The American Bar Association agreed to settle a lawsuit alleging its diversity legal scholarship fund violated the 1866 Civil Rights Act by excluding White applicants while limiting participation to underrepresented racial and ethnic groups. The American Alliance for Equal Rights claimed the fund relied on race-based eligibility in violation of protections covering contracts without regard to race. The ABA said that, consistent with a prior board resolution, it expanded eligibility for relevant programs to all participants who share the ABA’s values regardless of how participants identify themselves. AAER’s president Edward Blum framed the settlement as a signal that the ABA effectively dismantled the challenged policy. For higher education stakeholders—particularly law schools and professional graduate programs—the settlement underscores how civil-rights enforcement and institutional scholarship criteria are converging under heightened scrutiny of DEI policies.