By Nate Raymond
(Reuters) -A federal appeals court on Saturday blocked a venture capital fund from moving forward with a grant program that awards funding to businesses run by Black women in a case by the anti-affirmative action activist behind the successful U.S. Supreme Court challenge to race-conscious college admissions policies.
The Atlanta-based 11th U.S. Circuit Court of Appeals on a 2-1 vote granted a request by Edward Blum’s American Alliance for Equal Rights to temporarily block Fearless Fund from considering applications for grants only from businesses led by Black women.
Blum’s group asked the court to do so while it appealed a judge’s Tuesday ruling denying it a preliminary injunction blocking Fearless Fund from moving forward with its “racially exclusive program.” Grant applications were due Saturday.
The court’s majority agreed with Blum’s group that Fearless Fund’s grant program was “racially exclusionary” and likely violated the Section 1981 of the 1866 Civil Rights Act’s bar against racial bias in contracting.
Fearless Fund and Blum did not immediately respond to requests for comment.
The lawsuit is one of three that Blum’s Texas-based group had filed since August challenging grant and fellowship programs designed by the venture capital fund and two law firms to help give Black, Hispanic and other underrepresented minority groups greater career opportunities.
A different group founded by Blum, who is white, was behind the litigation that led to the June decision, powered by the Supreme Court’s 6-3 conservative majority, declaring race-conscious student admissions policies used by Harvard University and the University of North Carolina unlawful.
According to the Fearless Fund, businesses owned by Black women in 2022 received less than 1% of the $288 billion that venture capital firms deployed.
The fund aims to address that disparity, and counts JPMorgan Chase, Bank of America and MasterCard as investors. It has invested nearly $27 million in 40 businesses led by minority women since its founding in 2019.
It also provides grants, and Blum’s lawsuit took aim at its Fearless Strivers Grant Contest, which awards Black women who own small businesses $20,000 in grants and other resources to grow their businesses.
The lawsuit alleges that the program’s criteria illegally excludes applicants who are white, Asian or other races.
(Reporting by Nate Raymond in Boston; Editing by Andrea Ricci)
