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Analysis: SFFA decisions raise bar for race-based scholarships

The Conversation is an independent and nonprofit source of news, analysis and commentary from academic experts. Jeffrey C. Sun University of Louisville and Charles J. Russo University of Dayton The fate of hundred of millions of dollars in scholarship money is up in the air in Ohio after seven state universities put race-conscious programs on hold to check their legality. The review comes after Dave Yost, the state's attorney general, advised administrators in a call that using race as a factor to award funds may be unconstitutional. Yost's guidance was based on the U.S. Supreme Court's June 2023 decision in Students for Fair Admissions v. Harvard and Students for Fair Admissions v. UNC, which banned consideration of a student's race in college admissions, except under limited conditions. Yost's interpretation of the court's opinion should not have been a surprise. The day after the Supreme Court's decision, he had signaled that schools should clamp down on race-conscious programs. He warned that "disguised" race-conscious admissions policies are still race-conscious admissions policies. Targeting racial criteria Although Ohio did not consider race-conscious scholarships right after the Supreme Court decision came down, other states acted quickly to place such scholarships on the chopping block. Missouri's attorney general immediately banned the use of race in financial aid decisions. Officials at the universities of Kentucky and Missouri eliminated consideration of race in scholarships and grants. This raises a question that goes beyond Ohio: Are scholarships that use race as part of their criteria a thing of the past? The short answer is "no." But based on a review of the 2023 Supreme Court decision and other precedent, such programs will have to pass a tough judicial test. Even then, race can't be the only factor. Campus leaders have some guidance on what to do. In August 2023, for example, the federal departments of Justice and Education provided advice on how schools could keep a diverse student body without considering race in admissions decisions. Factors such as socioeconomic status, ZIP codes, high schools attended, academic achievements and demonstrated contributions to society could become more important in admissions decisions. But the federal agencies were silent on how the court's ruling would affect scholarships and financial aid. To figure that out, administrators may have to go back to the source: the 2023 Supreme Court decision. Diversity and 'strict scrutiny' When the Supreme Court reviewed the admissions programs at Harvard and the University of North Carolina, it used a strict scrutiny standard, the highest level of legal review under the 14th Amendment's equal protection clause. To pass muster, rules or laws that affect fundamental rights must serve a "compelling state interest" and be written to minimize their effect on such rights. In 2003 and again in 2016, the court ruled that a diverse student body is a compelling interest. But in 2023, Harvard and UNC weren't able to pass the strict scrutiny test. Both schools claimed their programs promoted diversity. The court ruled that the universities' race-conscious admissions programs involved racial stereotyping, lacked "sufficiently focused and measurable objectives warranting the use of race" and "unavoidably employ race in a negative manner." The programs violated both the equal protection clause of the Constitution and Title VI of the Civil Rights Act of 1964. Title VI bars discrimination based on race, color, or national origin in programs or activities that receive federal assistance, such as student loans and Pell Grants. Some legal scholars, not unreasonably, say the court's decision bans the use of race in awarding scholarships, as well as in admissions. But this overlooks two important facts: The Supreme Court did not rule that diversity can never be a compelling state interest or that race can never be considered. True, the use of race in many programs receiving federal assistance is now restricted, but it has not been completely outlawed. Even race-conscious admissions aren't completely off the table – if programs can pass the strict scrutiny test. Consideration of a student's race might be allowed if there is "an exceedingly persuasive justification that is measurable and concrete enough to permit judicial review," the court said. For example, the Supreme Court OK'd race-based policies at U.S. military academies on the theory that a strong national defense – a compelling state interest – requires a diverse officer corps. But after the Harvard and UNC decision, even these programs will need to explore other ways to achieve diversity. Strategies for diversity in admissions that don't take race into account, like those suggested by the departments of Education and Justice, can serve as a guide for school administrators. MIT and Stanford Law are among the programs already using criteria such as income, ZIP code and civic engagement to maintain diversity. More challenges ahead The use of race in scholarships and admissions is just one legal challenge race-conscious programs face. In July 2023, 13 state attorneys general – from Alabama, Arkansas, Indiana, Iowa, Kansas, Kentucky, Mississippi, Missouri, Montana, Nebraska, South Carolina, Tennessee and West Virginia – sent a letter urging Fortune 100 CEOs to eliminate all such programs at their companies. Critics of these programs also questioned the use of race in scholarship and financial aid programs funded from outside a university, including fellowships that consider race when helping underserved students. In contrast, some campus leaders and lawyers argue that the court's decision should be limited to race-conscious admissions. They argue it should not include other programs where race might be used as a factor. This article is republished from The Conversation.

$34.6 million verdict: Patent infringement case protects, rewards SC company

Action: Infringement Injuries alleged: Patent infringement with trade dress allegations Case name: GeigTech East Bay LLC v. Lutron Electronics Inc. Court/case no.: U.S. Southern District of New York / 18 civ 5290 Judge: Colleen McMahon Amount: $34.6 million Date: March 15, 2024 Most helpful expert: Douglas Kim, patent attorney, of Kim, Lahey & Killough, Greenville Attorneys: Gary Sorden of Cole Schotz, Dallas (for the plaintiff); Scott W. Breedlove of Carter Arnett, Dallas (for the defendant) GeigTech East Bay, a South Carolina company that makes modern window shades, obtained U.S. Patent No. 10,294,717, for a "shade bracket with concealed wiring" on May 21, 2019. The patent was originally filed by Richard J. McKenna of Foley & Lardner, Milwaukee, and obtained by Douglas Kim, a registered patent attorney, of Kim, Lahey & Killough, Greenville. GeigTech filed a federal patent infringement complaint with trade dress allegations against Lutron Electronics Co. Inc. One of the tactics Lutron used to try to invalidate the patent. However, the patent written by Kim withstood two challenges in the United States Patent Trial and Appeal Board and a jury trial. On March 12, the jury returned a verdict stating that Lutron had infringed on GeigTech’s patent and awarded $34.6 in damages. According to the jury verdict form, “Lutron opted to poach (GeigTech’s) patented designs and intellectual property to try and remain competitive in a segment of the market that (GeigTech) cornered.” As the finding of infringement was willful, GeigTech can ask the judge to triple the damages.

Defense verdict: Jury turns back lawsuit from pandemic-inspired claim

Action: Breach of contract and violation of South Carolina Unfair Trade Practices Act Injuries alleged: Breach of contract, unfair trade practice act, breach of warranty Case name: HHBC Inc. v. Jamis Bicycles Court/case no.: Beaufort County Common Pleas / 2021-CP-07-00143 Judge: Bobby Bonds Injuries alleged: $1.03 million (subject to tripling and addition of attorney’s fees to an estimated $4.5 million) Date: March 19, 2024 Most helpful expert: George Durant, CPA, Columbia Attorneys: Ashley Twombley and Thomas Iandoli of Twenge + Twombley, Beaufort (for the defendant); John Bowen of Laughlin & Bowen, Hilton Head (for the plaintiff) In 2021, plaintiff Hilton Head Bicycle Co. sued Jamis Bicycle Corp., alleging defendant breached a bicycle supply contract and caused plaintiff more than $1 million in damages. Plaintiff further alleged that the manner in which defendant breached the contract violated the South Carolina Unfair Trade Practices Act, allowing plaintiff to seek treble damages and attorney’s fees. The total exposure was estimated to be $4.5 million. A central issue at trial involved the unforeseen effects of COVID-19 pandemic on the supply chain, and whether these effects excused defendant from the alleged breach. This is one of the few known jury verdicts dealing with the unforeseen effects of COVID-19 and the South Carolina Uniform Commercial Code’s “commercial impracticably” provisions. Another central issue involved plaintiff's alleged damages, which were ultimately limited by the trial court judge before being presented to the jury. When plaintiff’s damages were presented to the jury, defendant alleged plaintiff’s damages claims were not supported by sufficient documentation (a calculation methodology, receipts, invoices, etc.) and amounted to little more than a homemade list of numbers set forth on a single sheet of paper. In closing arguments, plaintiff’s counsel Ashley Twombley argued, “My children have prepared Christmas list with more detail than this wish list prepared by .” After a six-day trial, the jury returned a unanimous verdict in favor of defendant, concluding it did not breach the contract, and that plaintiff was not entitled to any damages.