Problem:
Section 5003 of the American Rescue Plan Act provided financial benefits to restaurant and bar owners injured by forced closures due to COVID-19. The Act charged the Small Business Administration with administering the program—which only had a limited sum of money—and with providing access to those benefits through a race-based prioritization scheme. In short, minority business owners went to the front of the line, and white business owners went to the back of the line—effectively cutting off any likelihood of obtaining funds.
Action:
AFL sued the Small Business Administration on behalf of a class of restaurant and bar owners, seeking to have the priority access program declared unlawful and enjoined.
Result:
AFL VICTORY. AFL obtained a preliminary injunction in the U.S. District Court for the Northern District of Texas to stop race-based prioritization of access to COVID-19 relief funds for American restaurant owners. Most of AFL’s clients were able to obtain relief from the program before the funding pool was exhausted.
Links:
- Biden Administration Caves in Response to AFL Lawsuit, Will End Unconstitutional Racial Preferences in the Restaurant Revitalization Fund
- AFL Files Request with Court to Hold SBA Accountable for Damages for Discriminating Against Additional Restaurants and Restaurant Owners Based on their Race and Sex when Administering the Restaurant Revitalization Fund
