Alert
02.12.26
On February 6, 2026, the U.S. Court of Appeals for the Fourth Circuit issued a final Order in the case NADOHE v. Trump, permanently vacating a district court’s preliminary injunction against several provisions of Executive Order (EO) 14151, “Ending Radical and Wasteful Government DEI Programs and Preferencing,” and EO 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (as discussed in a previous client alert, the Fourth Circuit temporarily stayed the injunction in March 2025). The EOs sought to deter diversity, equity, and inclusion (DEI) initiatives. The plaintiffs challenged the provisions that directed federal agencies to terminate all “equity-related” grants and contracts, to require all federal funding recipients to certify that they do not “promot[e] DEI” that violates antidiscrimination laws, and to identify targets for civil investigations into “illegal DEI.” The plaintiffs—an association of diversity officers in higher education, an association of university professors, and the City of Baltimore—argued that these provisions were facially unconstitutional under the First Amendment and Fifth Amendment. While the Fourth Circuit held that the “plain text” of the EOs alone did not provide enough of a foundation for an injunction that relied on a facial challenge, the court’s decision did not rule out future challenges to the Trump administration’s interpretation and application of the EO provisions.
Enforcement Threat Provision
The court first addressed EO 14151’s “Enforcement Threat Provision,” which directed the Attorney General and agency leaders to develop a report recommending strategies to enforce federal civil rights laws and deter “illegal DEI” programs. The plaintiffs alleged that the provision was unconstitutionally vague under the Fifth Amendment’s Due Process Clause and that it violated the First Amendment, arguing that it chilled their speech and conduct in support of DEI because they feared that the Trump administration would retaliate by cutting funding or imposing penalties. The Fourth Circuit did not analyze the merits of this claim, finding instead that the alleged harm to the plaintiffs was too speculative and, as such, they lacked standing to bring the claim.
Specifically, the court explained that the plaintiffs’ theory of harm depended on a chain of contingent events: (1) the Attorney General would have to propose a plan to cut funds for organizations engaged in disfavored DEI activities, even though the provision does not mention funding; (2) the President would then have to adopt that part of the recommended enforcement plan; (3) the finalized plan would have to include at least one of the plaintiffs; and (4) some government actor would have to enforce the plan and cut funding. The court described this as “multi-tiered speculation” and held that such conjectural future harms cannot support standing, also noting that “it is difficult to see how [the plaintiffs] can be in imminent danger of an injury based on a provision that simply requires a cabinet official to issue a report at a future date.”
Termination and Certification Provisions
The court reached a different conclusion on standing and ripeness with respect to EO 14151’s “Termination Provision” and EO 14173’s “Certification Provision” but ultimately held that plaintiffs were unlikely to succeed on a claim that those provisions are facially unconstitutional. As described in prior alerts detailing the district court’s issuance of the preliminary injunction, and the Fourth Circuit’s temporary stay of same:
The Fourth Circuit held that the plaintiffs had standing to challenge these provisions because both provisions directly affect the terms of federal grants and contracts on which the plaintiffs rely. The Fourth Circuit noted that the Certification Provision presented plaintiffs with the real injury of a “lose-lose-lose choice” based on their planned activities, in which they would either have to change their programs to make the certification, risk a false certification, or forfeit federal funds and contracts. The court also held that the claims against these provisions were constitutionally ripe because neither the termination of plaintiffs’ contracts nor the chilling of their First Amendment activity were speculative or hypothetical, as the plain text of the EOs grants agencies “little discretion when it comes to enforcement.”
However, because the plaintiffs had challenged the provisions as facially unconstitutional (as opposed to challenging their specific application to the plaintiffs), the court focused solely on the plain text of the provisions, holding that the plaintiffs were unlikely to be able to establish that either provision was unconstitutional in substantially all applications.
As to the Termination Provision, the court noted that (on its face) it asks nothing of the plaintiffs, nor does it regulate private conduct. It merely “instructs the President’s subordinates to act and only ‘to the maximum extent allowed by law.’” The court noted that the President has broad authority to set policy priorities and instruct agencies on how to allocate funds within the bounds of existing law and that it is not the judiciary’s role to assess whether the policy is sound. The constitutional question, the court explained, will arise only if and when a particular funding decision is alleged to violate a recipient’s rights.
As for the Certification Provision, the court held that it ultimately requires only that contractors and grantees comply with federal anti-discrimination laws and certify that they do not operate DEI programs that violate those existing laws, which the Constitution does not confer a right to violate. The court noted: “Plaintiffs suggest that defendants view all DEI programs as illegal under existing antidiscrimination law. Perhaps, but the Certification Provision doesn’t say that.” If, in practice, the President or an agency misinterprets federal anti-discrimination law and uses the certification requirement to penalize lawful DEI programs, affected recipients can later challenge that interpretation in a specific enforcement proceeding.
Chief Judge Diaz’s Concurrence Signals Important Limits and Enduring Protections
In addition to authoring the opinion for the court, Chief Judge Diaz also wrote a concurrence that underscored serious concerns about how the Administration may ultimately interpret and enforce the EOs, and he emphasized that the court’s ruling should not be read as a blank check for overreach. He cautioned that the court’s ruling rested on the interpretation of the EOs that attorneys for the Administration made to the court:
Defendants represented at oral argument that there is “absolutely” DEI activity that falls comfortably within the confines of the law. I hope that’s true. But the evidence cited by plaintiffs, their amici, and the district court suggests a more sinister story: important programs terminated by keyword; valuable grants gutted in the dark; worthy efforts to uplift and empower denigrated in social media posts.
His concurrence explained that he felt bound to rule based on “the limited question before us” and concluded with a closing message: “For those disappointed by the outcome, I say this: Follow the law. Continue your critical work. Keep the faith. And depend on the Constitution, which remains a beacon amid the tumult.”
Judge Diaz’s concurrence reinforces a key takeaway of the decision: challenges to particular agency actions may succeed if enforcement extends beyond existing law or violates the Constitution. For contractors and grantees acting in good faith and within the bounds of federal anti-discrimination law, meaningful legal protections endure.
Practical Next Steps for Contractors and Grantees
In light of the Fourth Circuit’s decision, federal contractors and grant recipients should continue to assume that enforcement of EO 14151 and EO 14173 may proceed, subject to the constraints of existing federal law and future, as‑applied challenges. Federal contractors and grant recipients should: