On May 19, the Department of Justice announced a new “Civil Rights Fraud Initiative,” which will utilize the False Claims Act to investigate and pursue claims against recipients of federal funds that knowingly violate federal civil rights laws. Violations of the False Claims Act can result in treble damages and significant penalties.
Title VI of the 1964 Civil Rights Act prohibits recipients of federal funds from discriminating on the basis of “race, color, or national origin.” The Supreme Court has interpreted discrimination in the case of Students for Fair Admissions v. Harvard as disadvantaging one group of people in order to increase the representation of a second group. So, many programs that were considered acceptable prior to that decision may currently be viewed as a Title VI violation. In particular, the federal government considers manifestations of antisemitism or islamophobia to be Title VI violations. Antisemitism was explicitly mentioned multiple times by officials, including in the quotes below:
“Institutions that take federal money only to allow anti-Semitism and promote divisive DEI policies are putting their access to federal funds at risk,” said Attorney General Pamela Bondi. “This Department of Justice will not tolerate these violations of civil rights – inaction is not an option.”
“America has watched a tidal wave of anti-Semitism sweep our universities and seen public institutions codify inherently divisive policies like DEI at an unprecedented rate,” said Deputy Attorney General Todd Blanche. “In advancing the initiative, the Department of Justice’s Civil Fraud Section and Civil Rights Division will work in concert – alongside other Department components and government agencies – to identify and root out instances in which recipients of federal funds fail to uphold their basic obligations under federal civil rights laws. The days of using federal funds to further discrimination are over.”
The Congress adopted the False Claims Act during the Civil War to discourage the misuse of federal funds. Under that statute, any person can file a “qui tam” action in federal court to seek the recovery of mis-spent funds. When a qui tam action is successful, the whistleblower typically receives a portion of the monetary recovery. The Department of Justice also encourages the public to report instances of such discrimination to the appropriate federal authorities.
If a qui tam action is particularly promising, the Federal Government can take over the burden of conducting the lawsuit, but the whistleblower gets a negotiated portion of the final judgment.
Qui tam is an abbreviation of the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur, meaning “[he] who sues in this matter for the lord king as well as for himself.”
Most whistleblower cases involve tax fraud or improper performance by federal contractors who are providing a direct product or service to the government. However, because Title VI applies to the conduct of the entire entity that receives federal funds, this new invitation to whistleblowers can apply to discrimination that is only indirectly connected to federal funds. Hypothetically, if the football team (that receives no federal funds) is somehow claimed to be discriminating, then a qui tam lawsuit could be filed against the University because other parts receive federal funds.
In order to be eligible to receive funds under the False Claims Act, the whistleblower must have direct and independent knowledge of the facts in the complaint and not just base the complaint on facts that are common knowledge to the general public.
The False Claims Act provides for the collection of treble damages, so that whatever amount of harm is proven at trial, the court will award three times that amount. With the ultimate stakes raised by the treble damages provision, settlements before trial also tend to be higher.
This new Civil Rights Fraud Initiative raises the stakes for compliance beyond the $1 billion in Cornell federal research contracts that the Trump Administration has threatened to suspend based upon alleged antisemitism and improper DEI practices.
Unlike class action lawsuits that are based upon the legal claims of a group of students or staff, a qui tam lawsuit is based upon a legal claim of the federal government. Cornell has recently defended class action lawsuits based upon student claims that Cornell overcharged for tuition during the COVID pandemic closing and that Cornell violated antitrust laws when calculating financial aid packages. Cornell must fund its own costs of defending both class action lawsuits and qui tam lawsuits.
The Dept. of Justice also released a memo describing the program. The memo states, “The Department strongly encourages these lawsuits.”
