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A federal appeals court temporarily blocked a grant program that prioritized funding businesses owned by Black women.
The 11th U.S. Circuit Court of Appeals ruled in a 2-1 decision to block an organization called the Fearless Fund from continuing to run the Strivers Grant Contest, which awarded grants of $20,000 to businesses that are at least 51% owned by Black women, calling the program "racially exclusionary," according to a report from ABC News.
The order reversed a ruling last week by U.S. District Judge Thomas W. Thrash, who last week declined to grant a request by the American Alliance for Equal Rights to block the program.
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The American Alliance for Equal Rights argued that the Fearless Fund grant violated the Civil Rights Act of 1866. (H. Armstrong Roberts/ClassicStock/Getty Images)
"The members of the American Alliance for Equal Rights are gratified that the 11th Circuit has recognized the likelihood that the Fearless Strivers Grant Contest is illegal," American Alliance for Equal Rights founder and conservative activist Edward Blum said in a statement provided to Fox News Digital. "We look forward to the final resolution of this lawsuit.
The group was able to successfully argue to the appeals court that the fund was a violation of the Civil Rights Act of 1866, which prohibited racial discrimination in contracts.
However, Judge Charles R. Wilson, the lone vote against blocking the fund on the panel, wrote in his dissent that it was a "perversion of Congressional intent" to cite the 1866 law, arguing that statute was intended to prevent Black people from economic exclusion.
The Elbert P. Tuttle Courthouse of the U.S. 11th Circuit Court of Appeals. (U.S. Courts)
In a statement to ABC News, the Fearless Fund said that it "strongly" disagreed with the ruling and vowed to continue the legal battle.
"We strongly disagree with the decision and remain resolute in our mission and commitment to address the unacceptable disparities that exist for Black women and other women of color in the venture capital space," the Fearless Fund statement said.
The Fearless Fund, which was established to help Black female entrepreneurs gain access to venture capital funds, has been represented by prominent civil rights lawyers such as Ben Crump. In defending itself from litigation, the organization has argued that the funds provided to Black female-owned businesses amount to donations protected by the First Amendment and are not contracts. That argument was rejected by the majority on the appeals court panel, who wrote that the First Amendment "does not give the defendants the right to exclude persons from a contractual regime based on their race."
The Fearless Fund argued the grant was protected by the First Amendment. (iStock)
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The Fearless Fund did not immediately respond to a Fox News request for comment.
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