A high-stakes legal challenge has been filed against the Texas State Comptroller following the abrupt removal of more than 15,000 businesses from the state’s Historically Underutilized Business (HUB) program, raising significant constitutional and administrative law questions.
The lawsuit—brought by affected business owners including Cortena Williams and Ruben Mercado Jr.—argues that the Comptroller’s office exceeded its authority by effectively rewriting statutory eligibility requirements without legislative approval. Civil rights attorney Alphonso David, who serves as co-counsel in the case, describes the move as a “flagrant violation of the law” with far-reaching implications.
Separation of Powers at Issue
At the center of the litigation is whether an executive agency can unilaterally alter or narrow a legislatively enacted program. The HUB program, established by the Texas Legislature more than 35 years ago, was designed to remedy documented disparities in public contracting by expanding access to minority- and women-owned businesses.
Plaintiffs contend that the Comptroller’s actions violate core constitutional principles, including the separation of powers doctrine enshrined in the Texas Constitution. Specifically, the lawsuit alleges that the agency impermissibly attempted to reinterpret statutory language in a manner that contradicts legislative intent and established law.
Legal experts note that longstanding precedent generally prohibits administrative agencies from adopting interpretations that conflict with the plain meaning of a statute.
Administrative Law and Statutory Interpretation
The case also raises questions about the limits of administrative rulemaking authority. According to the complaint, the Comptroller implemented the changes through emergency regulatory action, bypassing the legislative process despite prior rejection of similar proposals.
Plaintiffs argue that this maneuver effectively removed race- and gender-based eligibility criteria embedded in the statute, while leaving other categories—such as service-disabled veteran-owned businesses—intact.
If upheld, such an interpretation could significantly alter the scope of agency discretion in Texas and potentially influence similar disputes nationwide.
Economic Impact and Standing
The plaintiffs further assert substantial economic harm resulting from the policy change, citing terminated contracts, lost business opportunities, and destabilized operations. The HUB program accounted for more than $4 billion in state contracting in 2024 alone, making it a critical economic channel for qualifying businesses.
The complaint frames these harms as both immediate and irreparable, strengthening arguments for injunctive relief.
Broader Civil Rights Implications
Beyond administrative law, the case intersects with evolving legal challenges to race- and gender-conscious economic programs across the United States. Advocates warn that allowing the Texas action to stand could embolden similar executive actions in other jurisdictions, effectively dismantling equity-focused programs without legislative oversight.
David emphasized that the case represents one of the first major affirmative legal challenges brought on behalf of businesses directly affected by such policy shifts.
“This litigation is about preserving lawful access to economic opportunity and ensuring that statutory protections cannot be erased through administrative action,” he said.
The case—filed as Globe Express Trucking Inc. et al. v. Kelly Hancock et al.—is expected to test the boundaries of administrative authority, statutory interpretation, and constitutional governance in the context of public contracting.
