Oregon Cares Challenge Moves Forward

Our case on behalf of Maria Garcia — owner of a Mexican specialty coffee shop in downtown Portland — is moving forward again.

The facts are not in dispute — Oregon proudly admits it limited benefits solely on the basis of race.  The state has made broad claims about the difficulties faced by black individuals and businesses as a result of the COVID virus, but hasn’t offered any reason to think individuals from other racial groups didn’t suffer the same difficulties.

The court denied CIR’s motion for a preliminary injunction late in 2020 on the grounds that Ms. Garcia did not suffer an irreparable harm when she was denied a grant.  In a related case challenging the same fund, two corporate plaintiffs and an individual moved to certify a class action.  The state promptly offered to settle with all concerned.  In fact, as part of that settlement, the state was forced to pay an additional $3.5 million to provide grants to non-black applicants.

Ms. Garica declined that settlement.  Oregon’s governor had already released a statement promising to fund new race-exclusive programs, making clear the need for a definitive legal ruling.  She remains determined to see her case through to a successful ruling on the merits.  And we are just as determined to achieve that ruling.

We expect to begin discovery shortly.  In the meantime, Ms. Garcia is moving forward with plans to restart her business.


IR has filed suit against the State of Oregon, Oregon’s Department of Administrative Services, and two Oregon non-profits, which established a coronavirus relief fund that exclusively provides federal grant money to black applicants, in violation of the Constitution and federal anti-discrimination law.  We are representing Maria Garcia, owner of the Revolucion Coffee House in downtown Portland, Oregon, who was denied coronavirus relief through the states race-exclusive fund.

In July, two non-profit corporations, The Contingent and the Black United Fund (BUF) sought $62 million in federal grant money to establish The Oregon Cares Fund (TOCF).  TOCF was described as “A Fund for Black Relief and Resiliency.”  It would distribute federal aid (intended to provide relief to all people impacted by COVID-19) exclusively to Black individuals and Black-owned businesses.  The Contingent and BUF were given full discretion in awarding grants, free of significant governmental oversight.

Discrimination During Time of Need

Oregon’s establishment of a race-exclusive fund comes at a time when small businesses across the state are competing for limited aid.  The lockdown that began in March continues to devastate small businesses, especially ones that rely heavily on foot traffic such as restaurants, cafes, and bars.  Many have yet to recover, and a good number of them will close permanently without financial assistance.

Yet, small businesses owned by Latino, Asian, Caucasian, Native American, or any other non-Black Oregonians are categorically excluded from an existing pool of federal funds solely because of their race. Under this system, a business with numerous Black employees, or one located in a predominantly Black neighborhood, is excluded from receiving aid merely because its owner is not Black.  Conversely, a Black-owned business operating in a primarily non-Black neighborhood or one with few Black employees could qualify merely on the basis of its owner’s skin color.

The Constitution and federal law prohibit state governments from arbitrarily awarding benefits on the basis of race.  In setting aside $62 million for the exclusively for the benefit of one race, Oregon has violated these prohibitions on racial discrimination.

Attempt to Justify Discrimination

The Contingent and BUF’s application made no claim of specific past government discrimination when it applied to distribute funds.  Instead, the Department of Administrative Services accepted general claims that historic racism has resulted in the Black community as a group having on average lower incomes than whites, less access to homeownership, greater unemployment, and lack of generational wealth.

The Supreme Court has held that states may not employ racial classifications to remedy such general societal disparities. Nor were these issues created by the spread of COVID-19, which the federal grant money was meant to address.  Meanwhile, Latino and Native Americans across the State who are in need of grants are prohibited from applying for these funds, which were expressly intended to help all Americans.

On November 20, 2020, CIR filed a federal lawsuit against the State of Oregon, Oregon’s Department of Administrative Services, The Contingent, and Black United Fund under the Equal Protection Clause of the Fourteenth Amendment and federal anti-discrimination law.  The suit asks the court to enjoin the further enforcement of illegal racial discrimination in the awarding grant funds.

Case Status: Pending

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