District Court Enjoins SBA From Using Race-Based Rebuttable Presumption Under 8(a) Program

The U.S. District Court for the Eastern District of Tennessee ruled on July 19, 2023, in Ultima Servs. Corp. v. U.S. Dep't of Agric. that the U.S. Small Business Administration's (SBA) and U.S. Department of Agriculture's (USDA) use of a "rebuttable presumption" of social disadvantage for certain minority groups to qualify for inclusion in the SBA's 8(a) Business Development Program (the 8(a) Program) violates the Fifth Amendment's Due Process Clause. The decision comes on the heels of the U.S. Supreme Court's ruling in Students for Fair Admissions, Inc. v. President & Fellows of Harvard College, in which the Court struck down race-based affirmative action in the college admissions process. As part of the district court's ruling in Ultima, it has enjoined the federal government from using the presumption of social disadvantage in administering the 8(a) Program. The specific implications of the ruling are as yet unclear, but the ruling could have significant and