(CBS4) – A high country business owner says Colorado’s grant to help businesses recover from the pandemic violates his constitutional rights by giving priority to minority-owned businesses. On Tuesday, a judge agreed.
In December of 2020, the General Assembly passed, and Gov. Jared Polis signed Senate Bill 20B-001, which allocated $4 million for COVID-19 relief payments to “minority-owned businesses,” but a small business owner challenged this program with a lawsuit forcing the General Assembly to revise law.
The new law was revised so that it applies not just to “minority-owned businesses,” but to what the law refers to as “disproportionately-impacted businesses.”
For Alma-based business owner Steve Collins, the law still didn’t work. He said it still gave priority to minority-owned businesses, so he filed the second lawsuit against the program.
“There are general eligibility criteria which every business owner, minority owned or not, must meet,” said Wen Fa, Attorney for the Pacific Legal Foundation. “For example, you have to have lost over 20% of your income since March 2020. You have received less than $20,000 in PPP loans, and Mr. Collins and his businesses meet all of that eligibility criteria, but even among all the businesses that meet those criteria, the law requires Colorado to provide a preference to prioritize minority-owned businesses where its distributing these grants.”
Fa emphasized that Collins, his client, does not object to any of the race neutral factors in the law, he simply wants a fair shot at receiving help. He operates an event planning business called Resort Meeting Source and has lost more than 30% of his revenue since March of 2020.
“He wants the opportunity to be treated as an individual, to be afforded equal justice before the law, but he also wants the grants to be distributed on a race-controlled basis to all struggling businesses that meet the eligibility criteria regardless of what race the owner is,” said Fa.
On Wednesday evening, the Office of Office of Economic Development and International Trade (OEDIT) filed a motion to dismiss.
In the filling the agency said in part,
“Every applicant who meets the criteria established by the Office of Economic Development and International Trade (OEDIT) will receive a grant. Plaintiffs thus have suffered no injury from the provisions of Colorado law they challenge here. Additionally, because race played no role in OEDIT’s funding decisions, no individual or business has suffered any injury from those provisions.”
Additionally, an employee with OEDIT, Michael Landes, filed a declaration regarding the program. In part of that declaration Landes indicated that minority-owned businesses may have been prioritized if there were too many applicants and wrote,
“At present, we have more than enough funds under the program to award $10,000 relief payments to each eligible applicant. As a result, we did not resort to the preferences contemplated in the program guidelines in the event OEDIT did receive more eligible applications than it could fund.”
It was Tuesday a judge granted a temporary restraining order, which stated in part:
Defendant Patrick Meyers, in his official capacity as Executive Director of the Colorado Office of Economic Development and International Trade, as well as his agents, employees, successors, and assigns, and all other persons in active concert or participation with him, is hereby IMMEDIATELY ORDERED AND Case 1:21-cv-02713-WJM-NYW Document 14 Filed 10/12/21 USDC Colorado Page 10 of 11 11 RESTRAINED from enforcing or otherwise giving any effect to the minority-owned business preferences of SB 21-001, in distributing COVID-19 relief grants through the Disproportionately Impacted Business Grant Program.
Judge William Martinez said the order would remain in effect until Oct. 26. Both parties will meet in court prior to discuss.