Viewpoint and Race Discrimination Claim in COVID Relief Grants Can Go Forward

To be sure, APEDF wasn’t (and isn’t) legally entitled to a COVID-relief grant. And as the County emphasizes, the government doesn’t engage in viewpoint discrimination simply because it “selectively fund[s] a program to encourage certain activities it believes to be in the public interest, without at the same time funding an alternative program which seeks to deal with the problem in another way.” That being said, “even in the provision of subsidies, the Government may not ‘ai[m] at the suppression of dangerous ideas.'” … “[E]ven though a person has no ‘right’ to a valuable governmental benefit and even though the government may deny him the benefit for any number of reasons, there are some reasons upon which the government may not rely.” …

The essence of APEDF’s First Amendment claim here is that the County manipulated the ARPA grant program to suppress ideas that it viewed as dangerous—namely, those associated with the Uhuru Movement. That, it seems to us, is the very kind of claim that the NEA v. Finley (1997) Court suggested might have merit. Though the government can deny funding to applicants for many reasons, it “may not deny” even a discretionary “benefit to a person on a basis that infringes his constitutionally protected interests—especially, his interest in freedom of speech.” See also Speiser v. Randall (1958) (“The appellees are plainly mistaken in their argument that, because a tax exemption is a ‘privilege’ or ‘bounty,’ its denial may not infringe speech.”)….

Having concluded that APEDF is entitled to full (rather than diminished) First Amendment protection, we restate the governing test: To state a First Amendment retaliation claim, APEDF must allege (1) that it engaged in “constitutionally protected” speech or associational activity, (2) that it “suffered adverse conduct that would likely deter a person of ordinary firmness from engaging” in that activity, and (3) that “there was a causal relationship between the adverse conduct” and the activity….

Pointing to the significance of the grants to its operations, APEDF claims that the County’s actions would likely deter a nonprofit of ordinary firmness from engaging in expressive association. The County denies the existence of any chill because, it says, APEDF (1) “is free to engage in protected expressive association (including with the Uhuru Movement) without the benefit of grant funding” and (2) “in fact it does so.” … [W]e think APEDF has the better of the argument….

APEDF has adequately alleged that it was put in a sufficiently “coercive” position here. The County offered nonprofits an opportunity to apply for grants to mitigate and remediate the financial harm caused by the global COVID pandemic. APEDF prepared and submitted two competitive grant applications explaining the economic harm it had suffered as a result of COVID and its need for the grants. It scored high on objective markers, and it initially won a $36,801 grant for radio equipment to permit Black Power 96 to “continue broadcasting timely information on local health and educational services and emergency alerts.” Then, though, APEDF claims that on account of its association with the Uhuru Movement, its first grant was revoked and its second application—for a $67,327 grant to purchase an “urgently needed” back-up power generator—was denied. Giving it the benefit of reasonable inferences, APEDF has plausibly alleged that the County effectively punished it for associating with the Uhuru movement—forcing it to choose between that association and an important infusion of cash that, by objective markers, it seemed to have warranted….

And the court also allowed APEDF’s Equal Protection Clause race discrimination claim to go forward:

We begin with the question whether APEDF, as an inanimate corporation, can assert a claim for race discrimination under the Equal Protection Clause. Taking a cue from our existing precedent, we conclude that it can…. [A] corporate entity needn’t assume a racial identity in order to bring a race-discrimination claim under the Equal Protection Clause. Rather, even a “colorless” corporation (our term) can suffer—and sue to vindicate—its own injury caused by a government actor’s intentionally discriminatory conduct, even if that conduct is directed at others….

APEDF alleges that the County discriminated against it because many of its leaders are black, most of its staff and volunteers are black, and it serves the black community. In other words, APEDF alleges that it was treated unequally because it contracts with and “associate[s] with members of a protected class.” Under our precedent, that is enough….

APEDF has plausibly alleged both direct and circumstantial evidence indicating that the County acted with a prohibited discriminatory intent. As for direct evidence, there are the blatantly race-coded texts between Latvala and Bonneau. Latvala’s opening salvo indicates that it was APEDF’s name that initially caught his eye: “Google the African peoples one.”  Then, in a follow-up, he stated: “[S]ee if this African group is a hate group.”  In the same exchange, he asked whether radio equipment specified in one of the grant applications was “for [B]lack [P]ower 96.” And continuing in the same vein, at a later Board work session, Latvala objected to the fact that APEDF was associated with the Uhurus, who, he said, were reportedly tied to “black nationalist groups.”

Circumstantial evidence also plausibly indicates that the County acted with a discriminatory purpose. First, it appears that the County took “procedural and substantive departures from the norms [it] generally followed” when revoking and denying APEDF’s funding requests. APEDF’s first grant application was ranked fourth out of 55 applications. The Board then awarded funding to the 34 top-ranked organizations, including APEDF. Notably, APEDF’s was the only grant award later revoked, and it was revoked without notice. So too with respect to APEDF’s second grant application: It (too) was ranked highly—this time fourth out of 78 applications. County staff recommended removing three organizations, including APEDF, from the list, but the Board ultimately funded all the applicants on the list except APEDF.

Second, APEDF has plausibly alleged that the County treated similarly situated white-coded comparators more favorably—and, further, that the County’s explanations for its differential treatment don’t hold water. For instance, with respect to the revocation of APEDF’s first grant, Latvala asserted at a Board meeting that the County should “prioritiz[e] people over products and things.” But as APEDF’s complaint explains, while its grant was revoked, four nonprofits that serve predominantly white communities—and are not black-led—obtained funding for similar “products and things”—building renovations, computers, a truck, furniture, etc….

Finally, APEDF has plausibly alleged that the County sought to establish a pretext for its discriminatory conduct. Recall one of Latvala’s texts to Bonneau: “[T]he [U]hurus are claiming we are discriminating if we defund them.”  But, he continued, “One of my questions yesterday was about political parties being eligible [for funding] so we are going to use that“—because, he boasted, “this ain’t my first rodeo.” …

Giving it the benefit of all reasonable inferences, APEDF has plausibly alleged that the County intentionally discriminated against it on the basis of race when it revoked its previously awarded grant for radio equipment and then denied its second grant request….