Judge dumps injunction bid in Atlanta VC fund discrimination case

A federal judge has denied a conservative group’s motion for a preliminary injunction against the Fearless Fund
The Rev. Al Sharpton leads Fearless Fund CEO Arian Simone from the federal courthouse in Atlanta on Tuesday, Sept. 26, 2023. (Ben Gray / Ben@BenGray.com)

Credit: Ben Gray

Credit: Ben Gray

The Rev. Al Sharpton leads Fearless Fund CEO Arian Simone from the federal courthouse in Atlanta on Tuesday, Sept. 26, 2023. (Ben Gray / Ben@BenGray.com)

Editor’s note: This story has been updated to reflect the American Alliance for Equal Rights’ motion to the 11th Circuit Court of Appeals.

The Fearless Fund, an Atlanta-based and Black women-founded venture capital firm, on Tuesday won the first battle in a lawsuit they are facing alleging a grant program for Black women small business owners is racially discriminatory.

At a hearing at the federal courthouse in downtown Atlanta, U.S. District Court Judge Thomas Thrash Jr. denied a motion from a conservative nonprofit to preliminarily bar Fearless from enforcing the racial eligibility criteria for its $20,000 grant program. The grant application period closes on Sept. 30.

When Ayana Parsons, COO and co-founder of Fearless Fund heard the judge’s ruling in favor of her group, she had “tears of joy.”

“From day one, this has been about the dismantling of economic progress, economic freedom and the American dream,” Parsons said.

The lawsuit against Fearless was brought by the American Alliance for Equal Rights, a group led by Edward Blum, a conservative activist who was instrumental in the successful challenge to affirmative action in college admissions. The suit alleges Fearless’ grant program violates the Civil Rights Act of 1866.

“The American Alliance for Equal Rights is disappointed with the court’s denial of our preliminary injunction challenging the racially exclusive policies of the Fearless Fund,” Blum said in a statement.

Lawyers for the Alliance argued in court that the eligibility criteria for the grant program was a “textbook case” of racial discrimination. Judge Thrash, however, disagreed, saying the program sends a message that Fearless wants to support Black women business-owners and that message is protected free speech. Thrash also said the Alliance had not shown “sufficient likelihood of success” on the merits of its case.

Later Tuesday, the Alliance filed an emergency motion with the 11th Circuit Court of Appeals in Atlanta asking for an injunction by Sept. 30 that would stop Fearless Fund from “from closing the application window or selecting a winner until this appeal is decided.” In the motion, lawyers for the Alliance argued that the denial of preliminary injunction by Judge Thrash on First Amendment grounds “flies in the face of decades of precedent, resurrecting arguments that were first tried by segregationists.”

Though the Alliance was not successful in its opening salvo against Fearless, at least one of the Alliance’s lawsuits has already had its intended effect. Morrison Foerster is one of the law firms in the group’s legal crosshairs over their diversity fellowship. In response to that suit, the firm changed the eligibility criteria of their program.

Similar conservative organizations have also targeted major corporations like McDonald’s, Target and Progressive, moves that are widely seen as an attack on affirmative action programs in business.

During the hearing, more than two dozen Fearless Fund supporters filled the courtroom, including high-profile leaders like the Rev. Al Sharpton and former Atlanta Mayor Kasim Reed. As Parsons and her co-founder Arian Simone left the courtroom, supporters cheered and applauded. After the hearing, Sharpton led a rally at the steps of the courthouse, but in a statement noted it is a temporary victory.

The Rev. Al Sharpton speaks to supporters and journalists after leaving federal court in Atlanta on Tuesday, Sept. 26, 2023 following a hearing for the Fearless Fund. (Ben Gray / Ben@BenGray.com)

Credit: Ben Gray

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Credit: Ben Gray

And though this is likely not the last time Fearless will be defending itself in court, Parsons said they are prepared and their work will continue.

“When we look after the most overlooked, the most marginalized, the most underrepresented, that helps everyone,” she said.

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