U.S. District Judge Royce Lamberth in Washington. (Photo: Diego M. Radzinschi / ALM)

A federal judge on Tuesday night refused to force the Trump administration to open a door to providing coronavirus relief funds to political consultants and lobbyists who contend they've been unfairly cut out of receiving aid amid the pandemic.

"The executive and legislative branches quickly responded to the COVID-19 crisis with this virtually unanimous legislation," U.S. District Judge Royce Lamberth in Washington wrote in an order published Tuesday. "For the judicial branch to intervene now and issue the requested injunction under these circumstances would not be in the public interest."

"Suddenly finding a constitutional right in a twenty-four-year-old regulation that has never even been litigated before and that was not suddenly enacted to deal with this crisis is something that the Judicial Branch should not do," he added.

Lamberth expressed sympathy for the plight of the plaintiffs, the American Association of Political Consultants and others.

"The court does not seek to understate the financial hardships that political consultants, lobbyists, and their staff are experiencing. These are trying times," Lamberth wrote. "Businesses and individuals of all trades are suffering from the detrimental effects of this pandemic. But the court is bound by existing precedent and cannot enjoin a constitutionally valid regulation on account of financial hardship."

The American Association of Political Consultants, a group representing political consulting and lobbying firms, had challenged the Trump administration last week over a regulation that broadly excluded the industry from a nearly $350 billion loan program for small businesses struggling amid the coronavirus outbreak. Days after filing the lawsuit, the Payroll Protection Program, or PPP, was fully tapped, but the trade group pressed forward with the expectation that Congress would authorize further loans.

With court operations severely limited, Lamberth held a telephonic hearing Monday that centered largely on whether the loans—with their favorable terms and possibility of full forgiveness—amounted to a federal subsidy. The Justice Department argued that the trade group's lawsuit was effectively contesting a longstanding regulation issued by the Small Business Administration that, for the past quarter century, has barred lobbying and political consulting businesses from receiving loans from the agency.

In his argument Monday, Justice Department attorney David Morrell stressed that the small business loans, with their below-market rates and "availability of forgiveness," were effectively the kind of subsidy that has long been off-limits to the influence industry. Morrell, a top political appointee in the Justice Department division tasked with defending Trump administration policies, stated repeatedly that the favorable terms of the loans "transforms" them into subsidies.

"The delta between market terms and the terms of these loans is exactly the kind of economic benefit that transforms these into subsidies," he said.

Jason Torchinsky, an election lawyer and member of the trade group's board, argued that the regulation was violating the free speech rights of the political consulting and lobbying firms. Torchinsky, a partner at Holtzman Vogel Josefiak Torchinsky, said the group was seeking loans not to fund their political speech but to cover payroll and other customary business expenses.

At the end of Monday's brief hearing, when asked about whether the trade group had demonstrated that firms were harmed by the regulation, Torchinsky said, "Companies are facing real economic harm and real economic uncertainty, and therefore should be eligible to apply for these for this regulation."

"The fact that they meet the basic requirements for this program, but for the fact that they sell politicians on ideas instead of selling widgets, constitutes the demonstration of  harm necessary."

On Tuesday, before Lamberth issued his decision, Torchinsky said he would likely appeal any ruling against the trade group.

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