Lawyers for barbershop that sued over COVID relief say the new version of the bill is still unconstitutional

Locals Barbershop and Salon
Posted at 9:57 PM, Jan 14, 2021
and last updated 2021-01-21 12:31:04-05

DENVER — Colorado lawmakers are working to modify a bill that offers COVID-19 relief to minority-owned businesses.

Senate bill 21-001 changes some of the wording of legislation was passed during the special session when it comes to minority-owned businesses.

The changes come after the state was sued by Locals Barbershop and Salon, which is owned by a white man, claiming the legislation was discriminatory.

“Like many other businesses, his business has been hit with the coronavirus pandemic and all of the restrictions that have been put in place,” said Wen Fa, an attorney from Pacific Legal Foundation representing the barbershop. “He’s definitely seen a decrease in his revenue, and he wanted to apply for relief.”

Fa said the way the COVID-19 relief for the $4 million was worded disqualified his client from receiving assistance since it is not a minority-owned business, which they believe violates the Equal Protection Clause of the 14th Amendment.

“The 14th Amendment gives every individual the right to be treated based on their needs and based on their merit rather than based on race,” Fa said.

The modifications change some of the wording in the bill from “minority-owned businesses” to “disproportionately impacted businesses.”

“When we say changes here, it’s usually my understanding that it’s probably a lawsuit that we’re going to lose, and so we need to change what we did to make sure that that’s OK,” said House Minority Leader Rep. Hugh McKean.

Both the previous and current versions of the bill have bipartisan support. The Senate approved the new version Thursday unanimously.

Under the new version of the relief bill, businesses that can meet one of seven criteria qualify for the relief funding, including being minority-owned or in an economically distressed area.

The Office of Economic Development and International Trade (OEDIT) will be responsible for accepting applications and allocating funding, which McKean said offers more flexibility on the selection process.

“Maybe this is just transference of responsibility, but now it becomes the problem of the executive branch because OEDIT is under the governor, and the governor can answer to how did that policy get through them and how did they carry it out,” McKean said.

An additional $37 million is being made available to other businesses for COVID-19 relief.

“Colorado has funding options for small businesses regardless of who you are. This piece is specifically to support minority-owned businesses and those were disproportionately impacted, but we do have funding for all small businesses as well,” said Rep. Leslie Herod, one of the bill’s co-sponsors.

She’s hoping to get this money out to businesses as soon as possible, and lawmakers are making quick work of the bill in the three days they are meeting.

At this point, none of the $4 million from the original law has been given out since the lawsuit against it is still pending.

Herod also doesn’t think the $4 million is enough to be able to provide relief for all who are struggling but said the state is doing what it can to help.

Even with the changes, however, Fa doesn’t think the legislation is constitutional.

“Unfortunately, even though the bill uses the word disproportionately impacted businesses, it still gives a preference to minority-owned businesses,” he said. “It’s wrong and unconstitutional for the government to not consider the applications of some businesses or put those at a disadvantage because of their race.”

Herod disagrees and believes the new legislation will stand up to any court challenges.

Meanwhile, McKean believes the lawsuit highlights the reason lawmakers shouldn’t pick and choose every aspect of who deserves relief during the pandemic.

“Instead of picking people out of the pool, let’s just make sure we find the pool and then let that apply equally to everyone,” McKean said.

The lawsuit brought on by the white barbershop is still pending.