Legal groups file amicus brief supporting Hello Alice amid discrimination lawsuit [The Press Democrat]

Dec. 21—Four legal groups filed an amicus brief Wednesday to show support for Hello Alice's motion to dismiss a lawsuit alleging the small business resource platform's grant program offered in partnership with Progressive Insurance Company unlawfully discriminated against business owners.

The partnership program between Hello Alice and Progressive offered $25,000 in grants to 10 Black-owned small businesses to be put toward the purchase of a commercial vehicle for each business.

The lawsuit against Hello Alice states that plaintiff, Ohio resident Nathan Roberts, who owns Ohio-based trucking dispatch company Freedom Truck Dispatch, experienced reverse-discrimination and that he was treated differently because of his race.

Southern Poverty Law Center, Lawyers' Committee for Civil Rights Under Law, Hispanic National Bar Association and Asian Americans Advancing Justice filed the brief Wednesday in U.S. District Court for the Northern District of Ohio Eastern Division in support of Hello Alice's work to distribute small businesses grants to business owners and entrepreneurs.

Neal Katyal, lead counsel on the case for Hello Alice, said in an email Wednesday that Hello Alice's actions are lawful and necessary in ensuring small business owners of all backgrounds have the resources they need to grow their business and succeed.

"Their engagement in this case is evidence of the potential for this and similar lawsuits to undo important progress we've made as a country toward equitable access to economic opportunities," he said in the statement.

"We are thankful to have a community of thought leaders fighting with us for equitable access to capital," Hello Alice co-founder and president Elizabeth Gore said in an email statement.

The groups argue in the brief that the plaintiffs' use of Section 1981 of the Civil Rights Act of 1866, a federal law which prohibited the discrimination on the basis of race, color and ethnicity when making and enforcing contracts according to the New York University School of Law, would exacerbate the economic harm Black business owners experience in today's society.

They argue three other points in the brief, adding that Section 1981 sought to ensure basic economic rights for Black citizens, using Section 1981 to weaponize against private groups like Hello Alice that support economic success for people of color goes against the law's intent and that applying Section 1981 in this scenario would hinder Black business owners' ability to have equal participation in the economy.

"(It) would roll back progress that has been accomplished through similar remedial, private philanthropic programs," the brief said. "Section 1981 should not now be weaponized in 2023 to challenge remedial philanthropic programs aimed at providing opportunities for Black business owners who face greater barriers in accessing funding."

Black business owners have historically faced roadblocks when it comes to funding for their businesses.

A study from Brookings found that in 2019, there were a total of just under 6 million businesses with more than one employee, but only 2.3% of these businesses were Black-owned.

A report from Intuit QuickBooks from January found that 57% of Black business owners were denied a bank loan at least once when they started their business, compared to 37% of non-Black business owners, according to reporting from Forbes.

Goldman Sachs 10,000 Small Businesses Voices survey data from February found that 37% of Black small business owners surveyed had difficulty accessing new capital and financing while 45% of these owners had to use personal savings to keep their business operating, the same Forbes article reported.

The groups argue in the brief that the grant program operated by Hello Alice and Progressive being found unlawful would exacerbate the economic inequities Black communities and business owners already face.

The class action lawsuit was filed in August by America First Legal, Mitchell Law PLLC and Ashbrook Byrne Kresge LLC, naming Progressive Preferred Insurance Company, Progressive Casualty Insurance Company and Circular Board Inc. — the company that operates Hello Alice — as defendants.

Roberts, who is white and holds a commercial policy from Progressive, stated he "did not realize the grant was available only for Black-owned small businesses" when he began filling out the application until he reached the part that emphasized the grants were for Black-owned businesses.

Gore, originally from Texas, is married to Sonoma County Supervisor James Gore.

She and Rodz started their online platform Hello Alice in 2017 to give small-business owners better access and a better idea of available resources — such as funding, networks and grant opportunities.

Miller is widely considered the architect of President Donald Trump's crackdown on undocumented immigrants when Miller served as senior adviser to the president. The foundation reported contributions and grants of nearly $6.8 million in 2021, the most recent year for which a Form 990 tax filing is publicly available.

Also representing the plaintiffs is Jonathan F. Mitchell. He's the creator of Senate Bill 8, a near-total ban on abortion in Texas, and the legal strategist behind similar efforts in other states. Mitchell has also worked to roll back same-sex marriage rights, gut the Affordable Care Act, and ban books dealing with race and LGBTQ+ issues.

You can reach Staff Writer Sara Edwards at 707-521-5487 or sara.edwards@pressdemocrat. com. On Twitter @sedwards380.

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