Rothe Development, Inc., a Texas corporation that bids on and performs contracts for computer systems and programming services, often bids for contracts with government agencies, including the U.S. Department of Defense (DOD) and branches of the military, to service computer systems. In 1998, Rothe lost a bid for a DOD contract to another company, despite being the low bidder, because the contract was awarded pursuant to a race-based program. In 2008, the United States Court of Appeals for the Federal Circuit ruled that the race-based program, on its face, as reenacted in 2006, violates the equal protection component of the Due Process Clause of the Fifth Amendment to the Constitution.
Unfortunately, the DOD continues to award contracts on the basis of race-base through use of Section 8(a) of the Small Business Act, which sets a “government wide goal” that “not less than 5 percent of the total value of all prime [federal] contract and subcontract awards for each fiscal year” be awarded to socially and economically disadvantaged small business concerns. The Small Business Administration (SBA) is authorized to contract with DOD to provide goods and services and then to subcontract that work to qualifying businesses, either on a “sole source” or on a “competitive” basis; most of the DOD Section 8(a) contracts are sole source. To participate in the program, a firm must be 51 percent owned and controlled by socially and economically disadvantaged individuals, defined to include “Black[,] Hispanic[,] Native[,] [and] Asian Pacific Americans . . . and other minorities”).
On May 9, 2012, Rothe filed its federal lawsuit. On May 23, 2014, MSLF filed its friend of the court brief. On June 16, 2014, the DOD and the SBA filed a cross-motion for summary judgment and a response to Rothe’s motion for summary judgment. On July 18, 2014, Rothe filed a response and a reply in support of its motion for summary judgment. On August 1, 2014, the DOD and the SBA filed a reply in support of its cross-motion for summary judgment. On October 20, 2014, oral arguments were held. On June 5, 2015, the federal district court upheld the use of race by the DOD and the SBA.
On July 2, 2015, Rothe appealed to the United States Court of Appeals for the District of Columbia Circuit. On October 13, 2015, Rothe filed its opening brief. On October 28, 2015, MSLF filed an amicus curiae brief in support of Rothe. On January 21, 2016, the DOD and the SBA filed their response brief. On January 21, 2016, the DOD and SBA filed their response brief. Rothe filed its reply brief on February 4, 2016. The court of appeals held oral argument on March 10, 2016. On September 9, 2016, a three-judge panel, in a 2-1 decision, held that the challenged provisions of the Small Business Act did not contain a racial classification and that it survived rational basis review.
On October 18, 2016, Rothe filed a petition for rehearing en banc. On October 21, 2016, the D.C. Circuit requested a response from the DOD and the SBA. The DOD and the SBA filed their response on November 8, 2016. On January 13, 2017, the D.C. Circuit denied the petition for rehearing en banc. On February x, 2017, MSLF agreed to represent Rothe before the Supreme Court of the United States.