Amicus Curiae Brief — Michigan Road Builders Ass'n v. Director, Michigan Department of Transportation

Buproms Court, *

921379 | nee et

MAR 16 1993 |

Jn Che | OFFICE OF THE CLcRX |

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Supreme Court Of The United States

OCTOBER TERM, 1992

MICHIGAN ROAD BUILDERS ASSOCIATION, INC., e¢ al.,

Petitioners,

v.

THE DIRECTOR OF THE MICHIGAN DEPARTMENT OF

TRANSPORTATION, in his official capacity, et al.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR THE ASSOCIATED GENERAL CONTRACTORS

OF AMERICA, INC. AS AMICUS CURIAE

SUPPORTING PETITIONERS

Michael E. Kennedy Walter H. Ryland*

Associated General Contractors Williams, Mullen,

of America, Inc. Christian, Dobbins, P.C.

1957 E. Street, N.W. Two James Center

Washington, DC 20006 1021 East Cary Street

(202) 393-2040 P.O. Box 1320

Richmond, VA 23210-1320

(804) 783-6415

Of Counsel Attorney for Amicus Curiae

March 18, 1993 *Counsel of Record

LAWYERS PRINTING COMPANY 7th & Franklin Bidg. Richmond, Virginia 23219 (804) 648-3664 h\ \°

QUESTIONS PRESENTED FOR REVIEW

Whether a state must first ascertain the nature and

scope of past discrimination against members of racial

minority groups before adopting a race-based preference

program which sets aside funds for members of such

minority groups in excess of the “not less than 10%"

directed by the Surface Transportation and Uniform

Relocation Assistance Act of 1987.

Whether one seeking to challenge a governmental

policy allocating specified highway contracts or parts

thereof to businesses owned by members of racial minority

groups can establish standing under Article II by showing

that the policy excludes bids of non-minorities from consid-

eration.

TABLE OF CONTENTS

QUESTION PRESENTED FOR REVIEW ...... i

BAmee OF CONTENTS ................ il

INTEREST OF THE AMICUS............ l

ee 3

REASONS FOR ALLOWANCE OF THE WRIT... 7

I A state must first ascertain

the nature and scope of past

discrimination against mem-

bers of racial minority groups

before adopting a race-based

preference program, which

sets aside funds for members

of such minority groups in

excess of the "not less than

10%" directed by the Surface

Transportation and Uniform

Relocation Assistance Act of

TE ar eg sd gg gag 05 7

II Whether one seeking to

challenge a governmental

policy allocating specified

highway contracts or parts

(ii)

thereof to businesses owned

by members of racial minor-

ity groups can establish

standing under Article UI by

Showing that the policy ex-

cludes non-minority _ bids

from consideration?. ....,... 2” 16

CONCLUSION

(iii)

TABLE OF AUTHORITIES

Cases Page

Allen v. Wright, 468 U.S. 737 (1984) ......... 20

Babbitt v. Farm Workers, 442 U.S. 289 (1979) . 20, 21

CC Distributors v. United States, 833 F.2d 1216

es ee een eb as ota 18

Christianson v. Colt Industries Operating Corp..,

Oe Ws ENO ol kc ov se eK 17

City of Richmond v. J.A. Croson Company, 488 U.S.

veiitth, ahi cs, Ce Ee aD 6, 8, 9, 12

Cone Corp. v. Hillsborough County 908 F. 2d 908

(11th Cir. 1990), cert. denied, 114 L. Ed 2d

Pee ee set i a eo Sintec eee 13

Cone Corp. v. Fla. Dept. of Transportation, 921 F.2d

1190 (11th Cir.), cert. denied, _-; U.S. __, 111

ee Rees) 0h, | a 17

Coral Constr. Co. v. King County, 941 F.2d 910 (9th

Cir.), cert. denied, __ U.S. __ 112 S.Ct. 875

Se a IS ee ee Gre pan a 19

DeBartolo Corp. v. Florida Gulf Trades Comm’n,

oe | 14

(iv)

DKT Memorial Fund Ltd. v. Agency for Int’l

Development, 887 F.2d 275 (D.C. Cir. 1989) 18

Firestone Tire and Rubber Co. v. Risjord, 449 U.S. 368

Se oe gy Vinee 17

Fullilove vy. Klutznick, 448 U.S. 448

ig SPR see ie aaaeanion ee 6, 8, 9, 10, 13

Harrison & Burrowes Bridge Construction, Inc.

v. Cuomo, 981 F.2d 50 (2d Cir. 1992) .... 16

H. K. Porter Company, Inc. v. Metropolitan Dade

County, 825 F.2d 327 (11th Cir. 1987),

vacated 489 U.S. 1062 (1989), rev’d

ee ot 2). }) fa, ba, a2

International Brotherhood of Teamsters v. United States,

mee We. WO CETTE ec ee ee we 19

Metro Broadcasting, Inc. v. FCC, 497 U.S. 547

i ENS Sore ree rere 8,9, 10, 11, 12

Michigan Road Builders Ass’n, Inc v. Milliken,

834 F.2d 583 (6th Cir. 1987), aff'd

109 S.Ct. 1333 (1989) 2... 2... 5

Milwaukee Pavers’ Ass’n vy. Fiedler, 922 F.2d 419

1, 0 ee ,, } 11, 13

NLRB v. The Catholic Bishop of Chicago, 440 U.S.

oS ae ane 13

(v)

Northeastern Florida Chapter v. City of Jacksonville,

951 F.2d 1217 (11th Cir. 1992) cert granted

Pa, WESEUEE 4 oS 0 ck ee ek eb ae 17,18

O’Donnell Construction Company v. District of

Columbia, 963 F.2d 420 (D.C. Cir. 1992) 10, 19

Penneil v. City of San Jose, 485 U.S. 1 (1988). ... 20

Planned Parenthood Ass'n of Chicago v. Keminers,

700 F.2d 1115 (7th Cir. 1983) .......... 18

Public Citizen v. United States, 491 U.S. 440 (1989) . 14

Regents of the University of California v. Bakke, 438

8 A re re ar re 18

Shelley v. Kraemer, 334 U.S. 1 (1948) ......... 16

Village of Arlington Heights v. Metropolitan Housing

Development Corp., 429 U.S. 252 (1977) .. 18

Warth v. Seldin, 422 U.S. 490, 501 (1975). ..... 17

West Virginia Ass’n of Community Health Centers

v. Keminers, 700 F.2d 1115 (7th Cir. 1983) . 18

Constitution of the United States

a ee 13

| ree ee ee ere ee 13

Regulations

ee 9

Statutes

Surface Transportation and Uniform Relocation

Assistance Act of 1987 (STURAA),

Pub. L. 100-17,

ig 3 2: Sr 5, 8, 12, 13, 14, 15, 16

Surface Transportation Assistance Act, 96 Stat.

ES 5

Intermodal Surface Transportation Efficiency Act of

1991 (ISTEA), P.L. 102-240,

We kk kk. 5, 8, 15

Other

House Conference Report No. 100-27, 1987 U.S. Code

ee 14

Congressional Record, October 23, 1991, p. 1710 .. 15

(vil)

No. 92-1379

IN THE

SUPREME COURT OF THE UNITED

STATES

OCTOBER TERM, 1992

MICHIGAN ROAD BUILDERS ASSOCIATION, INC., et al.,

Petitioners,

Vv.

THE DIRECTOR OF THE MICHIGAN DEPARTMENT OF

TRANSPORTATION, in his capacity, et al.

Respondents.

ON PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR THE ASSOCIATED GENERAL CONTRACTORS

OF AMERICA, INC. AS AMICUS CURIAE

SUPPORTING PETITIONERS

The Associated General Contractors of America,

Inc., with the written consent of the parties, submits this

brief as Amicus Curiae in support of the petitioners. The

letters of consent have been filed separately herewith.

INTEREST OF THE AMICUS CURIAE

The Associated General Contractors of America,

Inc. ("AGC") is a private, non-profit trade association

founded in 1918 to represent the national interests of

general construction contractors. Approximately 8,000 of

the leading firms engaged in general contracting are

among the association’s approximately 33,000 members.

Among other things, these firms construct highways,

bridges, buildings, industrial facilities, and municipal

utilities.

AGC has 100 state and local chapters throughout the

United States, with at least one chapter serving each state,

and one chapter in Puerto Rico. The Michigan Road

Builders Association is one of three AGC Chapters int he

State of Michigan, and like many other AGC members, its

members perform a substantial amount of public works.

AGC and its chapters therefore have a great interest

in government contracting policies and procedures. When

necessary, AGC and its chapters tum to the courts for

assistance with related issues. Several AGC chapters have

brought cases similar to this one. AGC has most recently

participated in this Court’s proceedings as amicus curiae in

Building and Construction Trades Council of the Metropoli-

tan District v. Associated Builders and Contractors of

Massachusetts/Rhode Island, Nos. 91-261 and 91-274, and

as amicus curiae in a case brought by another AGC

Chapter, Northeastern Florida Chapter of the Associated

General Contractors of American vy. City of Jacksonville,

Florida, No. 91-1721.

AGC’s longstanding policy is to support open

competitive bidding for public construction contracts. The

purposes of competitive bidding and AGC’s related policy

are "to give all persons equal rights to compete for Govern-

ment contracts; to prevent unjust favoritism, collusion or

fraud in the letting of contracts for the purchase of sup-

plies; and thus to secure for the Government the benefits

which arise from competition." United States Vv.

Brookridge Farm, 111 F.2d 461, 463 (10th Cir. 1940).

AGC is concerned that the Sixth Circuit’s opinion

will encourage states and localities to resort to race-based

preferences whenever and merely because minority firms

are available to do the work. This case impinges on one of

the deepest concerns of an industry committed to equal

opportunity but heavily burdened by government require-

ments politically for attractive results.

STATEMENT OF THE CASE

The amicus adopts Petitioners’ Statement of the

Case, but emphasizes the following.

This action was commenced on May 8, 1990 by the

Michigan Road Builders Association, Inc. (hereinafter

"MRBA" or Petitioners) seeking declaratory relief and an

injunction against the continued enforcement of policies

adopted by the Michigan State Transportation Commission

(hereinafter the "Commission"). These policies exclude

95% of MRBA’s 120 members, who perform 75% of the

total dollar value of all state highway construction con-

tracts, from bidding on selected highway construction

contracts let by the Michigan Department of Transportation

ie

(hereinafter "MDOT") because of the members’ race,

ethnic origin, and gender.

Specifically, the Commission adopted a policy

requiring fifteen percent (15 %) of the dollar amount of all

federal-aid highway funds awarded or administered by

MDOT to be expended with disadvantaged business enter-

prises (DBE’s), minority business enterprises (MBE’s),

women business enterprises (WBE’s), and handicapped-

owned businesses (HBO’s).

The Commission also mandated the use of “prime

contract set-asides" which expressly limited consideration

of bids or proposals to those submitted by

DBE/MBE/WBE/HBO firms. The policy sets forth the

reasons for adoption of these set-asides:

Recognizing the department's commitment

to DBEs/MBEs/WBEs/HBOs and recogniz-

ing that inequities have limited DBEs/

MBEs/WBEs/HBOs in their ability to obtain

adequate working Capital, bonding and

prerequisite experience necessary to be

competitive, a set-aside technique will be

used by the department. The set-aside

technique, included in the regular lettings,

will be used to meet the overall goals and to

provide construction services and procure-

ment opportunities for DBEs/MBEs/WBEs/

HBOs. Participation in set-aside contracts

will provide firms the Opportunity to gain

experience in the transportation industry.

ahs

DA eemeeneninill

The policy authorizes no waiver provisions.

Neither the goal nor the identification of which contracts

are to be set-aside can be questioned.

The Commission adopted this policy, including the

15% goal, on February 24, 1988, the day after the Sixth

Circuit Court of Appeals denied the State’s Motion for

Rehearing and Rehearing En Banc in Michigan Road

Builders Association y. Milliken, 834 F.2d 583 (6th Cir.

1987), aff'd, 109 S.Ct. 1333, 103 L.Ed.2d 804 (1989),

where the court had held that a Michigan statute setting

aside 7% of the State’s discretionary expenditures for

MBE’s, and 5% for WBE’s, was unconstitutional because

the State had no evidence of prior discrimination in its

highway construction industry.

The regulation at issue has been long-lived. It

appears in the Surface Transportation and Uniform Reloca-

tion Assistance Act of 1987 (STURAA), which was a

successor to the Surface Transportation Assistance Act

(STAA), enacted in 1983. Although under STURAA the

regulation expired in 1992, it was readopted and remains

in effect under the Intermodal Surface Transportation

Efficiency Act of 1991 (ISTEA). The principal difference

is that STURAA and ISTEA include women-owned

businesses on DBE’s.

The court first held that neither MRBA nor any of

the individual contractors had standing to maintain the

action.

Notwithstanding its holding that Petitioners lacked

standing, the district court went on to determine the case

on the merits. The court held that Congress intended the

4.

STURAA, to authorize the commission to require "the

maximum level of DBE participation possible" and to use

the set aside to assure attainment of that goal.

On appeal, in an unpublished opinion the Sixth

Circuit Court of Appeals affirmed the district court’s

judgment against Petitioners, adopting the district court’s

decision of the case on the merits as the basis for its

decision to affirm the judgment. App. at 1-2. The Sixth

Circuit stated that:

While the panel differs with some of the conclu-

sions of the district court concerning lack of stand-

ing, we nevertheless agree with the court’s reason-

ing concerning the merits of the claims brought by

plaintiffs, and therefore adopt that reasoning as set

out by the court in its opinion of April 11, 1991.

Under the circumstances of this case, resolution of

the appeal is governed by the Supreme Court’s

opinion in Fullilove y. Klutznick, 448 U.S. 448

(1980), rather than by the opinion released in City

of Richmond v. J. A. Croson Co., 488 U.S. 469

(1989).

SUMMARY OF ARGUMENT

The Sixth Circuit failed to apply this Court’s rulings

defining the parameters of Congress’ authority to authorize

States to enact race preferences as a remedy for discrimina-

tion. Specifically, the Sixth Circuit disregarded this

Court’s basic premise that racial preferences may influence

the award of public contracts, if at all, then only for

demonstrably remedial Purposes. In the absence of any

-6-

Congressional mandate to remedy discrimination under § 5

of the Fourteenth Amendment, the state cannot adopt a

preferential program without a record that satisfies the

Croson requirements.

If this Court determines to review the issues

regarding standing, then it is submitted that the test to be

imposed on petitioners is whether their pleadings and

evidence establish a realistic danger of sustaining a direct

injury as a result of the challenged program’s operation or

enforcement.

REASONS FOR ALLOWANCE OF THE WRIT

THIS COURT SHOULD GRANT THE WRIT BECAUSE

THE DECISION OF THE COURT OF APPEALS HAS

DECIDED AN IMPORTANT QUESTION OF FEDERAL

LAW WHICH HAS NOT BEEN SETTLED BY THIS

COURT, AND OTHER CIRCUITS HAVE REACHED

CONFLICTING DECISIONS.

ARGUMENT I

A state must first ascertain the nature and

scope of past discrimination against mem-

bers of racial minority groups before adopt-

ing a race-based preference program which

sets aside funds for members of such minor-

ity groups in excess of the "not less than

10%" directed by the Surface Transportation

and Uniform Relocation Assistance Act of

1987.

Petitioners’ position is that a state in adopting goals

and set-asides in excess of the 10% figure approved in

STURAA and ISTEA must satisfy the requirements of City

of Richmond v. J. A. Croson Co. , 488 U.S. 469 (1989) that

the record demonstrate that the state actor has a firm basis

for concluding that additional measures are needed to

remedy identified discrimination and that its actions are

narrowly tailored to the remedial objective.

The Sixth Circuit concluded that since the program

involved was a federal program governed by Fullilove v.

Klutznick, 448 U.S. 448 (1980) and since the state com-

plied with the applicable federal regulations in increasing

the goals, the increased goals were acceptable without

further need to demonstrate a remedial purpose. The

District Court interpreted Metro Broadcasting, Inc. y.

FCC, 497 U.S. 547 (1990) as applying the Fullilove

rationale to any program approved by Congress. 761 F.

Supp. at 1314. The Court in effect construed the statute to

permit racial preferences limited only by the capacity of

minority business to do the work.

However, under Fullilove whether a preference

enacted by congress will pass muster is still dependent on

whether the preference is remedial and narrowly tailored.

448 U.S. at 480 ( Burger, C.J.) While in Fullilove the

Court upheld the facial validity of a 10% goal, the case

involved no suggestion of any circumstances in which a

State could adopt a goal in excess of that amount.

£.

eee eee

The Sixth Circuit’s rote application of Fullilove and

Metro Broadcasting fails on two points: (1) it misconstrued

Fullilove to establish the standard of review of wholly

autonomous state action and (2) the statutory language does

not support the court’s construction that the "not less than"

10% language allows "a state recipient of federal funds to

set a goal of more than 10%. See 49 C.F.R. § 23.64(d)."

761 F.Supp. 1303, 1314-15.

1. Review of State Action

The issue concerned here is the level of scrutiny to

be applied to state action that relates to a federal program

but goes beyond anything that congress has sought to

authorize.

The inquiry required by strict scrutiny is set out in

City of Richmond v. J. A. Croson Co., 488 U.S. 469

(1989). In Metro Broadcasting, Justice O’Conner cited

Croson for the proposition that strict scrutiny also applies

to federal programs. [T]he Constitution requires that the

court apply a strict standard of scrutiny to evaluate racial

classifications..." Metro Broadcasting, 497 U.S. at 603

(O’Conner, J. dissenting).

Nevertheless, the central question is whether Con-

gress provided a sufficiently precise mandate for this court

to conclude that the racial preference embodied in the

MDOT program was the product of congressional, rather

than state, judgment. Given the suspect nature of racial

classifications, federal legislation cannot be said to direct

their use unless Congress itself makes the "critical determi-

nations" necessary to define the race-based program.

Fullilove v. Klutznick, 448 U.S. 448, 468 (1980) (Burger,

.%

C.J.) . See O'Donnell Construction Company v. District

of Columbia, 963 F.2d 420, 423, (D.C. Cir., 1992) (Con-

gressional oversight of the District of Columbia did not

transform the D.C. Council’s action unto congressional

legislation designed to enforce the Fourteenth Amendment. )

Initially, Fullilove makes it clear that congressional

involvement in a racially preferential program does not

foreclose judicial review:

Here we pass not on a choice made by a

Single judge or a school board, but on a

considered decision of the Congress and the

President. However, in no sense does that

render it immune from judicial scrutiny, and

it "is not to say that we ‘defer’ to the judg-

ment of congress. . . on a constitutional

question. . ."

448 U.S. at 473 (Burger, C.J.) Nothing in Metro Broad-

casting is to the contrary, and that case is distinguishable

on its facts. Strict scrutiny of the challenged state action

need not implicate this court’s ruling in Metro Broadcast-

ing, which involved the standard of review for a federal

policy which congress had unambiguously endorsed and

approved. In this case, the need for a state to increase its

goals or mandate set-asides for remedial purposes was

never identified by the Congress, MDOT, or any federal

Official.

In Metro Broadcasting the majority based its

holding on the fact that the program at issue was specifi-

cally approved by congress:

-10-

"It is of overriding significance in these

cases that FCC’s minority ownership pro-

grams have been specifically approved--

indeed mandated--by Congress.

497 U.S. at 563. The majority expressly based its decision

on the fact the specific programs at issue had been "man-

dated" by the Congress.

“We hold that benign race-conscious mea-

sures mandated by congress--even if those

measures are not "remedial" in the sense of

being designated to compensate victims of

past governmental or societal discrimination-

-are constitutionally permissible to the extent

that they serve important governmental

objectives..."

497 U.S. at 564-65.

In cases where Congress has not made the critical

determinations, or the State has exceeded the federal

parameters, a number of other circuits have held that the

action by a state to increase the goals had to independently

justify race-based action. H. K. Porter Co. v. Metropolitan

Dade County, 975 F. 2d 762 (11th Cir. 1992); Milwaukee

Pavers’ Association v. Fiedler, 922 F. 2d 419 (7th Cir.

1991), cert. denied «U.S. ___, 114 L. Ed.2d 714

(1991).

In H. K. Porter Company, Inc. v. Metropolitan

Dade County, 489 U.S. 1062 (1989) this Court vacated a

judgment of the Eleventh Circuit Court of Appeals that had

rejected a challenge to local action under a federal MBE

-11-

program. The Supreme Court remanded the case "for

further consideration in light of City of Richmond vy. J.A.

Croson Company". H.K. Porter teaches that, even though

Congressionally authorized spending is involved, judicial

review as to constitutional compliance is necessary and not

limited to issues of federal authority purportedly delegated

to state and local recipients.

On remand the Court of appeals distinguised Metro

Broadcasting on grounds that it involved programs that

were "specifically approved - indeed, mandated - by

Congress", and found no federal mandate for the State

action. H. K. Porter, 975 F.2d 762, 765 (11th Cir. 1992)

(petition for rehearing pending).

The question, of course, is how precise the federal

mandate must be before it can cloak racial discrimination

with federal approval. Federal appellate cases establish

two specific requirements.

First, Congress itself must define the scope of the

preferential program. If Congress fails to define the extent

of the program, the implementing agency must exercise its

discretion and fill the gap. In such a case, the program

reflects the judgment of the agency rather than Congress,

and the agency must independently establish the constitu-

tionality of the program.

This principle has been enunciated most Clearly in

the context of federal aid to state highway construction

programs. STURAA requires that 10% of federal highway

aid be expended with firms owned and controlled by

minorities or women. Pub. L. 100-17, §106(c), 101 Stat.

132, 145 (1987). If a state seeks to attach similar require-

AS.

——

ments to state expenditures for highway construction

beyond the 10% set-aside required by Congress, it cannot

to that extent claim a congressional mandate. The state’s

program must stand or fall on its own merits. Milwaukee

Pavers’ Ass'n v. Fiedler, 922 F. 2d 419, 424-425 (7th Cir.

1991), cert. denied, 111 S.Ct. 2261 (1991). Indeed, in

Cone Corp. v. Hillsborough County, 908 F. 2d 908 (11th

Cir. 1990), cert. denied, 114 L.Ed.2d 479 (1991), the fact

that the county had to independently justify its race-based

contracting program after it expanded the program beyond

the scope of the congressional mandate was not even

questioned. See also, H.K. Porter Co., supra, at 765-766

(holding that Congress had not mandated a minority set-

aside program where the relevant legislation did not

"dictate a specific percentage set-aside" for minorities).

Fullilove, supra, at 468 (enumerating "the specification of

a minimum level for minority business participation" as a

"critical factor" determined by Congress).

2. Statutory Construction

The initial error by the lower courts is the finding

that STURAA had authorized adoption of a DBE goal

greater than 10%. There is nothing on the face of the

statute to compel that conclusion, and no legislative history

indicates the existence of any such authorization. A

contrary construction of the statute is not only in accord

with the intent of congress but also avoids the need for

searching constitutional inquiry into the relationship

between sections 5 and | of the Fourteenth Amendment

and, in turn, the power of congress to authorize limitless

racial preferences. NLRB v The Catholic Bishop of Chica-

«14.

80, 440 U.S. 490 (1979): Public Citizen vy. United States,

491 U.S. 440 (1989): DeBartolo Corp. v. Florida Gulf

Trades Comm’n, 485 U.S. 568 (1988).

One of the changes made by STURAA to the 1982

authorizing act was the addition of Women Business

Enterprises as DBEs. Notwithstanding the addition of this

group, the Secretary of Transportation was directed not to:

. increase the overall 10 percent DBE

requirement set by this section as a result of

the inclusion of WBEs as a presumptive

group.

House Conference Report No. 100-27, 100th Cong. First

Session, Mar. 18, 1987, p. 148; 1987 U.S. Code Cong. &

Admin. News, 133.

Congress was clearly not mandating that MDOT

should adopt as a goal the "maximum level of DBE

participation possible." In fact, since Congress was the

body which determined what discrimination existed in the

highway construction industry and what level of

remediation was required to remove the effects of the past

discrimination, it is clear that a goal in excess of 10% was

viewed as not necessary to the achievement of that objec-

tive. Id,

Congress not only did not mandate a requirement

that states adopt goals in excess of 10%, but it mandated

that the goal remain at 10% notwithstanding the significant

expansion of the preferred class. Any contention that

STURAA mandates goals in excess of 10% is Clearly

erroneous.

-14-

In addition, during debate over the current federal

highway aid authorization bill (STEA) an amendment was

offered in the House of Representatives to increase

STURAA’s set-aside by providing 10% for DBEs, which

would no longer include women-owned businesses, and a

separate 5% for WBEs, for an overall goal of 15%. The

amendment was defeated. "Congressional Record," October

23, 1991 at 1710.

The Court placed great emphasis on the "not less

than" language of STURAA. However, if Congress had

fixed the maximum goal in stone at 10%, then a state

which had made independent findings of discrimination in

its contracting procedures would be prohibited from

adopting any remedial policy involving federally funded

projects which exceeded 10%, regardless of its compelling

interest. That is why Congress used the "not less than

10%" language. Ten percent would remedy Congress’

findings, and states would not be prohibited from utilizing

federal funds to remedy other discrimination. A state that

wishes to set a higher goal for a compelling governmental

interest is permitted, but not required, to do so.

The only construction of STURAA is that Congress

made findings of past discrimination in the highway

construction industry and concluded that, if 10% of the

funds appropriated for highway construction were expended

with DBEs, the present effects of such past discrimination

would be eliminated. If Congress had intended to authorize

States to adopt goals higher than 10%, it could have easily

done so in clear and concise language.

The rule adopted by the Sixth Circuit would just as

easily permit MDOT to adopt any DBE goal between 10%

-15-

and 100% so long as there was an available pool of

“certified" DBEs to do the type of work required by

MDOT. (A similar result was reached recently in Harrison

& Burrowes Bridge Construction, Incorporated v. Cuomo,

981 F.2d 50 (2d cir., 1992) Such a rule is no mule at all in

operation because it permits constantly increasing DBE

goals with no concern for their impact on the non-preferred

groups. That does violence to the Supreme Court’s

command that the rights guaranteed by Section 1 of the

Fourteenth Amendment are “guaranteed to the individual"

and “are personal rights", Shelley v. Kraemer, 334 U.S. 1,

22 (1948).

This Court should rule that STURAA does not

empower states to increase the goals or adopt set-asides

without a proper showing that it is enacting a narrowly

tailored remedy for identified discrimination.

ARGUMENT II

Whether one seeking to Challenge a govern-

mental policy allocating specified highway

contracts or parts thereof to businesses

owned by members of racial minority

groups can establish standing under Article

III by showing that the policy excludes non-

minority bids from consideration?

The Court of Appeals apparently agreed that Peti-

tioners’ had standing. It noted that it "differs with some of

the conclusions of the district court concerning lack of

standing," App. at 1, and went on to the merits. No cross-

petition on standing has been noted. The court would lack

-16-

jurisdiction to consider the merits if standing were lacking.

See Christianson v. Colt Industries Operating Corp., 486

U.S. 800, 818 (1988), 870 F.2d 1292 (7th Cir. 1989), cert.

denied, 493 U.S. 822 (1989); Firestone Tire and Rubber

Co. v. Risjord, 449 U.S. 368, 379 (1981).

However, since this Court is not required to accept

the lower court’s rulings on standing, and Petitioners have

requested review of the issue, the following is offered in

support of the Petitioners.

Unlike the situation in Northeastern Florida Chapter

Associated General Contractors of America, v. City of

Jacksonville (No. 91-1721) in which the issue was whether

Standing was properly pled, in this case there was testimo-

ny at trial. Both cases adopted a mechanical test requiring

a plaintiff to seek to bid on a contract before challenging

the exclusion from biddings.

The findings of fact, noted that Petitioners perform

75% of the value of state contracts, and that the

association’s executive director testified that Petitioners

members desired to bid on set-aside contracts but were

excluded. A non-minority witness who fabricated traffic

control signs testified that had he been permitted, he would

have bid on two projects that were set aside. 761 F.2d at

1306

The district court cited the Cone Corp. v. Florida

Department of Transportation, 921 F.2d 1190 (11th Cir.

1980), the precursor of the City of Jacksonville case, as

adopting a mechanical rule that Warth v. Seldin, 422 U.S.

490 (1975) and other cases required that the contractor

it.

actually apply for certification as a DBE. Testimony

Showed that no white firm has been certified as a DBE.

Id. at 1308. In addition the court held the witness should

have been on the contract from which he was excluded.

Id. at 1310. Petitioner correctly notes that it would be

futile for the witness to have attempted to apply for

certification on a DBE because he was white and not

disadvantaged.

In numerous cases in which the plaintiff was com-

pletely precluded from consideration for benefits for which

it would otherwise be eligible, the courts have found

Article III standing to be present regardless of whether the

plaintiff actually went through the futile gesture of applying

for benefits from which it was precluded. See, Regents of

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

280-281, N. 14 (constitutional injury in fact requirement

satisfied merely by denial of Opportanity to compete for

place in class based on race); Village of Arlington Heights

v. Metropolitan Housing Development Corp., 429 U.S. 252

(1977) (exclusion from opportunity to obtain housing

sufficient to confer Standing despite failure to apply for

housing); CC Distributors, Inc. v. United States, 833 F.2d

146, 149-150 (D.C. Cir. 1989) (denial of Opportunity to

compete is sufficient injury to confer standing); DKT

Memorial Fund Ltd. y. Agency for Int'l Development, 691

F.Supp. 394, 397-98 (D.D.C. 1988), aff'd in part, rev'd in

part on other grounds, 887 F.2d 275 (D.C. Cir. 1989)

(standing upheld based on exclusion from funding despite

no application for funding); W.Va. Ass’n of Com. Health

Centers v. Heckler, 734 F.2d 1570, 1574-75 (4th Cir.

1984) (standing found based simply on denial of opportuni-

ty to compete for funding); Planned Parenthood Ass’n of

Chicago v. Keminers, 700 F.2d 1115, 1118-20 (7th Cir.

-18-

1983) (standing satisfied where statute prevented plaintiff

from competing freely for funds).

Moreover, the Sixth Circuit’s decision is in conflict

with other courts of appeal that have considered standing in

cases involving set asides. In Coral Construction v. King

County, 941 F.2d 910, 929-30 (9th Cir. 1991), the

Defendants’ policy entitled WBE’s to an automatic five

percent (5%) competitive advantage over non-WBE

contracting terms. The Court found that plaintiffs had

standing to challenge the program because it contained an

“objectively unequal bidding process." Jd. at 22. In other

words, the court found a concrete injury in fact to exist

simply because "majority contractors did not enjoy an equal

playing field for contracts awarded under the set-aside

method." Jd. at 21. Depriving the plaintiff of an equal

opportunity to bid was held sufficient to confer standing in

O’Donnell Construction Company v. District of Columbia

963 F.2d 420, 423 (D.C. Cir. 1992.)

In the present case, as in Coral Construction,

MDOT’s policy contains an objectively unequal bidding

process. Plaintiffs do not enjoy an equal playing field

because the Defendants set aside a portion of their contracts

for DBE/MBE and WBE bidders only; non-DBE/MBE and

WBE firms are precluded from having their bids considered

at_all. Thus, as in Coral Construction, Bakke, and the

numerous other cases cited above, the Plaintiffs herein have

suffered a concrete injury in fact based on their exclusion

from the bidding process. As in the other cases, a futile

application is not necessary. See, int’l Brotherhood of

Teamsters v. United States, 431 U.S. 324 (1977).

-}9.

Standing for the purpose of a facial challenge to a

law can be established by showing that the ordinance will

be enforced against the plaintiff and there is a realistic

danger of sustaining a direct injury as a result of the

Statute’s operation or enforcement. Pennell vy. City of San

Jose, 485 U.S. 1, 8 (1988).

Writing for the Court, the Chief Justice noted that

‘application of the constitutional standing requirement [is

not] a mechanical exercise." Jd. at 7, citing Allen v.

Wright, 468 U.S. 737, 751 (1984). The Chief Justice

concluded that the likelihood that the ordinance would be

enforced to the disadvantage of the Association’s members

“is a sufficient threat of actual injury to satisfy Article II’s

requirement that ’[a] plaintiff who challenges a statute must

demonstrate a realistic danger of sustaining a direct injury

as a result of the statute’s operation or enforcement." Jd.

at 708, citing Babbitt v. Farm Workers, 442 U.S. 289, 298

(1979).

Here, the MRBA testified that it is excluded from

competing for contracts on the basis of race. That is an

injury in fact. Moreover, the sheer volume of business

done by Petitioners’ members makes it clear that there was

a “realistic danger" of sustaining a direct injury as a result

of the statute’s operation or enforcement.

In Babbitt, supra, 442 U.S. 299, it was held that

where the challenged election procedures would burden

freedom of Association it was not necessary to first seek to

invoke the procedures in order to have standing. The

argument in Babbitt was much like that of the Sixth Circuit

to establish standing to sue for the relief requested:

delaying adjudication until plaintiffs invoke the election

-20-

procedures might mean a better factual record. 442 U.S.

at 300. However the testimony was adequate.

We are persuaded however that awaiting

appellees’ participation in an election would

not assist our resolution of the threshold

operation whether the election procedures

are subject to scrutiny under the First

Amendment at all.

Id., 442 U.S. at 301.

the certainty of enforcement and "the total likeli-

hood that it would result in the exclusion of some Petition-

ers from bidding is sufficient to confer standing.

CONCLUSION

For the foregoing reasons the Petition for Writ of

Certiorari should be granted.

Associated General Contractors

of America, Inc.,

Amicus Curiae.

By s/ Walter H. Ryland

Mi:

Walter H. Ryland, Esquire

Williams, Mullen, Christian

& Dobbins

Two James Center

1021 East Cary Street

P.O. Box 1320

Richmond, VA 23210-1320

(804) 783-6415

Attorney for Amicus Curiae

Michael E. Kennedy, Esquire

Associated General Contractors

of America, Inc.

1957 E. Street, N.W.

Washington, D.C. 20006

(202) 393-2040

Of Counsel

xe

MAILING CERTIFICATE

I hereby certify that on this 18th day of

March 1993, I filed via certified mail 40 copies of

the Brief Amicus Curiae with the Clerk’s Office of

the Supreme Court of the United States.

The necessary filing and mailing was

performed in accordance with the instructions

given me by counsel in this case.

Bory bho

Lawyers Printing Company

Suite B-115

7th & Franklin Building

Richmond, Virginia 23219

OPPOSITION

BRIEF

I U.S

No. 92-1379 riLs @

IN THE SUPREME COURT| MAR 19 1993

OF THE UNITED STATES

| OFFICE OF THE CLERK

October Term, 1992

MICHIGAN ROAD BUILDERS ASSOCIATION,

INC., et al,

Petitioners,

Vv.

THE DIRECTOR OF THE MICHIGAN

DEPARTMENT OF TRANSPORTATION,

in his official capacity, et al,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR RESPONDENTS IN OPPOSITION

FRANK J. KELLEY

ATTORNEY GENERAL

THOMAS L. CASEY

Solicitor General

Counsel of Record

P. O. Box 30212

Lansing, Michigan 48909

(517) 373-1124

PATRICK F. ISOM

DAVID L. BALAS

Assistant Attorneys General

Attorneys for Respondents

tins

QUESTIONS PRESENTED

I

WHETHER RESPONDENT'S FISCAL YEAR 1991

DBE GOAL OF 15%, WITH THE LIMITED USE OF

SET-ASIDE CONTRACTS IN THE AMOUNT OF

1.32%, WAS ENTIRELY CONSISTENT WITH AND

INDEED MANDATED BY THE SURFACE TRANS-

PORTATION AND UNIFORM RELOCATION

ASSISTANCE ACT OF 1987 AND ITS

IMPLEMENTING REGULATIONS.

II

WHETHER THE LACK OF STANDING ISSUE IS

IRRELEVANT AND MOOT WHEN BOTH COURTS

BELOW ADDRESSED THE MERITS AND THE SIXTH

CIRCUIT DID NOT AFFIRM THE RULING THAT

PETITIONER LACKED STANDING.

wht

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ....cccecscvcceves 1

INDEX OF AUTHORITIES .cccccccsveseces iv

STATEMENT OF THE CASE .cccccccccsccsece 1

1. The federal scheme under STURAA.. 2

2. Michigan's compliance with the

FEGOral GCROMD 6.000655 640s esses is

3. The trial and stipulation of

the parties ..ccccccccccccsscees 16

4. The District Court Becision ..««s-> 20

5. The Sixth Circuit Decision ...... 24

SUMMARY OF REASONS FOR DENYING

Zee WAL cece ceeceneeeeeeeeeeeseeeeee 25

REASONS FOR DENYING THE WRIT ........ 30

THE SIXTH CIRCUIT'S DECISION

UPHOLDING RESPONDENT'S FISCAL

YEAR 1991 DBE GOAL OF 15% WITH

THE LIMITED USE OF SET-ASIDE

CONTRACTS IN THE AMOUNT OF

1.32% WAS ENTIRELY CONSISTENT

WITH AND INDEED MANDATED BY

STURAA AND ITS IMPLEMENTING

REGULATIONS AND THE APPLICABLE

DECISIGNS OF THIS COURT «sccccessvecs 30

1. THE CONSTITUTIONALITY OF

STURAA AND ITS IMPLEMENTING

REGULATIONS HAVING BEEN

CONCEDED BELOW, THE FACTS

OF THIS CASE DO NOT PRESENT

THE CONSTITUTIONAL ISSUE

ASSERTED BY PETITIONER .......... 30

-1i1ii-

HAVING WAIVED OBJECTION TO

MDOT'S METHODOLOGY USED IN

ARRIVING AT ITS 15% OVERALL

DBE GOAL, PETITIONER DOES

NOT PRESENT AN IMPORTANT

QUESTION ABOUT MDOT'S

COMPLIANCE WITH STURAA AND

ITS REGULATIONS WORTHY OF

THIS COURT'S ATTENTION ........

PETITIONER'S COLLATERAL

CHALLENGE TO FHWA'S

APPROVAL OF DBE GOALS

PRESENTS A HYPOTHETICAL

QUESTION NOT WARRANTING

VAG ME Geek CORRE ccc ccccces

THE LOWER COURTS' DECISIONS

UPHOLDING MDOT'S USE OF 1.32%

SET-ASIDES AS AUTHORIZED BY

THE FEDERAL SCHEME AND

CONSISTENT WITH STATE LAW

WERE CORRECTLY DECIDED ........

THE LOWER COURTS CORRECTLY

HELD THAT THE CONSTITUTION

PERMITS A STATE TO IMPLEMENT

A FEDERAL AFFIRMATIVE ACTION

DT ESSEC CC SSR ede eccesess’

THE STANDING ISSUE IS NOT

RELEVANT AND IS MOOT ..........

Page

-iv-

TABLE OF AUTHORITIES

Pages

Cases

City of Richmond v J.A. Croson Co,

Se Se ee OD 654404604 a 0 048 passim

Fullilove v Klutznick,

448 US 448 (1980) .~. ccc enn eenee passim

Harrison & Burrows v Cuomo,

961 F2d SO (2nd Cir, 1992) ..cccees 46

Metro Broadcasting v Federal

Communications Commission,

497 US S47 (1990) ccocccncccccseeses 43

Michigan Road Builders Association,

Inc v Milliken, 834 F2d 583

(Sun Cie, iverhs Of. ‘Ss.

469 US 1061 (1969) weccvccessssess 22,42

Milwaukee County Pavers

Association v Fiedler,

San Cau Gan (TER Gar, L9PL} sivcecs 43

Tennessee Asphalt Company v Farris,

942 F2d 969 (6th Cir, 1991) ....... 45

Statutes

Intermodal Surface Transportation

Act of 1991, Pub. L. 102-240,

AGS BCOG LELGS-AGAD ccascsewocessnes 2

Small Business Act, 15 USC § 632 .... 4

Surface Transportation Assistance

Act, Pub L No 97-424; 96 Stat

2097, 2100 (1983) wccccccccccsccees 45

ns Page

Surface Transportation and

Uniform Relocation Assistance

Act of 1987, Pub. L. 100-17,

101 Stat 132 (1987) wccsesccseccces 1

Other

Sup. CE. BR. LO.) ccaccvesvsecessssens 47

Supreme Court Practice, 6th Edition,

§ 4.4, pp 200-201 (1986) .......... 48

Title 23 of the U.S. Code ........ passim

ek fees 2 eererererr eres 1,45

>, ge ort ct | ean gery a 3

ea. . ool eter Pree or rr ae 3

Te. See tr estes eer ey ere 8

0: Ge & S50 5 eee 8

op GUS. ¢ 2). She 6 ie 6,33

ee ete Ce et eee warewus re 6

49 COO 6: AU. GRIOITE) 6.464 doe ee oe 7

0) CUR 6 SE.GGIHE 2. 15

40 CON © OF.060R) 2464550543555 8,9,38,39

60 GG &@ SOBE icii inn deshetno 4

49 CFR § 23.64(a)(d) and (e) ....... 9,34

OO CR 6 SEBS ook dnces shee 34

4S COR § 23.66 ceceevevvscevecssens 12,36

49 COR & 23.66(8) GRE (3B) sancesscvics 12

9 CPR 6 23, AMOONGIS A. ccc sewiarwess is

STATEMENT OF THE CASE

AS a condition of receiving federal

funds for highway construction projects,

recipients such as the Michigan Depart-

ment of Transportation ("MDOT") must

comply with the provisions of the

Surface Transportation and Uniform

Relocation Assistance Act of 1987, Pub.

L. 100-17, 101 Stat 132 (1987)

("STURAA") and its implementing federal

regulations, 49 CFR § 23.1 et seq,

including those relating to the use of

Disadvantaged Business Enterprises

("DBES"). (Pet. App. 36a-56a) Under

the federal regulations, recipients are

required to annually set goals for par-

ticipation of DBEs in federally funded

highway projects and submit the goals to

the designated agency of the United

States Department of Transportation

("USDOT") for review and approval.

~

Petitioner Michigan Road Builders

Association, Inc. ("MRBA" ) initially

challenged MDOT's DBE goal approved for

use in Fiscal Year (FY) 1990, but during

the course of this litigation, the 1990

DBE goal was superseded »y MDOT'sS DBE

goal approved for use in FY 1991. Trial

was conducted based upon the 1991 DBE

goal.1

1. The federal scheme under STURAA.

At issue in this case are federal

highway dollars distributed to Michigan

under STURAA.

lsince trial of this case, Congress has

re-authorized STURAA under the _ Inter-

mcod2i Surface Transportation Act of

1991, Pub. L. 102-240, 105 Stat 1918-

1919. The pertinent language is iden-

tical to that which appeared in STURAA.

It should also be noted that MDOT con-

tinues to recommend for approval a new

DBE goal for each fiscal year; MDOT has

obtained approval of a DBE goal for FY

1993 of 13.52%. This case, however,

involves STURAA and MDOT's FY 1991 fed-

erally approved DBE goal.

- 3-

STURAA states, in part, as follows:

Except to the extent that the Sec-

retary determines otherwise, not

less than 10 percent of the amounts

authorized [for highway projects}

; shall be expended with small

business concerns owned and _ con-

trolled by socially and economically

disadvantaged individuals [DBEs }.

Section 106(c) of STURAA. [Emphasis

added. }

Federal regulations to implement the 10%

minimum national DBE goal are set forth

at 49 CFR, Part 23.2

249 CFR § 23.1(b) states in part as

foliows:

This part implements .. . Title 23

of the U.S. Code (relating to high-

ways and highway safety).

STURAA is part of Titl 23. 49 CFR

§ 25.2 states, in part:

This part applies to any DOT program

through which funds are made avail-

able to members of the public for

accomplishing DOT's purposes.

a

In order for a contracting business

to be certified as a DBE, the business

must meet certain criteria as set forth

in 49 CFR § 23.53. A contracting firm

is disadvantaged, according to the fed-

eral regulations, if it is small3 and is

owned and controlled by individuals who

are socially and economically disadvan-

taged.

Under the federal regulations, there

is a rebuttable presumption that women,

Black Americans, Hispanic Americans,

Native Americans, Asian-Pacific

Americans, or Asian-Indian Americans are

socially and economically disadvantaged.

3what constitutes "small" is defined in

STURAA and its implementing regulations

by reference to section 3 of the Small

Business Act, 15 USC § 632 and the rele-

vant regulations promulgated thereunder.

aG~u

Other individuals may be found to be

socially and economically disadvantaged

on a case-by-case basis. If an individ-

ual applies for DBE certification, the

state must make a determination of

social and economic disadvantage, what-

ever the individual's race, ethnic ori-

gin and gender may be. This process

allows for the certification of socially

and economically disadvantaged white

males as well as the denial of certifi-

cation for members of presumptive groups

who are found not to be socially and

economically disadvantaged. A white

male was, in fact, found to be socially

and economically disadvantaged as a

result of his handicap and certified by

MDOT as a DBE. MRBA members are free to

take advantage of this opportunity.

49 CFR § 23.45(9g) addresses two

kinds of DBE goals: (a) overall goals

for the entire DBE program, and (b) con-

tract goals on each specific contract

with subcontracting possibilities. Only

the former goal is challenged in the

instant case.

With regard to overall DBE goals,

49 CFR § 23.45(g)(1)* states:

(1) Once the recipient has reviewed

proposed contracting to _ identify

those contracting activities which

have the greatest potential for MBE

[DBE] participation, the _ recipient

shall set goals that are practical

4with enactment of STURAA, the program

was expanded from a minority business

enterprise (MBE) program to a disadvan-

taged business enterprise (DBE) program

and the DBE designation superceded the

MBE designation. Petitioner has stipu-

lated that the regulations "incorporated

the definition cf social and economic

disadvantage" and implement the expanded

DBE program under STURAA. (Sixth Circuit

Joint Appendix, Vol II, pp 335-336, {M1

7, BS, 26, 32, 62 OOS 33.)

and related to the potential availa-

bility of MBEs [DBEs] in desired

areas of expertise.

[Emphasis added. ]

In setting overall DBE goals which are

"practical and related to the potential!

availability of [DBEs]} in desired areas

of expertise," the recipient must apply

certain mandated federal criteria:

(5) The applicant shall consider the

following factors in setting overall]

goals:

(1) Overall goals shall be based

on projection of the number and

types of contracts to be awarded

by the applicant and a projec-

tion of the number and types of

MBES -[DBEs} likely to be avail-

able to compete for contracts

from the recipient over the

period during which the goals

will be in effect.

(11) Overall goals shall also be

based on past results of the

applicant's/recipient's ef s

to contract with MBEs [DBEs] and

the reasons for the high or ]

level of those results.

49 CFR § 23.45(g)(5)

an

The STURAA goal setting and submis-

Sion process is mandatory under 49 CFR,

§ 23.41(a)(3)(1i) which provides:

(3) All applicants and recipients in

the following categories who will

let DOT-assisted contracts” shall

implement an MBE [DBE] program con-

taining all the elements set forth

in § 23.45. The program shall be

submitted for approval to the DOT

element concerned with application

for assistance or project approval.

(1) Applicants for Federal-aid high-

way program funds; [Emphasis added. }

As the underlined language indi-

cates, recipients shall implement the

program and do so in accordance with 49

CFR, § 23.45. 49 CFR § 23.45(k), adopted

pursuant to STURAA, requires’ states

under certain conditions to set aside

contracts to be bid upon and awarded

exclusively to DBEs ("set-aside con-

tracts") as follows:

perc

the

=

Where not prohibited by state or

local law and determined by the

recipient to be necessary to meet

MBE [ DBE] goals, procedures to

implement MBE [DBE] set asides shal]

be established.

49 CFR § 23.45(k).

With regard to submission of DBE

entage goals to FHWA above or below

10% level, 49 CFR § 23.64(a)(d) and

state:

(a) Each recipient of funds to which

this subpart applies that is

required to have an MBE [DBE] pro-

Gram under § 23.41 of this part

shall establish an overall goal for

the use of disadvantaged businesses.

ere

(d) Recipients submitting a goal of

ten percent or more shall submit the

goal under the procedures set forth

in § 23.45(g) of this part.

(e) If an FHWA or UMTA or PAA

recipient requests approval of an

overall goal of less than ten per-

cent, the recipient shall take the

following steps in addition to those

set forth in § 23.45(g) of this

part: [Emphasis added. ]}

[Additicnal procedures are then

set forth in th regulation.

i Bins

Since MDOT's goal is 15%, those

procedures are not relevant. }

It is apparent that while the national

goal is "not less than 10 percent," the

goal for each recipient throughout the

United States may be greater or less

than 10 percent. The interpretation and

practice of FHWA in this regard were

specifically addressed by Respondent

several years ago when the MRBA ques-

tioned MDOT's interpretation of the fed-

eral regulations. A clarification was

sought from the FHWA. In response,

USDOT's Deputy Assistant General Counsel

Robert Ashby conveyed FHWA's position:

In other words, the recipient must

determine, based on the factors set

forth in section 23.45(g) (i.e.,

number and availability of DBEs, the

contracting opportunities for DBEs

during the period covered by the

goal, the historical participation

of DBEs in the recipient's pro-

grams), what its overall goal should

be. Doing so is a Federal regulatory

aii

requirement for recipients in the

programs to which the DBE regula-

tions apply (49 CFR 23.64(d)). If

the goal submitted by the recipient

is not sufficient under the stan-

dards of section 23.45(g), then it

is subject to disapproval (49 CFR §

23.66), and the recipient could,

ultimately, be found in noncompli-

ance (49 CFR § 23.68). . . . Under

the statute and regulations, the ten

percent requirement is a minimum for

nationwide DBE participation that

this Department is expected _ to

attain, not a ceiling on goals that

the Department may expect a recipi-

ent to set.

The statute and its legislative his-

tory do not vitiate the requirement

of 49 CFR § 23.45(g) that recipients

set appropriate goals based on their

circumstances. If, based on the

relevant factors, a recipient's goal

should be higher than ten percent,

then the recipient is obligated to

set its goal at that higher level.

The judgment about whether a state's

proposed overall goal is acceptable

is made by the concerned DOT

operating administration (e.g., the

Federal Highway Administration);

this letter should not be construed

as making any prejudgment about the

specific goal that it is appropriate

for the State of Michigan to

establish.

Plaintiffs offered no evidence whatso-

to contradict that evidence of

-12-

FHWA's actual practice and its interpre-

tation of the statute and regulations.

As referenced in Counsel Ashby's

correspondence, 49 CFR § 23.66 provides

for

DBE

MDOT

review and approval of all proposed

goals:

(a) The Administrator reviews and

approves any overall goal of ten

percent or more submitted by a

recipient as provided in § 23.45(g)

of this part.

(b) The Administrator of the con-

cerned Departmental element approves

a requested goal of less than ten

ercent if he or she determines, on

the basis of the recipient's justi-

fication and any other information

available to the Administrator, that

- « 49 CFR § 23.66(a) and (b).

[Emphasis added. ]

Michigan's compliance with the

federal scheme.

In establishing a FY 1991 DBE goal,

prepared a report entitled

-l13-

"Development of the 1991 Fiscal Year

Overall Goal for DBE participation."

This report set forth the federally man-

dated criteria for developing an annual

DBE goal and the methodology MDOT used

to calculate its recommendation of a 15%

DBE goal for FY 1991, including a pro-

jected minimal use of set-aside con-

tracts, in the amount of we. FF

necessary to meet the 15% DBE goal.

In response to MDOT's' recommenda-

tion, the MRBA advised MDOT that it did

not object to the methodology used by

MDOT to reach the 15% DBE goal, but only

objected to the level of the 15% DBE

goal and the use of any set-aside con-

tracts to achieve that goal unless MDOT

first made independent findings that

there had been past discrimination in

Michigan.

«14

Petitioner asserts in its Statement

of the Case that 95% of the MRBA's mem-

bers are excluded from bidding because

of the member's race, ethnic origin and

gender and implies that this exclusion

extends to 15% of the total dollar

amount cf all federal highway funds

awarded in Michigan for the year in

question. (Pet. 4) That statement is

misleading.

In fact, only 1.32% of project funds

are set aside for bidding solely by

DBES. The MRBA's members do bid on the

remaining 98.68% of projects. MDOT

meets the remaining 13.68% of its goal

by imposing various levels of DBE sub-

contracting requirements on those con-

tracts which meet specified criteria.

The Michigan State Transportation

Commission ("Commission"), which serves

as the policy-making head of MDOT,

adopted the FY 1991 DBE goal of 15% and

the minimal use of set-aside contracts

in the amount of 1.32% at its meeting of

August 22, 1990.

At the same August 22, 1990 meeting,

the Commission formalized MDOT's past

practice of affording contractors bid-

ding on a federally funded project a

means by which to seek a modification or

waiver of DBE subcontracting require-

ments for specific contracts. This

waiver procedure was implemented in

accordance with 49 CFR § 23.45(h)(2) and

the basic guidance provided at 49 CFR

23, Appendix A. Written guidance on

this issue has been provided to contrac-

tors, and a revised Contract Special

Provision and standardized form for

Requests for Waiver have been developed.

=t§<

The FHWA approved the recommended FY

1991 DBE goal on October 1, 1990, and

the waiver form on October 2, 1990.

3. The trial and stipulation of the

parties.

A bench trial was held on November 7

and 8, 1990. The facts and other mat-

ters expressly accepted by the parties

and set forth in the Order On Pretrial

Conference entered by the District Court

on October 29, 1990 included, among

other things, the following:

II. Uncontroverted Facts: The par-

ties have agreed that the following

may be acceptable as_ established

facts for purposes of this case

only:

xk

11. The state must comply with fed-

eral rules regarding contracting

generally, and with federal

rules respecting the disadvan-

taged business program in

particular, as a condition of

receiving federal funding of

12.

22.

a P

construction projects. 23

U.S.C. Secs. 101 et seg. and 49

C.F.R. Sec. 23.68.

The federal regulations require

a recipient of federal funds

under STURAA, such as MDOT, to

establish an annual goal for the

use of Disadvantaged Business

Enterprises (DBES) and _ submit

the goal to the United State[s]

Department of Transportation

(DOT) for approval. 49 CFR §

23.64. The regulations permit

deviation from the statutory 10%

target figure, either upward, 49

CFR § 23.64(d), or downward, 49

CFR §§ 23.64(e), 23.65. In set-

ting its annual goal, MDOT is

required to consider criteria

such as the number and types of

contracts to be awarded, the

number of DBEs available to com-

pete for these contracts, and

the results of past efforts to

contract with DBEs. 49 CFR §§

23.64(d), 23.45(g)(5).

Kk*

After having the opportunity to

review the ‘Development of the

1991 Fiscal Year Overall Goal

for DBE Participation', the

Plaintiff, Michigan Road

Builders Association, Inc. on

August 16, 1990, stated, among

other things, that it had ‘no

objection to the procedure being

used to develop the 1991 DBE

Goal which considers prior

24.

25.

29.

33.

o18-

achievements, DBE contractor

availability and the projected

construction program.'

*x*x*

On August 22, 1990, the Commis-

Sion adopted a 15% DBE Goal for

the fiscal year beginning

October 1, 1990.

On August 23, 1990, MDOT sent

its 15% DBE goal to FHWA for

review and approval.

xxx

On October 1, 1990, the FHWA

approved MDOT's DBE Goal of 15%

for Fiscal Year 1991, effective

October 1, 1990.

xxx

The Surface Transportation and

Uniform Relocation Assistance

Act of 1987 (STURAA), Pub. L.

100-17, and the requilations

adopted pursuant to STURAA found

at 49 CFR 23.1 et seq. are con-

stitutional for purposes of this

action only. [Emphasis added. }

As seen above, Petitioner stipulated

at trial and reiterated in both its

trial and post-trial briefs that, for

aj9q

purposes of this lawsuit, STURAA and its

implementing federal regulations were

constitutional. Petitioner made a delib-

erate decision to forego challenging the

constitutionality of STURAA and its

implementing regulations. In reliance

on that stipulation, neither the USDOT

nor the FHWA were made parties nor given

the opportunity to otherwise participate

in this case.

Petitioner, in its Statement of the

Case (Pet. 4-5), suggests that Commis-

sion policy, rather than federal

requirements, served as the basis for

the Commission's adoption of a recommen-

dation to use 1.32% set-aside contracts

to achieve its 15% overall DBE goal.

However, as MDOT testified at trial,

while there were secondary reasons sup-

~20-

porting the use of set-aside contracts,

set-aside contracts would not have been

used if not necessary to achieve the

overall DBE goal. Petitioner's State-

ment of the Case omits any reference to

this unrefuted testimony by MDOT.

4. The District Court Decision.

On April 11, 1991, the District

Court issued its Opinion and Judgment.

MDOT and the Commission were dismissed

as Defendants under the Eleventh Amend-

ment.” ~ (Pet. App. 10a-lla) Former

Governor James J. Blanchard was dis-

missed for Petitioner's failure to state

a claim. (Pet. App. lla) Finally all

of Petitioner's claims were denied.

(Pet. App. 22a)

The District Court found that the

Petitioner had failed to establish

aie

standing since Petitioner's testimony at

trial did not meet Petitioner's burden

of establishing standing by showing

real, concrete injury. (Pet. App. 17a)

There was no testimony that any individ-

ual Petitioner had either sought to be

certified as a DBE, or had applied for

and was available to complete any of the

advertised projects. The District Court

found the alleged injury to the sole

Petitioner who testified only conjec-

tural and hypothetical. (Pet. App. 1l2a-

14a)

With respect to the MRBA itself, the

District Court found MRBA had no stand-

ing since: (1) its individual members

had not demonstrated standing on their

Own right; and (2) the Third Amended

Complaint was not germane to MRBA's own

«29—

Constitution and By-Laws which provided

that the MRBA "conduct only those acti-

vities which are for the common good and

benefit alike for all members." (Pet.

App. 14a, 16a) That is, some of MRBA's

members were found to be DBEs as to whom

the lawsuit would be detrimental rather

than beneficial. (Pet. App. 16a)

Notwithstanding that decision, the

District Court went on to rwle on the

merits of Petitioner's claims.

The District Court noted the

irrelevance of Michigan Road Builders

Association, Inc v Milliken, 834 F2d 583

(6th Cir, 1987), aff'd, 489 US 1061

(1989), which had struck down a state

law based affirmative action program.

(Pet. App. 17a) That program controlled

the expenditure of state, not federal,

atte

funds and there has been no claim that

Respondent has, in any way, resurrected

the program.

The District Court determined that

MDOT had conscientiously followed the

applicable federal statute and regula-

tions. (Pet. App. 19a, 22a) The

District Court recognized that neither

STURAA and the federal regulations nor

Fullilove v_ Klutznick, 448 US 448

(1980), and City of Richmond v J.A.-

Croson Co, 488 US 469 (1989), required

MDOT as a recipient of federal funds, to

conduct any inquiry to determine the

existence of prior discrimination in

Michigan. (Pet. App. 19a) The action

of Respondent in establishing a FY 1991

DBE goal of 15% of which only 1.32% was

reserved for set-aside contracts was

-24-

found to be a proper and constitutional

implementation of federal law, consis-

tent with the Fullilove and Croson

decisions. (Pet. App. 17a-22a)

5. The Sixth Circuit Decision.

The Petitioner filed a claim of

appeal on May 9, 1991 challenging the

District Court's opinion on the issues

of stancing and the constitutionality of

MDOT's actions. The Sixth Circuit Court

of Appeals questioned the Distict

Court's conclusions on lack of standing,

then adopted, as its own, the District

‘Court's reasoning on the merits of

Petitioner's claims. (Pet. App. la)

The Sixth Circuit specifically noted

that, under the facts of this case,

resolution of the appeal is governed by

the Supreme Court's decision in

=28—=

Fullilove rather than in Croson. (Pet.

App. 1a)

SUMMARY OF REASONS FOR DENYING THE WRIT

Since Petitioner expressly stipu-

lated to the constitutionality of STURAA

and its implementing regulations, this

case does not’ raise constitutional

issues. Moreover, the case presents no

close questions of interpretation; Peti--

tioner has identified no basis for its

position in STURAA or the regulations.

Respondent relies upon FHWA approval

of its program and the plain and unambi-

guous language of STURAA and its imple-

menting regulations to support both its

15% DBE goal and the 1.32% set-aside

technique to aid in achieving that goal.

Respondent asserts that STURAA and

its implementing regulations provide the

«26

sole authority for its DBE program. By

its enactment of STURAA, Congress deter-

mined that there had been past discrimi-

nation sufficient to justify remedial

action and fashioned the remedy to

address that past discrimination. While

the point is not put in issue by this

case, both Croson and Pullilove recog-

nize the congressional power under

Section 5 of the Fourteenth Amendment is

to remedy such society-wide discrimina-

tion.

Recipients, such as Respondent, were

not required to make individual findings

of past discrimination nor were they

required to individually establish the

Criteria to narrowly tailor the remedy.

Indeed, recipients could not voluntarily

undertake such an effort. Respondent

«SF.

was not authorized to make separate

findings with respect to past discrimi-

nation in Michigan and, based upon such

separate findings, to either refuse to

participate or modify the terms of its

participation in the federally mandated

program. Congress, not the recipients,

fashioned the criteria by the program.

Respondent's DBE program was intended to

Carry out the federal mandate in a man-

ner which conformed to the remedial cri-

teria fashioned in federal regulations.

Respondent makes no claim to any inde-

pendent basis in Michigan law for its

DBE program.

Respondent specifically sought guid-

ance from FHWA regarding the MRBA claim

that MDOT's DBE goal was not to exceed

10 percent. FHWA advised Respondent to

-38-

apply the criteria set forth in the fed-

eral regulations and that, if applica-

tion of the regulations to the factual

circumstances in Michigan yielded a DBE

goal in excess of 10%, Respondent was

obligated to adopt such higher percent-

age goal. Both the trial and appellate

courts below correctly found that

Respondent did nothing more than consci-

entiously follow federal law.

Petitioner also seeks review of a

Standing issue. It is true that United

States District Court Judge Douglas

Hillman opined that Petitioner lacked

Standing; however, Judge Hillman con-

ducted a trial on the merits and then

ruled on the substantive merits of the

Petitioner's claim. The United States

Sixth Circuit Court of Appeals subse-

=2G—

quently expressed disagreement with

Judge Hillman's remarks on the standing

issue, but went on to fully adopt his

reasoning on the merits of the case.

Since both courts decided the merits,

Petitioner was obviously not denied con-

sideration of the merits of its claims

for lack of standing. The standing

issue is moot. Resolution of the stand-

ing issue is, therefore, irrelevant to

the ultimate outcome of the case.

This case has received more than

adequate judicial scrutiny. No conflict

of decision is presented by this case

and no important question of federal law

is raised. The petition should be

denied.

= 30-

REASONS FOR DENYING THE WRIT

THE SIXTH CIRCUIT'S DECISION UPHOLD-

ING RESPONDENT'S FISCAL YEAR 1991

DBE GOAL OF 15% WITH THE LIMITED USE

OF SET-ASIDE CONTRACTS IN THE AMOUNT

OF 1.32% WAS ENTIRELY CONSISTENT

WITH AND INDEED MANDATED BY STURAA

AND ITS IMPLEMENTING REGULATIONS AND

THE APPLICABLE DECISIONS OF THIS

COURT.

1. THE CONSTITUTIONALITY OF STURAA

AND ITS IMPLEMENTING REGULATIONS

HAVING BEEN CONCEDED BELOW, THE

FACTS OF THIS CASE DO NOT PRE-

SENT THE CONSTITUTIONAL ISSUE

ASSERTED BY PETITIONER.

Petitioner misstates the nature of

the case when Petitioner asserts that

the issue before this Court is whether

Respondents' and the lower courts' con-

struction of STURAA and the Federal

Regulations can be considered a narrowly

tailored means employed by Congress to

achieve its objective, or whether STURAA

and the Federal Regulations should be

construed to mandate a preference goal

=3i-

of just 10%. (Pet. 20) After conceding

the constitutionality of STURAA and its

implementing regulations below, Peti-

tioner remains free to dispute the

correctness of the court's construction

of STURAA and the regulations, but may

not dispute their constitutionality as

so construed. However, virtually all of

Petitioner's arguments represent an

attempt to challenge their constitu-

tionality under the guise of arguing the

correct construction of STURAA and its

regulations. (Pet. 21-22)

Petitioner knew when it filed this

lawsuit that both Respondent and the

FHWA interpreted the plain language of

STURAA and the federal regulations to

provide for DBE goals above 10 percent.

Petitioner knew that FHWA had advised

332

Respondent that it was obligated to

adopt a goal over 10% where application

of the regulations yielded a goal in

excess of 10 percent. Petitioner may

not disclaim a constitutional challenge,

exclude FHWA from participation in the

suit, and then collaterally attack the

entire federal DBE program. Having

waived a constitutional challenge below,

the petition attempting to resurrect it

before this Court should be denied.

2. HAVING WAIVED OBJECTION TO

MDOT 'S METHODOLOGY USED IN

ARRIVING AT ITS 15% OVERALL DBE

GOAL, PETITIONER DOES NOT PRE-

SENT AN IMPORTANT QUESTION ABOUT

MDOT'S COMPLIANCE WITH STURAA

AND ITS REGULATIONS WORTHY OF

THIS COURT'S ATTENTION.

Petitioner attempts to circumvent

its concession regarding STURAA's const-

itutionality when it argues that the 15%

=33-

overall DBE goal submitted by MDOT and

approved by the FHWA fails to comply

with STURAA and its regulations because

these provisions "should be construed to

mandate a preference goal of just 10%."

(Pet. 20) This argument was thoroughly

considered by the courts below and cor-

rectly rejected as lacking merit.

The uncontroverted testimony at

trial revealed at least 12 other juris-

dictions have approved DBE goals in

excess of 10%. If the applicable regu-

lation, 49 CFR § 23.45(9g) (Pet. App.

47a-49a) did not require that states

adopt a DBE goal in excess of 10% when

calculated according to the three crite-

ria established by the rules, there

would be no reason for these twelve

states to have a goal over 10%, nor for

FHWA to have approved those goals.

«9é=

MDOT's application of the regula-

tions was approved by FHWA consistent

with its actual past practice and inter-

pretation of the statute and regulations

it is charged with administering.

STURAA's plain language requires an

expenditure of “not less _ than 10 per-

cent" of authorized funds with DBEs.

STURAA, § 106(c). Petitioner stipulated

that the regulations permit deviation

from the statutory 10% figure either

upward or downward pursuant to 49 CFR

§§ 23.64(d) and (3) and 23.65. Peti-

tioner has identified no aspect of

Respondent's program which is contrary

to those regulations.

The regulations require recipients

to set goals based upon their local

circumstances. Petitioner has not iden-

=$8~

tified, and cannot identify, any lan-

guage in STURAA and its implementing

regulations to support Petitioner's con-

struction that authority is only thereby

given for DBE goals up to 10 percent.

The lower courts correctly decided this

case and Petitioner's efforts to escape

its own admission below ‘should fail.

3. PETITIONER'S COLLATERAL CHAL-

LENGE TO FHWA'S APPROVAL OF DBE

GOALS PRESENTS A HYPOTHETICAL

QUESTION NOT WARRANTING REVIEW

BY THIS COURT.

Petitioner contends that the deci-

sions below interpret STURAA and its

regulations to authorize a recipient to

"adopt an unlimited goal" and to award

all or up to 100% of its federal funds

for highway projects to DBEs. (Pet. 6,

18, 19, 20)

o36<

Petitioner claims that any goal in

excess of 10% is automatically approved

by FHWA and is purely voluntary. No

one, aside from Petitioner, has so much

as suggested that a 100% DBE goal could

be supported by any- recipient or

approved by FHWA. Nor have the lower

courts rendered any decision such as

described by Petitioner. The argument,

overstating the rulings below = and

hypothesizing a state of facts unrelated

to this case, lacks merit.

49 CFR § 23.66 provides for review

and approval of all proposed DBE goals.

(Pet. App. 56a) Given the regulatory

criteria, it is inconceivable that every

recipient in the United States could set

100% DBE goals and have them all

approved by FHWA with the result that

=IP=

"DBE's are entitled to all Federal-aid

highway construction contracts." To so

frame the dispute in this case is pure

fantasy and ignores STURAA'sS purpose to

facilitate the entry of DBEs into the

contracting mainstream.

This case pertains to the goal set

by a single recipient of federal highway

funds. Respondent has never proposed a

goal in excess of 15%.5 Whether any

higher goal might in a future case on

different facts be submitted and be

approved by FHWA is utter speculation.

The evidence in this case pertains to

what Respondent was required to do to

arrive at a DBE goal in compliance with

SIndeed, as goals are set annually,

Respondent's current DBE goal has been

reduced to 13.52%.

eT

=~ 3@-

federal regulations. Petitioner chose

not to name the FHWA as a party to this

case and not to challenge its regula-

tions and administration of the DBE

program. No evidence was taken regard-

ing the extent to which FHWA might

approve recipient goals aggregating in

excess of 10 percent. Petitioner's

speculation as to how FHWA might admini-

ster the national DBE program’ and

related collateral attack on those hypo-

thetical actions does not present a

question worthy of this Court's atten-

tion.

4. THE LOWER COURTS' DECISIONS

UPHOLDING MDOT'S USE OF 1.32%

SET-ASIDES AS AUTHORIZED BY THE

FEDERAL SCHEME AND CONSISTENT

WITH STATE LAW WERE CORRECTLY

DECIDED.

49 CFR § 23.45(k), adopted pursuant

to STURAA, authorizes the use of set-

~39-

aside contracts "[w]jhere not prohibited

by state or local law and determined by

the recipient to be necessary to meet

MBE [DBE] goals." (Pet. App. 50a)

The language of 49 CFR § 23.45(k)

discloses a federal intent to allow

states to enact laws to prohibit use of

set-asides, even if determined to be

necessary to meet DBE goals. However,

neither below nor in this Court has

Petitioner identified any Michigan stat-

ute which would prohibit the use of set-

asides. The Michigan legislature has

not elected to opt out of using set-

asides in this federal program.

The fact that the use of set-aside

contracts will have other secondary

beneficial effects, as noted in the

Commission's policy and testimony of

=@O~

Respondent, does not make their use

unconstitutional. STURAA was adopted to

allow DBEs the opportunity to enter into

the mainstream of contracting and even-

tually gain sufficient experience to

compete effectively with the established

contracting community. The use of set-

asides furthers that objective by allow-

ing DBEs the opportunity to be prime

contractors so that they can develop the

skills, business structures and rela-

tionships, etc. necessary to act as a

prime contractor and to engage in such

competition.

Nevertheless, Respondent ' specifi-

cally testified at trial that even with

their secondary beneficial effects, set-

asides would not be used if not neces-

Sary to achieve MDOT'S overall DBE goal.

«io

The testimony was uncontroverted,

however, that use of set-asides was

indeed necessary to meet MDOT'S DBE

goals.

5. THE LOWER COURTS CORRECTLY HELD

THAT THE CONSTITUTION PERMITS A

STATE TO IMPLEMENT A _ FEDERAL

AFFIRMATIVE ACTION PROGRAM.

In Fullilove this Court held that

Congress had the power to impose an

affirmative action program such as at

issue here as part of its power to

enforce the equal protection guarantee

of the Fourteenth Amendment. In his

opinion, Chief Justice Burger stated

that:

Congress not only may induce volun-

tary action to assure compliance

with existing federal statutory or

constitutional anti-discrimination

provisions, but also, where Congress

has authority to declare certain

conduct unlawful, it may, as here,

authorize and induce state action to

avoid such conduct. Id., pp 483-84.

-42-

Petitioner argues that Croson is

applicable to the actions of the Respon-

dent. That case held that a DBE program

established by a city on unconstitu-

tional because the city had not made any

findings that it had caused prior

discrimination. Croson did not involve

implementation of a federal program. It

did not overrule Fullilove but instead

specifically recognized its continuing

6Indeed, Petitioner confuses the issues,

failing to acknowledge the difference

between the legal analysis this Court

has held applicable to cases involving

federal dollars expended by a state

under a federal program adopted by

Congress (such aS here and in Fullilove)

and those cases involving non-federal

dollars expended under a program adopted

by a political subdivision of a_ state

(such as in Croson). See, e.g., Peti-

tioner's citation to Milliken, supra, in

which a state law program was. struck

down and no authority of Congress to

enforce the Fourteenth Amendment was

involved. (Pet. 4, n. 1)

_

validity. The lower courts correctly

X

ruled that Croson does not apply to the

instant matter because MDOT is imple-

menting a federal program.

In Metro Broadcasting v Federal

Communications Commission, 497 US 547

(1990), which was decided subsequent to

Croson, this Court again held that

Congress had the authority to specifi-

cally approve and mandate minority pro-

grams similar to those implemented by

MDOT.

The rulings of the lower courts

upholding Respondent's DBE program are

supported by other appellate decisions

as well. For example, in Milwaukee

County Pavers Association v Fiedler, 922

F2d 419 (7th Cir, 1991), the plaintiffs

challenged the DBE program followed by

tiiaiaentaeeieeeimnie

-~44-

Wisconsin which was very similar to that

followed by MDOT herein. The Court

upheld the constitutionality of

Wisconsin's program and distinguished

Croson:

It is true that the statute [STURAA]}

does not require the states to

accept funds under it and, by doing

so, to become subject to the set-

aside provision and the implementing

regulations. But it authorizes them

to deo so, and action pursuant to a

valid authorization is valid. The

joint lesson of Fullilove and Croson

is that the federal government can,

by virtue of the enforcement clause

of the Fourteenth Amendment, engage

in affirmative action with a freer

hand than states and municipalities

can do. And one way it can do that

is by authorizing states to do

things that they could not do with-

out federal authorization. That was

Fullilove; it is this case as well.

922 F2d at 423-424.

The Court went on to hold:

They [Plaintiffs] are challenging

the state's role in the program.

Insofar as the state is merely doing

what the statute [STURAA] and regu-

lations envisage and permit, the

ai@.

attack on the state is an imper-

missible collateral attack on the

statute and regulations.

922 F2d at 424.

The Sixth Circuit recently discussed

the aifference between Croson and

Fullilove in Tennessee Asphalt Company v

Farris, 942 F2d 969 (6th Cir, 1991). In

that case, the Tennessee Road Builders

Association and some of its members

filed an action to challenge the consti-

tutionality of Tennessee's DBE program.

Like the instant matter, the plaintiffs

in that case conceded that the Surface

Transportation Assistance Act, Pub. L.

No 97-424; 96 Stat 2097, 2190 (1583

the forerunner of STURAA, and the regu-

lations found at 49 CFR § 23.1 et seg

were constitutional, but alleged that

they were improperly applied by

Tennessee. 942 F2d at 972. The Court

=46<-

held otherwise concluding that the case

was ". . . controlled by Fullilove and

not by Croson and Wygant." 942 F2d at

975. The Court noted that a state's

compliance with the mandates of a fed-

eral scheme is nothing more than compli-

ance with federal law. 942 F2d at 975.

The Second Circuit in Harrison &

Burrowes v Cuomo, 981 F2d 50 (2nd Cir,

1992), reached a similar conclusion in

finding that the State of New York prop-

erly followed STURAA and the federal

regulations in adopting a DBE goal of

17%.

MDOT's DBE goal is a conscientious

implementation of a lawfully enacted

federal program and was correctly upheld

by the courts below.

=@93=

6. THE STANDING ISSUE IS NOT

RELEVANT AND IS MOOT.

As stated in Sup. Ct. R. 10.1, "[a]

review on writ of certiorari is not a

matter of right, but of judicial

discretion". Generally, certiorari will

be granted only in the most compelling

of circumstances, such as the need to

secure uniformity of federal law or to

address an issue of overriding public

importance. Accord Sup. Ct. R. 10.1

(a)-(C). No such compelling circum-

stance exists with respect to the stand-

ing issue in this case.

It cannot be disputed that the Sixth

Circuit did not affirm the District

Court's decision on the standing issue.

The Sixth Circuit questioned the conclu-

sions of the District Court concerning

a48<

lack of standing (Pet. App. la), but

obviously felt no need to elaborate

Since the merits of Petitioner's claims

were addressed. The Sixth Circuit deci-

sion, therefore, provides no real or

intolerable conflict among the circuits

Or even an adjudication of the standing

issue warranting review by the Court.

Addressing the District Court's analysis

of the standing issue would be irrele-

vant to the ultimate outcome of the

case, with both courts below having

reached a decision on the merits. Reso-

lution of any perceived conflict would

not change that decision on the merits.

In Stern, Gressman_ & Shapiro,

Supreme Court Practice, 6th Edition

§ 4.4, pp 200-201 (1986), the authors

cite the policy of letting tolerable

-49-

conflicts go unaddressed, especially if

the issue is no longer a live one or the

resolution of the conflict is irrelevant

to the ultimate outcome of the case

before the Court. The standing issue in

this case does not warrant review by

this Court.

~$O~-

CONCLUSION AND RELIEF SOUGHT

For all of the foregoing reasons,

Respondent respectfully urges this Court

to deny the Petition for Writ of

Certiorari.

Respectfully submitted,

FRANK J. KELLEY

Attorney General

Thomas L. Casey

Solicitor General

Counsel of Record

P. O. Box 30212

Lansing, Michigan 48909

(517) 373-1124

Patrick F. Isom

David L. Balas

Assistant Attorneys General

Attorneys for Respondents

February 19, 1993

Ba hy #

“e

pas