Does Students for Fair Admissions Create "Clearly Defined Public Policy?"

The holding in Students for Fair Admissions – that affirmative action in college admissions violates the Constitution – is slowly making its way towards a showdown over tax exemption for nonprofits seeking to remedy the effects of discrimination.  Let's call them "DEI nonprofits."  So far, SFAA has been applied to nonprofits only after courts have strained to find the existence of a contract to which 42 U.S.C. 1981 is applicable.  

The latest case, filed in June, seeks to apply that holding to a straight out, no strings attached grant program designed to increase the number of African American women doctors.  The plaintiffs necessarily assert the existence of a contract, but there is none because all that is required is that African American women grantees be enroll in graduate medical school. Without a contract, 42 USC 1981 does not apply.  

But will nonprofits that provide non-contractual goods or services to a class of beneficiaries defined by race violate law or clearly defined public policy? If so, those nonprofits would not be entitled to tax exemption. That is the question not yet answered but we may get a preview in Do No Harm vs. American Association of University Women.  Here are excerpts from Do No Harm’s complaint:

21. The Selected Professions Fellowships . . . are “[o]nly open to women from ethnic minority groups historically underrepresented in certain fields within the United States: Black or African American, Hispanic or Latino/a, American Indian or Alaskan Native, Asian, and Native Hawaiian or Other Pacific Islander.”

22. White women are not included in that list. They are ineligible.

23. In fact, AAUW confirms that the Selected Professions Fellowships . . . are “restricted to women of color who have been underrepresented in th[o]se fields.” .

24. The exclusion of white applicants was intentional. AAUW’s current strategic plan confirms that AAUW seeks to “embody the goals and spirit of equity, inclusion, diversity[,] and intersectionality across all AAUW activities and participants.” AAUW confirms that its “diversity” goal means “prioritizing women of color” across all AAUW’s activities.

25. Consistent with this goal, at least since 2014, AAUW has advertised that the Selected Professions Fellowships for the Focus Professions Group were only open to women of color.

Interestingly, Do No Harm is not suing to enjoin all of AAUW’s gender-exclusive grant programs.  There are many of them and most are open to women of all races.  But not men, and yet the underlying principle Do No Harm advocates would seem just as applicable to transactions based on gender.  Do No Harm might explain that 1981 excludes only racial distinctions in contracts and that is why it doesn't attack gender-exclusive programs.  But I still think the case exposes the absurdity.  As Roger points out, the act of charity necessarily implies exclusion because not everybody has needs the satisfaction of which we call "charity."  And some needs are the result of societal race- or gender-based exclusions.  Do No Harm necessarily argues that any effort tied to immutable characteristics is unconstitutional even if the immutable characteristic correlates with a charitable need.  In its Memorandum in Opposition AAUW said this:

AAUW’s equity-based mission serves as the motivation behind its decision to limit one of its several fellowships to racial and ethnic minorities who are woefully underrepresented in medicine. AAUW seeks to combat these disparities by providing money to highly qualified women of color who seek professions in medicine, as research shows that racial and ethnic underrepresentation may have a direct correlation to disparate health outcomes plaguing communities of color.

It would have this Court enjoin AAUW’s affirmative efforts to bolster the ability of women of color to enter the medical field unless that program is open to its members. It claims that those two white, anonymous members wish to apply for one specific fellowship at AAUW but cannot because of their race. According to Plaintiff, AAUW’s fellowship violates Section 1981 because white women cannot apply.

As a whole, the Memorandum contains some of the best arguments I have seen why a DEI nonprofit should retain tax exemption even after SFAA.  And it makes a strong argument against standing that the courts seem too willing to grant.  Two things, though.  First, the memorandum does not make the obvious argument that there isn’t even an a contract.  42 USC 1981 can’t apply and thus Do Not Harm can’t prove a likelihood of success.  Second, AAUW adopts the impossible First Amendment argument I have previously condemned as an implicit repeal of Bob Jones.  If AAUW has a First Amendment right to limit its charitable impact to one race, as it argues, so does Bob Jones. That can't be right.  I still think AAUW's Memorandum in Opposition is very good, particularly regarding standing and DEI as an appropriate nonprofit and tax exempt charitable purpose. It's the first time I have seen an explicit defense of affirmative action as a legitimate charitable purpose.  Here are more excerpts:

First, Plaintiff lacks organizational standing. Participation in the lawsuit of the anonymous, individual members is required here, where a determination must be made as to whether the members are truly qualified to apply to AAUW’s fellowship. Plaintiff further fails to cite a single binding case that suggests the failure to be considered for a discretionary award is a cognizable harm sufficient to confer standing.

Second, the extraordinary relief Plaintiff seeks would violate the First Amendment. “[T]he Supreme Court has expressly found that the First Amendment can trump the application of antidiscrimination laws to protected speech.” Claybrooks v. ABC, 898 F. Supp. 2d 986, 993 (M.D. Tenn. 2012) (citing Hurley v. Irish-Am. Gay, Lesbian & Bisexual Grp. of Bos., 515 U.S. 557, 568 (1995)); see, e.g., 303 Creative LLC v. Elenis, 600 U.S. 570, 586 (2023). “[D]onating money qualifies” as protected speech. Coral Ridge Ministries Media, Inc. v. Amazon.com, Inc., 6 F.4th 1247, 1254 (11th Cir. 2021). So, too, does offering “acts of expressive association,” 303 Creative, 600 U.S. at 586, like mentorship. For that reason, AAUW cannot be compelled to alter its fellowship eligibility criteria because doing so would “‘modify the content of [AAUW’s] expression’—and thus modify [AAUW’s] ‘speech itself.’” Coral Ridge, 6 F.4th at 1256.

Third, the fellowship at issue is a valid affirmative action program, which seeks to address the “manifest imbalance” in women of color’s representation in the medical profession and does not “unnecessarily trammel” the interests of white women who are not similarly underrepresented in medicine. Johnson v. Transport. Agency, 480 U.S. 616, 630-31 (1987); United Steelworkers of Am., AFL-CIO-CLC v. Weber, 443 U.S. 193, 208 (1979).

Fourth, Plaintiff cannot show that any of its anonymous members would suffer any harm in the absence of injunctive relief. Other courts have rejected requests to preliminarily enjoin minority-focused charitable giving programs like the one at issue here for exactly this reason. See Moses v. Comcast Cable Commc’ns Mgmt., LLC, 2022 WL 2046345, at *3-4 (S.D. Ind., June 7, 2022).

Plaintiff has failed to explain how its anonymous members would suffer concrete, tangible harm if they were not able to apply for a single, discretionary fellowship. Moreover, the public has an interest in encouraging AAUW’s First Amendment right to award money to women of color in order to address persistent racial inequity in the medical field.

darryll k. jones