Federal minority business boost struck down

NEW YORK — A federal judge in Texas has ordered a 55-year-old U.S. agency that caters to minority-owned businesses to serve people regardless of race, siding with white business owners who claimed that the program discriminated against them.

The ruling was a significant victory for conservative activists waging a far-ranging legal battle against race-conscious workplace programs, bolstered by the Supreme Court’s ruling in June dismantling affirmative-action programs in higher education.

Advocates for minority-owned businesses slammed the ruling as a serious blow to efforts to level the playing field for Black, Hispanic and other minority business owners who face barriers in accessing financing and other resources.

Judge Mark Pittman of the U.S. District Court of the Northern District of Texas, who was appointed by then-President Donald Trump, ruled that the Minority Business Development Agency’s eligibility parameters violate the Fifth Amendment’s equal-protection guarantees because they presume that racial minorities are inherently disadvantaged.

The agency, which is part of the U.S. Commerce Department, was established during the Nixon administration to address discrimination in the business world.

The agency, which helps minorityowned businesses obtain financing and government contracts, operates in 33 states and Puerto Rico. According to its yearly reports, the agency helped businesses raise more than $1.2 billion in capital in fiscal 2022, including more than $50 million for Black-owned enterprises and more than $395 million for Hispanic-owned businesses.

In a sharply worded 93-page ruling, Pittman said that while the agency technically caters to any business that can show its “social or economic disadvantage,” white people and others not included in the “list of preferred races” must overcome a presumption that they are not disadvantaged. The agency, he said, has been using the “unconstitutional presumption” for “fifty-five years too many.”