Federal Court of Appeal Rules Biden Administration Cannot Deny COVID Relief Funds to White Restaurant Owners
The COVID relief bill passed by Congress and signed by President Biden allocates billions of dollars based on race. In mid-May, a Texas federal court ruled that the race-based parts of the law governing restaurant aid are unconstitutional. A higher federal court last week, the Sixth Circuit Federal Court of Appeal, ruled in the same way.
The law establishes a three-week “priority period” during which only claimants of certain racial and ethnic origins can seek redress. The appeals court stressed that there is no guarantee that funds will remain after the expiration of the priority period.
As noted in a recent article, the Biden administration is strongly committed to the idea of ”fairness” rather than equality. This means, in the words of the oft-cited critical race theorist Ibram X. Kendi: “The only cure for racist discrimination is anti-racist discrimination. The only remedy for past discrimination is current discrimination. The only remedy for current discrimination is future discrimination.
Given Jim Crow’s history, as well as current racial inequalities, it’s understandable that Biden wants to go the extra mile to ensure minority-owned restaurants get their fair share of COVID relief. But his adoption of the use of “anti-racist discrimination” to tackle racist discrimination was still likely to run into problems in the courts. Above all, Biden may come to regret his choices here because the arbitrariness of the racial exclusions in this law will strongly tempt the Supreme Court to use this case to strictly limit the government’s use of race.
As the Court of Appeal pointed out, the law is full of arbitrary distinctions. For example, a restaurateur is only considered “Asia-Pacific” if they are “native” to a specific set of countries. But the list of countries defies all logic. For example, it excludes Afghanistan, which sits in Central Asia and is a member of the South Asian Association for Regional Cooperation alongside Pakistan, India and Bangladesh.
Therefore, the court explained, “The harsh realities of the Small Business Administration’s racial gerrymandering are inevitable. Imagine two childhood friends, an Indian and an Afghan. Both own restaurants and both suffered devastating losses during the pandemic. If both apply to the Restaurant Revitalization Fund, the Indian claimant will be presumed to have priority over his Afghan friend. Why? Because of his ethnic heritage.
The law’s definition of “minority owned” is also quite arbitrary – it must be at least 51% minority owned. One of the restaurants that challenged the program is 50/50 owned by a husband and wife, one of whom is Latina. What is the point of forcing the husband to transfer an additional 1% property to his wife in order to receive relief?
Additionally, the law does not take into account who actually works at the restaurant or the community it serves. An upscale restaurant in Portland (America’s whitest big city) with mostly white employees serving mostly white customers is eligible for assistance if it is majority owned, say, by an investor from Hong Kong . But a Persian-owned restaurant in a racially mixed neighborhood in Los Angeles with a majority minority staff would not qualify.
Defenders of the program might say such imperfections are necessary to reach restaurants that have yet to receive relief due to structural racism. But the appeals court stressed that the same result could have been easily obtained without resorting to racial exclusions.
The court said: “Here the government could have used a number of alternative and non-discriminatory policies. Yet he failed to do so. For example, the government argues that minority-owned businesses have had disproportionately difficult access to capital and credit during the pandemic. But an obvious, race-neutral alternative exists: The government could prioritize all business owners who were unable to secure the necessary capital or credit during the pandemic. “
It may be true that systemic racism means that some minority-owned restaurants haven’t gotten the relief they needed. But surely there are restaurants owned by people of European, Middle Eastern and North African descent who have not received any relief either. Their minority employees will not thank the Biden administration if they lose their jobs.
As the court said, it is better to prioritize restaurants that need help the most and have not yet received help than to assume that some races and ethnicities automatically deserve more help than others. . At a minimum, this is what the Constitution requires.