Co-founders and CEOs of The Fearless Fund, Arian Simone (center left) and Ayana Parsons (center right), address journalists outside federal court in Miami on Jan. 31, 2024. A U.S. federal court of appeals panel has halted the venture capital firm’s grant program for Black women business owners, stating that a conservative group is likely to succeed in its lawsuit alleging discrimination. (AP Photo/Rebecca Blackwell, File)
june 04, 2024 Story by: Editor
A venture capital fund, Fearless Fund, has been blocked from continuing its grants to Black women-owned businesses, as ruled by a divided U.S. appeals court on Monday. The decision favored an anti-affirmative action group that filed a lawsuit against the program.
The 11th U.S. Circuit Court of Appeals in Atlanta found merit in the discrimination lawsuit filed by the group, reversing a previous decision that allowed the program to proceed during the ongoing case.
This ruling marks a win for Edward Blum, a conservative activist known for his involvement in successful challenges against race-conscious policies, including in college admissions.
Blum’s organization, American Alliance for Equal Rights, alleged that Fearless Fund violated a 19th-century federal law prohibiting racial bias in private contracts.
The lawsuit targeted Fearless Fund’s program, which provides $20,000 in grants and resources to help small businesses owned by Black women grow.
According to Fearless Fund, Black women-owned businesses received less than 1% of the $288 billion deployed by venture capital firms in 2022.
The panel of the 11th Circuit, led by Circuit Judge Kevin Newsom, appointed by former Republican U.S. President Donald Trump, concluded that Fearless Fund’s program did not qualify for speech protections under the First Amendment. Source: CNBC
Another Trump appointee, Robert Luck, supported Newsom’s order. However, Circuit Judge Robin Rosenbaum, appointed during the Obama era, dissented, accusing the plaintiffs of feigning harm from the program. The grant initiative had been previously halted following a decision from the appeals court.
Attorneys representing Fearless Fund stated that Monday’s ruling contradicted more than a century and a half of civil rights law, emphasizing that the decision is not the final resolution in the case.
Fearless Fund argued earlier this year that it had a constitutional right to express its belief in the economic importance of Black women through charitable initiatives.
In response, Blum stated that federal civil rights laws do not allow for racial distinctions based on overrepresentation or underrepresentation in various fields.
