United States District Judge William C. Griesbach sustained a motion last week for a temporary restraining order to block a program under the Department of Agriculture to forgive certain government loans for farmers belonging to at least one “socially disadvantaged group.” The Department of Agriculture identified groups eligible for this classification 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 . . . one or more of the following: Black/African American, American Indian, Alaskan native, Hispanic/Latino, Asian, or Pacific Islander.”
At only 10 pages, the court opinion is easy to read and digest. In that short space, Griesbach struck down the justification for thousands of “equity” programs in universities, government, and workplaces. If the case reaches the Supreme Court and sets precedent blocking race-based grants and preferences, it could spell trouble for any program that justifies distribution of benefits based on the race of the recipient.
Twelve farmers who were excluded from eligibility because they did not claim membership of one of the “socially disadvantaged groups” sued to block the nakedly discriminatory program. The USDA defended the program claiming, “a compelling interest in remedying its own past and present discrimination and in assuring that public dollars drawn from the tax contributions of all citizens do not serve to finance the evil of private prejudice.”
Griesbach noted that such programs, while well-intentioned, “must target a specific episode of past discrimination.” Affirmative action is a form of racial discrimination that is only legal when it’s narrowly tailored to address intentional discrimination by the entity seeking to mitigate its own past discrimination. “It cannot rest on a generalized assertion that there has been past discrimination in an entire industry.”
Second, Greisbach wrote, “there must be evidence of intentional discrimination in the past. . . . Statistical disparities don’t cut it, although they may be used as evidence to establish intentional discrimination.” And finally, “the government must have had a hand in the past discrimination it now seeks to remedy.” So if the government “shows that it had essentially become a ‘passive participant’ in a system of racial exclusion practiced by elements of a local industry, then the government can act to undo the discrimination.”
Unfortunately for proponents of the race-based program under review, the USDA failed to show that “the loan-forgiveness program targets a specific episode of past or present discrimination.”
USDA argued that “prior, race-neutral relief efforts failed to reach minorities.” But the judge noted the USDA failed to show “the remedy is narrowly tailored. To do so, the government must show serious, good faith consideration of workable race-neutral alternatives.”
Assuming, for the sake of argument, tthe USDA could meet its burden to show a history of intentionally discriminating against minorities, the judge countered, “The obvious response to a government agency that claims it continues to discriminate against farmers because of their race or national origin is to direct it to stop: it is not to direct it to intentionally discriminate against others on the basis of their race and national origin.”
Worse yet, the USDA was attempting to implement “a loan-forgiveness program purportedly intended to provide economic relief to disadvantaged individuals without actually considering the financial circumstances of the applicant.”
The USDA made the “extraordinary argument that racial discrimination inflicts no harm at all. The USDA asserted that the program is intended to help socially disadvantaged farmers affected by COVID-19,” but, as noted by the court, “it does not provide relief based on losses sustained during the pandemic. Instead, the only consideration in determining whether a farmer or rancher’s loans should be completely forgiven is the person’s race or national origin.”
Put simply, “Plaintiffs are excluded from the program based on their race and are thus experiencing discrimination at the hands of their government.”
The opinion has far-reaching implications for government preferences and set-asides in grants, contracts, and other programs. In 2019, for example, the federal government awarded $30.4 billion in contracts to “8(a)” businesses that received preferences due to their status as a minority-owned business. The USDA has promised to appeal the decision.