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Fourth Circuit Holds Minority-Owned Corporation Can Bring Race Discrimination Suit

The United States Court of Appeals for the Fourth Circuit recently decided in a case of first impression, that a minority-owned corporation had standing to bring a Title VI race discrimination suit because it established an “imputed racial identity” for the purposes of prudential standing considerations under federal law.  

The plaintiff, Carnell Construction Corporation (Carnell) won a bid to build low-income rental units in a public, federally funded housing project in Danville, Virginia. After extensive delays, the relationship between Carnell and the Danville Redevelopment and Housing Authority became strained. In May 2009, the Housing Authority informed Carnell that it would not extend its contract. Carnell sued claiming, among other things, race discrimination under Title VI.

On appeal, the Fourth Circuit addressed whether Carnell, as a corporate entity, met the statutory requirements of  Title VI, which protects any “person” from discrimination based on a “race, color or national origin.” Adopting the position of many other circuits, the court held that a properly certified minority-owned corporation could be the direct object of discrimination and meet the prudential standing requirements of showing that Carnell fell within the zone of interests protected by Title VI. Because Carnell publicly represented itself as a minority business enterprise, was owned by an African-American and was properly certified, the court held that it had standing to bring the claim.

Carnell Construction Corp. v. Danville Redevelopment & Hous. Auth., Nos. 13-1143, 13-1229, 13-1239 (4th Cir. Mar. 6, 2013). 

©2023 Katten Muchin Rosenman LLPNational Law Review, Volume IV, Number 80
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About this Author

Wendy E. Cohen, Financial Services Lawyer, Katten Muchin Law firm
Partner

Wendy E. Cohen represents investment managers and other sponsors of domestic and offshore securities and commodities hedge funds, funds of funds and other public and private pooled investment vehicles, as well as their service providers, including their managers, brokers, financial intermediaries and other financial institutions, and investment professionals. She provides advice on all corporate and related matters facing investment funds, including structure and organization, ongoing operations, restructuring and dissolution.

Having practiced for...

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