In National Urban League v. Trump, three organizations that receive federal funding filed suit to enjoin Trump’s executive orders addressing diversity, equity, and inclusion programs. As part of their suit, the plaintiffs moved for a preliminary injunction to halt the orders. But on May 2, 2025, the U.S. District Court for the District of Columbia denied the motion for a preliminary injunction, finding the plaintiffs were unlikely to prevail on the merits. The court reasoned that the plaintiffs either lacked standing to challenge provisions in the executive orders or they had not proved the provisions were unconstitutional.
Contractors and grantees have been concerned about a Certification Provision in one of the DEI orders. The provision requires agencies to include a term in contracts and grants that requires recipients to agree that compliance with federal anti-discrimination laws is material for purposes of the False Claims Act. The concern is that this Certification Provision greatly increased the risk of FCA liability. But the court didn’t share this concern, reasoning that a party is not liable under the FCA for good-faith but mistaken beliefs that DEI programs comply with federal law. The court believes the FCA’s scienter requirement would mitigate the risk of increased FCA liability.
