Minority business agency must serve all races, a federal judge rules
A federal judge in Texas has ordered a U.S. agency that serves minority-owned businesses to serve regardless of race.
The ruling sided with white business owners who claimed the program discriminated against them.
Judge Mark T. Pittman of the Northern District of Texas, who was appointed by former President Trump, argued that the Minority Business Development Agency’s (MBDA) eligibility parameters go against the equal protection guarantees in the Fifth Amendment.
The ruling was a significant victory for conservative activists looking to tackle race-conscious programs in the wake of the Supreme Court’s 2022 ruling disassembling colleges’ affirmative action programs, The Associated Press reported.
Advocates for minority-owned businesses say the ruling is a step back for efforts to even the playing field for business owners of color who may face barriers to creating and maintaining businesses, the AP said.
The agency is part of the U.S. Commerce Department and was created under the Nixon administration exactly 55 years ago. Pittman argued that it is 55 “years too many.”
In the ruling, Pittman argued that the MBDA and the federal government have “flagrantly” violated constitutional rights “for years.” He added, “Time’s up.”
Pittman ordered the agency to no longer impose the “racial and ethnic classifications” used in the past and no longer consider or use a business applicant’s race or ethnicity “in determining whether they can receive Business center programming.”
He argued that the agency advertises services exclusively for some races and not others. Applicants not on the agency’s list of preferred races can “attempt to ‘adequately show’ their ‘social or economic disadvantage’” by showing MBDA they are not disadvantaged because their race isn’t listed.
“That racial presumption fails strict scrutiny and thus violated the Fifth Amendment’s equal protection guarantees,” he wrote.
Pittman argued that while the agency’s work “may help alleviate opportunity gaps” that minority business owners face, “two wrongs do not make a right.”
“While the Agency may intend to serve listed groups, not punish unlisted groups, the very design of its presumption punishes those who are not presumptively entitled to MBDA benefits,” he wrote.
The agency helps minority-owned businesses obtain financing and government contracts. According to yearly reports, the AP reported, MBDA helped businesses raise more than $1.2 billion in fiscal 2022.
The Biden administration widened the agency’s scope under the 2021 Jobs Act, making it a permanent agency and increasing the funding to $550 million for five years, the AP noted.
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