A federal appeals court prevents the Fearless Fund from exclusively awarding grants to Black women.
In an opinion released on Monday, judges determined that the Fearless Fund's Fearless Strivers Grant Contest is "intensely probable" to violate the provisions of Title 42 of the United States Code, which guarantees equal rights under the law and forbids the incorporation of race when granting and enforcing contracts.
In the verdict, an appellate court instructed a federal courthouse in Georgia to insert a preliminary injunction, preventing the fund from ending its grant application process while the case remains in litigation.
The decision also mentions that the fund's program is improbable to be protected by the First Amendment.
The court's judgement marks a triumph for anti-affirmative action legal specialist Edward Blum, who filed a lawsuit in August against the fund on behalf of his group, American Alliance for Equal Rights.
AAER attorneys have argued that their anonymous clients were excluded from the grant program since they weren't Black and that they endured "extra damage" from the illegal act of racial discrimination, according to prior CNN reports.
Blum, the legal strategist responsible for the Supreme Court case that dismantled affirmative action in college admissions last year, commented on Monday, "I'm grateful for the court's decision."
"Our nation's civil rights laws do not permit racial distinctions because some groups are overrepresented in various endeavors while others are underrepresented," Blum said.
"Programs that exclude specific individuals based on their race, such as those the Fearless Fund has conceived and implemented, are unjust and divisive. The vast majority of all Americans believe that an individual's race should not be a factor in our nation's public policies."
Arian Simone, CEO and founding partner of Fearless Fund and founder of the Fearless Foundation, stated in a statement to CNN on Monday that the court's ruling was "devastating."
"I'm shattered for every girl of color who has a dream but will grow up in a country that chooses not to give her an opportunity to bring it to life," Simone said. "On their behalf, we will transform this agony into purpose and battle with every ounce of our strength."
Simone stated that the ruling sends a message that diversity in corporate America and education should not exist.
"America is meant to be a nation where everyone enjoys the freedom to achieve, the freedom to earn, and the freedom to prosper," she said. "However, as soon as we aimed to iron out the playing field for underrepresented groups, our freedoms were hindered."
Eleventh Circuit Judge Robin Rosenbaum issued a dissenting opinion in the case, claiming that Blum's lawsuit is equivalent to an athlete "falling" on the field to incur a foul.
"As American Alliance has characterized its members' approved grievances, it has shown nothing more than a performer's actions on the field," Rosenbaum wrote in the opinion.
"Although three of American Alliance's members express lip service to the idea they are 'ready and able' to take part in Fearless' Contest, their statements demonstrate, in context, that none has a real interest in actually entering the Contest."
In September 2023, the 11th Circuit Court of Appeals in Atlanta allowed the AAER's motion for an injunction, which suspended the program for the entirety of the AAER's lawsuit. The Fearless Fund subsequently challenged that verdict, and its lawyers provided oral arguments to the appeals court in January.
The legal conflict over the venture capitalist firm's grant program is occurring during a series of assaults against diversity, equity, and inclusion (DEI) initiatives in the corporate world, schools, and higher education within the previous months.
Blum and other conservative strategists have filed lawsuits against organizations, challenging their race-based programs.
In March, the Smithsonian's National Museum of the American Latino agreed to a settlement with the AAER, necessitating the museum to open its Latino-focused internship program to students of all races and ethnicities.
Black business leaders express concerns that these attempts to dismantle DEI programs may reverse years of progress in leveling the playing field for Black and brown people.
CNN's Justin Gamble contributed to this report.
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The Fearless Fund, being based in the United States, is directly affected by the court's decision.
The court's ruling has implications for US laws regarding equal rights and discrimination, as it pertains to the Fearless Fund's grant program.
