Cross Petition — Fulton County v. S. J. Groves & Sons Co.

Supreme Court brief1991

Ask Donna

What actually matters in this document.

Text

7 >

! .

90-173

evict U.S.

ame Ours |

on MAY 8 1991

orrice oF iHE CLERK

IN THE

Supreme Court of the United States

OctoserR TERM, 1990

FULTON COUNTY, GEORGIA,

Cross-Petitioner,

S.J. GROVES & SONS COMPANY AND

JASPER CONSTRUCTION COMPANY,

Cross-Respondents.

CROSS-PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

KerrH M. WIENER

Counsel of Record

Gary R. McCain

WEBB & DANIEL

Suite 3100, IBM Tower

i201 West Peachtree St., N.W.

Atlanta, Georgia 30309-3400

(404) 881-0433

Attorneys for Cross-Petitioner

Fulton County, Georgia

May 1991

Lex Publishing Company, 2161 Monroe Dr., Atlanta, Georgia 30324 (404) 875-5140

QUESTIONS PRESENTED

1. Whether a local or state government recipient

of federal funds under a federal grant may be liable in

monetary damages to a private party for its good faith

reliance upon and compliance with presumptively valid

federal regulations that are authorized by Congress, if

those regulations are subsequently held invalid?

2. Whether American Trucking Associations v.

Smith, 495 U.S. __, 110 L.Ed.2d 148 (1990), holds that a

local or state government recipient of federal funds

under a federal grant could be liable in monetary damages

to a private party for its good faith reliance upon and

compliance with presumptively valid federal regulations

authorized by Congress, if those regulations are

subsequently held invalid?

LIST OF INTERESTED PARTIES

The following were parties to the proceedings in the

Eleventh Circuit Court of Appeals: S.J. Groves & Sons

Company, Jasper Construction Company'

(Petitioners/Cross-Respondents) (hereinafter “Groves”),

and Fulton County, Georgia (Respondent/Cross-Peti-

tioner) (hereinafter “Fulco”).

The United States Department of Transportation was

a party to the proceedings in the District Court and an

appellant in the Court of Appeals. On September 18, 1989,

the Eleventh Circuit dismissed the United States Depart-

ment of Transportation pursuant to its motion for volun-

tary dismissal.

' Jasper Construction Company is a wholly owned subsidiary of S.J.

Groves & Sons Company.

TABLE OF CONTENTS

SEO UMNO 8 UD os vn secesovesncnseosanensssesensseasesssserenennsesssnee i

LIST OF INTERESTED PARTIES...................cccessersssecsrserscees ii

i iansesiesbacinspsnncusesnsnonavccooucsnsensenososuseores iii

EE WINES Dev cosie ss ccescecencnsuasosnnsassceesensscesvonessacess Vv

liad ricpoetscésersanenssesbérnnvenasss srsvancesbesestoveees 1

PPP EPPIUAL, DEAL EMAEIN[ ...0.0.0.0ccc0svovscorcsosorsenscssssenees 1

CONSTITUTIONAL PROVISIONS, STATUTES

AND REGULATIONS INVOLVED.............::cccseseseeseeeeees 2

SEE OWES GMM ics cssesivenscvncncvsssaccessnosecsssnsvnscvessors 4

EXISTENCE OF JURISDICTION BELOW .......00....ccceeeseeees 9

REASONS FOR GRANTING THE WRIT...........::cccsceceseeees 9

iinet ieactcitrnessransnsstnoniaes veesvibenbeevinsevensososwnnss 9

a ieee cecketansonocnsastisbrsbnanevbinbinsbucinvavevscens 11

I. Fulco As A Recipient Of Federal Funds

Under A Federal Grant Should Not Be

Liable In Monetary Damages To A Private

Party For Its Good Faith Compliance With

Presumed To Be Valid Federal Regulations

That Are Subsequently Held Invalid.................. 11

A. The DOT Regulations Are Presump-

I icsailacdienatesdernnsestsionsiniiversssnsvonsovinnes 12

B. The DOT Regulations Should Remain

In Effect To Protect Fulco, Even If Held

Invalid, Because of Fulco’s Reasonable

And Good Faith Reliance On Their

I Ticascedithietdeutcittinietversesssnensccnsosssnsunsnabubevis 12

ili

1. Fulco’s Reasonable And Good

Faith Reliance Upon The DOT

Regulations Should Be Protected ...... 12

2. The DOT Regulations’ Preemp-

tion Of The Georgia Low-Bid

Statute Should Remain In Effect ...... 16

3. Holding Fulco Liable In Damages

For Its Compliance With The

DOT Regulations Would Be In-

CII esis tiacieosn rene convenrantanensnscnrensennen 17

C. Holding A Local Government Liable

In Damages For Its Compliance With

Federal Regulations Pursuant To A

Grant Agreement Would Have A

EDORSEROTME TRIO ones itcsssnsasecsncscescesseccssese 18

D. The Eleventh Circuit’s Decision Con-

flicts With Decisions Of This Court

And Other Federal Courts Permitting

Good Faith Reliance In Defense To A

Reverse Discrimination Challenge............ 20

E. The “Choice” Of Foregoing Federal

PUTER BB POOR TRIO WIIEE a cncccenccecsncinsscesinssesnens 23

II. American Trucking Does Not Hold That A

Local Government Could Be Liable In

Monetary Damages For Good Faith Re-

liance Upon Federal Regulations....................... 24

ae NRE Ea coheih.tsvsscancindesensscincdelancnnimantstaisierstetnainiimpsascanenntye 29

TABLE OF AUTHORITIES

Cases

Alabama Nursing Home Association v. Harris,

CF Fae Be re CI atic ttiteatecstonenestnseinenensiinern 12

Albermarle Paper Co. v. Moody,

ee I I rarenieicsteinceninttinseactvnincnsvincadbiecadacurncvinmnen 21

Allen v. Board of Elections,

titans icc Sainsccaain dates onaaaitnn 28, 29

American Trucking Associations v. Scheiner,

Se Aa AI CRIB icrsactinscs iciceseyvinsencecoersemettnsnsedounennéton passim

American Trucking Associations v. Smith,

495 US. __, 110 L-Ed.2d 148 (1990) ...............0000. passim

Ashland Oil, Inc. v. Caryl,

Be ee Fe Ge catencco sahsinsnisiinannininsasastniinnanieianen 25

Associated General Contractors of Massachusetts, Inc.

v. Altshuler,

490 F.2d 9 (1st Cir. 1973), cert. denied, 416

I IN ccc heed cansxcasepainnanasaenisananiracersetenckaeasiniedesoin 21

Batterton v. Francis,

ee OI I wr cctninsnsnisniandauscsunbvasoussvininteanseecoueannars 16

Buckley v. Valeo,

0 SR tater issiencreareseasivoiectseepshnaclanacneoinnedaientes 12

Central Alabama Paving, Inc. v. James,

449 F. Supp. 629 (M.D. Ala. 1980)............cssesesseseeeeees 22

Chevron Oil Co. v. Huson,

Re ee BN Rip resecicnnsenscienncreannssennansnansaenootnne passim

Chicot County Drainage District v. Baxter State Bank,

ee SEEN BO GUID schictinnihacsacevicnsmbncenppmbsdosiinsioueess passim

Cipriano v. City of Houma,

I is icicbaiccbictnneihicvsnsesthnsesdbubscbaneesannsntien 9, 13

City of Lakewood v. Plain Dealer Publishing Co.,

IIE ccstisesadicsobasasesesdubnesi-snonbesuitenansanbnonesinns 27

City of Phoenix v. Kolodziejski,

ID scr hisiacesicnacisnicnsinnehenhalienosnnensosaecth 9,13

Contractors Association of Eastern Pennsylvania v.

Secretary of Labor,

442 F.2d 159 (3rd Cir.), cert. denied sub nom.,

Contractors Association v. Hodgson, 404 U.S. 854

aR Nadilivagezndebnnttieentsnsan tssiniss ab beahimnoksnienncheabioein passim

England v. Louisiana State Board of Medical Examiners,

INI siscaocanieidnnneadndotestpansacteseasersicsesislcahiees 28

Ferina v. United States,

ge | OE 24

Fidelity Federal Savings & Loan Association v. de la

Cuesta,

a epenilianettabinecnicntans 16

Fullilove v. Klutznick,

| ee 15, 18, 24

Great Northern Railway Co. v. Sunburst Oil & Refining

Co.,

SE AY SN REED cncriscncesnssonsacasvearssshuaconyrotecsnstsentensssnissses 29

Guardians Association v. Civil Service Commission of

the City of New York,

BD UD. SRE (UDG SD)... nsnsecvscscssssssesesscesssnsosesnsscnsnsscnence 19, 20

Heckler v. Matthews,

| a passim

vii

Kirschberg v. Feenstra,

Se ee Fe I: FO cass sncdccentsndovserencscanasecens 9,15

Lau v. Nichols,

I 19

Lemon v. Kurtzman,

Oe ae passim

Linkletter v. Walker,

ie ATS aR NEA RTE RF 26, 28

Los Angelés Department of Water & Power v. Manhart,

i cana 12

M.C. West, Inc. v. Lewis,

522 F. Supp. 338 (M.D. Tenn. 1981)..........:cceeees 16, 22

Marino v. Bowers,

Re te IE I, MIE saecicsessiscecdcconcnnstsnseu. csthanees 25

Marks v. United States,

NG I inci ss cctceteieatpbiaheaieneemiuaneetaineiins 27

Marvin v. Alston Independent School District,

TUG Fide CE Ns TDD vicina ses scscescennancctcennsisincsnns 21

Maryland-National Capital Park & Planning Commission

v. Lynn,

ES Fie ee cs Gr OE snneactnsevicexastahsceseeernnibacasndins 12

Milwaukee County Pavers Association v. Fiedler,

710 F. Supp. 1532 (W.D. Wis. 1989), modified in

part, 731 F. Supp 1395 (1990), aff'd, 922

ae ee ts SOR seis incascatninatrennsenivenniminsts 20, 24

NLRB v. Rockaway News Supply Co.,

i . __CRORMERUINC TEN nO PURI meen Ce passim

National Mines Corp. v. Caryl,

CEE Ee ID sere creniccinnisneneniqunniniesenenescaiaciia 25

viii

Neil v. Biggers,

Ie Ce ID ikciceinierinicensneceisinsiesencinnatinimiincsnanaaves 25

Northern Pipeline Construction Co. v. Marathon Pipe

Line Co.,

RN IIE, niiseccova acnsienavesacesnecernswieiininnniisnstnntininel 12

Norton v. Shelby County,

Be ne II sictosbacniccdnsnersinsabaaieesicesnimemsiisnnmnanoniasac 25

Ohio v. Price,

I I I i iasciininksneneknecssanninienniiitcsnonsianasbinanansbos 25

Pacific States Box & Basket Co. v. White,

a Se ii iecitinssacancncstcesdsnennecennecinterinsanetnainas 12

Public Utilities Commission v. United States,

I lect iteclniaiesiessnnsaseriaslapaséserisicsrniancnenenien 16

Rosebud Sioux Tribe v. State of South Dakota,

Se BOG GUNG, TOD asi vicnscseisncssvicscessssiscesnens 9,14

S.J. Groves & Sons Co. v. Fulton County,

696 F. Supp. 1480 (N.D. Ga. 1987) «0.00... 1,7, 16

S.J. Groves & Sons Co. v. Fulton County,

ke ee di Oe | en passim

Setser v. Novack Investment Co.,

Re ee I, HPD Siccesincnisisvesniinsnaneypsnsnccossonncs 22

Sisco v. ].S. Alberici Construction Co.,

ee | | an INTENT NTET 22

South Dakota v. Dole,

I I cosiinicsnisienssnctnmninonnnesiamiabilinnnnias 15, 19, 24

Southern Illinois Builders Association v. Ogilvie,

ou ge kb ee + | ra 10, 20

Stewart Machine Co. v. Davis,

SO I er caabbialavaacaios 19

United Jewish Organization v. Carey,

ee I IEEE sivsishiniceninnsessnasinninnesacsnsonsieinaneinte passim

United States Railroad Retirement Board v. Fritz,

gg ERR eRe Ce EE ae

United States v. Barbera,

ee ee ils COD cncadanssesinnstscsctstanlaccccrecrarerams 25

United States v. Harpole,

ee Fe Pe CUD waneinshsnevnsnacdacbirnssnouidcrrscecccteases 25

United States v. Middleton,

ry ee ET ELI PIED vcncinecrcscaniccseceursasecsessanconeis 12

United States v. Vida,

NTIS TUNE sennssneenievencecceccssenmmtvaxeeenlons 24

Valentine v. Smith,

654 F.2d 503 (6th Cir. 1981), cert. denied, 102

o_O aa 10, 20

Vance v. Bradley,

AG RED, ieenniscihisecinisnnennseistenedipiaienanincsniitsmciin 12

Constitution, Statutes and Regulations

ah Pen Ts erence ccerdeamncere 18

i a Ne Ns A I ee stecins caves ealbllisnaennshemtaselihnnsetiniaioaatntaade 16

Civil Rights Act of 1964, Tit. VI,

Rae re

Civil Rights Act of 1964, Tit. VII,

42 US.C. § 2000) ct 500. nee nsennsccnsccnsessorssnsssnncennsssnscsnee 21

Equal Credit Opportunity Act,

| ek 2 em RENE ARS ETNA EDO IER ISR aE 21

a INGE spsseastccesnrascsennstoncncktnpanpilboasecbonsclplbcudicnirpsamianincs 1

IE eo en 9

BB UGC. © TIBI ccccecccccsersorsecsssnsntssnccoseccsviossessssiastnosencssancunnenens 9

BB UDB. 6 TBI ccecesencsososesscscssnstivcsoncsneniscssnescsinnacsiesmmnsecnsnastebseies 9

BUI, 6 TID ceersececscsctcssosrsiccensnnitissnntetansaaiicneanvasantiesennsnens 9

44 Fed. Reg. at 44235 ...........cer-cecssscscsrscsssencerersssescseesesesesosoneseess 21

45 Fed. Reg. 21172 et seq., March 31, 1980, as amended

at 46 Fed. Reg. 23457 et seq., April 27, 1981,

and as amended at 46 Fed. Reg. 60458 et seq.,

December 10, 1961 .........c.cocccccscssscssscecscerecscnssososeseeee passim

4D CBB, PARR TD nsescasscceccososcccsscsoscocssocssnensovenesensveeseneeseseses passim

OBA os sesassscsceseccsonscoecccnnnscnsscsnsescnestacssieesctensennaneneneets 2

TD oososrnsereerersisnoccseseiscascnmosansnventsusannssabsscessonensnsosiaceaatets 6

Section 30 of the Airport and Airway Development Act

of 1970, as amended by the Airport and Airways

Development Act Amendments of 1976, 49 U.S.C.

§ 1730, as amended by the Airport and Airways

Improvement Act of 1982, 49 U.S.C. § 2219....... passim

O.C.G.A. § 36-10-2 (“The Low-Bid Statute”)............... passim

Miscellaneous

1B J. Moore, J. Lucas & T. Currier, Moore’s Federal

Practice F OA02Z{2Z] (2d edd. 1991).......c0ceceossccosvceceverrsseccesece 24

1976 U.S. Code Cong. & Ad. News 1600, 1602-04, 1608,

1611, 1637, 1638, 1639, 1640, 1644 2.0.2.2... 4

1982 U.S. Code Cong. & Ad. News 1156, 1159, 1161,

ROI, ie BOE dechaccsckans estensasssnapaesatinsscns-soeaisareciensies 4

No.

IN THE

Supreme Court of the United States

Octoser TERM, 1990

FULTON COUNTY, GEORGIA,

Cross-Petitioner,

S.J. GROVES & SONS COMPANY AND

JASPER CONSTRUCTION COMPANY,

Cross-Respondents.

CROSS-PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

OPINIONS BELOW

The Court of Appeals’ opinion sought to be reviewed is

reported at 920 F.2d 752 (11th Cir. 1991) and is reproduced in the

Appendix to the Petition for Writ of Certiorari filed by Groves

on April 6, 1991 at 1a (petition pending, Case No. 90-1562). The

District Court’s opinion is reported at 696 F. Supp. 1480 (N.D.

Ga. 1987) and is reproduced in the Appendix filed by Groves at

1b. The District Court’s other orders are unpublished but are

reproduced in Groves’ Appendix at 1c, 1d, and le.

JURISDICTIONAL STATEMENT

The opinion and judgment of the Eleventh Circuit Court of

Appeals were entered on January 7, 1991. This Cross-Petition

has been timely filed in accordance with Rules 12.3 and 13 of the

Rules of this Court. Fulco received a copy of Groves’ Petition for

a Writ of Certiorari on April 8, 1991. This Court’s jurisdiction is

invoked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISIONS, STATUTES AND

REGULATIONS INVOLVED

Section 30 of the Airport and Airway Development Act of

1970, as amended by the Airport and Airways Develop-

ment Act Amendments of 1976, 49 U.S.C. § 1730, as

amended by the Airport and Airways Improvement Act

of 1982, 49 U.S.C. § 2219:

The Secretary shall take affirmative action to as-

sure that no person shall, on the grounds of

race, creed, color, national origin, or sex, be ex-

cluded from participating in any activity con-

ducted with funds received from any grant

made under this chapter. The Secretary shall

promulgate such rules as the Secretary deems

necessary to carry out the purposes of this sec-

tion and may enforce this section, and any rules

promulgated under this section, through agency

and department provisions and rules which

shall be similar to those established and in effect

under title VI of the Civil Rights Act of 1964.

The provisions of this section shall be consid-

ered to be in addition to and not in lieu of the

provisions of title VI of the Civil Rights Act of

1964.

49 Code of Federal Regulations, Part 23 (45 Fed. Reg. 21172

et seq., March 31, 1980, as amended at 46 Fed. Reg. 23457 et

seq., April 27, 1981, and as amended at 46 Fed. Reg. 60458

et seq., December 10, 1981) entitled “Participation by Mi-

nority Business Enterprises in Department of Trans-

portation Programs”:

49 C.F.R. § 23.01-23.55 is reprinted in Groves’

Appendix at 1f.

42 U.S.C. § 2000(d) (Title V1):

No person in the United States shall, on the

ground of race, color, or national origin, be ex-

cluded from participation in, be denied the ben-

efits of, or be subjected to discrimination under

any program or activity receiving Federal finan-

cial assistance.

O.C.G.A. § 36-10-2:

Whenever it becomes necessary to build or re-

pair any courthouse, jail, bridge, causeway, or

other public works in any county, the county

governing authority shall cause the same to be

built or repaired by letting out the contract

therefor to the lowest bidder, at public outcry,

before the courthouse door, after having adver-

tised the letting of the contracts, as provided in

Code Section 36-10-3, provided that such county

authorities shall have authority to reject any

and all bids at the public letting. If, in their dis-

cretion, the public interest and economy require

it, the county authorities may build or repair

any public buildings, bridges, causeways, or

other public property in the county by contract

or sealed proposals, to be invited under the

same provisions as to specifications and like in-

formation as are provided in Code Sections 36-

10-3 and 36-10-4.

STATEMENT OF THE CASE

This case arises out of a resurfacing project at the

Fulton County, Georgia Airport. The Fulco Airport is

designated as a “reliever airport” by the United States

Federal Aviation Administration (“FAA”). The function

of a reliever airport is to provide facilities to divert as

much general aviation traffic from air carrier airports

such as Hartsfield International Airport as is possible in

the interest of safety to the traveling public using such

fields. Because Fulco’s Airport is a designated “reliever

airport”, it is eligible for federal assistance under Section

30 of the Airport and Airway Development Act of 1970, as

amended by the Airport and Airways Development Act

Amendments of 1976, 49 U.S.C. § 1730, as amended by the

Airport and Airways Improvement Act of 1982, 49 U.S.C.

§ 2219 (“AADA”).

The FAA determined that the instrumented runway

at the Airport was in a rapidly deteriorating condition

and would soon become hazardous and unusable and

have to be closed if it was not repaired immediately. Clos-

ing the instrumented runway would have resulted in

immediately closing the Airport. The DOT/FAA also de-

termined that the runway repair project “be furnished a

high-priority status to federal funds.”

Because Fulco did not have sufficient funds at that

time to repair the runway, Fulco in order to keep the Air-

? One of the purposes of the AADA as amended in 1976 and in 1982

was to make funds available for improvements to reliever airports be-

cause of the critical purpose they serve in connection with aviation

traffic and safety to the travelling public. 1982 U.S. Code Cong. & Ad.

News 1156, 1159, 1161, 1163, 1165, 1175; 1976 U.S. Code Cong. & Ad.

News 1600, 1602-04, 1608, 1611, 1637, 1638, 1639, 1640, 1644. According

to the legislative history of the AADA, "reliever airports” serve a vital

role nationwide, and it is a federal policy to maintain the operation of

and improve reliever airports. Id.

port in operation had no alternative except to apply for a

grant from the United States Department of Transporta-

tion (“DOT”) pursuant to the AADA. The record shows

that Fulco had to receive financial assistance from the

United States to accomplish the Airport Project, especially

based on the immediate need for the work. There is no

evidence that Fulco had any alternative available to it

based on the circumstances at that time.

As an express condition to approval of the Federal

Grant Agreement from the FAA and the DOT, Fulco was

required to comply with the provisions of the AADA and

the regulations promulgated by the DOT, including the

provisions of 49 Code of Federal Regulations, Part 23 (45

Fed. Reg. 21172 et. seq., March 31, 1980, as amended at 46

Fed. Reg. 23457 et seq., April 27, 1981, and as amended at

46 Fed. Reg. 60458 et seq., December 10, 1981) entitled

“Participation by Minority Business Enterprises in De-

partment of Transportation Programs” (hereinafter “49

C.F.R. Part 23”). The DOT Regulations and Federal Grant

required Fulco to prepare and submit for approval by the

FAA a Minority Business Enterprise (“MBE”) program

solely for the Airport Project. In compliance with the

DOT Regulations and Federal Grant, Fulco prepared a

five-year MBE program for the Airport Project in 1982

(“the 1982 Program”).

The DOT Regulations and Federal Grant provide

that meeting the MBE participation goals or making a

good faith effort to meet the goals is a condition of Fulco’s

receiving the DOT assisted contract. The District Court

found and there is no dispute that the Fulco 1982 MBE

Program was developed solely to comply with Section 30

of the AADA, the DOT Regulations, and as an express

condition of the Grant Agreement. Fulco is contractually

bound to the commitments made in the MBE program as

approved the DOT. The Grant Agreement provides that

Fulco’s adoption of the MBE Program is a “legal obliga-

tion,” which if Fulco failed to adopt would subject it to

sanctions, including termination of the agreement or

other measures which may affect Fulco’s ability to obtain

future DOT financial assistance. [Fulco’s Appendix at 40a-

41a].

The DOT/FAA reviewed the Fulco MBE Program

and determined its compliance with 49 C.F.R. Part 23 (in

effect in April, 1982), including the minority and female

percentage goals. The FAA officially approved Fulco’s

MBE Program on or about April 20, 1982. In approving

this Program, the FAA determined the MBE participation

percentage goals to be reasonable, practical, attainable, and

in compliance with 49 C.F.R. Part 23.45.

The bid which Groves submitted on the Airport

Project (approximately $820,000) was the lowest dollar bid

received by Fulco. The MBE participation percentage

given by Groves was only 4.15%, a number which was not

documented as required by the Bid Specifications. The

second lowest bid received (approximately $22,000 higher)

contained an MBE participation level of 10%. The third

lowest bid contained an MBE participation level of 22%.

Fulco conditionally awarded the contract for the Air-

port Project to Groves provided that it make a good faith

effort to increase its MBE participation pursuant to the

federal regulations. Approximately one month later

Groves had not increased its 4.15% MBE participation fig-

ure. At its next regularly scheduled Board Meeting, Fulco

determined that Groves had not used good faith efforts

during that month to increase its MBE participation, and

voted that Groves had not satisfied the condition for

award of the contract to it.

Thereafter, Fulco conditionally awarded the contract

to the second lowest bidder which had an MBE participa-

tion level of 10% in its original bid. As with Groves, the

award was conditioned upon that bidder's good faith ef-

forts to increase its MBE participation. Two days follow-

ing the conditional award of the contract, that bidder in-

creased its MBE participation from 10% to 16%. Fulco de-

termined that a 6% increase in two days constituted a

good faith effort on the part of the second lowest bidder,

and although it did not achieve the 20% MBE goal, Fulco

awarded the contract to the second lowest bidder with the

approval of the FAA.

Although Groves received the Invitation To Bid re-

ferring to the DOT Regulations and the Fulco 1982 Pro-

gram and attended the Pre-Bid Conference as early as

May, 1982, it did not raise any objection to the DOT Regu-

lations or the Fulco Program. Groves’ original application

in the District Court for a temporary restraining order,

which was denied, and the initial complaint Groves filed

in this case in August, 1982 did not raise any objection to

the validity of Fulco’s Program or the DOT Regulations.

To the contrary, Groves initially sought a temporary re-

straining order and then sought damages against Fulco

based on its claim that it had complied with the MBE Pro-

gram and DOT Regulations. It was not until December,

1982, after the Airport Project was underway, that Groves

for the first time sought damages against Fulco based on a

challenge to the validity of the 1982 MBE Program and

the DOT Regulations. Groves at no time sought an in-

junction against Fulco based upon a claim that Fulco’s

Program and the DOT Regulations were invalid.

Because Groves was challenging the constitutionality

of the DOT Regulations, the District Court ordered the

DOT and the Secretary of the DOT joined as “Federal De-

fendants” to defend the validity of the DOT Regulations.

[Groves’ Appendix at 34c-38c]. The District Court held the

DOT Regulations were invalid. S.J. Groves & Sons Co. v.

Fulton County, 696 F. Supp. 1480, 1495 (N.D. Ga. 1987).

The District Court also held that Fulco’s 1982 MBE

Program, which was based upon and required by the DOT

Regulations, violated the Georgia low-bid statute,

O.C.G.A. § 36-10-2, Title VI of the Civil Rights Act of 1964,

and the Equal Protection Clause of the Fourteenth

Amendment. [Groves’ Appendix at 2d-6d]. The District

Court found that reliance on a valid federal regulation

would have provided a defense against Groves’ claims,

since a valid federal regulation would preempt the

Georgia low-bid statute and the State Constitution and

would be consistent with Title VI and the Fourteenth

Amendment. [Id. at 2d]. The District Court held that

because the DOT Regulations were invalid, reliance on

the Regulations by Fulco did not provide it with a defense

to Groves’ claim for monetary damages for the alleged

violation of the low-bid statute by adoption of the 1982

MBE Program. [Id. at 2d; 33c].

On appeal the Eleventh Circuit reversed the ruling

of the District Court, holding that the DOT Regulations

were authorized by Congress and the District Court ap-

plied the incorrect standard of strict scrutiny. S.J. Groves

& Sons Co. v. Fulton County, 920 F.2d 752, 764-767 (11th

Cir. 1991). This holding is the subject of Groves’ Petition

for Writ of Certiorari filed in this case on April 8, 1991,

No. 90-1562.

The Eleventh Circuit also decided an important

question of federal law that conflicts with applicable deci-

sions of this Court and other courts of appeal. The

- Eleventh Circuit, despite finding that the DOT Regula-

tions were authorized by Congress, held that Fulco as a

local government recipient of federal funds under a fed-

eral grant may be liable in monetary damages to Groves

solely based on its good faith reliance on and compliance

with the presumptively valid DOT Regulations. The

Eleventh Circuit held that this “good faith reliance de-

fense” “is foreclosed by the recent Supreme Court deci-

sion in American Trucking Ass’ns v. Smith, ___ U.S. __,

110 S.Ct. 2323, 110 L.Ed.2d 148 (1990).” S.J. Groves, 920 F.2d

at 768. It is this far reaching decision which is the subject

of Fulco’s Cross-Petition.

eee

EXISTENCE OF JURISDICTION BELOW

Jurisdiction in the District Court was based on 28

U.S.C. §§ 1331 and 1332(a). The Eleventh Circuit had ap-

pellate jurisdiction pursuant to 28 U.S.C. § 1291, provid-

ing for appeals from final decisions, and 28 U.S.C. §

1292(b), providing for interlocutory appeals.

REASONS FOR GRANTING THE WRIT

SUMMARY

Fulco, as a local government recipient of federal fi-

nancial assistance pursuant to a federal grant from the

United States under the AADA, should not be held liable

in damages to a private party based solely on its good faith

reliance upon and compliance with presumed to be valid

federal regulations that are authorized by Congress, if

those federal regulations are subsequently held invalid.

The decision of the Eleventh Circuit with respect to

Fulco’s good faith reliance defense is based on an erro-

neous application and interpretation of this Court’s deci-

sion in American Trucking Associations v. Smith, 495

U.S. __, 110 L.Ed.2d 148 (1990), and is in conflict with

controlling decisions of this Court and other courts of

appeal protecting the reasonable reliance of a party on

prior law, even when such protection requires allowing a

statute which is subsequently held invalid to remain in

effect for a limited period of time. E.g., Heckler v.

Matthews, 465 U.S. 728 (1984), and cases cited therein;

Lemon v. Kurtzman, 411 U.S. 192 (1973); Chevron Oil Co.

v. Huson, 404 U.S. 97, 106-107 (1971); City of Phoenix v.

Kolodziejski, 399 U.S. 204 (1970); Cipriano v. City of

Houma, 395 U.S. 701 (1969); NLRB v. Rockaway News

Supply Co., 345 U.S. 71 (1953); Chicot County Drainage

District v. Baxter State Bank, 308 U.S. 371 (1939); Rosebud

Sioux Tribe v. State of South Dakota, 900 F.2d 1164 (8th

Cir. 1990); Kirschberg v. Feenstra, 609 F.2d 727 (5th Cir.

1979).

The Eleventh Circuit’s ruling on Fulco’s good faith

reliance defense is also in conflict with decisions of this

Court and other courts of appeal recognizing a defense to

a reverse discrimination challenge based on good faith

compliance with presumed to be valid federal regulations

in obtaining approval of an affirmative action plan by a

federal agency. See, e.g., United Jewish Organization v.

Carey, 430 U.S. 144 (1977); Valentine v. Smith, 654 F.2d

503, 509 (6th Cir. 1981), cert. denied, 102 S.Ct. 1972 (1982);

Southern Illinois Builders Association v. Ogilvie, 471

F.2d 680 (7th Cir. 1972); Contractors Association of Eastern

Pennsylvania v. Secretary of Labor, 442 F.2d 159, 175 (3rd

Cir.), cert. denied sub nom, Contractors Association v.

Hodgson, 404 U.S. 854 (1971).

The effect of the Eleventh Circuit’s ruling has signif-

icant and far reaching ramifications. If Fulco is liable in

damages based on its good faith compliance with con-

gressionally authorized and presumptively valid federal

regulations, then every local and state government that is

considering entering into any grant agreement with the

federal government and is required to comply with fed-

eral regulations would always be subject to the risk of lia-

bility in monetary damages for its mere compliance with

the federal regulations. Moreover, such a ruling would

mean that every governmental entity which complied

with the DOT Regulations and entered into a grant

agreement with the DOT, affecting hundreds of millions

of dollars in contracts, would be at risk for monetary

damages for complying with those Regulations.

If a local government as a recipient of federal funds

under a federal grant can be liable in monetary damages

to a private party for merely complying with federal regu-

lations authorized by Congress that are subsequently held

invalid, it would have a detrimental impact on the ability

of Congress to use the Spending Power to further any

broad national policy objectives by conditioning receipt of

federal monies upon compliance by local or state gov-

ernments with federal statutory and administrative di-

rectives. Such a ruling in this case will jeopardize this

technique to induce governments and private parties to

cooperate voluntarily with federal policy. Worthwhile

projects will go unfunded because local and state gov-

ernments will be extremely reluctant to enter into federal

grant agreements knowing that they could be subject to

monetary damages if the terms and conditions are subse-

quently held invalid.

DISCUSSION

I. Fulco As A Recipient Of Federal Funds Under A

Federal Grant Should Not Be Liable In Monetary

Damages To A Private Party For Its Good Faith

Compliance With Presumed To Be Valid Federal

Regulations That Are Subsequently Held Invalid

Groves, a disappointed bidder, is not entitled to re-

cover monetary damages from Fulco, a local government

recipient pursuant to a federal grant agreement, for an

alleged violation of the Georgia low-bid statute, based

solely on Fulco’s good faith compliance with presumed to

be valid federal regulations authorized by Congress, when

those regulations are subsequently held invalid. The

Eleventh Circuit erred in holding that Fulco’s good faith

reliance defense was foreclosed by this Court’s decision in

American Trucking, 110 L.Ed.2d 148. The Eleventh Cir-

cuit’s decision is in conflict with controlling decisions of

this Court and other courts of appeal which establish that

Fulco was entitled to rely on the DOT Regulations. The

Eleventh Circuit’s decision is also in conflict with

decisions of this Court and other courts of appeal which

recognize that a local government such as Fulco can rely

on the fact that it complied in good faith with federal

regulations in obtaining approval of an affirmative action

plan by a federal agency in defense to a reverse

discrimination challenge.

A. The DOT Regulations Are Presumptively Valid

Federal Statutes are presumptively valid unless it is

shown that the statute in question bears no rational rela-

tionship to a legitimate purpose. See, e.g., United States

Railroad Retirement Board v. Fritz, 449 U.S. 166, 174-176

(1980); Vance v. Bradley, 440 U.S. 93, 97 (1979); United

States v. Middleton, 690 F.2d 820, 822 (11th Cir. 1982).

Similarly, federal regulations enacted by federal adminis-

trative agencies pursuant to federal statutes, as well as the

actions of federal administrative agencies, are presump-

tively valid until proven otherwise. See, e.g., Pacific

States Box & Basket Co. v. White, 296 U.S. 176, 185-186

(1935); Alabama Nursing Home Association v. Harris, 617

F.2d 388, 393 (Sth Cir. 1980); Maryland-National Capital

Park & Planning Commission v. Lynn, 514 F.2d 829, 834

(D.C. Cir. 1975).

B. The DOT Regulations Should Remain In Effect

To Protect Fulco, Even If Held Invalid, Because

Of Fulco’s Reasonable And Good Faith Reliance

On Their Validity

1. Fulco’s Reasonable And Good Faith Re-

liance Upon The DOT Regulations Should

Be Protected

This Court has repeatedly recognized “in a number

of contexts, the legitimacy of protecting reasonable re-

liance on prior law even when that requires allowing an

unconstitutional statute to remain in effect for a limited

period to time.” Heckler, 465 U.S. at 746 (emphasis

added); see Northern Pipeline Construction Co. v.

Marathon Pipe Line Co., 458 U.S. 50, 87-89 (1982) (plurality

opinion); Buckley v. Valeo, 424 U.S. 1, 142-143 (1976) (per

curiam); Chevron, 404 U.S. at 106-107; see also Los Ange-

les Department of Water & Power v. Manhart, 435 U.S.

702, 718-723 (1978). The Court in Heckler held that the

“protection of reasonable reliance interests” in a statute

13 -

later declared invalid is a “legitimate governmental ob-

jective.” 465 US. at 746.

Applying this principle to the facts of this case, the

following is undisputed: Fulco’s good faith, reasonable

reliance on the DOT Regulations; the presumption of va-

lidity attached to the DOT Regulations which the District

Court and Eleventh Circuit held were authorized by

Congress; and the particular relations and conduct of

rights which became vested and were acted upon accord-

ingly between Fulco and the United States in connection

with the DOT Regulations and the Federal Grant.

It also is well-established by this Court that where a

statute or regulation is held unconstitutional, its existence

before it has been so declared is an operative fact which

cannot justly be ignored. E.g., Rockaway News Supply, 345

U.S. at 77; Chicot County, 308 U.S. at 374; see Kurtzman,

411 U.S. at 198-199 (Statutory made rules of law are hard

facts on which people must rely in making decisions and

in shaping their conduct); Kolodziejski, 399 U.S. at 213-

214; Cipriano, 395 U.S. at 706. The Eleventh Circuit's

decision is in conflict with this well-established doctrine.

The principle well stated in Chicot County is appli-

cable in this case:

The courts below have proceeded on the theory

that the Act of Congress, having been found to

be unconstitutional, was not a law; that it was

inoperative, conferring no rights and imposing

no duties, and hence affording no basis for the

challenged decree. [cit. omitted]. It is quite clear,

however, that such broad statements as to the

effect of a determination of unconstitutionality

must be taken with qualifications. The actual

existence of a statute, prior to such a determina-

tion, is an operative fact and may have conse-

quences which cannot justly be ignored. The

past cannot always be erased by a new judicial

declaration. The effect of the subsequent ruling

as to invalidity may have to be considered in

various aspects, — with respect to particular re-

lations, individual and corporate, and particular

conduct, private and official. Questions of rights

claimed to have become vested, of status, of

prior determinations deemed to have finality

and acted upon accordingly, of public policy in

the light of the nature both of the statute and of

its previous application, demand examination.

308 U.S. at 374 (emphasis added); see Rosebud Sioux

Tribe, 900 F.2d at 1172-1173 (applying Chicot County).

In Rockaway News Supply, the Court applied the

principle as fol!ows:

There are two obstacles in the way of the Board’s

complete disregard of this contract. The first is

that, even if inclusion of a forbidden provision

is enough to justify the Board in setting it aside

as to the future, it does not follow that it can be

wholly ignored in judging events that occurred

before it was set aside. It is one thing for the

Board to say that the parties should not go on

under such a contract; it is another to say that no

effect whatever may be given to a contract nego-

tiated in good faith by the union and the em-

ployer which both believed to be valid and op-

erative, to which both were conforming their

conduct, and which no authority had yet held

void.

Even where a statute is unconstitutional and

hence declared void as of the beginning, this

Court has held that its existence before it has

been so declared is not to be ignored.

345 US. at 77 (emphasis added). This principle should be

applied to protect Fulco’s reasonable reliance on the DOT

Regulations, including allowing those Regulations to

remain in effect for a limited period of time prior to any

ruling declaring them invalid. Similar to the contract dis-

cussed in Rockaway News Supply, Fulco’s contractual

relationship with the DOT, the Federal Grant and the

DOT Regulations are operative facts which cannot be ig-

nored. The effect of Fulco’s reliance should be considered

with respect to the particular relations and conduct of the

rights which have vested and been acted upon accord-

ingly between the United States and Fulco.

This principle is especially pertinent to this case be-

cause of the far reacning ramifications to the doctrine of

federalism and the legitimate broad policy objectives of

the Spending Power of a decision holding a local or state

government liable in monetary damages for its compli-

ance in good faith with federal regulations subsequently

held invalid. See, e.g., South Dakota v. Dole, 483 U.S. 203,

206-207 (1987) (Congress may further broad policy objec-

tives by conditioning receipt of federal monies upon

compliance by recipient with federal statutory and admin-

istrative objectives); Fullilove v. Klutznick, 448 U.S. 448,

474 (1980).

The Court in Kurtzman recognized “one of the first

principles of constitutional adjudication — the basic pre-

sumption of the constitutional validity of a duly enacted

state or federal law”, and held that the propriety of the

relief afforded “must be measured against the totality of

circumstances and in light of the general principle that,

absent contrary direction, state officials and those with

whom they deal are entitled to rely on a presumptively

valid state statute, enacted in good faith, and by no means

plainly unlawful.” 411 U.S. at 208-209.

In Kirschberg, 609 F.2d 727, the former Fifth Circuit

directly applied the principle. It held that a state law vio-

lated equal protection, but applied its ruling only

prospectively because of the substantial inequitable re-

sults, injustice or hardship if it applied its decision in that

case retroactively, citing Chicot County and other cases.

Id. at 735-736.

2. The DOT Regulations’ Preemption Of The

Georgia Low-Bid Statute Should Remain In

Effect

The District Court held and all parties agree that to

the extent any state law conflicts with the federal regula-

tions, it is preempted. Fulco’s reliance on the federal regu-

lations includes by definition reliance on the preemptive

effect those regulations would have with regard to any

conflicting state statute.

The DOT Regulations, which the Eleventh Circuit

and District Court held were rooted in congressional

authority, 920 F.2d at 764-765, and 696 F. Supp. at 1483-

1484, even if they are subsequently determined to be

invalid, still should preempt any conflicting state statute,

at least until they are declared invalid. See, e.g., Heckler,

and other cases cited supra at pp. 12-16. Because the Fulco

MBE Program was adopted solely in compliance with

presumed to be valid federal regulations, which were

mandated pursuant to a valid congressional act and

approved by appropriate federal authorities, it preempts

any conflicting provisions of state law under the

Supremacy Clause of the Constitution, Articie VI, cl. 2.

See, e.g., Fidelity Federal Savings & Loan Association v.

de la Cuesta, 458 U.S. 141, 153 (1982); Public Utilities

Commission v. United States, 355 U.S. 534, 544 (1958);

Contractors Association of Eastern Pennsylvania, 442 F.2d

at 166; M.C. West, Inc. v. Lewis, 522 F. Supp. 338, 349 n. 15

(M.D. Tenn. 1981).

“Legislative . . . regulations are ‘issued by an agency

pursuant to statutory authority .... Such rules have the

force and effect of law.’” Batterton v. Francis, 432 U.S. 416,

425-26 & n. 9 (1977). 49 C.F.R. Part 23 is a substantive or

legislative rule which had the force and effect of law since

it was issued pursuant to congressional authority, at least

until it is held invalid. Fulco was entitled to rely in good

faith on the regulations having the force and effect of law

and the presumption of validity at the time it entered

into the Grant Agreement. In addition, Fulco was entitled

to rely on the preemptive effect of the regulations on state

laws, including the Georgia competitive bid statute, when

it entered into the Grant Agreement.

A determination that the regulations are invalid

should only apply prospectively to a local government

which in good faith relies upon the validity of the regu-

lations and enters into a grant agreement. Otherwise,

every local and state government which enters into any

grant agreement with the federal government and is re-

quired to comply with federal regulations always would

be at risk that subsequently it could be held liable in dam-

ages for its mere compliance with presumed to be valid

federal regulations that are later held to be invalid. More-

over, if preemption does not apply during the time prior

to the declaration of invalidity, then every governmental

entity which complied with the DOT Regulations and

entered into a grant agreement with the DOT, affecting

hundreds of millions of dollars in contracts, potentially is

at risk for complying with the Regulations since their in-

ception.

3. Holding Fulco Liable In Damages For Its

Compliance With The DOT Regulations

Would Be Inequitable

Substantial unjust and inequitable results will accrue

to Fulco, which justifiably and reasonably relied on the

DOT Regulations, if a holding of invalidity is applied

retroactively and the Regulations are denied any pre-

emptive effect prior to the declaration of invalidity. See,

e.g., Chevron, 404 U.S. at 107-109; American Trucking,

110 L.Ed.2d at 161-164, 168-171 (plurality opinion), and

cases cited therein. Fulco faces liability in damages for

merely complying with the DOT Regulations. There also

potentially will be substantial inequitable and unjust re-

sults for local and state governments throughout the

United States who have complied in good faith with the

DOT Regulations since their adoption in 1981.

The substantial injustice to Fulco is further demon-

strated by the activities of Groves. The Fulco Airport

Project bid materials contained references to the required

compliance with 49 C.F.R. Part 23. Groves made no objec-

tion to such compliance. It was not until December, 1982,

approximately four months after the original complaint

was filed and after Fulco had awarded the contract to the

second lowest bidder and construction was underway that

Groves raised for the first time any of the constitutional

and other challenges to the validity of the regulations and

the Fulco MBE Program.

C. Holding A Local Government Liable In Dam-

ages For Its Compliance With Federal Regula-

tions Pursuant To A Grant Agreement Would

Have A Detrimental Impact

Pursuant to Article I, § 8, cl. 1 of the Constitution,

Congress attaches conditions on the receipt of federal

funds and employs the Spending Power to further na-

tional policy objectives. As well stated in Fullilove, 448

US. at 474:

Congress has frequently employed the Spending

Power to further the broad policy objectives by

conditioning receipt of federal monies upon

compliance by the recipient with federal statu-

tory and administrative directives. This Court

has repeatedly upheld against constitutional

challenge the use of this technique to induce

governments and private parties to cooperate

voluntarily with federal policy. [cases omitted].

(emphasis added). E.g., Dole, 483 U.S. at 206-207; Lau v.

Nichols, 414 U.S. 563 (1974); Stewart Machine Co. v.

Davis, 301 U.S. 548 (1937).

If a local or state government can be liable in mone-

tary damages for merely complying with federal regula-

tions which are subsequently held invalid, there will be a

detrimental impact on the ability of Congress to use the

Spending Power to further broad national policy

objectives by conditioning receipt of federal monies upon

compliance by local or state governments with federal

statutory and administrative directives. The Eleventh

Circuit’s ruling in this case jeopardizes this technique to

induce governments and private parties to cooperate

voluntarily with federal policy. Worthwhile projects will

go unfunded because local and state governments will be

reluctant to enter into federal grant agreements knowing

that they could be subject to monetary damages if the

terms and conditions are subsequently held invalid.

The ramifications of holding Fulco liable in this case

would be to hold “those [Fulco] charged with executing

state legislative directives to the peril of having their

[Fulco] arrangements unraveled if they act before there

has been an authoritative judicial determination that the

governing legislation is constitutional.” Kurtzman, 411

U.S. at 207. This would mean that local government offi-

cials would have to “stay their hands until newly enacted

state [or federal] programs are ‘ratified’ by the federal

courts, or risk the draconian, retrospective decrees should

the legislation fall.” Id. at 207-208.

In Guardians Association v. Civil Service Commis-

sion of the City of New York, 463 U.S. 582, 603 n. 24 (1983),

this Court stated:

[T]he Federal Government can always sue any

recipient who fails to comply with the terms of

the grant agreement and force the violator to

repay misspent funds... . But it is an entirely

different matter to subject the recipient to open-

ended liability to private plaintifjs. . . . Congress

may have felt that the salutary deterrent effect of

a compensatory remedy was outweighed by the

possibility that such a remedy would dissuade

potential recipients from participating in impor-

tant federal programs.

(emphasis added). The Court in Guardians refers to the

analogous “Pennhurst presumption that only limited

injunctive relief should be granted as a remedy for unin-

tended violations of statutes passed pursuant to the

spending power.” Id. at 602 & n. 23. If a recipient cannot

be liable in damages for violating a statute, surely it

should not be liable for complying with the statute if it is

later held invalid.

D. The Eleventh Circuit’s Decision Conflicts With

Decisions Of This Court And Other Federal

Courts Permitting Good Faith Reliance In De-

fense To A Reverse Discrimination Challenge

A local government such as Fulco can rely on the

fact that it complied in good faith with presumed to be

valid federal regulations in obtaining approval of an af-

firmative action plan by a federal agency in defense to a

reverse discrimination challenge. See, e.g., United Jewish

Organization, 430 U.S. 144; Milwaukee County Pavers

Association v. Fiedler, 710 F. Supp. 1532, 1545-1547 (W.D.

Wis. 1989), modified in part, 731 F. Supp. 1395, 1409-1410

(1990), aff'd, 922 F.2d 419 (7th Cir. 1991); Valentine, 654

F.2d at 509, cert. denied, 102 S.Ct. 1972 (state university

entitled to rely on findings by a federal agency of

discrimination in adopting affirmative action plan in

compliance with HEW); Southern Illinois Builders

Association, 471 F.2d 680 (upheld Illinois’ affirmative

action plan where complying with federal statutes and

directives in federally funded projects); Eastern

Pennsylvania, 442 F.2d at 175, cert. denied sub nom.,

Contractors Association v. Hodgson, 404 U.S. 854 (1971);

see also Marvin v. Alston Independent School District,

714 F.2d 1348, 1356 (Sth Cir. 1983) (Plaintiff is not entitled

to recover monetary damages against city school district

when it attempts in good faith to adhere to federal

guidelines, even if Court subsequently determines that it

did not comply with necessary procedures); Associated

General Contractors of Massachusetts, Inc. v. Altshuler,

490 F.2d 9 (1st Cir. 1973), cert. denied, 416 U.S. 957 (1974)

(upheld Massachusetts’ affirmative action plan adopted

in compliance with Executive Order 11246 requiring

contractors to accept federal agency approved affirmative

action plan imposing bid conditions on contractors).

This Court recognized that Title VII establishes a

complete immunity or “good faith” defense for employer

conduct shown to have been undertaken in good faith, in

conformity with, and in reliance on a written interpreta-

tion or opinion of the EEOC. Albermarle Paper Co. v.

Moody, 422 U.S. 405, 423 n. 17 (1975) (See 42 U.S.C. §

2000e-12(b), Title VII, § 713).? Similarly, Fulco is entitled to

a defense for its good faith reliance on and compliance

with written regulations promulgated by the DOT. The

EEOC states it is “fundamentally unfair” to expose those

subject to Executive Order to risks of liability under Title

VII when they act in compliance with government re-

quirements. 44 Fed. Reg. at 4425.

In addition, good faith compliance by an employer

with an affirmative action plan required by federal regu-

lations constitutes a defense to a reverse discrimination

3 The good faith reliance defense also has been codified under the

Equal Credit Opportunity Act. 15 U.S.C. § 169le(e). This statute pro-

vides an absolute defense against liability for “any act done or omitted

in good faith in conformity with any official rule, regulation .. . ,

notwithstanding that after such act or omission has occurred, such

rule, regulation ... is .. . determined by judicial or other authority to

be invalid... .”

challenge. See, e.g., Setser v. Novack Investment Co., 657

F.2d 962, 968 (8th Cir. 1981); Sisco v. J.S. Alberici Con-

struction Co., 655 F.2d 146 (8th Cir. 1981).

In United Jewish Organizations (“UJO”), this Court

concluded that the use of racial criteria by the State of

New York, in attempting to comply with the Voting

Rights Act and to secure the approval of the Attorney

General, did not violate the Fourteenth Amendment.

The Court affirmed the judgment of the court of appeals

that New York’s plan was not subject to challenge because

it was done in compliance with the Voting Rights Act

and with the approval of the Attorney General. 430 U.S.

at 164-165.

In Eastern Pennsylvania, the Court held that Execu-

tive Order 11246, the federal agency interpretation of the

Order and implementation of an affirmative action plan,

as a precondition to federally assisted construction pro-

jects in Pennsylvania, was valid as being within the im-

plied authority of the President and the Department of

Labor. 442 F.2d at 171, 174. The affirmative action plan

was approved by the Attorney General. Id. Although in

Eastern Pennsylvania, the President by Executive Order

acted without a congressional mandate as in the present

case, the Court upheld the federal imposition of the af-

firmative action requirement on federally assisted con-

struction contracts. 442 F.2d at 171, 174-175.

Moreover, the only reported case that considered the

validity of 49 C.F.R. Part 23 as that regulation existed at

the time of the approval of the Fulco MBE Program in

April, 1982 was M.C. West, 522 F. Supp. at 338. In M.C.

West, the Court expressly upheld the validity of 49 C.F.R.

Part 23 against similar constitutional and state law chal-

lenges.‘

* In Central Alabama Paving, Inc. v. James, 449 F. Supp. 629 (M.D. Ala.

1980), the Court held invalid the DOT's MBE Regulation prior to its

Significantly, the United States Department of Jus-

tice, similar to the Attorney General in Eastern Pennsyl-

vania and UJO, actively supported and defended the va-

lidity of 49 C.F.R. Part 23 as a participant in M.C. West. In

fact, the Attorney General specifically approved and con-

curred in 49 C.F.R. Part 23 on July 17, 1981. [Fulco’s Ap-

pendix at 1b]. Fulco, similar to the non-federal govern-

ments in UJO and Eastern Pennsylvania, was entitled to

rely on the opinion of the Attorney General of the United

States supporting and affirming the validity of 49 C.F.R.

Part 23 when it entered into the Grant Agreement with

the U.S. DOT in September, 1982.

Therefore, Fulco should not be held liable in mone-

tary damages for its good faith compliance with presumed

to be valid DOT Regulations, especially where the Regu-

lations were rooted in congressional authority, and were

declared valid by the Attorney General, the Department

of Justice, and the only federal court to have considered

their validity as they existed at the time Fulco entered

into the Grant Agreement with the DOT.

E. The “Choice” Of Foregoing Federal Funds Is Not

Relevant

The Eleventh Circuit remarked that “we have trou-

ble allowing a local government to plead reliance on fed-

eral regulations when the local government voluntarily

relied on those regulations.” S.J. Groves, 920 F.2d at 767.

The evidence shows that Fulco had no other alternative

but to obtain federal funds to accomplish the Airport

Project based on the circumstances which existed at that

time and therefore to comply with the federal regula-

tions. Fulco pursuant to state and local laws is restricted

amendment in 1981 to eliminate the conclusive presumption that

contractors who failed to comply with the MBE goals are ineligible for

consideration. Id. at 632.

and limited in the way it can raise and spend funds, and

the time it takes to do so.

The determination to forego federal grants does not

in reality provide much of a free “choice” to local and

state governments who need to fund worthwhile pro-

jects. This Court in Fullilove, 448 U.S. 448, and Dole, 483

U.S. 203, did not consider relevant the fact the states en-

joyed the “option” or “choice” of foregoing federal funds.

See Milwaukee County Pavers Association v. Fiedler, 710

F. Supp. 1532, 1546 (W.D. Wis. 1989), aff'd, 922 F.2d 419

(7th Cir. 1990).

Il. American Trucking Does Not Hold That A Local

Government Could Be Liable In Monetary Damages

For Good Faith Reliance Upon Federal Regulations

The Eleventh Circuit incorrectly held that American

Trucking, 110 L.Ed.2d 148, “foreclosed” Fulco’s good faith

reliance defense. The specific issue in American Trucking

was whether the constitutional decision in American

Trucking Associations v. Scheiner, 483 U.S. 266 (1987), in

which the Court held that a state tax law violated the

Commerce Clause, should be applied retroactively to the

parties before the Court.

The Eleventh Circuit based its holding on the four

dissenters’ opinion and Justice Scalia’s concurring opin-

ion. The Eleventh Circuit in effect created a purported

“majority” of the Court in adoption of what amounts to

“anticipatory stare decisis”. See 1B J. Moore, J. Lucas & T.

Currier, Moore’s Federal Practice 9 0.402(2] (2d ed. 1991).

Federal courts of appeal have a duty to follow the

majority opinions of this Court. E.g., United States v.

Vida, 370 F.2d 759, 766 (6th Cir. 1966); Ferina v. United

States, 340 F.2d 837-839 (8th Cir. 1965). In American Truck-

ing, there was no majority opinion. The Eleventh Circuit

gave undue controlling precedential weight to the dis-

senting opinion. Federal courts of appeal, as inferior

courts, cannot follow the dissenting opinions of the

Supreme Court. E.g., Marino v. Bowers, 657 F.2d 1363,

1368 (3rd Cir. 1981) (“Were we to require individuals to be

guided in their actions by dissenting opinions we would

stand the system of stare decisis on its head”); United

States v. Barbera, 514 F.2d 294, 300 (2nd Cir. 1975); United

States v. Harpole, 263 F.2d 71, 80 (5th Cir. 1959).

The fact that there was no clear majority opinion in

American Trucking entitled to stare decisis treatment is

demonstrated by the recent decisions of this Court in

Ashland Oil, Inc. v. Caryl, 111 L.Ed.2d 734 (1990); and Na-

tional Mines Corp. v. Caryl, 111 L.Ed.2d 740 (1990). In

these two recent decisions, this Court recognized its divi-

sion on the issue of retroactive application of its consti-

tutional decisions by analyzing the issue under both the

plurality and dissenting views in American Trucking.

This Court did not find either the plurality or dissenting

view controlling.

The Eleventh Circuit’s interpretation of the Ameri-

can Trucking dissent and Justice Scalia’s concurrence ap-

pears to apply the old void ab initio principle. The

Eleventh Circuit concluded those five Justices in Ameri-

can Trucking would hold that if the DOT Regulations are

unconstitutional, they are void from the beginning and

void when Fulco relied on them. The void ab initio prin-

ciple, once applied by this Court in Norton v. Shelby

County, 118 U.S. 425 (1886), however, has been rejected

and abandoned by this Court. As well stated by this Court

in Lemon v. Kurtzman:

Consequently, our holdings in recent years have

emphasized that the effect of a given constitu-

tional ruling on prior conduct “is subject to no

set ‘principle of absolute retroactive invalidity’

* Likewise, a judgment or affirmance of the Supreme Court rendered

by an equally divided Court is without force as precedent. E.g., Ohio v.

Price, 364 U.S. 263, 264 (1960); Neil v. Biggers, 409 U.S. 188, 192 (1972).

but depends upon a consideration of ‘particular

relations . . . and particular conduct . . . of rights

claimed to have become vested, of status, of

prior determinations deemed to have finality’;

and ‘of public policy in the light of the nature

both of the statute and of its previous applica-

tion.’ ” Linkletter supra at 627, 14 L.Ed.2d 601,

quoting from Chicot County Drainage Dist.,

supra, at 374, 84 L.Ed.2d 329. However appealing

the logic of Norton may have been in the ab-

stract, its abandonment reflected our recognition

that statutory or even judge-made rules of law

are hard facts on which people must rely in

making decisions and in shaping their conduct.

This fact of legal life underpins our modern de-

cisions recognizing a doctrine of nonretroactiv-

ity.

411 U.S. at 198-199 (emphasis added). The DOT Regula-

tions were the “hard facts” on which Fulco relied in en-

tering into the Grant.

The Eleventh Circuit states: “We are without power

to declare them [DOT Regulations] constitutional ‘in the

interim’. .. . There is simply no authority on which to do

this.” S.J. Groves, 920 F.2d at 768. In making this state-

ment, the Eleventh Circuit did not consider the decisions

in which this Court recognized the legitimacy of protect-

ing good faith and reasonable reliance on prior law,

“even when that requires allowing an unconstitutional

statute to remain in effect for a limited period of time”.

See, e.g., Heckler, 465 U.S. at 746, and cases cited therein

and supra at pp. 12-16.

The Eleventh Circuit’s creation of a purported

“majority” from the four dissents and one concurrence in

American Trucking violates the rule of this Court that

“when no single rationale commands a majority of the

members of the United States Supreme Court, the hold-

ing of the Court may be viewed as that position taken by

those members who concurred in the judgment on the

narrowest grounds.” E.g., Marks v. United States, 430 U.S.

188, 193 (1977); City of Lakewood v. Plain Dealer Publish-

ing Co., 486 U.S. 750, 464-465 n. 9 (1988). Justice Scalia con-

curred in the judgment of the plurality in American

Trucking, which held that the Scheiner decision did not

apply retroactively based on the retroactivity doctrine

enunciated in Chevron. The narrowest ground for the

non-retroactivity holding in American Trucking may be

viewed as that position taken from the plurality and con-

currence. The position of the dissent should not be

viewed as the holding of the Court, which can then be

used as controlling precedent to “foreclose” Fulco’s good

faith reliance defense.

Moreover, the American Trucking dissent makes a

distinction between “remedy” cases (i.e., cases concerning

the relief that a federal court should award when apply-

ing a new law), which the Chevron line of cases fall, and

“choice of law” cases (i.e., cases concerning the application

of a new constitutional or statutory rule), which Ameri-

can Trucking is an example. Fulco’s good faith reliance

defense involves a “remedy” case concerning the relief

that a federal court should award. The American Truck-

ing dissent recognizes that consideration of reliance can

be appropriate in the “remedy” cases. 110 L.Ed.2d at 189.

The Eleventh Circuit did not address this distinction.

Furthermore, the dissent in American Trucking is

distinguishable from the present case and not controlling.

First, American Trucking involved the issue of whether

this Court’s decision declaring a state tax law unconstitu-

tional should be applied retroactively to the parties in

another case. This case involves the issue of whether a

local government may be held liable in damages for its

mere good faith reliance on federal regulations. It does

not deal with the issue of whether a constitutional deci-

sion of this Court should be applied retroactively. Second,

in American Trucking, the State of Arkansas enacted the

invalid tax statute and collected the taxes which were

later determined to be invalid. Retroactive application of

Scheiner would result in Arkansas being liable to the tax-

payers for refunds of the wrongfully collected taxes.

In the present case, the equitable considerations are

much greater. Fulco played no part in enacting the federal

regulations. Retroactive application of a ruling holding

the regulations invalid would result in Fulco being liable

out of its own funds as damages based on its mere com-

pliance with presumptively valid federal regulations,

which it was contractually obligated to follow pursuant to

a federal grant agreement.

The Eleventh Circuit’s statement that it would have

“difficulty simply declaring the regulations unconstitu-

tional, and then not applying that declaration even to the

parties before the court” because it would approach an

“advisory opinion” is in error. This Court has repeatedly

announced new rules for the future only, refusing to ap-

ply them even to the parties before the Court. American

Trucking, 110 L.Ed.2d at 187 n. 11, and cases cited therein;

Allen v. Board of Elections, 393 U.S. 544 (1969); Linkletter

v. Walker, 381 U.S. 618, 621-622 (1965); England uv.

Louisiana State Board of Medical Examiners, 375 U.S. 411

(1964).

In England, this Court held that its opinion resolved

an ambiguity in prior law and therefore it would be un-

fair to apply the new rule to the parties in that case. “On

the record in the instant case, the rule we announce today

would call for affirmance of the District Court’s judg-

ment. But we are unwilling to apply the rule against

these appellants.” 375 US. at 422-423.

In Allen, this Court applied “purely prospectively” to

the parties its determination that certain amendments to

Mississippi's elections laws violated the Section 5 pre-

clearance procedures of the 1965 Voting Rights Act be-

cause “[t]hese Section 5 coverage questions involve

complex issues of first impression — issues subject to ra-

tional disagreement.” 393 U.S. at 571-572. See also Great

Northern Railway Co. v. Sunburst Oil & Refining Co., 287

U.S. 358 (1932).

CONCLUSION

For all the foregoing reasons, Cross-Petitioner Fulton

County, Georgia respectfully requests that the Court grant

its Cross-Petition for a Writ of Certiorari.

DATED: May 8, 1991

Atlanta, Georgia

Respectfully submitted,

KeitH M. WIENER