Ruling could have implications for minority businesses
It's a ruling reverberating across the country — even if the ramifications aren't yet clear.
Last week, a U.S. District Court judge in Texas ruled that a federal agency created to assist minority business owners could not use race as a deciding factor in whom to serve, essentially forcing it to open to white entrepreneurs.
The Minority Business Development Agency (MBDA), created in 1969, has offices across the country, including in Atlanta, which now must abide by the judge's decision unless it is appealed. Resources like help getting federal contracts, business consulting services and access to grants and loans aimed at addressing opportunity gaps for minority businesses now must be available to businesses regardless of race.
Many people see the MBDA court battle as part of a larger trend of lawsuits from conservative activists that aim to dismantle affirmative action in education and business. This is now at least the second federal agency in nine months that has been ordered by a judge to change how they administer minority business programming.
The MBDA is still exploring its options in the case, but in the meantime the agency is continuing its work assisting businesses owned by socially or economically disadvantaged individuals “in a manner consistent with the court's decision,” Eric Morrissette, acting undersecretary of commerce for minority business development, said in an emailed statement.
A spokesperson did not respond to follow-up questions.
It's unclear how programs and grants would be affected. The leader of the institute that houses Georgia's MBDA said the organization would continue working to support business owners.
How the case unfolded
In March 2023, three men — Jeffrey Nuziard, Christian Bruckner and Matthew Piper — sued President Joe Biden, administration officials and the MBDA, alleging agency offices in Texas, Florida and Illinois refused to help them because they are white.
In a 93-page ruling, issued March 5 on the 55th anniversary of the MBDA's creation, Judge Mark Pittman acknowledged the MBDA benefits non-minorities “as an economy is only as strong as its weakest link.” But, he wrote, “that was little comfort to Plaintiffs when the Agency wouldn't help them because of their skin color.”
The MBDA was established as an entity under the Commerce Department by President Richard
Nixon in a 1969 executive order. It was then renewed by every president until 2021, when Congress and Biden enshrined it in law. The president has proposed $80 million for the agency in his fiscal year 2025 budget.
The agency serves “socially or economically disadvantaged” individuals, which U.S. code defines, in part, as someone “who has been subjected to racial or ethnic prejudice or cultural bias … because of the identity of the individual as a member of a group.”
In deciding who is socially or economically disadvantaged, before this ruling, the MBDA presumed Blacks, African Americans, Latinos, American Indians, Alaska Natives, Asians, Native Hawaiians, Pacific Islanders and Hasidic Jews were disadvantaged.
But Pittman, a Trump appointee, said that violates the Fifth Amendment right to equal protection. He issued a permanent injunction against the entire agency using the presumption in determining who can receive help from their business center programs, essentially opening it up to all races and ethnicities.
`Soul of the country' hurt
The Georgia MBDA Business Center is housed at the Georgia Tech Enterprise Innovation Institute, the university's economic development arm, and has provided assistance for 20 years.
Donna Ennis, the institute's director of community engagement and program development, said the Georgia office has always helped everyone.
“We have had a number of companies with all ethnicities … call us and we always make sure that we provide a service to them, even if it's just making sure that they're getting to the right resource,” Ennis said.