A small venture capital firm faced tough questions from conservative judges Wednesday as it defended a grant program for Black women-owned businesses in a lawsuit that has become emblematic of a growing legal backlash against corporate diversity programs.
The Fearless Fund, which provides early-stage funding for businesses owned by women of color, is asking a three-judge panel in a U.S. federal court of appeals to lift an injunction against one of its programs, the Strivers Grant Contest, which provides $20,000 to businesses that are majority owned by Black women. The conservative group American Alliance for Equal Rights, filed a lawsuit last fall arguing that the program discriminates against people of other races.
The hearing in Miami on Wednesday is intended to decide whether the grant will remain suspended for the duration of the lawsuit. Questions by the conservative-leaning panel — consisting of two judges appointed by former President Donald Trump and one appointed by President Barack Obama — suggest the Fearless Fund will have an uphill battle.
Judge Kevin Newsom, a Trump appointee, pushed back against the Fearless Fund’s argument that the grants are protected by the First Amendment because they are charitable donations. He asked the Fearless Fund’s attorneys whether the same protection would apply to a contest open only to white applicants. That’s a question frequently raised by Edward Blum, the conservative activist who leads the American Alliance for Equal Rights and who was behind the Supreme Court case that ended affirmative action in college admissions.
“I think that’s a pretty simple yes or no,” Newsom said, interrupting when the attorney for the Fearless Fund, Jason Schwartz, started to reply.
Schwartz replied that a white-only contest set up under the same parameters would indeed be protected by the First Amendment.
“No matter how repugnant I might find that, the First Amendment protects all…
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