The Thin Legal Case for Affirmative Action in Contracting
Affirmative action in government contracting is alive -- barely. Last week, a federal appeals court upheld a Small Business Administration program that gives advantages to people who have suffered racial discrimination, reasoning that the law as written doesn’t discriminate on the basis of race, because anyone can be the target of racial bias. The decision, which is based on paper-thin legal logic, is an attempt to keep remediation-based affirmative action from disappearing altogether. It may be too little, too late.
The program, known as 8(a) after the section of the Small Business Act in which it appears, gives a preference in government contracting to small businesses owned by “socially and economically disadvantaged” individuals. The law defines the socially disadvantaged as people “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.”
If this sounds like race-based affirmative action, that’s because it is. The SBA regulations implementing the law create a presumption that any member of racial minority has been subject to bias. Unless the presumption is overcome by evidence that the business owner hasn’t suffered discrimination -- a pretty unlikely scenario -- the program functions to give minority business owners an advantage.
Back in the day, the racial preference wouldn’t have been a legal problem. The original theory of affirmative action was precisely to remedy past discrimination by giving an advantage to those who had suffered its effects, namely racial minorities.
But political backlash and a series of U.S. Supreme Court decisions in the 1990s chipped away at this rationale. Without ever saying that remediation was inherently a bad rationale, the court made it harder and harder to use it. In essence, the court held that before using affirmative action as remediation, an institution would have to show a precise fit between its discriminatory past and its forward-looking remedy.
In one high (or low) point of this jurisprudence, the case of Richmond v. Croson, Justice Sandra Day O’Connor struck down a minority set-aside created by the city government of Richmond, Virginia, the capital of the Confederacy, on the theory that there wasn’t enough evidence of past discrimination in contracting there.
Today, affirmative action still exists in higher education admissions -- but there it’s justified by the desire for diversity, not for remedying past racial wrongs. Set-aside-style affirmative action based on remediation is rare.
The current case arose when a non-minority contractor challenged the law underlying the SBA program. A panel of the U.S. Court of Appeals for the D.C. Circuit upheld it by a 2-1 vote.
The majority opinion, by Nina Pillard, a liberal judge appointed by President Barack Obama, achieved its legal goal by an extreme exercise of formalism. First, the court said it wasn’t going to consider the constitutionality of the SBA program as applied -- which would have involved looking at the SBA’s regulations implementing the law. Instead, the court looked only at the text of the law itself.
The court justified this decontextualized analysis by saying that the plaintiff in the case only wanted to challenge the law, not the regulations. That might be true, insofar as the plaintiff might have wanted a test case. But wherever possible, courts should view laws as they actually operate. Taking a law out of its real world context is a bad method of legal interpretation.
Once the law alone -- without the regulations -- was before the court, Pillard deployed a second kind of formalism. She wrote that the law on its face did not discriminate on the basis of race because it benefits individuals who have been discriminated against, not groups.
That’s true technically. The law states that it only applies to individuals who have been subject to racial bias. And it doesn’t say that it only is targeted to individual racial minorities. But all affirmative action programs benefit individuals.
The court reasoned that the law did not need to be subjected to the highest degree of constitutional scrutiny because it does not impose a group categorization. In other words, it doesn’t benefit individuals as members of groups, but based on their experiences. And the court said, accurately enough, that anyone could be subject to racial bias, regardless of race.
But the SBA isn’t in the habit of giving preferences to white contractors who say they’ve been subjected to bias. That’s not the point of the program -- or the law.
The court was being formalistic in order to save the program. It hinted that the SBA regulation might not survive close analysis, but left that issue for another day.
What would the Supreme Court do with this case? It all depends on who its members are. Conceivably, a liberal majority court could roll back some of the conservative precedents that made remediation-based affirmative action into an endangered species.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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