental” or “substantial” modification, and that therefore exceeds what can be required under § 504. The district court greatly expanded the size of the housing program and the funding that must be allocated to it, which further confirms that it effectuates a fundamental alteration. See Arc of Wash. State Inc. v. Braddock, 427 F.3d 615, 620– 22 (9th Cir. 2005) (holding that requiring an expansion in the number of persons served by a state program providing certain services to the disabled would constitute an impermissible fundamental alteration). 6 Once again, if an 6 The panel’s decision wrongly downplays the amount of the expenditures ordered by the district court, noting that the “$100 million” minimum projected price tag was “only 0.02% of the VA’s $407 billion 20 POWERS V. MCDONOUGH increase from 14 to 20 days of inpatient coverage counted as a fundamental change in Choate, see 469 U.S. at 301–06, then an expansion of the housing program on the scale ordered here certainly does as well. * * * The panel decision’s extraordinary holding that a failure to provide an ancillary benefit (housing) amounts to discrimination against disabled persons with respect to the provision of medical care, is squarely contrary to Supreme Court and Ninth Circuit precedent. On that basis alone, rehearing en banc should have been granted. III The panel opinion’s treatment of Plaintiffs’ so-called Olmstead claim under § 504 is also deeply flawed and warranted en banc rehearing. “In Olmstead, the Supreme Court interpreted the failure to provide . . . services in a community-based setting as a form of discrimination on the basis of disability . . . in violation of [Title II of] the ADA.” Townsend, 328 F.3d at 516–17. (Although Olmstead was an ADA case, the panel correctly recognized that its analysis would also apply to the annual budget for 2024.” See Powers, 163 F.4th at 1195. The panel’s use of this all-budget-percentage benchmark directly contravenes Supreme Court authority. See Olmstead, 527 U.S. at 603 (plurality) (“If the expense entailed . . . is properly measured for reasonableness against the State’s entire mental health budget, it is unlikely that a State, relying on the fundamental-alteration defense, could ever prevail.”). Moreover, the $100 million figure covers, not the cost of the entire injunction, but only the component involving temporary supportive housing, which is a fraction of the overall project. As the VA noted in its reply brief, that $100 million dollar figure alone “would consume nearly the entire annual homelessness budget” of the VA.  POWERS V. MCDONOUGH 21 similarly worded provisions of the Rehabilitation Act. Powers, 163 F.4th at 1187 n.11.) Under certain circumstances, failing to provide such community-based care “contraven[es] the . . . ADA’s ‘integration regulation,’ which require[s] that public entities administer services ‘in the most integrated setting appropriate to the needs of qualified individuals with disabilities.’” Townsend, 328 F.3d at 515 (quoting 28 C.F.R. § 35.130(d)); see also 38 C.F.R. § 15.130(d) (imposing a similar requirement on the VA under the Rehabilitation Act); 28 C.F.R. § 41.51(d) (same for general Rehabilitation Act regulations).7 In other words, a failure to “administer services in the most integrated setting appropriate,” Townsend, 328 F.3d at 515 (simplified), can supply grounds for a plaintiff’s claim that he or she was denied benefits based on disability in violation of the ADA, 42 U.S.C. § 12132, and the Rehabilitation Act, 29 U.S.C. § 794. The Olmstead Court referred to this form of discrimination as both “unjustified isolation” and “unjustified institutionalization” “of individuals with disabilities.” Olmstead, 527 U.S. at 597. As the Supreme Court made clear, an Olmstead claim is simply another species of “reasonable accommodation” claim. The liability-creating discrimination arises because, “[i]n order to receive needed medical services, persons with mental disabilities must, because of those disabilities, relinquish participation in community life they could enjoy given reasonable accommodations.” Olmstead, 527 U.S. at 601 (emphasis added). And, as with a Choate meaningful access claim, an Olmstead claim cannot be invoked to 7 The panel therefore erred to the extent that it concluded that the relevant integration regulation here was 28 C.F.R. § 35.130(d). See Powers, 163 F.4th at 1187. 22 POWERS V. MCDONOUGH require a “fundamental alteration” of the relevant program. Id. at 603 (four-Justice plurality); id. at 607 (Stevens, J., concurring in part and in the judgment) (agreeing with the plurality on this point). For the same reasons discussed earlier, Plaintiffs’ housing-construction theory entails a fundamental alteration of the relevant medical-benefits program, and it therefore cannot be sustained under Olmstead either. See Townsend, 328 F.3d at 518 (holding that Olmstead does not require “public entities . . . to create new programs that provide heretofore unprovided services”). But there is a further respect in which Plaintiffs’ Olmstead claim fails as a matter of law. The panel’s decision improperly extends Olmstead to address an entirely different category of institutionalization risks from those underlying an Olmstead claim. The gravamen of an Olmstead claim is that, because the agency only provides the relevant services in an institutional setting, “[i]n order to receive needed medical services, persons with mental disabilities must, because of those disabilities, relinquish participation in community life they could enjoy given reasonable accommodation.” Olmstead, 527 U.S. at 601. The risk of institutionalization underlying an Olmstead claim is thus the institutionalization associated with receiving the services offered by the agency. But that is not the “risk of institutionalization” on which the panel relied. Instead, the panel grounded the Olmstead claim in the extrinsic risk of institutionalization associated with the “never-ending cycle of jail and hospitalization” resulting from their homelessness. Powers, 163 F.4th at 1187; see also id. (relying on evidence that homelessness leads to an “institutional circuit” in which persons end up in “hospitals, jails and prisons”). Because Plaintiffs’ Olmstead claim does  POWERS V. MCDONOUGH 23 not involve a claim that the VA will institutionalize them in the course of providing services, but instead relies on extrinsic risks of institutionalization by others, that claim lacks the essential ingredient of an Olmstead claim and fails as a matter of law for that additional reason. IV There is a further respect in which both Plaintiffs’ meaningful access claim and their Olmstead claim contravene settled law. On its face, § 504(a) of the Rehabilitation Act’s prohibition requires a showing that the plaintiff was denied a federal benefit “solely by reason of her or his disability.” 29 U.S.C. § 794(a) (emphasis added). Plaintiffs’ housing-construction claims plainly fail this requirement as a matter of law. We have recognized that “[t]he causal standard for the Rehabilitation Act is . . . strict[], demanding that [a plaintiff] show that she was denied services ‘solely by reason of’ her disability.” Martin v. California Dep’t of Veterans Affs., 560 F.3d 1042, 1049 (9th Cir. 2009); see also, e.g., K.M. ex rel. Bright v. Tustin Unified Sch. Dist., 725 F.3d 1088, 1099 (9th Cir. 2013) (