Conservative Duo Fights Against DEI One Bias Claim at a Time (1)

Two conservative groups are using separate legal strategies to achieve the same goal—use the courts to thwart diversity programs.

The actions of the two groups with similar, patriotic-sounding names—America First Legal and American Alliance for Equal Rights—has grabbed the attention of diversity, equity, and inclusion offices at universities, law firms and corporations and prompted changes to DEI programs.

America First Legal, led by former President Donald Trump adviser Stephen Miller, alleges that corporate DEI programs are illegal under Title VII of the 1964 Civil Rights Act. The group filed at least 15 lawsuits and sent over 30 letters asking the US Equal Employment Opportunity Commission to probe companies including Morgan Stanley and IBM Corp.

“Sometimes conservatives have tended historically to want to leave the private sector alone and treat government like the bad guy,” America First Legal Vice President Gene Hamilton said in an interview. “Our view is much more nuanced, which is bad conduct is bad conduct, wherever it rears its head.”

American Alliance for Equal Rights, led by conservative activist Edward Blum, has largely banked on Section 1981 of the 1866 Civil Rights Act, which affirmed all citizens are equally protected by the law. The group has cited the statute in its challenge of DEI at law firms including Winston & Strawn, Morrison Foerster, and Perkins Coie. The 1866 statute is broader than Title VII, and plaintiffs who use it avoid both a damages cap and the EEOC’s pre-litigation charge process.

The Blum group’s use of Section 1981 brought a favorable ruling from the US Court of Appeals for the Eleventh Circuit, which in a June 3 split decision blocked venture capital firm Fearless Fund Management LLC’s grant program for Black women entrepreneurs because it was likely to violate the statute.

Section 1981 puts legal advocacy groups “in the driver’s seat in litigation, which is the primary goal,” said Nonnie Shivers, a management side attorney at Ogletree Deakins.

Both groups’ work is part of an accelerating effort to attack workplace diversity programs, though definitive court victories in DEI-related litigation have been scarce since the Supreme Court’s June 2023 Harvard decision that limited the use of race in college admissions.

The Blum group’s law firm suits were settled out of court—though all three legal operations changed the language of their DEI programs. The EEOC has yet to publicly respond to the Miller group letters, which demand that commissioners pursue self-directed charges against targeted companies.

“I don’t think that their efforts have yet resulted in anything close to a sea change in the Title VII framework, how anti-discrimination law works,” said Terill Wilkins, an employee-side attorney at Abrahamson Rdzanek & Wilkins. “At the same time, I think it would be a mistake for practitioners to ignore their efforts altogether or to downplay the significance of what they’re doing because this continues to be a really well-funded organization.”

Miller’s Operation

Miller’s America First Legal, founded in 2021, is staffed by Trump-era officials, including Hamilton, a former counselor to the attorney general, and Reed Rubinstein, a former deputy associate attorney general. The group raised $44 million in 2022—$27 million of which came from a single undisclosed donor, according to a 2023 tax filing cited by Bloomberg News.

“There is a unique opportunity, given what the Supreme Court said last year in the Harvard case, for us to push the accelerator even further down in the fight for more Americans and to bring more cases, more lawsuits, file more complaints,” Hamilton said.

The organization gets leads from sources that include tips from insiders and by examining company websites, Hamilton said. It has a hotline for those who believe they are being discriminated against by corporate DEI policies and solicits potential plaintiffs through X, formerly known as Twitter.

The “number of individuals reaching out to us has only increased over time, increased very substantially, and the information we obtain from insiders is very helpful,” said Rubinstein, the group’s senior counsel and director of oversight and investigations.

Specifying individuals who claim they’ve been harmed by DEI programs will be important proof of standing to sue for conservative groups, which are beginning to name names.

In a lawsuit filed June 4 against Ally Financial Inc., America First Legal identified a male job applicant who claims the company discriminated against him by hiring a female candidate with less experience, due to its DEI efforts.

America First Legal appears to keep a good deal of litigation work in-house, but has also sought support from smaller firms that have litigated on conservative legal causes, including Spero Law LLC and Murray Nolan-Berutti LLC.

While the group’s EEOC letters alleging that corporate DEI programs are illegal under Title VII have yet to get a response, it is hopeful that “someone’s paying attention,” Hamilton said. “But honestly, we don’t know.”

Blum’s Organization

While America First Legal’s main focus is high-profile corporations, litigation targets of Blum’s group have ranged from nonprofits such as the Fearless Fund, to law firms, to the Smithsonian.

Blum has taken the actions after he successfully brought the high court case that curtailed affirmative action in schools last year through a second group he formed about a decade ago, Students For Fair Admissions.

Blum said his group, like America First Legal, relies on unsolicited tips, though it has a “much more limited legal portfolio” than Miller’s operation. The group receives about a dozen emails a week with prospective race- and ethnicity-based legal violations, he said.

He declined to specify funding sources. The group is required to disclose funding to the IRS, but its records for the past year aren’t public yet.

His previous public interest ventures received high-dollar donations from the conservative nonprofit Donors Trust, which sent Students for Fair Admissions $1.5 million in 2018. Donors Trust according to its website has distributed more than $1.7 billion to more than 1,900 groups since its 1999 founding.

The group isn’t shelling out the big fees traditionally associated with high-profile litigation. “None of us are in it for the money,” said Adam Mortara, one of the attorneys for American Alliance for Equal Rights. Mortara left Bartlit Beck, A Chicago-based firm that built a reputation for handling major trials for the country’s biggest companies, after representing Students for Fair Admissions.

The outside legal counsel for Blum’s group includes attorneys at conservative boutique Consovoy McCarthy, public interest firm Pacific Legal Foundation, and Mortara’s solo practice Lawfair LLC. Pacific Legal Foundation is representing Blum’s group pro bono and Mortara’s legal efforts are deeply discounted, the lawyers said.

Consovoy McCarthy, which argued Blum’s high court affirmative action case, was paid $750,000 in 2022 and $303,000 in 2021, by Students for Fair Admissions, according to tax documents.

“As with all of our clients, we work tirelessly to achieve the most successful result we can” for Blum’s group, founding partner Thomas McCarthy said in an email. The firm declined to comment on billing arrangements.

Gibson, Dunn & Crutcher is defending many of the litigation targets of Blum’s group as pro bono clients. These include Fearless Fund, Hidden Star, and Founders First Community Development. Gibson Dunn also represented Morrison Foerster in Blum’s suit challenging the firm’s DEI program.

Defending groups against Blum’s anti-DEI litigation “has been a tremendous part of the firm’s work” over the past year, said Gibson Dunn partner Mylan Denerstein, co-chair of the firm’s public policy practice group.