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Comment by djoldman | Hacker News Reader

> These terms included affirming the statement that we “do not, and will not during the term of this financial assistance award, operate any programs that advance or promote DEI, or discriminatory equity ideology in violation of Federal anti-discrimination laws.”

(Emphasis mine)

I'm curious if any lawyer folks could weigh in as to whether this language means that the entire sentence requires the mentioned programs to be "in violation of Federal anti-discrimination laws." If so, one might argue that a "DEI program" was not in violation of a Federal anti-discrimination law.

Obviously no one would want to have to go to court and this likely would be an unacceptable risk.

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Not a lawyer, but the NSF clause covering clawbacks is pretty specific:

> NSF reserves the right to terminate financial assistance awards and recover all funds if recipients, during the term of this award, operate any program in violation of Federal antidiscriminatory laws or engage in a prohibited boycott.

A "prohibited boycott" is apparently a legal term aimed specifically at boycotting Israel/Israeli companies, so unless PSF intended to violate federal law or do an Israel boycott, they probably weren't at risk. They mention they talked to other nonprofits, but don't mention talking to their lawyers. I would hope they did consult counsel, because it would be a shame to turn down that much money solely on the basis of word of mouth from non-attorneys.

I don't think you are misunderstanding the surface requirements, but I think you are mistaking “would eventually, with unlimited resources for litigation, prevail in litigation over NSF cancelling funds, assuming that the US justice system always eventually produces a correct result” with “not at risk”.

I can imagine that a very risk averse lawyer would have pointed out the costs and uncertainties of litigation in cases like this. But if I were in their shoes and I really cared about the money, I would have pressed that lawyer to show examples where the clawback clause had been invoked since Jan 20. I'm not sure it's happened, which seems relevant to estimating the actual risk.

Interestingly, they may get more in donations than they would have from this grant, so maybe that needs to be including in the risk estimate as well...

> But if I were in their shoes and I really cared about the money, I would have pressed that lawyer to show examples where the clawback clause had been invoked since Jan 20.

And the lawyer would be able to present hundreds of cases covering billions of dollars of federal grants, cancelled since Trump issued EO 14151 setting in black and white the Administration's broad crusade against funding anything with contact with DEI and declaring the DEI prohibition a policy for all federal grants and contracts, under different grant programs, many of which were originally awarded before Trump came back to office and which would not have had DEI terms in the original grant language. They'd also be able to point out that some of the cancellations had been litigated to the Supreme Court and allowed, other clawbacks had been struck down by lower courts and were still in appeals.

Yeah it looks like about 1500 grants:

https://www.urban.org/urban-wire/nsf-has-canceled-more-1500-...

But if the concern is about the provision allowing NSF to claw back funds that have been spent by the organization then the question remains: has that happened? Right now if you search for terms related to NSF clawbacks, most of the top results refer to the PSF's statement or forum discussions about it (like this one). I can't find any instances of a federal clawback related to DEI. If that had happened I would assume that the response from the awardee would have been noisy.

If it was simply an agreement that the recipient won’t violate Federal law, it wouldn’t need to be stated (how could the intention be otherwise?). So I read it as an agreement to an interpretation that doing those things would violate the law.

> I read it as an agreement to an interpretation that doing those things would violate the law.

The Executive branch can make any claim it wants, but the Judiciary branch has the authority to decide what a reviewable claim means.

The GP's point is that it puts recipients in the position of having to argue that something they agreed to is invalid. This presumably places a higher burden of proof on the company.

In the absence of such a statement, the first claim would need to be "the DEI program your company runs is against federal law", which could then be tested in the courts.

> The GP's point is that it puts recipients in the position of having to argue that something they agreed to is invalid. This presumably places a higher burden of proof on the company.

Understood; while I disagree with the GP's point, I do appreciate your response.

I don't believe such example clauses raise the threshold for the defense against a claim given that there could be practically unlimited number of such examples. I don't believe that any such example so highlighted creates an effective higher priority than any other possible example under 14th amendment equal protection grounds.

Does the DOJ or PSF have more money for lawyers? If the answer isn’t the latter, the PSF is quite reasonably concluding that regardless of how a fair court might rule it would be financially perilous to attempt to stick up for the law, especially when a Republican supreme court has a fair chance of inventing another pretext for denying victory or allowing maximal harm to be done before acknowledging the law.

Ok? But that wasn't the OP's argument. Did you reply to the wrong thread?

No. I was just pointing out that your downplaying of the risks in this thread is too cavalier: I believe they think, as do I, that even the cost of testing the legality of a particular interpretation would be crushing for a small non-profit.

If your point is that corporate lawyers tend to see monsters behind every blade of grass, I agree. This is what they are paid to do. If I am a cavalier, it is to calm this community, to point out that they are over-indexed on this language and that it is the courts jurisdiction to decide what is meant.

There is no language that will magically prevent a government from canceling a grant and requiring a grantee to pursue relief from the court. This type of guarantee does not exist.

> If it was simply an agreement that the recipient won’t violate Federal law, it wouldn’t need to be stated (how could the intention be otherwise?).

Statements about not breaking specific existing laws are common in government contracts in the US (at all levels), functionally, they make violating the law a breach of contract. This enables the government to declare a breach and cancel the contract without the litigation that would be required for even a civil penalty for breaking the law, forcing the contractor to litigate for breach of contract (claiming that they did not breach the contract so that the government cancellation was itself a breach) instead.

Using a fantasy (“discriminatory equity ideology”) with an initialism collision with a common inclusivity practice (DEI), combined with recent practice by the same Administration, is clearly a signal of where the government intends to apply the guilty-until-proven-innocent approach in this case.

Yes, that’s what I meant, stated more clearly. The contract is spelling out behavior that both sides agree up front that they consider a violation of the law, so you can’t claim that you didn’t think you were breaching the contract because you didn’t think you were violating the law.

Or more specifically a warning that the administration intends to interpret the law in that manner, whether it is true or not. PSF could easily spend more than $1.5M in a lawsuit to challenge that interpretation if their grant was clawed back, so financially it isn't worth taking the money.

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