Rothe Development Corp. v. Department of Defense (Fed. Cir. 2008)
Although not a patent case, Rothe raises an important Federal Constitutional issue. In Rothe, the Federal Circuit has held that the statutory quota for governmental contracts with “small disadvantaged business” is facially unconstitutional as a race-based violation of the right to equal protection (through the Due Process Clause of the Fifth Amendment).
10 U.S.C. § 2323 (“Section 1207”) sets a goal that “five percent of federal defense contracting dollars” be awarded to small businesses owned and controlled by “socially and economically disadvantaged individuals.” Under the Small Business Act, Black Americans, Asian Americans, Hispanic Americans, and Native Americans are presumptively socially disadvantaged individuals.
Statutes that that include explicit racial classifications are reviewed with “strict scrutiny.” Such provisions are only valid if they “serve a compelling governmental interest, and [are] narrowly tailored to further that interest.” In the race setting, general efforts “to alleviate the effects of societal discrimination” are not considered compelling interests under the Supreme Court’s 1996 Shaw decision. Congress reauthorized Section 1207 in 2006. Thus, to be constitutional, the evidence of a compelling governmental interest at that time.
On appeal, the Federal Circuit found that older Congressional evidence (from the original enactment of the provision) was “stale” by 2006 and thus not reliable. Additionally, the record did not reflect that newer evidence was officially considered by Congress.
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Although we are mindful that Congress has broad discretion to regulate its internal proceedings, we are hesitant to conclude that the mere mention of a statistical study in a speech on the floor of the House of Representatives or the Senate is sufficient to put the study “before Congress” for purposes of Congress’ obligation to amass a “strong basis in evidence” for race-conscious action. |
Finally, the Federal Circuit found that the newer studies – even if considered by Congress – were inadequate because of the many methodology defects.
Upon these findings, the Federal Circuit held that congress did not have a compelling governmental interest in enacting Section 1207 and that the statute therefore is invalid as unconstitutional.
Note:
- Opinion written by Chief Judge Michel and joined by Circuit Judge Mayer and District Court Judge Stearns from Massachusetts sitting by designation. These judges were appointed by Presidents Reagan, Reagan, and Clinton, resptively.
“The Federal Circuit has held that the statutory quota for governmental contracts with “small disadvantaged business” is facially unconstitutional as a race-based violation of the right to equal protection (through the Due Process Clause of the Fifth Amendment).”
That’s not right at all — the Federal Circuit missed something key and made an overbroad ruling.
On appeal to the full circuit or the Supreme Court, I would claim that the statutory quota is not in fact race-based. I would concede that the assumption that people of certain races *are* disadvantaged is unconstitutional. But argue that deference to Congress and the need to alter statutes in the most narrow possible way, mean that only that clause should be stricken. This would then require that disadvantaged businesses be identified in some other way, by, for instance, financial situation, geographic region, or history.
While I can not speak for 6001 (whomever that is), I do think that many of you are misinterpreting the comments.
I do NOT think that (s)he meant that IF you disagree with any of Obama’s positions that you are a racist. I _think_ that (s)he meant that if you disagree with any of Obama’s positions you are _percieved_ as being racist.
If my interpretation is correct, then I am afraid that the comments art true.
Reading a lot of different political blogs & writing (and non-political ones that had politics spill over), the one point that came across most clearly was that if you were not voting for Obama then you were a racist.
Personally, I did not vote for Obama. Not because I am a racist (he11, my wife & I are different races), but because I disagreed with many of his policies. Unfortunately, too many people wanted to use bad logic and falsely conclude if A then B. Which is just another form of racism in itself.
Now, can someone here (haven’t gotten a reasonable answer anywhere else, yet) explain to me why it IS racist (which it is) to not vote for a particular person simply because of their race, but it is not consider racist to vote FOR someone just because of their case. Seems to me BOTH actions are racist/racism and voting FOR Obama just because of his race is just as bad as NOT voting for him just because of his race.
Just something to ponder instead of Bilski etc. ‘Nite all.
thanks,
LL
I want to read that as sarcasm but it won’t fly. Instead, it seems to be yet another commenter using that little word “us”. In Ohio, it’s still “us against them” is it, Mr Todd? Is there no law firm (or in house corp law dept) anywhere in Ohio that has within its portals a person holding a passport that isn’t a US passport? Are all such people to be forbidden to open any file of a patent application? Are the Russians and Chinese really succeeding, in selling their programming skills to US corporations? If there’s a war on waste, is giving something to a waster also an act of treason. The traditional penalty for treason is the death penalty, of course. I’m disappointed.
Now that racism has ended, how about some citizen based preferences, so that we hire Americans instead of H1B slave labor, or outsource our computer programming industry to India, China, Russia. I hear there was supposed to be a war on terror, isnt giving American jobs to people who dont like us TREASON? Notice you never heard a call to stop outsourcing from “Country First” McCain. This is why he lost Ohio.
Hang on a minute anonomouse, aren’t all government contracts already non-bid contracts given to Halliburton? I wonder if Dick Cheney knows anything about this?
There’s no place for race-based preferences in government contracting. From now on, all government contracts should be no-bid contracts given to Halliburton.
MaxDrei:
13 CFR 124.103
link to edocket.access.gpo.gov
r124.103.htm
I’m sure there’s some case law on this somewhere, too.
Somebody help me please: is the President Elect caught by the statutory definition of “socially disadvantaged” (presumptively)? I read that he is “black” but also that his mother is 100% white, from Kansas. So, is he entitled to statutory help, or not? Perhaps the old jurisprudence of the Republic of South Africa can help here?
Don’t get me wrong: I’m not holding Europe up as any shining example here. Can’t imagine when a mainland European country will anoint its first black head of state. Rather, just hoping that the USA is on the point of once more leading the world by the power of its example (as opposed to showing us the example of its power). It is possible for a new President to be, at the same time, a good thing for American voters and a good thing for the Rest of the World. In Europe this morning there is a huge wave of goodwill directed towards America, and that will make a difference to the prosperity of the USA, going forward. Talking about enlightened self-interest, offers of service from the disadvantaged are well-worth careful scrutiny. Some of them have got to where they are by being simply better at what they offer than those born into advantage.
The real-world result of these set-asides are multiple shell companies with a minority figurehead-owner. The 8(a) companies win the contracts and then subcontract the work to a regular company.
Basically, you need one 8(a) person to be willing to take a large salary as a pass-through and play minesweeper in his/her office.
Not exaggerating. Don’t come back and tell me what the rules are for sub-bing, etc. They all have the work-arounds and loopholes.
Government contracting is the dirtiest job I’ve ever had. I will never do it again.
6001:
Why must one be a racist for disagreeing with any of President-elect Obama’s policies? Can’t one simply disagree on the merits? Your supposed moral absolutism is frightening.
An A- student from Wyoming has a better chance of getting into Harvard than an A+ student from New York (a dime a dozen). The son and grandson of famous Yale alumni donors gets into Yale. The son and grandson of admirals gets into the Naval Academy. Half of the minister posts in a Swedish government are intended to go to women.
That said, reserving Government contracts for darker skinned businessmen is a terrible red flag setting equal opportunity back in my view. REMOVING obstacles and discrimination is a much better way. (BTW: The President-Elect apparently did not inform Harvard Law School about his skin color when applying for a scholarship and admittance.)
“On an unrelated note… why is the CAFC ruling on an issue of constitutionality?! (This is mostly rhetorical – I’m a little curious, but I don’t care enough to read the opinion for the backstory.”
District Court jurisdiction was in part based upon the Tucker Act, and appellate jurisdiction lies with the CAFC.
Mr. Stein, I know you’re mostly joking around, but a lot of patent lawyers have no idea what the Federal Circuit does outside of its patent case jurisdiction. The other areas are actually pretty interesting. Still, it’s an odd collection of subject areas for an appellate court.
The elimination of skin based preferences will duly lag the elimination of racism. The sooner racisim is entirely eliminated from human society the better.
And the comment by 6001 is just plain scary for an patent blog.
“The Federal Circuit has held that the statutory quota for governmental contracts with “small disadvantaged business” is facially unconstitutional as a race-based violation of the right to equal protection (through the Due Process Clause of the Fifth Amendment).”
Hmm. How about if the disadvantaged business is “tied to a particular machine?” Would such a preference pass under the “equal protection” clause of the Bill of Rights, section 14?
I’m hoping that the USPTO releases some Interim Guidelines to Constitutionality, letting us know how it may this ruling.
On an unrelated note… why is the CAFC ruling on an issue of constitutionality?! (This is mostly rhetorical – I’m a little curious, but I don’t care enough to read the opinion for the backstory. 😉 )
– David Stein
***I heard on TV last night that racism was over now that Obama won.***
No racism is only over if you agree with Obama. If you disagree with any of his policies, it is because YOU are a racist.
Affirmative action in the public sphere has focused mostly on education, employment and contracting. This last category has long been the least defensible. As this case shows, these set-asides are very costly to taxpayers, and the benefits usually flow to business owners who are relatively wealthy. Even if we accept as legitimate government aid based on race, contracting preferences are an extremely inefficient and indirect way to deliver such public aid to minority groups.
It’s great to see the Federal Circuit properly apply the restrictive Supreme Court cases in this area, and strike down DOD’s program.
so does this kill the Section 8(a) preferences from the Small Business Act?
I heard on TV last night that racism was over now that Obama won.
The sooner skin based preferences are entirely eliminated from human society the better.
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