By: Olivia Arline
Background and Decision
Last year, in American Alliance for Equal Rights v. Fearless Fund, The U.S. Court of Appeals for the Eleventh Circuit struck down a venture capital fund’s contest that provides grants to black women-owned businesses. Fearless Fund (Fearless) is a venture capital fund that seeks to “bridge the gap in venture capital funding for women of color.”[1] In fact, black women receive less than 0.35% of all venture capital funding.[2] To help alleviate this issue, Fearless holds an annual Fearless Strivers Grant Contest in which four winners are selected. Winners receive $20,000, mentorship, and other tools to help support business growth.[3] The contest is only open to black females who are legal US residents and businesses that are at least 51% black women-owned.[4]
American Alliance for Equal Rights (Alliance) is a nonprofit organization with the purpose of “ending racial classification and racial preferences in America.”[5] The organization sued Fearless on behalf of three business owners who wished to participate in Fearless’s contest but could not because they are not black women. Alliance challenged the contest under the anti-discrimination law 42 U.S.C § 1981, seeking a preliminary injunction. The district court denied the injunction. On appeal, the U.S. Court of Appeals for the Eleventh Circuit granted the injunction, and the parties settled the case with Fearless Foundation permanently closing the grant program.[6]
In the case the court decided two issues: (1) whether the plaintiffs had standing, and (2) whether the contest violated 42 U.S.C § 1981. The court found that the issue of standing turned on whether the business owners demonstrated injury in fact. Since the plaintiffs sought prospective relief, they had to demonstrate that they were “able and ready” to take action to demonstrate a concrete injury.[7] The court held that the allegations of the business owners were specific enough to demonstrate this factor.
Next, the court interpreted the alleged injury in the context of § 1981, a Civil War era law that prohibits racial discrimination in making and enforcing contracts. The statute construes what constitutes a contract very broadly.[8] The rules in the Fearless contest included the fact that Fearless would have the right to use the contestants’ name, image, and likeness for promotional purposes and that Fearless would have the right to “discuss and disclose” ideas in the contract’s entry. Therefore, under the broad interpretation of §1981, the contest was a contract. Therefore, since only black women were able to enter into the contract, the competition violated the statute.
Standing & Rosenbaum Dissent
In her dissent, Judge Rosenbaum pointed out how misguided it was to allow the manufactured injury in the case to demonstrate standing. Rosenbaum made the spot-on analogy of “flopping”, when a soccer player fakes an injury, to manipulate the referee to grant a penalty kick.[9] The standing requirement is meant to prevent this from occurring in the judiciary through the cases and controversies requirement. Therefore, she argues that Alliance has not demonstrated injury in fact.
As the majority mentions, the injury requirement can be demonstrated by showing that one is “able and ready” to do something. However, in Carney v. Adams, the Supreme Court found that an expression of intent is not enough where the context around one’s intent calls it into question.[10] In Carney, the plaintiff brought a challenge against judicial nomination rules. The court found that the context surrounding a challenge against the case demonstrated that the plaintiff only had a “desire to vindicate [their] view of the law . . . not an actual desire to become a judge.”[11] Similarly here, the context demonstrates that Alliance only desires to vindicate their views of race-based grants and not an actual desire to participate in the contest.
This context is demonstrated by the plaintiffs’ generic declarations, lack of past attempts, little effort in their applications, and anonymity. First, all three of the business owners’ declarations state that they are “ready and able to apply for a grant,” but not that they would even enter the contest. Instead, each declaration is generic and almost exactly the same. The only differences between the declarations are the locations of the businesses and a vague description of what each Owner would do with the money.[12]
Second, the lack of effort and genericism in the declarations further demonstrate that the owners do not have “an actual desire” to enter the contest. This is because the contest rules state that applicants will be judged on different factors like the strength of the business and how the business intends to use the grant. The owners provide no detail, not even information on what type of business they own, demonstrating a lack of effort and real desire to enter and win the contest.[13]
Third, not a single one of the owners attests that they have ever sought a grant for their business or entered a similar contest.[14] This makes the alleged injury even more suspect. The plaintiffs contend that, as individuals who have never sought out a single funding source or grant, they are particularly injured by a grant set aside for a demographic that disproportionately receives less funding.
Finally, all of the business owners are anonymous, referred to as Business Owners A, B, and C.[15] This anonymity further puts into context the plaintiffs’ vague assertions, almost identical declarations, little effort, and lack of past attempts to obtain a grant for their business. As in Carney, the owner’s expressions of intent are contradicted by the context surrounding that intent.
Broader Issue & Implications
This case represents a broader issue of attacks on programs that have to do with race. American Alliance for Equal Rights is no stranger to these types of challenges. In fact it is the organization’s entire purpose. Edward Blum, the president of Alliance, has financed other race-based challenges, specifically, he sponsored the litigation in Students for Fair Admissions v. Harvard. The organization is also currently challenging a STEM program for black students at the University of Texas Austin and an American Bar Association scholarship for students of color. Notably, in its suits, Alliance does not identify its affected members. Instead, they are anonymous, like “Owner A” or “Member B”. This factor of anonymity has recently led other circuits to find that there was no standing. Particularly, in Do No Harm v. Pfizer, the U.S Court of Appeals for the Second Circuit found there was no standing because the organization did not identify its affected members by legal name and, similar to the Alliance case, the members had virtually identical declarations.[16]
This pattern of challenges demonstrates a playbook of parties flopping and feigning injury to gain standing. By utilizing anonymous plaintiffs and generic declarations, interest groups are able to use non-injured parties to challenge programs that have been integral in balancing the playing field for marginalized groups. In reality, these interest groups are not motivated by an actual desire to participate in these programs. Just as in Carney, their actions demonstrate that they instead seek to vindicate their views.
The implications of the Alliance decision are currently limited to the Eleventh Circuit, where organizations with race-based grants should be conscious of whether their program constitutes a contract under §1981’s broad definition.[17] However, the case raises broader questions about whether race-based grantmaking programs will be permitted in other circuits. Additionally, the decision raises the possibility of a circuit split on standing requirements as the Second Circuit held that anonymous plaintiffs did not have standing in Do No Harm, while the Eleventh Circuit found standing for anonymous plaintiffs in Alliance. Therefore, a likely focus of future cases will be whether Article III’s standing requirement allows anonymity, particularly for cases brought on behalf of organizational members.[18]
[1] Am. All. for Equal Rts. v. Fearless Fund Mgmt., LLC, 103 F.4th 765, 769 (11th Cir. 2024).
[2] Amicus Brief – Fearless Fund Foundation, ACLU (June 4, 2024) https://www.aclu.org/documents/amicus-brief-fearless-fund-foundation [https://perma.cc/L4R6-CKMS].
[3] Am. All. for Equal Rts., 103 F.4th at 769.
[4] Id.
[5] Id. at 770.
[6] Fearless Fund Case Summary, Council on Foundations (last visited Nov. 5, 2025), https://cof.org/page/fearless-fund-case-summary [https://perma.cc/94WG-CFVG].
[7] Am. All. for Equal Rts., 103 F.4th at 772.
[8] Christopher Wilkinson & David Lawson, The Fearless Fund Decision: Implications for Corporate Giving and Constitutional Standing, Perkins Coie (July 22, 2024),
https://perkinscoie.com/insights/update/fearless-fund-decision-implications-corporate-giving-and-constitutional-standing [https://perma.cc/BH8L-PRJG].
[9] Am. All. for Equal Rts., 103 F.4th at 780
[10] Id. at 783.
[11] Carney v. Adams, 592 U.S. 53, 63-64 (2020).
[12] Am. All. for Equal Rts., 103 F.4th at 787-88.
[13] Id. at 788.
[14] Id. at 787.
[15] Wilkinson & Lawson, supra note 8.
[16] Id. at 786-87.
[17] Wilkinson & Lawson, supra note 8.
[18] Wilkinson & Lawson, supra note 8.
