OAN’s Stephanie Stahl
11:37 AM – Monday, October 2, 2023
The 11th Circuit Court of Appeals in Atlanta, Georgia, has issued an order to temporarily pause grant applications by the Fearless Fund, an Atlanta-based venture capital firm that specifically supports Black female entrepreneurs.
This ruling is considered a win for the American Alliance for Equal Rights, a conservative organization founded by Edward Blum, an activist known for his involvement in the challenge against affirmative action in college admissions.
In early August, the Alliance filed a lawsuit against the Fearless Fund, arguing that their $20,000 small business grant program was racially-biased since it exclusively supports Black women.
Additionally, Blum argued that the grant contest violates a section of the Civil Rights Act of 1866, which prohibits racial discrimination in contracts.
The majority on the 3-judge panel labeled the Fearless Fund’s program “racially exclusionary” and suggested that Blum’s group was likely to succeed.
The grant contest is among several programs run by the Atlanta-based Fearless Fund, which was established to bridge the gap in funding access for Black female entrepreneurs who receive less than 1% of venture capital funding, according to figures from Crunchbase.
In a statement on Sunday, Fearless Fund said that they would comply with the order, but still felt confident of ultimately prevailing in the lawsuit.
“We respectfully disagree with this court’s decision, appreciate the important points raised by the dissent, and look forward to further appellate review. We remain committed to defending the meaningful work of our clients,” said Alphonso David, president and CEO of the Global Black Economic Forum and one of the lead lawyers for Fearless.
The Fearless Fund has enlisted prominent civil rights lawyers, including Ben Crump, to defend against the lawsuit. According to the attorneys, the $20,000 in grants are not considered contracts, but rather, donations protected by the First Amendment.
However, in its majority opinion, the appellate panel disagreed, stating that the First Amendment “does not give the defendants the right to exclude persons from a contractual regime based on their race.”
The case has also become a test case, as the battle over racial considerations shifts to the workplace following the U.S. Supreme Court’s June ruling ending affirmative action in college admissions.
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