11th Circuit Halts Discriminatory Grant Program Exclusive to Black Female Entrepreneurs

11th Circuit Court pauses a Fearless Fund grant program available only for Black female entrepreneurs

In a recent decision on Sunday, the 11th Circuit Court of Appeals issued a temporary injunction against a lower court’s ruling, effectively pausing a grant program designed exclusively for Black female entrepreneurs.

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This means that the Fearless Fund, an Atlanta-based venture capital initiative supporting Black women-owned businesses, will temporarily cease accepting applications from investors pending the resolution of the appeal.

The lawsuit against the Fearless Fund was spearheaded by the American Alliance for Equal Rights (AAER), a conservative nonprofit organization.

Founded by Edward Blum, who also leads Students for Fair Admissions (SFFA), AAER has consistently challenged affirmative action programs.

They argue that the Fearless Fund’s specific focus on Black women-owned businesses is discriminatory, alleging a violation of Section 1981 of the Civil Rights Act of 1866.

Fearless Fund contended it had a First Amendment free speech right to ban white applicants from applying.

The 11th Circuit disagreed, saying, “Although the First Amendment protects the defendants’ right to promote beliefs about race, it does not give the defendants the right to exclude persons from a contractual regime based on their race.”

The court’s decision to halt the program was based on their belief that AAER has a strong likelihood of succeeding in their lawsuit and that allowing the program to continue would cause harm to the plaintiffs.

However, the decision was not unanimous.

A dissenting judge argued that AAER might not have the standing to sue, especially when representing white members. This judge contended that including Asian business owners in the lawsuit doesn’t justify the inclusion of white business owners.

However, the majority of the court believed that the law in question, 42 U.S.C. § 1981, aims to prevent discrimination against all races, not just specific ones.

Edward Blum, a key figure in this case, began his career in education in New York City.

He gained national attention for his role in the Abigail Fisher case, where a white student was denied admission to the University of Texas at Austin (UT Austin) in 2008 despite having a GPA higher than some admitted minority students.

Blum’s nonprofit, the Project on Fair Representation, played a significant role in providing legal support for Fisher.

In a landmark 2016 decision, the Supreme Court upheld UT Austin’s admissions policy in a 4-3 ruling, with Justice Kennedy noting the university’s race considerations in admissions met constitutional standards.

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