Court Opinion

ID: 9490365
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:41:15.464944+00
Date Added: 2024-06-11T17:54:03.407840
License: Public Domain

HARRY T. EDWARDS, Chief Judge,
dissenting:
Under the so-called “8(a)” program, agencies like the Department of Defense have been authorized by Congress to set aside certain government-contract work for socially and economically disadvantaged businesses that are otherwise qualified to perform the work. The statutory set-aside is not limited in terms of race, so it does not prescribe a benefit that is available only to members of racial minorities. Not surprisingly, appellant does not appear to doubt that Congress can, consistent with the Constitution, set aside certain contracts for socially and economically disadvantaged vendors. Rather, appellant asserts that the statute is constitutionally infirm because the regulations implementing the statute create a re-buttable presumption in favor of certain racial minorities. Appellant’s claim rests on absurd reasoning, which proves only one thing: appellant has no standing to challenge the statutory scheme supporting the 8(a) program.
Appellant’s challenge to the particular application of the 8(a) program in connection with the disputed APT procurement is moot, *1019because the government canceled its bid solicitation and gave adequate assurances that 8(a) would not be used again should solicitation be reopened. Thus, appellant has prevailed on the precise issue that prompted this law suit. However, applicant now smells blood and has decided that, so long as it is already in court, it might just as well use the occasion to attack the entire statute. Even assuming that appellant’s complaint can be read to subsume a statutory challenge (which I doubt) and even conceding that appellant can amend its complaint to include this claim, it remains clear that appellant has no standing to raise a facial challenge to the statute.
Appellant has not demonstrated that it is socially and economically disadvantaged as required by the statute. Appellant, thus, cannot show the requisite causation and re-dressability to satisfy the Article III standing requirements to bring this challenge based on the alleged race-based presumption in the regulations. Even if the court strikes down the allegedly unconstitutional race-based “presumption” in the regulations that implement the 8(a) program, appellant cannot show how its position would be improved.
In order to participate in the 8(a) program, a vendor must be socially and economically disadvantaged, and these statutory criteria would remain in effect even if the regulatory presumption is deemed unlawful. Appellant concedes that it is not socially and economically disadvantaged. It follows, therefore, that appellant has no standing to challenge the statute, which on its face is lawful and under which appellant can claim no benefits.
I. Analysis
It is well established that, in order to satisfy the standing requirements of Article III, a plaintiff must demonstrate (1) that it has suffered injury that is concrete and particularized; (2) that the injury is fairly traceable to the conduct of which it complains; and (3) that the injury is likely to be redressed by a court decision in its favor. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 2136-37, 119 L.Ed.2d 351 (1992).
Appellant’s alleged injury here is the inability to compete for 8(a) contracts. Appellant claims that the regulatory presumption that racial minorities are socially disadvantaged causes it injury, because the presumption effectively precludes it from competing with minority-owned businesses for government contracts under the 8(a) program. However, it is conceded that appellant would remain ineligible to bid on 8(a) contracts even if the regulatory presumption were removed, so it is clear that neither the causation nor redressability requirements of standing are satisfied.
A. The Statutory Structure of the 8(a) Program
The legislation that creates the 8(a) set-aside does not define social and economic disadvantage in terms of race. Socially disadvantaged individuals are defined as “those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.” 15 U.S.C. § 637(a)(5) (1994). Economically disadvantaged individuals are defined as “those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged. In determining the degree of diminished credit and capital opportunities the Administration shall consider, but not be limited to, the assets and net worth of such socially disadvantaged individual.” 15 U.S.C. § 637(a)(6)(A) (1994). Thus, the statute at issue creates no race-based barrier to appellant’s participation in the 8(a) program, because all socially and economically disadvantaged individuals, defined without regard to race, are eligible for the program.. Furthermore, consideration of social and economic disadvantage is not impermissible on its face, even if a disproportionate number of the parties who benefit from the standard are racial minorities. That minorities are disproportionately favored by such a program merely shows that minorities are disproportionately burdened by social and economic disadvantages. If Congress may consider “social and economic disadvantage” in the awarding of contracts, it surely may *1020adopt a set-aside to give relief to those who qualify on these terms.
During oral argument in this case, the suggestion was made that use of a “social and economic disadvantage” standard is essentially the same as providing that “only rich white business people will get procurement jobs.” This suggestion is completely off the mark: the disputed “social and economic disadvantage” standard includes both whites and blacks, whereas the hypothetical standard favoring “rich white business people” expressly excludes blacks. No doubt a program preferring “rich white business people” would fail constitutional scrutiny, but to acknowledge this is to say absolutely nothing about the merits of the 8(a) set-aside.
B. The Regulatory Structure of the 8(a) Program
The regulations that implement Congress’s statutory directive create a rebuttable presumption that certain racial minorities are socially disadvantaged. See 13 C.F.R. § 124.105(b)(1) (1996). Appellant claims that application of the presumption results in impermissible race bias and makes it clear that Dynalantic has standing to sue. Appellant is wrong on both counts.
First, the disputed presumption is “rebut-table,” thus not every minority is entitled to 8(a) status. Furthermore, even if minorities gain an advantage from the presumption, they (like all prospective 8(a) applicants) must show “economic” disadvantage. See 13 C.F.R. § 124.106 (1996). No applicant gains access to the 8(a) program merely because of minority status, for all must pass the test of “economic disadvantage.”
Second, even assuming, arguendo, that the presumption gives an impermissible advantage to minority applicants (and thus must be struck down), this would still afford no relief for appellant. The regulatory presumption is not a statutory mandate, so the 8(a) program would still survive without the presumption. The statutory directive focuses on “social and economic disadvantage,” not race, and these criteria are concededly lawful. Because appellant is not (and does not seek to be) socially or economically disadvantaged, no redress would come by virtue of the regulatory presumption being struck down. Appellant still would be ineligible to compete for 8(a) work.
At oral argument, the suggestion was made that, absent the presumption, procurement work formerly assigned to the 8(a) category would be made available to non-8(a) applicants like appellants. But there is absolutely nothing in the record to support this suggestion. Absent the presumption, the pool of work available for 8(a) set-asides will remain the same; and this work will be open for bids and awarded to applicants who satisfy the statutory “social and economic disadvantage” criteria. Appellant does not claim to satisfy these criteria, so it will gain nothing if the presumption is declared unlawful. Appellant, thus, fails to meet the causation and redressability requirements of standing, for it has not shown that any injury that it allegedly suffers from the 8(a) program results from the race-based presumption nor that removal of the race-based presumption would remedy its injury.
II. CONCLUSION
Appellant’s challenge to the particular APT procurement that gave rise to this case should be dismissed as moot. Appellant’s belated facial challenge to the statutory 8(a) program should be dismissed for lack of standing.