Advocates for minority-owned businesses say the ruling is critical to efforts to level the playing field for Black, Hispanic and other minority business owners who face barriers to accessing financing and other resources. He criticized it as a serious blow.
Judge Mark T. Pittman of the U.S. District Court for the Northern District of Texas, who was appointed by former President Donald Trump, said that the eligibility requirements for the Minority Business Development Authority require that racial minorities be The court ruled that this assumption violated the Fifth Amendment's equal protection guarantee. are in a disadvantageous position.
The agency is part of the U.S. Department of Commerce and was first created during the Nixon administration to address discrimination in the business world. The Biden administration expanded its coverage and scope in 2021 through the Infrastructure Investment and Jobs Act, making the agency a permanent agency and increasing funding to $550 million over five years.
The agency helps minority-owned businesses obtain financing and government contracts and currently operates in 33 states and Puerto Rico. According to its annual report, the agency helped businesses raise more than $1.2 billion in capital in fiscal year 2022, including more than $50 million for Black-owned businesses and $395 million for Hispanic-owned businesses. Contains more than a dollar.
In a sharply worded 93-page ruling, Pittman wrote that while the agency's efforts may be aimed at “alleviating the opportunity gap” faced by minority-owned businesses, “two wrongs make no right. It will not become.” And MBDA's racial presumptions are wrong. ”
Pittman said the agency technically works with any business that can demonstrate “social or economic disadvantage,” but white people and others not on the “list of priority races” It ruled that it was necessary to overcome the assumption that there was no disadvantage. The agency has been using the “presumption of unconstitutionality” for “55 years,” he said.
“Today, the clock is gone,” Pittman wrote.
Dan Lennington, deputy general counsel for the conservative Wisconsin Institute for Law and Liberty, which filed the lawsuit, said it was a “historic” victory and one that would overturn dozens of others that essentially take into account people of a particular race. It said it could impact similar federal, local and state government programs. are in a disadvantageous position. He said the ruling clears the way for him and other conservative groups to target these programs.
“We believe this decision will apply broadly to hundreds of programs that use the same language,” Lennington said.
A Justice Department lawyer representing the Minority Business Development Agency declined to comment on the ruling, which could be appealed to the conservative-leaning 5th U.S. Circuit Court of Appeals in New Orleans. be. The Justice Department said in court filings that minority owners are often denied loans at three times the interest rates of non-minority businesses, often receive smaller loans and are charged higher interest rates. He cited Congressional and other research showing that the country faces systemic barriers, including
John F. Robinson, president of the National Minority Business Council, said the ruling is “a blow to minority-owned businesses,” as majority-owned businesses already enjoy access to federal resources through the Small Business Administration. , said it won't help them.
“This could harm the entire minority business sector because it reduces the services available to minority-owned businesses,” Robinson said.
AP Race & Ethnicity Writer Graham Lee Brewer contributed to this article.
