May 28, 2021
A federal appellate court on Thursday invalidated the racial and gender preferences in President Biden’s $1.9 trillion American Rescue Plan Act as unconstitutional. The Sixth Circuit of Appeals granted a request to bring the plan to a halt pending further litigation, after finding the plan’s preferences for minority-owned small-restaurant owners for covid relief violated the 14th Amendment’s guarantee of equal protection under the law.
The ruling comes as a major blow to proponents of racial reparations, who saw Biden’s plan as a vehicle to provide cash to minority groups under the guise of covid relief.
The provision flagged by the court as unconstitutional was the law’s $29 billion Restaurant Revitalization Fund grant program for small, privately-owned restaurants struggling to meet payroll and rent due to the covid crisis. The law granted priority status to restaurants that have 51% ownership or more composed of specific racial and ethnic groups, including women. By effectively blocking struggling businesses owned by white males or ethnicities and nationalities excluded from a priority designation “to the back of the line,” the court ruled the COVID relief program infringed on core constitutional guarantees.
“When the government promulgates race-based policies, it must operate with a scalpel. And its cuts must be informed by data that suggest intentional discrimination. The broad statistical disparities cited by the government are not nearly enough,” the opinion reads.
The court criticized the Biden Administration’s plan by noting the government could only point to broad claims of societal discrimination but struggled to point to specific incidents of past intentional discrimination against minority business owners. “Indeed, the schedule of racial preferences detailed in the government’s regulation—preferences for Pakistanis but not Afghans; Japanese but not Iraqis; Hispanics but not Middle Easterners—is not supported by any record evidence at all,” the court found.
The opinion was authored by Judge Amul Thapar, the son of immigrants from India, whose father owns a heating and air-conditioning supply business in Toledo, Ohio. Judge Thapar was appointed to the bench by President George W. Bush.
The lawsuit was brought by the Wisconsin Institute for Law and Liberty. The organization’s President and General Counsel, Rick Esenberg, said, “The government is trying to allocate limited COVID relief funds on the basis of race and sex. The Court of Appeals held it cannot and that we are likely to succeed on our claim that this program is unconstitutional.”
The plaintiffs in the case are Jake’s Bar and Grill, a restaurant jointly owned by Antonio Vitolo, who is white, and his wife, who is Hispanic. If Vitolo’s wife owned more than 50% of the restaurant, then Jake’s Bar and Grill would be eligible to receive priority treatment for a grant, since her ethnicity qualifies as “socially and economically disadvantaged” under the law. But because she only owns 50% — her white husband owns the other half — the restaurant’s application cannot be considered until the Small Business Administration (SBA) first processes all applications from restaurants entitled to priority status based on race and gender.
This latest appellate ruling siding in favor of individual treatment rather than group-based racial or gender preferences.
Click here to the opinion.