To date, more than 100,000 restaurants have received $27.4 billion in relief funds. The lawsuit filed in the Eastern District of Tennessee is seeking a temporary restraining order and injunction to halt the administration from paying out any grants, unless it starts processing and paying out money in the order applications were received regardless of an applicant's gender or race. After filing his request for funding, Vitolo was told women and minority restaurant owners would be prioritized during the first 21 days of fund disbursement, which began on May 3. The $28.6 billion Restaurant Revitalization Fund has only been processing and funding requests from businesses owned by women; veterans; or socially and economically disadvantaged individuals. WebA happy dance of big, bold flavors. She launched her second newsletter, Expedite, independently three years later to continue chronicling the evolving restaurant technology industry. Some business owners have seen their approved grants rescinded due to lawsuits and lack of additional action from Congress. The lawsuit targets the three-week period from May 3 until Monday during which the $28.6 billion Restaurant Revitalization Fund has only been processing and funding requests from businesses owned by women; veterans; or socially and economically disadvantaged individuals. WebSouth China receives no funding from any government for the production of this publication. Related: The Restaurant Revitalization Fund application portal is closing on May 24, When the government promulgates race-based policies, it must operate with a scalpel, the majority opinion stated. A similar lawsuit, filed in Tennessee in May, also alleged that the program was discriminating against white people by prioritizing minority-owned businesses. For the same reason, the Court finds that Defendants have failed to show an "important governmental objective" or "exceedingly persuasive justification" necessary to support a sex-based classification. Email Us The SBA has not released any state-by-state statistics. Contact Detroit Free Press food writer Sue Selasky and send food and restaurant news to: 313-222-6872 or sselasky@freepress.com. Expertise: restaurant technology and operations. 2023 www.freep.com. For the first 21 days, the fund was open for applications from women, individuals who are economically or socially disadvantaged, and veterans. Lines and paragraphs break automatically. Her work has appeared in Food & Wine, Insider, Eater, the San Francisco Chronicle, and more. The SBA will not pay these claims because the legal conclusions in these court rulings would preclude payment. Burlington Centrals Nicholas Gouriotis figures out the difference. The question of the Constitutionality of race-based priorities and benefits was debated in a claim of racial discrimination against DoorDash, UberEats and Postmates that settled out of court in Arizona on June 2. Ittook issue with the third-party delivery companiespromotions that waived delivery fees for Black-owned restaurants in the wake of George Floyds murder. Wendy's wants to open more restaurants, just not in ghost kitchens. The SBA previously dropped prioritization of women and minority-owned businesses and rescinded payments promised to almost 3,000 restaurants following these three lawsuits, 2023 Informa USA, Inc., All rights reserved, The Penn Hotel Sports and Raw Bar / Facebook, Denny's raises over $1.2 million to fight childhood hunger in 12th annual No Kid Hungry fundraiser, Bojangles names Tom Boland as new chief marketing officer, Baskin-Robbins rolls out chicken-and-waffle flavored ice cream, How Jersey Mike's is becoming 'America's sandwich shop', Nations Restaurant News launches new CREATE Roadshow event series, San Diegos Trust Restaurant Group drives retention, innovation with culture of yes, Tech Tracker: Restaurant QR codes are evolving and so should yours, Congress introduces a $60 billion replenishment of the Restaurant Revitalization Fund, SBA data confirms that the current Restaurant Revitalization Fund cant meet demand, Allowed HTML tags:

. / CBS News. 3.1.2023 5:35 PM, Joe Lancaster Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Thus, the Court concludes that the government has failed to prove that it likely has a compelling interest in "remedying the effects of past and present discrimination" in the restaurant industry during the COVID-19 pandemic. Tex. The RRF is aimed at aiding restaurants, an industry decimated by the pandemic. Roughly $2.7 billion have already been administered to 21,000 restaurants under the program, the AP noted. A Sixth Circuit court panel ruled on May 28 that the Small Business Administrations prioritization of Restaurant Revitalization Fund grants on the basis of race and sex for the first 21 days of the program is unconstitutional. These race and sex preferences are patently unconstitutional, and the Court should promptly enjoin their enforcement. A little over a week later, more restaurant owners received emails telling them that their previously approved grants would not be disbursed. City of Richmond v. J.A. Neighborhood improvement, fighting poverty among priorities for Detroit's $400M rescue fund, New Michigan law clears the way for higher-alcohol canned cocktails, become a digital subscriber to the Free Press, Your California Privacy Rights / Privacy Policy. To get the Volokh Conspiracy Daily e-mail, please sign up here. As a report from The Counter noted, this sort of prioritization is not atypical for the SBA which has a history of supporting programs that target disadvantaged groups of business owners. In a similar lawsuit filed by Eric Nyman, owner of the Penn Hotel Sports & Raw Bar and Janice and Jason Smith, owners of the Lost Cajun in Keller, Texas, Judge Reed OConnor ruled on May 28 that the SBA must dole out grants in accordance with a race-neutral, sex-neutral first come, first served policy. The Lost Cajun was approved for an award on May 29, and though the Penn Hotel Sports & Raw Bars case was under review for slightly longer (since the restaurant sought more than $300,000), both restaurants received grants on June 1. Get todays need-to-know restaurant industry intelligence. "The simplest solution to all of it, all of the problems with the lawsuits and everything else goes away if you refill the fund," Polmar said in an interview. The Sixth Circuit court panel has ruled the prioritization of Restaurant Revitalization Fund loans on the basis of sex and race unconstitutional, 2023 Informa USA, Inc., All rights reserved, Denny's raises over $1.2 million to fight childhood hunger in 12th annual No Kid Hungry fundraiser, Bojangles names Tom Boland as new chief marketing officer, Baskin-Robbins rolls out chicken-and-waffle flavored ice cream, How Jersey Mike's is becoming 'America's sandwich shop', Nations Restaurant News launches new CREATE Roadshow event series, San Diegos Trust Restaurant Group drives retention, innovation with culture of yes, Tech Tracker: Restaurant QR codes are evolving and so should yours, SBA data confirms that the current Restaurant Revitalization Fund cant meet demand, The Restaurant Revitalization Fund application portal is closing on May 24, Allowed HTML tags:

. 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. Do not sell my personal infoPrivacy PolicyContact UsRSS, SBA stops Restaurant Revitalization Fund payments after courts rule they're discriminatory. Federal judges in Texas and Tennessee agreed, and the SBA halted all payments to priority applicants. 3807, the Restaurant Revitalization Fund Replenishment Act, calling for an additional $60 billion to be added to the fund. The lawsuits, representing the interests of a handful of restaurants owned and operated by white men, alleged discrimination because the application process prioritized applications based on race and sex. SBAs leadership is frustrated with this outcome and remains committed to doing everything we can to support disadvantaged businesses getting the help they need to recover from this historic pandemic, the letter stated. "You know not to depend on stuff until it's in your account but when you get an official letter, an official approval in a grant program from the government you have reason to believe you can count on it," she said. A bipartisan group of lawmakers, according to the Hill,onJune 10 introduced the Restaurant Revitalization Fund Replenishment Actof2021 to add an additional $60 billion to the fund. 3.1.2023 2:50 PM, 2022 Reason Foundation | They weren't alone Over 3,000 businesses received notices that their grants had been canceled. Related: SBA data confirms that the current Restaurant Revitalization Fund cant meet demand. A lawsuiton behalf of the operator of the Lost Cajun restaurantin Texaswas filed by America First Legal, a legal group founded by Stephen Miller and Mark Meadows, former aides to President Donald Trump, according to Reuters. "Everything is changing and there is so much going on, you need to adapt to change," she said. The $28.6 billion Restaurant Revitalization Fund was a popular program, offering grants to independent restaurants to help cover business losses due to the COVID-19 pandemic. The plaintiffs argue that even though the distributed grants cannot be returned, the Sixth Circuits decision will have further-reaching impacts on COVID-19-related federal aid: The Sixth Circuit decision sets the precedent that racial and gender priorities such as the ones in American Rescue Plan Act are unconstitutional, Rick Esenberg, president and general counsel for the WisconsinInstitute for Law and Libertysaid in a statement. "It seemed too good to be true, and it turned out that that was the case," said Tom Pisha-Duffly, chef and co-owner of Oma's Hideaway in Portland, Oregon. Vang says the funds helped her to strategize. | Its about relief money that was supposed to go first to women and minority-owned restaurant owners. They had applied for federal relief during the first 21 days of the Revitalization program, when priority was given to those groups because they were regarded as particularly in need of financial assistance. Thousands of others lost out on aid they were expecting thanks to lawsuits backed by conservative groups. According to the lawsuit, Janice Smith and Jason Smith applied for assistance from the Restaurant Revitalization Fund on May 5 and discovered that they were entitled Nearly 3,000 restaurateurs approved to receive a Restaurant Revitalization Fund (RRF) grants have been alerted that they wont be getting the money because of Eligibility was slated to open broadly afterward. A court in Texas issued a preliminary injunction preventing the SBA from disbursing funds to the priority group. The legal complaint argues that the fund requires the SBA to discriminate among restaurants according to the race and sex of the owner, by specifying that during the first 21 days of the program that officially began last week, the SBA administrator must prioritize awarding grants to businesses owned by women and racial minorities., These race and sex preferences are patently unconstitutional, and the Court should promptly enjoin their enforcement. . The SBA, tasked with managing the relief funds, announced on May 10 that 16,000 businesses were approved for grants totaling $2 billion in just the first week. Related: SBA data confirms that the current Restaurant Revitalization Fund cant meet demand. Weeks later, approvals in-hand, they learned that the relief funds they were promised weren't coming. 2021 CBS Interactive Inc. All Rights Reserved. The latest from Restaurant Business, sent straight to your inbox. The evidence submitted by plaintiffs indicates that the entire $28.6 billion in the Restaurant Revitalization Fund may be depleted before plaintiffs application can be considered for relief under the program, U.S. District Judge Reed OConnor said in his ruling. Earlier this year, the Restaurant Revitalization Fund was approved to support struggling small businesses. The Small Business Administration declined to comment on pending litigation. His earlier misses? On March 2, 1917, President Woodrow Wilson signed the Jones-Shafroth Act, granting Puerto Rico status a United State territory and granting all of its residents U.S. citizenship. WebThis program will provide restaurants with funding equal to their pandemic-related revenue loss up to $10 million per business and no more than $5 million per physical location. The flow ofSmall Business Administration funds has been halted forthousands of restaurantbusinesses owned by women, socially or economically disadvantaged individuals and veteransbecause of lawsuits filed by several white business owners. Licking your Thus, the lawsuit alleges, its possible that the entire $28.6 billion that Congress allocated to the Restaurant Revitalization Fund will be depleted before Nyman The nearly 3,000 restaurants whose application approvals were rescinded will be paid once it completes processing all previously filed non-priority applications, and only then if the RRF is not first exhausted, the SBA told The New York Times. Greer filed suit, claiming that the SBAs policy violates the Equal Protection Clause of the Constitution. This is not the first lawsuit filed against a federal program aimed at helping disadvantaged groups hurt by the pandemic. The owners of the Lost Cajun are white and claim that the decision does not provide them equal protection under the law, as required by the United States Constitution. 5.19.2021 3:46 PM. You can find out more about our use, change your default settings, and withdraw your consent at any time with effect for the future by visiting Cookies Settings, which can also be found in the footer of the site. Winsight is a leading B2B information services company focused on the food and beverage industry, providing insight and market intelligence to business leaders in every channel consumers buy food and beverage convenience stores, grocery retailing, restaurants and noncommercial foodservice through media, events, data products, advisory services, and trade shows. All rights reserved. Kristen Hawley writes about the restaurant business from San Francisco. The SBA announced the closure of the Restaurant Revitalization Fund with a final tally of how it awarded the programs $28.6 billion in funding. The restaurants that sued the SBA for discrimination received almost $1 million in Restaurant Revitalization Fund grants The SBA previously dropped prioritization of The owner of a weddings and events business in New York City contacted couples to say she would soon be able to refund some of the money they put down as a deposit on their canceled 2020 weddings. According to the lawsuit, Janice Smith and Jason Smith applied for assistance from the Restaurant Revitalization Fund on May 5 and discovered that they were entitled to more than $187,000 in relief. These court rulings would preclude payment are patently unconstitutional, and the SBA halted all payments to priority.. | Its about relief money that was supposed to go first to women and Restaurant. Pm, 2022 Reason Foundation | they were expecting thanks to lawsuits lack... 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