Court filing
Sixth Circuit Opinion — Vitolo v. Guzman
Filed May 27, 2021 in Vitolo v. Guzman; one of 25 filings from this case.
Record facts
| Court | U.S. Court of Appeals for the Sixth Circuit |
|---|---|
| Filed | 2021-05-27 |
U.S. Court of Appeals for the Sixth Circuit · No. 3:21-cv-00176-TRM-DCP · Doc. 37 · 2021-05-27 · Docket on CourtListener
Full text
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
Deborah S. Hunt
Clerk
100 EAST FIFTH STREET, ROOM 540
POTTER STEWART U.S. COURTHOUSE
CINCINNATI, OHIO 45202-3988
Tel. (513) 564-7000
www.ca6.uscourts.gov
Filed: May 27, 2021
Mr. Luke N. Berg
Mr. Rick Esenberg
Mr. Daniel P. Lennington
Wisconsin Institute for Law and Liberty
330 E. Kilbourn Avenue, Suite 725
Milwaukee, WI 53202
Ms. Marleigh D. Dover
Ms. Alexandra Rachel Saslaw
Mr. Jack Starcher
U.S. Department of Justice
950 Pennsylvania Avenue, N.W.
Washington, DC 20530
Mr. Matthew Janson McClanahan
156 Walker Hill Street
Crossville, TN 38555
Re: Case Nos. 21-5517/21-5528, Antonio Vitolo, et al v. Isabella Guzman
Originating Case No. : 3:21-cv-00176
Dear Counsel,
The court today announced a decision in the above-styled cases.
Enclosed is a copy of the court's opinion together with the judgment which has been entered
in conformity with Rule 36, Federal Rules of Appellate Procedure.
Yours very truly,
Deborah S. Hunt, Clerk
Cathryn Lovely
Deputy Clerk
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cc: Mr. John L. Medearis
Enclosures
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RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 21a0120p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
ANTONIO VITOLO; JAKE’S BAR AND GRILL, LLC,
Plaintiffs-Appellants,
v.
ISABELLA CASILLAS GUZMAN, Administrator of the
Small Business Administration,
Defendant-Appellee.
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Nos. 21-5517/5528
On Emergency Motion for Injunction Pending Appeal and to Expedite Appeal.
United States District Court for the Eastern District of Tennessee at Knoxville;
No. 3:21-cv-00176—Travis Randall McDonough, District Judge.
Decided and Filed: May 27, 2021
Before: NORRIS, DONALD, and THAPAR, Circuit Judges.
_________________
COUNSEL
ON MOTIONS AND REPLY: Daniel P. Lennington, WISCONSIN INSTITUTE FOR LAW
& LIBERTY, Milwaukee, Wisconsin, for Appellants. ON RESPONSE: Marleigh D. Dover,
Jack Starcher, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for
Appellee.
THAPAR, J., delivered the opinion of the court in which NORRIS, J., joined. DONALD,
J. (pp. 16–27), delivered a separate dissenting opinion.
_________________
OPINION
_________________
THAPAR, Circuit Judge. This case is about whether the government can allocate limited
coronavirus relief funds based on the race and sex of the applicants. We hold that it cannot.
>
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Thus, we enjoin the government from using these unconstitutional criteria when processing
Antonio Vitolo’s application.
I.
As part of the most recent coronavirus relief bill (the American Rescue Plan Act of
2021), Congress allocated nearly $29 billion for grants to help restaurant owners meet payroll
and other expenses. Pub. L. No. 117-2, § 5003(b)(2)(A), (c) (Restaurant Revitalization Fund).
The fund was created to aid small privately owned restaurants, not large chains. Id.
§ 5003(a)(4)(C). The Small Business Administration, a federal agency, processes the
applications and distributes the funds. During the application process, restaurant owners must
certify to the agency that the grant is necessary to support ongoing operations. Id.
§ 5003(c)(2)(A).
The key to getting a grant is to get in the queue before the money runs out. The Small
Business Administration distributes money on a first come, first served basis. But there is a
catch. During the first 21 days the agency gives grants to priority applicants only. Id.
§ 5003(c)(1). Priority applicants are restaurants that are at least 51% owned and controlled by
women, veterans, or the “socially and economically disadvantaged.” Id. § 5003(c)(3)(A); see
15 U.S.C. §§ 632(n), (q)(3), 637(a)(4)(A). Non-priority restaurants may apply during this time,
but they will not receive a grant until the initial period expires. Pub. L. No. 117-2,
§ 5003(c)(3)(A). If the fund is depleted by then, the non-priority restaurants are out of luck; the
Act does not provide for its replenishment.
Antonio Vitolo and his wife own a restaurant called Jake’s Bar and Grill. Vitolo is white
and his wife is Hispanic, and they each own 50% of the restaurant. Like many restaurants,
Jake’s Bar has struggled during the pandemic—it closed on weekdays and offered to-go orders
on weekends. It lost workers and a considerable amount in sales. So on the first day that the
Small Business Administration allowed applications, Vitolo submitted one.
Since the restaurant is not 51% owned by a woman or veteran, Vitolo had to qualify as
“socially and economically disadvantaged” to get priority status. Id. § 5003(c)(3)(A). The relief
bill defines social and economic disadvantage by reference to the Small Business Act. See id.
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Under the Small Business Act, a person is considered “socially disadvantaged” if he has been
“subjected to racial or ethnic prejudice” or “cultural bias” based solely on his immutable
characteristics. 15 U.S.C. § 637(a)(5); 13 C.F.R. § 124.103(a). A person is considered
“economically disadvantaged” if (1) he is socially disadvantaged; and (2) he faces “diminished
capital and credit opportunities” compared to non-socially disadvantaged people who operate in
the same industry. 15 U.S.C. § 637(a)(6)(A).
The Small Business Administration has injected explicit racial and ethnic preferences
into the priority process. See 13 C.F.R. § 124.103. Under a regulation that predates the
pandemic, the agency presumes certain applicants are socially disadvantaged based solely on
their race or ethnicity. Groups that presumptively qualify as socially disadvantaged—and thus
get to jump to the front of the line for priority consideration—include “Black Americans,”
“Hispanic Americans,” “Asian Pacific Americans,” “Native Americans,” and “Subcontinent
Asian Americans.”1 Id. § 124.103(b)(1). If you are in one of these groups, the Small Business
Administration assumes you qualify as socially disadvantaged. Indeed, the only way not to
qualify is if someone comes forward “with credible evidence to the contrary.” Id.
§ 124.103(b)(3).
Applicants who do not get the presumption must prove they have experienced racial or
ethnic discrimination or cultural bias by a preponderance of the evidence. Id. § 124.103(c)(1).
After reviewing that evidence, the Small Business Administration will consider an applicant a
victim of “individual social disadvantage” if it determines that (i) the applicant suffered episodes
of discrimination; (ii) each episode “negatively impacted the individual’s entry or advancement
1Other than those considered black, Hispanic, or Native American, a person receives a rebuttable
presumption of social disadvantage only if he or she has “origins from” a country identified by the Small Business
Administration. 13 C.F.R. § 124.103(b)(1). It is unclear what it means to have “origins from” a specific country,
but the agency tells us that “[b]eing born in a country does not, by itself, suffice.” Id.
Asian Pacific Americans qualify only if they have origins from Burma, Thailand, Malaysia, Indonesia,
Singapore, Brunei, Japan, China (including Hong Kong), Taiwan, Laos, Cambodia (Kampuchea), Vietnam, Korea,
the Philippines, U.S. Trust Territory of the Pacific Islands (Republic of Palau), Republic of the Marshall Islands,
Federated States of Micronesia, the Commonwealth of the Northern Mariana Islands, Guam, Samoa, Macao, Fiji,
Tonga, Kiribati, Tuvalu, or Nauru. Id.
Subcontinent Asian Americans must have origins from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the
Maldives Islands, or Nepal. Id.
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in the business world”; and (iii) together, those episodes caused the applicant to suffer “chronic
and substantial social disadvantage.” Id. § 124.103(c)(6).
The added evidentiary burden faced by white men and other non-presumptively
disadvantaged groups stands in marked contrast with lenient evidentiary standards set by the
American Rescue Plan Act. Congress recognized the urgency of providing relief to small
restaurants struggling to weather the pandemic. So it sought to cut as much red tape as possible.
To avoid “imposing additional burdens on applicants,” the Act requires the Small Business
Administration to accept the applicant’s “existing business identifiers” to show eligibility for a
grant, rather than requiring “other forms of registration or identification that may not be common
to their industry.” Pub. L. No. 117-2, § 5003(c)(2)(B). The government relies on restaurant
owners to self-certify that they meet these eligibility criteria when applying for a grant. Id.
§ 5003(c)(2)(A).
Vitolo sued to end the race and sex preferences in grant funding, claiming that they
violated his constitutional rights. With the funds rapidly depleting, Vitolo asked for a temporary
restraining order and ultimately a preliminary injunction that would prohibit the government
from handing out grants based on the applicants’ race or sex. The district court declined to issue
a restraining order and said that Vitolo was unlikely to succeed on the merits of his claim. Vitolo
filed a notice of appeal, and he asked the district court to enjoin the race and sex preferences
until his appeal was decided. The district court denied that motion too. Finally, the district court
denied the motion for a preliminary injunction.2 Vitolo also appealed that order.
Vitolo has filed a motion to expedite the appeal, which we grant. Before turning to the
merits of the preliminary injunction, we handle a couple issues the government has raised.
II.
First, during the briefing for the preliminary injunction in the district court, the
government argued that the plaintiffs lacked standing to challenge the Small Business
2While we ultimately disagree with the district court, we appreciate the district judge’s diligence in
handling this matter. District courts are extremely busy, and this judge is no exception. Yet he moved promptly at
every turn and made sure to provide the parties with thorough rulings.
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Administration’s use of racial preferences because the plaintiffs may not ultimately succeed. But
the district court correctly rejected that argument. The injury here is “the denial of equal
treatment resulting from the imposition of the barrier, not the ultimate inability to obtain the
benefit.” Ne. Fla. Chapter, Associated Gen. Contractors of Am. v. Jacksonville, 508 U.S. 656,
666 (1993); see also Parents Involved in Cmty. Schs. v. Seattle Sch. Dist. No. 1, 551 U.S. 701,
719 (2007) (“[O]ne form of injury under the Equal Protection Clause is being forced to compete
in a race-based system that may prejudice the plaintiff.” (citations omitted)). The government’s
use of racial preferences causes that injury. And that injury is redressable by a decision ordering
the government not to grant priority consideration based on the race of applicants. See Lujan v.
Defs. of Wildlife, 504 U.S. 555, 560 (1992); see also Waskul v. Washtenaw Cnty. Cmty. Mental
Health, 900 F.33 250, 255 n.3 (6th Cir. 2018) (noting that at the preliminary injunction stage the
plaintiff must show “a substantial likelihood of standing”).
It does not matter that the plaintiffs might not otherwise qualify for priority consideration.
For if the court enjoined use of “the race-based presumption of the SBA regulations or the race-
conscious portions of the definition of ‘socially disadvantaged,’. . . the playing field in qualifying
for the priority period would be ‘leveled.”’ R. 32, Pg. ID 268. Why? Because the race of the
applicant “would not factor into the order in which applications are processed by SBA.” Id.
That is enough to show a substantial likelihood of success on standing—and, indeed, the
government has not claimed otherwise on appeal.
Second, the government argues that the plaintiffs’ claim is moot. While this case was on
appeal, the 21-day “priority” phase of the grant program ended. The statute now requires the
Small Business Administration to begin processing grant requests in the order they were
received, without regard to the applicants’ race or sex. Thus, the government says, there is no
use for a court order requiring it to do the same.
Mootness is a high hurdle. The government must show that a court could order no
“effectual relief whatever” for the plaintiffs’ injury. Chafin v. Chafin, 568 U.S. 165, 172 (2013)
(citation omitted). What’s more, the government must show that it has “completely and
irrevocably eradicated the effects” of the program’s race and sex preferences. Los Angeles Cnty.
v. Davis, 440 U.S. 625, 631 (1979). But the government hasn’t cleared the bar. Race and sex
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preferences continue to bear on whether an applicant receives a grant before the money runs out.
And a court order ending those preferences will relieve the plaintiffs’ injury (and allow Vitolo’s
application to be considered sooner than it otherwise would).
Most fundamentally, the program’s race and sex preferences did not end with the priority
phase. That just marks when the Small Business Administration starts processing applications
from non-priority restaurants. The agency says processing takes approximately 14 days. Miller
Decl. ¶ 14. So all of the “priority” applications that were received in the 21-day window are still
being processed first. And no application is paid out before going through the 14-day processing
window. Id. ¶ 15. So with these preferences in place, the fund may be depleted before the
plaintiffs’ application has been processed. There is an obvious solution to this of course: The
agency can simply fund grants in the order they were received—without regard to priority status,
and without regard to the processing head start that many applications received on the basis of
race and sex.
Turning to this case, plaintiffs continue to suffer a real and concrete injury by having
their application considered behind the priority applications because of race and sex. Vitolo
submitted his application on May 3. Restaurants that submitted “priority” applications on May
24 will likely receive their grants before the agency has time to finish processing Vitolo’s
application. Add to this the fact that over half the funds have been approved to be distributed as
of May 25, 2021, to priority applicants. Miller Decl. ¶ 22. Since it normally takes 14 days to
process an application, this means that the agency should be almost through priority applications
received between May 3 and May 11. But that leaves all the priority applications received
between May 12 and May 24, which have gotten a processing head start relative to Vitolo’s
application. There is a real risk that the funds will run out, unless the agency processes Vitolo’s
application before the May 12 to May 24 batch. For these reasons, the government has failed to
show that the case is moot.
III.
We consider four factors in determining whether a preliminary injunction should issue:
(1) whether the moving party has shown a likelihood of success on the merits; (2) whether the
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moving party will be irreparably injured absent an injunction; (3) whether issuing an injunction
will harm other parties to the litigation; and (4) whether an injunction is in the public interest.
Nken v. Holder, 556 U.S. 418, 434 (2009). In constitutional cases, the first factor is typically
dispositive. Roberts v. Neace, 958 F.3d 409, 416 (6th Cir. 2020) (order) (per curiam). That’s
because “[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). And no cognizable harm results
from stopping unconstitutional conduct, so “it is always in the public interest to prevent violation
of a party’s constitutional rights.” Deja Vu of Nashville, Inc. v. Metro. Gov’t of Nashville
& Davidson Cnty., 274 F.3d 377, 400 (6th Cir. 2001) (citation omitted). We thus focus our
analysis on the plaintiffs’ likelihood of success on the merits.
Vitolo challenges the Small Business Administration’s use of race and sex preferences
when distributing Restaurant Revitalization Funds. The government concedes that it uses race
and sex to prioritize applications, but it contends that its policy is still constitutional. We
disagree.
A.
We start with race. Government policies that classify people by race are presumptively
invalid. U.S. Const. amend. XIV; Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 234, 235
(1995) (applying equal-protection principles to federal policies that discriminate by race). To
overcome that presumption, the government must show that favoring one race over another is
necessary to achieve a compelling state interest. Id. at 235. And even when the government can
show that it has a compelling interest, it must narrowly tailor its remedy to advance that interest.
This is a very demanding standard, which few programs will survive. See Parents Involved,
551 U.S. at 720.
The government concedes that strict scrutiny applies to its method of distributing these
funds. And for good reason: The policy grants privileges to individuals based explicitly on their
race.
Compelling Interest. Because strict scrutiny applies, we must first consider whether the
government has a compelling interest in giving some races priority access to the Restaurant
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Revitalization Funds, and for presumptively sending men from non-favored racial groups
(including whites, some Asians, and most Middle Easterners) to the back of the line. We hold
that it does not.
The government says it has a compelling interest in remedying past societal
discrimination against minority business owners. The Supreme Court has told us that remedial
policies can sometimes justify preferential treatment based on race. City of Richmond v. J.A.
Croson Co., 488 U.S. 469, 493–94 (1989) (plurality opinion); Adarand, 515 U.S. at 237. But the
bar is a high one. The government has a compelling interest in remedying past discrimination
only when three criteria are met:
First, the policy must target a specific episode of past discrimination. It cannot rest on a
“generalized assertion that there has been past discrimination in an entire industry.” J.A. Croson
Co., 488 U.S. at 498; see also Adarand, 515 U.S. at 226; Aiken v. City of Memphis, 37 F.3d
1155, 1162–63 (6th Cir. 1994) (en banc) (explaining that societal discrimination is not enough to
justify racial classifications and that there must be prior discrimination by the governmental unit
involved).
Second, there must be evidence of intentional discrimination in the past. J.A. Croson
Co., 488 U.S. at 503 (requiring an “inference of discriminatory exclusion”). Statistical
disparities don’t cut it, although they may be used as evidence to establish intentional
discrimination. See Aiken, 37 F.3d at 1163; United Black Firefighters Ass’n v. City of Akron,
976 F.2d 999, 1011 (6th Cir. 1992).
Third, the government must have had a hand in the past discrimination it now seeks to
remedy. So if the government “show[s] that it had essentially become a ‘passive participant’ in a
system of racial exclusion practiced by elements of [a] local . . . industry,” then the government
can act to undo the discrimination. J.A. Croson Co., 488 U.S. at 492 (plurality opinion). But if
the government cannot show that it actively or passively participated in this past discrimination,
race-based remedial measures violate equal-protection principles.
The government’s asserted compelling interest meets none of these requirements. First,
the government points generally to societal discrimination against minority business owners.
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But it does not identify specific incidents of past discrimination. And since “an effort to alleviate
the effects of societal discrimination is not a compelling interest,” the government’s policy is not
permissible. Shaw v. Hunt, 517 U.S. 899, 909–10 (1996); see also Parents Involved, 551 U.S. at
731 (plurality opinion) (“remedying past societal discrimination does not justify race-conscious
government action”).
Second, the government offers little evidence of past intentional discrimination against
the many groups to whom it grants preferences. 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.
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. For example, a witness
testified before a congressional committee that 32% of Hispanic-owned small businesses and
41% of black-owned small businesses have gone under during the pandemic, compared to only
22% of white-owned small businesses. When there is a single decisionmaker behind
the disparity, extreme differences among races may permit an inference of intentional
discrimination—for example, when a city hires one race at a disproportionate rate. See United
Black Firefighters Ass’n, 976 F.2d at 1011 (noting that “[w]here a gross disparity exists between
the expected percentage of minorities selected and the actual percentage of minorities selected,
then prima facie [but rebuttable] proof exists to demonstrate intentional discrimination in the
selection of minorities to those particular positions”). But when it comes to general social
disparities, there are simply too many variables to support inferences of intentional
discrimination. See J.A. Croson Co., 488 U.S. at 501–03; Associated Gen. Contractors of Ohio,
Inc. v. Drabik, 214 F.3d 730, 736–37 (6th Cir. 2000).
Third, the government has not shown that it participated in the discrimination it seeks to
remedy. When opposing the plaintiffs’ motions at the district court, the government identified
statements by members of Congress as evidence that race- and sex-based grant funding would
remedy past discrimination. For example, the government points to a House subcommittee
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hearing aimed at “understanding why aid to minority-owned businesses was delayed.” R. 18, Pg.
ID 109 (cleaned up). But rather than telling the court what Congress learned and how that
supports its remedial policy, it said only that Congress identified a “theme” that “minority- and
women-owned businesses” needed targeted relief from the pandemic because Congress’s “prior
relief programs had failed to reach” them. Id., Pg. ID 108. A vague reference to a “theme” of
governmental discrimination is not enough. To satisfy equal protection, the government must
identify “prior discrimination by the governmental unit involved” or “passive participa[tion] in a
system of racial exclusion.” J.A. Croson Co., 488 U.S. at 492 (plurality opinion) (cleaned up).
An observation that prior, race-neutral relief efforts failed to reach minorities is no evidence at
all that the government enacted or administered those policies in a discriminatory way.
For these reasons, we conclude that the government lacks a compelling interest in
awarding Restaurant Revitalization Funds based on the race of the applicants. And as a result,
the policy’s use of race violates equal protection.
Narrow Tailoring. Even if the government had shown a compelling state interest in
remedying some specific episode of discrimination, the discriminatory disbursement of
Restaurant Revitalization Funds is not narrowly tailored to further that interest.
For a policy to survive narrow-tailoring analysis, the government must show “serious,
good faith consideration of workable race-neutral alternatives.” Grutter v. Bollinger, 539 U.S.
306, 339 (2003); J.A. Croson Co., 488 U.S. at 507. This requires the government to engage in a
genuine effort to determine whether alternative policies could address the alleged harm. And, in
turn, a court must not uphold a race-conscious policy unless it is “satisfied that no workable race-
neutral alternative” would achieve the compelling interest. Fisher v. Univ. of Tex. at Austin,
570 U.S. 297, 312 (2013). In addition, a policy is not narrowly tailored if it is either overbroad
or underinclusive in its use of racial classifications. J.A. Croson Co., 488 U.S. at 507–08; Gratz
v. Bollinger, 539 U.S. 244, 273–75 (2003).
Here, the government could have used any number of alternative, nondiscriminatory
policies. Yet it failed to do so. For example, the government contends that minority-owned
businesses disproportionately struggled to obtain capital and credit during the pandemic. But an
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obvious race-neutral alternative exists: The government could grant priority consideration to all
business owners who were unable to obtain needed capital or credit during the pandemic.
Or consider another of the government’s arguments. It contends that earlier coronavirus
relief programs “disproportionately failed to reach minority-owned businesses.” Gov’t Resp. 15
(citation omitted). But a simple race-neutral alternative exists again: The government could
simply grant priority consideration to all small business owners who have not yet received
coronavirus relief funds. Indeed, the government already requires applicants to disclose what
prior assistance they have received—it need only make that criterion dispositive.
Because these race-neutral alternatives exist, the government’s use of race is
unconstitutional. Aside from the existence of race-neutral alternatives, the government’s use of
racial preferences is both overbroad and underinclusive. This is also fatal to the policy. Gratz,
539 U.S. at 273–75.
The government argues its program is not underinclusive because people of all colors can
count as suffering “social disadvantage.” Gov’t Resp. 17–18. But there is a critical difference
between the designated races and the non-designated races. The designated races get a
presumption that others do not. And that presumption can only be overcome if someone comes
forward with written evidence that the applicant has not been “subjected to racial or ethnic
prejudice or cultural bias.” 13 C.F.R. § 124.103(a), (b)(3). Since proving someone else has
never experienced racial or ethnic discrimination is virtually impossible, this “presumption” is
dispositive.
The non-designated races start with a much higher hurdle. They must bring forward
evidence that they suffered episodes of discrimination, which have “negatively impacted” their
“advancement in the business world,” and which caused them to suffer “chronic and substantial
social disadvantage.” Id. § 124.103(c)(6). Put this high hurdle against the rapid depletion of the
money and the 21-day window, and the hurdle becomes a wall.
The government’s policy is plagued with other forms of underinclusivity. Consider the
requirement that a business must be at least 51% owned by women or minorities. How does that
help remedy past discrimination? Black investors may have small shares in lots of restaurants,
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none greater than 51%. But does that mean those owners did not suffer economic harms from
racial discrimination? Indeed, the restaurant at issue, Jake’s Bar, is 50% owned by a Hispanic
female. It is far from obvious why that 1% difference in ownership is relevant. Yet the
government fails to explain why that cutoff relates to its stated remedial purpose.
The dispositive presumption enjoyed by designated minorities bears strikingly little
relation to the asserted problem the government is trying to fix. For example, the government
attempts to defend its policy by citing a study showing it was harder for black business owners to
obtain loans from Washington, D.C., banks. Gov’t Resp. 15. Rather than simply designating
those owners as the harmed group, the government relied on the Small Business
Administration’s 2016 regulation granting racial preferences to vast swaths of the population.
For example, individuals who trace their ancestry to Pakistan and India qualify for special
treatment. But those from Afghanistan, Iran, and Iraq do not. Those from China, Japan, and
Hong Kong all qualify. But those from Tunisia, Libya, and Morocco do not. This scattershot
approach does not conform to the narrow tailoring strict scrutiny requires.
The stark realities of the Small Business Administration’s racial gerrymandering are
inescapable. Imagine two childhood friends—one Indian, one Afghan. Both own restaurants,
and both have suffered devastating losses during the pandemic. If both apply to the Restaurant
Revitalization Fund, the Indian applicant will presumptively receive priority consideration over
his Afghan friend. Why? Because of his ethnic heritage. It is indeed “a sordid business” to
divide “us up by race.” League of United Latin Am. Citizens v. Perry, 548 U.S. 399, 511 (2006)
(opinion of Roberts, C.J.). And the government’s attempt to do so here violates the Constitution.
B.
The plaintiffs also challenge the government’s prioritization of women-owned
restaurants. Like racial classifications, sex-based discrimination is presumptively invalid. U.S.
Const. amend. XIV; United States v. Virginia, 518 U.S. 515, 531 (1996). Government policies
that discriminate based on sex cannot stand unless the government provides an “exceedingly
persuasive justification.” Virginia, 518 U.S. at 531. To meet this burden, the government must
prove that (1) a sex-based classification serves “important governmental objectives,” and (2) the
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classification is “substantially and directly related” to the government’s objectives. Miss. Univ.
for Women v. Hogan, 458 U.S. 718, 724, 730 (1982) (cleaned up).
The government fails to satisfy either prong. For starters, it fails to show that prioritizing
women-owned restaurants serves an important governmental interest. The government claims an
interest in “assisting with the economic recovery of women-owned businesses, which were
‘disproportionately affected’ by the COVID-19 pandemic.” Gov’t Resp. 20. But while
remedying specific instances of past sex discrimination can serve as a valid governmental
objective, general claims of societal discrimination are not enough. Hogan, 458 U.S. at 727–29.
Instead, to have a legitimate interest in remedying sex discrimination, the government
first needs proof that discrimination occurred. Thus, the government must show that the sex
being favored “actually suffer[ed] a disadvantage” as a result of discrimination in a specific
industry or field. Id. at 728; see Weinberger v. Wiesenfeld, 420 U.S. 636, 648 (1975) (“[T]he
mere recitation of a benign, compensatory purpose is not an automatic shield which protects
against any inquiry into the actual purposes underlying a statutory scheme.”); see also Craig v.
Boren, 429 U.S. 190, 200–04 (1976) (describing the high bar to using statistics as evidence of
discrimination and concluding that “proving broad sociological propositions by statistics is a
dubious business”). The government fails that burden here. It gives only a few examples of
statistical disparities between women-owned and male-owned businesses. For just one: The
government cites a survey that purports to show that women who received Paycheck Protection
Program loans asked for 40% less funding on average than their male counterparts. Statements
of this nature do nothing to support an inference of intentional discrimination. Without proof of
intentional discrimination against women, a policy that discriminates on the basis of sex cannot
serve a valid governmental objective.
Additionally, the government’s prioritization system is not “substantially related to” its
purported remedial objective. See Wiesenfeld, 420 U.S. at 651–53. The priority system is
designed to fast-track applicants hardest hit by the pandemic. Yet under the Act, all women-
owned restaurants are prioritized—even if they are not “economically disadvantaged.” Pub. L.
No. 117-2, § 5003(c)(3)(A). So whether a given restaurant did better or worse than a male-
owned restaurant next door is of no matter—as long as the restaurant is at least 51% women-
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owned and otherwise meets the statutory criteria, it receives priority status. Because the
government made no effort to tailor its priority system, we cannot find that the sex-based
distinction is “substantially related” to the objective of helping restaurants disproportionately
affected by the pandemic.3
The government contends that women “struggled to receive pandemic relief from the
Federal government” from prior aid programs. Gov’t Resp. 20 (citation omitted). But as we
previously discussed, the government has a ready alternative: Give priority to restaurant owners
who did not receive prior aid. There is no need to use sex as a proxy when the government seeks
to remedy a problem that is purely economic.
How does the government respond to all this? It faults the plaintiffs for offering “no
meaningful argument that a priority period for women-owned businesses is not substantially
related to the achievement of that objective.” Id. (cleaned up). But that gets things backwards:
It was the government’s burden to show that its discriminatory policy passes the substantial-
relation test. Virginia, 518 U.S. at 533 (“The burden of justification is demanding and it rests
entirely on the State.”). On this score, the plaintiffs did not need to say a word.
Thus, the government has failed to provide an exceedingly persuasive justification that
would allow the classification to stand.
C.
The plaintiffs are entitled to an injunction pending appeal. Since the government failed
to justify its discriminatory policy, the plaintiffs will win on the merits of their constitutional
claim. And like in most constitutional cases, that is dispositive here. See Roberts, 958 F.3d at
416; Husted, 697 F.3d at 436; Deja Vu, 274 F.3d at 400; see also Bonnell v. Lorenzo, 241 F.3d
800, 809 (6th Cir. 2001) (“[W]hen reviewing a motion for a preliminary injunction, if it is found
that a constitutional right is being threatened or impaired, a finding of irreparable injury is
mandated.”).
3Our court has previously applied strict scrutiny to sex-based affirmative-action programs. Brunet v. City
of Columbus, 1 F.3d 390, 404 (6th Cir. 1993). A government program that cannot survive intermediate scrutiny
surely could not survive strict scrutiny’s more exacting standard. So assuming Brunet remains good law after
United States v. Virginia, the policy would fail under that standard too.
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IV.
It has been twenty-five years since the Supreme Court struck down the race-conscious
policies in Adarand. And it has been nearly twenty years since the Supreme Court struck down
the racial preferences in Gratz. As today’s case shows once again, the “way to stop
discrimination on the basis of race is to stop discriminating on the basis of race.” Parents
Involved, 551 U.S. at 748 (plurality opinion).
The government shall fund the plaintiffs’ grant application, if approved, before all
later-filed applications, without regard to processing time or the applicants’ race or sex. The
government, however, may continue to give veteran-owned restaurants priority in accordance
with the law. This preliminary injunction shall remain in place until this case is resolved on the
merits and all appeals are exhausted.
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_________________
DISSENT
_________________
BERNICE BOUIE DONALD, Circuit Judge, dissenting. It took nearly 200 years for the
Supreme Court to firmly establish that our Constitution permits the government to use race-
based classifications to remediate past discrimination. See Regents of Univ. of Cal. v. Bakke,
438 U.S. 265 (1978). It took only seven days for the majority to undermine that longstanding
and enduring principle.
The majority’s conclusion that Plaintiffs are entitled to injunctive relief requires us to
make several assumptions. The majority’s reasoning suggests we live in a world in which
centuries of intentional discrimination and oppression of racial minorities have been eradicated.
The majority’s reasoning suggests we live in a world in which the COVID-19 pandemic did not
exacerbate the disparities enabled by those centuries of discrimination. The majority’s reasoning
suggests that we live in a world in which Congress passed the Restaurant Revitalization Fund
(“RRF”) not to aid the nation’s economic recovery, but to arbitrarily provide special treatment to
racial minorities and women.
The majority’s reasoning leads it to a puzzling, if not predictable, conclusion that the
twenty-one-day priority period in the RRF—a short-term, narrowly tailored, carefully calibrated
measure designed to assist businesses most devastated by the pandemic—is unconstitutional.
Because I find that the RRF is a carefully targeted measure necessitated by an unparalleled
pandemic, and because Plaintiffs have not demonstrated irreparable harm or a likelihood of
success on the merits, I dissent.
I.
The constitutional issues involved in this case are controversial, thorny, and unsettled.
However, I start by expressing my disappointment in our Court’s use of the emergency appellate
docket. Last year, I opined on this issue in the context of a case involving the constitutionality of
two COVID-19-related executive orders issued by the Governor of Kentucky. Pleasant View
Baptist Church v. Beshear, 838 F. App’x 936, 939-42 (6th Cir. 2020). I warned against the “use
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of the Court’s emergency docket” as a “forum to advocate for abrupt and sweeping change to
well-settled federal law.” Id. My concern in that case was with the parties; today, my concern is
focused on the Court.
Here, Plaintiffs unsuccessfully sought injunctive relief in the district court averring that
the RRF’s 21-day priority period was unconstitutional. During the priority period, the Small
Business Administration (“SBA”) provides grants to restaurants that are at least 51% owned and
controlled by women, veterans, or “socially and economically disadvantaged” individuals. Pub.
L. No. 117-2, § 5003(c)(3)(A); see 15 U.S.C. §§ 632(n), (q)(3), 637(a)(4)(A). The RRF—by
way of SBA regulation—establishes rebuttable presumptions that individuals of certain races or
ethnicities are “socially disadvantaged.” 13 C.F.R. § 124.103. The district court denied
Plaintiffs’ request for a temporary restraining order that would have prohibited the government
from prioritizing funding based on an applicant’s race or sex. In doing so, the district court
rejected Plaintiffs’ claims that the applicable provisions of the RRF violate the Constitution.
This case initially came to us on appeal after Plaintiffs filed an “emergency motion,”
contending that they would be irreparably harmed absent immediate intervention from this Court
because the pool of money in the RRF was shrinking every day.1 Specifically, they argued that
“[i]f this Court d[id] not promptly halt all payments from the [RRF], the limited available funds
w[ould] be fully depleted before the disfavored groups (largely white males) ever have a shot at
this much-needed relief.” (Mot. at 23).
At the time of Plaintiffs’ initial filing in this Court, Plaintiffs stated that, as of May 12,
RRF applications amounted to a total of $29 billion in requests, which exceeded the $28.6 billion
that Congress appropriated for the entire program. (Mot. at 9). Plaintiffs conceded, however,
that the SBA had only depleted about 20 percent of the available funds. (Id. at 9-10). Plaintiffs
effectively asked the Court to assume that the government would pay out every application
currently pending, such that no funds would remain at the conclusion of the prioritization period.
Plaintiffs did not cite to any provision in the American Rescue Plan Act of 2021 (“ARA”), nor
any facts in the record, to suggest that such an outcome was likely to occur. In short, Plaintiffs
1As outlined above by the majority, the district court eventually also denied Plaintiffs’ motion for a
preliminary injunction, but that came several days later, after Plaintiffs had already filed their appeal in this Court.
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had failed to meet their burden of showing irreparable harm. See D.T. v. Sumner Cnty. Schs.,
942 F.3d 324, 327 (6th Cir. 2019) (“To merit a preliminary injunction, an injury must be both
certain and immediate, not speculative or theoretical.”) (internal quotation marks omitted).2
This Court asked the government for additional facts related to “the status of the [RRF],
including but not limited to the amount of unallocated funds remaining, what the daily
disbursements have been for the past week, and any projections as to when the fund will run
out[.]” (Doc. No. 11). Of course, these facts would help the district court—and then this
Court—better understand the priority program framework, and, in turn, whether Plaintiffs were
truly at risk of not being able to receive funds. But by requesting that the government provide us
with this information, we effectively shifted the burden to the government to prove that Plaintiffs
would not suffer irreparable harm. This perverts the Rule 65 standard for injunctive relief. See
Granny Goose Foods, Inc. v. Bhd. of Teamsters & Auto Truck Drivers Loc. No. 70, 415 U.S.
423, 443 (1974) (“The burden was on employers to show that they were entitled to a preliminary
injunction, not on the Union to show that they were not.”) (emphasis added); N. Am. Coal Corp.
v. Loc. Union 2262, United Mine Workers of Am., 497 F.2d 459, 465 (6th Cir. 1974) (“[T]he
burden of proof remains upon the party seeking the extraordinary relief […] until all necessary
elements to the issuance of an injunction have been established.”).3
Under such novel standards, plaintiffs seeking injunctive relief will only have to show
that there is some possibility that they might suffer possible irreparable harm. Ostensibly, they
could label their appeal as an “emergency,” and the appellate court could hold the case
2We could have also dismissed this case on jurisdictional grounds. Plaintiffs’ initial emergency motion
addressed only the district court’s denial of their request for a temporary restraining order. “As a general rule, we do
not entertain appeals from a district court’s decision to grant or deny a temporary restraining order. That’s because
temporary restraining orders are usually of short duration and usually terminate with a prompt ruling on a
preliminary injunction, from which the losing party has an immediate right of appeal.” Maryville Baptist Church,
Inc. v. Beshear, 957 F.3d 610, 612 (6th Cir. 2020) (internal quotation and citation omitted). Before the district court
ruled on Plaintiffs’ motion for a preliminary injunction, the government provided sworn testimony to us indicating
that it was reserving the full amount of the money Plaintiffs requested. As such, even if we had dismissed Plaintiffs’
initial emergency motion, it would not have affected their ability to obtain relief.
3The impropriety of the burden-shifting aside, it is improper to ask any party to “reinvent the evidentiary
wheel and engage in unnecessarily duplicative, costly, and time-consuming factfinding[,]” when only the Court—
and not the parties themselves—seeks that additional information. City of Richmond v. JA Croson Co., 488 U.S.
469, 547 (1989) (Marshall, J., dissenting).
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indefinitely until the facts develop to the point where imminent harm is discernable. We have
never recognized such a low burden for such extraordinary relief; such a process is antithetical
to Rule 65. To even consider issuing an injunction on pure speculation that a constitutional
violation might arise in the future is inappropriate and beyond our role as a reviewing court.
I do not subscribe to new procedures that place this Court in a quasi-fact-finding role,
especially where Plaintiffs themselves failed to ask for limited discovery or otherwise explain
why any new facts were necessary to the resolution of their claims. They were the party
asserting an emergency, and “our adversary system is designed around the premise that the
parties know what is best for them, and are responsible for advancing the facts and arguments
entitling them to relief.” Greenlaw v. United States, 554 U.S. 237, 244 (2008) (internal
quotation and citation omitted). See also Carducci v. Regan, 714 F.2d 171, 177 (D.C. Cir. 1983)
(“The premise of our adversarial system is that appellate courts do not sit as self-directed boards
of legal inquiry and research, but essentially as arbiters of legal questions presented and argued
by the parties before them.”) (emphasis added).
In any case, the record should be developed before the district court, not here. Simply
put, Plaintiffs did not present any evidence with their initial emergency motion that they were at
risk of irreparable harm, and it is not our role as a reviewing court to find merit in a claim when
it is not apparent from the record.
II.
Other aspects of this appeal concern me as well. If Plaintiffs’ initial emergency motion
was limited solely to their request for injunctive relief as to their individual claims, the appeal
would have been limited in scope, “allow[ing] us to provide immediate resolution to factually
unique circumstances[.]” Pleasant View Baptist Church, 838 F. App’x at 942. Moreover,
Plaintiffs’ appeal would now arguably be moot, in light of (1) the expiration of the priority
period and (2) the SBA’s sworn testimony indicating that the RRF funds are not depleted and
that the government had set aside the full amount of money that Plaintiffs requested. (Doc. 13).4
4The majority contends that this case is not moot even with the expiration of the priority period. But that
determination rests in part on the assumption that the RRF could be depleted before the SBA processes Plaintiffs’
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But in their initial emergency motion, Plaintiffs asked us to go a step further—a big step
further—specifically requesting an injunction “ordering Defendants to cease disbursing funds
from [the RRF] until this Court or the District Court can rule on a preliminary injunction.” (Mot.
at 3). This request was extraordinary and would have had consequences reaching far beyond
Plaintiffs’ quest to obtain RRF funding for a single business. The majority properly declined to
go that far. With a favorable ruling to Plaintiffs, all eligible restaurant owners within the Sixth
Circuit who had already filed applications under the program would have had to wait
indefinitely, if not permanently, to learn if they would receive desperately needed monetary aid.
These restaurant owners are not parties to this case, and there was no need to subject them to
potentially devastating consequences.5 After all, courts are arbiters of disputes, not disrupters of
emergency relief efforts. The potential nationwide public harm that could have resulted
overwhelmingly outweighs any relief that might have inured to Plaintiffs had we granted their
claim to freeze the RRF entirely.6 For us to even consider granting that type of relief would have
been irresponsible without “the careful deliberation that we would normally undertake in a
traditional merits case.” Pleasant View Baptist Church, 838 F. App’x at 942.
III.
This case also presents dense and delicate issues of constitutional law regarding how
courts should scrutinize race-based government action. We should not be addressing these issues
application. While that might be theoretically possible, it looks highly unlikely based on the SBA’s sworn
declaration that, as of May 23, 2021, the SBA had disbursed only approximately $11,345,177,844 of the total $28.6
billion that Congress appropriated for the RRF. (See Doc. 13 at 3). As we have explained, “[i]f after filing a
complaint the claimant loses a personal stake in the action, ‘making it impossible for the court to grant any effectual
relief whatever,’ the case must be dismissed as moot.” Hrivnak v. NCO Portfolio Mgmt., Inc., 719 F.3d 564, 567
(6th Cir. 2013) (quoting Church of Scientology v. United States, 506 U.S. 9, 12 (1992)). Here, the expiration of the
priority period seems to “have completely and irrevocably eradicated the effects of [Plaintiffs’] alleged violation[s].”
Los Angeles Cty. v. Davis, 440 U.S. 625, 631 (1979).
5Although not briefed extensively by the parties, I note that even if there were merit to Plaintiffs’ claims,
the Supreme Court has clearly stated that an injunction “should be no more burdensome to the defendant than
necessary to provide complete relief to the plaintiffs.” Califano v. Yamaskai, 442 U.S. 682, 702 (1979). Plaintiffs
have not indicated that any other parties will join this case or that Plaintiffs have attempted to raise any claims on
their behalf, so I am not convinced that Plaintiffs even have standing to ask us to declare the entire RRF
unconstitutional or otherwise halt the processing of RRF payments. Nevertheless, I make my point above simply to
underscore the appropriateness of the emergency motion mechanism for such relief.
6This consideration obviously goes to the merits of the case, not just the propriety of addressing the issue
on an emergency motion, and, in any event, the majority limits injunctive relief to Plaintiffs’ claims only.
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on a whim, particularly when the Supreme Court has informed us that the strict scrutiny analysis
as to race-based classifications is not subject to a rigid formula. As Justice O’Connor stated in
Grutter v. Bollinger, “[c]ontext matters when reviewing race-based governmental action under
the Equal Protection Clause.” 539 U.S. 306, 327 (2003). “Not every decision influenced by race
is equally objectionable, and strict scrutiny is designed to provide a framework for carefully
examining the importance and the sincerity of the reasons advanced by the governmental
decisionmaker for the use of race in that particular context.” Id. (emphasis added); see also
Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 268 (Souter, J., dissenting) (“[T]he Court’s
very recognition today that strict scrutiny can be compatible with the survival of a classification
so reviewed demonstrates that our concepts of equal protection enjoy a greater elasticity than the
standard categories might suggest.”); Croson, 488 U.S. 469, 493 (1989) (plurality opinion)
(“Absent searching judicial inquiry into the justification for such race-based measures, there is
simply no way of determining what classifications are ‘benign’ or ‘remedial’ and what
classifications are in fact motivated by illegitimate notions of racial inferiority or simple racial
politics.”); Evan Gerstmann & Christopher Shortell, The Many Faces of Strict Scrutiny: How the
Supreme Court Changes the Rules in Race Cases, 72 U. Pitt. L. Rev. 1, 34 (2010) (explaining
different levels of “deferential scrutiny” applied by courts as to race-based government action).7
Here, context matters. The statutory and regulatory provisions at issue are complex, and
the RRF is just one component of broad-based emergency legislation designed to fight business
fallout that is uniquely and directly tied to the COVID-19 pandemic. In this sense, the RRF is
not so much traditional legislation in which the government has sought to encourage a long-term
change in public policy but rather a one-off monetary lifeline aimed at ameliorating short-term
economic devastation. That distinction is important, and it might call for a different kind of
deference to the legislature, even within the broader strict scrutiny framework. We must avoid
hurried judicial decision-making under such circumstances.
7I also note that although courts have largely operated under the framework that strict scrutiny review
applies to “all racial classifications,” Adarand, 515 U.S. 200, 227 (1995), even that notion has been called into
question. See, e.g., Johnson v. California, 543 U.S. 499, 516 (2005) (Ginsburg, J., concurring) (opining “that the
same standard of review ought not to control judicial inspection of every official race classification”); see also Gratz
v. Bollinger, 539 U.S. 244, 301 (2003) (Ginsburg, J., dissenting) (“Actions designed to burden groups long denied
full citizenship stature are not sensibly ranked with measures taken to hasten the day when entrenched
discrimination and its aftereffects have been extirpated.”).
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IV.
Despite my reservations as to whether we have jurisdiction to entertain this appeal—and,
more generally, whether this kind of appeal warrants anything other than the narrowest of
dispositions—I also conclude that Plaintiffs’ appeal would likely fail on the merits.
Plaintiffs argue that the priority period amounts to impermissible race- and gender-based
discrimination in violation of the Equal Protection Clause. “[T]he government has the burden of
proving that racial classifications ‘are narrowly tailored measures that further compelling
governmental interests.’” Johnson, 543 U.S. at 505 (quoting Adarand, 515 U.S. at 227). The
government asserted “a compelling interest in remedying the effects of past and present
discrimination that led to socially and economically disadvantaged business owners having less
access to capital and credit, including capital and credit provided through prior COVID relief
efforts.” The government also argued that it “has a compelling interest in supporting small
businesses owned by socially and economically disadvantaged small business owners who have
borne an outsized burden of the economic harms of [the] COVID-19 pandemic.”
Congress heard significant testimony from restauranteurs, economists, experts in finance,
and public interest advocates in the lead-up to the passage of the RRF. See Supporting Small
and Minority-Owned
Businesses
Through
the
Pandemic
(Feb.
4,
2021)
(“Supporting”), available at https://www.congress.gov/117/chrg/CHRG-117hhrg43965/CHRG-
117hhrg43965.pdf; Long-Lasting Solutions for a Small Business Recovery (July 15, 2020)
(“Solutions”), available at https://www.congress.gov/116/chrg/CHRG-116hhrg41297/CHRG-
116hhrg41297.pdf;
Paycheck
Protection
Program:
Loan
Forgiveness
&
Other
Challenges: Hearing Before the House Committee on Small Business (June 17, 2020)
(“Challenges”), available at https://www.congress.gov/116/chrg/CHRG-116hhrg41293/CHRG-
116hhrg41293.pdf.
Those experts offered evidence showing that minority-owned businesses were more
vulnerable to economic distress than businesses owned by white entrepreneurs—they were more
likely to operate in retail, accommodation, food services, and personal care services industries,
which were hardest hit by government shut-down orders and a decrease in foot traffic.
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Supporting, at 61. Moreover, minority-owned businesses were more likely to be in areas with
higher rates of COVID-19 infections. Id.
The district court noted that Congress also considered testimony indicating that, within
general historical discrimination in the banking industry, entrepreneurs of color have had specific
difficulty in accessing business capital. Supporting, at 38, 60-61, 78; Solutions at 10,
Challenges, at 11, 18. Witnesses testified that banks require more documentation from minority
applicants but approve loans less often or for lower amounts. Supporting, at 48, 60, 80. In
addition, witnesses testified that, because of historical difficulties in navigating the banking
industry, minority entrepreneurs had lower familial and household incomes, decreasing access to
private capital. Supporting, at 39, 60.
Moreover, the district court highlighted testimony indicating that minority business
owners lagged behind their white counterparts in access even to SBA programs. See Supporting,
at 62, 78; Challenges, at 11, 18. Of particular note to members of Congress, see, e.g., Solutions,
at 3; 21; 30; Challenges, at 3, was the failure of the Paycheck Protection Program (“PPP”)—in
which commercial banks were tapped to distribute funds—to reach minority-owned businesses,
see Supporting, at 8, 11, 38, 48–49, 61, 78–79, 80, 88; Solutions, at 10; Challenges, at 11.8
Taken together, that testimony was enough for the district court to conclude that
Congress had a “strong basis in evidence for its conclusion that remedial action was necessary”
to address specific past discrimination, particularly as it related to the pandemic. Associated
Gen. Contractors of Oh., Inc. v. Drabik, 214 F.3d 730, 735 (6th Cir. 2000) (quoting Croson, 488
U.S. at 500).
8In addition to the ample testimony presented to Congress, history itself speaks to a long tradition of
intentional discrimination by the federal government in housing and banking. For example, in 1934, the federal
government established the Federal Housing Administration (“FHA”), a government agency that was intended to
facilitate the purchase of affordable housing. In practice though, African-American families and other people of
color were excluded from the many benefits afforded by the FHA as a result of the discriminatory practice known as
redlining. See generally Laufman v. Oakley Bldg. & Loan Co., 408 F. Supp. 489 (S.D. Ohio 1976). Moreover,
through the 1990s, the federal government persistently denied African-American farmers applications for farm
loans, credit, and other benefit programs. See Pigford v. Glickman, 185 F.R.D. 82 (D.D.C. 1999). These actions
created generational wealth and stability for white families and generational poverty and instability for African-
Americans and other people of color.
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The majority mischaracterizes these asserted compelling interests as improper attempts to
generally remediate past societal discrimination against minorities. In doing so, the majority
overstates and mischaracterizes Congress’ objectives in establishing the RRF. As the district
court explained, the RRF was specifically targeted to provide aid to businesses who suffered
dramatic losses because of the pandemic, not simply to provide aid in the abstract to certain
minorities who have suffered past discrimination. The analysis does not change simply because
some of the factors that might have contributed to general historical discrimination of certain
minorities overlap to some degree with Congress’ justifications for establishing the priority
period.
The majority nevertheless contends that the priority period was overly broad in
attempting to accomplish that purpose, because, in the majority’s view, Congress did not
effectively consider possible race-neutral alternatives to the program. To that end, the majority
suggests that Congress could have “simply grant[ed] priority consideration to all small business
owners who had not yet received coronavirus relief funds” or that Congress could have more
effectively provided relief by “grant[ing] priority consideration to all business owners who were
unable to obtain needed capital or credit during the pandemic.” (emphasis added).
However, completely absent from the majority’s analysis on these points is that the
priority period was created expressly because the PPP—a prior, race-neutral attempt to assist
restauranteurs—failed to reach minority business owners. Moreover, “[n]arrow tailoring does
not require exhaustion of every conceivable race-neutral alternative.” Grutter, 539 U.S. at 339.
Legislation is not always perfect, but imperfection does not equate to unconstitutionality.
The majority’s suggested alternatives presuppose that Congress had ample time to think
of all possible ways in which it could distribute relief to small business owners. In normal times,
there may be some force to the majority’s position. But these are not normal times, and
Congress deemed that it needed to act fast. The principal purpose of the RRF—and the ARA
more generally—was to flood the nation with cash in order to keep economic activity moving
along. The statute at issue here is benign and not restrictive, and when emergency legislation
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meets that standard, we must afford special deference to the legislature, which is far better
positioned than the Court to assess what is best for the nation during an emergency.9
Further, as the government argues, while the SBA presumes certain races of people
qualify as “socially and economically disadvantaged,” that definition does not preclude people of
other races from qualifying as well—including white men like Vitolo. On the other hand,
because the presumption is rebuttable, individuals who have not suffered the disadvantage
targeted by the RRF may properly be excluded during the priority period.
Finally, the district court correctly noted that the twenty-one-day priority period was
narrow in scope: it “is time-limited, fund-limited, not absolutely constrained by race” and “does
not mean individuals like Vitolo cannot receive relief under this program.” Plaintiffs have not, at
this juncture, demonstrated that they are likely to succeed on their argument that the priority
period fails strict scrutiny.
V.
Plaintiffs are also unlikely to succeed on the merits of their argument that the RRF’s
gender-based priority is unconstitutional. Gender-based discrimination must serve “important
governmental objectives” and “the discriminatory means employed [must be] substantially
related to the achievement of those objectives.” United States v. Virginia, 518 U.S. 515, 524
(1996) (quoting Miss. Univ. for Women v. Hogan, 458 U.S. 718, 724 (1982)).
Relevant here, “[s]ex classifications may be used to compensate women for particular
economic disabilities [they have] suffered, to promot[e] equal employment opportunity, [and] to
advance full development of the talent and capacities of our Nation’s people.” Id. at 533
(internal quotation marks and citations omitted) (first and last alterations added). Although the
9I am mindful that judicial recognition of race-based classifications based solely on an emergency rationale
has, at times, produced unfortunate and unsavory results. See, e.g., Korematsu v. United States, 323 U.S. 214, 216,
221, 223-24 (1944) (concluding that government’s decision to “assembl[e] together and plac[e] under guard all
those of Japanese ancestry” in “assembly centers” was constitutional based on “[p]ressing public necessity[,]” where
“the need for action was great, and time was short.”); see also Skinner v. Railway Labor Executives’ Ass’n, 489 U.S.
602, 635 (1989) (Marshall, J., dissenting) (“History teaches that grave threats to liberty often come in times of
urgency, when constitutional rights seem too extravagant to endure . . . . [W]hen we allow fundamental freedoms to
be sacrificed in the name of real or perceived exigency, we invariably come to regret it.”). Had the RRF provision
been part of legislation enacted prior to the pandemic, I agree that the analysis might be different.
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congressional witnesses spent more time discussing how the history of discrimination against
minorities led to the need for targeted financial assistance in the wake of the pandemic, they
confirmed that much of what they told Congress about minority-owned businesses is also true of
women-owned businesses.
Addressing those economic disadvantages by prioritizing access to government funds is a
direct way to promote the important government interests of employment opportunities for
women and more fully developing the talent and capacity of American businesswomen.
Virginia, 518 U.S. at 533. Accordingly, Plaintiffs are unlikely to succeed on their argument that
the priority for women-owned businesses cannot survive intermediate scrutiny.
Regarding the remaining injunction factors, Plaintiffs argue that they will be irreparably
harmed absent the requested relief; they assert that the pool of money in the RRF is shrinking
every day and if an injunction is not entered, there will be nothing left for non-prioritized
applicants. The government responds that an injunction would delay disbursement of funds to
approved applicants. The public interest favors getting relief funds into the hands of business
owners as quickly as possible, especially where, as here, Plaintiffs are unlikely to succeed on the
merits of their appeal. City of Pontiac Retired Emps. Ass’n, 751 F.3d at 430.
VI.
The majority states that “[w]hen the government promulgates race-based policies, it must
operate with a scalpel.” But what good is a scalpel if the government is stripped of its other
policymaking tools. In this case, the government was uniquely situated to identify a pattern of
nationwide discrimination and created legislation designed to provide a temporary remedy. That
is not unconstitutional; that is the government doing its job. We are not in the business of telling
Congress what it cannot do except in the most extreme of circumstances.
For the foregoing reasons, I would hold that Plaintiffs are not entitled to injunctive relief,
and that their emergency motions should have been dismissed.
On a final note, I reiterate that this case should have never come to this point. As I
mentioned above, we should have disposed of the initial emergency motion on narrow
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jurisdictional grounds. But because of the Court’s unusual procedure in handling this appeal, we
are now left with a binding published opinion, etched in the stone of time. I urge my colleagues
on this Court to consider establishing clear procedures for emergency matters so that we are not
again placed in a position where we must address constitutional questions of profound
importance on a moment’s notice without development of the record.
I dissent.
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UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
Nos. 21-5517/5528
ANTONIO VITOLO; JAKE’S BAR AND GRILL, LLC,
Plaintiffs - Appellants,
v.
ISABELLA CASILLAS GUZMAN, Administrator of the
Small Business Administration,
Defendant - Appellee.
Before: NORRIS, DONALD, and THAPAR, Circuit Judges.
JUDGMENT
On Appeal from the United States District Court
for the Eastern District of Tennessee at Knoxville.
THIS CAUSE was heard on the record from the district court, Plaintiffs’ motions and reply, and
Defendant’s response.
IN CONSIDERATION THEREOF, it is ORDERED that the emergency motion for an injunction
pending appeal is GRANTED. The preliminary injunction shall remain in place until this case is resolved
on the merits and all appeals are exhausted.
ENTERED BY ORDER OF THE COURT
Deborah S. Hunt, Clerk
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FILED
DEBORAH S. HUNT, Clerk
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