Suit challenges priority of federal restaurant aid for women, minorities

A conservative legal outfit filed a lawsuit Wednesday against President Joe Biden’s administration for its prioritization of restaurants and bars owned by women and certain minorities in its COVID-19 relief package, arguing white men are being “pushed to the back of the line” for aid for their eateries.

The lawsuit led by the Wisconsin Institute for Law & Liberty targets the period from May 3 until May 24 during which the $28.6 billion Restaurant Revitalization Fund will only process and fund requests from businesses owned by women; veterans; or socially and economically disadvantaged individuals. Eligibility opens broadly after that period.

Biden has previously said that female-owned and minority-owned businesses have been disproportionately hurt by the COVID-19 economic crisis.

The lawsuit filed in U.S. District Court in East Tennessee names U.S. Small Business Association Administrator Isabella Casillas Guzman as the defendant.

A Small Business Administration spokesperson, Carol R. WIlkerson, said in an email that the agency does not comment on pending litigation.

The group sued on behalf of plaintiff Antonio Vitolo, owner of Jake’s Bar and Grill in Harriman, Tennessee. Vitolo applied immediately for aid on May 3, but doesn’t qualify to receive aid yet because he is a white male, according to the lawsuit. The group argues the gender and race distinctions are unconstitutional and is seeking an immediate halt to payouts under the program until the government starts processing them on a first-come, first-served basis.

“Given the limited pot of funds, this puts white male applicants at significant risk that, by the time their applications are processed, the money will be gone,” the lawsuit states.

The program relies on a definition of “socially disadvantaged” that is limited to people “subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.”

Groups presumed to be socially disadvantaged include: Black Americans, Hispanic Americans, Native Americans, including Alaska Natives and Native Hawaiians; Asian Pacific Americans; and Subcontinent Asian Americans.

For the $28.6 billion program, the Small Business Administration announced Wednesday that women, veterans, and socially and economically disadvantaged business owners have applied for $29 billion through more than 147,000 applications. Payments totaling $2.7 billion have already been sent out to 21,000 restaurants, officials said.

Beyond just the initial priority groups, the administration said it has received more than 266,000 applications total, representing more than $65 billion.

Officials said the application portal will remain open because the administration still has potential money available for businesses with 2019 annual revenue of $50,000 or less.

“The numbers show that we’ve been particularly successful at reaching the smallest restaurants and underserved communities that have struggled to access relief,” said Guzman, the administrator, in a statement.

The program extends to other similar types of businesses that meet a threshold for on-site eating and drinking, from bakeries to breweries.

The U.S. Department of Justice and a Small Business Administration spokesperson did not immediately respond to requests for comment on the lawsuit.

The lawsuit says Vitolo’s wife is Hispanic and owns half of the restaurant, but he is not eligible yet for payment. The law says a business is required to have 51% ownership by someone in one of the priority groups to qualify for the early priority for aid.

The Wisconsin Institute for Law & Liberty similarly has spearheaded a lawsuit against the Biden administration on behalf of white Midwestern farmers over another portion of the $1.9 trillion coronavirus relief package, alleging last month that they can’t participate in a COVID-19 loan forgiveness program because they’re white.

Under the Biden restaurant relief program, restaurants and bars can qualify for grants equal to their pandemic-related revenue losses, with a cap of $10 million per business and $5 million per location.

The program has set aside $9.5 billion for the smallest restaurants and bars, and a third of the applications were filed by businesses with annual pre-pandemic revenues of less than $500,000.