A grant program for Black women business owners is discriminatory, appeals court rules

NEW YORK (AP) — A U.S. federal court of appeals panel suspended a venture capital firm's grant program for Black women business owners, ruling that a conservative group is likely to prevail in its lawsuit claiming that the program is the discriminatory.

The ruling against the Atlanta-based Fearless Fund is another victory for conservative groups waging a sprawling legal battle against corporate diversity programs that have targeted dozens of companies and government institutions. The case against the Fearless Fund by was brought last year by the American American Alliance for Equal Rights, a group led by Edward Blum, the conservative activist behind the Supreme Court case that ended affirmative action in college admissions.

In a 2-1 ruling, the panel of the U.S. Court of Appeals for the 11th Circuit in Miami found that Blum was likely to prevail in his lawsuit claiming the grant program violates section 1981 of the 1866 Civil Rights Act, which prohibits discrimination on the basis of race when enforcing contracts. The Reconstruction-era law was originally intended to protect formally enslaved people from economic exclusion, but anti-affirmative action activists have been leveraging it to challenge programs intended to benefit minority-owned businesses.

The court ordered the Fearless Fund to suspend its Strivers Grant Contest, which provides $20,000 to businesses that are majority owned by Black women, for the remainder the lawsuit. The ruling reversed a federal judge's ruling last year that the contest should be allowed to continue because Blum's lawsuit was likely to fail. However, the grant contest has been suspended since October after a separate panel of the federal appeals court swiftly granted Blum's request for an emergency injunction while he challenged the federal judge's original order.