Lawsuits: Oregon provided $62 million of pandemic relief funds to only black residents and businesses

PORTLAND, OR – The state of Oregon has established a COVID-19 relief fund exclusively for black Oregonians and black-owned businesses to help them navigate through these unprecedented times.

According to its website, the “Oregon Cares Fund” is a targeted investment in the black community that comes directly from the CARES Act Coronavirus Relief Fund. Additionally:

“This fund is meant to provide the black community with the resources it needs to weather the global health pandemic and consequent recession. The Oregon Cares Fund is for black people, black-owned businesses, and black community-based organizations.”

The Wall Street Journal reported that back in July, the Oregon Legislature Emergency Board allotted $200 million to assist small businesses suffering losses because of the pandemic and government shutdowns.

Out of that total amount, $62 million was set aside for the Oregon Cares Fund. Black families are eligible for up to $3,000 and black-owned businesses for up to $100,000. The fund now sees mounting legal pressure as there have been lawsuits filed alleging the fund is unconstitutional.

Maria Garcia, the owner of the Revolucion Coffee House in Portland, applied for support and was denied because her business “did not meet the criteria because 0% of its owners identify as black. Garcia has filed a federal lawsuit alleging that the denial violates her rights under the 14th Amendment’s Equal Protection Clause.

Back in November, a federal court declined a petition in a separate lawsuit by the timber company Great Northern Resources. Both cases await a ruling on constitutional merits. The plaintiffs argue that their grant applications were unconstitutionally rejected because they are not black.

The lawsuits have been derided by backers of the fund as “political attacks,” but they also underscore a point Oregon legislative attorneys raised back in July when the legislature’s Emergency Board created the fund with federal aid money. 

Reportedly, that fund could be deemed unconstitutional unless the state specifically put forth detailed evidence of past discrimination against black families and businesses. The opinion said:

“We are not aware of evidentiary findings by the legislature or the Emergency Board in support of the grant program at issue here. Without any such findings, the program would almost certainly be unconstitutional under the Fourteenth Amendment.”

However, supporters of the fund have argued that there is plenty of evidence to help out black Oregonians. Attorneys representing The Contingent, a non-profit that is playing a lead role in administering the fund, argued in July that without such an effort, nearly $1.4 billion in federal aid given to Oregon would largely miss black Oregonians and businesses.

In a brief submitted to the Legislature by attorneys at the firm Schwabe, Williamson and Wyatt said:

“Without targeted legislation, COVID-19 will exacerbate past disparate impacts of discrimination, which gives rise to both the imperative and legal justification for the state to take race-conscious action for black people, black-owned businesses, and black community-based organizations.”

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The brief then detailed the state’s history of discrimination against black people and argued that the harms of that discrimination would be made worse if black Oregonians were left behind in an effort to recover from the pandemic. It said:

“Centuries of systemic and institutional discrimination, perpetuated and exacerbated by current systems, have caused economic disparities and exacerbated the black community’s vulnerability. The Oregon Cares Fund would ensure that the distribution of CARES funds does not perpetuate discrimination-related racial disparities.”

Brian Fizpatrick, a Vanderbuilt University law professor who has written about the Constitution’s Equal Protection Clause, said:

“Even with past harms, legislation that directs money to recipients on the basis of race would be very hard to defend in court.”

University of Oregon law professor Ofer Raban concurred that the legal bar the states need to clear is high. Raban said:

“The Supreme Court has made it clear that such explicit racial classifications are subjected to the most exacting form of constitutional scrutiny, even when their aim is benevolent rather than invidious.”

Raban added:

“In principle, remedying past or present societal (non-governmental) discrimination cannot justify race-conscious government programs, unless the government can show that it is a ‘passive participant’ in such societal discrimination.”

The logging company that filed suit against the state in late October argued that it had been financially devastated by the pandemic and that its application for a grant from the Oregon Cares Fund was certain to fail because its owners are not black.

One of the logging company’s first requests:

“That the court blocks The Contingent from awarding any more grants, which Great Norther said would constitute ‘irreparable harm’ to its rights.”

In response, the state and The Contingent offered to set aside $200,000 that the logging company would be eligible to receive if it wins its case. In November, U.S. District Judge Karin Immergut ruled that Great Northern “cannot show irreparable harm.”

The ruling added:

“Whether the Plaintiff may ultimately prove an unconstitutional practice by Defendants will be addressed later in this litigation.”

Garcia, who has been forced to close her cafe and lay off employees because of the coronavirus pandemic, said in her suit that she applied for a grant through the Oregon Cares Fund and “would have received one but for the fact that its owner is Mexican American.”

Allegedly, news of Garcia’s lawsuit prompted a statement from the non-profit Latino Network. The statement, which was signed by more than 30 leaders in the Latino community, called the lawsuit “anti-black” and that Garcia’s actions “do not represent the sentiment of Latinos.”

 
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Author: Jenna Curren

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