A judge recently ruled in favor of organizations providing grants for minority-owned small businesses. This is a move that could ultimately make it easier for business owners in traditionally underserved groups to get funding. But business owners that don’t fit into these groups have claimed that these grants available to only certain racial groups are discriminatory.
The lawsuit was originally filed by America First Legal, a firm founded by former Trump Aide Stephen Miller and others, on behalf of a White-owned trucking company. The defendants in the case, fintech platform Hello Alice and Progressive Insurance, ran a grant program that provided funds to Black-owned businesses to help them purchase commercial vehicles. The lawsuit claimed that Hello Alice and Progressive violated their civil rights by not allowing White-owned businesses to apply for the grant program.
America First Legal shared in a release at the time of the original lawsuit filing in 2023, “Progressive does not allow businesses owned by members of other races to even apply for these grants, and AFL’s client was barred from applying for this grant simply because he is not black. Progressive unlawfully offered these contractual benefits only to black-owned small businesses — a patent violation of 42 U.S.C. § 1981, which outlaws all forms of racial discrimination in the making of contracts. Circular Board LLC operates an online resource platform called Hello Alice, which conspired and partnered with Progressive in administering these racially discriminatory grants.”
However, a federal judge in Ohio recently ruled in favor of Hello Alice and Progressive, stating that plaintiffs failed to prove any harm that would warrant action by the court. Miller and other members of the plaintiff’s team still have yet to officially comment on the ruling. But the plaintiffs are still able to appeal the decision. For now, it seems as though grant programs that are available only to certain racial groups will still be allowed to proceed.
Neal Katyal, lead counsel from Hogan Lovells, the firm representing Hello Alice in the case, said in a recent release, “The dismissal of this case is significant because the lawsuit would make it more difficult for diverse small businesses to compete in today’s economy. The court ruled that this lawsuit is now over. The plaintiffs can try to appeal, but we are tremendously confident in our legal position and are ready and willing to fight not just for Hello Alice but the broader business community and ready to set an even broader precedent in the Court of Appeals.”
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