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Am. Ass'n of Political Consultants v. United States SBA

United States District Court for the District of Columbia

April 21, 2020, Decided; April 21, 2020, Filed

Civil Case No. 20-970

Opinion

MEMORANDUM OPINION

Before the Court are plaintiffs' motions for a temporary restraining order and a preliminary injunction. Plaintiffs seek to enjoin defendants from enforcing an allegedly unconstitutional regulation [*2]  prohibiting organizations involved in political consulting and lobbying from receiving loans or grants from the United States Small Business Administration ("SBA"). Plaintiffs filed the instant case in response to the passage of the Coronavirus Aid, Relief, and Economic Security ("CARES") Act, Pub. L. No. 116-136, 134 Stat. 281 (2020), which provided the SBA with $349 billion to disseminate aid to small businesses struggling to make ends meet during the COVID-19 crisis.

Plaintiffs claim that the regulation violates the First Amendment—because it unlawfully restricts political speech—and the equal protection principles contained in the Fifth Amendment's Due Process Clause. The regulation in question is twenty-four-years-old and, to the Court's knowledge, has yet to be challenged on these grounds. Defendants argue that the regulation is constitutional and that plaintiffs' motions should be denied because plaintiffs have failed to make the requisite showing for injunctive relief.

On April 20, 2020, the Court heard oral arguments via teleconference. Upon consideration of the parties' arguments and their briefs, the Court will deny plaintiffs' motions for injunctive relief.

Background

The COVID-19 pandemic has shaken this nation to its core. The virus has taken the lives of thousands [*3]  of Americans and permanently altered the lives of many more. COVID-19 has unquestionably had—and continues to have—a devastating impact on our nation's economy. As doctors, nurses, first responders, and other heroes fight this scourge on the front lines, the federal government sprang into action to provide an economic stimulus for our nation's businesses and citizens. On March 27, 2020, President Trump signed the CARES Act into law.

At issue here is the financial relief the CARES Act provides for small businesses through the Paycheck Protection Program ("PPP"). Section 1102(a)(2) of the CARES Act adds a new paragraph to Section 7(a) of the Small Business Act, 15 U.S.C. § 636(a)(36), which provides that "[e]xcept as otherwise provided in this paragraph, the [SBA] may guarantee [PPP] covered loans under the same terms, conditions, and processes as a loan made under this subsection." 15 U.S.C. § 636(a)(36)(B). Following that, the CARES Act details the ways in which PPP covered loans differ from other Section 7(a) loans. See id. § 636(a)(36)(D)-(R). For example, the PPP authorizes the SBA to make covered loans to some non-profit organizations, veterans organizations, independent contractors, and self-employed individuals, as well as to small business and Tribal concerns. Id. § 636(a)(36)(D)(i), (ii). The PPP also relaxes size limitations [*4]  to allow businesses with as many as 500 employees—or even more, depending on their industry—to receive loans. Id. § 636(a)(36)(D)(i)(I), (II).

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2020 U.S. Dist. LEXIS 69782 *

AMERICAN ASSOCIATION OF POLITICAL CONSULTANTS, et al., Plaintiffs, v. UNITED STATES SMALL BUSINESS ADMINISTRATION, et al., Defendants.

CORE TERMS

loans, plaintiffs', regulation, funds, consultants, subsidies, injunctive relief, lobbying, irreparable, merits, political speech, final rule, content-based, lobbyists, subsidize, motions, constitutional right, small business, organizations, restricts, preliminary injunction, public interest, injunction, violates, factors, payroll, succeed