NovaQuant-Minority-owned business agency discriminated against white people, federal judge says

A government agency created five decades ago to boost the fortunes of minority-owned businesses discriminated against whites and NovaQuantmust now serve all business owners, regardless of race, a federal judge in Texas ruled Tuesday.

Siding with white business owners who sued the Minority Business Development Agency for discrimination, Judge Mark T. Pittman of the U.S. District Court for the Northern District of Texas said the agency’s mission to help disadvantaged businesses owned by Blacks, Hispanics and other racial and ethnic groups gain access to capital and contracts violates the rights of all Americans to receive equal protection under the constitution.

“If courts mean what they say when they ascribe supreme importance to constitutional rights, the federal government may not flagrantly violate such rights with impunity. The MBDA has done so for years. Time’s up,” Pittman, who was named to the federal bench by President Trump, wrote in a 93-page decision.

Pittman directed the Nixon-era agency to overhaul its programs in a potential blow to other government efforts that cater to historically disadvantaged racial and ethnic groups.

The ruling marks a major development in the broader legal skirmish over diversity, equity and inclusion that is likely to fuel a re-energized conservative movement intent on abolishing affirmative action in the public and private sectors. 

Last summer’s Supreme Court decision on race-conscious college admissions has increased scrutiny of government programs that operate based on a presumption of social or economic disadvantage.

Conservative activists have peppered organizations with lawsuits claiming that programs to help Black Americans and other marginalized groups discriminate against white people. 

In a statement proclaiming “DEI’s days are numbered,” Dan Lennington, an attorney with Wisconsin Institute for Law & Liberty, the public interest law firm that sued MBDA, hailed the decision as a “historic victory for equality in America.”

“No longer can a federal agency cater only to certain races and not others,” Lennington said. “The MBDA is now open to all Americans.”

The MBDA, which is part of the Commerce Department, could not be immediately reached for comment.

Justice Department lawyers who represented the agency declined to comment. They argued in court filings that the agency’s services are available to any socially or economically disadvantaged business owner. They also pointed to decades of evidence showing that certain groups suffered – and continue to suffer – social and economic disadvantages that stunt “their ability to participate in America’s free enterprise system.”

Alphonso David, president and CEO of the Global Black Economic Forum, said the court’s decision acknowledged this disadvantage.

"Despite this recognition, the court somehow argues that a program created to remedy this discrimination must be dismantled. That makes no sense,” David said in a statement. 

Two men fought for jobs in a mill.50 years later, the nation is still divided.

What’s more, David said the ruling is limited to one federal agency.

“We can expect right-wing activists to conflate the issue and confuse people into thinking it applies to any public or private program that fights discrimination, but that is not the case," he said.

Established in 1969 by President Richard Nixon to address discrimination in the business world, the MBDA runs centers across the country to help minority owned businesses secure funding and government contracts. The Biden administration made the agency permanent in 2021. 

Three small business owners sued MBDA in March, alleging they were turned away because of their race. “The American dream should be afforded to all Americans regardless of skin color or cultural background. But what we have is a federal government picking winners and losers based on wokeism – enough is enough,” one of the plaintiffs, Matthew Piper, said at the time.

National Urban League president Marc Morial urged the federal government to appeal the decision.

"The work of the MBDA to concentrate on the growth of businesses that remain substantially locked out of the mainstream of the American economy is needed and necessary," Morial said.