Equal Protection Project Files Brief Opposing Black-Business-Only Grant Program in “Roberts v. Progressive” Appeal

Equal Protection Project Files Brief Opposing Black-Business-Only Grant Program in “Roberts v. Progressive” Appeal

The Equal Protection Project (EqualProtect.org) (EPP) has been tracking a case out of Cleveland called Roberts v. Progressive Preferred Insurance Company, where Progressive Insurance sponsored a grant program open only to Black-owned businesses. In March of this year EPP filed an amicus curiae, or “friend of the court” brief in the federal district court in Cleveland supporting the Plaintiffs, who were opposing a motion to dismiss the case filed by Progressive:

• Equal Protection Project Files Brief Opposing Progressive Insurance Blacks-Only Grant Program:

[EPP] has been following a case in Cleveland involving a contractual grant program sponsored by Progressive Insurance and designed to benefit small businesses, as long as the owners are Black.

The case, titled Roberts v. Progressive Preferred Insurance, et al., began in August of last year when Freedom Truck Dispatch LLC and its owner Nathan Roberts, who is White, sued Progressive, with the help of America First Legal, in the U.S. District Court for the Northern District of Ohio in Cleveland. You can review the initial Complaint here, but the first paragraph provides a good summary of the case:

Progressive Preferred Insurance Company provides commercial insurance to commercial trucking and delivery companies. It also engages in patently unlawful racial discrimination by offering a $25,000 “grant” to 10 “Black-owned small businesses to use toward the purchase of a commercial vehicle.” Progressive does not permit non-black-owned small businesses to even apply for the grant. Plaintiffs Nathan Roberts and Freedom Truck Dispatch bring suit to enjoin Progressive from continuing these racially discriminatory practices and recover classwide damages on behalf of everyone who has suffered unlawful racial discrimination on account of this program.

The case asserts one “cause of action” or legal claim to relief, namely, [violation of] federal statute 42 U.S. Code § 1981, entitled “Equal Rights under the Law.” This statute states, in important part, that “[a]ll persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts,” and also states that “rights protected by this section are protected against impairment by nongovernmental discrimination and impairment,” meaning that private parties, not just the government, are prohibited from racial discrimination in contracting. And this law has been around awhile, as it was enacted in 1866.

So the Plaintiffs, and EPP, think that Progressive is in violation of 42 U.S. Code § 1981 by offering its contractual grant program only to Black business owners.

Unfortunately, Progressive and their co-Defendant Circular Board, who does the online marketing for the grant Program under the trade name “Hello Alice,” moved to dismiss the case, and EPP filed an amicus brief supporting Plaintiffs. In the brief, available here, we argued (i) the Plaintiffs had standing to sue because (obviously) they were denied the chance to even apply for the grant program solely because of their skin color, which, of course, is actionable injury under controlling civil rights law, (ii) Section 1981 protects the rights of all citizens, of any race, and (iii) Defendants’ argument that they could discriminate because they were simply engaging in “free speech” was bogus.

Unbelievably, the district court issued an Order, available here, granting the motion, dismissing the case on standing grounds (only):

[P]laintiffs [must] also allege and show that ‘under a race-neutral policy’ they would have received the benefit [they were applying for], [if not,] those plaintiffs have no [standing].

This Order is erroneous because a plaintiff denied the right to apply for a grant program based solely on his skin color cannot know in advance if he would have been chosen for the grant. And, the case cited for this rule, Aiken v. Hackett, 281 F.3d 516 (6th Cir. 2002), sort of says that, but what it really says is that if you could not and would not have been chosen for the program on grounds apart from race, then you have no standing. But Aiken really doesn’t apply to a case like this.

So, Plaintiffs appealed the district court’s Order to the U.S. Court of Appeals for the Sixth Circuit, which covers Ohio, and filed their “Appellants’ Brief,” available here, last Monday, August 19, 2024. EPP, in turn, filed its Sixth Circuit amicus brief on Monday August 26, 2024. That brief, available here, and embedded at the end of this post, argues that (i) the district court misinterpreted Aiken and that Plaintiffs were injured by Progressive’s Blacks-only grant program, (ii) Section 1981 protects citizens of all races from discriminatory contract, and (iii) discriminatory conduct is not excused on “free speech” grounds. From the initial section on standing:

The district court dismissed this case because it reasoned that under this Court’s controlling precedent, Plaintiffs, now Appellants, simply were not injured by Appellee/Defendants’ racially discriminatory conduct. Roberts, 2024 WL 2295482, at *4 (citing Aiken, 218 F.3d at 519). The district court held that Aiken requires a plaintiff to allege both that a “racial preference cost them some benefit,” and that “under a race-neutral policy they would have received the benefit.” Id. (quoting Aiken, 218 F.3d at 519)(cleaned up). While that statement from Aiken is quoted accurately, the district court erred by taking that language in isolation and out of context.

In Aiken, a group of 177 City of Memphis, Tennessee police officers competed for 94 police sergeant jobs and were ranked for promotion by their “composite scores.” The City nonetheless promoted 18 Black officers who had not scored in the top 94, resulting in the lawsuit by White officers who were not promoted. But neither the lead plaintiff, Aiken, nor his co-plaintiffs, who were also White, had scored in the top 94. In other words, even if there had been no racial preference, Aiken would not and could not have been promoted using the City’s criteria. “[I]t  appears beyond debate that absent the forbidden criterion used by the City, the Appellants still would not have been promoted to sergeant,” as this Court observed. “The Appellants’ composite scores (not the City’s affirmative action program) kept them from being promoted.” Aiken, 218 F.3d at 518-19. These parties had no standing because, empirically, they could not have been injured due to racial discrimination – which is not the case here.

The other cases cited by Aiken and the district court are the same. In Texas v. Lesage, 528 U.S. 18 (1999), the University of Texas selected 20 PhD candidates out of a pool of 223 applicants, but Lesage’s application was so poor in comparison to others that it did not even make it into the university’s field of the top 40 applicants. Id. at 19. Thus while the university had taken race into account in making its final selections, there was no way, even in a race-neutral setting, Lesage would have been selected. Id. at 20. Where, the Court explained, it is undisputed that a “discrete” decision would have come out the same way regardless of the application of a race-based criterion, “there is no cognizable injury warranting relief.” Id. at 21. See also Donahue v. City of Boston, 304 F.3d 110 (1st Cir. 2004), in which plaintiff’s application for appointment to the police academy was so poor that 580 other applicants would have had to be rejected before the City reached Donahue’s application. N.E. Fla. Chapter of Assoc. Gen. Contractors of Am. v. City of Jacksonville [AGC], 508 U.S. 656, 666 (1993)(plaintiff not “required to allege that but for a [racially] discriminatory policy, [benefit] would have been awarded”; rather, “allegation that a ‘specific project’ was ‘precluded’ by . . . [racially discriminatory] ordinance . . . sufficient to establish standing.”). Thus a plaintiff is not required to allege that he would have received a benefit to establish standing; but, consistent with the rule of Aiken, a plaintiff that could not and would not have received a benefit even absent racially discriminatory conduct has no standing.

That is certainly not the case here, where absent the racially discriminatory criteria used by Appellees, Appellants could have, and very possibly would have been selected for Progressive’s contractual grant program. Appellant Roberts plausibly thought this was a definite possibility, as he immediately, upon receipt of the grant program application, began filling it out. And he was so incensed that he was ineligible to apply solely because of his skin color, that he immediately sent the application off to a civil rights organization he hoped would defend his rights in court. Under these circumstances, Aiken, Lesage, AGC and Donahue are no bar to Appellants prosecuting this case, and presented with such facts, the Court deciding each would have acknowledged Appellants’ standing to do so.

[italics in original, bold added]

We also pointed out the incongruity in Defendants/Appellants’ own argument, which the Appellants had not discussed in their brief:

Appellees’ position in this regard is especially suspect in that Progressive’s very reason for this contest was to remedy the alleged harm caused by what Progressive claims is past and ongoing discrimination against Black business owners:

Progressive sells insurance, including commercial auto insurance. Progressive also engages in various philanthropic activities, including funding grants that support small businesses. In 2023, via the Grant Program, Progressive offered $25,000 grants to ten Black-owned small businesses. It did so because [m]ultiple studies have shown how inequities have made it hard for Black entrepreneurs to access capital. Progressive thus determined to donate funds to alleviate this challenge.

Defendant Circular Board (d/b/a Hello Alice) made a similar claim, in even more vehement language:

Hello Alice’s mission is to help small businesses, and Hello Alice vehemently opposes racial discrimination. Indeed, a critical component of Hello Alice’s mission is to combat the effects that generations of pernicious racism have had on America’s capital infrastructure. Federal law does not compel purely private actors like Hello Alice, when choosing how and to whom they will donate money, to blind themselves to the centuries of invidious racism that have produced substantial existing racial inequities in access to capital. As the amici organizations explain, this suit is in fact ‘antithetical to and outside the scope of Section 1981’s congressional purpose.’

Appellees’ argument is that its grant program is required to rectify “inequities” because past and present discrimination against Black business owners caused them to suffer disadvantages in “access to capital,” i.e. injuries-in-fact. Yet they simultaneously argue that the very same type of discrimination that Black business owners suffered would not cause harm to those discriminated against by their grant program. Appellees cannot have it both ways logically or legally.

[emphasis in original]

We then pointed out some longstanding federal caselaw on discrimination and what constitutes “injury” supporting standing:

Other cases in and out of this Circuit agree that racially discriminatory application processes cause injury. See Perrea v. Cincinnati Pub. Sch., 709 F. Supp. 2d 628, 640 (S.D. Ohio 2010)(“one form of injury . . . is being forced to compete in a race-based system that may prejudice the plaintiff”); Rogers v. Windmill Pointe Vill. Club Ass’n, Inc., 967 F.2d 525, 528 (11th Cir. 1992)(“injury may be presumed from the fact of discrimination”); Agudath Israel of Am. v. Cuomo, 983 F.3d 620, 636 (2d Cir. 2020)(a “presumption of . . . injury flows from a violation of constitutional rights); Ass’n for Fairness in Bus. Inc. v. N.J., 82 F. Supp. 2d 353, 363 (D.N.J. 2000)(irreparable injury where plaintiffs were forced to “compete on an unfair playing field” because of racial set-aside program); Vitolo v. Guzman, 999 F.3d 353, 361 (6th Cir. 2021)(irreparable harm exists where government was allocating limited coronavirus relief funds “based on the race and sex of the applicants”). The district court erred by failing to recognize this overarching rule at the heart of the civil rights laws.

We are hopeful that between the Appellants’ Brief and EPP’s amicus brief that the Sixth Circuit will reverse the district court’s order and reinstate the case.

We will keep you updated as the case proceeds.

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