Memorandum in Support of TRO and PI — Vitolo v. Guzman

Record facts

U.S. District Court for the Eastern District of Tennessee · No. 3:21-cv-00176-TRM-DCP · Doc. 12-2 · 2021-05-12 · Docket on CourtListener

Full text

IN THE UNITED STATES DISTRICT COURT 
FOR THE EASTERN DISTRICT OF TENNESSEE 
______________________________________________________________________________ 
 
JAKE’S BAR AND GRILL, LLC, and 
ANTONIO VITOLO, 
 
 
 
 
 
 
 
 
 
 
 
Plaintiffs, 
  
 
v. 
 
 
 
 
 
  
 
 
 
 
ISABELLA CASILLAS GUZMAN,  
 
 
 
Defendant. 
______________________________________________________________________________ 
MEMORANDUM IN SUPPORT OF  
MOTION FOR TEMPORARY RESTRAINING ORDER AND  
PRELIMINARY INJUNCTION 
______________________________________________________________________________ 
INTRODUCTION 
 
Starting on Monday, May 3, 2021, the Small Business Administration (SBA), 
led by Defendant, began accepting applications for grants from the Restaurant 
Revitalization Fund. This fund, established by the American Rescue Plan Act of 2021 
(ARPA), offers relief funds to restaurant owners who have been impacted by the 
economic uncertainties created by the COVID-19 pandemic. 
 
But instead of administering this grant program with a neutral, first-come, 
first-serve process, ARPA establishes a priority period for women and certain 
minorities. Starting May 3, and continuing until May 24, SBA is evaluating and 
funding applications only from certain “priority” groups based on race and gender. 
Other restaurant owners—mostly white men—are being moved to the back of the line 
behind these preferred groups. On May 24, the priority period will end, and SBA will 
start evaluating applications from white male restaurant owners and will fund those 
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applications only to the extent there is money left in the limited fund. Yet Defendant 
has publicly represented that the fund will be insufficient to meet demand. 
 
Antonio Vitolo owns Jake’s Bar and Grill in Harriman, Tennessee. He applied 
immediately on May 3, 2021, but his application was queued behind other “priority” 
applicants because he was a white male. Every day that goes by without 
consideration, Vitolo is harmed. He is harmed because his application is not being 
treated on a first-come, first-serve basis like most other applications; instead, he is 
being subjected to intentional discrimination because he is a white male. If Vitolo 
were not a white male, then his application would be considered within the 21-day 
priority period. But because he is not, he waits, and by the time his turn comes, there 
may be no money left. 
 
Plaintiffs respectfully request that this Court enter a temporary restraining 
order, as soon as possible, and then a preliminary injunction, prohibiting Defendant 
from paying out any grants from the Fund, unless and until Defendant begins 
processing applications and paying grants in the order that the applications were 
received, without regard to the race or gender of the applicant. Only an immediate 
injunction can avoid the irreparable harm that will occur if the fund is depleted before 
Plaintiffs’ application is considered, as well as the daily indignity of being subjected 
to explicit, unconstitutional race and gender discrimination. 
 
 
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FACTS 
I. 
The Restaurant Revitalization Fund 
In Section 5003 of ARPA, Congress created the Restaurant Revitalization 
Fund, which is a $28.6 billion fund to support restaurants. ARPA, § 5003(b)(2).1 The 
law requires Defendant “to use amounts in the Fund to make grants” to restaurants 
impacted 
by 
“the 
uncertainty 
of 
current 
economic 
conditions.” 
ARPA, 
§ 5003(c)(2)(A)(i). 
ARPA requires Defendant to impose race– and gender–based priorities while 
administering the fund. The law provides that during the “initial 21-day period in 
which the Administrator awards grants,” Defendant is required to “prioritize grants 
to eligible entities that are small business concerns owned and controlled by women,” 
veterans, or “socially and economically disadvantaged small business concerns.” 
ARPA, § 5003(c)(3)(A). 
ARPA incorporates the Small Business Act’s definitions of the terms “socially 
disadvantaged” and “economically disadvantaged.” ARPA, § 5003(c)(3)(A). “Socially 
disadvantaged individuals are those who have been subjected to racial or ethnic 
prejudice or cultural bias because of their identity as a member of a group without 
regard to their individual qualities.” 15 U.S.C. § 637(a)(5). “Economically 
 
1 ARPA is available on Congress’s website at https://www.congress.gov/bill/117th-congress/house-
bill/1319.  
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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.” 15 U.S.C. § 637(a)(6)(A).  
In interpreting these definitions, SBA regulations further define “socially 
disadvantaged individuals” and “economically disadvantaged individuals” as those 
individuals who belong to certain racial and ethnic groups. 13 C.F.R. §§ 124.103, .104. 
Under these regulations, members of the following groups are presumed to be socially 
or economically disadvantaged: “Black Americans; Hispanic Americans; Native 
Americans (including Alaska Natives and Native Hawaiians); Asian Pacific 
Americans; or Subcontinent Asian Americans.” Id.  
White men do not qualify for the 21-day priority period, but other groups also 
do not. Defendant excludes many minorities from participation in the Restaurant 
Revitalization Fund’s priority period. See 13 C.F.R. § 124.103. For example, 
Defendant grants a preference to some Asians, but not others. Individuals from (or 
whose ancestors are from) the following countries do not qualify for special treatment 
under the program: Afghanistan, Iran, Iraq, Turkey, Syria, Saudi Arabia, Jordan, 
Palestine, Yemen, Kuwait, U.A.E., Qatar, Lebanon, Mongolia, Kazakhstan, 
Turkmenistan, Tajikistan, Kyrgyzstan, or Uzbekistan. Id. Similarly, individuals from 
north Africa—Egypt, Libya, Algeria, Tunisia, and Morocco—are excluded from SBA’s 
21-day priority preference. Id. 
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In short, white men (and other disfavored minority groups) do not qualify 
under ARPA or SBA’s regulations for priority treatment under Section 5003 of ARPA.  
On April 27, 2021, Defendant announced the opening of the application period 
for the Restaurant Revitalization Fund. Dec. ¶8, Ex. 1.2 According to this press 
release, “[f]or the first 21 days that the program is open, the SBA will prioritize 
funding applications from businesses owned and controlled by women, veterans, and 
socially and economically disadvantaged individuals.” Id. The press release 
emphasizes that “[a]ll eligible applicants are encouraged to submit applications as 
soon as the portal opens.” Dec. ¶8. This is because “[f]ollowing the 21 days, all eligible 
applications will be funded on a first-come, first-served basis.” Id. 
SBA also published an online handbook. Dec. ¶15 Ex. 7. This handbook 
confirms that women and certain minority restaurant owners will receive priority 
consideration, and that SBA will “only process and fund priority group applications 
during the first 21 days.” Id. 
II. 
Jake’s Bar and Grill and Antonio Vitolo 
Antonio (“Tony”) Vitolo is a white male who owns and operates Jake’s Bar and 
Grill, LLC, in Harriman, Roane County, Tennessee. Dec. ¶¶1, 2. Through the 
 
2 Attached to this memorandum is a sworn declaration of Plaintiff Antonio Vitolo. This declaration will 
be cited as “Dec. ¶ __.” The declaration contains exhibits, which will be cited as “Ex. __.” 
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restaurant, he supports his wife and children. Dec. ¶2. Vitolo’s wife is Hispanic and 
she owns 50% of the restaurant. Dec.  ¶2. 
Vitolo has owned Jake’s since 2018. Id. Like most restaurants, Jake’s was hit 
hard by the COVID-19 pandemic: Vitolo closed the restaurant during weekdays and 
offered to-go orders on the weekends. Dec. ¶5. Vitolo estimates that he lost $35,000 
in sales during the month of April 2020 alone. Dec. ¶6. He has also lost workers due 
to the economic uncertainty. Dec. ¶7. 
On Monday, May 3, 2020, Vitolo applied for a grant from the Restaurant 
Revitalization Fund at SBA’s web portal, restaurants.sba.gov; this was the first day 
that SBA allowed applications. Dec. ¶9.  
As he filled out his application, Vitolo noticed a section called “Priority in 
Awarding Restaurant Revitalization Funds.” Dec. ¶10. According to this section, 
Vitolo learned that “SBA will prioritize awarding funds to Applicants that are small 
business concerns at least 51 percent owned and controlled by individuals who are 
women, veterans, and/or socially and economically disadvantaged individuals.” Dec. 
¶10, Ex. 2. 
SBA’s grant application also included a long section describing who would 
qualify for these categories of special treatment. Dec. ¶11. This section explains that 
“socially and economically disadvantaged” restaurant owners must belong to the 
following racial groups: “Black Americans; Hispanic Americans; Native Americans 
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(including Alaska Natives and Native Hawaiians); Asian Pacific Americans; or 
Subcontinent Asian Americans.” Dec. ¶11, Ex. 3. 
Vitolo does not fit into any of these categories because he is not a woman, 
veteran, or socially disadvantaged. Dec. ¶¶ 1, 3. He would, however, qualify as 
“economically disadvantaged,” but for his race. Dec. ¶17.  
Vitolo truthfully filled out the application describing his race and gender. Dec. 
¶12, Ex. 4. Upon completing his application, SBA notified Vitolo that his application 
was “under review” and that his “calculated award amount” was $104,590.20. Dec. 
¶13, Ex. 5. 
The next day, May 4, SBA emailed Vitolo confirming receipt of his application. 
Dec. ¶14. The email also confirmed that SBA would not process his application: “the 
SBA will focus their reviews on the priority applications that have been submitted. 
Applicants who have submitted a non-priority application will find their applications 
remain in a Review status while the priority applications are processed during the 
first 21 days.” Dec. ¶14, Ex. 6. 
On May 7, SBA again emailed Vitolo. Dec. ¶16. According to this email, SBA 
received 186,200 applications during the first 48 hours. Of these, 46,400 were from 
women and 30,800 were from non-white restaurant owners. SBA represented that it 
is still accepting applications. Dec. ¶16, Ex. 8. 
In his declaration, Vitolo explained why he brought this lawsuit: “I do not want 
special treatment, but I just want to be treated equally under the law.” Dec. ¶ 20. 
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Every day that goes by he is the subject of unconstitutional discrimination, having 
been moved to the back of the line because he is a white male. Dec. ¶21.  
ARGUMENT 
I. 
 Standard of Review 
      The purpose of a temporary restraining order “is to preserve the status quo so 
that a reasoned resolution of a dispute may be had.” Procter & Gamble Co. v. Bankers 
Tr. Co., 78 F.3d 219, 226 (6th Cir. 1996). 
In determining whether to grant a temporary restraining order or a preliminary 
injunction, the Court considers: (1) the likelihood of success on the merits; (2) 
irreparable harm absent injunctive relief; (3) substantial harm to others from the 
proposed injunction; and (4) the broader public interest.” Nat'l Credit Union Admin. 
Bd. v. Jurcevic, 867 F.3d 616, 622 (6th Cir. 2017) (citing Washington v. Reno, 35 F.3d 
1093, 1099 (6th Cir. 1994)). 
At the preliminary injunction stage, a plaintiff “need not prove his case in full.” 
Ne. Ohio Coal. for Homeless v. Husted, 696 F.3d 580, 591 (6th Cir. 2012) (citations 
omitted). For purposes of a preliminary injunction, “it is ordinarily sufficient if the 
plaintiff has raised questions going to the merits so serious, substantial, difficult, and 
doubtful as to make them a fair ground for litigation and thus for more deliberate 
investigation.” Six Clinics Holding Corp., II v. Cafcomp Sys., Inc., 119 F.3d 393, 402 
(6th Cir. 1997). 
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The four factors above “are not prerequisites that must be met, but are 
interrelated considerations that must be balanced together.” Id. (quoting Michigan 
Coal. of Radioactive Material Users, Inc. v. Griepentrog, 945 F.2d 150, 153 (6th Cir. 
1991)). But “[w]hen a party seeks a preliminary injunction on the basis of a potential 
constitutional violation, ‘the likelihood of success on the merits often will be the 
determinative factor.’” Obama for Am. v. Husted, 697 F.3d 423, 436 (6th Cir. 2012) 
quoting Jones v. Caruso, 569 F.3d 258, 265 (6th Cir. 2009). 
II. 
Plaintiffs Are Likely to Succeed on the Merits Because Defendant’s 
Grant Program Unquestionably Includes Unconstitutional Race and 
Gender Discrimination. 
A.  “A racial classification, regardless of purported motivation, is 
presumptively invalid and can be upheld only upon an extraordinary justification.” 
Pers. Adm’r of Massachusetts v. Feeney, 442 U.S. 256, 272 (1979). This is because the 
Constitution forbids “discrimination by the general government . . . against any 
citizen because of his race.” Gibson v. State of Mississippi, 162 U.S. 565, 591 (1896). 
When confronted with such a racial classification, “[a]ny person, of whatever race, 
has the right to demand that any governmental actor subject to the Constitution 
justify any racial classification subjecting that person to unequal treatment under 
the strictest judicial scrutiny.” Adarand Constructors, Inc. v. Peña, 515 U.S. 200, 224 
(1995). “Under strict scrutiny, the government has the burden of proving that racial 
classifications are narrowly tailored measures that further compelling governmental 
interests.” Johnson v. California, 543 U.S. 499, 505 (2005) (citation omitted).  
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Gender discrimination is likewise unconstitutional. Classifications based on 
gender “are in many settings unconstitutional.” Feeney, 442 U.S. at 273 (collecting 
cases). When a plaintiff raises a claim of gender discrimination, government officials 
“must demonstrate an exceedingly persuasive justification for that action.” United 
States v. Virginia, 518 U.S. 515, 531 (1996). “The burden of justification rests 
entirely” on the government to prove that “the challenged classification serves 
important governmental objectives and that the discriminatory means employed are 
substantially related to the achievement of those objectives.” Id. at 532–33 (citations 
omitted). “The justification must be genuine, not hypothesized or invented post hoc 
in response to litigation. And it must not rely on overbroad generalizations about the 
different talents, capacities, or preferences of males and females.” Id.  
B.  In this case, the SBA has established a “priority” period benefit for certain 
categories of restaurant owners based on race and gender. During the first 21 days, 
SBA will only evaluat e and fund applications submitted by women or certain 
minorities. See Dec. ¶15, Ex. 7.3  SBA calls this the “priority period” during which it 
will only “process and fund” applications based on race and gender. Dec. ¶15, Ex. 7, 
pg 5. 
 
3 Although SBA will also consider applications from “veterans,” such a policy does not insulate the 
entire program from constitutional scrutiny. See, e.g., Feeney, 442 U.S. at 281 (reviewing a veterans’ 
preference for gender discrimination, although ultimately finding no evidence that the law “reflects a 
purpose to discriminate on the basis of sex.”). 
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SBA is simply following the law: ARPA provides that during the “initial 21-day 
period in which the Administrator awards grants,” Defendant is required to 
“prioritize grants to eligible entities that are small business concerns owned and 
controlled by women,” veterans, or “socially and economically disadvantaged small 
business concerns.” ARPA, § 5003(c)(3)(A). That last term, “socially and economically 
disadvantaged,” means certain minorities (but not all, as described supra). See 15 
U.S.C. § 637(a)(5) & (6)(A); 13 C.F.R. §§ 124.103, .104. Only members of the following 
groups are presumed to be socially or economically disadvantage: “Black Americans; 
Hispanic Americans; Native Americans (including Alaska Natives and Native 
Hawaiians); Asian Pacific Americans; or Subcontinent Asian Americans.” Id. White 
men (and other specific racial groups) are not eligible for the priority period by virtue 
of their race and gender.  
There is simply no doubt that Defendant’s “priority period” constitutes race 
and gender discrimination. 
C. Because the “priority period” of the Restaurant Revitalization Fund 
constitutes race and gender discrimination, the burden shifts to Defendant to justify 
this discrimination by meeting strict scrutiny in the case of the racial qualifications, 
see Johnson, 543 U.S. at 505, and intermediate scrutiny in the case of the gender 
qualification, Virginia, 518 U.S. at 531.  
Defendant has made no public statement justifying these gender and racial 
classifications. Defendant, for example, has not identified past discrimination on the 
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part of SBA that Defendant hopes to remedy. Of course, an agency may 
“unquestionably” cure its own past discrimination with a narrowly tailored remedy. 
United States v. Paradise, 480 U.S. 149, 167 (1987). Before a government “may 
permissibly employ a racial or ethnic classification, however, it must make a finding 
based upon material factual evidence, that it has in the past discriminated against 
those classes it now favors.” Michigan Rd. Builders Ass’n, Inc. v. Milliken, 834 F.2d 
583, 589 (6th Cir. 1987), aff’d, 489 U.S. 1061 (1989) 
 But an agency cannot simply wave a wand and say “past discrimination” – 
there must be more. For example, the Sixth Circuit requires evidence of recent, 
intentional, systemic discrimination against minorities to justify a racial preference 
in their favor. See, e.g., Brunet v. City of Columbus, 1 F.3d 390, 409 (6th Cir. 1993) 
(discrimination that occurred 14 years ago was too far removed to support a gender-
based affirmative action program); Michigan Rd. Builders Ass’n, Inc., 834 F.2d at 
592–3 (invalidating racial preferences due to failure to show it was necessary to 
remedy the government’s own “intentional discrimination” against minorities); 
Middleton v. City of Flint, 92 F.3d 396, 405 (6th Cir. 1996) (requiring proof of 
widespread discrimination, not just a few individual instances of discrimination, to 
justify race-based affirmative action). 
But that does not seem to be what is happening here. None of SBA’s public 
statements suggest it is attempting to fix a discriminatory SBA program. 
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Defendant may attempt to justify this “priority period” as a way to address 
“societal discrimination” or racial or gender inequities within the restaurant 
industry. This argument, however, will not survive constitutional scrutiny. See 
Michigan Rd. Builders Ass’n, Inc., 834 F.2d at 590 (collecting cases). Since 1978, the 
Supreme Court has consistently rejected the notion that “societal discrimination” 
could “justify a classification that imposes disadvantages upon persons like 
respondent, who bears no responsibility for whatever harm the beneficiaries of the 
special admissions program are thought to have suffered.” Regents of Univ. of 
California v. Bakke, 438 U.S. 265, 310 (1978). In other words, Plaintiffs should not be 
disadvantaged simply because of the government’s generalized notions of 
“discrimination” or inequity. “To hold otherwise would be to convert a remedy 
heretofore reserved for violations of legal rights into a privilege that all institutions 
throughout the Nation could grant at their pleasure to whatever groups are perceived 
as victims of societal discrimination. That is a step we have never approved.” Id. In 
overruling the Sixth Circuit, the Court wrote that “this Court never has held that 
societal discrimination alone is sufficient to justify a racial classification. Rather, the 
Court has insisted upon some showing of prior discrimination by the governmental 
unit involved before allowing limited use of racial classifications in order to remedy 
such discrimination.” Id. 
D.  Even if SBA could come up with a compelling or substantial government 
interest, there is no evidence that Defendant’s use of a “priority period” is narrowly 
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tailored or substantially related to achieving any justifiable goal. It is hard to imagine 
how a “priority period” of 21-days would be tailored in any way to address any alleged 
inequities or past discrimination. For example, Defendant cannot successfully argue 
that a neutral process would somehow disadvantage women and certain (but not all) 
minorities, such that a targeted 21-day “priority period” is the only way to level the 
playing field.  
Moreover, at least in the racial context, narrow tailoring involves several 
factors, such as: “(a) the necessity for the relief and efficacy of alternative [race-
neutral] measures, (b) the flexibility and duration of the relief, including the 
availability of waiver provisions, (c) the relationship of the numerical goals to the 
relevant labor market, and (d) the impact of the relief on the rights of third parties.” 
United States v. Paradise, 480 U.S. 149, 171 (1987) (plurality opinion). In this case, 
there is no evidence that SBA has included or even considered these hallmarks of a 
narrowly tailored remedy. 
Next, a remedy is not narrowly tailored if it is overinclusive. City of Richmond 
v. J.A. Croson Co., 488 U.S. 469, 506 (1989). As the Court in Croson rightfully noted, 
if the law was narrowly tailored “to compensate black contractors for past 
discrimination, one may legitimately ask why they are forced to share this remedial 
relief with an Aleut citizen who moves to Richmond tomorrow?” Id. at 506. In this 
case, SBA cannot explain how its “priority period” is necessary to rectify a compelling 
governmental interest with regard to all of the groups designated as “socially and 
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economically disadvantaged,” and whether some groups, such as Black Americans, 
must share this allegedly targeted benefit with other groups, such as Alaskan and 
Hawaiian natives. If evidence exists to justify a remedy for all “socially and 
economically disadvantaged” restaurant owners, Defendant has not shared it 
publicly.  
On the other hand, a program is also not narrowly tailored if it is 
underinclusive. Associated Gen. Contractors of Ohio, Inc. v. Drabik, 214 F.3d 730, 737 
(6th Cir. 2000). In this case, if the “priority period” is truly aimed at rectifying 
discrimination against women and minorities, then this program is significantly 
underinclusive because SBA extends the “priority period” benefit to some minorities 
and not others. See 13 C.F.R. § 124.103. SBA’s regulations pick and choose among 
Asian-Americans, offering a priority period to certain Asians from the Pacific region 
and the “subcontinent,” but not others from northern and western Asia. Id.  SBA 
cannot explain why it believes that Malaysian-Americans, for example, are socially 
disadvantaged while Syrian-Americans are not. Id.4 
E.  Given Defendant’s inability to identify a government interest or precise 
tailoring needed to satisfy either strict or intermediate scrutiny in the face of race 
and gender discrimination, Plaintiffs have therefore made a strong showing that they 
 
4 Under 13 C.F.R. § 124.103, SBA limits a 21-day “priority period” to citizens; non-citizens who own 
restaurants are ineligible for the benefit. For example, a Green Card holder from the Dominican 
Republic or Nigeria is not eligible for SBA’s “priority period.”   
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are likely to succeed on their equal-protection claim. Success on this prong of the test 
weighs strongly in favor of granting an injunction. “When a party seeks a preliminary 
injunction on the basis of a potential constitutional violation, “the likelihood of 
success on the merits often will be the determinative factor.” Husted, 697 F.3d at 436. 
III. 
Plaintiffs and Other Disfavored Applicants Are Irreparably Harmed 
By Being Pushed to the Back of the Line, Based Their Race and 
Gender, for Grants From a Limited Pot of Relief Funds. 
There are two irreparable harms that warrant a temporary restraining order 
and preliminary injunction.  
First, if this Court does not immediately halt all payments from the Restaurant 
Revitalization Fund (unless and until the blatantly unconstitutional race and gender 
preferences are eliminated), the limited available funds will be mostly, if not fully, 
depleted before the disfavored races and gender (largely white males) ever have a 
shot at this much-needed relief. Defendant has caused this problem by releasing 
funds on a first-come, first-serve basis (rather than dividing funds among all 
applicants) while simultaneously moving certain applicants to the back of the line 
based on their race and gender.   
In ARPA § 5003, Congress appropriated a limited, $28.6 billion fund to provide 
relief to restaurant owners impacted by COVID pandemic, but then gave women and 
certain minorities a 21-day priority window to access these funds. ARPA, § 
5003(b)(2)(A). To implement this program, the SBA is processing applications and 
awarding grants “in the order in which they are approved by the SBA,” and will stop 
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when the “funds [are] exhaust[ed].”5 Disfavored applicants (e.g., white males), are 
moved to the back of the line and will only be considered after any priority applicants 
who apply during the first 21 days. Id.  
While $28.6 billion may sound like a lot of money, SBA employees have publicly 
represented that the funds will quickly run out. According to the New York Times, 
Defendant Guzman recently said, “We know that the $28.6 billion is not enough to 
meet the demand.”6 And during a recent webinar, another SBA employee said that 
there are “probably not going to be enough funds, in all likelihood, for the demand 
that’s out there.”7  
During the first 48 hours the application was open, the SBA received 186,200 
applications, including 97,600 from “priority” applicants. Dec. ¶16, Ex. 8. Applicants 
can receive up to $5 million per location ($10 million per applicant).8 Yet if the 97,600 
“priority” applicants—from just the first 48 hours—receive average grants of 
 
5 United States Small Business Association, Restaurant Revitalization Fund, (last visited May 10, 
2021), https://www.sba.gov/funding-programs/loans/covid-19-relief-options/restaurant-revitalization-
fund. 
6 Annie Karni, More than 180,000 businesses applied to a new federal aid program in two days, The 
New York Times (May 5, 2021), https://www.nytimes.com/2021/05/05/us/politics/biden-stimulus.html.  
7 Stacy Cowley, Pandemic Relief Fund for Restaurants Is Open, but Cash Will Go Fast, The New York 
Times (May 3, 2021), https://www.nytimes.com/2021/05/03/business/Restaurant-Revitalization-Fund-
opening.html 
(quoting 
Patrick 
Kelley 
from 
a 
webinar 
available 
at 
https://www.youtube.com/watch?v=XGpQqHxT008).  
8 Restaurant Revitalization Fund, Small Business Association, https://www.sba.gov/funding-
programs/loans/covid-19-relief-options/restaurant-revitalization-fund 
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$300,000, well below the maximum, the entire fund will be exhausted before the 
agency considers any application from a disfavored applicant. 
Plaintiffs applied on the very first day the application was open, Dec. ¶9, yet 
they were immediately told by SBA that their application would not be considered 
until after any priority applicants who apply in the first 21 days. Dec. ¶14, Ex. 6.   
This Court can fully remedy the clear equal protection violation and ensure 
that all applicants receive an equal and fair shot at these critical relief funds, by 
immediately ordering SBA to cease disbursing any funds—unless and until it 
reprioritizes applicants without regard to their race or gender. Indeed, there is a 
relatively simply fix (for now). SBA can pause processing “priority” applications until 
it catches up on any earlier-filed applications from disfavored applicants who were 
moved to the back of the line based on their race and gender. Once caught up, the 
SBA can then continue processing all applications, without regard to race or gender, 
until the money runs out.    
If this Court does not issue an immediate temporary restraining order and 
preliminary injunction, however, the harm will most likely become irreparable. The 
SBA is currently paying out grants to “priority” applicants, Dec. ¶ 22, and every day 
that goes by, the fund grows smaller and smaller. At some point, knowable only to 
Defendant, the remaining funds will be insufficient to catch up on earlier-filed 
applications from disfavored applicants that were pushed to the back of the line. And 
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damages—if they are even available9—are an unworkable remedy, since it may be 
impossible to sort out who would have received a grant before the funds ran out, had 
the government not discriminated based on race and gender. Moreover, once the 
funds are depleted, any monetary remedy would vastly increase the size of the 
appropriation. Unless this Court is prepared to order the government to pay out far 
more claims than it budgeted for, a temporary restraining order and preliminary 
injunction is the only viable remedy.  
Even putting aside the irreparable harm from losing a fair shot at much-
needed relief funds, the flagrant constitutional violation is itself an irreparable harm. 
Indeed, “[w]hen constitutional rights are threatened or impaired, irreparable injury 
is presumed.” Obama for Am. v. Husted, 697 F.3d 423, 436 (6th Cir. 2012); Am. C.L. 
Union of Kentucky v. McCreary Cty., Kentucky, 354 F.3d 438, 445 (6th Cir. 2003) (“[I]f 
it is found that a constitutional right is being threatened or impaired, a finding of 
irreparable injury is mandated.”); Wright & Miller, 11A Fed. Prac. & Proc. § 2948.1 
(3d. ed.) (“When an alleged deprivation of a constitutional right is involved … most 
 
9 “Federal constitutional claims for damages are cognizable only under Bivens.” Loumiet v. United 
States, 828 F.3d 935, 945 (D.C. Cir. 2016). And while the Supreme Court has recognized a Bivens claim 
for a certain type of equal protection claim, Davis v. Passman, 442 U.S. 228 (1979) (gender 
discrimination in federal employment), the Supreme Court has more recently explained that courts 
must be very reluctant to extend Bivens to any new “context”—where “context” does not mean a 
different constitutional provision, but simply a different type of case with any “meaningful” differences 
to the only three contexts where the Court has recognized a Bivens damages remedy. Hernandez v. 
Mesa, 140 S. Ct. 735, 741–50 (2020); see also id. at 750–53 (Thomas, J., and Gorsuch, J., concurring) 
(calling for Bivens and Davis to be overruled). 
Case 3:21-cv-00176-TRM-DCP   Document 12-2   Filed 05/12/21   Page 19 of 22   PageID #: 56

 
20 
 
courts hold that no further showing of irreparable injury is necessary.”). Plaintiffs, 
and tens of thousands of other applicants, are being treated differently by the 
government, based solely on their race and gender. Such unequal treatment 
“demeans us all.” Grutter v. Bollinger, 539 U.S. 306, 353 (2003) (Thomas, J., 
concurring in part and dissenting in part).  
IV. 
Granting an Injunction Will Not Cause Harm to Others; in Fact, It Will 
Remove Unconstitutional Classifications and Restore the Equal 
Protection of the Laws. 
If an injunction is issued, and Defendant is ordered to treat all applicants on a 
first-come, first-serve basis, no one will be injured. Plaintiffs only seek equal 
treatment under the law, not special treatment. Even if some groups will lose 
“priority period” status, they are losing a status unconstitutionally granted to them 
by Defendant. “[N]o substantial harm can be shown in the enjoinment of an 
unconstitutional policy.” Chabad of S. Ohio & Congregation Lubavitch v. City of 
Cincinnati, 363 F.3d 427, 436 (6th Cir. 2004); Deja Vu of Nashville, Inc. v. Metro. 
Gov’t of Nashville & Davidson Cnty., Tenn., 274 F.3d 377, 400 (6th Cir. 2001). 
In any event, those individuals currently in the “priority period” queue will 
still be treated equally under Plaintiffs’ proposed remedy. If an injunction is granted, 
all applicants, regardless of race and gender, will be treated equally, as the 
Constitution requires. 
 
 
Case 3:21-cv-00176-TRM-DCP   Document 12-2   Filed 05/12/21   Page 20 of 22   PageID #: 57

 
21 
 
V. 
The Public Interest Will Be Served by an Injunction Because Such an 
Order Will Vindicate Clear Constitutional Rights. 
As a final matter, “it is always in the public interest to prevent the violation of 
a party’s constitutional rights.” G & V Lounge Inc. v. Mich. Liquor Control Comm., 
23 F.3d 1071, 1079 (6th Cir. 1994). Indeed, “[t]he public interest is promoted by the 
robust enforcement of constitutional rights.” Am. Freedom Def. Initiative v. Suburban 
Mobility Authority for Reg'l Transp., 698 F.3d 885, 896 (6th Cir. 2012). This case is 
no different: Plaintiffs seek the simple vindication of equal treatment under law. This 
is surely in the public interest. 
CONCLUSION 
 
Plaintiffs respectfully request a temporary restraining order prohibiting 
Defendant from paying out any grants from the Restaurant Revitalization Fund, 
unless Defendant begins processing applications and paying grants in the order that 
the applications were received, without regard to the race or gender of the applicants. 
 
Moreover, Plaintiffs respectfully request a preliminary injunction, requiring 
Defendant to process applications for grants from the Restaurant Revitalization Fund 
in the order that they were received, without regard to the race or gender of the 
applicant. 
 
 
Case 3:21-cv-00176-TRM-DCP   Document 12-2   Filed 05/12/21   Page 21 of 22   PageID #: 58

 
22 
 
 
Dated May 11, 2021 
 
 
WISCONSIN INSTITUTE FOR LAW & LIBERTY 
Rick Esenberg 
rick@will-law.org 
/s/ Daniel P. Lennington 
Daniel P. Lennington (pro hac vice pending) 
dan@will-law.org 
Luke N. Berg (pro hac vice pending) 
luke@will-law.org 
330 E. Kilbourn Ave., Suite 725 
Milwaukee, WI 53202 
Phone: (414) 727-9455  
Fax: (414)727-6385 
 
 
/s/ Matthew J. McClanahan 
Matthew J. McClanahan (BPR #036867) 
McClanahan & Winston, PC 
PO Box 51907 
Knoxville, Tennessee 37950 
Telephone: (865) 347-3921 
Fax: (865) 444-0786 
Email: matt@tennadvocate.com 
 
Attorneys for Plaintiffs 
Case 3:21-cv-00176-TRM-DCP   Document 12-2   Filed 05/12/21   Page 22 of 22   PageID #: 59

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