Another Preliminary Injunction Granted Against “Discriminatory” USDA Loan Forgiveness Program

In a Northern District of Texas order filed on Thursday, Judge Reed O’Connor granted a group of farmers their requests for a preliminary injunction and class certification in one of at least five lawsuits contesting a U.S. Department of Agriculture loan forgiveness program available only to farmers and ranchers of socially disadvantaged groups. 

In a similar Florida Middle District lawsuit, a preliminary injunction against the program was already granted and a temporary restraining order against the program was granted in another similar lawsuit by the Wisconsin Eastern District. The judge in the Texas lawsuit agreed with those in Florida and Wisconsin, concluding that the plaintiffs had support for their claims. 

Thursday’s order prevents the USDA from “discriminating on account of race or ethnicity in administering section 1005 of the American Rescue Plan Act for any applicant who is a member of the Certified Classes.” The nation-wide classes include farmers and ranchers who purportedly are or will face “racial discrimination” from the USDA under Section 1005 and farmers who are excluded from the “socially disadvantaged farmer or rancher definition.” Under the order, the USDA cannot consider race or ethnicity or other criteria which are “intended to serve as a proxy for race or ethnicity” when determining eligibility for the loan forgiveness program. 

Section 1005 of a COVID-19 pandemic relief bill approved the program which was designed for “socially disadvantaged farmers” and would provide up to 120% of the individual’s loans. Under the USDA definition, a socially disadvantaged farmer or rancher means one who belongs to one of a list of minority races. The plaintiffs in these lawsuits purported that this was illegal because race was being used as a determining factor for aid eligibility. 

The plaintiffs asked for class certification and a preliminary injunction on June 2, arguing that an injunction would not halt aid for farmers of minority races, as the defendants claimed, but would instead broaden eligibility and allow aid to be available to white farmers who are otherwise eligible. The USDA opposed this request, arguing that farmers it classifies as socially disadvantaged have been discriminated against in other programs and that the plaintiffs motion did not meet legal requirements and was flawed. 

In granting the plaintiffs’ motions, Judge O’Connor explained that the plaintiffs’ allegations met the requirements for both class certification and a preliminary injunction, including that they are likely to succeed in their constitutional challenge. The court further agreed with the plaintiffs that there is a threat that they will be irreparably harmed without the injunction. 

The plaintiffs are represented by Mitchell Law PLLC, America First Legal Foundation, and The Fillmore Law Firm LLP. The USDA is represented by the U.S. Department of Justice.