Another lawsuit seeks to overturn a program focused on helping minority-owned businesses qualify for these initiatives.
Three white-owned businesses sued the Minority Business Development Authority, claiming they were denied services that would benefit their businesses.
In a ruling handed down Tuesday, a federal district court judge in Texas ruled that the agency violated the constitutional rights of the three businesses. The justices cited Supreme Court decisions that declared Harvard University and the University of North Carolina's race-based affirmative action programs to violate the U.S. Constitution's guarantee of equal protection.
In July, another court decision took advantage of the same Supreme Court ruling to force the Small Business Administration to certify businesses as small and disadvantaged businesses and remove them from the 8(a) set-aside program. It forced them to stop the so-called “rebuttable presumption” process that allows them to participate. .
Under that process, the SBA automatically accepted businesses as socially disadvantaged businesses because their owners are members of minority groups. A district court judge in Tennessee ruled that the SBA could no longer use that process.
The SBA currently requires companies to submit a Social Disadvantage Statement explaining how they personally faced discrimination.
The Minority Business Development Agency used a similar estimation process.
The MBDA did not respond to requests for comment, but lawyers representing the three companies told The Washington Post they expected an appeal. The three businesses were represented by the Wisconsin Institute for Law and Liberty.
MBDA operates several programs, including the Business Center, Advanced Manufacturing Center, Export Center, and Federal Procurement Center. Until this lawsuit, the center was open only to minority-owned businesses.
All three companies that filed the lawsuit claimed that small businesses would benefit from MBDA's services, but because they are white, they could not apply.
The California Small Business Opportunity Association, a small business advocacy group, criticized the decision.
CAMEO CEO Carolina Martinez said, “This lawsuit threatens to undermine Black and brown business owners' fight against poverty by blocking their access to the American dream of self-reliance and business ownership. “This is part of a concerted effort by anti-diversity activists to fight back.”
Martinez said lawsuits and decisions like this close “the door to prosperity for entrepreneurs of color.”