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United States Court of Appeals for the Sixth Circuit
May 27, 2021, Decided; May 27, 2021, Filed
File Name: 21a0120p.06
[**1] 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. [**2] Thus, we enjoin the government from using these unconstitutional criteria when processing Antonio Vitolo's application.
] 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 [*2] 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 [*3] 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.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2021 U.S. App. LEXIS 16101 *; 2021 FED App. 0120P (6th Cir.) **; __ F.3d __; 2021 WL 2172181
ANTONIO VITOLO; JAKE'S BAR AND GRILL, LLC, Plaintiffs-Appellants, v. ISABELLA CASILLAS GUZMAN, Administrator of the Small Business Administration, Defendant-Appellee.
Prior History: [*1] 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.
Vitolo v. Guzman, 2021 U.S. Dist. LEXIS 95243, 2021 WL 2003552 (E.D. Tenn., May 19, 2021)
restaurants, funds, pandemic, sex, district court, disadvantaged, small business, Plaintiffs', classifications, processing, compelling interest, emergency, preliminary injunction, race-based, merits, race-neutral, preferences, women-owned, injunction, policies, qualify, intentional discrimination, strict scrutiny, remedying, tailored, economically disadvantaged, minority-owned, prioritization, ethnic, disparities
Banking Law, Banking & Finance, Federal Acts, Small Business Act, Public Contracts Law, Business Aids & Assistance, Small Businesses, Disabled, Disadvantaged, Minority & Women-Owned Businesses, Disadvantaged Businesses, Consumer Protection, Equal Credit Opportunity, Discriminatory Acts, Minority-Owned Businesses, Constitutional Law, Equal Protection, National Origin & Race, Nature & Scope of Protection, Civil Procedure, Justiciability, Standing, Burdens of Proof, Remedies, Injunctions, Preliminary & Temporary Injunctions, Mootness, Real Controversy Requirement, Grounds for Injunctions, Irreparable Harm, Public Interest, Likelihood of Success, Judicial Review, Standards of Review, Evidence, Inferences & Presumptions, Inferences, Gender & Sex, Burdens of Proof, Allocation