Fearless Fund Litigation Update – What Nonprofits And Other Private Actors Should Know

On June 3, 2024, a divided U.S. Court of Appeals for the Eleventh Circuit issued a decision in American Alliance for Equal Rights v. Fearless Fund Management, LLC, No. 23-13138 (11th Cir., June 3, 2024) ("Fearless Fund") upholding a preliminary injunction preventing Fearless Foundation, Inc., the fund's charitable arm, from moving forward with a funding contest open only to businesses majority-owned by Black women. The panel found that American Alliance for Equal Rights was "substantially likely" to prevail in its lawsuit claiming the funding contest violated Section 1981 of the Civil Rights Act of 1866 ("Section 1981") and was "substantially unlikely to enjoy First Amendment protection." The trial court below had declined to grant a preliminary injunction to halt the contest after determining that it may be protected under the First Amendment as expressive conduct.