Case 3:21-cv-00514-MMH-JRK Document 41 Filed 06/23/21 Page 1 of 49 PageID 395
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`UNITED STATES DISTRICT COURT
`MIDDLE DISTRICT OF FLORIDA
`JACKSONVILLE DIVISION
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`
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`SCOTT WYNN, an individual,
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`
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`v.
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`THOMAS J. VILSACK, in his
`official capacity as U.S. Secretary of
`Agriculture and ZACH
`DUCHENEAUX, in his official
`capacity as Administrator, Farm
`Service Agency,
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`
`
`
`
`Plaintiff,
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`Case No. 3:21-cv-514-MMH-JRK
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`
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`Defendants.
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`
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`O R D E R
`THIS CAUSE is before the Court on Plaintiff’s Motion for Preliminary
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`Injunction (Doc. 11; Motion) filed May 25, 2021, Defendants Response in
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`Opposition to Plaintiff’s Motion for Preliminary Injunction (Doc. 22; Response)
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`filed June 4, 2021, and Plaintiff’s Reply in Support of Motion for Preliminary
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`Injunction (Doc. 23; Reply) filed June 9, 2021.1 On June 16, 2021, the Court
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`held a hearing on the Motion at which the parties argued their respective
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`positions. Accordingly, the Motion is ripe for review.
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`
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`1 The Court also considered the brief filed by the National Black Farmers Association (NBFA)
`and Association of American Indian Farmers (AAIF). (Doc. 25; Amicus Brief).
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`I.
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`Background
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`In this action, Plaintiff challenges Section 1005 of the American Rescue
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`Plan Act of 2021 (ARPA), 2 which provides debt relief 3 to “socially
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`disadvantaged farmers and ranchers” (SDFRs). (Doc 1; Complaint). Specifically,
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`Section 1005(a)(2) authorizes the Secretary of Agriculture to pay up to 120% of
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`the indebtedness, as of January 1, 2021, of an SDFR’s direct Farm Service
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`Agency (FSA) loans and any farm loan guaranteed by the Secretary
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`(collectively, farm loans). Section 1005 incorporates 7 U.S.C. § 2279’s
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`definition of an SDFR as “a farmer of rancher who is a member of a socially
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`disadvantaged group.” 7 U.S.C. § 2279(a)(5). A “socially disadvantaged group”
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`is defined as “a group whose members have been subjected to racial or ethnic
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`prejudice because of their identity as members of a group without regard to
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`their individual qualities.” 7 U.S.C. § 2279(a)(6). Racial or ethnic groups that
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`categorically qualify as socially disadvantaged are “Black, American
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`Indian/Alaskan Native, Hispanic, Asian, and Pacific Islander.” Complaint at ¶
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`3; see also U.S. Dep’t of Agric., American Rescue Plan Debt Payments,
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`https://www.farmers.gov/americanrescueplan (last visited June 22, 2021).
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`White or Caucasian farmers and ranchers do not.
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`2 Pub. L. No. 117-2, 135 Stat. 4.
`3 At the hearing, counsel for the Government took exception to the Court’s use of the term
`“loan forgiveness,” arguing the relief is properly categorized as “debt relief.” (Doc. 37; Hearing
`Transcript at 48). To avoid confusion, the Court will use the term debt relief throughout this
`Order to refer to the relief provided to SDFRs in Section 1005.
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`Plaintiff is a White farmer in Jennings, Florida who has qualifying farm
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`loans but is ineligible for debt relief under Section 1005 solely because of his
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`race. Complaint ¶ 9. He sues Thomas J. Vilsack, the current Secretary of
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`Agriculture, and Zach Ducheneaux, the administrator of the United States
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`Department of Agriculture (USDA) and head of the FSA, in their official
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`capacities. Id. ¶¶ 10-11. In his two-count Complaint, Plaintiff alleges Section
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`1005 violates the equal protection component of the Fifth Amendment’s Due
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`Process Clause (Count I) and, by extension, is not in accordance with the law
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`such that its implementation should be prohibited by the Administrative
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`Procedure Act (APA) (Count II). See generally Complaint. Plaintiff seeks (1) a
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`declaratory judgment that Section 1005’s provision limiting debt relief to
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`SDFRs violates the law, (2) a preliminary and permanent injunction prohibiting
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`the enforcement of Section 1005, either in whole or in part, (3) nominal
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`damages, and (4) attorneys’ fees and costs. Id. at 20-21.
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`II. Legal Standard
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`A preliminary injunction is an extraordinary and drastic remedy. See
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`McDonald’s Corp. v. Robertson, 147 F.3d 1301, 1306 (11th Cir. 1998); see also
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`Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 24 (2008) (“A preliminary
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`injunction is an extraordinary remedy never awarded as of right.”); Davidoff &
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`CIE, S.A. v. PLD Int’l Corp., 263 F.3d 1297, 1300 (11th Cir. 2001). Indeed, “[a]
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`preliminary injunction is a powerful exercise of judicial authority in advance of
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`trial.” Ne. Fla. Chapter of Ass’n of Gen Contractors of Am. v. City of
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`Jacksonville, 896 F.2d 1283, 1284 (11th Cir. 1990). This is particularly true with
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`respect to preliminary injunctions of legislative enactments, which “must be
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`granted reluctantly and only upon a clear showing that the injunction before
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`trial is definitely demanded by the Constitution and by the other strict legal
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`and equitable principles that restrain courts.” Id. at 1287. This is because such
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`injunctions “interfere with the democratic process and lack the safeguards
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`against abuse or error that come with a full trial on the merits . . . .” Id.; see
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`also Robinson v. Attorney General, 957 F.3d 1171, 1178-79 (11th Cir. 2020)
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`(“[t]he chief function of a preliminary injunction is to preserve the status quo
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`until the merits of the controversy can be fully and fairly adjudicated.” (internal
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`quotations and citation omitted)).
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`“A plaintiff seeking a preliminary injunction must establish [1] that he is
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`likely to succeed on the merits, [2] that he is likely to suffer irreparable harm
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`in the absence of preliminary relief, [3] that the balance of equities tips in his
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`favor, and [4] that an injunction is in the public interest.” Winter, 555 U.S. at
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`20. The Eleventh Circuit recently described the heavy burden on a party
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`seeking preliminary injunctive relief as follows:
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`A district court may grant a preliminary injunction only if the
`moving party establishes that: (1) [he] has a substantial likelihood
`of success on the merits; (2) [he] will suffer an irreparable injury
`unless the injunction is granted; (3) the harm from the threatened
`injury outweighs the harm the injunction would cause the
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`opposing party; and (4) the injunction would not be adverse to the
`public interest.
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`Gonzalez v. Governor of Georgia, 978 F.3d 1266, 1270-71 (11th Cir. 2020); see
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`also Siegel v. LePore, 234 F.3d 1163, 1176 (11th Cir. 2000) (en banc). However,
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`the court also instructed that “the third and fourth factors merge when, as here,
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`the Government is the opposing party.” Id. at 1271 (internal quotations and
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`citation omitted).
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`The movant, at all times, bears the burden of persuasion as to each of
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`these requirements. See Ne. Fla., 896 F.2d at 1285. In deciding whether a party
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`has met its burden, “[a] district court may rely on affidavits and hearsay
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`materials which would not be admissible evidence for a permanent injunction,
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`if the evidence is appropriate given the character and objectives of the
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`injunctive proceeding.” Levi Strauss & Co. v. Sunrise Int’l Trading Inc., 51 F.3d
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`982, 985 (11th Cir. 1995) (internal quotations and citation omitted); see also
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`Cumulus Media, Inc. v. Clear Channel Commc'ns, Inc., 304 F.3d 1167, 1171
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`(11th Cir. 2002) (“Preliminary injunctions are, by their nature, products of an
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`expedited process often based upon an underdeveloped and incomplete
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`evidentiary record.”). Notably, a party’s failure to establish any one of the
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`essential elements will warrant denial of the request for preliminary injunctive
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`relief and obviate the need to discuss the remaining elements. See Pittman v.
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`Cole, 267 F.3d 1269, 1292 (11th Cir. 2001) (citing Church v. City of Huntsville,
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`30 F.3d 1332, 1342 (11th Cir. 1994)); Del Monte Fresh Produce Co. v. Dole Food
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`Co., 148 F. Supp. 2d 1326, 1339 n.7 (S.D. Fla. 2001).
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`III. Discussion
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`a. Likelihood of Success
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`Beginning with the first element required to obtain preliminary
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`injunctive relief, Plaintiff contends that the record before the Court shows that
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`he has a likelihood of success on the merits of his claim that Section 1005 is
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`unconstitutional because it violates his right to equal protection under the law.
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`Motion at 10. This element is often considered the most important factor in
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`granting preliminary injunctive relief. See Garcia-Mir v. Meese, 781 F.2d 1450,
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`1453 (11th Cir. 1986).
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`Since Section 1005 is a race-based governmental action, it is subject to
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`strict scrutiny. Grutter v. Bollinger, 539 U.S. 306, 326 (2003). As noted by the
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`Supreme Court,
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`Absent searching judicial inquiry into the justification for such
`race-based measures, there is simply no way of determining what
`classifications are “benign” or “remedial” and what classifications
`are in fact motivated by illegitimate notions of racial inferiority or
`simple racial politics. Indeed, the purpose of strict scrutiny is to
`“smoke out” illegitimate uses of race by assuring that the
`legislative body is pursuing a goal important enough to warrant
`use of a highly suspect tool. The test also ensures that the means
`chosen “fit” this compelling goal so closely that there is little or no
`possibility that the motive for the classification was illegitimate
`racial prejudice or stereotype.
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`City of Richmond v. J.A. Croson Co., 488 U.S. 469, 493 (1989) (plurality
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`opinion). Indeed, the Supreme Court instructs that “any person, of whatever
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`race, has the right to demand that any governmental actor subject to the
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`Constitution justify any racial classification subjecting that person to unequal
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`treatment under the strictest of judicial scrutiny.” Adarand Constructors, Inc.
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`v. Peña, 515 U.S. 200, 224 (1995).
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`“Although all government uses of race are subject to strict scrutiny, not
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`all are invalidated by it.” Grutter, 539 U.S. at 326-27; see also Adarand, 515
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`U.S. at 237 (seeking to “dispel the notion that strict scrutiny is strict in theory,
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`but fatal in fact.” (internal quotations and citations omitted)). To survive strict
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`scrutiny, a law must serve a compelling governmental interest and be narrowly
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`tailored to further that interest. Adarand, 515 U.S. at 227 (“Federal racial
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`classifications, like those of a State, must serve a compelling governmental
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`interest, and must be narrowly tailored to further that interest.”). Thus,
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`Plaintiff’s likelihood of success in this action turns on whether Section 1005
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`satisfies these requirements.
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`i. Compelling Governmental Interest
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`In the Response, the Government states that its “compelling interest in
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`relieving debt of [SDFRs] is two-fold: to remedy the well-documented history of
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`discrimination against minority farmers in USDA loan (and other) programs
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`and prevent public funds from being allocated in a way that perpetuates the
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`effects of discrimination.” Response at 18. In cases applying strict scrutiny, the
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`Eleventh Circuit has instructed:
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`In practice, the interest that is alleged in support of racial
`preferences is almost always the same—remedying past or present
`discrimination. That interest is widely accepted as compelling. As
`a result, the true test of an affirmative action program is usually
`not the nature of the government's interest, but rather the
`adequacy of the evidence of discrimination offered to show that
`interest.
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`Ensley Branch, N.A.A.C.P. v. Seibels, 31 F.3d 1548, 1564 (11th Cir. 1994)
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`(citations omitted). Thus, to survive strict scrutiny, the Government must show
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`a strong basis in evidence for its conclusion that past racial discrimination
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`warrants a race-based remedy. Id. at 1565. The law on how a governmental
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`entity can establish the requisite need for a race-based remedial program has
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`evolved over time. In Eng’g Contractors Ass’n of S. Fla. v. Metro. Dade Cnty.,
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`the Eleventh Circuit summarized the kinds of evidence that would and would
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`not be indicative of a need for remedial action in the local construction industry.
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`122 F.3d 895, 906-07 (11th Cir. 1997). The court explained:
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`A strong basis in evidence cannot rest on an amorphous claim of
`societal discrimination, on simple legislative assurances of good
`intention, or on congressional findings of discrimination in the
`national economy. However, a governmental entity can justify
`affirmative action by demonstrating gross statistical disparities
`between the proportion of minorities hired and the proportion of
`minorities willing and able to do the work. Anecdotal evidence may
`also be used to document discrimination, especially if buttressed
`by relevant statistical evidence.
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`Id. (internal quotations and citations omitted). Also, the court reaffirmed the
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`Ensley Branch court’s conclusion that although the Constitution requires
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`strong evidence of discrimination to justify the need for a race-based remedy, a
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`proponent of such a remedy need not have produced such evidence before
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`adopting the remedy. Id. at 911 (quoting Ensley Branch, 31 F.3d at 1565). As
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`such, the Government is not precluded from presenting post enactment
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`evidence to establish a compelling governmental interest in this case. Id.
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`Here, to establish the requisite evidence of discrimination, the
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`Government relies on substantial legislative history, testimony given by experts
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`at various congressional committee meetings, reports prepared at Congress’
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`request regarding discrimination in USDA programs, and floor statements
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`made by supporters of Section 1005 in Congress.4 See Response at 6-13 (citing
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`4 Plaintiff contests the Government’s ability to rely on such evidence, arguing there is no basis
`to determine what evidence Congress relied on when it passed Section 1005. See Motion at 4-
`6; Reply at 8-9. However, formal findings by a government entity “need neither precede nor
`accompany the adoption of affirmative action.” Ensley Branch, 31 F.3d at 1565; see also
`Wygant v. Jackson Bd. of Educ., 476 U.S. 267, 286 (1986) (rejecting any formal findings
`requirement). In reaching that conclusion in the public employer context, the Eleventh Circuit
`allowed the Government to justify its affirmative action plans post-hac using any evidence
`available to it. Ensley Branch, 31 F.3d at 1568 (“If the City and Board can now show strong
`evidence of the need for affirmative action in a department, then future affirmative action in
`that department is justified.”); see also Harrison & Burrowes Bridge Constructors, Inc. v.
`Cuomo, 981 F.2d 50, 60 (2d Cir. 1992) (“The law is plain that the constitutional sufficiency of
`a state's proffered reasons necessitating an affirmative action plan should be assessed on
`whatever evidence is presented, whether prior to or subsequent to the program's enactment.”);
`Contractors Ass'n v. City of Philadelphia, 6 F.3d 990, 1004 (3d Cir. 1993) (observing that
`“[b]ecause injunctions are prospective only, it makes sense to consider all available evidence .
`. . including prospective evidence.”). That said, there are several categories of evidence that
`are less significant than others. For example, any floor statement made by legislators
`advocating for Section 1005’s passage that are not backed by statistical or anecdotal evidence
`should likely be afforded little or no weight. See N.L.R.B. v. SW General, Inc., 137 S. Ct. 929,
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`floor statements made by Senators Corey Booker (Booker Floor Statement),
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`Debbie Stabenow (Stabenow Floor Statement), and others in the Congressional
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`Record from March 5, 2021, reported at S.1262-66.). This evidence consists of
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`substantial evidence of historical discrimination that predates remedial efforts
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`made by Congress and, to a lesser extent, evidence the Government contends
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`shows continued discrimination that permeates USDA programs.
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`The historical evidence includes things such as a dramatic decrease in
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`minority owned farms from 1920 to 1992; USDA’s discriminatory treatment of
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`SDFRs when they applied for loans through USDA, resulting in lower approval
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`rates among minority farmers; when loans were offered, they were frequently
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`for reduced amounts compared to the amount sought by SDFR applicants and
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`on less favorable terms; inequities in how the loans of minority farmers were
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`serviced by USDA; lack of SDFR representation on local USDA committees that
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`were responsible for overseeing USDA loan programs; and concerted efforts by
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`USDA to ignore complaints of discrimination made by minority farmers.
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`Response at 3-6, 20-25 (collecting evidence). It is undeniable—and notably
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`uncontested by the parties—that USDA had a dark history of past
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`discrimination against minority farmers. Compare id. with Reply at 4.
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`943 (2017) (noting “floor statements by individual legislators rank among the least
`illuminating forms of legislative history.”).
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`Based on the historical evidence of discrimination, Congress took
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`remedial measures to correct USDA’s past discrimination against SDFRs.
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`These measures included implementation of the “2501 Program” to increase
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`outreach to SDFRs; entering into multiple class action settlements with various
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`SDFR groups and awarding approximately $2.4 billion in relief to those who
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`were discriminated against; extending the statutory limitations period for
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`individuals to file discrimination claims against USDA; creating formal officers
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`that are responsible for ensuring compliance with civil rights laws and
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`nurturing relationships among SDFR populations; and adopting measures to
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`increase SDFR participation on local USDA committees. Response at 7-8. Due
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`to the significant remedial measures previously taken by Congress, for purposes
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`of this case, the historical evidence does little to address the need for continued
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`remediation through Section 1005. Rather, for the Government to show that
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`additional remedial action is warranted, it must present evidence either that
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`the prior remedial measures failed to adequately remedy the harm caused by
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`USDA’s past discrimination or that the Government remains a “passive
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`participant” in discrimination in USDA loans and programs. See Eng’g
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`Contractors, 122 F.3d at 911. This is where the evidence of continued
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`discrimination becomes crucial, and may be inadequate.
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`The Government contends its prior measures were insufficient to remedy
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`the effects of past discrimination because “state taxes eroded recoveries, debt
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`relief was incomplete, and reports before Congress showed that the settlements
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`have not cured the problems faced by minority farmers.” Response at 5 (citing
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`Stabenow Floor Statement). However, the actual evidentiary support for the
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`inadequacy of past remedial measures is limited and largely conclusory. For
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`example, the Government points to the insufficiency of USDA’s prior outreach
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`efforts to SDFRs that has resulted in a general distrust among SDFRs in
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`government programs. Stabenow Floor Statement (citing statistic that 73% of
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`Black farmers were not aware of pandemic relief programs available to them
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`due to poor efforts at outreach and lingering distrust of USDA). While this
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`evidence could support a need for greater outreach efforts such as those
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`provided for in Section 1006 of the ARPA, it is not tied in any way to a
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`governmental interest in affording SDFRs broad race-based debt relief and does
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`not support a finding that USDA continues to be a participant, passive or active,
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`in discrimination.
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`The Government also relies on three reports by the Government
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`Accountability Office. Two reports from 20195 document a number of barriers
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`that make it more difficult for SDFRs to obtain financing—including smaller
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`farm sizes, weaker credit histories, and lack of clear title to land—but similarly
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`5 GAO-19-464, INDIAN ISSUES: Agricultural Credit Needs and Barriers to Lending on Tribal
`Lands (May 2019); GAO-19-539, AGRICULTURAL LENDING: Information on Credit and
`Outreach to Socially Disadvantaged Farmers and Ranchers is Limited (July 2019).
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`fail to connect those barriers to prior or ongoing discrimination by USDA or to
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`a need for complete debt relief.6 The Government also cites to a recent report
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`from 2021,7 but that report does not add any new evidence as it merely echoes
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`the findings of the two 2019 reports as part of a more general discussion of
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`minority owned businesses’ limited access to credit. Thus, from an evidentiary
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`standpoint, these reports do little to move the needle in the Government’s
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`favor.8
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`The Government also contends SDFRs received a disproportionately low
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`proportion of pandemic relief assistance authorized in prior legislation, thereby
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`suggesting it remains a passive participant in discrimination. Response at 9-
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`10. Specifically, the Government cites to two statistics related to recent USDA
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`programs that have disproportionately benefited White farmers. The first
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`statistic shows 99.4% of relief under USDA’s Market Facilitation Program
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`(MFP) went to White farmers. Response at 10 (citing N. Rosenberg, USDA Gave
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`6 Notably, both 2019 reports include qualifying language regarding the limited nature of
`information regarding SDFRs access to credit. Both reports also include recommendations to
`remedy the barriers identified, none of which include absolute debt relief, much less debt relief
`awarded strictly on the basis of race.
`7 GAO-21-399T, FIN. SERVS.: Fair Lending, Access, and Retirement Sec. (Feb. 24, 2021).
`8 The Government’s reliance on the Jackson Lewis report does not fill the gap. Jackson Lewis,
`LLP, “Civil Rights Assessment” (Mar. 31, 2011). Notably, the Jackson Lewis report found
`SDFR “participation reasonably well reflected their respective Principal Operator
`populations,” with respect to FSA loan programs and, with respect to Rural Development loan
`programs, SDFR “participation for all groups exceeded their respective rural populations, with
`some by substantial margins.” Id. at xxi. Also, despite presenting numerous detailed
`recommendations to address the challenges faced by SDFRs, none included outright debt
`relief.
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`Almost 100 Percent of Trump’s Trade War Bailout to White Farmers, Farm Bill
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`Law Enterprise (July 24, 2019)). The second statistic shows 97% of the $9.2
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`billion in pandemic relief provided through USDA’s Coronavirus Food
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`Assistance Program in 2020 went to nonminority farmers. Stabenow Floor
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`Statement at 1264 (citing J. Hayes, USDA Data: Nearly all Pandemic Bailout
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`Funds Went to White Farmers, Envir’l Working Group (Feb. 18, 2021)). Even
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`taking these statistics at face value, they are less useful than they may appear
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`to be.
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`The first statistic is qualified by the fact that: “[a]pproximately seven
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`percent of the funds went to entities owned by corporations or individuals whose
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`race was not reported.” N. Rosenburg, supra. The report also identifies farm
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`size and specific crops—namely, soybeans—as being the target of MFP funding,
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`not racial identity. Id. As to the second statistic, both parties at least tacitly
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`acknowledge the 2020 relief went primarily to nonminority farmers because the
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`legislation targeted large farms that were disproportionately owned by
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`nonminority
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`farmers—not because
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`the
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`relief efforts were
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`facially
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`discriminatory. See Response at 10; Reply at 8. Where a race-neutral basis for
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`a statistical disparity can be shown, the Court can give that statistical evidence
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`less weight. Eng’g Contractors, 122 F.3d at 923. Here, the statistical
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`discrepancies presented by the Government can be explained by non-race
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`related factors—farm size and crops grown—and the Court finds it unlikely that
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`this evidence, standing alone, would constitute a strong basis for the need for a
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`race-based remedial program.
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`Additionally, the Government argues that SDFRs were in a more
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`precarious financial position headed into the pandemic due to prior
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`discrimination, citing evidence of higher delinquency and foreclosure rates
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`among SDFRs compared to nonminority farmers. Booker Floor Statement
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`(citing statistics that 13% of FSA direct loan recipients are currently
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`delinquent, but that group is made up of 35% of Black farmers and 24% of
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`Hispanic, Asian-American, and Indigenous farmers). The problem with the
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`Government’s reliance on this evidence lies in the fact that the statistical
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`evidence for the Government’s broader proposition is lacking. The Government
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`has not connected SDFRs disproportionate delinquency status to actual
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`discrimination by USDA outside of conclusory remarks made in support of the
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`legislation. Courts must be wary of finding statistical disparities untethered to
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`evidence of discrimination sufficient grounds for implementation of a race-
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`based program. See Croson, 488 U.S. at 499-500 (criticizing the district court’s
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`reliance on speculative statistics and finding they did not amount to evidence
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`of discrimination).
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`On the record presented here, the Court expresses serious concerns over
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`whether the Government will be able to establish a strong basis in evidence
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`warranting the implementation of Section 1005’s race-based remedial action.
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`Case 3:21-cv-00514-MMH-JRK Document 41 Filed 06/23/21 Page 16 of 49 PageID 410
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`The statistical and anecdotal evidence presented appears less substantial than
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`that deemed insufficient in Eng’g Contractors, which included detailed
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`statistics regarding the governmental entity’s hiring of minority-owned
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`businesses for government construction projects; marketplace data on the
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`financial performance of minority and nonminority contractors; and two studies
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`by experts. Id. at 912. To the extent remedial action is warranted based on the
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`current evidentiary showing, it would likely be directed to the need to address
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`the barriers identified in the GAO Reports such as providing incentives or
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`guarantees to commercial lenders to make loans to SDFRs, increasing outreach
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`to SDFRs regarding the availability of USDA programs, ensuring SDFRs have
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`equal access to the same financial tools as nonminority farmers, and efforts to
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`standardize the way USDA services SDFR loans so that it comports with the
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`level of service provided to White farmers. Nevertheless, at this stage of the
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`proceedings, the Court need not determine whether the Government ultimately
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`will be able to establish a compelling need for this broad, race-based remedial
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`legislation.9 This is because, assuming the Government’s evidence establishes
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`9 While the Court expresses reservations regarding the sufficiency of the Government’s
`evidence of a compelling governmental interest supporting the need for further broad ongoing
`relief, the Court recognizes that this record – consisting only of a complaint and briefing and
`evidence pertinent to the Motion for Preliminary Injunction – is limited. On a more fully
`developed record, the Government may be able to establish that despite past remedial efforts
`the harm caused by the disgraceful history of discrimination by the USDA in farm loans and
`programs is ongoing or that the Government is in some way a participant in perpetuating that
`discrimination such that further narrowly tailored affirmative relief is warranted.
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`the existence of a compelling governmental interest warranting some form of
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`race-based relief, for the reasons discussed below, Plaintiff has convincingly
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`shown that the relief provided by Section 1005 is not narrowly tailored to serve
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`that interest.
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`ii. Narrow Tailoring
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`Even if the Government establishes a compelling governmental interest
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`to enact Section 1005, Plaintiff has shown a substantial likelihood of success on
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`his claim that, as written, the law violates his right to equal protection because
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`it is not narrowly tailored to serve that interest. The narrow tailoring
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`requirement ensures that “the means chosen ‘fit’ th[e] compelling goal so closely
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`that there is little or no possibility that the motive for the classification was
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`illegitimate racial prejudice or stereotype.” Croson, 488 U.S. at 493 (plurality
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`opinion). “The essence of the ‘narrowly tailored’ inquiry is the notion that
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`explicitly racial preferences ... must be only a ‘last resort’ option.” Eng’g
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`Contractors, 122 F.3d at 926 (quoting Hayes v. North State Law Enforcement
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`Officers Ass'n, 10 F.3d 207, 217 (4th Cir. 1993)); see also Croson, 488 U.S. at
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`519 (Kennedy, J., concurring) (“[T]he strict scrutiny standard ... forbids the use
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`even of narrowly drawn racial classifications except as a last resort.”). In
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`determining whether a race-conscious remedy is appropriate, the Supreme
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`Court instructs courts to examine several factors, including the necessity for
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`Case 3:21-cv-00514-MMH-JRK Document 41 Filed 06/23/21 Page 18 of 49 PageID 412
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`the relief and the efficacy of alternative remedies; the flexibility and duration
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`of the relief, including the availability of waiver provisions; the relationship of
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`the numerical goals to the relevant labor market; and the impact of the relief
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`on the rights of third parties.” U.S. v. Paradise, 480 U.S. 149, 171 (1987).
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`Here, little if anything about Section 1005 suggests that it is narrowly
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`tailored. As an initial matter the Court notes that the necessity for the specific
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`relief provided in Section 1005—debt relief for all SDFRs with outstanding
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`qualifying farm loans as of January 1, 2021—is unclear at best. As written,
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`Section 1005 is tailored to benefit only those SDFRs who succeeded in receiving
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`qualifying farm loans from USDA, but the evidence of discrimination provided
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`by the Government says little regarding how this particular group of SDFRs
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`has been the subject of past or ongoing discrimination. See Section III(a)(i),
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`supra.10 Thus, the necessity of debt relief to the group targeted by Section 1005,
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`as opposed to a remedial program that more narrowly addresses the
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`discrimination that has been documented by the Government, is anything but
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`evident.
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`More
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`importantly, Section 1005’s rigid, categorical, race-based
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`qualification for relief is the antithesis of flexibility. The debt relief provision
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`10 Although the Government argues that historical discrimination against SDFRs also
`included things such as higher interest rates, less advantageous loan terms, and delayed
`approvals, the record evidence does not appear to show that SDFRs with current loans
`suffered such discrimination.
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`applies strictly on racial grounds irrespective of any other factor. Every person
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`who identifies him or herself as falling within a socially disadvantaged group11
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`who has a qualifying farm loan with an outstanding balance as of January 1,
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`2021, receives up to 120% debt relief—and no one else receives any debt relief.
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`Although the Government argues that Section 1005 is narrowly tailored to
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`reach small farmers or farmers on the brink of foreclosure, it is not. Regardless
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`of farm size, an SDFR receives up to 120% debt relief. And regardless of whether
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`an SDFR is having the most profitable year ever and not remotely in danger of