Can Kamehameha Schools Escape the Lawsuit by Eliminating Tuition?
Understanding the legal strategy behind a surprise announcement
What Just Happened
On December 23, 2025, just two months after Students for Fair Admissions filed a federal lawsuit challenging Kamehameha Schools' Native Hawaiian admissions preference, the school's Board of Trustees made a stunning announcement: starting with the 2026-27 school year, Kamehameha will no longer charge tuition.
The timing raised immediate questions. Was this a long-planned decision about fulfilling Princess Pauahi's vision? Or a calculated legal maneuver to sidestep the lawsuit?
The board's letter framed the decision in cultural terms. They wrote that "tuition suggests a transactional exchange" inconsistent with the relationship between "Ke Ali'i Pauahi" (Princess Pauahi) and her people. "Responsibility at Kamehameha has never flowed from payment," they explained. "It flows from aloha, ancestral connection, and preparation."
But the legal implications are impossible to ignore. The lawsuit against Kamehameha rests on a federal civil rights law—Section 1981—that prohibits racial discrimination in contracts. And the reason Section 1981 applies to private schools, according to past court decisions, is because charging tuition creates a contract.
So what happens if there's no tuition?
Kamehameha's Own Explanation
In a FAQ accompanying the announcement, Kamehameha Schools addressed the lawsuit directly—but framed it in cultural rather than legal terms.
Question: "Will this affect our efforts to defend our admissions policy?"
Kamehameha's Answer:
"External parties have attempted to frame Pauahi's relationship with her po'e keiki through a Western contractual lens. Kamehameha Schools rejects that framing. This decision strengthens the clarity that a Kamehameha education is Pauahi's gift, defined by her intent."
This is as close as Kamehameha comes to acknowledging the legal strategy. They're not saying "we're eliminating tuition to avoid Section 1981." Instead, they're saying "we reject the premise that this relationship is contractual at all."
The FAQ emphasizes that tuition "represented only a small fraction of the true cost of education" and that "tuition suggests a transactional exchange" inconsistent with the ali'i-lāhui relationship. "Responsibility at Kamehameha Schools has never flowed from payment," they explain. "It flows from aloha, ancestral connection, and preparation."
This framing serves dual purposes:
- Culturally: It repositions the school's mission in Hawaiian terms, rejecting Western frameworks
- Legally: It attacks the fundamental premise that admission to Kamehameha involves a "contract" at all
The Legal Foundation: Why Section 1981 Matters
To understand Kamehameha's strategy, you need to understand the law they're facing.
Section 1981, originally part of the Civil Rights Act of 1866, states that all persons shall have "the same right... to make and enforce contracts... as is enjoyed by white citizens." The law was written to ensure newly freed slaves could participate equally in economic life.
For most of its history, Section 1981 applied primarily to employment and property. Then in 1976, the Supreme Court decided Runyon v. McCrary, holding that Section 1981 also prohibits private schools from denying admission to students based on race.
The Runyon case involved two private schools in Virginia that refused to admit Black children. The Supreme Court ruled this violated Section 1981 because admission to school involves making a contract:
"The parents sought to enter into contractual relationships with [the schools] for educational services. Under those contractual relationships, the schools would have received payments for services rendered, and the prospective students would have received instruction in return for those payments."
Notice the language: "payments for services rendered" and "instruction in return for those payments." The Court's reasoning emphasized the exchange of money for education.
How This Applied to Kamehameha in 2006
When a family first challenged Kamehameha's admissions policy in 2003, this same question arose: Does Section 1981 apply to Kamehameha Schools?
The Ninth Circuit Court of Appeals said yes, in an 8-7 decision. Writing for the majority, the court noted that "because the schools charge tuition (albeit at a rate that represents only a fraction of the cost to educate students), the bargained-for exchange of payments for instruction exists here, as it did in Runyon."
The court added an important footnote: "We need not and do not decide whether § 1981 would apply if the Schools charged no tuition at all, but simply donated education to Native Hawaiian students."
In other words, the court explicitly left open the question we're now facing.
Even more tellingly, Judge Alex Kozinski wrote in his dissent:
"I don't believe section 1981 would apply at all if the schools were run entirely as a philanthropic enterprise and allowed students to attend for free... I have found no case where section 1981 has been applied to a charity."
Judge Kozinski essentially provided Kamehameha with a roadmap: eliminate tuition, potentially eliminate the lawsuit.
Kamehameha's Argument: No Payment, No Contract
If this case goes to court, here's what Kamehameha will likely argue:
1. Runyon Requires Payment
The Supreme Court's decision in Runyon was specifically about schools that charged tuition. The Court repeatedly emphasized the payment aspect of the relationship. Without payment, there's no "bargained-for exchange"—a fundamental requirement of contract law.
2. This Is Pure Charity Now
When an organization simply gives something away for free, that's not a contract—it's a gift. Contract law distinguishes between contractual relationships (where both parties exchange something of value) and charitable giving (where one party simply benefits another).
3. Judge Kozinski Said This Would Work
A Ninth Circuit judge already suggested that Section 1981 doesn't apply to schools that "simply donated education." While this was in a dissent (meaning it wasn't the court's official ruling), it shows that serious legal minds find this argument plausible.
4. No Federal Court Has Applied Section 1981 to Free Education
Despite Section 1981 existing since 1866, and despite countless schools and educational programs operating as charities, no federal court has ever held that Section 1981 applies when there's no tuition charged.
5. This Was Never Really a Contract
Kamehameha's FAQ reveals a deeper argument: the relationship between the school and its students was never truly contractual, even when tuition was charged. The tuition families paid "represented only a small fraction of the true cost of education"—it never reflected the actual exchange. This was always a gift from Pauahi's trust to Native Hawaiian children. The tuition was an administrative detail, not the substance of the relationship.
By this logic, the 2006 court was wrong to characterize the relationship as contractual just because a nominal fee was charged. Eliminating that fee doesn't change the relationship—it just clarifies what was always true.
6. Western Legal Frameworks Don't Define This Relationship
Kamehameha explicitly "rejects" the attempt to view Pauahi's relationship with Native Hawaiian children "through a Western contractual lens." The ali'i-lāhui relationship predates American law and exists independently of Western legal categories. Courts should respect that cultural framework rather than imposing foreign concepts.
SFFA's Counter-Argument: Contracts Exist Beyond Payment
Students for Fair Admissions will almost certainly argue that eliminating tuition doesn't eliminate the legal problem. Here's their likely response:
1. Parents Still Sign Binding Contracts
Even without tuition, Kamehameha requires parents to sign multiple agreements:
- The "Access Agreement" to create an account and apply
- The "Acknowledge, Consent, and Authorization" to submit the application
- The "Enrollment Contract/General Release" to enroll
Each agreement requires parents to give up something of value: they waive legal rights, grant Kamehameha publicity rights to use photos of their children, and agree to indemnify the school. In contract law, when you give something up in exchange for a benefit, that's "consideration"—enough to create a binding contract.
The SFFA complaint specifically points out that these agreements "contain a choice-of-law provision and a forum-selection clause" and emphasize their contractual nature with language like "THE CONTENTS AND NATURE OF THIS AGREEMENT ARE CONTRACTUAL, NOT A MERE RECITAL."
2. Section 1981's Text Doesn't Require Payment
The statute guarantees "the same right... to make and enforce contracts." It doesn't say "the same right to make and enforce contracts involving payment." The law's plain language covers all contractual relationships, paid or unpaid.
3. Enrollment Itself Is Valuable Consideration
When a student enrolls at Kamehameha, they're providing something valuable to the school:
- Their participation in the school community
- Their contributions to class discussions and activities
- Their future success as alumni who reflect well on the school
- Their presence helps fulfill the school's educational mission
This mutual exchange—education for participation—could constitute a contract even without money changing hands.
4. You Can't Evade Civil Rights Laws by Restructuring
Allowing schools to escape Section 1981 by eliminating tuition would create a dangerous precedent. Any private school could discriminate based on race, then avoid legal consequences by restructuring as a charity. Courts generally don't allow defendants to evade civil rights laws through creative restructuring.
The timing here is particularly suspicious: Kamehameha charged tuition for 138 years, then eliminated it two months after being sued under a law that applies because of tuition. That looks like evasion, not evolution.
5. Kamehameha Previously Admitted This Was Contractual
For nearly 140 years, Kamehameha operated on the premise that admission involved contracts. They charged tuition, signed enrollment contracts, required tuition contracts, and never disputed the contractual nature of the relationship—even during the 2006 lawsuit when they could have made this argument.
Courts sometimes prevent parties from taking contradictory positions through a doctrine called "judicial estoppel." While that typically applies within a single lawsuit, the principle reflects a broader concern: parties shouldn't be allowed to claim "this was never a contract" after operating for over a century as if it was.
6. Cultural Framing Doesn't Override Federal Civil Rights Law
Whatever the cultural significance of the ali'i-lāhui relationship, federal civil rights laws apply in Hawaii just as they do everywhere else in the United States. The Supremacy Clause of the Constitution makes federal law "the supreme law of the land." Cultural frameworks can inform how we understand relationships, but they can't exempt institutions from federal antidiscrimination laws.
The Supreme Court already rejected a similar argument in Rice v. Cayetano (2000), where Hawaii tried to limit voting rights based on Native Hawaiian ancestry. The Court held that however special the relationship between Native Hawaiians and the state, it couldn't justify racial classifications that violated the Fifteenth Amendment.
What the Law Says About Contracts
To understand who's right, we need to dig a bit into contract law.
Traditional contract law requires three elements:
- Offer - One party proposes something
- Acceptance - The other party agrees
- Consideration - Both parties exchange something of value
The tricky question is #3: consideration. Does "something of value" have to be money?
Not necessarily. Courts have found contracts where the consideration was:
- A promise not to sue
- Giving up a legal right
- Performing a service
- Even emotional or personal satisfaction in some cases
By this standard, when Kamehameha parents sign agreements waiving their legal rights and granting publicity rights, they're providing consideration. The fact that they don't also pay tuition might not matter.
But there's another principle: gratuitous promises (promises to give gifts) generally aren't enforceable as contracts. If I promise to give you $100 as a gift and then don't, you can't sue me for breach of contract—because there was no contract, just a failed promise.
Is Kamehameha's offer of free education more like a contract or a gift?
The answer might depend on whether parents are required to give up legal rights or agree to obligations in order to receive the education. If acceptance of the "gift" requires signing away rights, courts might see that as consideration sufficient to create a contract.
The Timing Question
There's an elephant in the room: the announcement came just two months after the lawsuit was filed.
Kamehameha's board letter makes no mention of the lawsuit. Instead, it frames the decision as a spiritual and cultural evolution—part of "a broader, intentional effort to clarify Ke Ali'i Pauahi's enduring relationships with her haumāna, her lāhui, and her 'āina."
But courts aren't blind to timing. When a defendant changes their behavior immediately after being sued, judges consider whether that change is:
- A genuine evolution that would have happened anyway, or
- A strategic maneuver to evade the lawsuit
This could cut both ways:
For Kamehameha: The board letter shows this fits into their existing strategic plan (E Ola! and Strategic Plan 2030). They've been evolving toward a culture-based model for years. The tuition elimination is a logical next step in that evolution, not a panicked legal response. The cultural framing is consistent with their long-term direction.
For SFFA: The timing is too convenient to ignore. Kamehameha has charged tuition for 138 years. They suddenly eliminate it two months after a lawsuit that specifically relies on tuition as the basis for Section 1981? The FAQ even acknowledges that "external parties" are trying to frame the relationship as contractual—then announces a change that removes the most obvious contractual element. That looks like restructuring to evade civil rights laws.
What About Past Discrimination?
Even if eliminating tuition works going forward, SFFA's lawsuit also seeks damages for past discrimination.
The complaint specifically mentions Families A and B who wanted to apply in previous years when Kamehameha charged tuition. Those applications definitely involved contracts—the tuition contracts that Kamehameha required parents to sign, which the school's own documents described as binding contractual obligations.
The complaint quotes from Kamehameha's "KS Tuition Contract" which made parents agree "to pay KS tuition" "in consideration for KS's enrollment of" their child. For the 2025-26 school year (before the tuition elimination), parents had to pay $5,675, $6,983, or $12,934 per student depending on campus and grade.
So even if the court agrees that Section 1981 doesn't apply to the new tuition-free model, Kamehameha might still face liability for past exclusions when tuition was charged. The tuition elimination might protect them going forward, but it can't undo the contractual relationships from prior years.
The Unanswered Questions
This legal strategy raises fascinating questions that courts have never directly addressed:
Can Kamehameha eliminate ALL contractual elements?
Even without tuition, some binding agreements seem necessary. Parents need to agree to follow school rules. The school needs permission for medical treatment in emergencies. Students need to agree to a code of conduct.
Can these all be restructured as "conditions of the gift" rather than contractual obligations? Or do they necessarily create a contractual relationship?
According to the SFFA complaint, Kamehameha currently requires parents to sign agreements that explicitly state: "THE CONTENTS AND NATURE OF THIS AGREEMENT ARE CONTRACTUAL, NOT A MERE RECITAL." Can the school continue using these same forms while simultaneously arguing no contract exists?
What did Congress intend in 1866?
The Civil Rights Act was written when:
- Most education required tuition
- Public schools were just emerging
- The concept of "free private education" funded by large endowments was essentially unknown
Did Congress intend for wealthy charitable schools to be exempt from civil rights laws? That seems unlikely given the law's purpose of ensuring equal access to economic opportunity. But the question has never been tested.
Does it matter that Kamehameha previously admitted it was a contract?
For 138 years, Kamehameha operated on the premise that admission involved a contract—they charged tuition, signed contracts, and in the 2006 lawsuit, never disputed the contractual nature. The Ninth Circuit majority opinion states that Kamehameha "concedes that it employs a preference that favors Native Hawaiian applicants."
Can they now claim "actually, this was never a contract"? Or does their century-plus of operating as if contracts existed prevent them from taking that position now?
How does this affect other civil rights laws?
If cultural frameworks can override "Western contractual" concepts for purposes of Section 1981, what about other federal laws? Could schools claim exemption from:
- Title VI (prohibiting race discrimination in federally funded programs)
- Title IX (prohibiting sex discrimination in education)
- The Americans with Disabilities Act
Kamehameha doesn't receive federal funds, so Title VI doesn't apply to them. But the broader principle—that cultural relationships exist outside Western legal frameworks—could potentially affect other institutions and other laws.
What Happens Next
The legal process will likely unfold like this:
- SFFA will probably file an amended complaint arguing that contracts exist even without tuition, pointing to the binding agreements parents must sign
- Kamehameha will likely move to dismiss arguing Section 1981 doesn't apply to their new model, or file for summary judgment on this issue
- The district court will have to decide whether the elimination of tuition eliminates Section 1981's applicability, both going forward and for past claims
- The losing side will appeal to the Ninth Circuit, which previously ruled 8-7 on this exact issue
- This could ultimately reach the Supreme Court since no federal court has answered this question definitively, and the Court has shown interest in education-related civil rights cases
The case won't be resolved quickly. Major civil rights cases typically take years to wind through the court system. The Supreme Court's recent decision in Students for Fair Admissions v. Harvard took nearly a decade from initial filing to final resolution.
Why This Matters Beyond Kamehameha
The outcome of this legal question affects more than just one school in Hawaii.
If courts hold that Section 1981 doesn't apply to free private education:
- Other private schools could restructure as tuition-free charities to avoid civil rights laws
- Wealthy institutions with large endowments would have more flexibility to discriminate than schools that need tuition revenue
- The scope of civil rights protections would depend on an organization's business model rather than their conduct
- Cultural or religious institutions could potentially claim exemption from antidiscrimination laws by framing relationships in non-Western terms
If courts hold that Section 1981 applies even without tuition:
- Private charities would face the same civil rights obligations as businesses
- The "right to contract" would encompass a broader range of relationships, including those without direct payment
- Schools couldn't evade civil rights laws through financial restructuring
- Federal civil rights laws would apply uniformly regardless of how institutions frame their cultural or religious missions
The case also tests the relationship between federal law and indigenous sovereignty. While Kamehameha is not a tribal entity (Native Hawaiians are not a federally recognized tribe), the school's argument about rejecting "Western contractual" frameworks in favor of ali'i-lāhui relationships raises broader questions about legal pluralism—whether different legal frameworks can coexist, or whether federal law must apply uniformly.
The Bottom Line
Kamehameha Schools has made a bold legal move by eliminating tuition. Whether it works depends on questions that federal courts have never definitively answered.
The school has strong arguments based on the Supreme Court's language in Runyon and the lack of any case applying Section 1981 to free education. Judge Kozinski's dissent in the 2006 case provides a roadmap for this exact strategy. Their cultural framing—that this relationship was never contractual in the Western sense—adds another dimension to the argument.
But SFFA has strong counter-arguments too. Parents still sign binding contracts that require them to waive legal rights. The law's text doesn't require payment. The timing looks suspicious. And allowing schools to evade civil rights laws by eliminating tuition creates troubling incentives.
The court will need to decide whether the "right to make and enforce contracts" protected by Section 1981 requires payment, or whether it encompasses any relationship involving mutual obligations—even when one party charges nothing.
This is genuinely unsettled law. Neither side has a slam-dunk argument. Kamehameha's framing is sophisticated: they're simultaneously making a legal argument (this isn't a contract) and a cultural one (Western legal frameworks don't apply to ali'i-lāhui relationships). Whether courts will accept either argument—or see them as attempts to evade civil rights laws—remains to be seen.
And whatever the court decides will have implications far beyond Kamehameha Schools.
In future articles, we'll explore the strategic implications of this move, the historical context of Section 1981 and education, and what the legal proceedings might look like as this case unfolds.