This Gov’t Program May Be Next On The Chopping Block In The Aftermath Of Landmark SCOTUS Affirmative Action Ruling

The Biden administration’s Minority Business Development Agency (MBDA) is currently facing a legal challenge for giving assistance to Americans based on race, and it may suffer the same fate at the Supreme Court as colleges and universities did earlier this year in the court’s affirmative action ruling.

The Wisconsin Institute for Law and Liberty (WILL) filed the suit in March in a federal court in the Northern District of Texas, representing three different clients from Texas, Wisconsin and Florida, according to an announcement from WILL. The suit alleges that the MBDA, which helps minority-run businesses apply for federal grants and get other forms of capital, violates the equal protection clause of the Constitution by giving some races preferential treatment and will likely win in court, following similar rulings like the Supreme Court’s decision in June to end the practice of race-based admissions at both public and private higher education institutions in a pair of cases involving Harvard and the University of North Carolina, according to experts who spoke to the Daily Caller News Foundation.

The agency was enshrined into law in 2021 through the Minority Business Development Act (MBDA) under the Biden administration but has been around since 1969 through an executive order issued by former President Richard Nixon, according to the Washington Post. Judge Mark T. Pittman, appointed by former President Donald Trump, is overseeing the case and has already issued an injunction, noting that the case is likely to succeed.

The final ruling from Pittman is expected to determine the constitutionality of the MBDA and whether the agency will be blocked from using racial categories to determine eligibility and the use of the word “minority” in its name, according to The Washington Post.

“The Minority Business Development Agency, its Business Center Program, and their differential treatment of Americans based on race are extremely vulnerable in WILL’s ongoing litigation,” Dan Morenoff, lawyer and executive director at the American Civil Rights Project, told the DCNF. “I expect that the Court will rule them unconstitutional when it issues a final opinion. The agency and its program expressly classify Americans by race and treat them differently based on that classification. At least eight of the nine justices of the Supreme Court have held that the Constitution bars the federal government from discriminating to exactly the same extent, and under the same analysis, that the equal protection clause bars the states from discriminating.”

The MBDA reports that it helped minority businesses receive $1.6 trillion in contracts in 2022, with $319 billion coming from the federal government, $860 billion from the private sector, $75 billion from state governments and $306 billion from local governments, according to the agency’s 2022 performance summary. Black Americans received the most in contracts, with $680 billion going to the group, followed by Hispanic Americans receiving $526 billion, Native Americans receiving $243 billion and Asian Americans receiving $138 billion.

“I fully expect the District Court to maintain in its final ruling the substance of its ruling on the preliminary injunction motion, that the program unconstitutionally ‘provides services to certain races and ethnicities but not to others,’” William Jacobson, a law professor at Cornell and president of the Legal Insurrection Foundation, told the DCNF. “The District Court rendered the preliminary injunction about three weeks before the Supreme Court’s Students for Fair Admissions ruling on affirmative action. That Supreme Court ruling buttresses the District Court’s ruling on the scope of the Equal Protection Clause, so I would not expect the District Court to back off its preliminary ruling.”

The agency also touts creating 7,904 jobs and retaining another 7,514 jobs in 2022 for minorities, according to the report. Minority companies in the construction sector reaped 43% of the monetary benefits, followed by the services sector and the finance and insurance sector at 19% and 12%, respectively.

“Either this case or one of the many parallel cases contesting intentional discrimination by the Biden administration will eventually make it to the Supreme Court,” Morenoff told the DCNF. “Those cases (and I’m not speaking comprehensively) have already seen lower courts ban racial discrimination in the distribution of: COVID-aide to farms, loans to small businesses, and — here — a myriad of business coaching supports. Each of these cases reiterates the legal point that the federal government cannot pick winners and losers based on race.”

Following the Supreme Court’s decision to end race-based admissions in higher education, conservatives have set their targets on companies’ use of racial preferences and quotas, with a group of Republican attorneys general sending letters to dozens of employers warning them that they were violating the law in August.

A federal court in 2021 put a hold on a similar program that would have provided $4 billion in debt relief to minority farmers but was later forced to be reworked to include white farmers, according to NBC News. Another case in 2021 stopped the Restaurant Revitalization Fund, which aimed to give $28.6 billion in aid to restaurants, from prioritizing applicants based on race and gender, according to The New York Times.

“America must continue to advance towards a colorblind society where every person is judged on their merit and not the color of their skin,” Dan Lennington, deputy counsel at WILL, said in the announcement. “The Biden Administration’s choice to create this race-based agency is a step back for civil rights, and we aim to correct that misstep.”

The Department of Justice and the MBDA did not respond to a request for comment from the DCNF.

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