In Gordon College v. U.S. Small Business Administration, (D DC, July 18, 2024), the D.C. federal district court dismissed claims by a religious nonprofit college that its rights under RFRA as well as the 1st and 14th Amendments were infringed when it was denied forgiveness of a $7 million loan that it received under the Covid era Paycheck Protection Program. Loan forgiveness was available to qualifying small businesses. Gordon College's loan forgiveness application was denied because it had over 500 employees and thus did not meet the SBA's small-business size standard. Rejecting plaintiff's RFRA claim, the court said in part:
... [P]laintiff fails to identify a “sincere religious belief” that has been infringed by application of the PPP’s 500-employee cap to plaintiff.... Absent here ... is any articulated connection between plaintiff’s asserted need to have more than 500 employees and its exercise of religion. Plaintiff, for example, does not allege that “any religious group” has “as one of its tenets” the requirement that an associated religious institution have more than 500 employees ... or that it has treated having more than 500 employees to “ris[e] to [any] level of significance in [its] religion.”...
As to plaintiff's Constitutional challenges, the court said in part:
... [T]he application of the PPP’s 500-employee cap to plaintiff is neutral and generally applicable, thereby triggering rational basis review, rather than strict scrutiny. Plaintiff has failed to bring a rational-basis challenge by not plausibly alleging that no reasonable set of facts could provide a rational basis for the PPP’s 500-employee cap. Accordingly, plaintiff’s Free Exercise and Equal Protection claims are dismissed....
Here, plaintiff alleges that “[d]efendants have interfered with the autonomy of [plaintiff] to define its own doctrine, membership, employment, staffing, affiliation, and other internal requirements” by “insisting on certain requirements [sic] for determining staffing and employment.... [P]laintiff has failed ... to explain why the PPP’s 500-employee cap... interfered with any “matters of faith and doctrine.” Plaintiff’s religious autonomy claim is thus dismissed.
