An Ohio business owner alleged Hello Alice illegally discriminated against him because he is white, but a federal judge dismissed his lawsuit Tuesday.
A federal judge in Ohio has dismissed a federal lawsuit that accused the online small business resource company Hello Alice of racial discrimination for overseeing a grant program that awarded money only to Black-owned businesses.
Judge Patricia A. Gaughan delivered the decision Tuesday, saying the lawsuit didn’t allege any harm that could be remedied by the court system. A news release from the fintech platform said Gaughan’s ruling marks “a significant win for the broader small business community.”
Hello Alice is co-founded by Elizabeth Gore, who lives in Healdsburg and is married to Sonoma County Supervisor James Gore.
“Facing a labor shortage, heightened interest rates and inflation, this country needs its small business owners, and they, in return, need the capital and resources that programs like Hello Alice provide,” Gore said in the news release. “We are thrilled for the judgment in favor of Hello Alice, as this represents one less threat to our nation’s small business community and economy.”
The legal battle started in October 2023 when an Ohio business owner alleged the company illegally discriminated against him because he is white. At the time, he was applying for a grant program that Hello Alice was running in partnership with Progressive Insurance Co.
The complaint listed Ohio resident Nathan Roberts, who owns trucking company Freedom Truck Dispatch, as the plaintiff. Defendants were Progressive Preferred Insurance Co., Progressive Casualty Insurance Co. and Circular Board Inc. — the company that operates Hello Alice.
Roberts, who held a commercial insurance policy from Progressive, received an email from the company offering 10 grants of $25,000 each to Black-owned small business owners to be put toward purchasing a commercial vehicle, according to the original complaint.
Roberts initially “did not realize the grant was available only for Black-owned small businesses” and stopped filling out the application once that became clear to him. His lawsuit alleged the awards for Black-owned businesses only discriminated against him.
Hello Alice, which was the administrator of the grants on behalf of Progressive, filed a motion to dismiss the case in December, claiming the lawsuit was “wrong in every relevant respect.” Hello Alice’s lawyers alleged that the grant program offered had non-race related eligibility requirements that Roberts did not disclose in the original lawsuit.
Attorneys also argued the grant program amounted to a “gratuitous promise,” not a contract, and that the grant program was a valid affirmative action program under U.S. Supreme Court precedent.
Lead counsel Neal Katyal from Hogan Lovells, the firm representing Hello Alice, said the resolution of the case “beats back a meritless lawsuit” and makes clear that the federal courts will not hear “weak challenges” such as those by Roberts.
“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,” Katyal said in a news release. “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.”
Following the filing of the original lawsuit, Hello Alice launched the “Elevate the American dream” campaign to spotlight local businesses through awarded grants.
It also recently expanded and now supports 1.5 million small business owners making it one of the largest small business networks in the country.
A news release from Hello Alice said the company distributed 49 grants to small businesses across the country.
You can reach Staff Writer Sara Edwards at 707-521-5487 or sara.edwards@pressdemocrat. com. On Twitter @sedwards380.
