Plaintiff (American Alliance for Equal Rights) challenges Defendant's (American Bar Association) Legal Opportunity Scholarship Fund, claiming that the fund discriminates against white applicants in violation of Section 1981.

The scholarship awards $15,000 to select students who will start law school in the fall. Plaintiff alleges that the scholarship is racially discriminatory as evidenced by the purpose and mission of the scholarship which is to encourage "racial and ethnic minorities to apply to law school and provide financial assistance for them to complete their legal education." Plaintiff also points to 1) information to donors that state that their gift "will bring about a more diverse...legal profession", and 2) a promotional video about the scholarship where Defendant states "the legal profession needs to reflect the population that it represents" and that the scholarship is for "law students of color."

Plaintiff states that one of its members satisfies all of the scholarship's non-discriminatory requirements, is "ready and able" to apply, had all application materials ready for submission, and would have applied if there were no racial and ethnic bar against white applicants.

On June 16, 2025, Defendant filed a motion to dismiss for failure to state a claim. Defendant also asserts that Plaintiff lacks standing because they are unable to allege that one of its members would have standing to sue on their own behalf. Additionally, Defendant states that Plaintiff did not allege the existence of a contractural relationship which is required for a Section 1981 claim. Lastly, Defendant argues that the First Amendment bars Plaintiff's claims because the relief Plaintiff seeks would interfere with Defendant's rights to free speech and expression.

On June 25, 2025, Plaintiff amended their complaint to address each of Defendant's arguments within the motion to dismiss. As a result, on July 8, 2025, the court denied the motion as moot.

On July 30, 2025, Defendant filed a motion to dismiss Plaintiff's amended complaint for the same reasons listed above in their first motion to dismiss.

On January 21, 2026, the court granted and denied in part Defendant's motion to dismiss the amended complaint. The complaint was dismissed for lack of standing insofar as Plaintiff's standing flowed from Member B. However, the motion was denied as to failure to state a claim because Plaintiff plausibly alleged that the ABA requires scholarship applicants to sign a release that is effectively a license to use copyrighted application materials, and this is enough to form a contract which makes this a plausible Section 1981 claim. The court did not comment on the Defendant's First Amendment affirmative defense because more facts through discovery are needed.

On February 24, 2026, the parties filed a status report stating that they are engaged in settlement discussions.