Atlanta Appeals Court Blocks Grant Applications for Black Women Business Owners After Two Judges Dubbed the Program ‘Racially Exclusionary,’ Ignoring Systemic Racism, Attorney Says
An appeals court has ordered a venture capital firm that provides grants to Black women entrepreneurs to pause grant applications after a federal judge shut down a request by an activist on a rampage against affirmative action.
According to The Atlanta Journal-Constitution, the 11th Circuit Court of Appeals in Atlanta, Georgia, ordered the Fearless Fund to pause grant applications on Sept. 30 while the federal lawsuit filed by conservative activist Edward Blum is pending. Blum and his nonprofit American Alliance for Equal Rights claim that the Fearless Fund discriminates against white people.
Blum claims in his lawsuit that the fund violates the Civil Rights Act of 1866 because it is only eligible for women of color. The Fearless Fund was created by Arian Simone, Ayana Parsons, and “The Cosby Show” actress Keshia Knight Pulliam and is the first venture capital fund for women of color by women of color—the firm grants eligible women and business owners $20,000 in seed funding and growth financing.
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American Alliance for Equal Rights filed an emergency motion after U.S. District Judge Thomas Thrash denied their request for an injunction to stop the grants on Sept. 26. A three-judge panel with the 11th Circuit overturned the ruling 2 to 1.
The two judges who agreed with Blum called the Fearless Fund “racially exclusionary.” Another 11th Circuit panel will now rule on whether the injunction that blocks the grants will remain in place as the case is being litigated at the district court level.
“The plaintiffs have established an irreparable injury,” read the ruling.
The Fearless Fund released a statement following the 2-1 decision, noting they disagreed with the ruling.
“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,” read the statement.
One of the attorneys for the Fearless Fund, Alphonso David, also shared a statement following the ruling.
“We respectfully disagree with this court’s decision, appreciate the important points raised by the dissent, and look forward to further appellate review,” said David. “We remain committed to defending the meaningful work of our clients.”
The Fearless Fund is also being represented by civil rights attorney Ben Crump, Gibson Dunn & Crutcher, and the NAACP Legal Defense Fund. The firm provides grants for businesses that are at least 51 percent Black-owned with a mission to close the gap in venture capital funding for Black women and women of color. Less than one percent of total venture capital funding raised by companies in the United States in 2018 was allocated for businesses founded by women of color.
Blum is also the founder of the group that filed a lawsuit opposing affirmative action policies at Harvard and the University of North Carolina, Students for Fair Admissions. The U.S. Supreme Court ruled last June that race can no longer be considered in college admissions and ended affirmative action. The conservative is also behind a racial discrimination lawsuit against two law firms providing grants and career opportunities for Black and Hispanic people.
“Excluding students from these prestigious fellowships based on their race is unfair, polarizing, and illegal,” said Blum.
Venture capitalist attorney Von Bryant says that Blum and Alliance are failing to consider the systematic racism Black people experience and have experienced for generations.
“In the context of historically systemic racism, what the Fearless Fund grant is really trying to do is be a beacon for people who have historically and presently had an uphill battle for funding,” Bryant told NPR. “This program is trying to address that.”
