Court Cases We Are Monitoring
Overview
The Council is committed to helping our members stay informed about litigation that may have an impact on the philanthropic sector. This resource is designed to be a guide to cases that could impact the operations of foundations and other grantmaking organizations. For a more comprehensive overview of cases targeting DEI initiatives broadly, we recommend consulting this DEI litigation tracker published by The Meltzer Center for Diversity, Inclusion, and Belonging at New York University School of Law.
This webpage was last updated on December 5, 2025.
Cases
AAER vs. Hispanic Scholarship Fund
United States District Court for the District of Columbia
The American Alliance for Equal Rights (AAER) has sued the Hispanic Scholarship Fund (HSF) in federal court in Washington, D.C., challenging the eligibility rules of the HSF Scholars Program, specifically the requirement that applicants “identify as being of Hispanic heritage.” The complaint asserts that this criterion excludes all non-Hispanic students, including Asian, White, Black, and Native American applicants, even when they meet every other academic and financial qualification.
AAER brings its claims under 42 U.S.C. § 1981, a provision of the Civil Rights Act of 1866 that guarantees all persons the same right to make and enforce contracts regardless of race or ethnicity. The lawsuit characterizes the HSF Scholars Program as a contract. By conditioning that contractual opportunity on Hispanic heritage, AAER argues that HSF is engaging in unlawful race-based discrimination under § 1981.
Current Status: The complaint was filed December 3, 2025. The case is in its initial phase, and the Court has not set the dates yet.
Buckeye Institute v. IRS
U.S. District Court in the Southern District of Ohio
The Buckeye Institute is challenging an Internal Revenue Code provision that requires 501(c)(3) charities to disclose the names and addresses of their major donors to the IRS. Buckeye argues that this mandatory donor-identity reporting violates the First Amendment by chilling free association and deterring supporters. After the district court held that the rule must be evaluated under “exacting scrutiny,” the federal government appealed, and the case is now before the Sixth Circuit.
American Alliance for Equal Rights and Do No Harm v. Buckfire & Buckfire, P.C.
United States District Court for the Eastern District of Michigan, Southern Division
American Alliance for Equal Rights (AAER) and Do No Harm have filed a lawsuit in federal court in Detroit against the law firm Buckfire & Buckfire, P.C. The complaint claims that Buckfire unlawfully rejected three white students who applied for the firm’s medical and law school diversity scholarships.
According to AAER and Do No Harm, the program violates 42 U.S.C. § 1981, a federal law that prohibits racial discrimination in contracts by both public and private entities. The groups are asking the court to issue a permanent order preventing Buckfire from learning applicants’ race, treating applicants differently because of race, or using race in any way when running its scholarship programs.
Current Status: The case is in its initial phase. Buckfire has until January 2, 2026 to respond.
First Choice Women’s Resource Centers, Inc. v. Platkin
The Supreme Court of the United States
First Choice Women’s Resource Centers, Inc. v. Platkin arose from a subpoena issued by New Jersey’s Attorney General, which demanded production of a broad list of documents and records, including the names of most of First Choice’s donors. First Choice, a faith-based pregnancy center, challenged the subpoena in federal court, arguing that compelled disclosure would violate their First Amendment rights to speech, association, and privacy. At the same time, the Attorney General sought to enforce the subpoena in state court. The federal district court dismissed First Choice’s claims as “not ripe” meaning not yet at a stage where the federal court can hear the case, because the state court had not yet ordered First Choice to comply with the subpoena. On appeal, the Third Circuit affirmed the lower court’s decision.
The key question before the Court is procedural: when a state action creates a credible chilling effect on constitutional rights, must the target wait for state enforcement before raising federal constitutional claims, or can it seek federal court relief in advance? A ruling for the state could mean that organizations whose protected speech is chilled by state investigations or similar action would have to wait until the state has taken all necessary steps to enforce those actions before they could be challenged in federal court.
Current Status: The U.S. Supreme Court heard oral arguments on December 2nd. The Court will publish its opinion in 2026.
State of Tennessee v. United States Department of Education
United States District Court for the Eastern District of Tennessee
Tennessee, joined by Students for Fair Admissions, Inc. (SFFA), has filed a lawsuit against the U.S. Department of Education and Secretary Linda McMahon. The case challenges the Hispanic-Serving Institutions (HSI) program under Titles III and V of the Higher Education Act. At issue is a requirement that at least 25% of a school’s enrollment be Hispanic in order to qualify for certain federal grants. State leaders and SFFA argue that this threshold leaves out colleges and universities in Tennessee that meet every other eligibility measure. They contend the rule amounts to race-based discrimination, puts federal funding out of reach for many schools, and pressures institutions to alter their student demographics in ways that conflict with anti-discrimination laws.
Current Status: The case is still technically open, but the court has paused further proceedings after earlier blocking the Department of Education’s guidance. That injunction remains in place; the case has not been settled or closed but is "paused" until either party moves to reopen it.
National Religious Broadcasters vs. Werfel
United States District Court for the Eastern District of Texas
The National Religious Broadcasters, an association of conservative broadcasters, Intercessors for America, a conservative prayer advocacy group, and two Baptist churches in Texas filed suit against the Internal Revenue Service (IRS) claiming their right to speak freely about political candidates and issues was being “improperly chilled” by the Johnson Amendment. They are asking the court to declare the Johnson Amendment unconstitutional.
The Johnson Amendment refers to language introduced by then-Senator Lyndon Johnson in 1954, which prohibits non-profit organizations exempt from tax under § 501(c)(3) from “directly or indirectly” participating in political campaigns, specifically in endorsing or opposing political candidates.
The plaintiff churches and the IRS have jointly submitted a request for the court to approve an order settling the parties' dispute, which centers on whether the plaintiffs can engage in political speech during religious services without jeopardizing their tax-exempt status. Under the proposed order now before the court, "speech by a house of worship to its congregation, in connection with religious services through its customary channels of communication on matters of faith, concerning electoral politics viewed through the lens of religious faith" will not be considered to fall under the Johnson Amendment's prohibition on participation or intervention in political campaigns. Although the order would only directly apply to the plaintiff organizations, it potentially opens the door for further challenges to IRS enforcement of the Johnson Amendment on First Amendment grounds.
Current Status: On November 25th, the parties met and presented their arguments to the Court. We are currently awaiting the Court's decision.
American Alliance for Equal Rights v. Pritzker
United States District Court for the Central District of Illinois
American Alliance for Equal Rights (AAER), a nonprofit member organization, filed suit against Illinois Governor Jay Robert Pritzker and the Chairman of the Illinois Student Assistance Commission alleging that the state program's race-based criteria violates the Equal Protection Clause of the Fourteenth Amendment. AAER alleges that the state-run Minority Teachers of Illinois Scholarship Program, which provides up to $7,500 per year to minority students pursuing teaching careers, is unconstitutional and discriminatory because it excludes non-minority students. AAER argues that Illinois cannot disqualify students from competing for a taxpayer-funded college scholarship because of their race, and race-based discrimination is unconstitutional under the Equal Protection Clause.
Current Status: Pritzker's motion to dismiss the case was denied. Pritzker's response was due in early September but Pritzker has filed an extension for more time.
Foundation Against Intolerance and Racism, Inc. v. Steve Walker
United States District Court for the Western District of Washington
Foundation Against Intolerance & Racism (FAIR) filed a lawsuit alleging a homeownership program operated by the Washington State Housing Finance Commission violates the Equal Protection Clause. FAIR claims that the program, which offers financial assistance to first-time homebuyers, limits eligibility to certain racial and ethnic groups and is therefore discriminatory and unconstitutional.
Current Status: In July 2025, FAIR filed an amended complaint. In the amended complaint, FAIR re-allege that at least one of their members is “able and ready” to apply for the benefit (i.e., qualifies under non-racial eligibility criteria), and therefore has “standing” to sue in their own right. We are currently awaiting the State's response.
American Alliance for Equal Rights v. Kwame Raoul, James Bennett, and Alexi Giannoulias
United States District Court for the Northern District of Illinois
The American Alliance for Equal Rights (AAER) challenged Illinois' Senate Bill 2930, which mandates nonprofits to collect and publicly disclose demographic data about their staff, including race, gender, and sexual orientation. The law requires nonprofits to use state-defined demographic classifications, which the Alliance argues are irrational and offensive. AAER claims that SB 2930 violated the First Amendment by compelling speech and the Fourteenth Amendment by promoting state-ordered racial discrimination.
Current Status: In August 2025, the federal district court rejected the Alliance’s request to block the law and allowed parts of the state’s defense to move forward. The Alliance and the U.S. government have both appealed that decision to the Seventh Circuit Court of Appeals. While the appeal is underway, the lower court has paused all activity in the case and temporarily stopped Illinois from enforcing the law against two of the Alliance’s members. The case currently remains before the Seventh Circuit, no final appellate decision yet.
Cases That Have Been Decided
Catholic Charities Bureau, Inc. v. Wisconsin Labor Review Comm’n
The Supreme Court of the United States
On June 5, 2025, The United States Supreme Court ruled 9-0 that Wisconsin violated the Constitution by “imposing a denominational preference by differentiating between religions based on theological choices.” Last year, the Wisconsin Supreme Court ruled that Catholic Charities’ ministry to the poor and needy was not “typical” religious activity because it served everyone, not just those who were Catholic. This meant that Catholic Charities could not join the Wisconsin Catholic Church’s unemployment compensation program but was stuck paying into the state’s less efficient and more costly plan.
The outcome of this case will have far-reaching effects on the treatment of religious organizations under state laws, particularly concerning tax exemptions and the newly expanded definition of religious activities.
