In the aftermath of the Supreme Court’s decision, Student for Fair Admission, which banned the use of affirmative action in university admissions, the real possibility of suing higher education institutions under the federal False Claims Act was raised, not only for continuing to use race in admissions, but also for engaging in any “diversity, equity, and inclusion” (DEI) programming that was seen as race-discriminatory. President Trump’s recent Executive Order, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, has only heightened the possibility of bringing such suits, as it explicitly invoked language from the False Claims Act as an incentive to federal grant awardees to abide by federal anti-discrimination laws.

What would it mean to bring an action under the federal False Claims Act for race or sex discrimination on the part of a college or university? Though it is an untested and complicated area of the law, this article considers how private and public universities could face huge damage claims under potential False Claims Act filings for any past race and sex preferences conducted under the guise of DEI. In addition, it is suggested how colleges and universities might yet avoid such legal exposure for past False Claims Act violations.

To receive federal monies, colleges and universities must regularly certify they will comply with Title VI and Title IX, the federal laws forbidding discrimination based on race and sex, respectively. Such certifications may come as part of a Program Participation Agreement needed to receive federal student loan monies or similar certifications to receive federal research grants.

[RELATED: Just Say No to Discrimination]

Yet abundant examples can be cited that universities have been blatantly violating Titles VI and IX for years, rendering their Title VI and Title IX compliance certifications false. These actions then open universities up to suits under the federal False Claims Act, which “prohibits false or fraudulent claims for payment to the United States, 31 U. S. C. §3729(a), and authorizes civil actions to remedy such fraud to be brought by the Attorney General, §3730(a), or by private individuals in the Government’s name, §3730(b)(1),” as explained by Justice Scalia speaking for the majority in the 2007 case Rockwell Int’l Corp. v. United States.

Justice Scalia’s quote points to one of the unique and most often used features of the False Claims Act, namely that a private individual, on behalf of the government, can bring suit against the alleged violator. This private individual is known as a qui tam relator and could be an internal whistleblower or external party like an ex-employee or even a data miner. This qui tam relator literally relates to the government information about fraudulent activity on the part of the institution. Let’s consider the basics of a hypothetical situation to illustrate the details of how such a False Claims action might play out.

Say a university receives $35,000,000 annually in federal student aid, having certified that it will comply with Title VI and Title IX, and yet turns around and violates Title VI and Title IX by offering scholarships to students of a single race, or by conducting a science camp only for girls, or by advertising an external internship opportunity that excludes straight men. These Title VI and IX violations could render the certifications false, and a qui tam relator could file a civil suit in federal district court claiming the institution violates the False Claims Act.

The suit brought by a qui tam relator, initially under seal, is evaluated by the Department of Justice (DOJ), which may intervene to take up the case, though it is not required to do so. Cases in which the DOJ intervenes have a higher likelihood of success. Proof of intent to defraud is not needed in a successful suit; rather, the showing of reckless conduct is sufficient.

Under the False Claims Act a successful suit can lead to the payment of up to triple damages, so under the example cited above, the university could be facing $105,000,000 in payouts. This amount does not include civil penalties or attorney’s fees. The statute of limitations on the False Claims Act, depending on the circumstances, could be up to 10 years, so the liabilities could grow alarmingly large for any university with multi-year violations of Titles VI and IX and yet made false compliance certifications. The qui tam relator is entitled to between 15 percent and 30 percent of the payout, depending on whether the government intervenes and how much the relator’s information contributes to a successful prosecution.

It is true that in some jurisdictions, public universities can invoke “sovereign immunity”—claim to be an “arm of the state”—and block such actions under the False Claims Act, but the case law is not consistent on this issue across the country. Worthy of note are a couple of recent cases brought against public universities, namely Purdue University, which was compelled to settle a suit involving research fraud, and Pennsylvania State University, which settled a case centered on cybersecurity noncompliance.

Having said all of the above, we would agree that it is not in the best interest of any university—public or private—to be faced with multi-million-dollar False Claims Act payouts, which could lead a university to have to sell off important assets to pay damages. The surest way of preventing legal exposure going forward is to simply end all Title VI and IX violations immediately at the higher education institution.

[RELATED: Ending Racial Preferences]

But what about past Title VI and IX violations that could expose an institution to False Claims Act litigation?

Fortunately, there is a way that has long been recognized to mitigate those False Claims Act liabilities. By public self-disclosure of the actions related to the false claims, an institution would thus prevent a qui tam relator from filing a successful suit. In other words, it would make sense for universities to publicly disclose from the past 10 years all Title VI and IX violations and their false compliance statements. This could be a laborious task, but it would be a lot cheaper than facing litigation and huge payouts.

In summary, the recent Supreme Court decision on affirmative action and President Trump’s Executive Order from his second day in office have increased the possibility of universities facing huge financial liabilities under the False Claims Act because of their DEI profligacy. To avoid those liabilities going forward, universities should bring themselves into full compliance with Title VI and IX immediately, and to mitigate legal exposure for violations of Titles VI and IX from the previous decade, they should consider full public disclosure of their past DEI sins.

Image of Students for Fair Admissions Rally by Whoisjohngalt on Wikimedia Commons