Vitolo v. Guzman — U.S. District Court, E.D. Tenn., Knoxville Division

Case summary

Jake's Bar and Grill, LLC and Antonio Vitolo filed a complaint on May 12, 2021 in the U.S. District Court for the Eastern District of Tennessee, No. 3:21-cv-00176-TRM-DCP, against Isabella Casillas Guzman, the Administrator of the Small Business Administration. The complaint concerns Section 5003 of the American Rescue Plan Act, under which Congress appropriated $28.6 billion to create the Restaurant Revitalization Fund, and the statutory instruction that for the first 21 days the SBA prioritise awarding grants to certain applicants. The plaintiffs pleaded that the priority rule makes distinctions based on race and sex. The court denied a temporary restraining order on May 17 and 19, 2021 and denied an injunction pending appeal on May 20, 2021; the plaintiffs appealed to the Sixth Circuit the same day. On August 6, 2021 the government moved to dismiss the amended complaint for lack of jurisdiction, the Fund having been exhausted.

Case at a glance

What does the complaint allege?

That under Section 5003 of the American Rescue Plan Act Congress appropriated $28.6 billion to create the Restaurant Revitalization Fund, to be administered by the defendant, who runs the SBA, and that for the first 21 days beginning May 3, 2021 the defendant was obligated to prioritise awarding grants to certain applicants, so that Antonio Vitolo's application for Jake's Bar and Grill in Harriman, Roane County, Tennessee would not be processed until after those applications.

What did the district court decide?

It denied the temporary restraining order, by order of May 17, 2021 and memorandum opinion of May 19, 2021, and denied the plaintiffs' emergency motion for an injunction pending appeal on May 20, 2021, noting that a party must ordinarily move first in the district court for an injunction while an appeal is pending. On June 10, 2021 it denied a further temporary restraining order sought by additional plaintiffs.

What is the government's position on mootness?

That the amended complaint should be dismissed for lack of jurisdiction. Its August 6, 2021 memorandum states that the SBA stopped accepting RRF applications on May 24, 2021 because claims dwarfed the allocation, continued paying out awards until June 30, 2021, at which point the Fund became exhausted, and that the Fund is now closed.

Summary written from the documents on this page; every sentence is sourced.