Justice Department compliance review of the Minnesota Department of Health has closed after Minnesota repealed the statute behind a grant program that federal officials said used race, color and national origin in deciding which applicants could receive public funding.
The July 7 announcement from the Justice Department’s Office of Public Affairs said the Minnesota Department of Health, known as MDH, had voluntarily resolved the review under Title VI of the Civil Rights Act of 1964. The review concerned the Capacity Strengthening Initiative, a state grant program designed for organizations serving people of color.
According to the Department, the Capacity Strengthening Initiative limited eligible grantees to organizations that worked with people of color, gave strategic consideration and priority to proposals from organizations led by populations of color, and directed grant funds toward counties with higher proportions of Black or African American and nonwhite Latino communities. After the Department notified MDH of the compliance review, Minnesota repealed the enabling statute and MDH confirmed that the program had ended.
Assistant Attorney General Harmeet K. Dhillon, who leads the Justice Department’s Civil Rights Division, framed the resolution around the rule that recipients of federal financial assistance cannot allocate benefits on the basis of race, color or national origin. The Department then closed the review without announcing litigation, a consent decree or a separate court filing.
The development matters for state agencies, health departments, universities, nonprofits, contractors and grant recipients that rely on federal funds while operating diversity, equity, outreach or capacity-building programs. In-house counsel should expect closer review of eligibility language, scoring criteria, board materials, grant notices and internal communications where protected characteristics appear in funding decisions.
The broader legal sector context is a sharper federal focus on race-conscious public funding criteria. Title VI applies to recipients of federal financial assistance and the Minnesota review shows how a program can attract scrutiny even when it is presented as community support rather than exclusion.
In-house counsel should treat the Minnesota Department of Health review as a warning that Title VI risk can begin before any grant is awarded. Eligibility wording, priority criteria and program purpose may all become evidence if the Justice Department questions whether federal funds are being allocated on the basis of race, color or national origin.
Law firms advising public agencies, healthcare organizations, universities and nonprofits should test whether grant documents draw a clear line between lawful outreach and race-conscious award criteria. Civil Rights Division scrutiny is likely to focus on program design, procurement records and scoring files before any dispute reaches court.