restaurant revitalization fund lawsuit

Greer seeks monetary relief under the $28.6-billion Restaurant Revitalization Fund ("RRF") created by the American Rescue Plan Act of 2021 ("ARPA") and administered May 13, 2021 / 10:55 AM The $28.6 billion Restaurant Revitalization Fund has only been processing and funding requests from businesses owned by women; veterans; or socially and A small restaurant in Los Angeles hired a headhunter to recruit two senior employees to help grow the business. U.S. District Judge Travis R. McDonoughsoriginal ruling stated that the plaintiffs argument had failed to rebut the federal governments priority in halting the impacts of historical discrimination based on sex and race. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. The Small Business Administration declined to comment on pending litigation. The agency is conducting extensive outreach campaigns so there is full awareness of whats available to those affected.. For the same reason, the Court finds that Defendants have failed to show an "important governmental objective" or "exceedingly persuasive justification" necessary to support a sex-based classification. "We're in a food desert," she said. But not everyone waseligible or will receive funds. NEXT: ACLU-Connecticut Condemns "Racial Ridicule" Arrest for Online Post. Thousands more restaurants received approval notices in the weeks following and were told to expect funds in their bank account within seven business days. The owner of Bangkok 96 Street Food inside the Detroit Shipping Co.in Detroit applied for and received funds. According to court records, the SBA paid $187,753 to the owners of the Lost Cajun in Keller, Texas; $640,425 to Penn Hotel Sports & Raw Bar in Hershey, Pa.; and $104,590 to Jakes Bar and Grill in Harriman, Tenn. on June 1, which satisfied the full claims of each applicant., Related: Congress introduces a $60 billion replenishment of the Restaurant Revitalization Fund. This case underscores that there was a lot of nervousness in the restaurant industry that the $28.6 billion was going to go fast, Sean Kennedy, vice president for public affairs with the National Restaurant Association told Nations Restaurant News. Restaurant Revitalization Fund Replenishment Act Introduced : On June 8, 2021, a bipartisan group of Senators and U.S. Follow @SusanMariecooks on Twitter. Some say they're considering collective legal action, others fear this roadblock could be the final nail in the coffin for their beleaguered businesses. The SBA argued that the government has a compelling interest in redressing the effects of past and present discrimination against minority-owned small businesses and that the prioritization scheme furthers that interest. The matter came to light days after a group of senators and congressmen from both parties had introduced a bipartisan proposal to re-up the RRF with $60 billion. A Sixth Circuit court panel ruled on May 28 that the Small Business Administrations prioritization of Restaurant Revitalization Fund grants on the basis of race and sex for the first 21 days of the program is unconstitutional. The Penn Hotel Sports and Raw Bar was one restaurant that filed aa lawsuit for discrimination and received funds. The $28.6 billion Restaurant Revitalization Fund was a popular program, offering grants to independent restaurants to help cover business losses due to the COVID-19 pandemic. Eugene Volokh is the Gary T. Schwartz Distinguished Professor of Law at UCLA. Thus, the Court concludes that the government has failed to prove that it likely has a compelling interest in "remedying the effects of past and present discrimination" in the restaurant industry during the COVID-19 pandemic. newsletter, Sign up for the These race and sex preferences are patently unconstitutional, and the Court should promptly enjoin their enforcement. Indeed, SBA Administrator Isabel Guzman proudly cited the preferences as a way of helping members of the industry who were most in need. Some of these emails indicated an application had been denied and that the SBA would no longer consider it. All rights reserved. The Restaurant Revitalization Fund was practically destined to be oversubscribed. Do not sell my personal infoPrivacy PolicyContact UsRSS, SBA stops Restaurant Revitalization Fund payments after courts rule they're discriminatory. Its about relief money that was supposed to go first to women and minority-owned restaurant owners. Sign up here. The lawsuit was filed by a legal advocacy group called America First Legal, founded by Stephen Miller and Mark Meadows, both aides to former president Donald Trump, on behalf of a Keller restaurant called the Lost Cajun. This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. "Everything is changing and there is so much going on, you need to adapt to change," she said. In Portland, the owners of Oma's Hideaway are determined to make it work. [The defendants' evidence] lacks the industry-specific inquiry needed to support a compelling interest for a government-imposed racial classification. The application portal remained open through Monday because money set aside for establishments with 2019 annual revenue of not more than $50,000 was potentially still available. In the suit, the Lost Cajun owners Janice Smith and Jason Smith, along with Pennsylvania restaurant owner Eric Nyman, allege that the Small Business Administrations plan to distribute pandemic relief funds to small businesses is unconstitutional. To proceed based on this interest, Defendants must provide a "strong basis in evidence for its conclusion that remedial action was necessary.". However, the Small Business Administration reported on May 18 that it had already received more than 303,000 applications representing over $69 billion, with nearly 38,000 applicants already approved for more than $6 billion. Over the weekend, the SBA notified 2,965 previously approved priority Restaurant Revitalization Fund applicants in a form email that it will be unable to pay the promised grants due to the outcome of the lawsuits in Texas and Tennessee thatbarred the SBAfrom distributing grantson the basis of race and sex. 3.1.2023 2:50 PM, 2022 Reason Foundation | Privacy Policy | The RRFs funding ran out at the end of the 21-day period, or much faster than expected, prompting three applicants outside of the preference groups to file lawsuits. In a similar lawsuit filed by Eric Nyman, owner of the Penn Hotel Sports & Raw Bar and Janice and Jason Smith, owners of the Lost Cajun in Keller, Texas, Judge Reed OConnor ruled on May 28 that the SBA must dole out grants in accordance with a race-neutral, sex-neutral first come, first served policy. The Lost Cajun was approved for an award on May 29, and though the Penn Hotel Sports & Raw Bars case was under review for slightly longer (since the restaurant sought more than $300,000), both restaurants received grants on June 1. The SBA, tasked with managing the relief funds, announced on May 10 that 16,000 businesses were approved for grants totaling $2 billion in just the first week. A court initially rejected the argument, but the decision was reversed upon appeal, and the plaintiffs prevailed in the other two actions. They had applied for federal relief during the first 21 days of the Revitalization program, when priority was given to those groups because they were regarded as particularly in need of financial assistance. However, the majority stated that the decision would not be moot because the racial and sex-based priorities continue to impact the continued distribution of the funds, even though the 21-day period is over. Tex. The SBA opened the fund to the priority groups for the first 21 days of the application window. "Depending on what the landlord does, we could stay open, we could close tomorrow, if he decides to kick us out. The U.S. District Court for the Northern District of Texas on June 11 ordered a halt to payments from the Small Business Administrations Restaurant Revitalization Fund, which is part of President Joe Bidens $1.9 trillion economic stimulus plan passed by Lines and paragraphs break automatically. The administration announced at the fund's launch more than a week ago it would prioritize businesses owned by women, veterans and other socially or economically disadvantaged individuals for the first 21 days of the program, then process applications for all businesses on a first-come, first-serve basis. Three restaurants involved in the high-profile suits had their applications processed and received grants totaling close to $933,000. | As to race-based classifications, Plaintiffs challenge SBA's implementation of the "socially disadvantaged group" and "socially disadvantaged individual" race-based presumption and definition from SBA's Section 8(a) government-contract-procurement scheme into the RRF- distribution-priority scheme as violative of the Equal Protection Clause. This is not the first lawsuit filed against a federal program aimed at helping disadvantaged groups hurt by the pandemic. Burlington Centrals Nicholas Gouriotis figures out the difference. This only happens if legislators Republican senators, especially are motivated to, act, she said. These four House Republicans broke with the GOP to oppose inflation estimates McCarthy, GOP pump brakes on release of Jan. 6 footage to Tucker Carlson. Not Great, What the Second Round of CARES Act Funding Means for Restaurants, The Coronavirus Stimulus Package: What Everyone in the Restaurant Industry Should Know, Help Is on the Way for Restaurants. The SBA responded to a request for this article but has not yet shared the total number of businesses that have had their grants revoked. The Restaurant Revitalization Fund has been depleted. The SBA will not pay these claims because the legal conclusions in these court rulings would preclude payment. After filing his request for funding, Vitolo was told women and minority restaurant owners would be prioritized during the first 21 days of fund disbursement, which began on May 3. The plaintiffs argue that even though the distributed grants cannot be returned, the Sixth Circuits decision will have further-reaching impacts on COVID-19-related federal aid: The Sixth Circuit decision sets the precedent that racial and gender priorities such as the ones in American Rescue Plan Act are unconstitutional, Rick Esenberg, president and general counsel for the WisconsinInstitute for Law and Libertysaid in a statement. A little over a week later, more restaurant owners received emails telling them that their previously approved grants would not be disbursed. Philip Greer, the owner of a cafe in Texas, wanted to apply to the Small Business Administrations Restaurant Revitalization Fund (RRF) for help after his cafe lost $100,000 in revenue because of the pandemic. Veronique de Rugy For the first 21 days, the fund was open for applications from women, individuals who are economically or socially disadvantaged, and veterans. 2021 CBS Interactive Inc. All Rights Reserved. Imagine relaxing with friends in your own backyard, sipping cocktails made from in-house infused spirits or wine from an eclectic selection. Other restaurant owners report a similar experience: After days of calls, emails, and messages through the SBA portal and reassurance that the money was still coming, the grants were rescinded. A legal group founded by ex-Trump aide Stephen Miller on Thursday filed another lawsuit accusing the Biden administration of racial discrimination in the distribution of COVID-19 relief funds, this time for money designated for restaurant owners. An online portal that served as an information and application hub for the program will close on July 14, leaving hundreds of thousands of restaurants out of the grant program. The fund launched May 3 as partof the American Rescue Plan Act. We were like, 'What? The broad statistical disparities cited by the government are not nearly enough., The dissenting opinion of the Sixth Circuit panel argued that the Biden Administration offered substantial evidence proving that minority-owned businesses were more vulnerable to economic distress than businesses owned by white entrepreneurs.. These business owners had their Restaurant Revitalization Fund grant applications approved as part of a program that prioritized traditionally underserved owners women, veterans, people of color, and other disadvantaged groups. "All the lawsuits go away if the fund is refilled, because everyone receives their money.". | In a similar case, a federal district judge in Texas issued a preliminary ruling in May that the Restaurant Revitalization Fund discriminated against white restaurant operator, Philip Greer, owner of Greers Ranch Caf in Stephenville, Texas, alleging that the federal government violated the Constitutions Equal Protection Clause. Volokh is the Gary T. 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