Fearless Fund’s Legal Battle: Federal Appeals Court Blocks Grant Program For Black Women Entrepreneurs
A federal court has temporarily blocked Fearless Fund’s grant program for Black women entrepreneurs amid an ongoing lawsuit by the American Alliance for Equal Rights.
The decision reverses last week’s ruling by US District Judge Thomas V. Thrash, ultimately denying the conservative group’s allegation that the program was racially discriminatory.
The Lawsuit Against Fearless Fund
Fearless Fund invests in women of color-led businesses seeking pre-seed, seed level or series A financing.
The American Alliance for Equal Rights, founded by Edward Blum, brought a lawsuit against Fearless Fund in August 2023.
The lawsuit targeted the Fund’s Fearless Strives Grant Contest, which awarded Black small-owned female businesses $20,000 in grants.
The lawsuit accused the grant program of violating Section 1081 of the Civil Rights Act of 1866, which bars racial bias in private contracts by opening its grant competition only to Black women.
Last week, US District Judge Thomas V. Thrash ruled that Fearless Fund could continue offering the grant program only to Black women entrepreneurs.
The judge refused to issue an injunction blocking the program and confirmed the grant program qualified as charitable giving – a form of protected speech under the First Amendment.
Fearless Fund was backed by a strong defence team, including Ben Crump, the attorney who represented the families of George Floyd and Tyre Nichols in their civil lawsuits.
They took to Instagram to announce the news, saying, “Today is a victorious day, and we still have more work to do, but today we celebrate.”
Blum, however, told The Washington Post he was disappointed with the decision, and he intended to appeal, which he has now done.
Blum’s successful appeal
A panel of federal judges temporarily blocked the program on Saturday, writing that it was “racially exclusionary” and “substantially likely” to violate a federal law prohibiting racial discrimination in contracting.
The 2-1 decision by the Atlanta-based 11th US Circuit Court of Appeals temporarily prevents the Fearless Fund from running the Strivers Grant Contest.
It reversed the ruling by US District Judge Thomas V. Thrash last week.
According to ABC News, Fearless Fund said in a statement that it would comply with the order but remained confident of ultimately prevailing in the lawsuit.
“We strongly disagree with the decision and remain resolute in our mission and commitment to address the unacceptable disparities that exist for Black women and other women of color in the venture capital space,” Fearless Fund said.
Ongoing attacks on racial equity
Blum has brought several lawsuit cases against racial equity programs and funds after quitting his job in the late 1990s to focus on finding plaintiffs for lawsuits seeking to overturn racial equality legislation.
In 2013, Blum, the architect behind the case Shelby County v. Holder, dismantled a vital component of the 1965 Voting Rights Act.
The Shelby County ruling marked a significant turning point for voting rights in the US. It struck down the key provisions of the Voting Rights Act of 1965. It left millions of voters of color without the mechanism that had stopped voting discrimination before it could be implemented.
Blum’s most recent case and “win” was the Supreme Court’s affirmative action ruling.
Education analyst James S. Murphy revealed that from 2015-2020, Blum’s two central non-profits, Project on Fair Representation and Students for Fair Admissions, received $11.2 million in contributions, with Blum receiving more than $900,000 in pay.
Murphy also wrote that Blum has secured considerable financial backing from prominent conservative funders Searle Freedom Trust, the Scaife Foundation and the Bradley Foundation.
There was also at least $3 million from Donors Trust, with the Koch and DeVos families among its major contributors. He also received money from Consovoy McCarthy, a high-end boutique specializing in far-right causes, including defending Donald Trump.
Featured image credit: The Associated Press.
