Ohio Contractors Ass'n v. Keip

ENGEL, Circuit Judge.

I respectfully dissent. I would affirm the judgment of the district court upon the narrow ground that Ohio’s Minority Business Enterprise Act is fatally flawed by its failure to incorporate any durational limitations upon its operation. In its present form, this act presents a very real danger of fostering a dependency upon favoritism which is inimical to general principles of equality and, I believe, to the commands of the Equal Protection Clause. While Bakke and Fullilove clearly allow a certain amount of latitude in remedial plans, even at the expense of color-blind treatment, I do not believe they support legislation such as this, which contains no durational limitation.

Race-conscious remedies are extraordinary. The Supreme Court has approved them only when based on findings of constitutional or statutory violations. Fullilove, 448 U.S. at 497, 100 S.Ct. at 2784 (Powell, J.). Moreover, these racial classifications must be limited to redressing the effects of past illegal discrimination. To qualify as a constitutionally permissible means of ameliorating the effects of identified past discrimination, this type of remedy must be “reasonably necessary” or “substantially related to the achievement of its remedial purpose.” See Fullilove, 448 U.S. at 515, 100 S.Ct. at 2793 (Powell, J.); Fullilove, 448 U.S. at 520, 100 S.Ct. at 2796 (Marshall, J.). An important factor in the “means” test is “the planned duration of the remedy.” See Fullilove, 448 U.S. at 510, 100 S.Ct. at 2791 (Powell, J.). If an originally permissible race-conscious remedy continues to operate after fulfilling its objective of redressing past discrimination, it becomes an impermissible racial preference.

The Ohio MBE Act contains absolutely no durational limitation and thus threatens to outlive its legitimate purpose. This deficiency is aggravated by the General Assembly’s failure to articulate the Act’s objectives, thus making it difficult to determine when the objectives have been fulfilled.

In Fullilove, Chief Justice Burger noted generally that in adopting this type of race-conscious remedy, “Congress must proceed only with programs narrowly tailored to achieve its objectives, subject to continuing evaluation and reassessment; administration of the programs must be vigilant and flexible....” 448 U.S. at 490, 100 S.Ct. at 2780 (Burger, C.J.). He also emphasized that that particular MBE provision “may be viewed as a pilot project, appropriately limited in extent and duration, and subject to reassessment and re-evaluation by the Congress prior to any extension or re-enactment.” 448 U.S. at 489, 100 S.Ct. at 2780 (Burger, C.J.) (footnote omitted). Likewise, in Fullilove, Justice Powell noted that “[t]he temporary nature of [the § 103(f)(2) set-aside] ensures that a race-conscious program will not last longer than the discriminatory effects it is designed to eliminate.” 448 U.S. at 513, 100 S.Ct. at 2792 (Powell, J.). Detroit Police Officers’ Association v. Young, 608 F.2d 671 (6th Cir.1979), cert. denied, 452 U.S. 938 , 101 S.Ct. 3079 , 69 L.Ed.2d 951 (1981), upon which the majority here places considerable reliance, similarly emphasizes the necessity of durational limitations in its concluding paragraph:

*177 In the event the district court concludes that the affirmative action plan may remain in force, it will be necessary to determine a formula for its eventual termination. In approving the plan in Weber, the Supreme Court noted that it was a temporary measure to eliminate a manifest racial imbalance, not a measure to maintain a given balance. Steelworkers v. Weber, supra, 443 U.S. 193 , 99 S.Ct. 2721 [ 61 L.Ed.2d 480 ]. Unless the parties are able to agree on provisions for termination of the plan in event of its approval, this will be an ingredient of the final judgment.

608 F.2d at 697-98 .

I do not view this requirement as an incidental concern. I am unable to agree with the majority that the absence of any durational limits may be safely overlooked because it is “incredible” that a popularly elected legislature would suffer the continuance of such a law beyond the period of constitutional need. On the contrary, I find it entirely credible that such a law may remain in force well beyond the elimination of discriminatory effects. It is precisely this danger which has occasioned such emphasis in the courts upon some distinct termination or “sunset” provision.

I agree with the majority that Equal Protection imposes an obligation of self-correction upon the states as well as upon the federal government. It is also unrealistic to expect that the states will buttress their legislation with the sophisticated legislative history which Congress is capable of producing in support of federal legislation. While I therefore tend to agree with the majority that the district court may have taken “too restrictive a view” of the facts surrounding enactment of the Ohio MBE Act, it must certainly be observed that the legislature apparently took great pains to avoid any direct determination that there had been actual past discrimination against minority business enterprises justifying the Act’s set-aside provisions. The majority opinion acknowledges as much in its observation that “the Act did not contain a preamble which stated in so many words that its purpose was to correct past practices by which the state was involved in discrimination against minority contractors.” Ante p. 6. As pointed out by Judge Kinneary in the district court, the finally enacted bill did contain a preamble:

Amended Substitute House Bill 584, commonly known as the Minority Business Enterprise Act [the “Act”], was enacted by the General Assembly and signed into law in December of 1980. As set forth in its preamble, the Act amended several sections of the Ohio Revised Code and created several new sections in order to

“establish a minority business development loan program, to provide construction contracts bonds for minority businesses unable to obtain them from private sources, to set aside 5% of state construction contracts and 15% of state procurement contracts for minority businesses, to require a portion of every state construction contract to be reserved for minority subcontractors and materialmen, [and] to require all state and local procurement contracts to contain anti-discrimination clauses.... ”

Preamble, Am.Sub.H.B. 584 (Defendants’ Exhibit No. 127). Plaintiffs do not challenge the portions of this comprehensive scheme that deal with the minority business loan and bonding programs, but do challenge those portions of the Act, as amended, that mandate the set-aside of contracts for minority participation only.

Thus the General Assembly had the opportunity to make findings of past discrimination, but failed to do so. The only statement of purpose in the Act is found in Ohio Rev.Code Ann. § 122.73 (Baldwin), which describes the Ohio development financing commission’s powers under the Act and establishes the minority development financing advisory board:

The Ohio development financing commission is invested with the powers and duties provided in sections 122.71 to 122.-85 of the Revised Code, in order to promote the welfare of the people of the state by encouraging the establishment *178 and expansion of minority business enterprises, to stabilize the economy, to provide employment, to assist in the development within the state of industrial, commercial, distribution, and research activities required for the people of the state, and for their gainful employment, or otherwise to create or preserve jobs and employment opportunities, or improve the economic welfare of the people of the state. It is hereby determined that the accomplishment of those purposes is essential so that the people of the state may maintain their present high standards of living in comparison with the people of other states and so that opportunities for employment and for favorable markets for the products of the state’s natural resources, agriculture, and manufacturing shall be improved and that it is necessary for the state to establish the minority development financing advisory board and invest it and the Ohio development financing commission with the powers and duties provided in sections 122.71 to 122.85 of the Revised Code.

Once more, Senator William S. Bowen, Chairman of the Senate Commerce and Labor Committee, who had earlier introduced in the Ohio Senate a bill containing the set-aside provisions which were ultimately adopted, avoided any suggestion of past discriminatory practices.

Judge Kinneary’s opinion further reports:

Am.Sub.H.B. 584 was brought to the floor of the Senate for approval on November 24, 1980. Senator Bowen, as Chairman of the reporting committee and chief sponsor of the set-aside amendments, introduced and spoke in favor of the bill. He restated the purposes of the bill as follows:

“Amended substitute House Bill 584 codifies into permanent law a purpose clause indicating that the Ohio development financing commission is invested with the powers given to it by the bill in order to promote the public welfare by encouraging the establishment and expansion of minority business enterprises, to establish the economy, to assist in industrial/commercial distribution and research development, to create and preserve jobs, and to improve the economic welfare of Ohioans.

These purposes are deemed essential to the maintenance of Ohioans’ favorable standard of living as compared to persons in surrounding states, and so that employment opportunities in the marketing of Ohio products would be enhanced.”

Transcript of Proceedings before the Ohio Senate, November 24, 1980 (Defendants’ Exhibit No. 128), pp. 13-14. Senator Bowen went on to describe briefly how the set-aside provisions would operate, id. at 18, but did not state what their purpose was, if different from the general purposes he had outlined earlier. He stated: “The committee had several hearings on the bill. We have heard similar measures relative to MBE’s relative to bonding, relative to set-aside. I don’t think it pertinent that I elaborate or dwell on the merits of the bill. I think the component parts are understood.” Id. at 20.

What is significant in these statements and many others relied upon by Judge Kinneary, is not the presence of a socially desirable purpose, which these comments laudably reflect, but the absence of the kind of finding which bespeaks compelling necessity and hence a constitutional justification for departing from normal concepts of equal protection.

While I would be reluctant to strike down the Act on this basis alone, I seriously question whether the Supreme Court majority which upheld the findings in FuUilove would accept the very minimal legislative history here. When this deficiency is combined with the absence of any temporal limitations, it is simply impossible to determine when the legislative objective has been accomplished.

Finally, I am convinced that the majority, by suggesting in Part C that section 5 of the Fourteenth Amendment is merely “enabling” legislation without which Congress would have no explicit authority to enforce *179 the equal protection clause against a state, underreads the emphasis which Chief Justice Burger and Justice Powell place in Fullilove upon the unique role expressly created for the Congress by the General Welfare Clause and the Commerce Clause, as well as section 5 of the Fourteenth Amendment. 448 U.S. at 473-78; 499-502, 100 S.Ct. at 2772-74; 2785-2787. In my opinion, that emphasis was made not because the Court was concerned with the power of Congress to act generally, but because it was concerned with the radical nature of the remedy Congress had prescribed. As Justice Powell observed:

Racial preference never can constitute a compelling state interest. “ ‘Distinctions between citizens solely because of their ancestry’ [are] ‘odious to a free people whose institutions are founded upon the doctrine of equality.’ ” Loving v. Virginia, supra [ 388 U.S. 1 ] at 11 [ 87 S.Ct. 1817 at 1823 , 18 L.Ed.2d 1010 ] quoting Hirabayashi v. United States, 320 U.S. 81, 100 [ 63 S.Ct. 1375, 1385 , 87 L.Ed. 1774 ] (1943). Thus, if the set-aside merely expresses a congressional desire to prefer one racial or ethnic group over another, § 103(f)(2) violates the equal protection component in the Due Process Clause of the Fifth Amendment. See Bolling v. Sharpe, 347 U.S. 497, 499 , 74 S.Ct. 693, 694 , 98 L.Ed. 884 (1954).

Fullilove, 448 U.S. at 497, 100 S.Ct. at 2784 (Powell, J.). Similarly a mere desire to promote the interests of minority contractors in Ohio can never constitute a state interest sufficient to justify the set-aside provisions of Ohio’s MBE Act, and yet that represents the only clearly articulated justification offered by the Ohio General Assembly. Proper respect for the motives of the General Assembly might justify our assuming the proper motive of eradicating past discrimination, but when this uncertainty is added to the total absence of any termination date or any objective standard for determining it, the result, in my opinion, is nothing more than an uncontrolled expression of impermissible racial preference.