Generally, you can give gifts to whoever you want, even limited to people of a particular race. But if there are any strings at all attached to your “gift,” it may become a contract, and you can then be sued for racial discrimination in contracts, if you hand the ‘gifts’ out based on race.
That’s what happened to the American Bar Association. It attached a few minor strings to the race-based scholarships it offered, and ended up being sued for racial discrimination in contracts, because it excluded whites from applying for the scholarships, which were deemed contracts because of the few strings attached to them.
A news report explains:
The American Bar Association can’t escape a lawsuit accusing the group, tasked with setting national ethical and professional standards for lawyers and judges, of discriminating against white law school students in doling out certain scholarships.
In the ruling, U.S. District Judge Joan B. Gotschall said the lawsuit could continue because the plaintiffs had done enough to show that the ABA’s refusal to accept scholarship applications from white applicants amounted to a potential violation of federal laws forbidding discrimination in the making of contracts. [specifically, 42 U.S.C. 1981]…Gottschall delivered the decision on Jan. 21, allowing the American Alliance for Equal Rights (AAER) to continue with its legal claims against the ABA….The AAER had filed suit against the ABA in April 2025, accusing the ABA of illegally discriminating against white students under its Legal Opportunity Scholarship Fund.
Under LOSF, the ABA for more than two decades has awarded $15,000 annual scholarships to students beginning law school…applicants must be a member of a non-white racial or ethnic minority group…the AAER notes that the ABA drafts model rules of professional conduct for attorneys, “including the one barring lawyers from ‘discrimination on the basis of race.'” “But instead of opposing racial discrimination, the ABA practices it.”
In filing the complaint, the AAER asserted the ABA has improperly continued its discriminatory scholarship program even after the U.S. Supreme Court ruled in 2023 that “race-based admissions in higher education” are illegal under federal civil rights law, no matter the race of those receiving preference or being discriminated against….
the ABA particularly argued it should be allowed to exclude white applicants when awarding scholarships, regardless of the apparent prohibition on such discrimination in federal law.
They argued the ABA should have a First Amendment right to create scholarship programs open only to non-white applicants because such awards are in keeping with the ABA’s policy of increasing diversity in the ranks of American lawyers…
The ABA asserted no one has a legal or contractual right to any scholarship funds, which are “discretionary gifts” awarded by the ABA.
In her decision, Gottschall…said the AAER had done enough to move ahead on their claims of discrimination in the makings of contracts.
While the ABA argued the scholarships are “discretionary gifts” and the applications are not contracts, the judge noted the AAER had shown that applicants must sign a release allowing the ABA to, “among other things … use a winner’s application materials for promotional purposes.”
“Since that is effectively a license to use copyrighted application materials, and a license constitutes valuable consideration sufficient to form a contract, the court concludes that the amended complaint pleads a plausible … claim (under federal law),” Gottschall wrote.
The plaintiffs are represented by the Consovoy McCarthy law firm in Arlington, Virginia.
