Case 3:20-cv-01866-IM Document 32 Filed 12/06/20 Page 1 of 21
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`Murphy & Buchal LLP
`James L. Buchal, Oregon Bar No. 921618
`3425 SE Yamhill Street, Suite 100
`Portland, Oregon 97214
`(503) 227-1011 (phone)
`(503) 573-1939 (fax)
`jbuchal@mbllp.com
`
`Benbrook Law Group, PC
`Bradley Benbrook *
`Stephen M. Duvernay*
`400 Capitol Mall, Suite 2530
`Sacramento, California 95814
`(916) 447-4900 (phone)
`(916) 447-4904 (phone)
`brad@benbrooklawgroup.com
`steve@benbrooklawgroup.com
`
` *
`
` admitted pro hac vice
`
`
`Counsel for Plaintiffs (additional counsel for plaintiffs listed on signature page)
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`
`U N I T E D S T A T E S D I S T R I C T C O U R T
`D I S T R I C T O F O R E G O N
`P O R T L A N D D I V I S I O N
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`Great Northern Resources, Inc., Dynamic
`Service Fire and Security, LLC, and Walter
`Van Leja, on behalf of themselves and others
`similarly situated,
`
`Case No. 3:20-cv-01866-IM
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`
`
`
`
`
`
`
`Plaintiffs,
`
`v.
`
`Katy Coba, in her Official Capacity as
`State Chief Operating Officer and
`Director of the Oregon Department of
`Administrative Services; Oregon
`Department Of Administrative
`Services; The Contingent; Black
`United Fund of Oregon; DOES 1–10,
`
`
`
`Defendants.
`
`Plaintiffs’ First Amended
`Class-Action Complaint
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`plaintiffs’ first amended class -action complaint
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`Plaintiffs Great Northern Resources, Inc., Dynamic Service Fire and Security,
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`LLC, and Walter Van Leja bring this class action to enjoin the defendants from
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`enforcing the State of Oregon’s racially exclusionary criteria for distributing money
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`from the Oregon Cares Fund for Black Relief and Resiliency (the “Fund”), a $62-
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`million dollar grant program established by the Oregon Legislature to provide
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`financial relief to individuals and businesses affected by the Covid-19 pandemic.
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`Grants from the Fund are only available to individuals and business owners who “self-
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`identify as Black.” This express use of race in distributing government money is
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`unconstitutional and violates numerous federal anti-discrimination statutes, and the
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`plaintiffs seek classwide relief against its continued use.
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`JURISDICTION AND VENUE
`1. The Court has subject-matter jurisdiction under 28 U.S.C. § 1331 and 28
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`U.S.C. § 1343.
`2. Venue is proper because at least one defendant resides or has its offices located
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`in this judicial district. See 28 U.S.C. § 1391(b)(2).
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`PARTIES
`3. Plaintiff Great Northern Resources, Inc. is a corporation organized under Or-
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`egon law.
`4. Plaintiff Dynamic Service Fire and Security, LLC is a limited liability company
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`organized under Oregon law.
`5. Plaintiff Walter Van Leja is a citizen and resident of Oregon.
`6. Defendant Katy Coba is the Chief Operating Officer and Director of the Ore-
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`gon Department of Administrative Services (“DAS”). Defendant DAS is the central
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`administrative agency of the Oregon state government, which implements the policy
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`and financial decisions made by the Governor and Oregon Legislature. Or. Rev. Stat.
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`§ 184.305; see Oregon Dep’t of Admin. Servs., Administrative Overview (Jan. 2014).
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`DAS is responsible for overseeing the State’s management and distribution of funds
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`received from the Federal government through the Coronavirus Aid, Relief, and Eco-
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`nomic Security Act’s $150 billion Coronavirus Relief Fund. As COO and Director of
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`DAS, Coba is responsible for managing and coordinating DAS’s programs and oper-
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`ations, including the grant program and Fund that is the subject of this litigation.
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`Coba is sued in her official capacity.
`7. Defendant The Contingent is a Portland-based nonprofit corporation orga-
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`nized under Oregon law. As set forth in further detail below, for all relevant purposes
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`The Contingent has acted jointly with the State of Oregon and Defendant DAS by
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`administering the Fund such that it is a state actor and has been acting under color of
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`state law.
`8. Defendant Black United Fund of Oregon is a Portland-based nonprofit cor-
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`poration organized under Oregon law. As set forth in further detail below, for all
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`relevant purposes The Black United Fund of Oregon has acted jointly with the State
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`of Oregon and Defendant DAS by administering the Fund such that it is a state actor
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`and has been acting under color of state law.
`9. The true names or capacities—whether individual, corporate, associate, or
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`otherwise—of the Defendants named as Does 1–10, are presently unknown to the
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`plaintiffs and are sued by these fictitious names. The plaintiffs will seek leave to amend
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`this complaint to show the true names or capacities of these defendants if and when
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`they have been determined.
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`GENERAL ALLEGATIONS
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`A.
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`The Oregon Legislature Established The Fund To Provide Coronavirus
`Relief Grants On The Basis Of Race
`10. On July 14, 2020, the Oregon Legislature’s Joint Emergency Board ap-
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`proved a $62 million grant to establish the Fund, using money allocated to the State
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`by the Federal government in the CARES Act’s $150 billion Coronavirus Relief Fund.
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`The Fund is a grant program overseen by DAS and administered by two Oregon-
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`based community organizations (The Contingent and the Black United Fund of Or-
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`egon) that are responsible for reviewing applications and making funding decisions.
`11. DAS is “responsible for transmitting the [grant] funds and working with The
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`Contingent on ensuring that federal spending, reporting, and other legal require-
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`ments are met, including that the funds are expended by December 30, 2020.” Ex-
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`hibit 1, Oregon State Leg. Joint Emergency Bd., Leg. Fiscal Office Analysis, Agenda
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`Item 3: Oregon Cares Fund for Black Relief and Resiliency (July 14, 2020) (“Cares
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`Fund Agenda Report”), at p. 2.
`12. The Contingent is the recipient of the $62 million grant from DAS and is
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`responsible for managing business grants from the Fund. The Black United Fund of
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`Oregon is responsible for managing grants to individuals and families from the Fund.
`13. The Fund is explicitly targeted at providing relief to the “Black community,”
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`to support “Black relief and resiliency.” Ex. 1, Cares Fund Agenda Report at p. 1. To
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`be eligible for relief funds, individuals, families, and businesses must (1) live in or be
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`based in Oregon, (2) demonstrate hardship due to COVID-19, and (3) “self-identify
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`as Black.” Id. Likewise, community-based non-profits are eligible for funds if they can
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`demonstrate a significant tie to the Black community, which includes having an
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`“[o]rganizational environment [that] is Black-focused and [being] recognized by the
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`community served as a Black-serving organization,” and at least 33% of the staff and
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`a majority of the organization’s leadership that are Black. Id. Individuals and families
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`are eligible to receive grants up to $3,000, and businesses and community-based non-
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`profits can receive up to $100,000 in grants. Id.
`14. As part of the application process, individuals, families, and businesses seek-
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`ing grants from the Fund must state whether they “identify” as Black—and funding
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`decisions are based on whether applicants satisfy this threshold criteria.
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`15. Consistent with restrictions imposed by the federal government through the
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`CARES Act, all funds allocated to the grant program must be expended by December
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`30, 2020. Cares Fund Agenda Report at p. 2.
`B.
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`Great Northern Applies For A Coronavirus Relief Grant From The Fund
`16. Logging is an important business in Oregon. The State boasts 5 of the 10
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`largest sawmills (by volume of sawn wood) in the country. Oregon leads the nation
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`in softwood lumber production, plywood production, and engineered wood. Sixty-
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`five percent of Grant County in Eastern Oregon is classified as forestland, and twenty
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`percent of county residents have forest-sector jobs.
`17. Great Northern is a small, family-run logging company based in Grant
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`County. It was founded in 1991. The focus of Great Northern’s business is selective
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`harvesting and timber salvage—along with thinning and fuel reduction—on privately
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`owned and federally managed lands in Grant County, and then selling merchantable
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`timber to local sawmills. Salvage logging is the practice of harvesting dead, dying,
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`diseased, or down timber, which is essential to responsible and sustainable forest man-
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`agement.
`18. Around the time Great Northern was preparing its first delivery of the year
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`in March 2020, the local mill stopped making new log purchases because of uncer-
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`tainty in the timber market induced by the pandemic. By the time the mill started
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`buying again several months later, Great Northern’s timber had dried and cracked,
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`and was not in condition to be sold to the mill. (Unlike fresh timber that can sit for
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`six months or more before being processed and cut into lumber, salvage logs have a
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`short life span before they crack.)
`19. Like many small businesses around the state, Great Northern’s business has
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`suffered during the pandemic. After over seven months of slow operations, the com-
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`pany has exhausted its modest operating capital reserves and company revenue is far
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`eclipsed by its costs and expenses. Great Northern estimates that the mill’s closure and
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`subsequent moratorium on buying timber cost the business at least $100,000.
`20. Over the past few months, Great Northern has applied to several govern-
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`ment-relief programs to mitigate the impact of the pandemic, but so far it has received
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`no financial assistance.
`21. In April 2020, Great Northern applied for a grant of up to $10,000 from
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`the U.S. Small Business Administration’s economic injury disaster loan program. The
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`SBA denied the company’s application. Great Northern submitted a second applica-
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`tion to the SBA, which was also denied.
`22. In connection with its grant applications, the SBA informed Great Northern
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`that it could obtain a loan from the SBA’s COVID-19 EIDL program, but the com-
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`pany declined because it decided it would be too risky to take on debt given the un-
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`certain economic outlook.
`23. On September 24, 2020, Great Northern applied for an emergency grant
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`through the Greater Eastern Oregon Development Corporation. The application was
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`denied. Great Northern resubmitted an application to the program on October 19,
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`2020. As of this filing, Great Northern has not received a response to its second ap-
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`plication.
`24. On October 4, 2020, Great Northern submitted a grant application to the
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`Fund through the Contingent’s website. As part of the application, Great Northern
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`described the pandemic’s impact on its business, including the effect of the mill clo-
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`sure and moratorium discussed above.
`25. Great Northern also submitted financial details showing that its revenue had
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`dropped from approximately $150,000 in 2019 to less than $30,000 in 2020, and
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`that the company projected a loss of approximately $200,000 for the year.
`26. Finally, the application asked: “What percentage of owners of this business
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`identify as Black?” Great Northern answered “0.”
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`27. On October 29, 2020, Great Northern sued the defendants to stop them
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`from enforcing their racial exclusionary policy. On November 9, 2020, the Contin-
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`gent denied Great Northern’s application. Great Northern intends to reapply for relief
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`from the Fund and will do so if and when the courts enjoin the enforcement of the
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`racial exclusion that renders Great Northern ineligible for relief from the Fund.
`28. The Fund is still accepting applications through the Contingent’s website.
`29. Great Northern has sustained and is continuing to suffer injury in fact by
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`being forced to compete in a race-based system for government benefits. See Adarand
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`Constructors, 515 U.S. at 211; Northeastern Fla. Chapter, Associated Gen. Contractors
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`of Am., 508 U.S. at 666. That injury is caused by the defendants’ enforcement of a
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`racially exclusionary policy that prohibits non-black individuals and non-black-owned
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`businesses from obtaining relief from the Fund.
`30. Time is of the essence because all funds in the grant program must be ex-
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`pended by December 30.
`C. Dynamic Service Wishes To Apply For Relief From The Fund, But It Is
`Disqualified From Obtaining Relief On Account Of Its Race
`31. Dynamic Service Fire and Security, LLC, is a low-voltage electrical contractor
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`that works primarily in apartment buildings. It installs and repairs fire-alarm systems,
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`access controls, telephone entry, and low-voltage telephone and cables. It is located
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`in Salem, but it works throughout the state. Most of its jobs are located in Portland.
`32. Dynamic Service is owned by a married couple, Walter Leja and Tonya Mor-
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`gan. It has two permanent employees and three additional temporary workers who
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`remain on call. All employees are paid on an hourly basis.
`33. The pandemic has devastated Dynamic Service’s business. The nature of Dy-
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`namic Service’s business requires its employees to work in close contact with others,
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`often indoors, throughout the day. To ensure protection for its workers, Dynamic
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`Service has spent a significant amount of money on personal protective equipment
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`and cleaning supplies.
`34. The pandemic has also caused Dynamic Service’s clients to fall behind on
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`their payments. Many apartment buildings that it serves have deferred rents, and they
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`have had trouble paying their bills. Dynamic Service currently has a total of $27,000
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`in overdue invoices.
`35. Pandemic-induced shutdowns in California and Washington state—as well
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`as import restrictions—have made supplies more difficult to obtain. This has led to
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`numerous adverse effects on Dynamic Service’s business.
`36. Dynamic Service has also suffered increased costs due to pandemic regula-
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`tions. Supply houses have limited direct access for customers, and require them to
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`wait in the parking lot for materials. On several occasions Dynamic Service had to pay
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`workers to sit in the parking lot for supply delivery or pickup, waiting more than five
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`hours for orders to get processed.
`37. The pandemic has dramatically reduced the number of jobs available for Dy-
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`namic Service to work on. When Dynamic Service is able to find work, the projects
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`take longer to complete and come with higher labor costs.
`38. Dynamic Service’s gross revenue has declined substantially from its pre-pan-
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`demic levels. In January and February of 2020, Dynamic Service grossed around
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`$40,000 each month; now it takes in between $10,000 and $18,000 of gross monthly
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`income. And this decline in gross revenue does not account for the increased costs
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`that Dynamic Service has incurred.
`39. In response to these financial challenges, Dynamic Service has borrowed
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`$37,000 from an online lender and $40,000 from Morgan family members. And it
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`has maxed out its credit cards at $30,000.
`40. In May or June of 2020, Dynamic Service obtained a loan for $20,040 from
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`the Paycheck Protection Program.
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`41. Dynamic Service recently tried to apply for relief from the State’s $20 million
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`small business grant program, which was announced on November 18, 2020. The
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`program, however, stopped accepting applications within a few hours, and by the time
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`Dynamic Service visited the website it couldn’t submit its application in time because
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`the funds had been exhausted.
`42. Dynamic Service intends to apply and will apply for relief from the Fund if
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`and when the courts enjoin the enforcement of the racial exclusions that render Dy-
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`namic Service ineligible for relief.
`43. The Fund is still accepting applications through the Contingent’s website.
`44. Dynamic Service has sustained and is continuing to suffer injury in fact by
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`being disqualified for a government benefit on account of race, and by being forced
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`to compete in a race-based system for government benefits. See Adarand Constructors,
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`515 U.S. at 211; Northeastern Fla. Chapter, Associated Gen. Contractors of Am., 508
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`U.S. at 666. That injury is caused by the defendants’ enforcement of a racially exclu-
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`sionary policy that prohibits non-black individuals and non-black-owned businesses
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`from obtaining relief from the Fund.
`45. Time is of the essence because all funds in the grant program must be ex-
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`pended by December 30.
`D. Mr. Leja Wishes To Apply For Individual And Family Relief From The
`Fund, But He Is Disqualified From Obtaining Relief On Account Of His
`Race
`46. Mr. Leja has suffered significant harm to his personal finances on account of
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`COVID-19. His personal income is derived entirely from his family-owned company,
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`Dynamic Service Fire and Security, LLC, which has been devastated by the pandemic.
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`Mr. Leja and his wife have had to take a six-month forbearance on their mortgage,
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`which will force them to make higher monthly mortgage payments in the future. Yet
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`Mr. Leja’s monthly personal income remains far below its pre-pandemic levels.
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`47. Mr. Leja wishes to apply for individual and family relief from the Fund, but
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`he is ineligible for this relief because he is not black.
`48. Mr. Leja intends to apply and will apply for individual and family relief from
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`the Fund if and when the courts enjoin the enforcement of the racial exclusions that
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`render Mr. Leja and his family ineligible for relief.
`49. The Fund is still accepting applications for individual relief through the Con-
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`tingent’s website.
`50. Mr. Leja has sustained and is continuing to suffer injury in fact by being
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`disqualified for a government benefit on account of his race, and by being forced to
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`compete in a race-based system for government benefits. See Adarand Constructors,
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`515 U.S. at 211; Northeastern Fla. Chapter, Associated Gen. Contractors of Am., 508
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`U.S. at 666. That injury is caused by the defendants’ enforcement of a racially exclu-
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`sionary policy that prohibits non-black individuals and families from obtaining relief
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`from the Fund.
`51. Time is of the essence because all funds in the grant program must be ex-
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`pended by December 30.
`E.
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`Defendants’ Use Of Race To Distribute Grants From The Fund Violates
`The Equal Protection Clause And Federal Antidiscrimination Statutes
`52. The Fourteenth Amendment’s equal protection clause provides that, “No
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`State shall . . . deny to any person within its jurisdiction the equal protection of the
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`laws.” U.S. Const., Amdt. 14, § 1.
`53. “[T]he central purpose of the Fourteenth Amendment was to eliminate racial
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`discrimination emanating from official sources in the States.” Pena-Rodriguez v. Col-
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`orado, 137 S. Ct. 855, 867 (2017) (quoting McLaughlin v. Florida, 379 U.S. 184,
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`192 (1964)). “Laws that explicitly distinguish between individuals on racial grounds
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`fall within the core of [the Fourteenth Amendment’s] prohibition.” Shaw v. Reno, 509
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`U.S. 630, 642 (1993). “ ‘[A]t the heart of the Constitution’s guarantee of equal
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`protection lies the simple command that the Government must treat citizens as indi-
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`viduals, not as simply components of a racial, religious, sexual or national class.’ ” Par-
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`ents Involved in Cmty. Sch. v. Seattle Sch. Dist. No. 1, 551 U.S. 701, 730 (2007) (plu-
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`rality opinion of Roberts, C.J.) (quoting Miller v. Johnson, 515 U.S. 900, 911 (1995))
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`(internal citation omitted). Put simply, “[d]istinctions between citizens solely because
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`of their ancestry are by their very nature odious to a free people whose institutions
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`are founded upon the doctrine of equality.” Rice v. Cayetano, 528 U.S. 495, 517
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`(2000) (internal quotation marks omitted).
`54. “[O]ne form of injury under the Equal Protection Clause is being forced to
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`compete in a race-based system that may prejudice [a] plaintiff.” Parents Involved, 551
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`U.S. at 719 (plurality opinion of Roberts, C.J.) (citing Adarand Constructors, 515
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`U.S. at 211; and Northeastern Fla. Chapter, Associated Gen. Contractors of Am., 508
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`U.S. at 666).
`55. “[A]ll racial classifications, imposed by whatever federal, state, or local gov-
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`ernmental actor, must be analyzed by a reviewing court under strict scrutiny.”
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`Adarand Constructors, 515 U.S. at 227. Under strict scrutiny, the government has
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`the burden of proving that racial classifications “are narrowly tailored measures that
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`further compelling governmental interests.” Id. “The reasons for strict scrutiny are
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`familiar. Racial classifications raise special fears that they are motivated by an invidious
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`purpose. Thus, [the Supreme Court has] admonished time and again that, ‘[a]bsent
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`searching judicial inquiry into the justification for such race-based measures, there is
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`simply no way of determining . . . what classifications are in fact motivated by illegit-
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`imate notions of racial inferiority or simple racial politics.’” Johnson v. California, 543
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`U.S. 499, 505–06 (2005) (quoting City of Richmond v. J.A. Croson Co., 488 U.S.
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`469, 493 (1989)).
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`56. Defendants’ use of race as the qualifying factor in distributing grants from
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`the Fund fails strict scrutiny. It is not based on a compelling interest, nor is it narrowly
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`tailored. Adarand, 515 U.S. at 227.
`57. The Supreme Court has stated repeatedly that addressing past societal dis-
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`crimination is not a compelling interest. “[G]eneralized assertion[s]” of discrimina-
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`tion cannot justify remedial race-based action because they “provide[] no guidance
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`for a legislative body to determine the precise scope of the injury it seeks to remedy.
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`It ‘has no logical stopping point.’ ” J.A. Croson Co., 488 U.S. at 498 (quoting Wygant
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`v. Jackson Bd. Of Educ., 476 U.S. 267, 275 (1986)). Likewise, “[a] generalized asser-
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`tion of past discrimination in a particular . . . region is not adequate because it ‘pro-
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`vides no guidance for a legislative body to determine the precise scope of the injury
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`it seeks to remedy.’ ” Shaw v. Hunt, 517 U.S. 899, 909 (1996) (citation omitted); see
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`also J.A. Croson Co., 488 U.S. at 499 (“an amorphous claim” of past discrimination
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`insufficient to justify race-based quota system). Rather, the Equal Protection Clause
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`requires the government to identify discrimination with specificity, have actual evi-
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`dence of discrimination that demonstrates race-based action is necessary, and tailor
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`any race-conscious action to that discrimination. Shaw, 517 U.S. at 909; see also J.A.
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`Croson Co., 488 U.S. at 500, 504.
`58. But the Oregon Legislature did precisely what the Supreme Court has said
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`it cannot do: It established the Fund based upon claims of generalized discrimination.
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`The Joint Emergency Board’s scant legislative record focuses broadly on general no-
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`tions of past and present societal discrimination. See Multnomah County Board of
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`County Commissioners, Letter in Support of The Oregon Cares Fund (July 10, 2020)
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`(arguing that “Oregon’s (and the country’s) racist history has created a present in
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`which Black Oregonians have been disproportionately impacted by the COVID pan-
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`demic,” and claiming that “The Oregon Cares Fund would address this dispropor-
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`tionate impact by providing direct funding to Black individuals and families, Black-
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`led businesses, and Black-owned organizations.”); Washington County Administrative
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`Office, Letter RE: Emergency funding for the Oregon Cares Fund for Black Relief and
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`Resiliency (July 13, 2020) (“We join the call for accountability and concrete change
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`to end racial injustice and the brutality that it gives rise to. We support the movement
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`to dismantle systemic racism. We know that systemic racism contributes to economic,
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`social, and health disparities that directly impact our county. [¶] We must, therefore,
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`become an active part of the remedy. We are writing to respectfully urge you to sup-
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`port the Funding of the Oregon Cares Fund for Black Relief and Resiliency.”).
`59. The legislative analysis briefly mentions that “National and state data show
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`that the Black community is one of the communities experiencing a disproportionate
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`share of negative economic and health effects due to COVID-19,” referring to a single
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`draft report from the National Bureau of Economic Research. Ex. 1, Cares Fund
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`Agenda Report, at p. 1.1 Even accepting as true the unfortunate circumstance that
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`members of the Black community have been disproportionately impacted by the pan-
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`demic, this is not a form of “discrimination” that can be remedied by a race-based
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`program. In any event, the promoters of the Fund tied this disparate impact from the
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`pandemic to generalized conditions by asserting that the pandemic has “widen[ed]”
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`pre-existing “gaps” due to “400 years” of prior generalized discrimination within so-
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`ciety. “[R]emedying past societal discrimination does not justify race-conscious gov-
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`ernment action.” Parents Involved, 551 U.S. at 731 (opinion of Roberts, C.J.); Shaw,
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`517 U.S. at 909–910 (“[A]n effort to alleviate the effects of societal discrimination is
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`not a compelling interest”); see also Wygant, 476 U.S. at 276 (plurality opinion) (“So-
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`cietal discrimination, without more, is too amorphous a basis for imposing a racially
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`1. The report is Robert W. Fairlie, NBER Working Paper 27309, The Impact of
`COVID-19 On Small Business Owners: Evidence of Early-Stage Losses From The April
`2020 Current Population Survey, Nat’l Bureau of Econ. Research (June 2020),
`online at https://www.nber.org/papers/w27309.pdf.
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`classified remedy.”); id. at 288 (opinion of O’Connor, J.) (agreeing with plurality that
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`“a governmental agency’s interest in remedying ‘societal’ discrimination . . . cannot
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`be deemed sufficiently compelling to pass constitutional muster under strict scru-
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`tiny”).
`60. In fact, the materials presented to the legislature confirm that the Fund was
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`motivated by a general desire to remedy past societal discrimination, which is not
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`constitutionally permissible. Yet the Fund’s proponents put general societal discrimi-
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`nation front and center in the materials they submitted to the Joint Emergency Board:
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`The Black community across Oregon is in the midst of two pandemics.
`The first is this country’s 400 years of racial violence and strategic di-
`vestment from the Black community, deepened here in Oregon
`through intentional policy and practice. More recently, it is the Covid-
`19 pandemic that is widening the gaps between the average white Or-
`egonian and the average Black Oregonian. This gap must be narrowed
`through targeted investment in our community—for Black people,
`for Black-owned businesses, and for Black community based or-
`ganizations. And that narrowing includes The Oregon Cares Fund.
`The Oregon Cares Fund (TOCF) is a $62 million targeted invest-
`ment in the Black community from the CARES Act’s Coronavirus
`Relief Fund (CRF).
`
`Historic Disparities
`
`The myriad of issues requiring remedy prior to and exacerbated by the
`COVID-19 pandemic are institutional, and cannot be mitigated
`through one singular effort or fund. Black people began this pandemic
`far behind the average Oregonian whether it is in health, education, or
`economic prosperity. . . . Immediate intervention is necessary to enable
`the Black community to meet basic needs and help us begin to chart a
`course for our collective recovery.
`
`Exhibit 2, Oregon State Leg. Joint Emergency Bd., July 14, 2020 Meeting Materials,
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`Ex. 9, Testimony—The Oregon Cares Fund, The Oregon Cares Fund: A Fund For
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`Black Relief And Resiliency, p. 3 of exhibit (labeled as page 8) (emphasis in original).
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`61. Because Oregon did not link the grant program to specific, “identified dis-
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`crimination,” Defendants cannot establish that the program furthers a compelling
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`state interest—and it is therefore “almost impossible” to conduct a narrow-tailoring
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`inquiry. J.A. Croson Co., 488 U.S. at 507. The Legislature’s superficial analysis con-
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`firms that Defendants cannot meet their burden of showing that the use of race to
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`distribute grants is narrowly tailored. Among other things, narrow tailoring requires
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`“serious, good faith consideration of workable race-neutral alternatives.” Grutter v.
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`Bollinger, 539 U.S. 206, 339 (2003); see also J.A. Croson Co., 488 U.S. at 507 (mi-
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`nority set-aside program was not narrowly tailored in part because city had not con-
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`sidered “the use of race-neutral means” to achieve its interest); Wygant, 476 U.S. at
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`280 n.6 (plurality opinion) (noting that the term “narrowly tailored” “require[s] con-
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`sideration” of “lawful alternative and less restrictive means”). But here, the Oregon
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`Legislature gave no consideration of race-neutral alternatives—it just established a
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`grant program that is reserved for members of a particular race.
`62. This record demonstrates that Defendants’ use of race as a basis for eligibility
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`for Fund grants cannot satisfy strict scrutiny. The Legislature failed to identify dis-
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`crimination with specificity and failed to develop a “strong basis in evidence” before
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`taking race-conscious action. Shaw, 517 U.S. at 909. The legislative record shows that
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`the Fund is an attempt to address general societal discrimination. Accordingly, the use
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`of race as the basis for distributing grants from the Fund violates the Constitution’s
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`Equal Protection guarantee.
`
`* * *
`63. As set forth above, DAS is the agency responsible for implementing the Fund,
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`which included transmitting $62 million in federal relief funds to the Contingent to
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`establish the Fund, and “working with The Contingent on ensuring that federal
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`spending, reporting, and other legal requirements are met.” Ex. 1, Cares Fund
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`Agenda Report at p. 2. This includes ensuring that the Fund satisfy the Oregon
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`Legislature’s directive that grant recipients meet the “[s]pecific requirement[]” that
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`they “self-identify as Black.” Id. at p. 1.
`64. The Contingent and the Black United Fund of Oregon were jointly engaged
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`with DAS to administer the Fund and charged by the Oregon Legislature to distribute
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`grants on the condition that recipients “self-identify as Black.” The Contingent and
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`the Black United Fund of Oregon are therefore liable as state actors for the purposes
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`of 42 U.S.C. § 1983 because the Oregon Legislature “create[d] the legal framework
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`governing [their] conduct,” “delegate[d] [the State’s] authority” to the Contingent
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`and the Black United Fund of Oregon to deploy race-based classifications when over-
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`seeing the Fund, and generally “provided a mantle of authority” to the Contingent
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`and the Black United Fund of Oregon such that the organizations were acting as the
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`state itself when distributing grants from the Fund. Nat’l Collegiate Athleti