Fearless Fund Litigation Update

-- by Jessie Gabriel

Last week we got another ruling in the Fearless Fund lawsuit. This is the case in which Edward Blum (the same guy who took down affirmative action) is now seeking to invalidate the Fearless Fund’s grant program for Black female entrepreneurs. If you are not familiar with the case or need a quick refresher on how we got to this point, please take a look at our earlier post. This is not solely a rage piece. I could certainly write one of those, but I assume most people reading this will have their own rage experience. Instead, I’m going to keep this relatively straightforward so we can get to why this all matters, legally. 

Remind me what has happened in the case. The plaintiff in this case, The American Alliance for Equal Rights (the name alone makes my heart race, but I digress), an organization that purports to represent a group of non-Black women entrepreneurs, filed suit to invalidate the grant program. As a first step, before their case gets decided on its merits, they requested an order from the court enjoining (stopping) the grant program while the case is pending. The federal district court rejected that request on the basis that the lawsuit itself was unlikely to be successful under the First Amendment and that the plaintiffs here would not suffer irreparable harm if the program stayed in place. AAER appealed that decision to the Eleventh Circuit Court of Appeals. On June 3, 2024, the Eleventh Circuit granted the appeal and reversed the district court, ordering the court to enter the injunction. If you’re so inclined, you can read the complete opinion here. 

Who is making these decisions? The lawsuit was filed in the U.S. District Court for the Northern District of Georgia (i.e. Atlanta). Each district court sits within a federal circuit. For example, New York is part of the Second Circuit and California is part of the Ninth Circuit. Here’s a tidy map of the federal appellate courts, in case you’re wondering which circuit you’re in. Georgia is part of the Eleventh Circuit, which also includes Florida and Alabama. Federal appeals typically go to a three-judge panel. In this case, the appeal was heard by Judge Newsom (a Trump appointee), Judge Luck (a Trump appointee), and Judge Rosenbaum (an Obama appointee). It’s painful to have to list out who appointed each judge because, if the world were fair and just, it wouldn’t matter. Not the case. The decision to impose the injunction was issued by (you guessed it!) Judges Newsom and Luck, with Judge Rosenbaum dissenting. 

Give me the majority opinion in a nutshell. The majority found that the plaintiff had standing and was likely to succeed on the merits of their claim that the grant program violated 42 U.S.C. § 1981, which requires that everyone be given the same right to contract as White citizens. This statute (regardless of the fact that it is explicit that it was meant to protect non-White citizens (!)) is really about race neutrality (surprise!). Since the grant contest excludes non-Black citizens, it’s got to go. They rejected the district court’s argument about the First Amendment and that the contest represented Fearless Fund’s protected expressions. This was a bit of a cheeky argument to begin with, throwing SCOTUS’s decision protecting a website designer who wanted to refuse service to gay people getting married, back in the court’s face. I didn’t think it was a particularly persuasive point, but I appreciated the gesture. In short, regardless of the fact that § 1981 was enacted to protect Black people who were being denied commercial opportunities by White people, we’re now going to say it’s a race-neutral statute. All people must be treated equally! This aggression will not stand! 

What did the dissent have to say? Judge Rosenbaum kinda nailed it. She put together an incredibly compelling and detailed argument about why these plaintiffs do not have standing. What is standing? Well, you need to be someone who suffered a real injury as a result of this purported legal violation in order to file any lawsuit. It’s a constitutional requirement. As Judge Rosenbaum points out, in similar cases, SCOTUS has required a detailed account demonstrating that each plaintiff in this case was ready and able to participate in the program and, essentially, would have participated but for the racial exclusion. In other words, you need to show that you aren’t just bringing this suit to strike something down. You need to allege that you really, really would have applied if you could have. This has come up in government contracting where successful plaintiffs have demonstrated that they applied for these types of contracts all the time, so it’s easy to believe they would have applied for this one. Surprise, surprise, we don’t have that here! There is no allegation that any of the plaintiffs regularly (or ever) applied to similar grant programs. It’s almost as if they brought this suit just because they were just so outraged by the injustice of it all. That’s not enough. She uses the analogy of soccer players “flopping” in an effort to get refs to call fouls. I found this analogy to be distracting, even though (apparently like Judge Rosenbaum) I’m an Arsenal fan. 

Highest upchuck factor. In a show of righteous indignation over the insensitivity of Judge Rosenbaum’s “flopping” analogy, the majority really tugs at the old heart strings. “Let us not forget: We’re talking about real-live, flesh-and-blood individuals who were excluded from the opportunity to compete in Fearless’s contest solely on account of the color of their skin.” Dude. Seriously. If you don’t know what’s wrong with that statement, I don’t think I can explain it to you.  

What’s next? Fearless Fund may be able to appeal the ruling to SCOTUS (I’m not enough of a procedural expert to know for sure). Will they do that? I don’t know that either. People who do this type of work know much better than I do how to be strategic about these things in light of this particular case, but also longer-term policy priorities.  

This is all to say that we are still in the same place we were in before. Programs meant to support people of color carry increasing risk because of the makeup of our federal courts. Keep in mind that this case is about race only. The statute at issue says nothing about gender. What can you do about it? VOTE. VOTE. VOTE. Federal judges, like SCOTUS judges, are nominated by the President and confirmed by Congress. Vote for President, Vote for Congress, and go out hard to encourage other people to do the same. Whether it’s right or not, there is a very real chance that this decision would have been different, and that women in this country would still have the right to choose whether to terminate a pregnancy, if Hillary Clinton had been President instead of Donald Trump. And judicial appointments are for.ever.