UNITED STAT ES DIS TRICT COURT F OR THE DIS TRICT OF COLUM BIA DIAMOND VENTURES, LL C, : : P laintif f, :

: v. : CIVIL ACTION NO. 03-1449 (G K) : SANDY K . BARUAH, ACTING : ADMIN ISTRATO R, SMALL : BUSINES S ADMINISTRATION, : : Defendan t. :

MEMORAN DUM OP INION AND ORDER I n this case broug ht under the Equal Credit Opportunity Act (" ECOA" ), Plaintiff, Diamond Venture s, L L C (“D iamond”), claims that the Small Business Administration (" SBA" ) discriminated ag ainst it as a minority -owne d company when it failed to license it as a Small Business I nvestment Company (" SBI C"). Def endant moves for summ ary judgme nt pursuant to Rule 56 o f t h e Fe dera l Rules of Civil Procedur e, which Plaintiff h as o p p o s ed

. Upon consideration of the parties' submissi ons and the entire recor d, and for the following rea sons, the C ourt will deny Def endant' s motion. I. BACKG ROUND SBI Cs are privately owned companies the SBA licenses to provide financ ing and consulting service s to small businesses. See 15 U.S.C. § 681 et seq. I n Dec ember 2001, Diamond submitt ed
to the SBA a Manag ement Assessment Questionnaire (“MAQ ”) dated Dec ember 7, 2001, to obtain

a Participating Securities SBI C license. Def ’s Mot., Dec lara tion of Har ry Haskins (“H askins Dec l.”) [Dkt. No. 90-2] ¶ 20. The MAQ was ref err ed to SBA Financ ial Analy st Kar en Ellis for revie w. I d. Subsequently , Diamond submitt ed a revised or amende d MAQ dated Marc h 29, 2002. I d. ¶¶ 20-21.Diamond proposed “to focus on funding businesses in inner city low income are as with high Afric an

Americ an populations.” 2nd Am. Compl. [Dkt. No. 47] ¶ 57. By letter of April 24, 2002, Diamond sub mitted another amende d MAQ and reque sted the SBA to revie w Diamond as a Debe nture Securities L icense e, rathe r than as a Participating Securities L icense e. Haskins Dec l., Ex

. 4 (sea led). Ellis rec ommended ag ainst inviting Plaintiff for an interview, and on J une 4, 200 2 , Def endant’ s I nvestment Commi tte e u n a n im o u s ly a d o p te d her rec ommendation, eff ectively reje cting Diamond’s proposal for an SBI C license. Haskins Ex

. 6; see 2nd Am. Compl. ¶ 14 (“The SBA does
not acc ept SBI C license applications from those who have not been invited.”). Def endant explained its decision in a detailed letter to Plainti ff da ted J uly 23, 2002. Haskins Dec l., E x . 7. Following a meeting with Plaintiff in September 2002, Def endant ag ree d to revie w another MAQ submitt ed by Diamond, in October , 2002, Haskins Dec l. ¶ 32, and assig ned it to SBA Analy st Stephen Knott for revie w, Haskins Dec l. ¶ 33. Knott also rec ommended ag ainst inviting Plaintiff for an interview, and the I nvestment Commi ttee aga in unanimously adopted the rec ommendation. I d. ¶ 34. Def endant explained its decision in a detailed letter dated F ebrua

ry 25, 2003. Haskins Dec l., Ex . 11. 1 Earl Peek, who was a member of Diamond’s manag ement team, filed this civil action pro se

on J une 30, 2003. His second amende d complaint filed on Dec ember 12, 2003, substitut ed Diamond Venture s, L L C, as the proper pl aintiff. The pa rties commenc ed discove ry in J une 2004 following the Court’s denial of Def

endant’ s Rule 12(b)( 6) motion to dismiss on the g round that Def endant is

I n its first MAQ, Plaintiff applied for a Participating Securities L icense which allows 1 SBI Cs “to invest SBA g uara nteed fund s and issue instruments based on an equity interest in its clients or ‘portfolio’ companies.” 2nd Am. Comp. ¶¶ 12-13. I n its third MAQ submitt ed on April 24, 2002, Plaintiff ap p lied for a Debe nture S ecur ities L icense which allows SBI Cs to loan m oney to companies a t “a stated rate of i ntere st.” I d. This was later clar ified to mean a

Debe nture, not a Participating Securities, application. Plaintiff challeng es Def endant’ s reje ction of its application for a De benture L icense . 2nd Am. Compl. ¶ 25. -2-not a cre ditor within the meaning of ECOA. See Memorandum Opinion and Orde r of J une 8, 2004

[Dkt. No. 25]. Def

endant has not rene wed the fore g oing argum en t as a b asis for dismiss al or summary judgme nt. Def endant filed its Motion for Summary J udg ment on October 30, 2008 and b ri ef i n g was completed on Ma

rch 26, 2009. II. STANDARD OF REVIEW Summa ry judgme nt is war rante d only “if the pleading s, the discovery and disclosure materia ls on file, and any aff idavits show that there is no g enuine issue a s to any materia l fac t and that the movant is entitled to judgme nt as a matter of law.” Fe d. R. Civ. P. 56(c) ; see Celotex Corp.

v. Catrett, 477 U.S. 317 (1986). As a g ener al rule, “ [i ]n deciding w hether there is a g enuine issue of fact before it, the court must assume the truth of a l l statements proffere d by the party opposing summary judgme nt.” Gre ene v. Dalton, 164 F.3d 671, 674 (D.C. Ci r. 1 9 9 9 ). Al l rea sonable infere nces that may be draw n from the fac ts must be draw n in favor of the nonmoving party

. Ander son v. L iberty

L obby , I nc., 477 U.S. 242, 255 (1986). T he non-mova nt, howeve r, “ma

y not rest upon the mere alleg ations or denials of h i s pleading , but

. . . must set forth specific fac ts showing that there is a g enuine issue f or trial.” I d., 477 U.S. at 248. “A dispute o v er a materia l fac t is ‘g enuine’ if ‘the evidenc e is such that a rea sonable jury could return a verdic t for the non-moving party ’.

. . . Fa ctual disputes that are i rr el ev an t o r

unnece ssary will not be counted.” Arring ton v. United States, 473 F.3d 329, 333 (D.C. Cir. 2006) (quoting Ander son, 477 U.S. at 248). A fac t is “mater ial” if it might aff ect the outcome of the case under the substantive g overning law. Ander son, 477 U.S. at 248. When fac ts are not controve rted in opposition to a summary judgme nt motion, the C o u rt “may assume that fac ts identified by the

-3-moving party in its statement of materia l fac ts are admitted.” L ocal Civil Rule 7(h). When fac ts are

d i s p u ted, howeve r, “cr edibility deter minations, the weig hing of the evidenc e, and the draw i n g o f leg itimate infere nces f

rom the fa cts, are jury functions, not those of a judge .” Ander son, 477 U.S.
at 255. The Supreme Court ha s consistently emphasized that “at the summary judgme nt stag e, the j u d g e' s function is not

. . . to weig h the evidenc e and deter mine the truth of the m at t er , b u t t o deter mine whether there is a g enuine issue for trial.” I d. at 248. Our Court of Appea ls has war ned that in case s alleg ing discrimination, s u mm a r y ju d g ment “must be approa ched with specia l caution.” Aka v. Washington Hospital Center, 116 F.3d 876, 879-80 (D.C. Cir. 1997), rev’ d on other g rounds, 156 F.3d 1284 ( D.C. Cir. 1998) (en ba nc) ( citation and interna l quotation omit ted). III. ANALYSIS E C OA m ak es it unlawful for any cre ditor to discriminate ag ainst any application, with respe ct to any aspec t of a cre dit transac tion

. . . on the basis of rac e. . . .” 15 U.S.C. § 1691(a)

. The purpose of ECOA is to prohibit “cr edit decisions based on fac tors such as . . . rac e wh i ch are irrele vant to c reditworthiness.” Miller v. Am. Ex press Co., 688 F.2d 1235, 1238 (9th Cir. 1982). Pursuant to the Small Business I nvestment Act, the SB A license s SBI Cs to “stim ulate and supplement the flow of private equit y ca p i t al and long- term loan funds” to small businesses. 15 U.S.C. § 661. I n g ener al, SBI Cs raise their own financ ing capital by , among other vehicles, issuing

secur ities backe d or g uara nteed by the SBA. Thus, in the event an SBI C defa ults on its commitment
to secur ity holders, th e S BA gu ar an t ees pay ment and the SBI C become s indebted to the SBA for repa y ment. Haskins Dec l. ¶¶ 5-8. Upon rec eip t of an application for an SBI C license, the SBA Administrator must deter

mine whether the applicant meets cer tain private capital require ments and whether its manag ement “is qualified and has the knowledg e, experience , and capa bility nece ssary

-4-to comply with this ch ap t er . ” 15 U.S.C. § 681(c) (3). Consideration is g iven t o “the need for and

availability

of financ ing f

or small business conce rns in the g eog raphic are a in which the a pplicant is to commence business,” the business re putation of the applica nt’s owner s and manag ement and the probable succe ss of proposed opera tions, “including adequate profita b i l i t y and financ ial soundness.” I d. The “first step” in the proce ss is “the [ applicant’ s] submissi on of an MAQ, which seeks information primarily on the proposed business strateg y of the SBI C and the qualifica tions o f the individual s wh o wi l l manag e the prospec tive SBI C.” Haskins Dec l. ¶ 12. I f a majority of Def endant’ s I nvestment Commi ttee votes in favor of the MAQ, the “prospe ctive manag ement team is invit ed for an int ervie w. I f t hat i s succe ssful, [t he team] rec eives what is commonly ref err ed to

as a ‘g o-for

th’ letter formally inviting them to submit a formal SBI C L icense Application.” I d. ¶ 15. A. Disparate Im pact Discr im ination The Supreme Court has ruled that “Title VI I

. . . prohibits

. . . both intentional discrimination

. . . as well as, in some case , prac tices that are not intended to discriminate but in fac t have a disproportionately adver se eff ect on minorities (known as ‘dispara te impact’).” Ricci v. DeStafa no, __ U.S. __, 129 S. C t. 2658, 2672 (2009) (pa renthe sis in original). 2 T o d emons trate disparate impact, Plaintiff “must offe r statistical evidenc e of a kind an d deg ree sufficien t t o s how t hat t he seemingly neutra l prac tice in question has caused the exclusion of applicants for [credit] beca use of their membership in a protec ted g roup.” Watson v. For t Worth

Be cause the District of Columbi a Circuit has “express[ed] no opinion about whether 2 a disparate impact claim can be pursued under ECOA,” this Court will follow the D.C. Circuit’s lead and “[a]ssum [e] without deciding that a disparate impact claim is cog nizable under ECOA.” Gar cia v. J ohanns, 444 F .3d 625, 633 n. 9 (D.C. Cir. 2006). -5-Ba

nk and T ru s t , 487 U.S. 977, 994 (1988). Moreove r, “a showing of a [specific or particula r prac tice] is an integ ral part o f the plaintiff’s

. . . case in a disparate -impact suit.” Wards Cove Packing Company , I nc. v. Antonio, 490 U.S. 642, 657 (1989). Finally , as rec ently as last y ear , the Supreme Court re- aff

irmed that a defe ndant may be liable for disparate i m p ac t d i scrimination provided the plaintiff can prove that the challeng ed prac tice is not job rela ted, is not consistent with business nece ssity , or that there exis ted an equally valid, less-discriminatory alterna tive that serve d defe ndant’s nee ds but that it refused to adopt. Ricc i, 129 S. C t. at 2678. Plaintiff can avoid summary judgme nt by prese nting “data showing that the [S BA approve d debentur e license s to Africa n Americ an owned businesses] at ra tes far below their numbe rs in the applicant pool and the g ener al population.” Holcomb v. Powell, 433 F.3d 889, 899 (D.C. Cir. 2006) (citations omitted). “Unde r Title VI I disparate impact analy sis, an employ ment test with an adver se impact on rac ial minorities is prohibited unless the test is ‘demonstr ab l y a m ea sure of job perf ormanc e.’” Rudder v. District of Columbi a, 890 F. Supp. 23, 40 (D.D.C. 1995) (quoting Grig g s

v. Duke Power Co., 401 U.S. 424, 436 (19 7 1 )). On s ummary judgme nt, howeve r, t he question is
not whether the prac tice is leg itimate but rat h er “w h ether the plaintiff[] [has] cast such doubt on [defendant’ s] cre dibilit y that a rea sonable juror could reg ard it as prete x t and infer a discriminatory motive, or that a rea sonable fac tfinder could conclude it was inconsistent with business nece ssity or achie vable in a nondiscriminatory way .” Ander son v. Z ubieta, 180 F.3d 329, 345 (D.C. Cir. 1999). B. P laintif

f’s Allegations of

Specif ic P ract ices Causing Disp arate Im pact Plaintiff alleg es that the SBA discriminated ag ainst it by deny ing its application for an SBI C Debe nture L icense

. The SBA denies such discrimination a nd responds, basica lly , that the L icense

was denied b ec au s e P l ai ntiff could not meet the ag ency ’s qualifica tions. I n particula r, the SBA

-6-claims that the Plaintiff la cked sufficie nt e x perie nce in the are a of venture capital investments a nd exit s from s u ch investments, that there was inconsistency betwee n Plaintiff’s Business Plan and I nvestment Strateg y , that Plaintiff’s manag ement team had not demonstrated a history of working toge ther as a cohesive team on any venture rela ted projec ts, and that only two of the four team members ha d worke d toge ther a t all previously

. I t is clea r that the SBA has proff

ere d leg itimate, non-discriminatory rea sons for its denial of Pl a in ti f f ’ s SB I C license application. There fore , the question become s whether Plainti f f h a s p r o d u c e d sufficie nt evidenc e for a rea sonable fac t-finder to conclude that t h e S BA ’s reasons wer e not the
actua l rea sons, but only a prete x t to mask intentional discrimination ag ainst Plaintiff on the basis of

rac e. See B rady

v. Offic e of the Serg eant a t Arms, 520 F.3d 490, 494 ( D.C. Cir. 2008). Plaintiff proff

ers much evidenc e in opposition to Def endant’ s justification for deny ing its application, only

some of which the Court need a ddress a t this t ime. First, it of fer s the testimony of two qualified experts w ho have both rende red opinions that P laintiff was in fac t qualified to be licensed as an SBI C. Ex pert Report of Dr. Timoth y Ba t es 3 (“B ates Report”) , at 66, Ex

. G to Dec lara tion of J aime W. L use (“L use Dec l.”) (Diamond “ra nks as a particularly

highly qualified SBI C applicant”) ; Ex pert Report of Edward C leveland (“Clevela nd Report”) , Ex

. H to L

use Dec l. at 9 (“this team will be very succe ssful and a model for the prog ram in coming y ear s”). Second, Plaintiff pre sents a compa rison of t he area s in Diamond’s final MAQ which w ere criticized by

Knott, with other applica tions that re ceive d g o-for th letters or lice nses and c ontained

The question of the respe ctive qualifica tions of Diamond’s experts is one of the many 3 disputed material a cts which must be re solved by the jury

. -7-material i n t h ei r M AQs simil ar to that which Diamond prese nted, and wer e not criticized. I n

particula r, Plaintiff asser

ts that this compar ison shows that the SBA praised non-minority led firms planning to invest in L MI are as that are not known to have high- minority p o p u l at i o n s and that 4 Plaintiff was criticized for proposing to invest in L MI are as with high Afric an Americ an populations such as those in portions of the Southeast United States. Ag ain, the acc urac y of the fac ts relied upon--a nd/or ignor ed-- in the se compa risons, as well as the final conc lusions to be draw n from the compar isons, are issues whic h only a jury can r esolve. Third, Plaintiff offe rs evidenc e that while v en t u re capital and equity experience may be useful proxi es (or su b s titutes) for rac e, there is no study validating them as a reliable predic tor of

succe ss for SBI Cs. Four th, the main thrust of Plaintiff’s arg ument is that the SBA’s “five y ear rule” (which the 5 Court will assume is, in fac t, either an absolute or de fac to require ment) results in a disparate impact 6

on Afric an Americ an owned or manag ed firms, and that Def endant cannot prove that such requirem ent is job-rela ted, or consistent with business nece ssity , or that there are no valid, less discriminatory

alterna tives. See Ricci, 129 S. Ct. at 2678. When evalua ting whether Plaintiff has sufficie nt evidenc e to survive summary judgme nt, it i s n ec essary to view the SBA’s insistence on meeting this “five y ear require ment” ag ainst wh at Plaintiff’s expert has descr ibed as a “long , detailed history ” of interac ting with b o t h Af ri can

None of the pape rs submitted by

the par ties define the acr ony

m “L MI .” 4 The SBA require s that eac h SBI applicant have at least two principals eac h of whom 5 has five y ear s or more of

experience in venture c apital investing

. This assumption comports with the require ment that all infere nces be draw n in favor 6 of the non-moving party . See Ande rson, 477 U.S. at 248. -8-Americ an funds and minority -oriente d venture capital funds in a n atmosphere of “anta g onism a nd distrust.” Ba tes Report, at 54 (citing Final Report. An Analy sis of the SSBI C Prog ram: Problems and Prospects (B ates, 1995)). See also, United States Commi ssion on Civil Rights Evaluation 7 Publication, Ten Yea

r Check-U

p: Have Fe dera l Ag encie s Responded to Civil Rights (June 12, 2003). I n particul ar , Dr

. Ba tes repor ts that the SBA is awa

re that only two Afric an Americ an controlled SBI Cs, both owned by one firm, have ever been licensed, out of a total of approximately 350 in exis tence in 2003. Ba tes Report, at 47. Fur thermore , the SBA’s own statistics show that in Fisca l Year

2002, “50% or more Black- Owned” firms rec eived only 2.55% of total Reg ular SBI C financ ings, and 0.49 perc ent of funding from Reg ular SBI C funding dollars; and in Fisca l Yea r 2003, “5 0% or more Bla ck-O wned firms rec eived only 5.37% of total Reg ular SBI C financ ings and 1.64[%] of Reg ular SBI C f unding dollars.” Ex

. R a

nd S to L use Dec l. I f these fig ures are corr ect, no more than 0.86% of SBI Cs in 2003 were A frica n Americ an owne d and contr olled. Fifth, Plaintiff offe rs Dr. Ba tes’ repor t as “re liable statistical disparate impact evidenc e” “to show that the seeming ly neutra l prac tice in question has cause d the exclusion of applicants” beca use of their rac e. Watson, 487 U.S. at 9 9 4

. I n this case , the expert’s task is made that much more difficult beca

use of the failure of SBA to rec ord the rac e of SBI C applicants who fail to obtain licenses. Be cause of that failure , it is virtually impossibl e to deter mine the number of minority and

I t should be noted that the SBA itself commissioned this Report from Dr. Ba tes who 7 is the Distinguished Professor of Economics at Way ne State University

. Both the SBA and the Depa rtment of J ustice have reta ined Dr. Ba tes, at differ ent times, to c onsult about the exi stence of rac ial discrimination in the marketplac e. -9-non-min o ri ty applicants who applied to the prog ram and wer e reje cted. Howeve r, the Supreme 8 Court has spoken direc tly to th i s d ifficulty , stating that “in case s wher e [such] statistics will be difficult if not impossibl e to asc erta in, . . . cer tain other statistics--suc h as m easur es i ndicating the

rac ial composition of ‘otherw ise-qualifie d applicants’ for at-issue jobs--ar e equally probative.

. . .” Wards Cove, 490 U.S. at 651; see Malave v. Potter, 320 F.3d 321, 326 (2d Cir. 2003) (finding “er ror for the District Court to have reje cted out of hand [pl aintiff’s] statistical analy sis” wher e data on the number of qualified Hispanic applicants was not available to conf o rm to “the preferred methodology descr ibed in Ward’s Cove” ( emphasis in orig inal)). Ba sed on data g ather ed from survey ing 24 minority venture capitalists who are members of the National Association of I nvestment Companies (“N AI C”), Ba tes Report at 12, Dr. Ba tes wrote that the SBA “re quire[s] principal work experience in investment banking and mainstream venture capital investing fields in which very few minorities wer e traditionally able to obtain such experience ,” id. at 72, “while downg rading the actua l work experience ” in “commer cial banking and local economic development” that most “o ft en ty pifies principals of minority -oriente d [venture capital] funds.” I d. Dr. Ba tes conclude s that the “re sult is a population of SBI Cs wher e only a 9 fra ction of 1% of the funds are owned and controlled b y Afric an Americ ans.” I d. Dr. Ba tes

Whil e it is true that the SBA does keep statistics on the rac e of succe ssful applicants, 8 it is hard to be lieve that in this day and ag e any fede ral ag ency fails to ke ep statistics on those who apply and ar e not succ essful. There is no question that the SBA ra ises many challeng es to the methodology used 9 by Dr. Bates in his “compa rability analy sis.” Both sides spend ma ny pag es in their briefs arg uing about the analy sis and the validity of the compar isons. Ag ain, howeve r, the evalua tion o f ex pert testimony is c lear ly within the province of the jury

. No issue could be more “mater ial” to the final verdic t it will rende r in this case than the weig ht it does, or does not, acc ord to Plaintiff’s statistical evidenc e-- espec ially

in light of the a

bsence of re levant ra cial statistics from the SBA

.

-10-“believe [s] that near ly all of the prof it-oriented [venture capital] funds serving black and Hispanic (but not Asian) firms are NAI C members.” Ba tes Report at 12 (par enthesis in orig inal). I t appea rs that he identified 24 such firms as qualified SBI C applicants, see id. at 12-13 (excluding 12 “funds” that “we re larg ely newe r funds that had not completed or rec ently completed fundra ising and had not y et made VC investments”). Dr. Ba tes repor ts that “[t] he 23 [si c] minority -orie n t ed funds extensively discussed [ ] ar e ru n b y p rincipals of diverse rac ial backg rounds, but most are Afric an Americ ans: 28 of the 39 principals wer e Afric an Americ ans, three wer e Hispanic, three wer e Asian and five wer e white.” I d. at 45. Although Def

endant has conclude d that venture capit al ex p er ience is part and parc el of running a succe ssful SBI C, see Haski n s De cl

. ¶¶ 5, 13-15; Def .’s Ex

. 4, Dec lara

tion of Dar

ry l Hairston (“H airston Dec l.”) ¶ 9, it has not proffe red a ny empirica l evidence linking the e quivalent of ten y ear s’ venture capital experience (at least two principals eac h with five y ear s’ experience ) to the succ ess of a

n SBI C. There is no question that “[u] nder Title VI I d i s para te i mpact analy sis, an employ ment test with an adver se impact on rac ial minorities is prohibited unless the test is ‘demonstra bly a measure of job perf

ormanc e.’” Rudder v. District of Columbi a, 890 F. Supp. 23, 40 (D.D.C. 1995) (quoting Grig g s v. Duke Power Co., 401 U.S. 424, 436 (1971))

. The SBA has o ff er ed n o s u ch evidenc e. I ndeed the SBA has acknow ledg ed that “succ essful [S BI C] manag ers usually have many y ear s of experience in venture c apital or re lated fie lds.” Hairston Dec l. ¶ 9 (empha sis a dded). In addition, Hairston, SBA D e p u ty A s s o ciate Administrator for Manag ement and Administration, who “wa s also involved in cre ating and implementing the initial versions of t he [ MAQ] proce ss,” Hairston Dec l.

-11-¶ 3, acknow ledg es the “re levan[cy ]” to debentur e S BI C s of commerc ial lending and economic

development e x perie nce. I d. ¶¶ 10- 11. Plaintiff has sug g ested that Def endant modify its evalua

tive criter ia for SBI Cs to place work experience in the commerc ial banking and local development fields (whe re Afric an Americ ans have had rele vant experience ) on equal footing with the venture capital experience that principals of Afric an Americ an firms have traditionally lacke d. See Ba tes Report at 46 (prior to 1999, principals of only one minority -owne d venture capital fund had prior work experience in investment banking prior t o j o i n i n g t he minority fund). Summary judgme nt “is not appropr iate” if, as here , Plaintiff shows “that there is an alterna tive that can sat i s fy the employ er’ s need in a nondiscriminatory fashion.” Ander son, 180 F.3d at 344. There is no evidenc e that Def endant has ever considere d this, or any other a lternative, to substitute for or a lleviate the dispar ate impac t of the “f ive y ear rule.” Six th, Plaintiff offe rs the Report of the SBA I nspector Gene ral, i s s u ed M arc h 20, 2003, concluding that “[t] he Division’s evalua tion of the application [of Diamond] and the de c is io n to d eny

wer e not acc omplished in acc ordanc e with the exis ting SBA proce dures and criter ia.” OI G Report, Ex . CC to L use De cl. at 2. 1 0 Seventh, Plaintiff also offe rs the following evidenc e of what it calls “dire ct evidenc e of direc t discriminatory conduct.” Whil e that evidenc e, by itself, would not suffice to convince a rea sonable

Presumably , the jury will also be informed that the I nspector Gene ral conclude d that 1 0 no decision made by

SBA re g arding Plaintiff was base d on the ra ce of Plaintiff’s principals. -12-jury of direc t discrimination, it may still be prese nted to the jury for its consideration on the issue 1 1 of dispara te impact. I n view of Plaintiff’s evide n ce that the challeng ed “five y ear rule” disproportionately excludes Afric an Americ an firms from secur ing SBI C licenses, the absenc e of any statistical or other kinds of evidenc e showing a “demonstra ble rela tionshi p ” b et we en the challeng ed criter ia and an SBI C’s succe ss, Plaintiff’s s u g g e s te d n o n d is c r im in a to r y a lt e r n a ti v e s o lu ti o n , the SBA’s history vis-avis involvement of Afric an Americ an owned fu n d s i n t o i ts prog rams, and the numerous materia l fac ts in dispute, the Court finds that g enuine issues of materia l fac t exis t with reg ard to Plaintiff’s 1 2 disparate impact clai m a

nd that Plaintiff has offe red sufficie nt evidenc e from which a rea sonable jury could conclude that Def

endant is liable for disparate impact discrimination on the basi s o f ra ce. Acc ording ly , it is ORDERED that Def

endant’ s Motion for Summary J udg ment [Dkt. No. 90] is denied ; and it is

See, for example, the ear ly comments of L eonar d Fa gan , whose job was simply to

1 1 intake MAQs filed by email to the I nvestment Division, but e-ma iled that the MAQ was “we ak,” and noted that Peak was a “fr at brother” of another SBA employ ee who was Afric an Americ an, and the comments of Kar en Ellis, who revie wed Plaintiff’s first MAQ, that Peek “had a sense of entitlement about being in the prog ram,” and “knew that all along I didn’t think he was g oing to g et an interview [t o rec eive a g o-for

th letter]

. . . I had tol d them [Diamond] that probably s i n ce t h e d ay [I ] started revie wing the MAQ,” and her denials of knowing the rac e of the applicants when the MAQ she was revie wing contained tha t information.

See Diamond Venture s’s Statement of Genuine I ssues and Statement of Fa cts [Dkt. 1 2 No. 102]. -13-F URTHER ORDERED that the parties shall appea r for a Status Confere nce on April 15, 2010, at 10:45 a.m .

/s/ Marc h 29, 2010 GL ADYS KESSL ER United States District J udg e Copies via ECF t o all couns el of recor d

-14-