Justice Department Launches Unprecedented Use of False Claims Act to Target Civil Rights Violations

In a major policy shift, the Department of Justice has announced plans to use the False Claims Act (FCA) to pursue organizations that violate federal civil rights laws while receiving government funds. The initiative, detailed in a May 19, 2025, memorandum from Deputy Attorney General Todd Blanche, signals a significant expansion of the government’s enforcement toolkit against what the administration describes as “illegal DEI” practices.

The memorandum states the DOJ will “utilize the False Claims Act to investigate and, as appropriate, pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws.” This approach represents a departure from traditional enforcement mechanisms, where multiple agencies have typically shared oversight of civil rights compliance.

The False Claims Act, originally created during the Civil War to combat defense contractor fraud, prohibits knowingly submitting false claims or making false representations to the federal government. Violations can result in severe penalties, including treble damages. In fiscal year 2024 alone, the DOJ collected nearly $3 billion from FCA settlements and judgments.

Under the new initiative, contractors or grant recipients could face FCA liability if they falsely certify compliance with civil rights laws while engaging in practices the administration considers discriminatory. The memorandum specifically mentions Title IV, Title VI, and Title IX of the Civil Rights Act of 1964 as potential areas of enforcement.

The policy appears to be implementing Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” issued by President Trump on January 21, 2025. That order directed federal agencies to end what it characterized as “dangerous, demeaning, and immoral race- and sex-based preferences under the guise of so-called ‘diversity, equity, and inclusion.'”

Legal experts note that successful FCA actions typically require proving three key elements: the representation must be fraudulent, knowing, and material. This means the government would need to demonstrate an actual legal violation occurred, not merely assert that a practice violates their interpretation of civil rights laws.

“The materiality requirement creates a significant hurdle,” said one legal observer who requested anonymity. “Just because the government claims a practice violates civil rights laws doesn’t automatically make it so under existing case law. Courts will ultimately determine whether these representations are material.”

The memorandum provides examples where universities accepting federal funds could potentially violate the FCA, including when they “encourage antisemitism, refuse to protect Jewish students, allow men to intrude into women’s bathrooms, or require women to compete against men in athletic competitions.” It also targets “racist preferences” in DEI programs that “assign benefits or burdens on race, ethnicity, or national origin.”

However, some legal experts question whether the administration’s positions align with current judicial interpretations, particularly regarding transgender rights, which remain contested in various court cases nationwide.

For government contractors and grant recipients, this policy shift creates significant new compliance considerations. Organizations may need to review their diversity initiatives, internal reporting procedures, and complaint handling processes to minimize potential FCA exposure.

Legal advisors recommend several risk mitigation strategies, including conducting thorough due diligence before making representations to the government, establishing robust internal reporting mechanisms, promptly investigating civil rights complaints, and consulting with counsel regarding potential good faith defenses to FCA actions.

The initiative reflects the administration’s stated priority of targeting what it views as discriminatory diversity programs, but its implementation may face judicial scrutiny as cases develop. The lack of precedent in applying the FCA to civil rights matters could complicate enforcement efforts and leave many organizations uncertain about compliance requirements.

As this policy unfolds, contractors and grant recipients will need to carefully navigate the intersection of civil rights compliance and government contracting to avoid potential FCA liability while fulfilling their legal obligations to employees and students.