Court halts Fearless Fund’s grants for Black women

A panel of federal appellate judges on Saturday temporarily blocked an Atlanta-based venture fund from awarding $20,000 grants to Black female entrepreneurs, writing that the program was “racially exclusionary” and “substantially likely” to violate a federal law prohibiting racial discrimination in contracting.

The temporary injunction issued by a panel on the U.S. Court of Appeals for the 11th Circuit prevents the private Fearless Fund from closing its application window. The fund was sued this summer by a conservative group alleging that its program discriminated on the basis of race by exclusively handing out grants to Black female business owners.

Saturday’s decision reverses a Tuesday ruling by U.S. District Judge Thomas W. Thrash, who denied a request by the plaintiff, the American Alliance for Equal Rights, to halt the grant awards process.

The alliance, led by conservative activist Edward Blum, filed its lawsuit in August, a month after the U.S. Supreme Court effectively banned race-conscious college admissions through rulings on cases that Blum initiated against Harvard and the University of North Carolina.

“The members of the American Alliance for Equal Rights are gratified that the 11th Circuit has recognized the likelihood that the Fearless Strivers Grant Contest is illegal,” Blum said in a statement Saturday. “We look forward to the final resolution of this lawsuit.”

A separate 11th Circuit panel will now decide whether the Fearless Fund will be blocked from awarding money under its Fearless Strivers Grant Contest while the case is litigated in district court. Saturday’s order merely halts the grant process until that separate panel issues a ruling. It’s unclear when that determination will be made.

“We respectfully disagree with the decision, appreciate the important points made by the dissent, and look forward to further appellate review,” said Jason Schwartz, a lawyer with Gibson, Dunn & Crutcher, which is representing the Fearless Fund. “We remain committed to defending our clients’ meaningful work.”

Thrash, who was appointed by President Bill Clinton, denied the Blum-led alliance’s preliminary injunction request Tuesday, ruling from the bench that the Fearless Fund’s grant program qualified as charitable giving, a form of protected speech under the First Amendment. The alliance appealed hours later.

But in Saturday’s order, a majority on the three-judge appeals panel held that the First Amendment does not protect the Fearless Fund from awarding grants only to Black women. Judges Robert J. Luck and Andrew L. Brasher, who were both appointed by President Donald Trump, concluded that the plaintiffs established that the Fearless Fund was “substantially likely” to violate the law if they closed the application window and awarded the grants.

In the dissent, Judge Charles R. Wilson, a Clinton appointee, wrote that he would deny the injunction, arguing that the alliance did not meet the requirements. Wilson criticized the plaintiffs’ citation of the Civil Right Act of 1866, a Reconstruction-era law meant to grant economic rights to enslaved people who were emancipated.

“It is a perversion of Congressional intent to use [the law] against a remedial program whose purpose is to ‘bridge the gap in venture capital funding for women of color founders’ — a gap that is the result of centuries of intentional racial discrimination,” Wilson wrote.

In addition to the Fearless Fund case, the Blum-led alliance in August sued two law firms — Perkins Coie and Morrison & Foerster — alleging that the firms’ diversity fellowships for law students discriminated on the basis of race.


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