Conservative activist uses Civil War-era law to challenge US corporate
diversity
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[September 26, 2023]
By Nate Raymond
(Reuters) - The anti-affirmative action activist behind the successful
U.S. Supreme Court challenge to race-conscious college admissions
policies is trying to use a Civil War-era law designed to protect
formerly enslaved Black people from racial bias to dismantle American
corporate diversity programs.
In a trio of lawsuits filed since August, Edward Blum's American
Alliance for Equal Rights organization has challenged grant and
fellowship programs designed by a venture capital fund and two law firms
to help give Black, Hispanic and other underrepresented minority groups
greater career opportunities.
Those lawsuits accuse all three of violating Section 1981 of the 1866
Civil Rights Act, a law enacted after the Civil War that guarantees all
people the same right to make and enforce contracts "as is enjoyed by
white citizens."
While the law was adopted with formerly enslaved Black people in mind,
courts have interpreted it for decades as protecting white people from
racial discrimination as well. Blum's group relies upon those rulings in
seeking a corporate sequel to the June decision, powered by the Supreme
Court's 6-3 conservative majority, in favor of another group he founded
declaring race-conscious student admissions policies used by Harvard
University and the University of North Carolina unlawful.
His strategy faces its first major test on Tuesday, when U.S. District
Judge Thomas Thrash in Atlanta hears arguments in Blum's lawsuit
challenging venture capital firm Fearless Fund's grant program designed
to promote businesses owned by Black women.
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With a Saturday deadline approaching for this year's grant applications,
Blum's group is asking Thrash, an appointee of Democratic former
President Bill Clinton, to quickly issue a preliminary injunction
barring Fearless Fund from using race-based criteria for the grant
program.
"All of our nation's civil rights laws - including the 1866 Civil Rights
Act - enshrine the command that someone's race and ethnicity must never
be used to help or harm them in public and private employment and
contracting," Blum, who is white, told Reuters in an email.
Sarah Hinger, a lawyer at the American Civil Liberties Union's Racial
Justice Program, said Blum's lawsuits pose a threat to efforts to remove
barriers to opportunity for people of all races in private sector jobs.
"This is an effort to scare similar employers and investors away from
what is in some ways a nascent effort to address inequities," Hinger
added.
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Atlanta-based Fearless Fund is a small player in the $288 billion
venture capital market. It was launched in 2019 by three prominent Black
women - actress Keshia Knight Pulliam, entrepreneur Arian Simone and
corporate executive Ayana Parsons - and has invested nearly $27 million
in businesses led by minority women.
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![](../images/092623PIX/news_l84.jpg)
Anti-affirmative action activist Edward Blum, founder of Students
for Fair Admissions (SFFA), speaks to reporters at the "Rally for
the American Dream-Equal Education Rights for All," ahead of the
start of the trial in a lawsuit accusing Harvard University of
discriminating against Asian-American applicants, in Boston,
Massachusetts, U.S., October 14, 2018. REUTERS/Brian Snyder/File
Photo
![](http://archives.lincolndailynews.com/2015/May/02/images/ads/current/guzzardo_lda022609.png)
It also provides grants to businesses owned by Black women - a
category that in 2022 received less than 1% of all venture capital
funding, according to the advocacy group digitalundivided.
The lawsuit by Blum's Texas-based group takes aim at the fund's
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.
FREE SPEECH ARGUMENT
Fearless Fund has brought in prominent lawyers to defend it,
including civil rights attorneys Ben Crump and Alphonso David, who
during a news conference called Blum's use of the Civil War-era law
"cynical."
The fund's attorneys in court papers have said Blum wants to
"distort the purpose and text of this seminal civil rights statute
to use it against Black people" to dismantle this grant program.
They argue that the rules for the grants are merely criteria for
being eligible for a "discretionary gift" and do not create a
"contract" subject to the civil rights law.
Because charitable giving is a form of free speech under the U.S.
Constitution's First Amendment, Fearless Fund's lawyers have said it
cannot be forced to use race-neutral criteria for a grant program
designed to further its belief that "Black women-owned businesses
are vital to our economy."
They have cited another June Supreme Court ruling holding that an
evangelical Christian website designer from Colorado had a First
Amendment right to refuse to create websites for same-sex marriages
to support the fund's argument that it can consider race in deciding
how to express itself through charity.
Blum's group countered that Fearless Fund's argument would
ironically undermine the very causes it favors by essentially
invalidating Section 1981 and deeming racial discrimination
protected by the First Amendment.
His lawsuits appear already to be seeing results. Another Blum
target, law firm Morrison & Foerster, has appeared to buckle by
removing language specifying that a diversity fellowship for law
students was open only to Black, Hispanic, Native American or LGBT
applicants. Morrison & Foerster did not immediately respond to a
request for comment.
(Reporting by Nate Raymond in Boston, Editing by Alexia Garamfalvi
and Will Dunham)
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