In Mid-America Milling Company v. United States Department of Transportation, Case No. 3:23-cv-00072 (“Mid-America”), the Plaintiffs challenged the United States Department of Transportation’s (“DOT”) use of a rebuttable presumption when determining if an individual is socially disadvantaged for purposes of the DOT’s Disadvantaged Business Enterprise program (“DBE Program”). The Plaintiff in Mid-America argued that the DOT’s use of a rebuttable presumption that businesses owned by women and certain races and ethnicities are socially disadvantaged is unconstitutional disparate treatment on the basis of race and sex.

On September 23, 2024, the Mid-America court issued a preliminary injunction enjoining the DOT 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 in connection with the DBE Program.

On Wednesday, May 28, 2025, the DOT (through the Department of Justice) and the Plaintiffs submitted a proposed joint consent order that seeks to resolve by settlement the Plaintiffs’ claims of unconstitutional racial discrimination.

If approved and implemented in its current form, the consent order would largely eliminate the use of the DOT’s DBE program until state-certifying agencies recertified all existing DBE contractors without using a rebuttable presumption of social disadvantage. The proposed consent order provides the following:

1. 1. The DOT has determined that the race- and sex-based presumptions in its DBE program can no longer pass constitutional scrutiny, and that the DBE program’s use of race and sex-based presumptions of social and economic disadvantage violate the equal protection component of the Due Process Clause of the Fifth Amendment of the U.S. Constitution;
   2. The determination of DBE eligibility using race- and sex-based presumptions, as reauthorized by the Infrastructure Investment and Jobs Act, and in the FAA Reauthorization Act of 2024, is not supported by the Constitution as currently interpreted under equal protection jurisprudence;
   3. The use of DBE contract goals in a jurisdiction, where any DBE in that jurisdiction was determined to be eligible based on a race- or sex-based presumption, violates the equal protection component of the Due Process Clause of the Fifth Amendment; and
   4. The DOT may not approve any federal, state, or local DOT-funded projects with DBE contract goals where any DBE in that jurisdiction was determined to be eligible based on a race- or sex-based rebuttable presumption.

If implemented, the DOT will be barred from, in any state, approving any federal, state, or local DOT-funded projects with DBE contract goals where any DBE in that jurisdiction was determined to be eligible for the DBE Program based on a race- or sex-based rebuttable presumption.

State and Local Transportation Agencies determine if a company is eligible to be certified as a DBE. As such, under the consent order as drafted, if a State and Local Transportation Agency historically applied the rebuttable presumption of social disadvantage based on race or sex to certify companies as a DBE, the DOT will be barred from approving any DOT-funded project in that state that has any DBE contract goals. Given the wide-spread use of the rebuttable presumption of social disadvantage by State and Local Transportation Agencies when certifying companies as DBEs, this consent order, if approved, will eliminate the use of DBE contract goals until the applicable State and Local Transportation Agencies revoke the DBE status of all entities that were certified as a DBE based on the rebuttable presumption.

Tribes and Alaska Native Corporations do not rely on the rebuttable presumption in order to establish their social disadvantage for purposes of the DOT’s DBE program.  The proposed consent order, however, would not preserve the ability of Tribe and Alaska Native Corporations to take advantage of the DBE Program because the proposed consent order bars the use of any DBE goals, regardless of whether those goals are being met by companies that relied upon the rebuttable presumption to be certified as a DBE or by companies, like companies owned by Tribes and Alaska Native Corporations, that did not rely upon the rebuttable presumption.

For example, if a single, individually owned company in the State of Alaska was certified as a DBE due to the rebuttable presumption, the DOT would be barred by the proposed consent order from approving any projects in Alaska that had DBE goals.

The District Court recently approved a motion to intervene filed by the National Association of Minority Contractors; Women First National Legislative Committee; Airport Minority Advisory Council; Women Construction Owners & Executives, Illinois Chapter; Atlantic Meridian Contracting Corp.; and Upstate Steel.  These intervenors are likely to oppose the proposed consent order, and the District Court may require modifications to it, or reject it.

If the proposed consent order is granted, State and Local Transportation Agencies may pivot to the approach used by the SBA in the 8(a) Program after Ultima, and solicit narrative descriptions of prejudice and discrimination from existing DBE-certified contractors, as a work-around to their inability to use rebuttable race and gender-based presumptions.  The proposed consent order only bars the use of DBE contract goals where any DBE in the state was determined to be eligible based on a race- or sex-based rebuttable presumption of social disadvantage. If the certifying agencies for a particular state revoke all existing DBE certifications and require recertification as a DBE without using the rebuttable presumption, the end result would be that no DBE contractor in the state relied upon the rebuttable presumption for DBE certification. Therefore, that state could then start using DBE goals again under the terms of the proposed consent order.

This article summarizes aspects of the law. This article does not constitute legal advice. For legal advice regarding your situation, you should contact an attorney.