In what could be the first court interpretation of the federal government's $2 trillion COVID-19 stimulus package, a federal judge appeared reluctant to order changes to a portion of the law that some small businesses alleged was leaving them out.

At a telephonic hearing Friday, U.S. District Judge Stephanie Gallagher of the District of Maryland raised questions about whether the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, had an implied private right of action to allow small businesses to sue Bank of America over its application process. She also wanted to know whether the small businesses serving as lead plaintiffs in the class action had actually suffered irreparable harm.

"It seems to me to be a great deal of speculation and uncertainty, particularly when one is talking about the inability to apply for something versus a more concrete situation," she said at the hearing.

Plaintiffs attorney M. Celeste Bruce insisted the harm to small businesses was real.

"It's not speculative," said Bruce, a partner at Rifkin Weiner Livingston in Bethesda, Maryland. "The federal government is saying if we don't get this money into their hands, these businesses will not be able to operate. I don't think it's speculation. I don't think the federal government would have given $349 billion away based on a speculation that folks need it, or maybe they don't."

Enu Mainigi, of Williams & Connolly, speaking for Bank of America, said that the lead plaintiffs in the class action, none of whom could show harm, should "not create roadblocks for the larger small business community ultimately in getting the loans that they need."

"What this court does could have a chilling effect on other lenders," she said at the hearing.

The judge is hearing whether to grant a motion for a temporary restraining order in a class action alleging Bank of America limited its loans under the Paycheck Protection Program to applicants that don't have lending relationships with other banks. The program, launched April 3, is designed to protect payroll expenses for two months.

Although the case focuses on a portion of the CARES Act, the judge's decision could be among the first in which a court interprets the law, passed March 27.

At the hearing, Bruce insisted that Bank of America's restrictions made it likely that many small businesses would not get loans and shut down. She noted that the fund would be gone in 10 days under the current "burn rate."

"Banks were not put in the middle of this to be gatekeepers, to decide who would apply for a loan, to decide who gets a lifeline and who doesn't," she said. "Only the court in this time frame and under these circumstances can provide the relief we have requested. If relief is not afforded in this courtroom, small businesses have no place to go. The money will be gone, and they will not be given an opportunity to apply for funds."

She said Bank of America's actions had no legislative or legal authority under the CARES Act.

But the judge later asked, "With respect to the language of the CARES Act, specifically, and your arguments that it did not delegate authority to lending institutions to impose other requirements, you agree it also does not expressly restrict lenders from imposing other requirements?"

Charles Fax, another partner at Rifkin Weiner, argued that the CARES Act had an implied right of action, citing the U.S. Court of Appeals for the Fourth Circuit's 2019 decision in Planned Parenthood South Atlantic v. Baker.

Gallagher, echoing Bank of America's arguments, said that case did not deal with the CARES Act, and courts have found that the Small Business Act, of which the paycheck program is a part, does not allow for a private right of action.

Mainigi, Bank of America's lawyer, questioned the alleged harm to the lead plaintiffs and insisted that the allegations of the "run rate" of the fund were "speculative."

"I'm not aware of any of these plaintiffs where it's clear they have been unsuccessful in getting a loan, period," she said. "They still have the option to pursue loans through other lenders, including lenders they have a relationship with. And they have until June 30."

Bank of America, in court filings, has insisted that a temporary restraining order would slow down its ability to process loans.

Mainigi, in court, continued to defend Bank of America's right to impose restrictions in the first place.

"The act established criteria for getting the loans," she said. "It did not establish criteria for applying for loans."