DBE Litigation Ends

What happened: A federal judge in Kentucky dismissed a years-long challenge to the U.S. Department of Transportation’s (DOT) Disadvantaged Business Enterprise (DBE) program March 19, saying recent changes instituted by the agency preempted any further need for the litigation. Judge Gregory Van Tatenhove’s ruling will likely have minimal immediate effect on DBE program implementation but could open the door for other legal challenges or policy changes in the longer term.

Background: The suit, filed October 2023 by two non-DBE plaintiffs, Mid-America Milling and Bagshaw Trucking, argued the program was unconstitutional, in part because race and gender were factors in determining “disadvantaged” status. While the Biden administration, the original defendants, stood by the existing DBE program, the Trump Administration began working with the plaintiffs to settle the case after taking office in January 2025.

The proposed settlement, submitted to Judge Van Tatenhove in May, would eliminate DBE goals based on race or gender. Then on Oct. 3, rather than waiting for the judge’s ruling on the proposal, U.S. DOT released an interim final rule (IFR) making that major programmatic change, effective immediately. As ARTBA has reported in the months since, the DBE program has been suspended while states reevaluate the status of previous DBE firms.

Meanwhile, a group of pro-DBE organizations and companies successfully intervened as parties in the lawsuit last year. In light of the new DBE rule, they petitioned the judge to dismiss the suit, which would preserve their longer-term legal options. So, while the dismissal leaves the new DBE regulations in place, the court never ruled on the suit’s underlying constitutional questions. This leaves future legal challenges – or a change in direction by another presidential administration – as possibilities.

What’s next: In light of all these developments, Congress will need to address the DBE program as part of its pending surface transportation reauthorization. Please contact Rich Juliano or Prianka Sharma with any questions or feedback.