The evidence submitted by plaintiffs indicates that the entire $28.6 billion in the Restaurant Revitalization Fund may be depleted before plaintiffs application can be considered for relief under the program, U.S. District Judge Reed OConnor said in his ruling. Greer filed suit, claiming that the SBAs policy violates the Equal Protection Clause of the Constitution. The decision comes after a federal judge in Texas issued an injunction on the release of the funds following a lawsuit from a Dallas-Fort Worth restaurant that alleges the programs plan to distribute funds to businesses owned by women, veterans, and racial minorities is unconstitutional. A letter obtained by Nation's Restaurant News told those applicants awaiting funds: The SBA is not able to pay 2,965 priority applicants including yourself who were previously approved and notified of their approval. Its estimated that 1 in 6 restaurants across the country permanently closed due to the pandemic. Doing so will promote equal rights under the law for all American citizens and promote efforts to stop racial discrimination, the lawsuit adds, mirroring language included in AFLs, socially disadvantaged farmers and ranchers., Few industries have been harder hit by lockdowns and restrictions than the restaurant and bar industry., Lawmakers trounce Lobbyists in annual charity hockey game, These four House Republicans broke with the GOP to oppose inflation estimates bill, Biden mocks Rep. 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The ruling involved the Restaurant Revitalization Fund, a $28.6 billion program in the COVID relief law President Biden signed in March. Nation's Restaurant News is part of the Informa Connect Division of Informa PLC. The New York event company owner, who asked to not be named, has had to move out of her apartment because she couldn't pay rent. "There are $50 billion of applications that are pending right now that are not going to be funded, because the federal dollars aren't there," he said. Thursdays lawsuit from America First Legal (AFL) specifically takes issue with the Small Business Administrations (SBA) handling of the $28.6 billion in the Restaurant Revitalization Fund within President Bidens American Rescue Plan package passed by Congress. Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with the site, and to show advertisements that are targeted to your interests. But on Wednesday, the agency announced it had already received more than 147,000 applications from women, veterans and other disadvantaged restaurant owners in just over a week, requesting $29 billion in funds. Veronique de Rugy 3.1.2023 4:21 PM, Eric Boehm 3.2.2023 12:01 AM, Jacob Sullum Senate group wades into tough talks on Social Security. More:Neighborhood improvement, fighting poverty among priorities for Detroit's $400M rescue fund, More:New Michigan law clears the way for higher-alcohol canned cocktails, According to the lawsuit, Vitolo, a white male, claims that giving priority to certain groups "putswhite male applicants at significant risk that, by the time their applications areprocessed, the money will be gone. The $28.6 billion Restaurant Revitalization Fund has only been processing and funding requests from businesses owned by women; veterans; or socially and (Damian Dovarganes/AP). Members of Congress have introduced an effort to refill the fund with an additional $60 billion, though some operators worry that a re-up of funds won't be prioritized as pandemic restrictions are lifted and restaurants resume service at full capacity. Registered in England and Wales. 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. newsletter, Sign up for the [The defendants' evidence] lacks the industry-specific inquiry needed to support a compelling interest for a government-imposed racial classification. /sites/all/themes/penton_subtheme_nrn/images/logos/footer.png. Please enter valid email address to continue. The Restaurant Revitalization Fund has been depleted. According to a court filing, the last priority applications were processed on May 27 and the rest of the money in the fund was re-allocated to non-priority applicants. The lawsuit filed in the Eastern District of Tennessee is seeking a temporary restraining order and injunction to halt the administration from paying out any grants, unless it starts processing and paying out money in the order applications were received regardless of an applicant's gender or race. (Note: the Reuters piece refers to the restaurant as Blessed Cajuns, which is the limited liability corporation that operates the Lost Cajun.). The Restaurant Revitalization Fund was introduced as part of President Biden's American Rescue Plan, funneling billions directly to independent restaurants. Privacy Policy | The SBA opened the fund to the priority groups for the first 21 days of the application window. Trump successfully chilled FBI from being willing to investigate anything Christie: Trump grand jury foreperson did a lot of damage to case, Trumps polling strength causes heartburn for Senate GOP, Bill Maher: I am afraid of Trump on a very personal level. 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. To get the Volokh Conspiracy Daily e-mail, please sign up here. 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. The Sixth Circuit court panel has ruled the prioritization of Restaurant Revitalization Fund loans on the basis of sex and race unconstitutional, 2023 Informa USA, Inc., All rights reserved, Denny's raises over $1.2 million to fight childhood hunger in 12th annual No Kid Hungry fundraiser, Bojangles names Tom Boland as new chief marketing officer, Baskin-Robbins rolls out chicken-and-waffle flavored ice cream, How Jersey Mike's is becoming 'America's sandwich shop', Nations Restaurant News launches new CREATE Roadshow event series, San Diegos Trust Restaurant Group drives retention, innovation with culture of yes, Tech Tracker: Restaurant QR codes are evolving and so should yours, SBA data confirms that the current Restaurant Revitalization Fund cant meet demand, The Restaurant Revitalization Fund application portal is closing on May 24, Allowed HTML tags: . Do not sell my personal infoPrivacy PolicyContact UsRSS, SBA stops Restaurant Revitalization Fund payments after courts rule they're discriminatory. Under the Biden restaurant relief program, restaurants and bars can qualify for grants equal to their pandemic-related revenue losses, with a cap of $10 million per business and $5 million per location. Rather, agencies have a responsibility to decide if there has been a history of discrimination in the particular industry at issue .". The Restaurant Revitalization Fund was introduced as part of President Biden's American Rescue Plan, funneling billions directly to independent restaurants. His rebound downs Marian Catholic. Defendants propose as the government's compelling interest "remedying the effects of past and present discrimination" by "supporting small businesses owned by socially and economically disadvantaged small business owners who have borne an outsized burden of economic harms of [the] COVID-19 pandemic." Ittook issue with the third-party delivery companiespromotions that waived delivery fees for Black-owned restaurants in the wake of George Floyds murder. 3807, the Restaurant Revitalization Fund Replenishment Act, calling for an additional $60 billion to be added to the fund. 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 by the Small Business Administration ("SBA"). At The Weisblatt Firm, our legal team supports all types of businesses, including hedge funds. During that window, ARPA directs SBA to "take such steps as necessary" to prioritize eligible restaurants "owned and controlled" by "women," by "veterans," and by those "socially and economically disadvantaged." Copyright 2023, JURIST Legal News & Research Services, Inc. M. Tyler Gillett | U. Pittsburgh School of Law, US, Federal judge rules restaurant relief fund discriminated against white man. Lines and paragraphs break automatically. Licking your People drink outdoors March 31, 2021, on the patio of Big Dean's Ocean Front Cafe in Santa Monica, California. The Restaurant Revitalization Fund was practically destined to be oversubscribed. A court initially rejected the argument, but the decision was reversed upon appeal, and the plaintiffs prevailed in the other two actions. Restaurants in Texas and Tennessee filed lawsuits against the SBA, arguing thatprioritizing the Restaurant Revitalization Fundtogroups based on race and gender is unconstitutional. [] SBAs leadership is frustrated with this outcome and remains committed to doing everything we can to support disadvantaged businesses getting the help they need to recover from this historic pandemic.. The $28.6 billion Restaurant Revitalization Fund has only been processing and funding requests from businesses owned by women; veterans; or socially and economically disadvantaged individuals. 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. Of the applications, 57% came from women, veterans, and socially and economically disadvantaged business owners, who had already applied for $29 billion in the $28.6 billion program by May 12, the SBA has said. thelawsuitbrought by the Wisconsin Institute for Law & Liberty, the $28.6 billion Restaurant Revitalization Fund, Oswego Easts Jehvion Starwood steps up with winning 3-pointer in OT. A US federal judge issued a preliminary ruling Tuesday in favor of a white male restaurateur who claimed he had been discriminated against in connection to his The Wisconsin Institute for Law & Liberty, a conservative, nonprofit law firm, filed the lawsuit against SBAadministrator Isabella Casillas Guzman on behalf of Vitolo in May, stating that Vitolo failed to receive a Restaurant Revitalization Fund grant after applying on May 3 allegedly because he is a white man. He asked the court to issue a temporary restraining order prohibiting the SBA from administering the RRF on the basis of sex or race. 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. These race and sex preferences are patently unconstitutional, and the Court should promptly enjoin their enforcement. "Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities. Judge says Starbucks committed egregious and widespread labor violations Greta Thunberg removed from site of Norwegian wind farm protest, Zero-calorie sweetener popular in keto diets linked to strokes, heart attacks, China, Belarus call for cease-fire, negotiations in Ukraine, Fight in high school classroom leaves one dead, one injured, The shepherd boy, the wolf and the threat to Israeli democracy, Watch live: White House monkeypox response team holds briefing, Do Not Sell or Share My Personal Information. While this is certainly unfortunate, Congress cannot reasonably have been expected to predict with precision the level of demand for funds nor how the demand would break down between priority and non-priority applications, the judge wrote. Oops. The owner of a weddings and events business in New York City contacted couples to say she would soon be able to refund some of the money they put down as a deposit on their canceled 2020 weddings. 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. "I'm going to try to restart my business because I have no choice other than personal bankruptcy," she said. Vang added that it hasn't been easy and cited the laborshortage as the reason labor supply for needing to cut back on employee hours and days of operation. The Wisconsin Institute for Law and Liberty (WILL) suedon behalfof Antonio Vitolo, the owner of Jake's Bar and Grill in Harriman, Tennessee,according to the Hill. For the first 21 days, the fund was open for applications from women, individuals who are economically or socially disadvantaged, and veterans. The SBA will not pay these claims because the legal conclusions in these court rulings would preclude payment. Expertise: restaurant technology and operations. Neither of the owners qualifies for prioritization as a socially disadvantaged individual, which means that their application wouldnt be processed until after that 21-day period in which the Administration has been directed to process applications from those groups. In February, I joined local Rochester area restaurateurs to announce my sponsorship of H.R. CBS News reporter covering economic policy. When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. This is ugly, pernicious, and toxic. "Under the guise of pandemic relief, the American Rescue Plan Act enables the federal government to engage in illegal and unconstitutional race and sex discrimination. One was an air ball., Go big or go home. To proceed based on this interest, Defendants must provide a "strong basis in evidence for its conclusion that remedial action was necessary.". Doing so will promote equal rights under the law for all American citizens and promote efforts to stop racial discrimination, the lawsuit adds, mirroring language included in AFLs lawsuit filed late last month against the Department of Agricultures program to provide aid to socially disadvantaged farmers and ranchers., Ina statement announcing the new lawsuit Thursday, Miller said, Few industries have been harder hit by lockdowns and restrictions than the restaurant and bar industry.. The judge wrote that Congress has gathered myriad evidence suggesting that small businesses owned by minorities have suffered more severely than other kinds of businesses during the COVID-19 pandemic, and that the Governments early attempts at general economic stimulus disproportionately failed to help those businesses directly because of historical discrimination patterns., Similarly, McDonough said Congress had before it evidence showing that woman-owned businesses suffered historical discrimination that exposed them to greater risks from an economic shock like COVID-19, and that they received less benefit from earlier federal COVID-19 relief programs.. As courts debated the fund's fate, thousands of restaurants were left in limbo. TheSBAdoes not have a comment, however, theSBAis working to ensure the economic aid is accessible to all that are eligible, including those hit hardest, while protecting program integrity and ensuring as quick distribution as possible of the aid, a representative from the Small Business Administration said in a statement. Business owners who spent months waiting for relief eagerly moved forward: The owners of a small wine bar in Brooklyn told their landlord that they'd soon pay the 15 months of back rent they owed. Three restaurants involved in the high-profile suits had their applications processed and received grants totaling close to $933,000. 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. It's not known how many restaurants in Michigan applied for RRF funding. They alleged that they were the victims of discrimination and asked that funds not be distributed to the priority groups as the SBA had planned so the money could be allocated more fairly. She launched her second newsletter, Expedite, independently three years later to continue chronicling the evolving restaurant technology industry. Thousands of others lost out on aid they were expecting thanks to lawsuits backed by conservative groups. THE HILL 1625 K STREET, NW SUITE 900 WASHINGTON DC 20006 | 202-628-8500 TEL | 202-628-8503 FAX. 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. The lawsuit said the limited funding put white male applicants at significant risk that, by the time their applications are processed, the money will be gone an argument that did not sway the judge. The restaurants that sued the SBA for discrimination received almost $1 million in Restaurant Revitalization Fund grants The SBA previously dropped prioritization of "The simplest solution to all of it, all of the problems with the lawsuits and everything else goes away if you refill the fund," Polmar said in an interview. Greers lawsuit was backed by the America First Legal Foundation, whose president is former Trump Administration senior adviser Stephen Miller, architect of that administrations infamous Muslim travel ban. The National Restaurant Association agreed that the ruling would not have much impact on the day-to-day ability of the SBA to administer the RRF but they do not know whether this ruling will impact government-issued grants or loans moving forward. | This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. The lawsuit opens the door for a class action suit, in which all restaurant owners and restaurants in the United States who are encountering or who will encounter race or sex discrimination from the Small Business Administration, could be potentially entitled to relief from the court. Vang says the funds helped her to strategize. All rights reserved. The IRC offers several resources on its site including a tool to quickly contact elected representatives. The SBA received requests for more than triple the allocated funds. Restaurant Revitalization Fund Replenishment Act Introduced : On June 8, 2021, a bipartisan group of Senators and U.S. Croson Co. (1989). May 13, 2021 / 10:55 AM His earlier misses?