Litigation Update: AAER v. Fearless Fund

The Fearless Fund ran the “Strivers Grant Contest,” which awards $20,000 and other benefits “only to black females.” Last year, the American Alliance for Equal Rights sued Fearless, claiming its racially discriminatory contest violated 42 U.S.C. §1981, which prohibits private parties from discriminating on the basis of race when making or enforcing contracts. Fearless raised several arguments in reply—claiming, for instance, that the Alliance didn’t have standing and that the contest was a valid “affirmative action” program—but it also raised a First Amendment defense. According to Fearless, its discriminatory contest was really an act of “expressive association.” Although the Supreme Court rejected that argument when segregationists made it, Runyon v. McCrary (1976), Fearless won on it in the district court in Georgia. The Alliance sought an injunction pending appeal, which a split panel of the Eleventh Circuit granted. The court concluded that the Alliance had “clearly shown the existence of a contractual regime,” which brought the case “within the realm of §1981.” The Court then rejected Fearless’ First Amendment argument, emphasizing that the Constitution “does not give [Fearless] the right to exclude persons from a contractual regime based on their race.” On the merits, the Eleventh Circuit reversed the district court, with instructions to enter a preliminary injunction against the Fearless Fund, holding that (1) the Alliance has standing and (2) that preliminary injunctive relief is appropriate because Fearless’s contest is substantially likely to violate § 1981, is substantially unlikely to enjoy First Amendment protection, and inflicts irreparable injury. Joining us to discuss this litigation and ruling is the Manhattan Institute’s Ilya Shapiro, who filed an amicus brief alongside the American Civil Rights Project and Buckeye Institute in support of the Alliance. Featuring: Ilya Shapiro, Senior Fellow and Director of Constitutional Studies, Manhattan Institute