Second Amended Complaint — Blessed Cajuns v. Guzman

Record facts

U.S. District Court, Northern District of Texas (Fort Worth Division) · No. 4:21-cv-00677-O · Doc. 40 · 2021-08-03 · Docket on CourtListener

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plaintiffs’ second amended complaint 
 
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U N I T E D  S T A T E S  D I S T R I C T  C O U R T  
F O R  T H E  N O R T H E R N  D I S T R I C T  O F  T E X A S  
F O R T  W O R T H  D I V I S I O N  
 
 
 
Blessed Cajuns LLC; Janice Smith; 
Jason Smith; PSBH LLC; Eric 
Nyman; Lynds Inn, LLC; Andrew 
Lynds; Heather Brown; OCF Cafe 
LLC; Ori Feibush; GBB Hospitality 
Group LLC; GBB Services LLC; 
Jimmy Loup; 7th Avenue Property 
Management Inc.; Eric Schiller, 
Plaintiffs, 
v. 
Isabella Casillas Guzman, in her 
individual capacity and in her official 
capacity as administrator of the Small 
Business Administration; United States 
Small Business Administration, 
Defendants. 
 
 
 
 
 
 
   Case No. 4:21-cv-00677-O 
 
 
 
PLAINTIFFS’ SECOND AMENDED COMPLAINT 
Section 5003 of the American Rescue Plan Act appropriated $28.6 billion to cre-
ate the Restaurant Revitalization Fund, which is administered by the Small Business 
Administration. This fund provided relief for restaurants harmed by the COVID-19 
pandemic, but the statute required Administrator Guzman to give discriminatory 
preferences to restaurants owned by women and racial minorities. The statute pro-
vides that during the first 21 days of this program, which started on May 3, 2021, the 
administrator of the SBA must “prioritize awarding grants” to businesses owned by 
women and racial minorities. See American Rescue Plan Act § 5003(c)(3)(A) (at-
tached as Exhibit 1).  
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These race and sex preferences are patently unconstitutional, and this Court 
moved quickly to enjoin their enforcement with respect to the original named plain-
tiffs in this litigation. See Order of May 28, 2021, ECF No. 18. In response to this 
Court’s preliminary-injunction order of May 28, 2021, the defendants represented to 
this Court that they would cease processing all “priority” applications until the Small 
Business Administration “completes processing all previously filed non-priority appli-
cations, and only then if the RRF is not first exhausted.” Supplemental Declaration of 
John A. Miller, ECF No. 28-1 at ¶ 8. 
On June 30, 2021, the Small Business Administration announced that it was clos-
ing the Restaurant Revitalization Fund because the $28.6 billion that had been allo-
cated to the Fund was exhausted. See Exhibit 4. At no point prior to this point did 
the Small Business Administration publish a list of which businesses had received re-
lief, when those business applied, and when they were funded.1 
Most of the plaintiffs in this case had their applications approved and received 
payments from the Fund after this Court issued its preliminary injunction but before 
the Fund closed. But plaintiff GBB Hospitality Group LLC and its owner, Jimmy 
Loup, never had their application approved—even though Mr. Loup submitted the 
application within the first few minutes after the Fund began accepting applications 
on May 3, 2021. Plaintiff 7th Avenue Property Management Inc. and its owner, Eric 
Schiller, likewise never had their application approved, even though Mr. Schiller 
submitted his application on May 5, 2021. 
The application submitted by GBB Hospitality Group LLC and Mr. Loup, as well 
as the application submitted by 7th Avenue Property Management Inc. and Mr. 
 
1. As described below, the Small Business Administration subsequently responded to 
a Freedom of Information Act request with a list of all business that received 
awards, the award amount, and the approval date. See Small Business Administra-
tion, Restaurant Revitalization Fund (RRF) FOIA, https://bit.ly/3y6Xblt (last 
visited July 30, 2021). 
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Schiller, would have been approved if Administrator Guzman had not deployed the 
patently unconstitutional use of race and sex preferences that the plaintiffs sued to 
enjoin. GBB Hospitality Group LLC and Mr. Loup and 7th Avenue Property 
Management Inc. and Mr. Schiller therefore seek damages under Bivens v. Six Un-
known Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971), to com-
pensate them for this denial of their constitutional rights. 
JURISDICTION AND VENUE 
1. The Court has subject-matter jurisdiction under 28 U.S.C. § 1331 and 28 
U.S.C. § 1343. 
2. Venue is proper because a substantial part of the events giving rise to the 
claims occurred in this judicial district. See 28 U.S.C. § 1391(b)(2). 
PARTIES 
3. Plaintiff Blessed Cajuns LLC is a limited liability company incorporated un-
der the laws of Texas, operating under the name “The Lost Cajun Keller.” It operates 
in Keller, Texas.  
4. Plaintiff Jason Smith is co-owner of Blessed Cajuns LLC. He resides in Fort 
Worth, Texas.  
5. Plaintiff Janice Smith is co-owner of Blessed Cajuns LLC. She resides in Fort 
Worth, Texas.  
6. Plaintiff PSBH LLC is a limited liability company incorporated under the 
laws of Pennsylvania, operating under the name “Penn Hotel Sports & Raw Bar.” It 
operates in Camp Hill, Pennsylvania.  
7. Plaintiff Eric Nyman owns PSBH LLC.  
8. Plaintiff Lynds Inn LLC is a limited liability company incorporated under 
the laws of Vermont. It operates in Waitsfield, Vermont. 
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9. Plaintiff Andrew Lynds is a co-owner of Lynds Inn LLC. He resides in Waits-
field, Vermont. 
10. Plaintiff Heather Brown is a co-owner of Lynds Inn LLC. She resides in Lee 
County, Florida. 
11. Plaintiff OCF Cafe LLC is a limited liability company incorporated under 
the laws of Pennsylvania.  
12. Plaintiff Ori Feibush is the owner of OCF Cafe LLC. He resides in Phila-
delphia County, Pennsylvania. 
13. Plaintiff GBB Hospitality Group LLC is a limited liability company incor-
porated under the laws of Texas, doing business under the name “Grub Burger Bar.” 
14. Plaintiff GBB Services LLC is a pass-through payroll company owned by 
GBB Hospitality Group LLC. 
15. Plaintiff Jimmy Loup is the owner, founder and CEO of Grub Burger Bar. 
He resides in Brazos County, Texas. 
16. Plaintiff 7th Avenue Property Management Inc. is an S-corporation incor-
porated under the laws of Florida, doing business under the name “Gaspars Grotto.”  
17. Plaintiff Eric Schiller is a co-owner of 7th Avenue Property Management 
Inc. He resides in Hillsborough County, Florida. 
18. Defendant Isabella Casillas Guzman is administrator of the Small Business 
Administration. Administrator Guzman is sued in her official capacity. 
19. Defendant United States Small Business Administration is an agency of the 
United States government. 
STATEMENT OF FACTS 
20. Section 5003 of the American Rescue Plan Act of 2021, H.R. 1319, 117th 
Cong. (2021), provides aid to restaurants that have been harmed by the COVID-19 
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pandemic. It appropriates $28.6 billion to create the Restaurant Revitalization Fund, 
which will be administered by the Small Business Administration.  
21. Section 5003 provides that during the first 21 days of this program, which 
started on May 3, 2021, the administrator of the SBA must “prioritize awarding 
grants” to businesses owned by women and racial minorities. See American Rescue 
Plan Act § 5003(c)(3)(A) (attached as Exhibit 1).  
22. Plaintiffs Jason and Janice Smith own the Lost Cajun Keller. They submitted 
an application for relief under the Restaurant Revitalization Fund on May 5, 2021. 
Their application indicated that they were eligible for up to $187,753.17 worth of 
relief. 
23. Plaintiff Eric Nyman owns the Penn Hotel Sports & Raw Bar. He submitted 
an application for relief under the Restaurant Revitalization Fund on May 3, 2021. 
His application indicated that he was eligible for up to $640,424.65 worth of relief.  
24. Plaintiffs Andrew Lynds and Heather Brown own the Lynds Inn LLC. They 
have submitted an application for relief under the Restaurant Revitalization Fund. 
Their application indicated that they were eligible for up to $630,082 worth of relief. 
25. Plaintiff Ori Feibush owns OCF Cafe LLC. He submitted an application for 
relief under the Restaurant Revitalization Fund on May 3, 2021. His application in-
dicated that he was eligible for up to $946,497.62 worth of relief.  
26. Plaintiff Jimmy Loup owns GBB Hospitality Group LLC. He submitted an 
application for relief under the Restaurant Revitalization Fund on May 3, 2021. His 
application indicated that he was eligible for up to $6,709,795.00 in relief. 
27. Plaintiff Eric Schiller owns 7th Avenue Property Management Inc. He sub-
mitted an application for relief under the Restaurant Revitalization Fund on May 5, 
2021. His application indicated that he was eligible for up to $1,489,118.86 in relief. 
28. None of the plaintiffs qualify as a “socially disadvantaged individual” or 
“economically disadvantaged individual” under the SBA’s regulations. See 13 C.F.R. 
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§§ 124.103, .104. They were therefore subjected to unconstitutional race and sex 
discrimination by the “priorities” that the statute commands for minority- and 
women-owned businesses.  
29. On May 23, 2021, plaintiffs Blessed Cajuns LLC, Janice Smith, Jason 
Smith, PSBH LLC, and Eric Nyman filed suit to stop the defendants from prioritizing 
applications according to race and to enforce a first-come-first-served system that re-
moves any advantage that applicants may have received from the 21-day “priority” 
window. That same day, the plaintiffs moved for class certification and a preliminary 
injunction.  
30. On May 28, 2021, this Court granted the plaintiffs’ application for a pre-
liminary injunction. The Court limited its relief to plaintiffs Blessed Cajuns LLC, 
Janice Smith, Jason Smith, PSBH LLC, and Eric Nyman—the only named plaintiffs 
in the case at that time—as the proposed class had not yet been certified. The Court 
ordered the defendants to process the named plaintiffs’ applications “as if the SBA 
had initiated processing of those applications at the time the applications were filed.” 
Order (ECF No. 18) at 11. It also enjoined the defendants from processing or con-
sidering any Restaurant Revitalization Fund application filed later in time than the 
named plaintiffs’ applications “until their applications have been processed and con-
sidered in accordance with a race-neutral, sex-neutral ‘first come, first served’ policy.” 
Id.  
31. The defendants responded to this order by quickly processing those plain-
tiffs’ applications and disbursing the funds into their bank accounts. See Defendants’ 
Response to Order of May 29, 2021 (ECF No. 19).  
32. The defendants represented to the Court that the Small Business Admin-
istration had made changes sua sponte to begin processing other non-priority applica-
tions, including applications from the plaintiffs who subsequently joined this lawsuit, 
and had stopped processing priority applications. Id. During the hearing of June 3, 
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2021, the defendants’ counsel acknowledged that these changes were contrary to the 
requirements of § 5003(c)(3)(A) and had been made by the Small Business Admin-
istration without following the rulemaking requirements of the Administrative Pro-
cedure Act. 
33. To ensure that the funds awarded to the plaintiffs are not clawed back by 
the defendants following the expiration of this suit, the plaintiffs require a permanent 
injunction to enforce their awards from the Restaurant Revitalization Fund as lawfully 
granted. 
34. On June 30, 2021, the Small Business Administration announced that it 
was closing the Restaurant Revitalization Fund because the $28.6 billion that had 
been allocated to the Fund was exhausted. See Exhibit 4. 
35. Yet Mr. Loup’s application was never approved before the Fund was de-
pleted on June 30, 2021—even though Mr. Loup applied within minutes after the 
Fund opened for applications on May 3, 2021. The portal for the Restaurant Revital-
ization Fund was supposed to open at 11:00 a.m. central time on May 3, 2021, but 
it actually opened at 10:04 a.m. central on May 3, 2021, and Mr. Loup had his ap-
plication submitted by 10:26 a.m. that day. See Exhibit 2. 
36. In like manner, Mr. Schiller’s application was never approved before the 
Fund was depleted on June 30, 2021—even though Mr. Schiller applied only two 
days after the Fund opened for applications on May 3, 2021. 
37. According to the Small Business Administration’s data, and despite the ad-
justments made in response to the injunction issued by this Court, only 6,758 of the 
101,006 grants (6.7%) went to business owners who were not members of the “pri-
ority” demographic groups. 34% of the grants went to businesses owned by socioec-
onomically disadvantaged persons, almost 44% went to women-owned businesses, and 
5.7% were distributed to businesses owned by veterans. 
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38. Indeed, although the Small Business Administration did not proactively 
provide granular details about the operation of the program—that is, who received 
what and when—the Small Business Administration did release data in response to a 
Freedom of Information Act (FOIA) request that display the results of the defendants’ 
discriminatory actions in awarding grants based on the constitutionally forbidden 
grounds of race and gender. See Small Business Administration, Restaurant Revitali-
zation Fund (RRF) FOIA, https://bit.ly/3rB0bnG (last visited July 22, 2021). 
39. Sorting by date of award in the spreadsheet that the Defendants released 
through FOIA appears to show that, prior to this Court’s injunction on May 28, 
2021, and the United States Court of Appeals for the Sixth Circuit’s decision of May 
27, 2021, in Vitolo v. Guzman, 999 F.3d 353 (6th Cir. 2021), the defendants had not 
approved a single non-priority application. See Small Business Administration, Restau-
rant Revitalization Fund (RRF) FOIA, https://bit.ly/3rB0bnG (last visited July 22, 
2021) (sorting by “Approval Date” in Column B and comparing the approval date 
with the priority categories in columns V–X). But during this period, and beginning 
a mere four days after the application period opened, the defendants approved tens of 
thousands of applications for individuals based on their self-identification as a socially 
and economically disadvantaged business, or a women-owned business. Id. Unfortu-
nately, the data produced by the Defendants do not indicate when each of the listed 
businesses applied for relief. 
CLAIM FOR RELIEF 
40. The Constitution prohibits the federal government from discriminating on 
account of race or ethnicity. See Bolling v. Sharpe, 347 U.S. 497 (1954). The Consti-
tution likewise prohibits the federal government from engaging in sex discrimination 
absent an “exceedingly persuasive justification.” See United States v. Virginia, 518 U.S. 
515, 531 (1996). 
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41. Title VI of the Civil Rights Act of 1964 prohibits discrimination on the 
grounds of race, color, or national origin in any program that receives federal funds. 
See 42 U.S.C. § 2000d.  
42. The Small Business Administration violated Mr. Loup and Mr. Schiller’s 
rights and the rights of their companies under the Constitution and Title VI by dis-
criminating on account of race and sex in administering the Restaurant Revitalization 
Fund. 
43. The Small Business Administration’s unconstitutional race and sex prefer-
ences are the but-for cause of Mr. Loup and Mr. Schiller’s failure to obtain relief from 
the Restaurant Revitalization Fund.  
44. The Court should therefore award Mr. Loup, GBB Hospitality Group LLC, 
and GBB Services LLC damages under Bivens v. Six Unknown Named Agents of Fed-
eral Bureau of Narcotics, 403 U.S. 388 (1971), in an amount equal to what they 
would have received had their application been considered in a colorblind and sex-
neutral process. See Davis v. Passman, 442 U.S. 228, 243–44 (1979). The Court 
should award similar relief to Mr. Schiller and 7th Avenue Property Management Inc. 
45. The Court should also enter a declaration that the discriminatory provisions 
of Section 5003 of the American Rescue Plan Act of 2021, H.R. 1319, 117th Cong. 
(2021), are unconstitutional, and a permanent injunction prohibiting the defendants 
from recovering Restaurant Revitalization Funds disbursed to the plaintiffs contrary 
to the purported statutory requirements of section 5003(c)(3)(A). 
DEMAND FOR RELIEF 
46. The plaintiffs respectfully requests that the court: 
a. 
declare section 5003(c)(3)(A) of the American Rescue Plan Act of 
2021, H.R. 1319, 117th Cong. (2021), unconstitutional because it 
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requires discrimination on account of race and sex in awarding funds 
under the Restaurant Revitalization Fund; 
b. 
declare that the Small Business Administration and Administrator 
Guzman violated the constitutional rights of Mr. Loup, GBB Hospi-
tality Group LLC, and GBB Services LLC damages, as well as Mr. 
Schiller and 7th Avenue Property Management Inc., by discriminat-
ing on account of race and sex in administering the Restaurant Revi-
talization Fund; 
c. 
award Mr. Loup, GBB Hospitality Group LLC, and GBB Services 
LLC damages against Administrator Guzman in her individual capac-
ity; 
d. 
award Mr. Schiller and 7th Avenue Property Management Inc. dam-
ages against Administrator Guzman in her individual capacity; 
e. 
enter a permanent injunction enjoining the defendants from recover-
ing Restaurant Revitalization Funds disbursed to plaintiffs contrary 
to the purported statutory requirements of section 5003(c)(3)(A); 
f. 
award costs and attorneys’ fees under 42 U.S.C. § 1988;  
g.  
award all other relief that the Court may deem just, proper, or equi-
table. 
 
 
 
Gene P. Hamilton 
Virginia Bar No. 80434 
Vice-President and General Counsel 
America First Legal Foundation 
300 Independence Avenue SE 
Washington, DC 20003 
(202) 964-3721 
gene.hamilton@aflegal.org 
 
Respectfully submitted. 
 
 /s/ Jonathan F. Mitchell  
Jonathan F. Mitchell 
Texas Bar No. 24075463 
Mitchell Law PLLC 
111 Congress Avenue, Suite 400 
Austin, Texas 78701 
)
0 (phone
394
-
(512) 686
 
(512) 686-3941 (fax)
 
jonathan@mitchell.law 
 
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H. Dustin Fillmore 
Texas Bar No. 06996010 
Charles W. Fillmore 
Texas Bar No. 00785861 
The Fillmore Law Firm, L.L.P. 
201 Main Street, Suite 801 
Fort Worth, Texas 76102 
(817) 332-2351 (phone) 
(817) 870-1859 (fax) 
dusty@fillmorefirm.com 
chad@fillmorefirm.com 
 
Bradley A. Benbrook* 
California Bar No. 177786 
Stephen M. Duvernay* 
California Bar No. 250957 
Benbrook Law Group, PC 
400 Capitol Mall, Suite 2530 
Sacramento, California 95814 
(916) 447-4900 (phone) 
(916) 447-4904 (fax) 
brad@benbrooklawgroup.com 
steve@benbrooklawgroup.com 
 
* admitted pro hac vice 
 
Dated: July 30, 2021 
Robert Henneke 
Texas Bar No. 24046058 
Texas Public Policy Foundation 
901 Congress Avenue 
Austin, Texas 78735 
(512) 472-2700 (phone) 
rhenneke@texaspolicy.com 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Counsel for Plaintiffs and  
the Proposed Class 
 
 
 
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CERTIFICATE OF SERVICE 
I certify that on July 30, 2021, I served this document through CM/ECF upon: 
Christopher D. Dodge  
United States Department of Justice  
Civil Division, Federal Programs Branch  
1100 L Street, NW  
Washington, DC 20005 
(202) 598-5571 
christopher.d.dodge@usdoj.gov 
 
Counsel for Defendants 
 
 /s/ Jonathan F. Mitchell  
Jonathan F. Mitchell 
Counsel for Plaintiffs and  
the Proposed Class 
 
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