Amicus Curiae Brief — City of Richmond v. J. A. Croson Co.

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upremre Court, U.S.

‘LED

38OSSPH F. SPANIOL, JR,

i & Cirits

_——

No. 87-998

IN THE

Supreme Court Of The United States

October Term, 1987

CITY OF RICHMOND,

Appellant,

J.A. CROSON COMPANY, .

Appellee

On Appeal From

The United States Court Of Appeals

For The Fourth Circuit

BRIEF OF THE ASSOCIATED SPECIALTY

CONTRACTORS, INC., AMICUS CURIAE

John A. McGuinn

Gary L. Lieber

Porter, Wright, Morris & Arthur

1233 20th Street, N.W.

Washington, D.C. 20036

(202) 778-3000

Attorneys for

Associated Specialty

Contractors, Inc

Dated: June 8, 1988

Balmar Printing & Graphics, Washington, D.C

»le

Table of Contents

Page

pe PC eee eee il

The Interest Of The Amicus Curiae .......... |

EE = 64 6 eB 6 eo 0% 64 0 ow 2

a 2

I. No Compelling Governmental Interest Justifies The

Richmond MBE Program Because There Was No

Evidence Of Unlawful Racial Discrimination

Either By Contractors In The Local Construction

Industry Or By The City Of Richmond Whose Ef-

fects The Program Sought To Remedy ..... 3

II. The Richmond MBE Program Is Not Narrowly

Tailored To Achieve A Remedial Goal ..... 7

eo POPOV ETE CULT ETT ee )

Table of Authorities

Page

Berger v. Iron Workers Reinforced Rodmen, 843 F.2d

1303 (99088) ow wo whee ee ween e ee 6

Fullilove v. Klutznick, 448 U.S. 448 (1980) ...... in passim

Hazelwood School District v. United States, 433 U.S.

OD CIGTPD . oa ss 00 on eae eee 4

Hirabayshi v. United States, 320 U.S. 81 (1943) ... 2

International Brotherhood of Teamsters v. United

States, 431 U.S. 324 (1977) .........6.8-. 4

J.A. Croson Co. v. City of Richmond, 822 F.2d 1355

Ce By) Pere ee 6, 7,9

Loving v. Virginia, 388 U.S.1(1967) ......... 2

Regents of University of California v. Bakke, 438 U.S.

Y 10.) | eee es eee 2

Wygant v. Jackson Board of Education, 476 U.S. 267

(. Pere ewreer ce in passim

BRIEF OF THE ASSOCIATED SPECIALTY

CONTRACTORS, INC., AMICUS CURIAE

This brief is being filed on behalf of the Associated Special-

ty Contractors, Inc., amicus curiae, in support of affirming the

judgment of the Fourth Circuit Court of Appeals finding that the

Richmond MBE Plan violated the Equal Protection Clause of the

Fourteenth Amendment to the Constitution of the United States.

The Interest Of The Amicus Curiae

The Associated Specialty Contractors, Inc. is a national

umbrella organization consisting of eight construction trade as-

sociations involved in various specialty areas of construction. The

constituent members of the Associated Specialty Contractors, Inc.

are (1) Mason Contractors Association of America, (2) Mechani-

cal Contractors Association of America, (3) National Association

of Plumbing, Heating and Cooling Contractors, (4) National

Electrical Contractors Association, (5) National Insulation Con-

tractors Association, (6) National Roofing Contractors Associa-

tion, (7) Painting and Decorating Contractors of America, and (8)

Sheet Metal and Air Conditioning Contractors National Associa-

tion.

Representatives of local chapters of the National Association

of Plumbing, Heating and Cooling Contractors and the National

Electrical Contractors Association appeared at the Richmond City

Council hearing on April 11, 1983, and spoke in opposition to the

proposed MBE Program (J.A. 31-31; 32-35; 37-40).

The purpose of Associated Specialty Contractors, Inc. is to

advance the common interests of the members of the eight con-

Stituent trade associations.

The interest of Associated Specialty Contractors, Inc. in the

present litigation is (1) to protect the members of the constituent

associations from being excluded from government contract

markets on the basis of race or nationality, and (2) to preserve a

truly competitive environment in the construction industry in

order to provide a quality product at the lowest competitive cost.

The problems posed by Minority Business Enterprise

Programs are not limited to the City of Richmond. As detailed in

the appendices to the brief amicus curiae of the National League

of Cities, et al., the reach of these programs is national in scope

with a proliferating number of both state and local plans that af-

fect the construction industry on a regular and constant basis.

Statement

The briefs of the parties and other amici curiae have ade-

quately described the Richmond MBE Program and its application

to the mechanical contractor that commenced this litigation, and

they will not be repeated in this brief.

ARGUMENT

This Court has historically and understandably been extreme-

ly suspicious of governmental action or decisions made wholly on

race-based distinctions. This Court has "consistently repudiated

‘{d]istinctions between citizens solely because of their ancestry’ as

being ‘odious to a free people whose institutions are founded upon

the doctrine of equality”. Loving v. Virginia, 388 U.S. 1, 11 (1967)

(quoting from Hirabayshi v. United States, 320 U.S. 81, 100

(1943)). In Regents of University of California v. Bakke, 438 U.S.

265, 291 (1978), this Court has stated that "racial and ethnic dis-

tinctions of any sort are inherently suspect and thus call for the

most exacting judicial examination".

The “exacting judicial examination" of race-based

governmental distinctions has been held by this Court to involve

two tests: "First any racial classification ‘must be justified by a com-

pelling governmental interest’ [citations omitted]. Second, the

means chosen by the State to effectuate its purpose must be ‘nar-

rowly tailored to the achievement of that goal”. Wygant v. Jack-

son Board of Education, 90 L.Ed.2d 260, 268 (1986) (quoting

Fullilove v. Klutznick, 448 U.S. 448, 491 (1980)).

I. No Compelling Governmental Interest Justifies The

Richmond MBE Program Because There Was No

Evidence Of Unlawful Racial Discrimination Either

By Contractors In The Local Construction Industry

Or By The City Of Richmond Whose Effects The

Program Sought To Remedy

The "evidence" allegedly justifying the "compelling

governmental interest" in adopting the Richmond MBE Program

consists of a 41-page transcript of a hearing before the Richmond

City Council. Summarized, that "evidence" consisted of three

points: (1) Between 1978 and 1983 .67% of the city’s construction

contracts were awarded to minorities, whereas the population of

the city is 50% minority (J.A. 43); (2) an association of general con-

tractors and certain specialty contractor associations in the Rich-

mond area had few minority members (J.A. 27, 34, 36, 39-40); and

(3) two speakers who made conclusory remarks that there was

general racial discrimination in the construction industry in Rich-

mond, in Virginia and other parts of the United States.

There was no other statistical evaluation, anecdotal evidence

or any evidence at all that the City of Richmond had ever excluded

any particular minority contractors from city construction work.

Whether there must be a "particularized finding" of racial dis-

crimination "by the governmental unit involved", as required by the

plurality opinion in Wygant, 90 L.Ed.2d at 270, or merely whether

the government agency "must have a firm basis for determining

I Councilperson Marsh stated that:

I have been practicing law in the community since 1961, and I am familiar

with the practices in the construction industry in this area, in the State

and around the nation. And I can say without equivocation, that the

general conduct in the construction industry in this area, and the state

and around the nation, is one in which racial discrimination and ex-

clusion on the basis of race is widespread.

(J.A. 41) City Manager Deese recounted his experience in Pittsburgh, Pennsyl-

vania, where he observed "racial discrimination in the area of contracting" (J.A.

42). These conclusory comments are obviously entitled to no weight in determin-

ing whether the City of Richmond in fact discriminated against minority construc-

tion contractors and will not be further pursued in this brief.

that affirmative action is warranted’, as required in the concurring

opinion of Justice O’Connor in Wygant, 90 L.Ed.2d at 280, neither

requirement is met by the meager evidence before the City Coun-

cil in the late hours of April 11, 1983.

The .67% of city contracts awarded to minority construction

contractors in the 1978-83 period reveals nothing about either ra-

cial discrimination in the construction industry in the Richmond

area or racial discrimination practiced by the City of Richmond in

excluding minority contractors from city construction projects.

There are many nondiscriminatory barriers to successful entry into

the specialty contractor industry. These include: specialized

knowledge and experience in the trade; general knowledge in

operating a successful business and in appropriate bidding

methods and procedures; sufficient working capital and reserves;

ability to meet bonding requirements; and establishment of a track

record of successful execution of work to attract customers.

Many of these barriers do not exist in the context of employ-

ment discrimination cases where this Court on occasion has ap-

proved findings of discrimination based on a comparison between

the percentage of unskilled minorities employed and the rercent-

age of minorities in the general population of the appropriate

standard metropolitan statistical area. See Jnternational Brother-

hood of Teamsters v. United States, 431 U.S. 324, 339-40, n.20

(1977). But cf. Hazelwood School District v. United States, 433 U.S.

299, 308, n.13 (1977), where the Court, even in an employment

case, cautioned that where the job requires special qualifications

the appropriate comparison was not to general population statis-

tics but to the smaller segment of the population possessing the

special qualifications.

But in the case of construction entrepreneurs, as opposed to

unskilled employees, the appropriate inquiry is a comparison be-

tween the minority contractors awarded city construction jobs and

the number of qualified minority employers in the standard

metropolitan statistical area. And here the record is silent, except

for the showing that there were very few minority employers who

were members of the associations appearing at the city council

hearing.

The ultimate inquiry in the case does not yield a definitive

answer on this record. Why do there appear to be so few qualified

minority subcontractors in the Richmond area? There was surely

no particularized finding of racial discrimination either in the con-

struction industry generally or by the City of Richmond in par-

ticular.

One possible answer is that the nondiscriminatory barriers to

entry into the construction industry previously identified in this

brief may adversely impact minorities because of general past

societal discrimination against minorities.* But the explicit teach-

ing of the Wygant case is that past societal discrimination against

minorities will not support a racial classification program for the

obvious reason that a finding of such discrimination would "uphold

remedies that are ageless in their search into the past and time-

less in their ability to affect the future". Wygant v. Jackson Board

of Education, supra at 270.

The facile assumption that construction contractors and their

associations practice racial discrimination in the Richmond con-

2 Indeed, one of the opponents of the program noted at the City Council hear-

ing that only 4.7% of construction firms in the United States were minority owned

and that 41% of that number were located in California, Illinois, New York,

Florida and Hawaii, leaving only 2.8% of all construction firms in the remaining

45 states being minority owned (J.A. 35).

3 The City of Richmond and the amici supporting it make much over the lack

of any argument by the opponents that there was no racial discrimination in the

local construction industry. See, for example, App. Br., pp. 5-6, 15, 19, 23). The

answer to this argument is that the City never made a prima facie case of racial dis-

crimination in the local construction industry and there was, therefore, nothing to

rebut. In addition, the representatives of the construction trade associations

denied engaging in racial discrimination (J.A. 20, 38).

4 By suggesting this possibility, the amicus does not embrace "societal dis-

crimination" as the reason why there appear to be relatively few minority employers

in the construction industry in Richmond in relation to the minority population.

On the record of this case there is no proven explanation for the apparent

phenomenon.

struction industry and in the construction industry generally, which

lace the brief of Appellant and the amici supporting it, should not

be accepted by the Court. The over decade-old Congressional

findings of racial discrimination in the construction industry na-

tionally supporting the set-aside program ultimately endorsed in

Fullilove v. Klutznick, 448 U.S. 448 (1980), say nothing about al-

leged racial discrimination in the construction industry in Rich-

mond in 1983, and are woefully out of date on a national basis.

Moreover, a recent decision by the United States Court of Appeals

for the District of Columbia Circuit discloses that construction

contractors and contractor associations may be totally innocent

parties in a context where labor unions have been found liable for

racial discrimination in the construction industry in the

Washington, D.C. area. Berger v. Iron Workers Reinforced Rodmen

Local 201, 843 F.2d 1395, 1435-1438 (1988).

Yet the target of the Richmond MBE Program is aimed

squarely at nonminority construction contractors in the Richmond

area based on outdated national data and the purest of assump-

tions of contractor liability for alleged racial discrimination in the

construction industry in Richmond.

Unfortunately, the record in this case reeks of the "politics of

race" and "political transfers" that the Court below condemned.

JA. Croson v. City of Richmond, 822 F.2d at 1358, 1360 (1987).

Councilperson Richardson opened the hearing by stating that the

purpose of the program was to "recycle" city dollars "back to

minority businesses" (J.A. 12). One of the program’s proponents

spoke of an Oakland, California program that resulted in twenty-

two million dollars "of investment and development within Oak-

land minority communities” (J.A. 19).

There is, of course, nothing wrong with the general sentiment

that a particular group wants "a piece of the action”. But when a

locality having a50% minority population seeks to achieve "a piece

of the action" by mandating the exclusion of nonminority busi-

nesses from 30% of the locality’s subcontractor construction busi-

ness expressly to "recycle" city money to minority businesses, it has

erected a racial classification that is clearly condemned by the

Equal Protection Clause of the Constitution

The decision of this Court in Fullilove v. Klutznick, 448 U.S.

448 (1980), approving a federal law requiring a 10% set-aside to

minority contractors on a particular spending program is clearly

distinguishable from the present case.” In that case the Court

stressed the special constitutional competence under the Spend-

ing Power and Section 5 of the Fourteenth Amendment of the

Congress of the United States, "a co-equal branch" of the federal

government, representing all districts and states of the country, to

make findings of past discrimination against minorities, supported

by congressional committees, the U:S. Civil Rights Commission

and the General Accounting Office, resulting in narrowly tailored

remedial relief based on racial classifications. 448 U.S. at 465-67;

472; 483; 499-502; 503-06).

Here, in contrast, the City of Richmond does not have the

special authority and competence of the U.S. Congress and is ob-

viously more capable of political manipulation to achieve "the bald

dispensation of public funds and employment based on the politics

of race". 822 F.2d at 1358. -

II. The Richmond MBE Program Is Not Narrowly

Tailored To Achieve A Remedial Goal

The City of Richmond also fails utterly to meet the second

prong of the strict test for state and local programs mandating per-

centage set-asides for minority businesses based on racial clas-

sifications. It is not "narrowly tailored" to achieve the remedial

goal. See Wygant v. Jackson Board of Education, 90 L.Ed.2d at 268.

> The observations of Justices Rehnquist and Stewart in dissent in Fullilove v.

Klutznick, 448 U.S. 448, 532 (1980), that approval of set-asides on the basis of race

will lead to "notions of ‘racial entitlement” and the separate dissenting view of Jus-

tice Stevens in the same case that "members of the favored group will feel entitled

to ‘a piece of the action” (448 U.S. at 536) have come to full fruition in this case.

6 While Fullilove is distinguishable, the Associated Specialty Contractors, Inc.

believes for many of the reasons expressed in this brief that Fullilove was fun-

damentally wrongly decided and invites the Court to reconsider that decision.

The basic flaw in the Richmond program, as well as many

others throughout the United States, is that its framers simply took

the criteria for "narrow tailoring" set out by Chief Justice Burger

in the Fullilove case and attached them as "boilerplate" to the local

program. As argued above, the Congressional set-aside approved

in Fullilove was endorsed because it was Congressional action

based on the Spending Powers and Section 5 of the Fourteenth

Amendment and fortified by committee findings and other ap-

propriate agencies of the federal government.

The automatic "tacking on" of the Fullilove "narrow tailoring"

requirements to the Richmond MBE Program has ludicrous

results. That Richmond, geographically situated in the southland

of the United States, is protecting Eskimos and Aleuts from racial

discrimination by giving them set-aside priorities is simply astound-

ing. There was certainly no testimony at the City Council meeting

about discrimination against Eskimos and Aleuts in the Richmond

area for the obvious reason that they do not reside there. The only

apparent reason for their inclusion is because they were included

in the racial classifications approved in Fullilove. This Court in

Wygant, however, expressly rejected a similar "undifferentiated"

laundry list of racial classifications to be protected where it was not

shown that the governmental entity had "engaged in prior, pur-

poseful discrimination against each of these minority groups". 90

L.Ed.2d at 275, n.13 (emphasis added).

Similarly the waiver provision in the Richmond Program is

wholly inadequate because it is expressly limited to "exceptional

circumstances", and there is no administrative appeal mechanism

to test the appropriateness of a denial of a waiver. The waiver is

either granted or denied on the unreviewable fiat of the political

administrator.

Finally, ’ the 30% set-aside figure is wholly arbitrary. None

of the proponents of the measure gave any reasons why 30% was

. ‘ . ; :

In the interest of economy the amicus will not address other deficiencies in

the "narrow tailoring" requirement inherent in the Richmond Program which have

been adequately covered by other parties.

the appropriate number. As the Fourth Circuit held in this case,

"The figure simply emerged from the mists". 822 F.2d at 1360.

The post hoc rationalization of the city and the amici support-

ing it is that the 30% figure is roughly half way between the per-

centage of minority contractors utilized by the City and the 50%

minority population figure in Richmond, referring to a similar

analysis by Justice Powell in the Fullilove case, 448 U.S. at 513-14.

These post hoc rationalizations, however, miss the point that there

must at least be a finding that 30% of the qualified Richmond con-

tractors are minority owned. To the extent that number is less than

30% -- and all the evidence points to the fact that it is considerab-

ly less®-- the 30% set-aside is subject to abuse in that a smal! num-

ber of minority contractors will be sharing a comparatively large

amount of city construction work, thereby reducing competition

and increasing costs to the city and its taxpayers.

CONCLUSION

For all of the above reasons Associated Specialty Contrac-

tors, Inc., as amicus curiae, supports affirmance of the decision

below.

Respectfully submitted,