By Nate Raymond
(Reuters) – A U.S. judge has ruled that the U.S. Department of Transportation’s decision to award billions of dollars in federal highway and public transit funding to disadvantaged small businesses based on race or gender is unconstitutional.
U.S. District Judge Gregory Van Tatenhove in Frankfort, Kentucky, ruled Monday that a 1983 federal program that treats businesses owned by racial minorities and women as presumptive disadvantaged and eligible for such funding violates the equal protection guarantees of the U.S. Constitution.
“The court is well aware of the discrimination that certain groups of people in this country have faced in the past,” Van Tatenhove wrote. “And the court is certain that the federal government has nothing but good intentions in seeking to right past wrongs.”
But Van Tatenhove, appointed by former Republican President George W. Bush, said the federal government cannot classify people in a way that violates the equal protection principles in the U.S. Constitution.
He relied in part on a 6-3 conservative Supreme Court ruling last year that effectively banned affirmative action policies long used in college admissions to increase the number of black, Hispanic and other underrepresented minority students on U.S. campuses.
A judge has barred the Department of Transportation from relying on race or gender when evaluating contracts bid on by two companies that filed a lawsuit last year over the policy: Mid-America Milling Company and Bagshaw Trucking, which operate in Kentucky and Indiana.
A spokesman for the ministry said it will continue to defend the program as the case proceeds, but that in the meantime it will abide by the court’s ruling.
The ruling is the latest instance of a court blocking a federal program meant to benefit minority-owned businesses following the Supreme Court’s decision.
In March, a judge in a separate case barred a federal agency called the Minority Business Development Agency, which is charged with providing assistance to minority-owned businesses, from rejecting applicants based on race.
Since 1983, Congress has authorized the Disadvantaged Business Enterprise program, which requires the Department of Transportation to ensure that at least 10 percent of funding for highway and public transportation projects goes to disadvantaged businesses.
In 2021, it was reenacted through Democratic President Joe Biden’s Infrastructure Investment and Jobs Act, which earmarked more than $37 billion for that purpose.
While any company could be considered socially and economically disadvantaged, black, Hispanic, and certain other racial groups, along with women, were considered disadvantaged.
The plaintiffs argued that the program discriminated against other racial groups, such as white people, and that it violated the Fifth Amendment to the Constitution.
(Reporting by Nate Raymond in Boston; Editing by Matthew Lewis)
