Diamond Ventures: SBA Discrimination Lawsuit to Go to Trial

A discrimination lawsuit brought against the Small Business Administration by venture capital firm Diamond Ventures, LLC will go to trial after mediation in the case has been unsuccessful.

“After seven years of litigation, a favorable court ruling and two extensions of the mediation deadline, SBA has not settled a matter that the district judge clearly told SBA in April to ‘get serious and get this resolved,’” said C. Earl Peek, managing parter and co-founder of Diamond Ventures, in an e-mail to Politic365. “The case update, filed July 28, noted that the mediation ended and is over.”

Diamond Ventures filed the lawsuit in 2003, alleging discriminatory practices in the SBA’s Small Business Investment Company (SBIC) have adversely impact minority and women-owned businesses after the firm’s own SBIC applications were rejected twice. Through matching funds requested from the SBA, Diamond Ventures’ ultimate goal was to spur business development in low-income communities.

SBA and Diamond Ventures had their fourth mediation session July 22, according to court documents.

The SBA recommended extending the mediation for 60 days; however, attorneys for Diamond Ventures argued, “…the SBA cannot require Diamond ‘voluntarily’ to mediate under (law) and, given the fruitless months that the parties have attempted to resolve this litigation, no basis exists for a show cause proceeding…or for Diamond to be ordered to continue this mediation process, thereby delaying its day in Court even more than the seven-plus years that have already passed.”

Author: Bridgette Outten

A Chicago native, Bridgette has been a journalist since she first wrote for her seventh grade newsletter. Today, that passion is just as strong. She has written for several newspapers, including the Houston Chronicle, the Houston Defender, the Marshall News-Messenger (Texas) and the Springfield News-Sun (Ohio).