. The RRF is aimed at aiding restaurants, an industry decimated by the pandemic. Over the weekend, the SBA notified 2,965 previously approved priority Restaurant Revitalization Fund applicants in a form email that it will be unable to pay the promised grants due to the outcome of the lawsuits in Texas and Tennessee thatbarred the SBAfrom distributing grantson the basis of race and sex. Smooth and cool., Do Not Sell/Share My Personal Information. from America First Legal (AFL) specifically takes issue with the Small Business Administrations (SBA) handling of the $28.6 billion in the Restaurant Revitalization Fund within President Bidens American Rescue Plan package passed by Congress. Thursdays lawsuit from America First Legal (AFL) specifically takes issue with the Small Business Administrations (SBA) handling of the $28.6 billion in the Restaurant Revitalization Fund within President Bidens American Rescue Plan package passed by Congress. A bipartisan group of lawmakers, according to the Hill , on June 10 introduced the Restaurant Revitalization Fund Replenishment Act of 2021 to add an additional $60 The broad statistical disparities cited by the government are not nearly enough., The dissenting opinion of the Sixth Circuit panel argued that the Biden Administration offered substantial evidence proving that minority-owned businesses were more vulnerable to economic distress than businesses owned by white entrepreneurs.. However, this fund was quickly depleted, and many restaurants are still struggling to keep their doors open. They had applied for federal relief during the first 21 days of the Revitalization program, when priority was given to those groups because they were regarded as particularly in need of financial assistance. The evidence submitted by plaintiffs indicates that the entire $28.6 billion in the Restaurant Revitalization Fund may be depleted before plaintiffs application can be The Associated Press reported Wednesday that women, veterans and socially and economically disadvantaged business owners have already applied for $29 billion in aid, accounting for more than 147,000 applications. A letter obtained by Nation's Restaurant News told those applicants awaiting funds: The SBA is not able to pay 2,965 priority applicants including yourself who were previously approved and notified of their approval. Sign up here. U.S. District Judge Travis McDonough in Knoxville, Tennessee, issued the opinion denying a temporary restraining order last week in thelawsuitbrought by the Wisconsin Institute for Law & Liberty. The decision overturned a Tennessee federal judge's original ruling that declined a temporary restraining request from Antonio Vitolo, the owner of Jake's Bar and Grill LLC in Harriman, Tenn. Its estimated that 1 in 6 restaurants across the country permanently closed due to the pandemic. The lawsuit called for a more equitable distribution of the funds on a first-come, first-serve basis. May 13, 2021 / 10:55 AM The communication did not say whether the SBA would pursue a judicial or legislative remedy. This case underscores that there was a lot of nervousness in the restaurant industry that the $28.6 billion was going to go fast, Sean Kennedy, vice president for public affairs with the National Restaurant Association told Nations Restaurant News. "And these are men and women from all walks of life who share a passion for serving in the restaurant industry, and their applications are valid. The owner of a weddings and events business in New York City contacted couples to say she would soon be able to refund some of the money they put down as a deposit on their canceled 2020 weddings. Some of these emails indicated an application had been denied and that the SBA would no longer consider it. In 2018, Michigan had 16,543 eating and drinking places, according to state data from the National Restaurant Association. In a similar case, a federal district judge in Texas issued a preliminary ruling in May that the Restaurant Revitalization Fund discriminated against white restaurant operator, Philip Greer, owner of Greers Ranch Caf in Stephenville, Texas, alleging that the federal government violated the Constitutions Equal Protection Clause. Federal judges in Texas and Tennessee agreed, and the SBA halted all payments to priority applicants. Uno to sell frozen pizza business to Great Kitchens Food Co. Red Robin's recovery gets off to a fast start. The pause in disbursement prevents more than 2,900 of those businesses from receiving COVID relief funds allocated in the Restaurant Revitalization Fund, according to Reuters. The matter came to light days after a group of senators and congressmen from both parties had introduced a bipartisan proposal to re-up the RRF with $60 billion. Some business owners have seen their approved grants rescinded due to lawsuits and lack of additional action from Congress. A US federal judge issued a preliminary ruling Tuesday in favor of a white male restaurateur who claimed he had been discriminated against in connection to his application for some of the nearly $29 billion in relief offered by the Biden administration. He described her as a scrappy small business owner herself. A $28.6 billion federal restaurant aid fund has in its first week received more than 266,000 applications from struggling restaurants, many of which come from the women- and minority-owned businesses the fund is prioritizing. /sites/all/themes/penton_subtheme_nrn/images/logos/footer.png. The nearly 3,000 restaurants whose application approvals were rescinded will be paid once it completes processing all previously filed non-priority applications, and only then if the RRF is not first exhausted, the SBA told The New York Times. {"Economically 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. In the suit, the Lost Cajun owners Janice Smith and Jason Smith, along with Pennsylvania restaurant owner Eric Nyman, allege that the Small Business Administrations plan to distribute pandemic relief funds to small businesses is unconstitutional. U.S. District Judge Travis R. McDonoughsoriginal ruling stated that the plaintiffs argument had failed to rebut the federal governments priority in halting the impacts of historical discrimination based on sex and race. While the Court is mindful of statistical disparities and expert conclusions based on those disparities, "[d]efining these sorts of injuries as 'identified discrimination' would give governments license to create a patchwork of racial preferences based on statistical generalizations about any particular field of endeavor." 2021 CBS Interactive Inc. All Rights Reserved. Accordingly, the Court concludes that Plaintiffs are likely to succeed on the merits of their claim that Defendants' use of race-based and sex-based preferences in the administration of the RRF violates [equal protection principles] . "As a small, independent business that is partially owned by women and people of color, I think we're very un-used to pleasant news from a bank. But on Wednesday, the agency announced it had already received more than 147,000 applications from women, veterans and other disadvantaged restaurant owners in just over a week, requesting $29 billion in funds. Neighborhood improvement, fighting poverty among priorities for Detroit's $400M rescue fund, New Michigan law clears the way for higher-alcohol canned cocktails, become a digital subscriber to the Free Press, Your California Privacy Rights / Privacy Policy. [] SBAs leadership is frustrated with this outcome and remains committed to doing everything we can to support disadvantaged businesses getting the help they need to recover from this historic pandemic.. Please enter a valid email and try again. The agency is conducting extensive outreach campaigns so there is full awareness of whats available to those affected.. "The simplest solution to all of it, all of the problems with the lawsuits and everything else goes away if you refill the fund," Polmar said in an interview. Related: The Restaurant Revitalization Fund application portal is closing on May 24, When the government promulgates race-based policies, it must operate with a scalpel, the majority opinion stated. And its cuts must be informed by data that suggest intentional discrimination. Philip Greer, the owner of a cafe in Texas, wanted to apply to the Small Business Administrations Restaurant Revitalization Fund (RRF) for help after his cafe lost $100,000 in revenue because of the pandemic. The owners of the Lost Cajun in Keller say that the governments plan to prioritize Restaurant Revitalization Fund applications from businesses owned by minorities, women, and veterans is discriminatory. Privacy Policy | However, the Small Business Administration reported on May 18 that it had already received more than 303,000 applications representing over $69 billion, with nearly 38,000 applicants already approved for more than $6 billion. The U.S. District Court for the Northern District of Texas on June 11 ordered a halt to payments from the Small Business Administrations Restaurant Revitalization Fund, which is part of President Joe Bidens $1.9 trillion economic stimulus plan passed by Eligibility was slated to open broadly afterward. Vitolo splits the ownership of Jakes Bar & Grill with his wife, who is Hispanic, but the SBA required a business to be at least 51% owned by a woman, veteran and/or socially or economically disadvantaged individual in order to be eligible within the three-week prioritization window. Nearly 3,000 restaurateurs approved to receive a Restaurant Revitalization Fund (RRF) grants have been alerted that they wont be getting the money because of WebSouth China receives no funding from any government for the production of this publication. Lord Mansfield (William Murray), Chief Justice of King's Bench and developer of English commercial law, was born in Scone, Scotland, on March 2, 1702.Learn more about Lord Mansfield from the Biddle Law Library, University of Pennsylvania Law School. The restaurants that sued the SBA for discrimination received almost $1 million in Restaurant Revitalization Fund grants The SBA previously dropped prioritization of "We keep it going.". Defendants argue the race-conscious rules serve a compelling interest and are narrowly tailored, satisfying strict scrutiny. There was no word from the Justice Department on whether they would appeal the ruling. An online portal that served as an information and application hub for the program will close on July 14, leaving hundreds of thousands of restaurants out of the grant program. The legal complaint argues that the fund requires the SBA to discriminate among restaurants according to the race and sex of the owner, by specifying that during the first 21 days of the program that officially began last week, the SBA administrator must prioritize awarding grants to businesses owned by women and racial minorities., These race and sex preferences are patently unconstitutional, and the Court should promptly enjoin their enforcement. To date, more than 100,000 restaurants have received $27.4 billion in relief funds. As courts debated the fund's fate, thousands of restaurants were left in limbo. As a report from The Counter noted, this sort of prioritization is not atypical for the SBA which has a history of supporting programs that target disadvantaged groups of business owners. Lines and paragraphs break automatically. Sign up to receive texts from Restaurant Business on news and insights that matter to your brand. 3807, the Restaurant Revitalization Fund Replenishment Act, calling for an additional $60 billion to be added to the fund. "You know not to depend on stuff until it's in your account but when you get an official letter, an official approval in a grant program from the government you have reason to believe you can count on it," she said. 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, the minority opinion stated. The lawsuit said the limited funding put white male applicants at significant risk that, by the time their applications are processed, the money will be gone an argument that did not sway the judge. This only happens if legislators Republican senators, especially are motivated to, act, she said. Registered in England and Wales. "All the lawsuits go away if the fund is refilled, because everyone receives their money.". Related: SBA data confirms that the current Restaurant Revitalization Fund cant meet demand. 1998 - 2023 Nexstar Media Inc. | All Rights Reserved. 3.1.2023 5:00 PM, Emma Camp She called the SBA's hotline and was told the money was on its way. The owners of the Lost Cajun are white and claim that the decision does not provide them equal protection under the law, as required by the United States Constitution. To proceed based on this interest, Defendants must provide a "strong basis in evidence for its conclusion that remedial action was necessary.". They alleged that they were the victims of discrimination and asked that funds not be distributed to the priority groups as the SBA had planned so the money could be allocated more fairly. They're legitimate and they deserve to be funded.". Web page addresses and e-mail addresses turn into links automatically. | In February, I joined local Rochester area restaurateurs to announce my sponsorship of H.R. WebNew Leaf Initiative Inc (EIN# 883342112) is an tax exempt organization filed with Internal Revenue Service (IRS). The SBA received requests for more than triple the allocated funds. Copyright 2023 CBS Interactive Inc. All rights reserved. / CBS News. However, the majority stated that the decision would not be moot because the racial and sex-based priorities continue to impact the continued distribution of the funds, even though the 21-day period is over. Veronique de Rugy Defendants propose as the government's compelling interest "remedying the effects of past and present discrimination" by "supporting small businesses owned by socially and economically disadvantaged small business owners who have borne an outsized burden of economic harms of [the] COVID-19 pandemic." TheSBAdoes not have a comment, however, theSBAis working to ensure the economic aid is accessible to all that are eligible, including those hit hardest, while protecting program integrity and ensuring as quick distribution as possible of the aid, a representative from the Small Business Administration said in a statement. Members help make our journalism possible. Three restaurants involved in the high-profile suits had their applications processed and received grants totaling close to $933,000. The SBA announced the closure of the Restaurant Revitalization Fund with a final tally of how it awarded the programs $28.6 billion in funding. Support local journalism and become a digital subscriber to the Free Press. | Some say they're considering collective legal action, others fear this roadblock could be the final nail in the coffin for their beleaguered businesses. 5.19.2021 3:46 PM. The fund itself was based on the RESTAURANTS Act, a congressional proposal that sought $120 billion in direct aid to independent restaurants. 3.1.2023 5:35 PM, Joe Lancaster The 2,965 operators are all women, persons deemed socially and economically disadvantaged, or military veterans. The SBA opened the fund to the priority groups for the first 21 days of the application window. | The Restaurant Revitalization Fund has been depleted. The judge granted the restraining order, directed Greer to file his application with the RRF before May 19, and enjoined the SBA to process and consider his application. The lawsuits, representing the interests of a handful of restaurants owned and operated by white men, alleged discrimination because the application process prioritized applications based on race and sex. Please enter valid email address to continue. She's worried for the future of her restaurant, one of the only places in her area that serves locally sourced food at accessible prices. Individuals who are members of the following groups are presumed to be socially disadvantaged: Black Americans; Hispanic Americans; Native Americans (including Alaska Natives and Native Hawaiians); Asian Pacific Americans; or Subcontinent Asian Americans.")} Doing so will promote equal rights under the law for all American citizens and promote efforts to stop racial discrimination, the lawsuit adds, mirroring language included in AFLs lawsuit filed late last month against the Department of Agricultures program to provide aid to socially disadvantaged farmers and ranchers., Ina statement announcing the new lawsuit Thursday, Miller said, Few industries have been harder hit by lockdowns and restrictions than the restaurant and bar industry.. The National Restaurant Association agreed that the ruling would not have much impact on the day-to-day ability of the SBA to administer the RRF but they do not know whether this ruling will impact government-issued grants or loans moving forward. Jakes Bar and Grill owner Antonio Vitolo won the appeal of his lawsuit against the SBA on May 28 after a Sixth Circuit court panel ruled that the 21-day prioritization program is unconstitutional. Greer prepared an application on behalf of his restaurant, is eligible for a grant from the RRF, but has not applied because he is barred from consideration altogether during the program's first twenty-one days from May 3 to May 24, 2021. Sean Kennedy, executive vice president for public affairs at the National Restaurant Association, said that all priority group applicants who will not receive promised grant money have been notified. Restaurant Revitalization Fund Replenishment Act Introduced : On June 8, 2021, a bipartisan group of Senators and U.S. In our April interview, Administrator Guzman said she expected the money to run out and encouraged all eligible businesses in both the priority and non-priority groups to apply as soon as possible, in part to help demonstrate need. By May 15, the fund received 147,000 applications from the prioritized group requesting $29 billion in relief funds, according to the SBA. Miller called the ruling, the first, but crucial, step towards ending government-sponsored racial discrimination, and railed against Critical Race Theory, which he characterized as a new wave of government discrimination., Uganda dispatch: new anti-homosexuality bill to be presented to Parliament years after previous legislation was overturned in court, Pakistan dispatch: political plays risk economic instability as IMF negotiations drag on, The Supreme Courts Radical Second Amendment Jurisprudence is Sowing Chaos in the Lower Courts, The Rule of Law in Ukraine: A Cornerstone to International Stability for the Future, How the Lives of Ukraines Law Students Have Changed in the Year Since Russia Invaded, Making Peace with Native Title in Australia: How a Treaty Can Unlock Change. To your brand are to get the Volokh Conspiracy Daily e-mail, please up! 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