A federal court judge in Atlanta has ruled that a Black-owned venture capital firm can continue a grant program that supports Black women entrepreneurs, according to NBC News.

Senior U.S. Judge Thomas Thrash denied a preliminary injunction that would’ve stopped grants being distributed by the Atlanta-based Fearless Fund. The American Alliance for Equal Rights, a non-profit founded by anti-affirmative action activist Edward Blum, the man behind admissions cases the Supreme Court decided on this past summer, filed the request.

“We will continue to run the nation’s first venture capital fund that is built by women of color for women of color,” Fearless Fund CEO and co-founder Arian Simone told a crowd of supporters, according to NBC News.

Following the decision, Blum said, in a statement, that he plans to appeal.

Fearless Fund is a venture capital fund and organization focused on providing capital and support to businesses founded by women of colour. The fund was established by Arian Simone and Keshia Knight Pulliam in 2019. Its primary mission is to address the significant funding gap for women of colour entrepreneurs in the U.S., its website reads.

Moreover, it aims to invest in and support early-stage startups led by women of colour in various industries, including technology, consumer products, and more. In addition to financial investments, the fund provides mentorship, networking opportunities, and resources to help these entrepreneurs grow and scale their businesses.

The company, which has come to represent the conflict over corporate diversity practices, gained a key victory on Tuesday (Sept. 26). So much so that onlookers say the lawsuit against it may serve as a test case as the conflict over racial factors intensifies after the June verdict by the U.S. Supreme Court that banned affirmative action in college admissions.

The alliance argued that the fund’s Fearless Strivers Grant Contest, which awards $20,000 to Black women who run businesses, violates a section of the Civil Rights Act of 1866 prohibiting racial discrimination in contracts.

Judge Thrash countered, saying that the grants were “charitable donations” partly meant to convey the idea that Black women business owners have experienced prejudice. The judge also said that giving money is “expressive conduct” protected by the First Amendment.

Furthermore, the alliance argued that Latinx could not access the fund, which they claim is discriminatory. However, Fearless Fund runs the grant contest four times a year, and to be eligible, a business must be at least 51 per cent owned by a Black woman.

According to Fearless Fund attorney Mylan Denerstein, the alliance is ostensibly invoking a portion of the 1866 Civil Rights Act created to guarantee that Black people previously enslaved would have the same legal rights as white people to execute contracts following the Civil War.

“The plaintiff is attempting to turn this seminal civil rights law on its head,” Denerstein told NBC News.

Proceedings are ongoing.