March 5, 2025 Story by: Editor
In Mid-America Milling Company v. United States Department of Transportation, Case No. 3:23-cv-00072 (“Mid-America”), the plaintiffs challenged the Department of Transportation’s (DOT) use of a rebuttable presumption when determining whether a business owner qualifies as socially disadvantaged under the agency’s Disadvantaged Business Enterprise (DBE) Program.
The plaintiffs argued that DOT’s assumption—that businesses owned by women and certain racial or ethnic groups qualify as socially disadvantaged—constitutes unconstitutional disparate treatment based on race and sex.
On September 23, 2024, the court issued a preliminary injunction, barring DOT from mandating the use of race- and gender-based rebuttable presumptions for contracts under the DBE Program that the plaintiffs were bidding on.
However, the ruling was not a nationwide injunction and was limited only to the plaintiffs in this case. It prevented DOT from applying the rebuttable presumption only to the contracts the plaintiffs bid on, rather than invalidating the policy across the board.
Following the ruling, a dispute arose regarding its scope. The plaintiffs contended that the injunction prohibited DOT from using the rebuttable presumption in any project they bid on, regardless of the project’s location. In contrast, DOT maintained that the injunction applied only to projects in Indiana and Kentucky—the states where the plaintiffs were bidding.
The district court declined to extend the injunction nationwide, stating that such a ruling would apply broadly to non-parties and would be “directed toward defendants and applicable anywhere, against anyone”—which it did not intend.
However, the court clarified that the injunction applies to any DOT project the plaintiffs bid on, regardless of location. As a result, the ruling could impact DOT contracts beyond Kentucky and Indiana, applying to any project nationwide for which the plaintiffs submit a bid.
District Court’s Amended Injunction:
“The United States Department of Transportation, Peter Buttigieg, Shailen Bhatt, Todd Jeter, and any successors in office are ENJOINED from mandating the use of race- and gender-based rebuttable presumptions for United States Department of Transportation contracts impacted by DBE goals upon which the Plaintiffs bid, to be effective in any state in which Plaintiffs operate or bid on such contracts.”
This ruling could have significant implications for the DBE Program and similar affirmative action policies in federal contracting, particularly as challenges to race- and gender-based classifications continue to be litigated in courts.
Source: JD Supra
