Rothe Development, Inc. v. Department of Defense

107 F. Supp. 3d 183, 97 Fed. R. Serv. 969, 2015 U.S. Dist. LEXIS 72925, 2015 WL 3536271
CourtDistrict Court, District of Columbia
DecidedJune 5, 2015
DocketCivil Action No. 2012-0744
StatusPublished
Cited by20 cases

This text of 107 F. Supp. 3d 183 (Rothe Development, Inc. v. Department of Defense) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rothe Development, Inc. v. Department of Defense, 107 F. Supp. 3d 183, 97 Fed. R. Serv. 969, 2015 U.S. Dist. LEXIS 72925, 2015 WL 3536271 (D.D.C. 2015).

Opinion

MEMORANDUM OPINION

KETANJI BROWN JACKSON, United States District Judge

Section 8(a) of the Small Business Act, 15 U.S.C. § 637(a) (2012), establishes a business development program for “socially and economically disadvantaged small business concerns[.]” Id. § 637(a)(1)(B). Plaintiff Rothe Development, Inc. (“Rothe” or “Plaintiff’) is a small business based in San Antonio, Texas that has filed the instant action against the Department of Defense (“DOD”) and‘the Small Business Administratiqn (collectively, “Defendants”) to challenge the constitutionality ,of the Section 8(a) program on its face. (See Compl., ECF No. 1, ¶ 1.) Rothe argues that the statute’s definition of “socially disadvantaged” small business owners, 15 U.S.C. § 637(a)(5), is a racial classification that violates Rothe’s right to equal protection under the Due Process Clause of the Fifth Amendment of the United States Constitution. (See Compl. ¶¶ 1-2.) Rothe also claims that- Section 8(a) violates the nondelegation doctrine. (See id.; see also id. ¶ 30.)

The constitutional challenge that Rothe brings in the instant case is nearly identical- to the challenge brought in the case of DynaLantic Corp. v. United States Department of Defense, 885 F.Supp.2d 237 (D.D.C.2012). The plaintiff in DynaLantic sued the DOD, the Small Business Administration, and the Department of the Navy alleging, inter alia, that Section 8(a) was unconstitutional both on its face and as applied to the military simulation and training' industry. See DynaLantic, 885 F.Supp.2d at 242. The DynaLantic court disagreed with the plaintiffs facial attack; it explained in a lengthy opinion the reasoning behind the Court’s conclusion that the Section 8(a) program is facially constitutional. See id. at 248-80, 283-91. Here, Rothe relies on substantially the same rec *188 ord evidence and nearly identical legal arguments, and it urges this Court to strike down the race-conscious provisions of Section 8(a) on their face and thus to depart from DynaLantic’s holding in the context of the instant case. (See, e.g., Mot. Hr’g Tr., Oct. 20, 2014, at 27:21 (Plaintiffs counsel asserting that the DynaLantic court “was just wrong”).)

Before this Court at present are the parties’ cross-motions for summary judgment, as well as the parties’ motions to limit or exclude the proffered testimony of each other’s expert witnesses — commonly referred to as “Dauberb motions” based on the Supreme Court’s seminal ruling on the admissibility of expert testimony in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). As explained fully below, this Court concludes that Defendants’ experts meet the relevant qualification standards under Federal Rule of Evidence 702 and offer what appear to be reliable and relevant opinions; therefore, Plaintiffs Dauberb motion to exclude Defendants’ proffered expert testimony will be DENIED. By contrast, this Court finds sufficient reason to doubt the qualifications of one of Plaintiffs experts and to question the reliability of the testimony of the other; consequently, Defendants’ Dauberb motions to exclude Plaintiffs expert testimony will be GRANTED. With respect to the cross-motions for summary judgment, this Court agrees with the DynaLantic court’s reasoning, and thus this Court, too, concludes that Section 8(a) is constitutional on its face. Accordingly, Plaintiffs motion for summary judgment will be DENIED, Defendants’ cross-motion for summary judgment will be GRANTED, and judgment will be entered in Defendants’ favor. A separate order consistent with this memorandum opinion will follow.

I. BACKGROUND

A. The Section 8(a) Program

Congress enacted the Small Business Act of 1953 (“the Act”), 15 U.S.C. §§ 631-57s, in order to encourage and develop the “capacity of small business” in America, and thereby to promote national “economic well-being” and “security!.]” 15 U.S.C. § 631(a) (1958). Section 8(a) of the Act grants the Small Business Administration the authority to acquire procurement contracts from other government agencies and to award or otherwise arrange for performance of those contracts by small businesses “whenever [the agency] determines such action is necessary!.]” Id. § 637(a). This authority remained “dormant for a decade” after the Act’s passage, DynaLantic, 885 F.Supp.2d at 253, but over the course of many years and after a series of executive orders and legislative amendments, see id. at 253-57, the current Section 8(a) program emerged with the express purpose of helping socially and economically disadvantaged individuals who own small businesses “compete on an equal basis in the American economy!,]” 15 U.S.C. § 631(f)(2)(A) (2012).

The Section 8(a) program provides small businesses that socially and economically disadvantaged individuals own — the Small Business Administration refers to such businesses as “small disadvantaged businesses” or “SDBs,” see Small Disadvantaged Business Program, 73 Fed.Reg. 57,490 (Oct. 3, 2008) — with valuable “technological, financial, and practical assistance, as well as support through preferential awards of government contracts!,]” DynaLantic, 885 F.Supp.2d at 243; see also 15 U.S.C. § 636(j)(10)(A); 13 C.F.R. § 124.404. 1 SDBs can receive myriad *189 types of assistance and support under the Section 8(a) program, including help “develop[ing] and maintain[ing] comprehensive business plans!,]” 15 U.S.C. § 636(j)(10)(A)(i); “nonfinancial services” such as “loan packaging, [ ] financial counseling, [ ] accounting and bookkeeping assistance, [] marketing assistance, and [] management assistance!,]” id. § 636(j)(10)(A)(ii); assistance “obtaining] equity and debt financing!,]” id. § 636(j)(10)(A)(iii); and the opportunity to compete for certain government contracts that are limited to Section 8(a) program participants, see id. § 637(a)(1)(D).

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107 F. Supp. 3d 183, 97 Fed. R. Serv. 969, 2015 U.S. Dist. LEXIS 72925, 2015 WL 3536271, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rothe-development-inc-v-department-of-defense-dcd-2015.