The Biden Administration’s effort to distribute federal benefits by race is already running into legal trouble. Two rulings last week sided with plaintiffs who sued the Small Business Administration for violating equal treatment under the law.
At issue is the SBA requirement that only applications for restaurant relief from women and racial minorities will be processed in the first 21 days, sending everyone else to the back of the line. As the courts recognized, the danger is that the SBA will run out of funds before these other applications can be considered.
A federal judge in Texas ruled that the SBA’s Restaurant Revitalization Fund was wrong to distribute $28.6 billion in Covid-19 relief on the basis of an owner’s sex and race. Plaintiffs
restaurant Blessed Cajuns lost nearly $350,000 in gross revenue due to Covid-19.
restaurant lost $800,000 during the pandemic.
America First Legal, which represents them, notes they are eligible for the relief but not for the SBA’s priority-group status. Federal Judge
granted a preliminary injunction on grounds the restaurateurs are “experiencing race and sex discrimination at the hand of government officials.”
Meanwhile, in Vitolo v.
the Sixth Circuit Court of Appeals granted a preliminary injunction against the SBA on behalf of white plaintiff
half-owner of Jake’s Bar and Grill in Tennessee. The other half is owned by his wife, a Latina. In a 2-1 decision joined by Judge
cites Supreme Court precedents such as Adarand and Richmond v. Croson to eviscerate the SBA’s discriminatory logic.
The SBA justifies its bias as necessary to remedy past societal discrimination. But Judge Thapar notes that the Supreme Court has said such a remedy is only justified under narrow circumstances. It must address a specific episode of past discrimination, the past discrimination must have been intentional, and the government must have played a role in that discrimination. Judge Thapar writes that the SBA fails all three tests.
This legal analysis is an arrow to the heart of much of the Biden Administration’s racially divisive agenda. It will, at a minimum, force the Biden lawyers to explain their justification for distributing racial spoils with far more specificity. Even if they do, these and similar cases may end up at the Supreme Court.
The Wisconsin Institute for Law & Liberty, which argued for Mr. Vitolo and Jake’s Bar and Grill, notes that Judge Thapar cites the famous conclusion to Chief Justice
2007 plurality opinion in a case involving race preferences in the Seattle school system: the “way to stop discrimination on the basis of race is to stop discriminating on the basis of race.”
The Supreme Court is currently considering whether to take up Students for Fair Admissions v. Harvard, which concerns the university’s use of race to discriminate against Asian-Americans in admissions. The SBA cases are a reminder that even if the Court ducks the Harvard case, the issue of racial preferences won’t go away. It will return in hundreds of equally contentious ways because at stake is a bedrock principle of the American Constitution.
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Appeared in the June 1, 2021, print edition.