Trump tariffs face key test at Federal Circuit, chief justices say states should consider bar exam alternatives and more ➡️

☀️ Good morning from The Legal File! Here is the rundown of today's top legal news:

 📦 Judges question whether Trump tariffs are authorized by emergency powers

U.S. appeals court judges sharply questioned whether President Donald Trump's tariffs were justified by the president's emergency powers, after a lower court said he exceeded his authority with sweeping levies on imported goods.

The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., is considering the legality of "reciprocal" tariffs that Trump imposed on a broad range of U.S. trading partners in April, as well as tariffs imposed in February against China, Canada and Mexico.

In hearing arguments in two cases brought by five small U.S. businesses and 12 Democratic-led U.S. states, judges pressed government lawyer Brett Shumate to explain how the International Emergency Economic Powers Act (IEEPA), a 1977 law historically used for sanctioning enemies or freezing their assets, gave Trump the power to impose tariffs.

Trump is the first president to use IEEPA to impose tariffs.

The arguments — one day before Trump plans to increase tariff rates on imported goods from nearly all U.S. trading partners — mark the first test before a U.S. appeals court of the scope of his tariff authority. The president has made tariffs a central instrument of his foreign policy, wielding them aggressively in his second term as leverage in trade negotiations and to push back against what he has called unfair practices.

Read more.

📑 Trump administration memo asks federal fund recipients to restrict DEI

The U.S. Justice Department issued a memo on July 30 asking recipients of federal funds to ban diversity, equity and inclusion programs, which President Trump has aimed to dismantle since taking office in January.

Trump has passed executive orders aimed at restricting DEI but the recent memo laid out specific examples of actions that it said federal fund recipients should restrict — such as some training sessions and policies aimed at protected groups. It also said federal funds should not be used to support third parties that engage in DEI.

Recipients of federal funds range from schools, colleges and universities to nonprofit organizations and private firms that are government contractors. The memo was released publicly by the Justice Department.

In an example to support one of its recommendations, the memo said that "a scholarship program must not target 'underserved geographic areas' or 'first-generation students' if the criteria are chosen to increase participation by specific racial or sex-based groups."

In another recommendation, it said a program targeting low-income students "must be applied uniformly without targeting areas or populations to achieve racial or sex-based outcomes."

Federal law already bars discrimination on grounds of race, gender and ethnicity.

The Trump administration has eliminated DEI-related programs in the government and fired many people who worked in those initiatives. It has faced some legal pushback. Several private firms have rolled back such initiatives in recent months.

Read more.

💲Brown University reaches deal to restore federal funding, will pay $50 million 

Brown University reached a deal on July 30 with the Trump administration to restore funding for the university's federally sponsored medical and health sciences research and to resolve some compliance reviews, the university and the government said.

Brown University said that as part of the deal, it will pay $50 million over 10 years to support workforce development in Rhode Island. Education Secretary Linda McMahon separately confirmed the deal in a statement.

The Trump administration has threatened to cut federal funds for institutions over pro-Palestinian protests against U.S. ally Israel's war in Gaza, climate initiatives, transgender policies and diversity, equity and inclusion programs.

Last week, Columbia University agreed to pay over $220 million to resolve federal probes. The New York Times reported on July 28 that Harvard was open to spending up to $500 million to end its dispute with the government. A U.S. official said in April the government would block $510 million in grants for Brown.

Rights advocates have raised concerns about free speech, academic freedom and due process over the government's funding threats against universities.

In particular, the government has alleged universities allowed antisemitism on their campuses during last year's pro-Palestinian protests.

Protesters, including some Jewish groups, say the Trump administration wrongly equates their criticism of Israel's military assault in Gaza and its occupation of Palestinian territories with antisemitism, while conflating their advocacy for Palestinian rights with support for extremism.

Read more.

✍️ States should consider bar exam alternatives, chief justices say

Establishing new ways to license attorneys beyond the bar exam and encouraging innovation by law schools are among the ways state courts can improve America's justice system, according to a report released on July 30 by a group of state chief justices.

The report comes from the Committee on Legal Education and Admissions Reform, an 18-month collaboration between the Conference of Chief Justices and the Conference of State Court Administrators. 

It said state supreme courts should take a more active role in legal education and attorney admissions in order to address unmet legal needs, declining public confidence in courts and the legal system, and barriers to public service legal careers. State supreme courts oversee attorney licensure.

The report recommended encouraging hands-on learning opportunities for lawyers and law students, reforming the bar admissions process and examining alternatives to the bar exam, streamlining character and fitness reviews, supporting public service attorneys, and encouraging attorneys to practice in rural areas.

To date, six states have enacted alternative attorney licensing pathways that don’t rely solely on the bar exam, and another seven are considering such alternatives, according to the report. Such moves can lower costs for law graduates and get them into practice sooner while also helping states encourage public service careers and legal access in rural areas, the committee found.

Read more.

👋 That's all for today, thank you for reading The Legal File, and have a great day!

For more legal industry news, read and subscribe to The Daily Docket.