ABA settles lawsuit over scholarship fund eligibility rules

The American Bar Association has settled a lawsuit over its Legal Opportunity Scholarship Fund, ending a challenge that pushed the nation’s largest voluntary association of lawyers to recast one of its diversity programs around eligibility rules meant to withstand equal-protection scrutiny.

The dispute centered on whether the scholarship, long tied to the ABA’s Goal III diversity mission, unlawfully excluded white applicants. The American Alliance for Equal Rights, led by Edward Blum, filed suit in the U.S. District Court for the Northern District of Illinois in April 2025, nine days after the ABA Board of Governors adopted a resolution saying Goal III programs should be open to all people who share the association’s commitment to that goal, and that eligibility should rest on demonstrated commitment rather than group identity.

By April 27, 2026, the ABA said it had reached a settlement with AAER through a joint stipulation of dismissal. The association said it had already informed the court that it was implementing the board’s April 3, 2025 resolution and that changes to the scholarship would take effect before the next application cycle, rendering the case moot. The new rules, announced in October 2025, require applicants to be entering first-year law students, have at least a 2.5 undergraduate GPA, and show a strong commitment to advancing diversity, equity and inclusion.

The rewrite matters because it shows how legal institutions are trying to preserve diversity pipelines after the Supreme Court’s 2023 Students for Fair Admissions decision narrowed race-conscious admissions policies. In that climate, the ABA has kept its Goal III language intact while changing how programs are structured and defended. The association says Goal III exists to eliminate bias and enhance diversity in the association, the profession and the justice system, but the scholarship fight shows that mission now has to be translated into criteria framed in universal terms.

Bloomberg Law reported on Nov. 4, 2025, that the ABA had already updated the scholarship to accept applicants who demonstrated a strong commitment to advancing DEI, while AAER said it would keep pressing the case. The settlement now locks in that shift. The ABA says the Legal Opportunity Scholarship has existed for 26 years, has benefited more than 400 students, and currently awards 20 to 25 incoming law students each year, with grants of $15,000 paid over three years of law school.

The case also lands after other pressure on the ABA’s diversity work. In January 2025, 21 state attorneys general warned the association that its law school diversity standard did not account for the SFFA ruling, and in February a coalition asked the Equal Employment Opportunity Commission to investigate an ABA diversity clerkship hiring program. Together, those fights suggest a broader legal profession rewrite is underway, one in which diversity programs are being preserved, but only after being redesigned to survive the new constitutional and statutory terrain.