Supreme Court Asked to Weigh Race-Based Loan Relief Challenge

The Supreme Court has been asked to take up a challenge against a COVID-era Biden administration loan forgiveness program — since shut down — that offered race-based relief for farm loans, according to a petition from a farmer who claims she was barred from participating.

President Joe Biden signed the American Rescue Plan in March 2021, which earmarked $4 billion for the forgiveness of loans held by minority farmers and ranchers.

Leisl Carpenter, a white farmer who suffered losses on her Wyoming ranch during the coronavirus pandemic, says she was excluded from the program on the basis of her ethnicity.

According to the Department of Agriculture, Section 1005 of the American Rescue Plan created a debt relief program for "socially disadvantaged" ranchers affected by the pandemic.

"Carpenter was ineligible for Section 1005 debt relief because she is Caucasian," the petition read, arguing that the Constitution's guarantee of equal protection under the Fifth Amendment was violated by the program.

Carpenter's complaint was initially brought to federal court by the Mountain States Legal Foundation, which represented her and 11 other farmers who did not qualify for the debt-relief program. According to the petition, it "provided up to 120% debt relief for certain 'socially disadvantaged' farmers and ranchers."

The race-based loan forgiveness program was shut down after a U.S. district court judge in Tennessee issued a national injunction in July 2021 and called the program "reverse racism."

Prior to the national injunction being issued, the federal government had already issued test payments that amounted to approximately $1 million.

Congress reportedly repealed Section 1005 after the Inflation Reduction Act passed in August 2022 and the debt relief program was replaced by a similar program that was not based on race.

Carpenter appealed to the 10th U.S. Circuit Court of Appeals, arguing the Wyoming federal district court wrongly sided with the Justice Department's claim that the case became moot with the program's repeal.

In October, the 10th Circuit found that the repeal "rendered any equal protection injury impossible" and said Carpenter's case could not move forward because the $1 million in payments went to New Mexico farmers.

"If Appellees' administration of the test payments can be said to have excluded Ms. Carpenter from consideration at all, it was because she lives in Wyoming rather than New Mexico," the panel's majority decision read. "Even if she were not white, Ms. Carpenter would have been excluded from the test payments."

The Supreme Court petition, filed Monday, requests the justices determine if Carpenter's case is actually moot and whether that creates a precedent for the federal government to invalidate a lawsuit after allegedly violating equal protections.

"The 10th Circuit's rule creates a road map for invidious discrimination whenever the federal government wants to do something," William Trachman, Mountain States' general counsel, told the Washington Examiner Monday.

"Whether that's Biden's DEI across all forms of government or some other reparations program or Congress's decision to focus on race at the Federal Aviation Administration: all these programs, the goal for the government could be to do as much as they possibly can, in secret, as fast as they can," Trachman said. "And then pay no price."

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