An appeals court has ruled that the Biden administration can’t use race and sex as factors when distributing coronavirus relief funds.
In a 2-1 ruling, a three-judge panel of the 6th U.S. Circuit Court of Appeals said last week that the Small Business Administration was violating the Constitution’s equal protection clause by giving priority to minority- and female-owned restaurants seeking coronavirus relief funds.
“Government policies that classify people by race are presumptively invalid,” Judge Amul Thapar, a Trump appointee, wrote for the court. “Like racial classifications, sex-based discrimination is presumptively invalid.”
Antonio Vitolo, an owner of Jake’s Bar and Grill in Harriman, Tennessee, brought the case. He is White, and his wife is Hispanic. They share ownership of the restaurant 50-50.
They challenged the Biden administration’s allocation to restaurants owned by at least 51% minorities or women during the first 21 days of distributing roughly $29 billion as part of the American Rescue Plan.
The federal government reasoned that it should prioritize minority- and female-owned businesses because of past discrimination.
Court documents pointed to the congressional testimony of one expert who said 32% of Hispanic and 41% of Black businesses had failed during the pandemic, compared with 22% of White businesses.
After the 21-day period, other restaurants would be eligible to receive any available funds, the Biden administration said.
The 6th Circuit found no evidence to support the government’s preference and said the policy was inconsistent because it gave priority to “Pakistanis but not Afghans; Japanese but not Iraqis; Hispanics but not Middle Easterners.”
“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,” Judge Thapar wrote. “The policy’s use of race violates equal protection.”
The court enjoined the administration from continuing to prioritize race or gender.
The Justice Department declined to comment about the ruling or whether it will appeal to the Supreme Court.
Judge Alan Eugene Norris, a Reagan appointee, joined Judge Thapar in the opinion. Judge Bernice B. Donald, an Obama appointee, disagreed with the majority.
In her dissent, Judge Donald said the Supreme Court has established that the Constitution allows the government to use “race-based classifications to remediate past discrimination.”
“The majority’s reasoning suggests we live in a world in which centuries of intentional discrimination and oppression of racial minorities have been eradicated,” she wrote.