Fund Fire: Fearless Fund Ruling Puts Race-Conscious Programs at Risk: Lawyers

A US Federal Court of Appeals panel ruled that the American Alliance for Equal Rights will likely prevail in its lawsuit accusing Fearless Fund’s grant program of violating Section 1981 of the Civil Rights Act of 1866, which prohibits racial discrimination in contracts. O’Melveny partner Tristan Morales, counsel for the National Venture Capital Association, which filed an amicus brief in the case, said that the ruling could impact programs that have broader racial diversity goals, as well as specific investments in which a litigant could allege that race was a component to a decision that caused them to lose the contract. “I think those different types of programs are along a risk spectrum, and at different parts of the spectrum in terms of the likelihood that they will draw a complaint,” Morales said.

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