On Friday, June 11, the Small Business Administration halted funds earmarked in the Restaurant Revitalization Fund for women-, minority-, and veteran-owned businesses after three white business owners sued with claims of discrimination. One of the three plaintiffs is Eric Nyman, owner of Penn Hotel & Raw Sports Bar in Hershey.
The suit was filed by conservative legal advocacy group America First Legal, an organization founded by former Trump aides Stephen Miller and Mark Meadows. Nyman joins owners Janice Smith and Jason Smith of Dallas-area restaurant the Lost Cajun in filing the suit, which claims prioritizing businesses run by “women, veterans, or people from economically and socially disadvantaged groups” is unconstitutional. When applications for the Restaurant Revitalization Fund opened on May 3, applications from socially disadvantaged business owners were given priority for three weeks, after which point applications were processed in the order they were received.
The suit alleges that Nyman applied for relief under the Restaurant Revitalization Fund on May 3 and was told that he would be eligible for more than $640,000 in relief. After a SBA press release on May 18 noted that 57 percent of the applications for relief had been from “women, veterans, and socially and economically disadvantaged business owners,” Nyman and the Smiths responded with a suit claiming that the $28.6 billion worth of relief funds could be spent before Nyman and the Smiths — who are white — can get their hands on it. “They are therefore being subjected to unconstitutional race and sex discrimination by the ‘priorities’ that the statute commands for minority- and women-owned businesses,” the suit alleges.
As a result of the lawsuit, a temporary injunction was filed by District Judge Reed O’Connor in Texas, and funds that the SBA had previously approved for thousands of minority-owned restaurants will be halted until the case is settled. According to Reuters, 2,965 applicants from priority groups were approved for funds from May 26 to May 28. A Biden administration official told Reuters that they would fight to maintain the prioritizing program and “do everything we can to support disadvantaged businesses getting the help they need to recover from this historic pandemic.”
- Two Trump Cronies and a DFW Restaurant Are Behind the Lawsuit Preventing Minority-Owned Businesses From Receiving Restaurant Revitalization Fund Relief [Eater Dallas]
- Everything Restaurants Need to Know About the Restaurant Revitalization Fund [Eater]
- U.S. SBA halts some grants under injunction in lawsuit filed by white restaurant owners [Reuters]