Judge Deals Blow to Biden Equity Agenda, Rules Minority-Business Aid Agency Must Be Open to All Races

A federal judge in Texas struck a blow this week against race-based discrimination by the Biden administration, ruling that an agency tasked with aiding disadvantaged businesses cannot limit its services based on arbitrary racial classifications.

The ruling by U.S. District Judge Mark T. Pittman could have implications for federal programs nationwide and the future of President Joe Biden’s “whole-of-government equity agenda.”

In a 93-page ruling on Tuesday, Pittman said that the 55-year-old Minority Business Development Agency’s use of a “codified list of preferred races/ethnicities to determine who gets benefits and who doesn’t” is unconstitutional. “Today the clock runs out,” he wrote.

The ruling by Pittman, who was appointed by former president Donald Trump, is the latest setback for proponents of using identity-based discrimination to correct past discrimination against historically marginalized groups. It comes on the heels of last year’s Supreme Court ruling in the Students for Fair Admissions cases, which held that it is unconstitutional for colleges and universities to consider a prospective student’s race in their admissions processes.

Pittman’s ruling was in response to a March 2023 lawsuit by the Wisconsin Institute for Law & Liberty, or WILL, which was filed on behalf of three small business owners — Jeffrey Nuziard, who owns a sexual-wellness center in Texas, Christian Bruckner, who owns a project-management business in Florida, and Matthew Piper, who owns a small architecture firm in Wisconsin. All three are white men.

They alleged in the lawsuit that they were denied the ability to even apply for MBDA services because of their race, and that is a violation of the Constitution’s equal-treatment requirement.

“They are all interested in finding new ways to grow their businesses and would value the advice, grants, consulting services, access to programs, and other benefits offered by the MBDA. But that agency won’t help them because of their race,” the lawsuit said.

Lawyers for the government argued that the MBDA’s race-based programming is constitutional because it remedies past discrimination in which the government “passively participated,” according to Pittman’s ruling.

Pittman disagreed, calling out the government’s use of arbitrary and imprecise racial classifications, and its presumption that those classifications could be used as stand-ins for advantage or disadvantage. Under the government’s racial classifications, “Oprah Winfrey is presumptively disadvantaged, while Plaintiffs and even more disadvantaged Americans are not,” Pittman wrote.

He noted that Nuziard and Bruckner both contacted MBDA offices but were denied the opportunity to even apply for benefits because of their race. He wrote that “it’s not that they were denied benefits they would otherwise certainly get, but that they didn’t really have a shot because of their skin color.”

While the MBDA’s work may help alleviate opportunity gaps minority businesses face, Pittman wrote, “two wrongs do not make a right. And the MBDA’s racial presumption is wrong.”

“While the Agency may intend to serve listed groups, not punish unlisted groups, the very design of its presumption punishes those who are not presumptively entitled to MBDA benefits,” Pittman wrote.

National Review has reached out to the U.S. Department of Commerce and the MBDA for comment. WILL called the ruling “an historic legal victory.”

“We think that this decision is going to impact hundreds and hundreds of programs at the federal and state and local level,” said Daniel Lennington, a WILL lawyer. “Biden has said this is the cornerstone of his equity agenda.”

WILL is part of a patchwork of conservative and libertarian-leaning legal firms, civil-rights activists, and elected leaders pushing back on identity-based discrimination and efforts to impose leftist diversity, equity, and inclusion programs in broad swaths of American life. Some of the groups have focused on government discrimination, while others have fought discrimination by private businesses, corporations, nonprofits and even venture-capital firms.

Lennington said the government’s racial classifications, and who qualifies for those classifications, are “irrational” and “insane.”

“According to the Biden administration, Asia stops at Afghanistan,” he said. “Asia includes Pakistan, but not Afghanistan.”

He said Pittman’s ruling won’t prevent disadvantaged people from getting government help.

“They just need to be disadvantaged as people who are individuals, not as members of groups where you just assume that they are,” Lennington said. “The punchline is, people need to be treated as individuals. And we should definitely help people who have disadvantages. We want the government to help people who need help.”

Lennington said he expects the Biden administration to appeal Pittman’s ruling because because it imperils so many other government equity programs.

“We’re going to use this decision to pursue more lawsuits and get more wins for equality,” Lennington said, “because we think the government and all of its programs should be colorblind and should help people based on need, not based on race.”