The state’s $62 million relief fund for Black Oregonians has agreed to stop allocating money while a federal court considers a new legal challenge that could shut down the program for good.
U.S. Judge Karin Immergut previously denied two separate requests for an injunction or restraining order to stop the fund from using race to distribute grants. In those instances, the Oregon Cares Fund set aside money for the plaintiffs in case they prevailed in their legal challenges.
For that reason, Immergut concluded they could not show irreparable harm and declined to shut down the state’s novel program.
Now, though, one of those original plaintiffs has joined with a Salem electrical contractor to seek class-action status for their case. Backed by a national conservative group, they are seeking a temporary restraining order or preliminary injunction against the Oregon Cares Fund on behalf of themselves and others in their situation.
Immergut will consider the motion Thursday. Fund organizers have agreed not to notify new grant applicants of awards until she rules on the new motion.
“The Oregon Cares Fund is, of course, following Judge Immergut’s ruling to not make any new awards, but will continue to distribute funds previously awarded while we await the next hearing,” said fund organizers in a statement Monday. “These funds – 4% of $1.4 billion (allocated to Oregon through the federal CARES Act) – are a crucial lifeline to Black Oregonians, Black-owned businesses and Black-led nonprofits who have not had fair access to other COVID relief funds.”
John Day logging company Great Northern Resources, the original plaintiff, joined with Dynamic Service Fire and Security and its owner, Walter Van Leja, to file a renewed motion Friday in the U.S. District Court in Portland.
They contend that Oregon has violated the equal protection clause of the U.S. Constitution by distributing benefits on the basis of race and that they and other non-Black individuals and businesses who have suffered because of the pandemic will be irreparably harmed if the fund is allowed to continue distributing money on the basis of race.
As of Monday, organizers of the Oregon Cares Fund had already approved nearly $50 million in payments and paid out more than $38 million to Black Oregonians, Black-owned businesses and Black-led nonprofits. Federal dollars used to seed the fund must be spent by Dec. 30.
That leaves $12 million that hasn’t yet been allocated, money that is in limbo while the fund awaits the court’s ruling Thursday.
Judge Immergut rejected a request from Great Northern Resources to block the fund in November after The Contingent, the non-profit administering the fund, agreed to set aside $200,000 for the logging company in case they prevailed in their legal challenge.
Immergut then rejected a similar motion earlier this month in a separate case brought against the fund by Maria Garcia, the Mexican-American owner of prominent downtown Portland coffee shop, Revolución Coffee.
In that case, The Contingent agreed to set aside $46,853.65, the maximum amount that Garcia would have qualified for if she were eligible for the funds. Immergut ordered last week that Garcia’s case be consolidated with the Great Northern suit.
“Plaintiff brought this lawsuit as a singular entity, not as a class,” Immergut wrote in her ruling rejecting Garcia’s motion. “Plaintiff’s interests are protected by The Contingent’s deposit of monies from the Fund into the Court’s registry.”
But with the renewed complaint, Great Northern Resources and Dynamic Service Fire and Security seek class-action status. They maintain they can make a stronger case for a preliminary injunction to block the fund from continuing to distribute money based on race.
“The defendants previously escaped a preliminary injunction by posting a bond sufficient to cover the claims for damages asserted by individual plaintiffs,” Friday’s motion said. “No such maneuver is possible when the plaintiffs are suing as class representatives and demanding classwide injunctive relief and damages. Accordingly, the plaintiffs seek a temporary restraining order or preliminary injunction to halt the illegal racial exclusions that the defendants are imposing on this Covid relief money.”
The Oregon Legislature’s Emergency Board voted in July to allocate federal CARES Act dollars to seed the unique fund.
At the time, the legislative counsel’s office warned that setting aside funds for one race could be considered unconstitutional without strong data and evidence showing “past discrimination in the economic sphere.” Other legal experts have since questioned the constitutionality of the fund as well.
But proponents of the fund pointed in July to a separate legal opinion from firm Schwabe, Williamson & Wyatt that contended that Black Oregonians are both suffering disproportionate economic harms from COVID-19 and receiving less aid from existing relief efforts.
Eleven prominent Oregon business groups, including Oregon Business & Industry, the Portland Business Alliance and the Oregon Business Council, released a statement last week expressing their support for the fund.
“We recognize that the health and wellbeing of the entire Oregon business community is linked,” the group said. “We also recognize that past and current racial discrimination have led to significant inequities, and those inequities are only growing due to the pandemic. The Oregon Cares Fund is an effort – organized by Oregon’s Black leaders – to dismantle these inequities, level the playing field, and build toward a future that truly allows for shared prosperity.”
— Jamie Goldberg
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