Cortena Williams built her business in one of the most competitive industries in the country and did everything the state of Texas asked her to do to succeed. She earned certification through a program the state created decades ago to increase opportunities for women and people of color. She followed the rules, invested in her company, and competed fairly for government contracts.
For a Black woman operating in the construction sector — a field where women and people of color remain significantly underrepresented — that certification meant opportunity. It meant the chance to compete in a market that had long excluded businesses like hers.
Ruben Mercado Jr. built his company with that same understanding. As a Hispanic American contractor, he structured his entire business around the state’s Historically Underutilized Business (HUB) program. He developed relationships with state agencies. He hired workers and positioned his company to compete for projects that would allow it to grow.
Then, without warning, the foundation both businesses relied on disappeared.
More than 15,000 businesses across Texas received the same message. The Texas State Comptroller issued a notice stating that companies owned by Black, Hispanic, Asian, Native American, and women entrepreneurs would be suddenly stripped of their certification under the state’s HUB program.
Businesses that had structured their growth around a program that existed for more than three decades suddenly found themselves locked out of the system entirely.
For Ruben Mercado Jr., the impact was devastating. Contracts tied to his HUB certification were abruptly terminated, threatening the stability of the business he spent years building. For Cortena Williams, the opportunity she had worked so hard to earn vanished overnight.
In response, several business owners, including Ms. Williams and Mr. Mercado, as well as a trade organization, filed a landmark lawsuit against the State of Texas, challenging the decision in what is known as “The HUB Case.” We — along with Petrillo, Klein & Boxer and Chad Dunn — are pleased to serve as their legal counsel. And while some may view this lawsuit as a technical dispute about government contracting, the scope of this case is far more expansive and significant. This lawsuit speaks to the fundamental principle of economic opportunity and free enterprise; the rule of law and separation of powers in our government; and ultimately, the trajectory of civil rights in this nation.
Economic Opportunity and Free Enterprise
The HUB program was created by the Texas Legislature more than 35 years ago. The purpose of the program is straightforward: to address documented exclusion of minority- and women-owned businesses from the state’s contracting system. The program does not guarantee anyone a contract. It does not promise outcomes. What it guarantees is the opportunity to compete — a chance for businesses that had historically been locked out of public markets to participate.
The chance to participate is directly tied to economic opportunity and prosperity. Entrepreneurs create businesses with the goal of succeeding, not failing. They develop business plans, take out loans, hire employees, and open storefronts; all based on opportunities that exist. But here, essentially overnight, the State Comptroller removed thousands of businesses owned by women and people of color from a program structured to provide opportunities, while service disabled veteran owned businesses remain eligible. That outcome is not neutral, but a personal and financially devastating affront to the women and people of color who were removed from the program.
The financial implications of this program for businesses owned by women and people of color are significant. In 2024 alone, more than $4 billion in Texas state contracts flowed through the HUB program, and the evidence of its historical effectiveness is overwhelming: thousands of entrepreneurs built companies, hired workers, and contributed to their communities through this program.
The effectiveness is so strong that when a proposal was recently introduced in the Legislature to change the program, it was rejected. However, the interim State Comptroller unilaterally imposed essentially the same change through emergency regulations, eliminating eligibility for the businesses the program was designed to support. And that decision and the mechanism utilized to effectuate a change was not only wrong, but a flagrant violation of the law.
Rule of Law
Under basic federal and state constitutional principles, the legislature writes the laws, the executive administers those laws, and the judiciary determines whether those laws are constitutional.
The Comptroller’s actions to unilaterally remove protections created by law violates that core constitutional principle. The Comptroller, as a member of the executive branch, does not have the legal authority to strike out certain words in a statute or attempt to rewrite a law to align with his personal or ideological beliefs. In fact, the Texas Constitution explicitly prohibits “one government branch exercising a power attached to another.” See Tex. Const. art. II, § 1.
Further, decades of case law clearly state that “an administrative agency’s construction of a statute cannot contradict the statute’s plain meaning.” Nevertheless, the Comptroller’s regulation attempts to erase women and minorities from the statute’s HUB definition and denies their businesses the corresponding benefits.
The Comptroller’s actions also run afoul of the core purpose of the law. Public contracting is one of the largest economic engines in the country. It determines which businesses scale, which companies hire, and which communities see sustained investment. The HUB law was enacted to correct documented exclusion and ensure that businesses funded by taxpayer dollars reflect the diversity of the taxpayers themselves. If access to those markets can be removed overnight from businesses defined by race and gender, and by someone with no legal authority to do so, it threatens the function and purpose of the rule of law.
Future Trajectory of Civil Rights in the Nation
Beyond economic opportunity and the rule of law, this case also concerns the future trajectory of civil rights in this country.The businesses removed from the program were defined by three characteristics: race, ethnicity, and gender. You cannot erase racial, ethnic and gender based remedies and pretend that women and people of color were not the targets.
The HUB program existed precisely because women and people of color had been systematically excluded from government contracting. That history is not in dispute or controversial. It is the reason the Legislature created the program in the first place.
What is happening in Texas does not exist in isolation. Across the country, programs created to provide equal opportunity in contracting for marginalized groups are facing ideological legal and political challenges. If the actions in Texas are allowed to stand, they will send a signal far beyond one state. Other officials may attempt similar maneuvers. Programs designed to expand economic opportunity could be dismantled administratively rather than through legislative debate. The consequences would reshape how billions of dollars in public contracting are distributed.
That is why this lawsuit matters. It represents the first major affirmative legal challenge brought on behalf of entrepreneurs whose economic survival is directly threatened by these state-based policy shifts. If we allow more than 15,000 minority- and women-owned businesses to be erased from public contracting without lawful authority, we send a message about whose participation in our economy is protected — and whose is conditional.
That is not a message we can or should accept.
——————-
Alphonso David is a civil rights attorney, Co-Counsel to plaintiffs in “The HUB case”: Globe Express Trucking Inc. et al vs. Kelly Hancock et al.; Co-Counsel to the Fearless Fund and Fearless Foundation, and the President and CEO of the Global Black Economic Forum.
Straight From
Sign up for our free daily newsletter.
