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 Plaintiffs 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 May 28, 2025, the DOT (through the Department of Justice (“DOJ”)) and the Plaintiffs submitted a proposed joint consent order that seeks to resolve by settlement the Plaintiffs’ claims of unconstitutional racial discrimination. The proposed consent order would bar the DOT from approving 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.

On Thursday, June 19, 2025, intervenors in Mid-America, a coalition of DBEs and organizations that represent them who have intervened in the case to defend the DBE Program (the “Intervenors”), filed their opposition to the proposed consent order.  In their opposition, the Intervenors argue that the court should reject the proposed consent order for the following reasons:

• • The proposed consent order would resolve the Intervenors’ interests without their consent as they have not agreed to the consent order, and, as a party, the Intervenors’ right to litigate the issues, including the constitutionality of the DBE Program, should be preserved. The Intervenors make the point that they have not been afforded the opportunity to present evidence or argument on the underlying legal and factual issues, and that they should be afforded that chance prior to the case being resolved.

• • The proposed consent order is “tainted with collusion” between the Plaintiffs and the federal government and was not a product of adversarial negotiation. The Intervenors argue that the proposed consent order was not the product of “fair and full of ‘adversarial vigor’’—such as by incorporating independent mediation, multiple offers, or extensive discovery—which is a sign of fairness.”

• • The proposed consent order seeks to reverse case law that has, historically, upheld the DBE Program and ignores that, while strict scrutiny may apply to the rebuttable presumption of social disadvantage in the DBE Program, that does not mean the rebuttable presumption cannot meet that level of scrutiny and be affirmed as constitutional based on appropriate evidence.

• • The proposed consent order is an attempt to avoid the Administrative Procedures Act because it seeks to “permanently and substantially” amend a rule otherwise subject to statutory rulemaking.

• • The DOJ has not explained why it has changed its legal position in this case. While the proposed consent order relies upon the Students for Fair Admissions, Inc. case, the Intervenors point out that the DOJ had defended the DBE program in this case after the United States Supreme Court issued its decision in Students for Fair Admissions, Inc., and that the DOJ has not offered any explanation for the reversal of its legal position in this case.

• • The federal government has violated 28 U.S.C. § 530D, which requires the DOJ to inform Congress when it decides not to defend the constitutionality of “any Federal statute, rule, regulation, program, policy, or other law.” The Intervenors argue the intent of this statute is to permit Congress to defend congressionally authorized programs that are subject to legal attack when the executive branch fails to do so.

• • In a related argument, the Intervenors argue that the proposed consent order is an attempt by the executive branch to effect legislative change through litigation and avoid the need to go to Congress, or even through a public rulemaking process, to reverse or change a congressionally authorized program:

The DBE program was re-authorized by Congress just four years ago. IIJA § 11101(e). “[W]hen Congress has passed a statute and a President has signed it, it poses grave challenges to the separation of powers for the Executive at a particular moment to be able to nullify Congress’ enactment solely on its own initiative and without any determination from the Court.” Windsor, 570 U.S. at 762.24 As a result, “district judges should be on the lookout for attempts to use consent decrees to make end runs around the legislature.” Kasper v. Bd. of Election Comm’rs of Chi., 814 F.2d 332, 340 (7th Cir. 1987).

Since the proposed consent order has no end date, it purports to bind all future administrations. As the Supreme Court has acknowledged, “public officials sometimes consent to, or refrain from vigorously opposing, decrees that go well beyond what is required by federal law,” which can then “bind … officials to the policy preferences of their predecessors and may thereby improperly deprive future officials of their designated … executive powers.” Horne v. Flores, 557 U.S. 433, 449 (2009) (citation modified)….

Ultimately, a court evaluating a proposed consent decree must “be alert to the possibility that the consent decree is a ploy in some other struggle,” Dunn v. Carey, 808 F.2d 555, 560 (7^th Cir. 1986). Such is the case here. Plaintiffs and the Administration hope to accomplish through agreement what they cannot muster the political will to do through appropriate, lawful processes: Significantly dismantle a federal program that has been regularly reauthorized by Congress with broad, bipartisan support and repeatedly held constitutional by successive federal courts of appeals. See IIJA; see also supra n.18 and accompanying text. This Court should not permit the Original Parties to make an end-run around the other two co-equal branches of government.

• • The proposed consent order is overbroad, vague, and cannot be effectively administered on its current terms:
    • The Intervenors argue the proposed consent order is overbroad because:
      • it seeks to impair the FAA Reauthorization Act of 2024, a statute which the Plaintiffs did not challenge;
      • it extends to contracts and projects that the Plaintiffs are not bidding upon. As such, the Plaintiffs could, theoretically, take on the mantle of private attorney general, moving for enforcement whenever they suspect a potential violation, even in projects in which they have no interest;
      • it seeks to permanently impair the DBE Program and asks the court to exercise jurisdiction over its terms in perpetuity without any duration or time limit;
      • state and local agencies—who will be indirectly bound by the proposed consent order’s restrictions—will be impacted by the proposed consent order but be “barred from registering their objections as “affected” parties.”
      • it applies to federal, state or local DOT-Funded projects, such that the proposed consent order would, in the words of the Intervenors, “put state and local agencies to a difficult choice: Refrain from remediating past discrimination through the carefully crafted congressionally authorized DBE program, or give up hope of federal funding from the United States Department of Transportation. This Court should not permit the Original Parties to pull the rug out from under those state and local agencies without affording them notice and an opportunity to be heard.”
    • The Intervenors argue the proposed consent order is vague because it does not define what it means when it refers to “DBE goals” or what is meant by the provision that “the use of DBE contract goals” unconstitutional.
      • The Intervenors also argue that The DBE program is much more than the rebuttable presumption contained in regulations. And yet, the PCO attempts to undermine all efforts to assist socially and economically disadvantaged businesses in the transportation sector. The constitutionality of the DBE program writ large, rather than the rebuttable presumption specifically, is beyond the scope of the evidence and arguments in this case.”
    • The Intervenors argue the proposed consent order cannot be effectively administered due to its breadth and scope. The Intervenors note that the proposed consent order bars the use of DBE goals “where any DBE in that jurisdiction was determined to be eligible based on a race- or sex-based presumption.” In regards to the latter term, the Intervenors argue that the proposed consent order does not address:
      • • Who must have made that determination?
        • Would the proposed consent order bar a jurisdiction from using DBE goals if it had ever previously certified any DBE under the federal race- and sex-based rebuttable presumption, even if the jurisdiction had no such current active certifications?
        • Would the proposed consent order bar a jurisdiction from using DBE goals if a solo practitioner, certified in one state using a presumption, relocated to another state but maintained their out-of-state certification?

• • The proposed consent order is not in the public interest. The Intervenors argue:

The PCO is simply not in the public interest. As an initial matter, the Original Parties have not explained how they intend to implement and enforce the proposed agreement without cutting off a lifeline for tens of thousands of minority- and women-owned businesses around the country who rely on the DBE program to break into an industry where they are still largely excluded due to the effects of longstanding discrimination. Intervenor DBEs’ experiences are tragically not unique. With an opportunity to fully develop and present their case, they intend to demonstrate that the DBE program is a narrowly tailored remedial program helping address the effects of a long history of discrimination in the transportation industry.

The Plaintiffs and the DOJ will have an opportunity to respond to the Intervenors’ opposition. Notably, the Intervenors argue that because the proposed consent order is a “settlement,” the District Court does not have the authority to unilaterally modify the consent order. Instead, the Intervenors argue that the District Court must either approve or reject the consent order in its current form. The Intervenors do note that if the District Court rejects the proposed consent order, the District Court could offer suggestions or recommendations to the parties as to how they could address the reasons why the proposed consent order was rejected.

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