Judge Issues Injunction Against Biden’s USDA Over Race-Based Loan Forgiveness Program

A farmer harvests crops near Presho, South Dakota, on Oct. 13, 2014. Andrew Burton/Getty Images

A district court judge granted an injunction against the Biden administration’s loan-forgiveness program for nonwhite farmers and ranchers, ruling in favor of a Tennessee farmer who argued in a lawsuit that the provision was unconstitutional.

U.S. District Judge S. Thomas Anderson for the Western District of Tennessee ruled that the U.S. Department of Agriculture (USDA) should halt its distribution of funds through the program until the case is fully resolved. The program, otherwise known as Section 1005, was created under a provision in the American Rescue Plan Act that was approved by Congress earlier this year.

“However important the goal of eliminating the vestiges of prior race discrimination, and it is important, the government’s efforts cannot withstand strict scrutiny. Therefore, Plaintiff has shown a likeliness of success on the merits at trial,” he wrote (pdf) in favor of farmer Robert Holman, who was being represented by Southeastern Legal Foundation and the Mountain States Legal Foundation.

While there isn’t a cap on the amount of loan money that can be granted by the USDA, some $3.8 billion had been provided to the program, and those funds may be depleted before the case is resolved, the judge ruled in explaining why he created an injunction against the program.

Elaborating further, Anderson ruled that Holman “has shown a substantial likelihood that he will prevail on his claim” that the provision violates the Fourteenth Amendment’s Equal Protection clause. “Absent action by the Court, socially disadvantaged farmers will obtain debt relief,” he wrote, “while Plaintiff will suffer the irreparable harm of being excluded from that program solely on the basis of his race.”

The farm loan program was part of President Joe Biden’s plan to promote “equity,” and it would pay off “the loans of black, Hispanic, American Indian, Native Alaskan and Hawaiian farmers” and award them “an additional 20 percent of the value as a cash payment,” the Southeastern Legal Foundation noted.

Section 1005 pays up to 120 percent of a direct or guaranteed farm loan for black American Indian, Hispanic, Asian American, or Pacific Islander farmers, according to the USDA’s website.

Following the national injunction, the USDA rebuffed the order on its website and said the “law provides USDA direction to deliver debt relief to socially disadvantaged farmers and ranchers who hold a qualifying farm loan.” The USDA said that borrowers should still submit paperwork and “will be prepared to provide the debt relief authorized by Congress at the earliest opportunity, depending on the ongoing litigation.”

The USDA’s lawyers, meanwhile, had argued before Anderson that Congress enacted the provision in a bid to solve the effects of alleged racial discrimination in USDA loan programs. Offering loans to nonwhite people under the program would, according to the attorneys, remedy those effects.

Congress looked at the evidence that discriminatory loan practices at the USDA placed minority farmers at a disadvantage before the COVID-19 pandemic, which is why the provision had been necessary, the USDA’s lawyers also argued.

A judge in Wisconsin previously ruled against Section 1005 of the American Rescue Plan Act, offering a similar argument as Anderson’s.

“Plaintiffs are excluded from the program based on their race and are thus experiencing discrimination at the hands of their government,” Wisconsin U.S. District Judge William Griesbach wrote in the opinion last month, adding that plaintiffs “have established a strong likelihood that Section 1005 of the ARPA is unconstitutional.”

However, Anderson’s ruling goes a step further than Griesbach’s order in that he created an injunction rather than a temporary restraining order.