UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF WISCONSIN
`
`
`
`v.
`
`Plaintiffs,
`
`
`
`
`
`
`
`
`
`
`
`Case No. 21-C-548
`
`
`
`Defendants.
`
`
`
`ADAM P. FAUST, et al.,
`
`
`
`
`
`THOMAS J. VILSACK, et al.,
`
`
`
`
`
`
`
`
`
`
`
`DECISION AND ORDER GRANTING PLAINTIFFS’
`MOTION FOR A TEMPORARY RESTRAINING ORDER
`
`
`
`
`
`Twelve plaintiffs, who reside in nine different states, including Wisconsin, brought this
`
`action against the Secretary of Agriculture and the Administrator of the Farm Service Agency
`
`(FSA), seeking to enjoin officials of the United States Department of Agriculture (USDA) from
`
`implementing a loan-forgiveness program for farmers and ranchers under Section 1005 of the
`
`American Rescue Plan Act of 2021 (ARPA). Plaintiffs assert that Section 1005 denies them equal
`
`protection of the law because eligibility to participate in the program is based solely on racial
`
`classifications. This matter comes before the Court on Plaintiffs’ motion for a temporary
`
`restraining order pursuant to Rule 65 of the Federal Rules of Civil Procedure. For the following
`
`reasons, the motion will be granted.
`
`
`
`The American Rescue Plan Act of 2021 was enacted on March 11, 2021. H.R. 1319, 117th
`
`Cong. (2021). As part of the ARPA, Congress appropriated “such sums as may be necessary” to
`
`pay for the cost of loan modifications and payments to “socially disadvantaged” farmers and
`
`ranchers. § 1005(a)(1). Under Section 1005, “the Secretary shall provide a payment in an amount
`
`up to 120 percent of the outstanding indebtedness of each socially disadvantaged farmer or rancher
`
`Case 1:21-cv-00548-WCG Filed 06/10/21 Page 1 of 10 Document 21
`
`

`

`
`
`as of January 1, 2021, to pay off the loan directly or to the socially disadvantaged farmer or
`
`rancher.” § 1005(a)(2). Loans eligible for forgiveness include direct farm loans made by the
`
`Secretary or farm loans guaranteed by the Secretary. Id. The term “socially disadvantaged farmer
`
`or rancher” has the meaning given in 7 U.S.C. § 2279(a). § 1005(b)(3). Under that statute,
`
`“socially disadvantaged farmer or rancher” means a farmer or rancher who is a member of a
`
`“socially disadvantaged group.” § 2279(a)(5). “Socially disadvantaged group” is then defined as
`
`“a group whose members have been subjected to racial or ethnic prejudice because of their identity
`
`as members of a group without regard to their individual qualities.” § 2279(a)(6). In other words,
`
`the loan forgiveness program is based entirely on the race of the farmer or rancher.
`
`
`
`Defendants have interpreted “socially disadvantaged farmer or rancher” to include
`
`individuals “who are one or more of the following: Black/African American, American Indian,
`
`Alaskan native, Hispanic/Latino, Asian, or Pacific Islander.” American Rescue Plan Debt
`
`Payments, U.S. DEPARTMENT OF AGRICULTURE, available at https://www.farmers.gov
`
`/americanrescueplan (last visited June 7, 2021). The USDA describes how the loan-forgiveness
`
`plan will be administered on its website. It explains, “Eligible Direct Loan borrowers will begin
`
`receiving debt relief letters from FSA in the mail on a rolling basis, beginning the week of May
`
`24. . . . After reviewing closely, eligible borrowers should sign the letter when they receive it and
`
`return to FSA.” Id. It advises that, in June 2021, the FSA will begin to process signed letters for
`
`payments, and “about three weeks after a signed letter is received, socially disadvantaged
`
`borrowers who qualify will have their eligible loan balances paid and receive a payment of 20%
`
`of their total qualified debt by direct deposit, which may be used for tax liabilities and other fees
`
`associated with payment of the debt.” Id.
`
`
`
`Case 1:21-cv-00548-WCG Filed 06/10/21 Page 2 of 10 Document 21
`
`2
`
`

`

`
`
`
`
`Plaintiffs are twelve white farmers and ranchers from nine different states. Plaintiffs
`
`moved for a temporary restraining order seeking to enjoin the purportedly unconstitutional race-
`
`based program before all of the money is distributed. Defendants responded to the motion on June
`
`8, 2021, and Plaintiffs filed a reply brief the following day. The motion is now ripe for the Court’s
`
`consideration.
`
`A temporary restraining order, as opposed to a preliminary injunction, is sought and heard
`
`on an emergency basis. The purpose of a temporary restraining order is to preserve the status quo
`
`pending the complete briefing and consideration of a motion for a preliminary injunction. See
`
`Geneva Assurance Syndicate, Inc. v. Med. Emergency Servs. Assocs., 964 F.2d 599, 600 (7th Cir.
`
`1992) (“The essence of a temporary restraining order is its brevity, its ex parte character, and . . .
`
`its informality.”). In general, the showing required for a temporary restraining order and a
`
`preliminary injunction are the same. Specifically, a plaintiff must show that “(1) without this
`
`relief, it will suffer ‘irreparable harm’; (2) ‘traditional legal remedies would be inadequate’; and
`
`(3) it has some likelihood of prevailing on the merits of its claims.” Speech First, Inc. v. Killeen,
`
`968 F.3d 628, 637 (7th Cir. 2020) (quoting Courthouse News Serv. v. Brown, 908 F.3d 1063, 1068
`
`(7th Cir. 2018)). If a plaintiff makes such a showing, the court proceeds to a balancing analysis,
`
`to determine whether the balance of harm favors the moving party or whether the harm to other
`
`parties or the public sufficiently outweighs the movant’s interests. Id. A temporary restraining
`
`order “is an extraordinary and drastic remedy, one that should not be granted unless the movant,
`
`by a clear showing, carries the burden of persuasion.” Goodman v. Ill. Dep’t of Fin. & Prof’l
`
`Regulation, 430 F.3d 432, 437 (7th Cir. 2005) (internal quotation marks and citations omitted).
`
`Plaintiffs challenge the USDA’s use of race classifications for allocating funds under the
`
`loan-forgiveness program as violative of the equal protection guarantee in the United States
`
`
`
`Case 1:21-cv-00548-WCG Filed 06/10/21 Page 3 of 10 Document 21
`
`3
`
`

`

`
`
`Constitution. They assert that they are likely to succeed on their claim. “The liberty protected by
`
`the Fifth Amendment’s Due Process Clause contains within it the prohibition against denying to
`
`any person the equal protection of the laws.” United States v. Windsor, 570 U.S. 744, 774 (2013).
`
`“Government policies that classify people by race are presumptively invalid.” Vitolo v. Guzman,
`
`--- F.3d ---, 2021 WL 2172181, at *4 (6th Cir. May 27, 2021) (citing U.S. Const. amend. XVI;
`
`Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 234–35 (1995)). “[W]hen the government
`
`distributes burdens or benefits on the basis of individual racial classifications, that action is
`
`reviewed under strict scrutiny.” Parents Involved in Cmty. Schs. v. Seattle Sch. Dist. No. 1, 551
`
`U.S. 701, 721 (2007) (citations omitted). Under this standard, “the government has the burden of
`
`proving that racial classifications ‘are narrowly tailored measures that further compelling
`
`governmental interests.’” Johnson v. California, 543 U.S. 499, 505 (2005) (quoting Adarand, 515
`
`U.S. at 227). Because the program grants privileges to individuals based solely on their race, strict
`
`scrutiny applies.
`
`Defendants assert that the government has a compelling interest in remedying its own past
`
`and present discrimination and in assuring that public dollars drawn from the tax contributions of
`
`all citizens do not serve to finance the evil of private prejudice. Dkt. No. 17 at 16. “The
`
`government has a compelling interest in remedying past discrimination only when three criteria
`
`are met.” Vitolo, 2021 WL 2172181, at *4; see also City of Richmond v. J.A. Croson Co., 488
`
`U.S. 469 (1989) (plurality opinion). The Sixth Circuit recently summarized the three requirements
`
`as follows:
`
`First, the policy must target a specific episode of past discrimination. It cannot rest
`on a “generalized assertion that there has been past discrimination in an entire
`industry.” J.A. Croson Co., 488 U.S. at 498. . . . Second, there must be evidence of
`intentional discrimination in the past. J.A. Croson Co., 488 U.S. at 503. Statistical
`disparities don’t cut it, although they may be used as evidence to establish
`intentional discrimination. . . . Third, the government must have had a hand in the
`
`
`
`Case 1:21-cv-00548-WCG Filed 06/10/21 Page 4 of 10 Document 21
`
`4
`
`

`

`
`
`
`past discrimination it now seeks to remedy. So if the government “shows that it had
`essentially become a ‘passive participant’ in a system of racial exclusion practiced
`by elements of a local industry,” then the government can act to undo the
`discrimination. J.A. Croson Co., 488 U.S. at 492. But if the government cannot
`show that it actively or passively participated in this past discrimination, race-based
`remedial measures violate equal protection principles.
`
`Vitolo, 2021 WL 2172181, at *4–5 (alterations omitted).
`
`Here, Defendants lack a compelling interest for the racial classifications. Defendants assert
`
`that “Congress targeted the debt payments in Section 1005 to the minority groups that it determined
`
`had suffered discrimination in the USDA programs and that had been largely left out of recent
`
`agricultural funding and pandemic relief.” Dkt. No. 17 at 17. But Defendants have not established
`
`that the loan-forgiveness program targets a specific episode of past or present discrimination.
`
`Defendants point to statistical and anecdotal evidence of a history of discrimination within the
`
`agricultural industry. Id. at 16–17. But Defendants cannot rely on a “generalized assertion that
`
`there has been past discrimination in an entire industry” to establish a compelling interest. J.A.
`
`Croson Co., 488 U.S. at 498; see also Parents Involved, 551 U.S. at 731 (plurality opinion)
`
`(“remedying past societal discrimination does not justify race-conscious government action”).
`
`Defendants’ evidence of more recent discrimination includes assertions that the vast majority of
`
`funding from more recent agriculture subsidies and pandemic relief efforts did not reach minority
`
`farmers and statistical disparities. Id. at 17. Aside from a summary of statistical disparities,
`
`Defendants have no evidence of intentional discrimination by the USDA in the implementation of
`
`the recent agriculture subsidies and pandemic relief efforts. “An observation that prior, race-
`
`neutral relief efforts failed to reach minorities is no evidence at all that the government enacted or
`
`administered those policies in a discriminatory way.” Vitolo, 2021 WL 2172181, at *5.
`
`Defendants have failed to establish that it has a compelling interest in remedying the effects of
`
`
`
`Case 1:21-cv-00548-WCG Filed 06/10/21 Page 5 of 10 Document 21
`
`5
`
`

`

`
`
`past and present discrimination through the distribution of benefits on the basis of racial
`
`classifications.
`
`In addition, Defendants have not established that the remedy is narrowly tailored. To do
`
`so, the government must show “serious, good faith consideration of workable race-neutral
`
`alternatives.” Grutter v. Bollinger, 539 U.S. 306, 339 (2003). Defendants contend that Congress
`
`has unsuccessfully implemented race-neutral alternatives for decades, but they have not shown
`
`that Congress engaged “in a genuine effort to determine whether alternative policies could address
`
`the alleged harm” here. Vitolo, 2021 WL 2172181, at *6. The obvious response to a government
`
`agency that claims it continues to discriminate against farmers because of their race or national
`
`origin is to direct it to stop: it is not to direct it to intentionally discriminate against others on the
`
`basis of their race and national origin.
`
`The Section 1005 program is a loan-forgiveness program purportedly intended to provide
`
`economic relief to disadvantaged individuals without actually considering the financial
`
`circumstances of the applicant. Indeed, Congress can implement race-neutral programs to help
`
`farmers and ranchers in need of financial assistance, such as requiring individual determinations
`
`of disadvantaged status or giving priority to loans of farmers and ranchers that were left out of the
`
`previous pandemic relief funding. It can also provide better outreach, education, and other
`
`resources. But it cannot discriminate on the basis of race. On this record, Defendants have not
`
`established that the loan forgiveness program under Section 1005 is narrowly tailored and furthers
`
`compelling government interests. The Court concludes that Plaintiffs are likely to succeed on the
`
`merits of their claim that Defendants’ use of race-based criteria in the administration of the
`
`program violates their right to equal protection under the law.
`
`
`
`Case 1:21-cv-00548-WCG Filed 06/10/21 Page 6 of 10 Document 21
`
`6
`
`

`

`
`
`
`Next, the Court finds that Plaintiffs will suffer irreparable harm absent a temporary
`
`restraining order. Defendants make the extraordinary argument that racial discrimination inflicts
`
`no harm at all. Though Defendants assert that Section 1005 is intended to help socially
`
`disadvantaged farmers affected by COVID-19, it does not provide relief based on losses sustained
`
`during the pandemic. Instead, the only consideration in determining whether a farmer or rancher’s
`
`loans should be completely forgiven is the person’s race or national origin. Plaintiffs are
`
`completely excluded from participation in the program based on their race. If the Court does not
`
`issue an injunction, the USDA will spend the allocated money and forgive the loans of minority
`
`farmers while the case is pending and will have no incentive to provide similar relief on an
`
`equitable basis to others. Plaintiffs are excluded from the program based on their race and are thus
`
`experiencing discrimination at the hands of their government.
`
`Defendants assert that, even if Plaintiffs suffer irreparable harm, the harm is not imminent
`
`because the USDA is “just beginning” to administer the program and the funds are “statutorily
`
`unlimited.” Dkt. No. 17 at 14–15. Congress has apportioned “such sums as may be necessary” to
`
`pay for the program. § 1005(a)(1). While there is no explicit cap on the funds allocated to the
`
`loan-forgiveness program, based on current estimates, 0.2% of the $1.9 trillion package in the
`
`ARPA has been allocated to the program. Defendants sent offer letters to eligible farmers and
`
`ranchers as early as May 24, 2021. On June 9, 2021, Defendants sent offer letters to 8,580 farmers,
`
`and intend to send another 6,836 letters beginning June 14, 2021. Dkt. No. 17-2, ¶¶ 32, 35.
`
`Defendants indicate that it will take an average of seven days to receive an accepted offer and that
`
`the FSA will process payment immediately upon receipt of the offer. Id. ¶¶ 29–31. Defendants
`
`have already started to forgive loans, and the 8,580 farmers and ranchers who were sent offer
`
`letters represent approximately 49% of the loans that will be forgiven under the program. The
`
`
`
`Case 1:21-cv-00548-WCG Filed 06/10/21 Page 7 of 10 Document 21
`
`7
`
`

`

`
`
`entire $3.8 billion that has been allocated to the program may be depleted before briefing and
`
`consideration of the motion for a preliminary injunction. Plaintiffs’ injuries are also irreparable in
`
`light of Defendants’ sovereign immunity and Plaintiffs’ inability to seek damages. For these
`
`reasons, the Court finds that Plaintiffs will suffer irreparable harm absent a temporary restraining
`
`order.
`
`Finally, the Court considers the irreparable harm Defendants will suffer if preliminary
`
`relief is granted and the public interest. These factors “merge when the Government is the
`
`opposing party.” Nken v. Holder, 556 U.S. 418, 435 (2009). Here, the public interest and balance
`
`of harms weigh in Plaintiffs’ favor. The public interest would be served by the entry of a temporary
`
`restraining order, as it is “always in the public interest to prevent the violation of a party’s
`
`constitutional rights.” Déjà vu of Nashville, Inc. v. Metro. Gov’t of Nashville & Davidson Cty.,
`
`Tennessee, 274 F.3d 377, 400 (6th Cir. 2001). Because Plaintiffs have established a strong
`
`likelihood that Section 1005 of the ARPA is unconstitutional, the public interest favors the
`
`issuance of a temporary restraining order. Although Defendants assert that thousands of minority
`
`farmers have a strong interest in expeditiously receiving funds under the program, they
`
`acknowledge that there is no true urgency, as certain loan payments may take up to nine weeks to
`
`process. Dkt. No. 17 at 15. There is no reason that a temporary halt on payments will cause any
`
`harm. Defendants have advised that they will not foreclose on any delinquent loans and that banks
`
`holding USDA-backed loans will not foreclose on them. Though Defendants would be enjoined
`
`from allocating funds to eligible farmers and ranchers under a temporary restraining order, they
`
`would not be prevented from identifying eligible recipients, mailing notices, accepting and
`
`reviewing applications, responding to inquiries and providing guidance regarding the program,
`
`and making other determinations. The purpose of a temporary restraining order is to preserve the
`
`
`
`Case 1:21-cv-00548-WCG Filed 06/10/21 Page 8 of 10 Document 21
`
`8
`
`

`

`
`
`status quo pending a decision on the merits. Once a loan is forgiven, it cannot easily be undone.
`
`A narrow temporary restraining order resolves any threat of serious delay. The Court finds that
`
`the public interest and balance of equities weigh in favor of Plaintiffs.
`
`Plaintiffs have satisfied the elements necessary to obtain a temporary restraining order.
`
`Defendants argue that any temporary restraining order should be limited to Plaintiffs and not the
`
`thousands of other farmers across the country. They suggest that the Court issue a limited
`
`injunction requiring that the government set aside funds to pay off Plaintiffs’ qualified loans
`
`pending the outcome of the litigation. While universal injunctions are rare, they “can be necessary
`
`to provide complete relief to plaintiffs, to protect similarly-situated nonparties, and to avoid the
`
`chaos and confusion that comes from a patchwork of injunctions.” City of Chicago v. Barr, 961
`
`F.3d 882, 916–17 (7th Cir. 2020) (internal quotation marks and citations omitted). A nation-wide
`
`injunction is appropriate in this case. Defendants’ proposal to set aside funds to pay off any of
`
`Plaintiffs’ qualified loans is unworkable. If the USDA forgave Plaintiffs’ loans, it would be
`
`required to forgive every farmer’s loan, since the only criteria for loan forgiveness is the
`
`applicant’s race. Plaintiffs estimate that this would increase the cost of the program to $400 billion.
`
`Dkt. No. 19 at 3. In addition, nothing would prevent Plaintiffs from amending the complaint to
`
`add other farmers and ranchers as plaintiffs to this action. To ensure that Plaintiffs receive
`
`complete relief and that similarly-situated nonparties are protected, a universal temporary
`
`restraining order in this case is proper.
`
`Rule 65(c) provides that a court may issue a temporary restraining order “only if the movant
`
`gives security in an amount that the court considers proper to pay the costs and damages sustained
`
`by any party found to have been wrongfully enjoined or restrained.” Fed. R. Civ. P. 65(c). The
`
`
`
`Case 1:21-cv-00548-WCG Filed 06/10/21 Page 9 of 10 Document 21
`
`9
`
`

`

`
`
`Court finds that no security shall be required because Defendants did not request such security and
`
`have provided no evidence that they will suffer financial loss from a temporary restraining order.
`
`For these reasons, Plaintiffs’ motion for a temporary restraining order (Dkt. No. 12) is
`
`GRANTED. Defendants are enjoined from forgiving any loans pursuant to Section 1005 until the
`
`Court rules on Plaintiffs’ motion for a preliminary injunction.
`
`SO ORDERED at Green Bay, Wisconsin this 10th day of June, 2021.
`
`s/ William C. Griesbach
`William C. Griesbach
`United States District Judge
`
`Case 1:21-cv-00548-WCG Filed 06/10/21 Page 10 of 10 Document 21
`
`10
`
`
`
`
`
`