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 April 2, 2025.
Cases
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.
American Alliance for Equal Rights v. Southwest Airlines Co.
United States District Court for the Northern District of Texas
The American Alliance for Equal Rights (AAER), a nonprofit member organization, filed suit against Southwest Airlines seeking a declaration that its ¡Lánzate! Travel Award Program violated the Civil Rights Act of 1866 and 1964. Southwest’s program gave a select number of Hispanic college students free flights to visit their families as they pursued their studies. AAER alleges that the program harmed two of its members by excluding non-Hispanic students.
The Civil Rights Act of 1866 (42 U.S.C. § 1981) bars any racial discrimination in making or enforcing contracts. Title VI of the Civil Rights Act (42 U.S.C. § 2000d) prohibits racial and other forms of discrimination in programs or businesses that receive federal funding.
Current Status: AAER rejected Southwest’s settlement offer, which involved terminating the program and a payment of $0.01, the value of nominal damages sought by AAER in its complaint.
Catholic Charities Bureau, Inc. v. Wisconsin Labor Review Comm’n
The Supreme Court of the United States
The Supreme Court of the United States heard arguments in the case of Catholic Charities Bureau, Inc. v. Wisconsin Labor Review Commission on March 31, 2025. This case addresses whether a state violates the First Amendment’s religion clauses by denying a religious organization an otherwise-available tax exemption because the organization does not meet the state’s criteria for religious behavior. The case originated from a decision by the Wisconsin Labor and Industry Review Commission (LIRC), which determined that Catholic Charities Bureau, Inc. (CCB) and its sub-entities were not operated primarily for religious purposes and thus were not exempt from making contributions to Wisconsin's unemployment insurance system. The Wisconsin Supreme Court upheld this decision, stating that while CCB professed religious motivations, its activities were primarily charitable and secular.
During the Supreme Court hearing, the justices examined whether the state's criteria for determining religious behavior infringed upon the First Amendment rights of CCB. The arguments focused on the balance between state regulations and religious freedoms, with significant implications for how religious organizations are classified and taxed. The outcome of this case could have far-reaching effects on the treatment of religious organizations under state laws, particularly concerning tax exemptions and the definition of religious activities. A decision is expected later this year, which will provide further clarity on these critical issues.
Current Status: The United States Supreme Court heard arguments on March 31, 2025. We are awaiting the Court's final 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: On January 17, 2025, AAER filed a response to Pritzker’s motion to dismiss the case, we are awaiting the Judge’s decision.
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: Parties are still litigating, and the next filing is expected shortly but does not yet have a public due date.
Parents Defending Education vs. District of Columbia Public Schools in Washington
A parents' rights group asked the U.S. Department of Education's Office for Civil Rights (ORC) to open an investigation into an "Empowerment Club" in District of Columbia Public School (DCPS). PDE alleges discrimination on the basis of race in programs or activities that receive federal financial assistance in violation of both Title VI and the Equal Protection Clause. PDE is a third-party organization with members who are parents of school children throughout the country. PDE asks for an investigation because the DCPS have affinity group programming that is not open to all students. The District allows only some students to participate in affinity group programming and participation is based on their race.
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: Parties are still litigating, and the next filing is expected shortly but does not yet have a public due date.
