Opposition Brief — Charles Taylor Construction Co. v. United States

Supreme Co ur

(a ) FILE

NOV 27 WS6

OCTOBER TERM, 1996

CHARLES TAYLOR CONSTRUCTION COMPANY, ET AL.,

PETITIONERS

v.

UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE RESPONDENTS IN OPPOSITION

WALTER DELLINGER

Acting Solicitor General

FRANK W. HUNGER

Assistant Attorney General

MARLEIGH D. DOVER

E. Roy HAWKENS

Attorneys

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

_— mee

QUESTION PRESENTED

Whether the court of appeals correctly affirmed the

district court’s dismissal of a complaint alleging that

the Small Business Administration administers the

Section 8(a) program of the Small Business Act, 15

U.S.C. 637(a), in a way that awards a disproportionate

number of contracts in Arizona to Hispanic-owned

firms.

(I)

TABLE OF CONTENTS

ESN IES. SET SE a NEE 1

ES REA Ee RE NEES AR aa 1

SII lich nce dlath cca ts dandainneseeeguntdinnsabbsnenbmaansinecsoasenekd 1

PIE iasntiattningsisceelcesussdedbbaucsadeesadiucredineacsaciastscecceus 3

EN SEIT Tier or te oo TONER GG AO VE Oe SEO 7

TABLE OF AUTHORITIES

Cases:

Attorney General v. Irish People, Inc., 684 F.2d

928 (D.C. Cir. 1982), cert. denied, 459 U.S. 1172

LPT WislelasialatsAtidniseenevcandsensiipsebicghigeintésienditiaedadpesseses

City of Richmond vy. Croson, 488 U.S. 469 (1989) .... 6

Eastern Canvas Products, Inc. v. Brown, 580 F.2d

or

EE iis AN IIIT ties dinsnacelstssiuhdkinhainieseescacgndaseesauenses 2

Fagan v. SBA, 783 F. Supp. 1455 (D.D.C.), aff’d,

BF Fe We CaP ats Gills ROWED cccosevecsiennavsessccensencnneneves 4

Fordice Construction Co. v. Marsh, 773 F. Supp.

ee Ae SING TEU ctlbcbcisstedinpidcbndecngettandiasinenendoones 5

J. & L. Parking Corp. v. United States, 834 F.

Supp. 99 (S.D.N.Y. 1993), aff’d, 23 F.8d 397 (2d Cir.

TUNE -Ahessiatiniadicietiatnbdgaenennonnianibbbaihdikaetiiasguiambesetebennenncs 4

Liberty Construction, In re, 9 F.3d 800 (9th Cir.

EEE -seneckanaiichhiehetaabidunliensstebbabtnvbiabithevsacsscasssassesees 7

Regents of the University of California v. Bakke,

RI GATED sikeasniesdntnleindeiseinbinnteptioninsitiainiriadiens 4

Soberal-Perez v. Heckler, 717 F.2d 36 (2d Cir. 1983),

cert. denied, 466 U.S. 929 (1984) 0.0.0.0... eee 4

United States v. Hohri, 482 U.S. 64 (1987) ............. 6

Vallely v. Northern Fire & Marine Ins. Co., 254

Reel Se CITED chinnsncibcinedidhabschnaintpenigseesnseterravciusineses 6-7

(III)

IV

Constitution, statutes and regulations:

Ty UN: Ts Oise caretscuncoomusuaneniaine

Civil Rights Act of 1964, Tit. VI, 42 U.S.C.

Small Business Act, 15 U.S.C. 631 et seq.:

§ 5(D)(1), 15 U.S.C. GB4(D)(1) «0... cecceeeeeeeseeeeeeeeeeeneenes

© Sim), BB UKs. GRR) cncccicreaccscsoscscanesvonasionns 1, 2, 3, 4, 6

Tucker Act:

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SE es IED dinin setiscicsvnitionicantapnabnapinnadiantbibtieie

Be OFF i Set tad hated <cdnietinetinnvtiiindinsccicmienbiabeiceiinten

Jn the Supreme Court of the United States

OCTOBER TERM, 1996

No. 96-497

CHARLES TAYLOR CONSTRUCTION COMPANY, ETAL.,

PETITIONERS

Vv.

UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE RESPONDENTS IN OPPOSITION

OPINIONS BELOW

The per curiam order of the court of appeals (Pet.

App. Al-A2) and the memorandum order of the district

court (Pet. App. A3-A5) are unreported.

JURISDICTION

The judgment of the court of appeals was entered on

May 22, 1995. The petition for a writ of certiorari was

filed on August 21, 1995, and docketed on September

27, 1996. The jurisdiction of this Court is invoked

under 28 U.S.C. 1254(1).

STATEMENT

Section 8(a) of the Small Business Act, 15 U.S.C.

637(a), establishes a program to foster and promote

(1)

2

business enterprises of socially and economically

disadvantaged persons and entities. Under that pro-

gram, federal agencies contract with the Small Busi-

ness Administration (SBA) to fulfill qualifying pro-

curement needs. The SBA generally fulfills those

needs by subcontracting with SBA-certified, small-

business concerns. The SBA generally does not se-

lect the specific subcontractor from the pool of eligi-

ble participants. That decision is typically made by

the procuring agency through competitive bidding.

See 13 C.F.R. Pt. 124; Pet. App. A7-A8 (Gov’t Motion

for Summary Affirmance); see, e.g., Eastern Canvas

Products, Inc. v. Brown, 580 F.2d 675, 677-678 (D.C.

Cir. 1978).

Petitioners are an African-American-owned busi-

ness and its owner. The business, which is licensed

to remodel and construct buildings in Arizona, quali-

fies as an eligible small-business concern under the

Section 8(a) program. Petitioners brought this action

in the United States District Court for the District

of Columbia alleging, as relevant here, that the SBA

awards a disproportionate share of contracts in Ari-

zona to Hispanic-owned firms in violation of the Fifth

Amendment and Title VI of the Civil Rights Act of

1964, 42 U.S.C. 2000d. See Pet. App. A18-A19. Peti- |

tioners requested declaratory relief “prohibiting the

disproportionate awarding of contracts to Hispanic

owned firms [and directing] a fair, appropriate setting

aside of contracts to black owned firms, specifically

the [petitioners].” Jd. at A21. Petitioners also re-

quested monetary damages of $17,298,624.62 under

the Tucker Act, 28 U.S.C. 1346(a)(2). See Pet. App.

A18, A25. That sum represented profits: petitioners

claimed they would have earned had they received the

3

contracts that were awarded to other contractors. Id.

at A25.

The district court dismissed petitioners’ amended

complaint. The court ruled that 42 U.S.C. 2000d does

not provide a basis for the relief requested by

petitioners because “the statute does not apply to

federal agencies, such as SBA, that directly provide

government benefits.” Pet. App. A4. The court also

rejected petitioners’ constitutional challenge to the

SBA’s administration of the Section 8(a) program.

The court stated that the program does not “guaran-

tee any particular group a proportionate or ‘appro-

priate’ share of business” and, in any event, there is

“no basis in the law of equality” for a judicial order

that directs “‘a fair, appropriate setting aside of con-

tracts to black owned firms.’” Pet. App. A4 (quoting

Complaint, id. at A21). Finally, the court held that it

lacked subject matter jurisdiction over petitioners’

Tucker Act claim, because the court’s statutory

authority to consider such claims was limited to

amounts not exceeding $10,000. Jbid.

Petitioners appealed, and the government moved for

summary affirmance. The court of appeals affirmed

the dismissal of petitioners’ complaint “substantially

for the reasons stated by the district court in its

order filed October 18, 1994.” Pet. App. Al.

ARGUMENT

The court of appeais properly affirmed the district

court’s dismissal of petitioners’ complaint. Petition-

ers’ contentions do not present any issue warranting

review by this Court.

1. Petitioners are not entitled to relief under Title

VI of the Civil Rights Act, 42 U.S.C. 2000d. Section

2000d provides as follows:

4

No person in the United States shall, on the

ground of race, color, or national origin, be

excluded from participation in, be denied the

benefits of, or be subjected to discrimination

under any program or activity receiving Federal

financial assistance.

As the Second Circuit has explained, Section 2000d

does not provide a cause of action against federal

agencies, like the SBA, that provide direct govern-

ment benefits. Soberal-Perez v. Heckler, 717 F.2d 36,

38-41 (1983), cert. denied, 466 U.S. 929 (1984). Rather,

it authorizes the federal government “to terminate

federal funding of private programs that use race as a

means of disadvantaging minorities in a manner that

would be prohibited by the Constitution if engaged in

by government.” 717 F.2d at 40 (quoting Regents of

the University of California v. Bakke, 438 U.S. 265,

329 (1978) (Brennan, J., concurring in part)). Accord

J. & L. Parking Corp. v. United States, 834 F. Supp.

99, 104-105 (S.D.N.Y. 1993), aff’d, 23 F.3d 397 (2d Cir.

1994); Fagan v. SBA, 783 F. Supp. 1455, 1465-1466 n.10

(D.D.C.), aff’d, 19 F.3d 684 (D.C. Cir. 1992). There is

no conflict among the courts of appeal on that ques-

tion.

2. The district court also properly dismissed peti-

tioners’ claim for relief under the Fifth Amendment.

As an initial matter, petitioners’ contention that the

SBA awarded a disproportionate amount of business

to persons of Hispanic origin misconceives the role of

the SBA in administering the Section 8(a) program.

The SBA arranges to supply federal agencies with

goods and services as a prime contractor, 15 U.S.C.

637(a), and identifies eligible Section 8(a) program

participants, 13 C.F.R. 124.101-124.211. When two or

5

more eligible program participants are able to supply

the goods or services, and the contracts meet certain

monetary thresholds, the SBA regulations provide for

competitive bidding. See 13 C.F.R. 124.311. But con-

trary to petitioners’ understanding, the SBA does not

select the subcontract recipients. The SBA’s regula-

tions provide that the procuring agencies shall make

the awards based on the evaluation criteria set out in

the bid solicitation and the Federal Acquisition Regu-

lation. See 13 C.F.R. 124.311(f). Thus, the SBA is not

a proper party-defendant for petitioners’ discrimina-

tion claim, and that fact alone provided an adequate

basis for the district court to dismiss petitioners’

claims alleging discrimination by the SBA. See Pet.

App. A8.

Even if the SBA were a proper defendant, petition-

ers’ complaint failed to allege facts that would estab-

lish a violation of the Fifth Amendment’s proscrip-

tion against racial discrimination. Petitioners al-

leged that the SBA has given a “disproportionate

amount of busiress to Hispanic owned firms.” Pet.

App. Al9. But petitioners did not allege facts demon-

strating that petitioners’ bids or capabilities were

comparable to those of the Hispanic-owned businesses

and that petitioners were denied the contracts based

on racial considerations. “Discrimination cannot

exist in a vacuum; it can be found only in the unequal

treatment of people in similar circumstances.” At-

torney General v. Irish People, Inc., 684 F.2d 928, 946

(D.C. Cir. 1982), cert. denied, 459 U.S. 1172 (1983)."

1 Unlike the plaintiff in Fordice Construction Co. v.

Marsh, 773 F. Supp. 867 (S.D. Miss. 1990), upon which peti-

tioners principally relied below (Pet. App. A4), petitioners

have made no allegation that the SBA precluded them from

6

Furthermore, the district court was correct in

observing that the relief requested by petitioners—“a

declaratory judgment ‘prohibiting the dispropor-

tionate awarding of contracts to hispanic owned firms

{and directing] a fair, appropriate setting aside of

contracts to black owned firms’”—has “no basis in

the law.” Pet. App. A4 (quoting Complaint, id. at

A21). The Section 8(a) program does not guarantee

any particular group a proportionate or “appropriate”

share of business, Pet. App. A4, and the imposition of

any such broad and rigid quota system would itself

raise serious constitutional issues. Cf. City of Rich-

mond v. Croson, 488 U.S. 469 (1989).

3. Petitioners’ Tucker Act claim for contract dam-

ages was also properly dismissed. Subject to other

limitations not relevant here, a district court’s Tuck-

er Act jurisdiction is limited to claims “not exceeding

$10,000 in amount,” 28 U.S.C. 1346(b)(2). See United

States v. Hohri, 482 U.S. 64, 72 (1987) (“Tucker Act

claims for more than $10,000 may be brought only in

the United States [Court of Federal Claims].”).

In the instant case, petitioners invoked Tucker Act

jurisdiction and sought contract-related damages of

more than $17,000,000. Pet. App. Al8, A25. The

district court correctly dismissed petitioners’ Tuck-

er Act claim for lack of subject matter jurisdiction,

id. at A8-A5, and the court of appeals correctly af-

firmed that ruling, id. at Al-A2. Cf. Vallely v.

Northern Fire & Marine Ins. Co., 254 U.S. 348, 353

(1920) (“[cJourts are constituted by authority and

bidding on contracts that they were otherwise capable of per-

forming.

7

they can not go beyond the power delegated to

them”).

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

WALTER DELLINGER

Acting Solicitor General

FRANK W. HUNGER

Assistant Attorney General

MARLEIGH D. DOVER

E. ROY HAWKENS

Attorneys

NOVEMBER 1996

2 Petitioners’ reliance (Pet. 10) on the Ninth Circuit’s deci-

sion in In re Liberty Construction, 9 F.3d 800 (1993), is mis-

placed. In that case, the court considered whether the district

court had jurisdiction over plaintiffs contract-related claims

under the “sue and be sued” provision of the Small Business

Act, 15 U.S.C. 634(b)(1). Petitioners did not raise or rely upon

the “sue and be sued” provision in the district court. See Pet.

App. A15.