© Reuters.
By Nate Raymond
(Reuters) – A federal appeals court on Saturday blocked a venture capital fund from moving forward with a program that provides funding to companies run by Black women in a case of the anti-affirmative action activist behind the successful race challenge. of the Supreme Court of the United States. conscious college admissions policies.
The Atlanta-based 11th U.S. Circuit Court of Appeals, by a 2-1 vote, granted a request from Edward Blum’s American Alliance for Equal Rights to temporarily block Fearless Fund from considering grant applications only. of companies run by black women.
Blum’s group asked the court to do so while appealing a judge’s ruling Tuesday denying him a preliminary injunction preventing Fearless Fund from moving forward with its “racially exclusive program.” Grant applications were due Saturday.
The majority judges, U.S. Circuit Judges Robert Luck and Andrew Brasher, agreed with Blum’s group that the Fearless Fund’s “racially exclusive” grant program likely violated Section 1981 of the Act Civil Rights Act of 1866, a Civil War-era law that prohibits racial bias in hiring.
U.S. District Judge Thomas Thrash concluded earlier this week that, under the free speech protections of the First Amendment of the U.S. Constitution, Fearless Fund had the right to express its belief in the importance of black women to the economy. through charity.
But the appeals court majority, made up of two appointees of former Republican President Donald Trump, said the First Amendment “does not give defendants the right to exclude people from a contractual regime based on race.”
Blum in a statement said his group was “satisfied that the 11th Circuit has recognized the likelihood that the Fearless Strivers Grant Contest is unlawful.” Defense attorneys said they planned to request additional appellate review.
“We remain committed to defending the meaningful work of our clients,” said Jason Schwartz, attorney at Fearless Fund.
Fearless Fund describes itself as “built by women of color for women of color.”
The lawsuit is one of three that the Texas-based Blum Group has filed since August challenging grant and scholarship programs designed by the venture capital fund and two law firms to help provide greater career opportunities to Black people, Hispanics and other underrepresented minority groups.
A different group founded by Blum, who is white, was behind the litigation that led to the June decision, pushed by the Supreme Court’s 6-3 conservative majority, that declared illegal the race-conscious student admissions policies used by Harvard University and the University of the North. Carolina.
According to Fearless Fund, Black women-owned businesses in 2022 received less than 1% of the $288 billion deployed by venture capital firms.
The fund aims to address that disparity and counts JPMorgan Chase (NYSE , Bank of America and MasterCard as investors. It has invested nearly $27 million in 40 companies led by minority women since its founding in 2019.
It also provides grants, and Blum’s lawsuit targeted its Fearless Strivers grant contest, which gives Black women small business owners $20,000 in grants and other resources to grow their businesses.
The fund argued that Blum was trying to “upend a fundamental civil rights statute” by suing him under a Civil War-era law enacted to protect formerly enslaved blacks from racial prejudice.
U.S. Circuit Judge Charles Wilson, appointed by former Democratic President Bill Clinton, in a dissenting opinion Saturday called it a “perversion” of Congress’ intent to use that law against a recovery program like the Fearless Fund.
