According to the lawsuit, Janice Smith and Jason Smith applied for assistance from the Restaurant Revitalization Fund on May 5 and discovered that they were entitled to more than $187,000 in relief. {"Economically disadvantaged individuals are those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged. She's the founder of Expedite, a weekly restaurant technology newsletter highlighting news and big ideas about the future of the restaurant industry. A similar lawsuit, filed in Tennessee in May, also alleged that the program was discriminating against white people by prioritizing minority-owned businesses. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Mostly law professors | Sometimes contrarian | Often libertarian | Always independent, Eugene Volokh The suit alleges that the Smiths are being subjected to unconstitutional race and sex discrimination by the priorities that the statute commands for minority- and women-owned businesses, and that because more than half of the requests for Restaurant Revitalization Fund monies were made by business owners under those categories, its possible that the entire $28.6 billion that Congress allocated to the Restaurant Revitalization Fund will be depleted before the plaintiffs can even be considered for relief under the program.. 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. Neighborhood improvement, fighting poverty among priorities for Detroit's $400M rescue fund, New Michigan law clears the way for higher-alcohol canned cocktails, become a digital subscriber to the Free Press, Your California Privacy Rights / Privacy Policy. Eugene Volokh is the Gary T. Schwartz Distinguished Professor of Law at UCLA. He finished every time., Lifes a beach under the basket for Lemonts Miles Beachum. 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. 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. | "If we are Get browser notifications for breaking news, live events, and exclusive reporting. (Damian Dovarganes/AP). 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. Web page addresses and e-mail addresses turn into links automatically. The agency is conducting extensive outreach campaigns so there is full awareness of whats available to those affected.. "It seemed too good to be true, and it turned out that that was the case," said Tom Pisha-Duffly, chef and co-owner of Oma's Hideaway in Portland, Oregon. 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. 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. 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. Greer filed suit, claiming that the SBAs policy violates the Equal Protection Clause of the Constitution. 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.. Please enter valid email address to continue. "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. Based on the number of applications from the priority groups, Greer feared that the fund would run out of money before the SBA could get around to considering his application. A bipartisan group of lawmakers, according to the Hill,onJune 10 introduced the Restaurant Revitalization Fund Replenishment Actof2021 to add an additional $60 billion to the fund. WebA happy dance of big, bold flavors. Lord Mansfield (William Murray), Chief Justice of King's Bench and developer of English commercial law, was born in Scone, Scotland, on March 2, 1702.Learn more about Lord Mansfield from the Biddle Law Library, University of Pennsylvania Law School. Defendants argue the race-conscious rules serve a compelling interest and are narrowly tailored, satisfying strict scrutiny. For the first 21 days, the fund was open for applications from women, individuals who are economically or socially disadvantaged, and veterans. Copyright 2023 CBS Interactive Inc. All rights reserved. "This is critical in the first-come first-served program in order to ensure that those businesses are able to apply," she said. Assuming arguendo that the evidence is relevant, even the case cited by Defendants recognizes the well-established principle about the industry-specific inquiry required to effectuate Section 8(a)'s standards: "The fact that Section 8(a) is constitutional on its face, however, does not give the SBA or any other government agency carte blanche to apply it without reference to the limits of strict scrutiny. Her work has appeared in Food & Wine, Insider, Eater, the San Francisco Chronicle, and more. Thus, the lawsuit alleges, its possible that the entire $28.6 billion that Congress allocated to the Restaurant Revitalization Fund will be depleted before Nyman On March 2, 1917, President Woodrow Wilson signed the Jones-Shafroth Act, granting Puerto Rico status a United State territory and granting all of its residents U.S. citizenship. The restaurant was named for Tom Pisha-Duffly's grandmother his oma who passed away from COVID-19 in the early days of the pandemic. Restaurant Revitalization Fund Replenishment Act Introduced : On June 8, 2021, a bipartisan group of Senators and U.S. Get todays need-to-know restaurant industry intelligence. People drink outdoors March 31, 2021, on the patio of Big Dean's Ocean Front Cafe in Santa Monica, California. 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.. Kristen is the creator of two industry newsletters; the first was acquired by a media company in 2016. A $28.6 billion federal restaurant aid fund has in its first week received more than 266,000 applications from struggling restaurants, many of which come from the women- and minority-owned businesses the fund is prioritizing. They weren't alone Over 3,000 businesses received notices that their grants had been canceled. You can find out more about our use, change your default settings, and withdraw your consent at any time with effect for the future by visiting Cookies Settings, which can also be found in the footer of the site. 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.. In a recent Zoom call with independent restaurant operators, Erika Polmar, executive director of the Independent Restaurant Coalition (IRC) said that it's unlikely the measure will pass as a standalone bill, but instead might be added to a reconciliation package like the bipartisan infrastructure package, potentially in July. 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. However, this fund was quickly depleted, and many restaurants are still struggling to keep their doors open. "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. However, the SBA has a mandate to prioritize applications from women, veterans and persons from socially and economically disadvantaged groups for the first 21 days of the program. ", Said an SBA spokeswoman: "While we cannot comment on the specifics of the litigation, it is the North Star of the U.S. Small Business Administration to assist underserved small businesses, and well continue to do so. The legal complaint argues that the fund requires the SBA to discriminate among restaurants according to the race and sex of the owner, by specifying that during the first 21 days of the program that officially began last week, the SBA administrator must prioritize awarding grants to businesses owned by women and racial minorities., These race and sex preferences are patently unconstitutional, and the Court should promptly enjoin their enforcement. 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. 1998 - 2023 Nexstar Media Inc. | All Rights Reserved. The fund launched May 3 as partof the American Rescue Plan Act. Some say they're considering collective legal action, others fear this roadblock could be the final nail in the coffin for their beleaguered businesses. May 13, 2021 / 10:55 AM Nearly 3,000 approved applicants, all women and people in groups deemed most in need, were told they wouldn't get their funds following legal challenges to the selection process. Experience: Kristen Hawley has nearly two decades of experience in the media industry. 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. Registered in England and Wales. NEXT: ACLU-Connecticut Condemns "Racial Ridicule" Arrest for Online Post. We were like, 'What? An appellate court later overturned McDonoughs decision. Indeed, SBA Administrator Isabel Guzman proudly cited the preferences as a way of helping members of the industry who were most in need. But not everyone waseligible or will receive funds. That suit is still pending, but unlike in the Texas case, Tennessee judge Travis McDonough denied the groups request for an injunction that wouldve paused the disbursement of funds. The IRC offers several resources on its site including a tool to quickly contact elected representatives. 2021 CBS Interactive Inc. All Rights Reserved. She and her business partner will soon meet with their landlord, who she says has been surprisingly "very cool" about not receiving rent for over a year, to figure out the future. Restaurant Revitalization Fund Replenishment Act of 2021 On June 11, 2021, Congress introduced the Restaurant Revitalization Fund Replenishment Act of 2021 to replenish the fund with $60 billion. The Associated Press reported Wednesday that women, veterans and socially and economically disadvantaged business owners have already applied for $29 billion in aid, accounting for more than 147,000 applications. In mid-June, the SBA told nearly 3,000 restaurants that they would not receive grant money they were promised because of the federal lawsuits. "We're in a food desert," she said. 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: . 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. In at least one instance, the plaintiff was assisted in bringing the legal action by a conservative group that objected to the SBAs acknowledged bias. 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. Burlington Centrals Nicholas Gouriotis figures out the difference. While the Court is mindful of statistical disparities and expert conclusions based on those disparities, "[d]efining these sorts of injuries as 'identified discrimination' would give governments license to create a patchwork of racial preferences based on statistical generalizations about any particular field of endeavor." Individuals who are members of the following groups are presumed to be socially disadvantaged: Black Americans; Hispanic Americans; Native Americans (including Alaska Natives and Native Hawaiians); Asian Pacific Americans; or Subcontinent Asian Americans.")} The SBA will not pay these claims because the legal conclusions in these court rulings would preclude payment. 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. (Note: the Reuters piece refers to the restaurant as Blessed Cajuns, which is the limited liability corporation that operates the Lost Cajun.).
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