On October 11th, the Supreme Court of the United States (SCOTUS) issued its decision not to hear an appeal of the DC Circuit’s Federal Court of Appeals decision that found the SBA’s 8(a) Business Development (BD) Program constitutional. This is the “current” result of what is known as the “Rothe” case. Rothe Development, Inc. (a Woman-Owned Small Business) started challenging the constitutionality of the 8(a) BD program back in 2012 on grounds that the definition of “socially disadvantaged” business owners is a racial classification that violates Rothe’s right to equal protection under the Due Process Clause of the Fifth Amendment. With the SCOTUS decision not to hear the appeal, the decision of the Court of Appeals stands. That decision which used the lowest of the 3 levels of scrutiny, or a “rational basis” standard, to determine the constitutionality of the law (instead of the more intense “strict scrutiny” standard that would be applied had the Court concluded that the statute was not race-neutral on its face) may still be challenged. It is expected that while the statute, itself, was not found unconstitutional, the SBA implementing regulation, 13 CFR 124.103, might be separately challenged and might have to pass muster under the strict scrutiny test. (Note: Rothe previously challenged the Small Disadvantaged Business (SDB) Program [of which the 8(a) BD program is a subset] back in 2008 which resulted in significant changes to that program.)
