CASE OVERVIEW 

Jurisdiction: Travis County District Court, State of Texas
Filing Date: March 2, 2026
Type of Action: Verified Original Petition and Application for Declaratory and Injunctive Relief Relief Sought: Preliminary Injunction, Permanent Injunction, Declaratory Judgment

PLAINTIFFS 

Ipsum General Contractors, LLC – Houston, TX (general contractor; founded by Hispanic American Ruben Mercado Jr.) 

Mpulse Healthcare & Technology, LLC – Sugarland, TX (medical technology distributor; owned by Black American Tyrone Dixon) 

Williams Professional Water Restoration Service LLC – Burleson, TX (restoration services; owned by Black American woman Cortena Williams) 

Houston WiFi, Ltd. Co. d/b/a Houston Construction Services – Houston, TX (general contractor; owned by Hispanic American Ray Gutierrez) 

NAMC, Inc. – Greater Houston Chapter – Houston, TX (nonprofit trade association; 155 minority- and women-owned contractor members)

DEFENDANTS 

Kelly Hancock, Acting Texas Comptroller of Public Accounts (official capacity) Marc D. Williams, Executive Director, Texas Department of Transportation (official capacity) Stephanie Muth, Executive Commissioner, Texas Health and Human Services Commission (official capacity) Will Mckerall, Executive Director, Texas Facilities Commission (official capacity)

BACKGROUND 

The Texas Historically Underutilized Business (HUB) Program, codified under Tex. Gov't Code Chapter 2161, was enacted in the 1990s to remedy documented disparity in state procurement. The statute defines eligible HUBs as small businesses majority-owned by Black Americans, Hispanic Americans, women, Asian Pacific Americans, Native Americans, or disabled veterans with a service-connected disability rating of 20% or higher. On December 2, 2025, Acting Comptroller Hancock issued emergency regulations (TRD-202504402) restructuring the program exclusively for service-disabled veteran-owned businesses, renaming it "VetHUB" (Veteran Heroes United in Business). On January 6, 2026, the Comptroller decertified all HUBs owned by minorities and women.

LEGAL ARGUMENT

The plaintiffs advance three core legal claims. 

First, Acting Comptroller Hancock exceeded his statutory authority under Tex. Gov't Code Chapter 2161 — the HUB program was created and defined by the Legislature, and the Comptroller has no power to unilaterally restructure or dismantle it by emergency regulation. 

Second, the emergency regulation (TRD-202504402) was procedurally defective, failing to meet the legal requirements governing emergency rulemaking under Texas law. 

Third, by decertifying thousands of businesses that had legally held HUB status for years — without notice, without a hearing, and without due process — the Comptroller deprived them of a state-created property interest in violation of the Texas Constitution's separation of powers protections. 

The Legislature's explicit rejection of House Bill 167 in the 2025 session, which would have accomplished the same result through proper legislative process, makes the Comptroller's unilateral action all the more legally indefensible.

KEY FACTS & FIGURES 

16,995 HUBs were certified as of Fiscal Year 2024; fewer than 500 remain following decertification. All remaining VetHUB-certified businesses are owned by white men.

In FY2024, HUB-certified businesses were awarded approximately $4.1 billion in state contracts out of roughly $20 billion total. The three named agency defendants (TxDOT, HHSC, TFC) spent more than $1.6 billion on HUB-related contracts in the first half of FY2025 alone. 

In 2025, the Texas Legislature considered and rejected House Bill 167, which would have restricted HUB eligibility to disabled veterans — the precise change the Comptroller enacted by emergency rule. 

A federal court (W.D. Tex., Dec. 22, 2025) dismissed an Equal Protection challenge to the HUB Program's subcontracting requirements. See Aerospace Solutions, LLC v. Hegar, No. 24 Civ. 1383.

RELIEF SOUGHT 

Declaration that the Emergency Regulation (TRD-202504402) is null and void. 

Temporary and permanent injunction barring enforcement of the Emergency Regulation.

Order requiring the Comptroller to reinstate plaintiffs' HUB certifications. 

Order requiring TxDOT, HHSC, and TFC to resume compliance with the HUB Act's statutory requirements. 

Attorney's fees and costs under Tex. Civ. Prac. & Rem. Code §§ 37.009, 106.002(b).

ATTORNEYS

Lead Counsel — Alphonso David, Global Black Economic Forum. 

Lead Counsel — Adam Schuman, David Hoffman, Shanice Hinckson, Petrillo Klein + Boxer LLP. 

Local Counsel — Chad W. Dunn, Brazil & Dunn LLP.