A number of the economic relief programs recently enacted by Congress have included provisions granting special treatment or preferences on the basis of group identity.  The American Rescue Plan of 2021, for example, included two such programs.  One, a part of the Restaurant Revitalization Fund, gave priority to restaurants that are at least 51% owned and controlled by women, veterans, or the ‘socially and economically disadvantaged,” defined as persons from groups that have been “subjected to racial or ethnic prejudice” or “cultural bias.”  A different portion of the Act authorized debt relief for “socially disadvantaged farmers and ranchers,” defined as “a group whose members have been subjected to racial or ethnic prejudice because of their identity as members of a group without regard to their individual qualities.”

With impressive speed, opponents of these provisions have filed legal challenges, and several courts have enjoined their operation.  For example, in Blessed Cajuns LLC v. Guzman (N.D. Tex., May 28, 2021), white restaurant owners who wished to secure a relief grant asked that the preference be blocked, claiming that prioritizing minority applicants would exhaust available funds and constitute a race-based or sex-based measure that violated the Equal Protection Clause of the Fourteenth Amendment.  The District Court agreed, finding that the plaintiffs were likely to prevail on their claim of “irreparable harm” and ordering that applications must be “processed and considered in accordance with a race-neutral, sex-neutral ‘first come, first served’ policy.”

The Court of Appeals for the Sixth Circuit reached a similar result, enjoining the consideration of race or sex but allowing the veteran preference to remain in force.  The majority characterized race and gender portions of the program as a form “gerrymandering” that could not survive the heightened scrutiny appropriate for such measures.  It stressed that the government had failed to consider and use a number of “alternative, nondiscriminatory policies” that would achieve its professed goals without employing what it claimed were arbitrary distinctions.  And it declared that, consistent with the admonition by Chief Justice John Roberts in Parents Involved in Community Schools v. Seattle Schools District No. 1(2007), “the ‘way to stop discrimination on the basis of race is to stop discriminating on the basis of race’” Vitolo v. Guzman (6th Cir., May 27, 2021). 

The farm relief initiative has also been challenged and enjoined.  In Wynn v. Vilsack (M.D. Fla., June 23, 2021), the District Court acknowledged a “long and sad history of discrimination” against the groups that would benefit from the program.  It found, however, that even if the preference could be characterized as serving a “compelling” government interest, it was not, as required by the Supreme Court, “narrowly tailored.”  Rather, it was an “inflexible” and “categorical” measure that gave blanket priority on the basis of group identity, regardless of individual need.  The Court took the unusual step of issuing a nationwide injunction, barring the Secretary of Agriculture from issuing any “payments, loan assistance, or debt relief . . . until further order from the Court.” 

In each case the relief granted is temporary, with preliminary injunctions entered pending full consideration of the issues posed and it remains to be seen what the ultimate fate of these programs will be.