Petition for Writ of Certiorari — Fulton County v. Webster
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No.—— 001174 JAN 1 0 2001
OFRAIGE OF THE CLERK
IN THE ,
Supreme Court of the United States
FULTON COUNTY, GEORGIA, ef ai.,
Petitioners,
Vv.
DANIEL WEBSTER, et ai.,
Respondents.
On Petition for a Writ of Certiorari to the
United States Court of Appeals
for the Eleventh Circuit
PETITION FOR A WRIT OF CERTIORARI
DEBORAH FLOYD DONALD B. VERRILLI, JR.*
THE FLOYD LAW OFFICES LESLIE H. LEPOW
267 Highway 74 North ELIZABETH A. CAVANAGH
Suite | JENNER & BLOCK, LLC
P.O. Box 3319 601 13th Street, N.W.
Peachtree City, GA 30269 Washington, D.C. 20005
(770) 486-6311 (202) 639-6000
JUNE GREEN * Counsel of Record
OVERTIS HICKS BRANTLEY
OFFICE OF FULTON COUNTY
ATTORNEY
141 Pryor Street, S.W.
Suite 4038
Atlanta, GA 30303
(404) 730-7750
WILSON-EPES PRINTING Co., INC. — (202) 789-0096 - WASHINGTON, D.C. 20001
24 2 er
QUESTIONS PRESENTED
1. Whether a federal court may enjoin a local
government from ever considering race, ethnicity, or gender in
future government contracting, where such a broad injunction
exceeds the scope of the constitutional violation it purports to
remedy, extends beyond the court’s equity jurisdiction, and
severely limits the discretion of a sovereign body to address and
ameliorate past discrimination.
2. Whether an injunction prohibiting a_ local
government from enforcing a government contracting program
creating a preference for minority- and women-owned
businesses is moot and must be vacated, where the program
automatically expired pending appeal, and no new race- or
gender-conscious program has replaced it.
-ij-
LIST OF PARTIES
Pursuant to Rule 14.1(b), the following list identifies all of
the parties to the proceeding in the United States Court of
Appeals for the Eleventh Circuit whose judgment is sought to
be reviewed:
Fulton County, Georgia, \
Appellant/Cross-Appellee Below.
Michael Cooper,
Appellant/Cross-Appellee Below.
Daniel Webster,
Appellee/Cross-Appellant Below.
Peggy Webster,
Appellee/Cross-Appellant Below.
Webster Greenthumb Co.,
Appellee/Cross-Appellant Below.
Kelly Goff,
Appellee/Cross-Appellant Below.
Pursuant to Rule 29.6, petitioners state that the named
petitioners do not have any corporate parent, subsidiary, or
affiliate that is publicly held.
TABLE OF CONTENTS
QUESTIONS PRESENTED .................
See Meee Nets oe beck Jed BEC Ee
TABLE OF AUTHORITIES .........cecccees
PETITION FOR A WRIT OF CERTIORARI ....
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Ee cue crcabetabeasueene couse
CONSTITUTIONAL PROVISIONS INVOLVED
SIATEMENE OF THE CASE ..........2005.
A. I OK ae valiw’s doodle dea s
B. Proceedings Below ...............
REASONS FOR GRANTING THE WRIT ......
I. THE ELEVENTH CIRCUIT’S DECISION
UPHOLDING AN INJUNCTION THAT
PROHIBITS FULTON COUNTY FROM
EVER CONSIDERING RACE, ETHNICITY,
OR GENDER IN FUTURE COUNTY
CONTRACTING CONFLICTS WITH THE
DECISIONS OF OTHER CIRCUITS, AND
IMPROPERLY LIMITS THE DISCRETION
*seeeeee
“es e** @ @
ee 8 6's «
“see ee ©
OF A LOCAL GOVERNMENT. ................ ll
-iv-
Il. THE DECISIONS OF THIS COURT AND
OTHER CIRCUITS MAKE CLEAR THAT
BECAUSE THE CHALLENGED PROGRAM
HAS EXPIRED AND NO NEW RACE- OR
GENDER-CONSCIOUS PROGRAM HAS
REPLACED IT, EVEN A PROPERLY
TAILORED INJUNCTION WOULD BE
Pe boa sa hobca cs cb ikee weak ona pasanie 20
GREE 4c cb doe bkceebe adwadeseinseneainn 27
APPENDIX A
Webster v. Fulton County, Georgia,
No. 99-12216 (11th Cir. July 19, 2000) ........... la
APPENDIX B
Webster v. Fulton County, Georgia,
No. CIV. A. 196-CV-2399-TWT
ee eer errr ys Perry e 2a
APPENDIX C
Webster v. Fulton County, Georgia,
No. Civ. A 1:96CV2399TWT
GERD. Ga. FU OS TGR eek ec eed ce SH 65a
APPENDIX D
Webster Greenthumb Co. v. Fulton County, Georgia,
No. Civ. A. 1:96CV2399-TWT
GUD. Ga. Gogh. 06, SREP as oe ed We a8 ies 113a
APPENDIX E
Webster v. Fulton County, Georgia,
No. 99-12216-CC (11th Cir. Oct. 12, 2000)
(Order denying petition for rehearing and
PEORIUNE GI DUNES. a.0:9:0 t's ce Maa ea eee ke 204a
-Vi-
TABLE OF AUTHORITIES
CASES
Adarand Constructors, Inc. v. Slater,
FO MR DUUEOUEE ELo vac cdcedWevissccasas 22, 23
Allard Enterprises, Inc. v. Advanced
Programming Resources, Inc.,
546 FSG DOO Cee CAE, BSG c cc ccccccccccscccces 18
Arizonans for Official English v. Arizona,
Fae Wa STD 66.05 can wevnkasde naka knees 20
Association of Community v. Organizations
for Reform Now (ACORN) v. Edgar,
FO FS 198 CHG TRSGD co ccccccdccescecece 16, 18
Associated General Contractors of Connecticut,
Inc. v. City of New Haven, 41 F.3d 62
GOO Get DU: dn ciknlth Mil osdeeaenekews passim
Associated General Contractors of America v.
City of Columbus, 172 F.3d 411 (6th Cir.
SOU i vc nccesnasiveneuctcbceusesuhinel passim
Burke v. Barnes, 479 U.S. 361 (1987) ............ passim
Chicago & Northwestern v. Transport Co. v.
Railway Labor Executives’ Association,
SUR FOG BOG CH CAD GE 6 i ccccdccccccceses \. 18
City of Mesquite v. Aladdin's Castle, Inc.,
Gp Ge eT ED oun i schddhucbhaacesexs 21, 22, 23
City of Richmond v. J.A. Croson Co.,
GE Uh GO IG Fak cnn cksencceccas 9, 15, 16, 17
In re Davis, 899 F.2d 1136 (11th Cir. 1990)............ 17
-vii-
TABLE OF AUTHORITIES - continued
Diffenderfer v. Central Baptist Church of
Miami, Florida, Inc., 404 U.S. 412
GOED od wana vad waeenpns Eedcwen'eendsees 21, 23
FDIC v. Verex Assurance, Inc., 3 F.3d 391
PGE MI Recisiseatastccasecusasesetens 19
Friends of the Earth, Inc. v. Laidlaw
Environmental Services (TOC), Inc.,
Fae OR BEF CE Co aE POSEN ida vet he di 22
Gibson v. Firestone, 741 F.2d 1268 (11th Cir.
SO ci Save nve ceed scabies cbtesensacessdac 12
Harrison & Burrowes Bridge Constructors, Inc.
v. Cuomo, 981 F.2d 50 (2d Cir. 1992) ..... 9, 11, 15, 26
Hayes v. North State Law Enforcement Officers
Association, 10 F.3d 207 (4th Cir. 1993) .......... 12
Jones v. Temmer, 57 F.3d 921 (10th Cir. 1995) ...... 11, 26
Kentucky Right of Life, Inc. v. Terry, 108 F.3d 637
SN DUDA 4bbs nid cectewaedcwoenssecés 11, 26
Maryland Highways Contractors Association,
Inc. v. Maryland, 933 F.2d 1246 (4th Cir.
DT anhttwédhw uh olotsdustesanabedess chic 11, 26
Narey v. Dean, 32 F.3d 1521 (11th Cir. 1994) .......... 19
National Black Police Association v. District of
Columbia, 108 F.3d 346 (D.C. Cir. 1997)....... 11, 26
Native Village of Noatak v. Blatchford,
38 F.3d 1505 (9th Cir. 1994) ................. 11, 26
-Vill-
TABLE OF AUTHORITIES - continued
Northeastern Florida Chapter of the Associated
General Contractors of America v. City of
Jacksonville, 508 U.S. 656 (1993) ............ 21, 23
Singleton v. Wulff, 428 U.S. 106 FP er aaa. 19
Toussaint v. McCarthy, 801 F.2d 1080 (9th Cir.
WE trsakdtessividevariciicn. 12
United States Department of the Treasury,
Bureau of Alcohol, Tobacco & Firearms
v. Galioto, 477 U.S. 556 (1986) .............. 11, 25
United States v. Concentrated Phosphate
Export Ass'n, Inc., 393 U.S. 199 ele des oe a 22
United States v. WT. Grant Co., 345 U.S. 629
EL Mesbaccdealccssscacae 22
Waldman Publisher Corp. v. Landoll, Inc.,
el | I A na a: 12
Younger v. Harris, 401 U.S. 37 | Ey ee i ied 17
i) Re ee ee wy en eS 1
Geen G CN 6 oho Fhe WARS ee jew 24
Sy ge ih RUE pail ICO a ae 2
OM, Cops, Gan, WIV, 68 igo ok sisvkhcss enh os, 2
PETITION FOR A WRIT OF CERTIORARI
Fulton County, Georgia (“Fulton County” or “the
County”), through undersigned counsel, respectfully requests
that this Court issue a writ of certiorari to review the judgment
of the United States Court of Appeals for the Eleventh Circuit
affirming the decision of the United States District Court for
the Northern District of Georgia permanently enjoining the
County from using racial, ethnic, or gender participation goals
in evaluating or awarding County contracts.
OPINIONS BELOW
The opinion of the Court of Appeals is reported at 218
F.3d 1267, and is reprinted at Pet. App. la. The opinion of the
district court entering final judgment with respect to the
constitutionality of the challenged program is reported at 51 F.
Supp. 2d 1354, and is reprinted at Pet. App. 2a-64a. The
opinion of the district court on cross-motions for summary
judgment is reported at 44 F. Supp. 2d 1359, and is reprinted at
Pet. App. 65a-112a. The opinion of the district court with
respect to attorneys’ fees and costs is reported at 112 F. Supp.
2d 1339, and is reprinted at Pet. App. 113a-203a. The Court of
Appeals’ order denying Fulton County’s petition for rehearing
and suggestion for rehearing en banc, which will be published
inatableat _F.3d___, is reprinted at Pet. App. 204a-205a.
JURISDICTION
The judgment of the Court of Appeals was entered on July
19, 2000. See Pet. App. la. A timely petition for rehearing and
suggestion for rehearing en banc was denied on October 12,
2000. See Pet. App. 204a-205a. The jurisdiction of this Court
is invoked under 28 U.S.C. § 1254(1).
i.
CONSTITUTIONAL PROVISIONS INVOLVED
This case involves the following constitutional provisions,
the pertinent portions of which are set forth below:
No State shall . .. deny to anv person within its jurisdiction
the equal protection of the laws.
U.S. Const. amend. XIV, § 1.
The Judicial Power shall extend to all Cases . . . [or]
Controversies ... .
U.S. Const. art. II, § 2.
STATEMENT OF THE CASE
This petition seeks review of an Eleventh Circuit decision
upholding an injunction that forbids Fulton County, Georgia,
from ever considering race, ethnicity, or gender in connection
with future County contracting. The injunction thus bars the
County not only from enforcing the affirmative action program
that the district court actually considered and struck down as
unconstitutional — a program that automatically expired during
the appeal in this case — but also from adopting any new
affirmative action program based on an updated factual
predicate.
The Eleventh Circuit’s decision upholding this sweeping
injunction directly conflicts with a recent decision of the Sixth
Circuit, which held that once an existing affirmative action
program has been declared unconstitutional and its enforcement
enjoined, a broader injunction against future affirmative action
programs improperly exceeds the scope of the constitutional
«fs
violation it purports to remedy and extends beyond the court’s
equity jurisdiction. The decision below also conflicts with
Second Circuit decisions recognizing that the constitutionality
of an affirmative action plan depends on the factual
justification offered for that plan, leaving local governments
free to enact new plans supported by new data even when the
factual justification for a previous plan was inadequate.
Review is warranted to resolve these conflicts and to address
the injunction’s unlawful and unwarranted intrusion upon the
County’s authority to adopt appropriately narrow remedial
legislation if a record is assembled that avoids the evidentiary
deficiencies identified by the district court. Moreover, the
Eleventh Circuit’s failure even to consider this issue in its
decision was plainly erroneous, and provides an additional
reason for granting review.
Review is also warranted because even a properly tailored
injunction — limited to enjoining enforcement of the plan at
issue in this case — could not stand. This Court and other
circuits have held that when legislation expires or is repealed
or amended, any issues arising from its application are moot
and cannot be addressed by a federal court consistent with
Article Ill. Because the challenged affirmative action program
expired automatically pending appeal, and no new race- or
gender-conscious program has replaced it, any injunction
against enforcement of that program would be moot and would
have to be vacated.
A. Background
This case arises from Fulton County’s efforts to remedy a
long history of discrimination against minority- and female-
owned businesses in the County. In pursuit of that goal, the
Fulton County Board of Commissioners (the “Board”) adopted
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its first minority business enterprise program in 1979. Pet.
App. 3a. That program was continued by Board resolutions in
1984 and 1987. See id. Additionally, from 1989 to 1993,
Fulton County instituted a program of race- and gender-neutral
measures designed to increase the pool of bidders in the
County’s contracting. During this same period, the County also
commissioned studies to determine whether discrimination was
present in the relevant markets. Those studies showed gross
underrepresentation of minority contractors, as well as
discrimination against female business owners. The County
also assembled an extensive record of anecdotal discrimination,
which revealed pervasive discrimination against minority and
female business enterprises. The Board conducted public
hearings during 1992 to consider these studies, together with
additional verbal and written testimony from numerous
witnesses. See Pet. App. 4a-5Sa.
On the basis of the record compiled at those hearings, as
well as the studies previously commissioned, Fulton County
adopted an affirmative action contracting program in 1992, and
amended that program to adopt the 1994 Minority and Female
Business Enterprise (“MFBE”’) Program so as “‘to alleviate the
effects of past and present discrimination against minority and
female business enterprises and to enhance contracting
opportunities for minority and female businesses.” Pet. App.
6a. Instead of fixed quotas, the 1994 MFBE Program
established annual participation goals with respect to African-
American businesses, Hispanic businesses, Asian-American
businesses, Native American businesses, and female
businesses. See Pet. App. 7a. The Program also continued the
previously adopted race- and gender-neutral business
opportunity measures. See Pet. App. 11la-12a.
Bl
By its terms, the Program was to expire automatically after
five years, unless the Board renewed it. See Pet. App. 6a. In
fact, the Program did expire on September 16, 1999 — while
this case was on appeal to the Eleventh Circuit. See infra. No
race- or gender-conscious program has replaced it.
B. Proceedings Below
Plaintiffs Daniel Webster, Peggy Webster, and the Webster
Green Thumb Company (“Green Thumb”) filed suit in 1996 in
the United States District Court for the Northern District of
Georgia, challenging the constitutionality of Fulton County’s
1994 MFBE Program under 42 U.S.C. §§ 1981 and 1983 and
the Equal Protection Clause of the Fourteenth Amendment. On
cross-motions for summary judgment, the district court issued
an order on February 12, 1999, denying Green Thumb’s motion
and granting in part the County’s motion. See Pet. App. 65a.
After a six-day bench trial that began on May 11, 1999, and
addressed only the constitutionality of the 1994 MFBE
Program, the court issued a final judgment that Green Thumb
had standing to challenge the Program (the plaintiffs conceded
that the Websters lacked individual standing), and that the
Program violated the Equal Protection Clause. See Pet. App.
15a, 63a.
Specifically, the court concluded that the County had not
established an adequate “evidentiary foundation” for the
Program, and that the Program was not narrowly tailored to
meet a compelling governmental interest. Pet. App. 63a. The
court based its finding primarily on its conclusion that the
County had not itself discriminated in awarding contracts and
could not disprove race-neutral explanations for gross
disparities in the rates at which minority businesses obtained
County contracts. In so holding, the court gave no weight to
6-
the County’s unrebutted evidence of pervasive discrimination
in the private market — discrimination that the County was
obligated to remedy. The district court also entered an
injunction permanently enjoining the County “from using
racial, ethnic or gender participation goals in accepting or
rejecting bids, determining whether bidders are responsive and
responsible bidders and in the awarding of Fulton County
contracts.” Pet. App. 63a.
The broad scope of that injunction was at odds with the
representations of counsel and the evidence presented at trial.
Counsel for both Green Thumb and the County emphasized
that the plaintiffs sought an injunction against the 1994 MFBE
Program only. Counsel for Green Thumb asked only for an
injunction against “continuing the 1994 MFBE Program.”
May 24, 1999 Trial Tr. 1014 (emphasis added); see also id.
1079-80 (“The evidence is clear that this program cannot
withstand constitutional muster, and we ask your Honor to
enjoin i# immediately.”) (emphasis added). In his opening
statement, counsel for the County likewise explained: “/T]he
plaintiffs are seeking only injunctive relief prospectively for
this program which, as the evidence will show, is scheduled to
sunset in September of 1999, a few months from now.” May
11, 1999 Trial Tr. 29-30 (emphasis added). Similarly, in
closing, counsel contended that “[p]laintiffs have not met their
burden to obtain an injunction enjoining the remaining three
months of this five-year program.” May 24, 1999 Trial Tr.
1042 (emphasis added).
At no time before the entry of final judgment did the
district court suggest that it might enter a broader injunction.
To the contrary, the court made clear that it planned to evaluate
only the 1994 MFBE Program and its constitutionality. See
Pet. App. 2a (describing the trial as involving only “the issue of
i.
whether Defendant Fulton County’s 1994 Minority and Female
Business Enterprise (“MFBE”) Program is in violation of the
Equal Protection Clause”). Moreover, at the outset of the trial,
the court noted that “the implementation of the Fulton County
MFBE Program is not before the Court,” although “there may
be aspects of the implementation of the program which are so
intertwined with the constitutionality of the program itself that
I don’t want to . . . issue any legal rulings that are going to
affect the introduction of evidence.” May 11, 1999 Trial Tr. 3-
4 (emphasis added). The district court nevertheless entered an
injunction that not only barred enforcement of the 1994 MFBE
Program, but also prohibited Fulton County from ever
considering race, ethnicity, or gender in awarding contracts.
Because the 1994 MFBE Program was still in effect at the
time of the district court’s ruling, the County did not argue that
a properly tailored injunction would be moot, and the district
court did not address mootness in its opinion. The Program
automatically expired on September 16, 1999, and has not been
replaced. |
The County appealed the district court’s final judgment to
the United States Court of Appeals for the Eleventh Circuit,
arguing that: (1) the injunction should be vacated because it
exceeded the scope of the constitutional violation it purported
to remedy, and an appropriately narrowed injunction would be
moot; (2) the district court erred in finding that the County
violated the Equal Protection Clause; and (3) Green Thumb’s
chalienge to the 1994 MFBE Program should be rejected for
lack of standing.' On July 19, 2000, an Eleventh Circuit panel
‘Green Thumb cross-appealed, challenging (1) an interlocutory order
denying plaintiffs’ motion to contact prospective class members, and (2) the
dismissal of plaintiff Kelly Goff on standing grounds. The cross-appeal was
me
issued a decision affirming on the basis of the district court’s
opinion. See Pet. App. la. Thus, the panel upheld the district
court’s injunction permanently prohibiting Fulton County from
using racial, ethnic, or gender participation goals in evaluating
or awarding County contracts. In a footnote, the panel declined
to address the County’s challenge to the scope of the injunction
on the ground that “(t]he argument was not presented to the
district court; rather, it was raised for the first time on appeal.”
Pet. App. la. Fulton County’s petition for rehearing and
suggestion for rehearing en banc was denied on October 12,
2000. See Pet. App. 20Sa.
REASONS FOR GRANTING THE WRIT
This case presents two important questions. First, may a
federal court issue an injunction that forbids a local government
from ever considering race, ethnicity, or gender in future
government contracting, where such a broad injunction exceeds
the scope of the constitutional violation it purports to remedy,
extends beyond the court’s equity jurisdiction, and severely
limits the discretion of a sovereign body to address and
ameliorate past discrimination. Second, whether an injunction
prohibiting a local government from enforcing a government
contracting program creating a preference for minority- and
women-owned businesses is moot and must be vacated, where
the program automatically expired pending appeal, and no new
race- or gender-conscious program has replaced it.
Each of these questions warrants review. See S. Ct. Rule
10. The Eleventh Circuit’s decision upholding the injunction
issued by the district court directly conflicts with decisions of
other circuit courts. The Sixth Circuit vacated portions of an
dismissed in its entirety.
9-
injunction virtually identical to the one at issue here, on the
ground that once an existing affirmative action program has
been declared unconstitutional and its enforcement enjoined, a
broader injunction against future affirmative action programs
improperly exceeds the scope of the violation it purports to
remedy. See Associated Gen. Contractors of Am. v. City of
Columbus, 172 F.3d 411, 418 (6th Cir. 1999). The Second
Circuit has similarly recognized that the constitutionality of an
affirmative action plan depends on the statistical data
supporting that plan, so that local governments are free te enact
new plans supported by new data even if the factual
justification for a previous plan was insufficient. See
Associated Gen. Contractors of Conn., Inc. v. City of New
Haven, 41 F.3d 62, 66 (2d Cir. 1994); Harrison & Burrowes
Bridge Constructors, Inc. v. Cuomo, 981 F.2d 50, 60 (2d Cir.
1992); see also City of Richmond v. J.A. Croson Co., 488 U.S.
469, 509-10 (1989). This Court’s review is necessary to
reconcile these decisions with the Eleventh Circuit’s order
upholding a grossly overbroad injunction against Fulton
County.
More fundamentally, this Court should review the
important issue presented here because as a result of the
decisions below, Fulton County — perhaps alone among
sovereign jurisdictions in the United States — is under an
injunction that permanently forbids it, upon pain of contempt,
from considering race, ethnicity, or gender in future County
contracting. Such an injunction impreperiy intrudes upon the
County’s authority to adopt appropriately narrow remedial
legislation if a record is assembled that addresses the
evidentiary deficiencies identified by the district court. See,
e.g., City of Columbus, 172 F.3d at 415. Indeed, the injunction
effectively gives the district court an unprecedented form of
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preclearance authority over any such legislation the County
might seek to adopt in the future.
The Eleventh Circuit plainly erred when it declined to
address this issue — which went to the jurisdiction of the
district court — on the ground that it was raised for the first
time on appeal. The Court of Appeals was obligated to satisfy
itself of its own jurisdiction and that of the district court, even
if the issue was not previously raised. Moreover, other circuits
have correctly held that a federal court must refuse to enter a
defective injunction even if no party objects. The Eleventh
Circuit also ignored precedents holding that it is proper for
appellate courts to consider an argument not presented below
where the argument presents a significant question of great
public concern, the proper resolution of the issue is beyond
reasonable doubt, or a party had no opportunity to raise the
issue below. Fulton County’s overbreadth argument easily met
these conditions. Accordingly, the Eleventh Circuit improperly
failed to address that argument, and this Court’s review is
necessary to address that failure.
Finally, as to the second question presented, allowing even
a properly tailored injunction — limited to enjoining the 1994
MFBE Program — would contravene decisions of this Court
and other circuits. This Court has held that a challenge to the
validity of a statute that has expired becomes moot when the
statute expires by its own terms. Burke v. Barnes, 479 U.S. 361
(1987). Because the 1994 MFBE Program expired pending
appeal, any issues arising from its application are therefore
moot. A decision of the Second Circuit also requires a
conclusion that even a properly tailored injunction would be
moot because the challenged contracting program has expired.
City of New Haven, 41 F.3d 62. Moreover, in light of Burke’s
teaching that a challenge to the validity of a statute that has
DR cig FRY, > oO
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expired should be treated no differently from a challenge to a
statute that has been repealed, see 479 U.S. at 363, any decision
upholding an injunction against the expired 1994 MFBE
Program would conflict with the decisions of this Court and six
other circuits that have held that a challenge to a statute is moot
once the statute is repealed or amended. See United States
Dep't of the Treasury, Bureau of Alcohol, Tobacco & Firearms
v. Galioto, 477 U.S. 556, 559-60 (1986); Kentucky Right of
Life, Inc. v. Terry, 108 F.3d 637, 644-45 (6th Cir. 1997);
National Black Police Ass'n v. District of Columbia, 108 F.3d
346, 347-49 (D.C. Cir. 1997); Jones v. Temmer, 57 F.3d 921,
922 (10th Cir. 1995); Native Village of Noatak v. Blatchford,
38 F.3d 1505, 1509-11 (9th Cir. 1994); Harrison & Burrowes
Bridge Constructors, Inc., 981 F.2d at 58-61; Maryland
Highways Contractors Ass'n, Inc. v. Maryland, 933 F.2d 1246,
1247-48 (4th Cir. 1991).
I. THE ELEVENTH CIRCUIT’S DECISION
UPHOLDING AN INJUNCTION THAT PROHIBITS
FULTON COUNTY FROM EVER CONSIDERING
RACE, ETHNICITY, OR GENDER IN FUTURE
COUNTY CONTRACTING CONFLICTS WITH
THE DECISIONS OF OTHER CIRCUITS, AND
IMPROPERLY LIMITS THE DISCRETION OF A
LOCAL GOVERNMENT.
The decision of the Eleventh Circuit upholding an
injunction that permanently forbids a local government from
considering race, ethnicity, or gender in future government
contracting squarely conflicts with the decisions of several
other circuits. Unlike the Eleventh Circuit, those circuits have
recognized that (1) once an existing affirmative action program
has been declared unconstitutional and its enforcement
enjoined, a broader injunction against future affirmative action
14.
programs improperly exceeds the scope of the constitutional
violation it purports to remedy; and (2) the constitutionality of
an affirmative action plan depends on the factual justification
offered for that plan, so that local governments are free to enact
new plans supported by new data even when the factual
justification for a previous plan was insufficient. This Court’s
prompt review is necessary to resolve this conflict. The issue
presented is an important one — by effectively requiring Fulton
County to preclear any affirmative action plan with a federal
court, the Eleventh Circuit’s decision severely threatens the
discretion invested in local governments, which are charged
with the duty to address discrimination. Finally, the Eleventh
Circuit’s failure even to consider Fulton County’s challenge to
the scope of the injunction was plainly erroneous and only
increases the importance of review in this case.
1. First, the decision below conflicts with a recent
decision of the Sixth Circuit, which held that an injunction
virtually identical to the one at issue here exceeded the scope
of the constitutional violation it purported to remedy, and
thereby inappropriately limited city officials’ discretion. See
City of Columbus, 172 F.3d at 418. As a general matter, of
course, “injunctive relief must be tailored to fit the nature and
extent of the established violation.” Gibson v. Firestone, 741
F.2d 1268, 1273 (11th Cir. 1984); see also Waldman Publisher
Corp. v. Landoll, Inc., 43 F.3d 775, 785 (2d Cir. 1994); Hayes
v. North State Law Enforcement Officers Ass'n, 10 F.3d 207,
217 (4th Cir. 1993). Courts have not hesitated to set aside
injunctions that “impose unnecessary burdens on lawful
activity.” Waldman, 43 F.3d at 785. This is particularly true of
injunctive relief against state and local officials, whose
discretion must not be unnecessarily constrained by federal
courts. See Toussaint v. McCarthy, 801 F.2d 1080, 1086-87
(9th Cir. 1986).
Or a ee ar eS Dee ae
we ee
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In City of Columbus, the Sixth Circuit applied these
principles and vacated an injunction to the extent that it
prohibited not only an existing minority- and female-owned
without court approval. See 172 F.3d at 415. The Sixth Circuit
held that a district court lacks jurisdiction to enter such a broad
injunction. See id. at 415-18. Although the Sixth Circuit
acknowledged that Article [I] equity jurisdiction might
authorize a federal court, once it has found a constitutional
violation by a governmental entity, to administer expansive
remedial orders, see id. at 417, it emphasized that “[t}his use of
equitable power . . . has been confined to those circumstances
in which the . . . mere cessation of the particular activity or
method of operation will not serve to remedy the
[constitutional] violation.” Jd. Once the existing set-aside
program had been declared unconstitutional and its
enforcement enjoined, however, the city no longer had any set-
aside program. See id. at 419. In the absence of any condition
violating the Constitution, the trial court’s order could not be
characterized as a remedial order within its equity jurisdiction.
Id.; see also id. at 418 (“‘federal-court decrees exceed
appropriate limits if they are aimed at eliminating a condition
that does not violate the Constitution or does not flow from
such a violation”) (quoting Milliken v. Bradley, 433 U.S. 267,
282 (1977)).
The Sixth Circuit went on to observe that the “plaintiffs’
real grievance is not simply with the particular set-aside
ordinance; their real contention is that the City cannot,
consistent with the requirements of Croson, adopt any set-aside
program.” Jd. at 415 (emphasis added) (citing Croson, 488
U.S. 469). But whatever the “efficiency” of such an approach,
the court held that it is “wrong.” /d. The court emphasized that
federai judges may not “‘assume to control the discretion with
-14-
which municipal assemblies are invested when deliberating
upon the adoption or rejection of ordinances proposed for their
adoption. The passage of ordinances by such bodies are
legislative acts, which a court of equity will not enjoin.”” Jd.
(quoting New Orleans Water Works Co. v. City of New
Orleans, 164 U.S. 471, 481 (1896)). The injunction at issue
improperly limited municipal officials’ discretion by
prohibiting the local government from adopting a new program,
and was therefore vacated.
By barring all future consideration of race, ethnicity, or
gender in Fulton County’s contracting program, and thus
permanently forbidding the adoption of any new programs
authorizing such preferences (without even providing for the
possibility of court approval of a new program, as in City of
Columbus), the injunction in this case effects an even more
severe result than the injunction vacated by the Sixth Circuit.
The only issue considered at trial and resolved in the district
court’s decision in this case was “whether Defendant Fulton
County’s 1994 Minority and Female Business Enterprise
(“MFBE’) Program is in violation of the Equal Protection
Clause.” Pet. App. 2a. Thus, enjoining the 1994 MFBE
Program would have eliminated the only constitutional
violation found here. But the injunction issued by the district
court and upheld by the Eleventh Circuit goes much further,
permanently prohibiting all future County programs that
attempt to ameliorate past discrimination and effectively
requiring Fulton County to preclear any future MFBE program
with a federal court. Under the Sixth Circuit’s decision in City
of Columbus, such a broad prohibition is not a remedial order
within the court’s Article III equity jurisdiction. See 172 F.3d
at 417. This Court’s review of the Eleventh Circuit’s decision
is necessary to reconcile these directly conflicting rulings.
-15-
2. The Eleventh Circuit’s decision also conflicts with
decisions of the Second Circuit recognizing that the
constitutionality of an affirmative action plan depends.on the
statistical data supporting that plan, leaving local governments
free to enact new plans supported by new data even if the
factual justification for a previous plan was insufficient. In
Associated General Contractors of Connecticut, Inc. v. City of
New Haven, the Second Circuit stated that “[iJn the context of
race-based set-asides, Croson makes clear that the
constitutionality of any municipal plan is inextricably linked to
its factual justification.” 41 F.3d at 66; see Croson, 488 U.S.
at 509-10. The Second Circuit went on to hold that the
expiration of the challenged set-aside program mooted the case,
since the City of New Haven had neither repealed its plan to
avoid an adverse judgment nor reenacted the same or a similar
plan. 41 F.3d at 66.2 Moreover, any new plan enacted by the
City of New Haven presumably would “be supported by
updated statistical data and therefore be subject to attack and
justification on different and additional grounds.” /d.; see also
id. (“the Supreme Court’s decision in Croson makes it
unreasonable to expect that [the expired program] will be
reenacted without an updated factual predicate”). Similarly, in
Harrison & Burrowes Bridge Constructors, Inc., 981 F.2d at
60, the Second Circuit emphasized that “whether [the state’s
new minority business] program . . . will survive scrutiny under
Croson cannot be decided until the bases for adopting
particular set-asides are known and the state proceeds to
enforce them.”
By upholding an injunction that prohibited Fulton County
not only from enforcing the existing 1994 MFBE Program, but
also from adopting a new plan based on new data, the Eleventh
?As discussed below, the same is true in this case. See infra Part II.
-16-
Circuit flouted these principles. The relevant inquiry under
Croson was whether Fulton County could demonstrate a
“strong basis in evidence” to support the 1994 MFBE Program.
Pet. App. 17a. The district court concluded that the County had
failed to carry this burden. See, e.g., Pet. App. 51a (evidence
“fails to provide a strong basis in evidence for the 1994 MFBE
Program”); Pet. App. 54a-55a (same). Under the Second
Circuit’s decisions — indeed, under any reasonable
analysis — that conclusion could not prevent Fulton County
from undertaking additional studies and asserting in the future,
based on new factual evidence, that a “strong basis in evidence
exists” for a revised program. But the trial court’s injunction
precludes Fulton County from doing so, even though the
County is obligated to address discrimination it determines
exists. This Court’s review is plainly warranted to reconcile
these conflicting decisions.
3. Tne issue presented here is an important one with
far-reaching implications. The injunction upheld by the
Eleventh Circuit severely threatens the legislative discretion
invested in local governments — which are charged with the
duty to address discrimination — to craft remedial schemes and
adopt contracting programs that do not perpetuate
discriminatory patterns. See generally Croson, 488 U.S. at 509
(“Nothing we say today precludes a state or local entity from
taking action to rectify the effects of identified discrimination
within its jurisdiction.”). That injunction effectively requires
Fulton County to preclear any affirmative action plan with a
federal court, in violation of the principle that federal courts
may not interfere with, or restrain in advance, legislative
activity by municipal bodies. See City of Columbus, 172 F.3d
at 415-18; see also Association of Cmty. Orgs. for Reform Now
(ACORN) v. Edgar, 56 F.3d 791, 798 (7th Cir. 1995) (vacating
portion of injunction that “intru{ded] upon the operations of
19.
state government” and thereby “failed to exhibit an adequate
sensitivity to the principle of federalism”); of. Younger v.
Harris, 401 U.S. 37, 53 (1971) (“it can seldom be appropriate
for these courts to exercise any such power of prior approval or
veto over the legislative process”). And it does so despite
Croson’s lesson “that the constitutionality of any municipal
plan is inextricably linked to its factual justification.” City of
New Haven, 41 F.3d at 66; see Croson, 488 U.S. at 509-10.
This Court’s review of this issue is necessary to protect
sovereign bodies from such unjustified and open-ended
interference from federal courts, and to provide guidance to
local governments seeking to remedy discrimination without
running afoul of the law.
a Finally, the Eleventh Circuit erred when it declined
even to address these issues on the ground that Fulton County’s
overbreadth argument had been raised for the first time on
appeal. See Pet. App. la. That argument goes to the
jurisdiction of the district court. See City of Columbus, 172
F.3d at 415-18 (holding that a district court lacks jurisdiction
to enter an injunction permanently barring all use of racial or
gender goals in connection with awarding contracts). Because
an appellate court must satisfy itself not only of its own
jurisdiction but that of the lower courts, even if the issue has
never been raised previously, see, e.g., In re Davis, 899 F.2d
1136, 1138 n.5 (ilth Cir. 1990), the Eleventh Circuit was
obligated to address Fulton County’s pation challenge to
the scope of the injunction.
Indeed, an injunction as brocd as that issued by the district
court has such sweeping consequences that, as the Seventh
Circuit has held, “a district judge has not only the power but
also the duty to refuse to enter a defective injunction even if
-18-
neither party objects.” Chicago & Nw. Transp. Co. v. Railway
Labor Executives’ Ass’n, 908 F.2d 144, 149 (7th Cir. 1990).
Such an injunction “imposes burdens on the court that issues it
and potentially affects the rights of third parties; on both
grounds the court has a duty independent of the desires of the
parties to assure that the injunction is proper.” J/d.; see also
ACORN, 56 F.3d at 797. Accordingly, review of the scope of
a far-reaching injunction is necessary and appropriate, even
where no challenge to its breadth was raised in the district
court. See Allard Enters., Inc. v. Advanced Programming Res.,
Inc., 146 F.3d 350, 360 (6th Cir. 1998) (reviewing challenge to
nationwide geographic scope of injunction although issue was
not raised below); see also ACORN, 56 F.3d at 796-98
(vacating portion of overbroad injunction despite parties’
failure to raise issue).
The impact of the injunction in this case is especially
severe. The injunction precludes a municipal government from
ever taking any action to eradicate the effects of past
discrimination, and places control over a government’s
legislative and policymaking functions in the hands of a federal
court — a result that the Sixth Circuit has deplored. City of
Columbus, 172 F.3d at 415; see also ACORN, 56 F.3d at 798
(vacating portion of injunction that “intru[ded] upon the
operations of state government” and thereby “failed to exhibit
an adequate sensitivity to the principle of federalism”).
Moreover, it concerns a matter of substantial public concern:
the amelioration of past discrimination. Thus, the Eleventh
Circuit’s failure to address this issue was plainly erroneous.
That failure also conflicts with controlling precedent of
this Court, which has held that a federal appellate court has full
authority to consider issues not presented to the district court
where the proper resolution is beyond any doubt or where
-19-
“‘injustice might otherwise result.”” Singleton v. Wulff, 428
U.S. 106, 121 (1976) (quoting Hormel v. Helvering, 312 U.S.
552, 557 (1941)).? For the reasons discussed above, see supra
at 16-17, whether or not an injunction may prevent a local
government from adopting any race- or gender-conscious
contracting measures without first clearing those measures with
a federal court is plainly a significant issue of great public
concern. And the resolution of that issue is beyond all doubt:
The injunction in this case is overbroad and must be struck
down. See supra at 12-16.
Finally, the County had no meaningful opportunity or
reason to challenge the scope of the injunction in the district
court. See Fed. R. Civ. P. 46 (“{I]jf a party has no opportunity
to object to a ruling or order at the time it is made, the absence
of an objection does not thereafter prejudice the party.””). The
parties presumed throughout the district court proceedings that
any injunction would be limited to the 1994 MFBE Program,
and the court gave no indication before entering final judgment
that it would deviate from that assumption — to the contrary,
the court confirmed the parties’ presumption. See supra at 6-7.
Thus, Fulton County had no opportunity or reason to argue that
an injunction prohibiting it from ever using ethnic or gender
*Similarly, the Eleventh Circuit has held that an appellate court may
consider an issue presented for the first time when “the appellant had no
opportunity to raise it below” or when “the issue presents significant
questions of great public concern.” FDIC v. Verex Assurance, Inc., 3 F.3d
391, 395 (11th Cir. 1993); see also Narey v. Dean, 32 F.3d 1521, 1526-27
(11th Cir. 1994) (exercising discretion to consider issue on appeal that was
not raised below). In the instant case, the Eleventh Circuit inexplicably
ignored these precedents.
-20-
participation goals in awarding contracts would be
impermissibly overbroad.‘
Accordingly, the Eleventh Circuit’s refusal to address the
overbreadth issue denied the County any consideration by any
court of its argument that an injunction purporting to bar more
than the 1994 MFBE Program was overbroad. For this
additional reason, this Court should review the judgment below
and address the merits of the County’s overbreadth argument.
II. THE DECISIONS OF THIS COURT AND OTHER
CIRCUITS MAKE CLEAR THAT BECAUSE THE
CHALLENGED PROGRAM HAS EXPIRED AND |
NO NEW RACE- OR GENDER-CONSCIOUS
PROGRAM HAS REPLACED IT, EVEN A
PROPERLY TAILORED INJUNCTION WOULD BE
MOOT.
The decisions of this Court and other circuits make clear
that even a properly tailored injunction — limited to the 1994
MFBE Program — would be moot. The 1994 MFBE Program
expired automatically in September 1999. See supra at 5.
Although the Board was authorized to extend it for five years
if a new disparity study showed a continuing need for it, no
such study was done, and the Board did not renew the Program.
Id. No race- or gender-conscious contracting plan has replaced
the Program. Therefore, Green Thumb’s claims for injunctive
and declaratory relief are plainly moot, and the Eleventh Circuit
should have vacated the injunction. See Arizonans for Official
English v. Arizona, 520 U.S. 43, 67 (1997) (“{A]Jn actual
‘Nor was the County required to present such an argument to the
district court in a post-judgment motion; the injunction was part of a final
judgment that could not have been more clear.
Ste
controversy must be extant at all stages of review.”) (quotation
and citation omitted). The Eleventh Circuit’s failure to do so
merits this Court’s review.
1. Allowing even a properly tailored. injunction to
stand in this case would contravene this Court’s decision in
Burke v. Barnes, 479 U.S. 361. In Burke, thirty-three
individual members of the House of Representatives filed suit
challenging the President’s action in seeking to pocket-veto a
bill that had been passed by both the House and the Senate. Jd.
at 362. After the court of appeals entered judgment that the bill
had become a law notwithstanding the President’s attempt to
pocket-veto it, but before this Court decided its review of the
case, the bill expired by its own terms. /d. at 363. This Court
explained that, under Diffenderfer v. Central Baptist Church of
Miami, Florida, Inc., 404 U.S. 412, 414-15 (1972) (per
curiam), declaratory and injunctive relief is “inappropriate”
where a challenged statute has been repealed. The Court then
held: “We see no reason to treat a challenge to the validity of
a statute that has expired any differently from a challenge to the
validity of a statute that has been repealed, and accordingly
hold that any issues concerning whether H.R. 4042 became a
law were mooted when that bill expired by its own terms.”
Burke, 479 U.S. at 363. Similarly, because the 1994 MFBE
Program expired automatically, any issues arising from its
application — including the validity of an injunction against
enforcement of that Program — are now moot.
This Court has not recognized any exception to mootness
that would alter this result. This is not a case in which the
offending legislation has been repealed but may be reenacted in
a form similar to its present one. Compare Northeastern Fla.
Chapter of the Associated Gen. Contractors of Am. v. City of
Jacksonville, 508 U.S. 656, 662 (1993); City of Mesquite v.
«22.
Aladdin's Castle, Inc., 455 U.S. 283, 289 & n.11 (1982).
Unlike this case, Florida Associated General Contractors
involved a governmental body that repealed and reenacted a
challenged minority set-aside ordinance while an appeal was
pending in this Court. Similarly, in Aladdin's Castle, the
proponent of a repealed statute explicitly stated that it intended
to reenact the legislation. See 455 U.S. at 289 n.11. Moreover,
in that case, the City of Mesquite had passed the ordinance
challenged in the Supreme Court only after a similar law was
declared unconstitutional by a Texas state court. /d. at 287-89.
The 1994 MFBE Program, in contrast, expired by its own terms
and has not been replaced with any form of race- or gender-
conscious contracting prefererice, and the County has no history
of reenacting, in slightly modified form, statutes that have been
found unconstitutional.
Nor is this a case involving “voluntary cessation” of
challenged conduct, unaccompanied by a change in legislation.
Compare Adarand Constructors, Inc. v. Slater, 528 U.S. 216
(2000); Friends of the Earth, Inc. v. Laidlaw Envtl. Servs.
(TOC), Inc., 528 U.S. 167 (2000);- United States v.
Concentrated Phosphate Export Ass'n, Inc., 393 U.S. 199
(1968); United States v. W.T. Grant Co., 345 U.S. 629 (1953).
In such cases, because there is nothing preventing the defendant
from resuming its offending acts, this Court has held that
“{vjoluntary cessation of challenged conduct moots a
case . . . only if it is absolutely clear that the allegedly wrongful
behavior could not reasonably be expected to recur.” Adarand
Constructors, 528 U.S. at 222 (citing Concentrated Phosphate
Export Ass'n, 393 U.S. at 203) (internal quotation marks
omitted). But where — as here — the case involves a statute
that expires or is repealed or amended, no such showing is
required. Rather, such a case is moot unless the challenged
legislation is likely to be reenacted in substantially similar
-23-
form. Compare Burke, 479 U.S. at 363; Diffenderfer,404 U.S.
at 414-15, with Fia. Associated Gen. Contractors, 508 U.S. at
662; Aladdin's Castle, 455 U.S. at 287-89.*
The district court did not suggest a contrary result. Its
opinion below contains only one reference to the expiration of
the Program:
No evidence was offered of any intention on the part of
Fulton County to allow the 1994 MFBE Program to expire.
The legality of the Program was vigorously defended at
trial. The Court infers from this that the County believes
there is a continuing need for the Program and that it will
be continued unless enjoined by this Court.
Pet. App. 6la. This staiement is not a finding regarding
mootness, however; the 1994 MFBE Program had not yet
expired at the time of the decision, and no mootness issue was
before the court. Rather, the court’s statement arose in an
entirely different context. The court made the statement in the
course of deciding whether the Program was narrowly tailored,
*Adarand Constructors does not undermine this conclusion. Although
that case also involved a challenge to a set-aside program favoring
“disadvantaged businesses,” the “voluntary cessation” was a state agency’s
grant of disadvantaged business status to the plaintiff. Adarand
Constructors, 528 U.S. at 221-22. The Tenth Circuit assumed that that act
mooted the case against the United States Department of Transportation
(“DOT”) because DOT would accept the state agency’s certification for
purposes of federal projects. /d. This Court disagreed, holding that it was
not clear whether DOT would classify plaintiff as a disadvantaged business
for purposes of federal contracting. /d. at 222-23. Therefore, this Court
held, the suit against DOT was not moot. /d. No such “voluntary cessation”
even arguably exists in this case, where, as in Burke, the offending conduct
ceased because of the expiration of a challenged statute.
-24-
which depends in significant part on an analysis of the
preference’s duration. /d.°
Accordingly, because the 1994 MFBE Program has
expired, this Court’s decision in Burke directs that even a
properly tailored injunction — limited to enjoining the
Program — would be moot. Review is therefore warranted to
ensure consistency with this Court’s precedents.
2. A decision of the Second Circuit, Associated
General Contractors of Connecticut, Inc. v. City of New Haven,
41 F.3d 62, also requires a conclusion that even a properly
tailored injunction would be moot. In that case, the City of
New Haven enacted a set-aside for minority- and female-owned
business enterprises in 1983. Jd. at 64. In light of this Court’s
decision in Croson, however, the City created a special
committee to determine whether sufficient evidentiary support
existed for the 1983 program. Jd. At about the same time,
Associated General Contractors of Connecticut, Inc. challenged
the constitutionality of that program. /d. at 65. When the City
*Similarly, the district court’s comment in its recent opinion on Green
Thumb’s motion for attorneys’ fees and costs that there was evidence that
the County would have reenacted the Program absent an injunction has
nothing to do with mootness. See Pet. App. 123a. The court made that
statement in the course of determining whether Green Thumb was a
“prevailing party” under 42 U.S.C. § 1988(b) — limited by Eleventh Circuit
case law to those who “conceivably could benefit” from the court’s
judgment — so as to be entitled to attorneys’ fees. Pet. App. 119a-120a
(emphasis added). Applying that standard, the district court found that
Green Thumb “conceivably could benefit” from a favorable judgment
because “evidence exists” that the injunction altered Fulton County’s
actions. Pet. App. 123a. The court did not cite any record evidence in
support of this statement, however. Moreover, the mootness of the
injunction was not at issue, and the court did not purport to make any
findings in this regard.
-25-
later adopted a similar set-aside ordinance with a three-year _
sunset provision, the contractors filed an amended complaint
seeking declaratory and injunctive relief with respect to this
latest legislation. Jd. The district court granted summary
judgment in favor of the plaintiffs in May 1992, but neglected
to enter final judgment until August 1993, over a month after
the subsequently enacted program would have expired by its
own terms had it not been declared unconstitutional. Jd. The
Second Circuit held that the case was moot.
Like the program at issue in City of New Haven, the 1994
MFBE Program expired by its own terms pending appeal. As
was true of the City of New Haven, Fulton County “did not
repeal [the Program] to avoid an adverse judgment and it has
not reenacted [the Program] or a similar provision.” Jd. at 66.
And even if the County were to enact a new race- and gender-
conscious contracting plan, it would have to be supported by
updated statistical data, and would be subject to attack and
justification on different grounds. /d.; see supra at 15. As the
Second Circuit recognized, “[t]his probability counsels in favor
of a finding of mootness.” 41 F.3d at 66. Accordingly,
because even an appropriate injunction would contravene the
Second Circuit’s ruling, this Court’s review is necessary.
2 Burke admonished that a challenge to the validity
of a statute that has expired should be treated no differently
from a challenge to a statute that has been repealed. Burke, 479
U.S. at 363. Thus, a decision upholding a properly tailored
injunction in this case would conflict not only with Burke and
City of New Haven, but also with the decisions of this Court
and five other circuits that have held that a challenge to a
statute is moot once the statute is repealed or amended. See
Galioto, 477 U.S. at 559-60 (holding challenge to firearm
possession statute moot where legislation was amended while
-26-
case was under consideration in Supreme Court); Kentucky
Right of Life, Inc., 108 F.3d at 644-45 (finding challenge to
campaign contribution law moot where law was amended
pending appeal); National Black Police Ass'n, 108 F.3d at
348-49 (holding that a challenge to a District of Columbia law
limiting campaign contributions became moot when the statute
was amended to increase such limits); Jones, 57 F.3d at 922
(finding challenge to statute moot after it was amended); Native
Village of Noatak, 38 F.3d at 1509-11 (finding challenge to
statute moot after statute was repealed and noting that “[a]
statutory change . . . is usually enough to render a case moot,
even if the legislature possessed the power to reenact the statute
after the lawsuit is dismissed”); Harrison & Burrowes Bridge
Constructors, Inc., 981 F.2d at 58-61 (holding challenge to
statute moot in light of amendment); Maryland Highways
Contractors Ass'n, Inc., 933 F.2d at 1247-48 (finding that
repeal of minority set-aside program and subsequent
reenactment to comply with Croson mooted original
challenge).
Because allowing even a properly tailored injunction to
stand in this case would directly conflict with these rulings, this
Court’s review is clearly warranted.
The petition for a writ of certiorari should be granted.
Respectfully submitted,
DONALD B. VERRILLI, JR.
Counsel of Record
DEBORAH FLOYD LESLIE H. LEpow
THE FLOYD LAW OFFICES ELIZABETH A. CAVANAGH
267 Highway 74 North JENNER & BLOCK, LLC
Suite 1 601 13th Street, N.W.
P.O. Box 3319 Washington, D.C. 20005
Peachtree City, GA 30269 (202) 639-6000
(770) 486-6311
JUNE GREEN
OVERTIS HICKS BRANTLEY
OFFICE OF FULTON COUNTY ATTORNEY
141 Pryor Street, S.W., Suite 4038
Atlanta, GA 30303
(404) 730-7750
Dated: January 10, 2001
APPENDICES
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Appendix A
United States Court of Appeals,
Eleventh Circuit.
Daniel WEBSTER and Peggy Webster, et al., Plaintiffs-
| Cross-Appellants,
Webster Green Thumb Company, and others similarly
situated, Plaintiffs-
Appellees, Cross-Appellants,
v.
FULTON COUNTY, GEORGIA, Defendant-Appellant,
Cross-Appellee,
Mike Kenn; Michael Hightower, et al., Defendants-Cross-
: Appellees.
No. 99-12216.
July 19, 2000.
Before ANDERSON, Chief Judge, and DUBINA and HILL,
Circuit Judges.
PER CURIAM:
The judgment of the district court is affirmed on the basis of
the opinion of the district court published at 51 F. Supp. 2d
1354 (N.D. Ga. 1999).
AFFIRMED.”
' We decline to address appellants’ challenge to the scope of the
injunction. The argument was not presented to the district court; rather, it
was raised for the first time on appeal.
2a
Appendix B
United States District Court,
N.D. Georgia,
Atlanta Division.
Daniel WEBSTER, et al., Plaintiffs,
v.
FULTON COUNTY, GEORGIA, et al., Defendants.
No. CIV. A. 196-CV-2399-TWT.
June 11, 1999.
ORDER
THRASH, District Judge.
This is a race and sex discrimination case brought pursuant
to 42 U.S.C. §§ 1981 and 1983, and the Equal Protection
Clause of the Fourteenth Amendment. Beginning on May 11,
1999, the Court conducted a bench trial spanning over six
days on the issue of whether Defendant Fulton County’s 1994
Minority and Female Business Enterprise (“MFBE”) Program
is in violation of the Equal Protection Clause. The trial was
then adjourned for two days for the Court to review the
documentary evidence. The Court heard closing arguments
on May 24, 1999. Based on the evidence admitted at trial and
the Court’s findings of facts and conclusions of law as set
forth below, the Court concludes that the 1994 MFBE
Program violates the Equal Protection Clause and is therefore
unconstitutional.
3a
I. BACKGROUND
The remaining named Plaintiffs in this case are Daniel
Webster (white male), Peggy Webster (white female), and
The Webster Green Thumb Company (“Green Thumb”).
Plaintiff Daniel Webster is the current owner of Green
Thumb, a landscaping and tree removal service.. The
remaining Defendants are Fulton County and Michael
Cooper, former Director of the Department of Contract
Compliance and Equal Employment Opportunity
(“Department”) for Fulton County. As part of their
_ discrimination action, the Plaintiffs allege that Fulton County
has operated since September 16, 1994, an unconstitutional
affirmative action program, the 1994 MFBE Program.
Plaintiffs assert that the 1994 MFBE Program unreasonably
and unlawfully burdens and discriminates against businesses
based solely on the race and/or sex of the businesses’ owners.
The Plaintiffs’ principal claim is that Fulton County operates
an illegal MFBE program that favors minorities and females
in the award of contracts for goods and services. The
Plaintiffs request a declaratory ruling from this Court that
Fulton County’s 1994 MFBE Program is unconstitutional.
(Doc. 35). They further seek an injunction to forbid further
implementation of the 1994 MFBE Program, together with
affirmative injunctive relief.
Fulton County adopted its first minority business enterprise
program in 1979. The Fulton County Board of
Commissioners at that time resolved to begin an affirmative
action program with a goal that at least 20% of all County
public contracts be awarded to minority bidders. The Board
passed resolutions continuing the program in 1984 and 1987.
The 1987 resolution established the Office of Contract
Compliance and Equal Employment Opportunity. In 1988,
\
4a
Defendant Cooper was hired as its first Director. In
September, 1988, the Board adopted a Female Business
Enterprise Resolution and requested a study of discrimination
against female business owners. This resulted in the
February, 1989, Fulton County Female Business Enterprise
Study by Beth Shapiro & Associates and the Coalition of 100
Black Women (“Shapiro Study”). (Def. Exh. 214). In the
Shapiro Study, it was noted that “[n]Jo historical data are
available from any source within Fulton County regarding the
extent of usage of female businesses by the Purchasing
Department because the vendor list does not distinguish
female businesses.” (Jd. at iii). This data was not available
from any other source within Fulton County. (/d. at 24). The
Shapiro Study did provide extensive anecdotal evidence of
barriers to female businesses in doing business with the
County. This evidence included the testimony at a public
hearing in October, 1989. At this hearing it was revealed that
most of the participants never considered County contracts as
a viable source of business for a variety of reasons. These
reasons ranged from the types of services female-owned
businesses typically provide and the difficulty in
mainstreaming these professional services through the
purchasing and contracting process to the difficulties
associated with any small business such as bonding
requirements. (/d. at 31). The Shapiro Study recommended
the adoption of specific numerical contract goals. (/d. at 32).
It recommended a goal of 5% without any real explanation as
to the goal’s calculation. (/d. at 33).
In January, 1989, the Supreme Court struck down a
municipal minority set-aside program and adopted a strict
scrutiny standard of review for such programs in the future.
In response, the Board and the City of Atlanta commissioned
Dr. Andrew F. Brimmer and Dr. Ray Marshall to conduct a
5a
fact-finding study relating to the participation of minorities
and females in the City of Atlanta and Fulton County
marketplace. The purpose of the study was to allow the City
of Atlanta to reintroduce its minority and female business
development program. Drs. Brimmer and Marshall also
studied whether discrimination against minority-owned and
female-owned business enterprises (“MFBEs”) has reduced
their participation in the public and private sector contracting
and procurement activities in the Atlanta and Fulton County
marketplace. In 1990, Drs. Brimmer and Marshall produced
and submitted to the County and City of Atlanta the
Brimmer-Marshall Study which consisted of eight volumes
entitled “Public Policy and Promotion of Minority Economic
Development: City of Atlanta and Fulton County.” (Def.
Exh. 146). Dr. Thomas Boston, an economics professor,
prepared a report included in the Brimmer-Marshall Study
entitled “Discrimination and Economic Development:
Effects on Minority and F emale Business Enterprises.”
In April and June, 1992, Fulton County conducted open
public hearings in which numerous individuals provided
further anecdotal evidence regarding their experiences in the
Fulton County contracting and procurement activities and
practices in the Atlanta/Fulton County marketplace. On
October 21, 1992, the Board passed a resolution accepting the
findings of the Brimmer-Marshall Study. This resolution also
authorized a Female Business Enterprise Program and
adopted the 5% goal recommended by the Shapiro Study.
The Board then passed another Resolution that authorized the
implementation of a MFBE Program under the auspices of
Defendant Cooper as the Director of the Department. (Def.
Exh. 200). The 1992 MFBE Program utilized minority and
female participation goals of 25% for African-Americans, 1%
for Hispanics, 1% for Asian-Americans, 1% for Native
6a
Americans and 5% for female business enterprises. (Def.
Exh. 204, p. 19).
In 1994, the Board engaged Dr. Boston to conduct a post-
disparity study. Dr. Boston submitted this Post-Disparity
Study to the Board in June, 1994. (Def. Exh. 21). On June
15, 1994, the Board approved and adopted Dr. Boston’s Post-
Disparity Study on June 15, 1994. The Board then directed
that the Department implement amendments to the MFBE
Program based on the Post-Disparity Study. On July 20,
1994, the Board passed a resolution adopting certain
amendments to the MFBE Program based upon the Post-
Disparity Study. The Program became effective on
September 16, 1994.
The stated purpose of the 1994 MFBE Program was to
alleviate the effects of past and present discrimination against
minority and female business enterprises and to enhance
contracting opportunities for minority and female businesses.
(Pl. Exh. 1 at 1, 10). The 1994 MFBE Program provides that
it shall expire five years from its effective date. (Jd. at 55).
As stated in the 1994 MFBE Program, the Board “considered
and determined that there are no reasonable race and gender
neutral alternatives or policies available which alone will
accomplish the amelioration and remedy the effects of past
and present discrimination.” (Jd. at 9). The 1994 MFBE
Program sets forth the following annual business
participation goals for the following groups: (1) African-
American business ‘enterprises — 26%; (2) Hispanic business
enterprises-1%; (3) Asian-American business
enterprises-1%; (4) Native American business
enterprises—1%; and (5) Female business enterprises—6%.
(Id. at 16-17). :
Ta
The 1994 MFBE Program provides that these goals are in
effect for five years and are subject to an annual review and
adjustment by the Department and approval by the Fulton
County Manager and Board. (Jd. at 17). Pursuant to the
MFBE Program, the participation goals for minority and
female business enterprises are not considered to be fixed
quotas. (/d. at 19). The participation goals for each project
or contract are set by the Department’s Director based on the
following non-exclusive list of factors: (1) the number of
minority and female business enterprises known to be
available for the type and value of service to be obtained;
(2) a forecast of all eligible contracts to be awarded within the
coming fiscal year, specifying the type and value of goods
and services to be obtained; (3) the minority and female
business enterprise percentages of the total number of
business entities known to be available for the type and value
of goods and services to be obtained; (4) the statistical and
data sources by which each goal was calculated; and (5) the
statistical and data sources from the 1994 Post-Disparity
Study. (/d. at 18-19).
The 1994 MFBE Program further provides that the good
faith efforts of a potential contractor to meet minority and
female business participation goals shall be considered in
deciding contract awards. (/d. at 19). These good efforts
include, but are not limited to: (1) attendance at pre-bid
meetings which are scheduled to inform minority and female
business enterprises of prime and _ subcontracting
opportunities; (2) advertisements in general circulation
media, trade association publications, and minority and
female enterprise media to provide notice of opportunities;
(3) written notice to known minority and female business
enterprises soliciting their interest in opportunities;
(4) efforts made to select portions of work for minority and
8a
female businesses subcontracting in areas likely to be
successful; (5) efforts to negotiate with minority and female
businesses for specific subcontracting; (6) efforts made to
assist minority and female businesses to meet bonding,
insurance, or other governmental contracting requirements;
(7) a statement of reasons why a particular minority or female
business enterprise contacted is not qualified for a contract;
and (8) communication with the Department seeking
assistance for identifying minority and female business
enterprises. (/d. at 19-20, 34-35).
The MFBE Program applies “to the totality of Fulton County
procurement and contracting, including construction and the
acquisition of all commodities, equipment, goods and
services (including professional services), however titled and
irrespective of the modality or manner procured, and
irrespective as to whether purchased or leased.” The initial
categories established by the Board that were encompassed
under the MFBE program are listed as (1) construction;
(2) commodities; (3) services; and (4) professional services.
(Jd. at 22-23). Fulton County reserved the right to amend
these categories upon recommendation by the Fulton County
Manager and the Board. (/d. at 22).
The 1994 MFBE Program provides that the Department shall
evaluate and set appropriate minority or female business
participation goals for each specific project or contract. (/d.
at 25). The Department should consider (1) the nature of the
project or contract and the relevant specifications; (2) the
availability of minority and female business enterprises in
various industry classifications and professions which are
ready and able to provide goods and services on the particular
project or contract; (3) the level of participation of such firms
on past projects or contracts awarded by Fulton County; and
9a
(4) other relevant factors. (/d. at 26). The MFBE Program
proposes several methods to achieve the minority and female
business participation goals as follows:
(1) Minority and Female Business Enterprise Solicitations
on Procurement Purchase Orders. For all purchases, each
Fulton County buyer and any other Fulton County
employee having the authority to procure is required to
contact at least one minority or femele business enterprise
bidder.
(2) Joint Ventures Program. The Department shall
encourage, where economically feasible, establishment of
joint ventures and mentor protégé programs to insure prime :
contracting opportunities for minority or female business
enterprises on eligible projects. If the prime contractor is a
minority or female business ‘enterprise or a joint venture
between minority and female firms, subcontracting
participation with minority and female business enterprises
shall be required on all projects exceeding $10,000,000.
(3) Mentor/Protégé Ventures. The Department encourages
mentor/protégé prograns to assist individual minority and
female business enterprises in financing, bonding,
construction management and technical assistance.
(4) Minority and Female Business Enterprise
Subcontracting and Supplier Purchasing Goals on
Construction Projects and Other Contracts. The
Department shall ensure the maximum practicable
opportunity for minority and female business participation
by requiring that all bidders on a designated project or
contract comply with certain remedial measures.
10a
(5) Construction Subcontracting. The Department may
impose a requirement that bidders wanting to serve as
prime contractors on a bid for a Fulton County construction
project identified under Program Scope shall subcontract
with minority and female business enterprises for a stated
percentage of the dollar value of the project.
(6) Subcontractor Participation. Where a prime contractor
utilizes one or more subcontractors to satisfy its minority or
female business participation commitment, the prime
contractor may count only expenditures to minority and
female business enterprise contractors that perform a
commercially useful function in the contract work.
(7) Suppliers Participation. Where a prime contractor
utilizes one or more suppliers to satisfy its minority or
female business participation commitment, credit will be
given toward the applicable goal as follows: (1) 100% of
the contract amount for minority and female business
suppliers who manufacture the goods supplied; (2) 100%
of the contract amount for minority and female business
suppliers who are wholesalers warehousing the goods
supplied; and (3) where an extraordinarily large portion of
the contract price is for equipment or supplies, a lower
project goal may be set than otherwise would be required.
(8) Professional Services. Where Fulton County requires
the utilization of professional consultants, the Department
shall make knowledgeable and available minority or female
business enterprises aware of opportunities to serve as
primary consultants on bids.
(Id. at 27-33).
lia
The 1994 MFBE Program provides that the Department’s
good faith efforts are established, where the situation is
deemed to be an emergency, and where deemed appropriate
by the Director, the Fulton County Manager and the Board.
(/d. at 36). A bidder or offeror may seek a partial or total
waiver of the project goals. The application for a waiver shall
include documentary evidence of the bidder’s or offeror’s
good faith efforts to meet the project goals and why the
request should be granted. (/d. at 37).
The 1994 MFBE Program contains a section entitled “Race
and Gender Neutral Business Opportunity Assistance
Measures.” (/d. at 39). In this section, the 1994 MFBE
Program provides that the Department has developed a
comprehensive and multifaceted Outreach Program in an
effort to increase participation:among MFBEs in the Fulton
County bid process. (/d. at 40). The section also lists several
other race and gender neutral opportunity business measures
consisting of the following: (1) the Fulton County
Purchasing Department, with the assistance of the
Department, shall investigate the extent to which non-
competitive procurement modalities such as sole source,
multi-year, blanket and emergency purchases have been
utilized excessively or unnecessarily to the detriment of
competition; (2) the Department, Purchasing Department,
Project Management Department, and using departments
shall identify large Fulton County contracting opportunities to
determine whether they may be segmented into two or more
smaller bids to provide increased contracting opportunities
for small businesses; (3) the Purchasing Department shall
determine whether it is appropriate to segment multi-bids to
provide increased procurement opportunities for MFBEs who
may not have submitted bids on all items requested; (4) the
12a
Department and other appropriate departments will conduct
seminars and workshops on how to do business with Fulton
County; (5) the Department will work closely with local
governmental entities in providing bonding assistance;
(6) the Department shall assist small businesses in locating
available financial resources within the Atlanta area; (7) the
Department shall act as a clearinghouse for information on
financial assistance programs for small businesses; (8) the
Department will offer services to assist small businesses in
construction management and technical services; (9) when a
contract or service award has been made, the Department’s
Director and the purchasing agent shall furnish, upon request,
a letter to the contractor stating the information that may be
utilized by the MFBE to establish lines of credit with lending
institutions and manufacturers; (10) Fulton County may
make special provisions for reasonable progress payments
during the performance of a contractual obligation by small
MFBEs; and (11) Fulton County shall enforce all existing
policies and regulations relating to the prompt payment of its
bidders. (/d. at 40).
The 1994 MFBE Program provides that all firms
participating as either a minority or female business
enterprise must be certified before the award of a bid or
execution of a contract after review and evaluation as to
compliance. (/d. at 45). In determining whether a firm is
eligible to be certified, any minority or female firm engaged
in or attempting to engage in business in the Fulton County
Metropolitan Statistical Area before July 20, 1994, is
rebuttably presumed to have suffered past racial or gender
discrimination and is therefore an eligible minority or female
business enterprise. In order to be a certified minority or
female business enterprise, the firm or joint venture must
comply with certain eligibility standards regarding minority
13a
or female control and ownership of the firm or joint venture.
(Id. at 47-49). The Department reviews whether there is
sufficient minority or female operational or managerial
contro! so that the firm can be certified. (/d. at 49-51).
The 1994 MFBE Program provides an appeals process for
any contractor, bidder or offeror who has been denied
certification as an MBE or FBE or against whom a
determination has been made of non-compliance with the
program policy requirements. (/d. at 51-52). A notice of
appeal must be filed with the Department’s Director who will
then forward the notice to the Department’s Hearing Officer.
(/d.). The Department’s Hearing Officer, after conducting a
hearing, will then issue a decision either affirming, altering or
reversing the determination of non-compliance or denial of
certification by the Department’s Director. The Invitation to
Bid/Request for Proposal used by Fulton County lists the
“requirements for all bidders interested in doing business
with Fulton County.” (Pl. Exh. 2). Item 28 of the
requirements states that: “Fulton County has a minority and
female business enterprise participation program. Failure to
comply with this program may result in rejection of a bid.”
(/d.). The foregoing historical facts are undisputed. To the
extent that decision of the case requires resolution of factual
disputes, those matters are discussed below.
II. DISCUSSION
The present action was filed in 1996. The Plaintiffs, in part,
challenge the constitutionality of Fulton County’s 1994
MFBE Program and seek a declaratory judgment and an
injunction against the further implementation of this program.
Based on the evidence admitted at the bench trial, the
Plaintiffs contend that Defendant Fulton County has failed to
14a
demonstrate either a compelling or important governmental
interest in using racial or gender classifications as a basis to
award contracts. They contend that Fulton County has failed
to show sufficient evidence of actual discrimination, whether
active or passive, to justify any program of racial or gender
preference. The Plaintiffs further contend, based upon the
admitted evidence, that the race and gender-conscious 1994
MFBE Program is not narrowly tailored to remedy
specifically identified discrimination. The Defendants
contend that the Fulton County 1994 MFBE Program is
constitutional based on evidence identifying past
discrimination against minority and female business
enterprises. Based on the evidence admitted, the Defendants
contend that Fulton County had a compelling interest in
remedying past discrimination and that Fulton County
properly considered and implemented race and gender-neutral
remedies. The Defendants contend that the 1994 MFBE
Program is narrowly tailored to remedy past discrimination
based on its flexibility toward reaching goals and its
graduation, waiver and sunset provisions. |
A. STANDING
At various times during the pendency of this action, the
Defendants have questioned whether the Plaintiffs have
standing to bring their constitutional claims. At the bench
trial, the Defendants again challenge whether any of the
Plaintiffs (Green Thumb, Daniel Webster, and Peggy
Webster) have standing to challenge the constitutionality of
the 1994 MFBE Program. The Defendants also contend that
the Websters have no standing to challenge the remaining
constitutional claims. The Court concludes that Green
Thumb has standing to challenge the program based on the
evidence admitted at the bench trial and the reasons stated in
15a
the Court’s order addressing the parties’ summary judgment
motions. In addressing an affirmative action set-aside
program for contractors’ services, the Supreme Court has
stated that:
When the government erects a barrier that makes it more
difficult for members of one group to obtain a benefit than
it is for members of another group, a member of the former
group seeking to challenge the barrier need not allege that
he would have obtained the benefit but for the barrier in
order to establish standing. The “injury in fact” in an equal
protection case of this variety is the denial of equal
treatment resulting from the imposition of the barrier, not
the ultimate inability to obtain the benefit. And in the
context of a challenge to a set-aside program, the “injury in
fact” is the inability to compete on an equal footing in the
bidding process, not the loss of a contract. To establish
standing, therefore, a party challenging a set-aside
program ... need only demonstrate that it is able and ready
to bid on contracts and that a discriminatory policy prevents
it from doing so on an equai footing.
Northeastern Florida Chapter of the Associated General
Contractors of America v. City of Jacksonville, Fla., 508 U.S.
656, 666, 113 S. Ct. 2297, 2303, 124 L. Ed. 2d 586 (1993).
The Plaintiff Green Thumb has demonstrated that it is able
and ready to bid on contracts and that a discriminatory policy
prevents it from doing so on an equal footing. (Pl. Exh. 1,
206, 207). The Plaintiffs acknowledge that Daniel and Peggy
Webster have no standing to challenge the constitutionality of
the 1994 MFBE Program. The Court will reserve ruling on
16a
whether the Websters have standing to assert a claim for
monetary damages.”
B. LEGAL STANDARDS FOR SCRUTINIZING
PREFERENCE PROGRAMS
The Equal Protection Clause of the Fourteenth Amendment
provides that “[n]o State shall ... deny to any person within its
jurisdiction the equal protection of the laws.” U.S. Const.
Amend. XIV. The Supreme Court in City of Richmond v. J.A.
Croson Co., 488 U.S. 469, 109 S. Ct. 706, 102 L. Ed. 2d 854
(1989), has set forth the constitutional standard applicable for
programs establishing racial or ethnic preferences. The Court
applied the strict scrutiny test, which requires a “searching
judicial inquiry into the justification” for the preference to
determine whether the classifications are remedial or “in fact
motivated by illegitimate notions of racial inferiority or
simple racial politics.” Jd. at 493, 109 S. Ct. at 721. The
Strict scrutiny test is therefore designed to expose
“illegitimate uses of race by assuring that the legislative body
is pursuing a goal important enough to warrant use of a
highly suspect tool” and to “ensure that the means chosen
‘fit’ this compelling goal so closely that there is little or no
possibility that the motive for the classification was
illegitimate racial prejudice or stereotype.” Jd.
Accordingly, the strict scrutiny test requires that racial or
ethnic preference programs “must be based upon a
‘compelling governmental interest’ and must be ‘narrowly
tailored’ to achieve that interest.” Engineering Contractors
' Because Green Thumb is the only Plaintiff with standing to challenge
the constitutionality of the 1994 MFBE Program, the Court will refer herein
to Green Thumb as “Plaintiff.”
17a
Assoc. of South Florida, Inc. v. Metropolitan Dade County,
122 F.3d 895, 906 (11th Cir. 1997), cert. denied, 523 U.S.
1004, 118 S. Ct. 1186, — L. Ed. 2d — (1998) (citation
omitted). Explicit racial preferences may not be used except
as a “last resort.” Jd. at 926. To uphold a racial or ethnic
preference program, the district court must first make a
factual determination that a strong basis in evidence exists to
support the conclusion that the remedial racial or ethnic
program is necessary. Croson, 488 U.S. at 500, 109 S. Ct. at
725; Engineering Contractors, 122 F.3d at 906. General,
amorphous claims of societal discrimination, simple
legislative assurances of good intention, or congressional
findings of discrimination in the national economy are not
sufficient to establish a “strong basis in evidence.”
Engineering Contractors, 122 F.3d at 907. Racial or ethnic
preference programs, however, can be justified by
demonstrating gross statistical disparities between the
proportion of minorities hired for projects or contracts, and
the proportion of minorities willing and able to do the work.
Id. Anecdotal evidence may be used to establish
discrimination, especially if buttressed by relevant statistical
evidence. Jd. Accordingly, in this case, if Fulton County can
show that it has become a “ ‘passive participant’ in a system
of racial exclusion practiced” in connection with the awards
of projects and contracts in the county, the Supreme Court
has made it “clear that the [county] could take affirmative
steps to dismantle such a system.” Croson, 488 U.S. at 492,
109 S. Ct. at 721.
If there is a strong basis in evidence to justify a race or ethnic
conscious program, the next step requires courts to consider
whether the program is sufficiently narrowly tailored to
achieve that interest. Racial and ethnic preferences must be a
“last resort” option. See Engineering Contractors, 122 F.3d
18a
at 926. Such programs must be “vigorously scrutinized to
ensure that they do not go too far.” Jd. at 927. The following
four factors, as identified by the Eleventh Circuit, provide a
useful analytical structure for determining whether a race or
ethnicity-conscious program is _ narrowly tailored:
(1) necessity for the relief and the efficacy of alternative
remedies; (2) the flexibility and duration of the relief,
including availability of waiver provisions; (3) the
relationship of numerical goals to the relevant labor market;
and (4) the impact on the rights of innocent third-parties.
Engineering Contractors, 122 F.3d at 927.
Intermediate scrutiny is the applicable constitutional standard
for analyzing programs that establish gender preferences.
Engineering Contractors, 122 F.3d at 907-08. Thus, to
withstand constitutional challenge to a gender preference
program, such gender preference must serve important
governmental objectives and be substantially related to
achievement of those objectives. Jd. The proponent of a
gender preference program must present sufficient probative
evidence of discrimination. Jd. at 910. The Eleventh Circuit
recognized that the “sufficient probative evidence” standard
is less stringent than the “strong basis in evidence” required
to bear the weight of a race or ethnic preference program. Id.
at 909-10. The following guidelines set forth the boundaries
of intermediate scrutiny evidentiary analysis: (1) the local
government must demonstrate some past discrimination
against women, but not necessarily discrimination by the
government itself; and (2) such review “is not to be directed
toward mandating that gender-conscious affirmative action is
used only as a ‘last resort’.” Jd. at 910. “Under intermediate
scrutiny, a gender-conscious program need not closely tie its
numerical goals to the proportion of women in the market.”
Id. at 929.
19a
In making its factual determination that either a “strong basis
in evidence” or “sufficient probative evidence” exists to
support the necessity of an affirmative action program, the
court may consider post-enactment evidence in addition to
pre-enactment evidence. Engineering Contractors
Association of South Florida, Inc. v. Metropolitan Dade
County, 943 F. Supp. 1546, 1557 (S.D. Fla. 1996), aff'd, 122
F.3d 895 (1997). Pre-enactment evidence pertains to
evidence developed before Fulton County enacted the MFBE
Program, and thus, could have been relied upon by the Board
in adopting the MFBE Program. Jd. Conversely, post-
enactment evidence pertains to evidence developed after the
MFBE Program was enacted and was therefore not relied
upon as a rationale for the program. /d. The Eleventh Circuit
has held that post-enactment evidence may be introduced into
the record to determine the constitutionality of a race or
gender preference program:
Although Croson requires that a public employer show
strong evidence of discrimination when defending an
affirmative action plan, the Supreme Court has never
required that, before implementing affirmative action, the
employer must have already proved that it has
discriminated. On the contrary, formal findings of
discrimination need neither precede nor accompany the
adoption of affirmative action.
Engineering Contractors, 122 F.3d at 911 (quoting Ensley
Branch, N.A.A.C.P. v. Seibels, 31 F.3d 1548, 1565 (11th Cir.
1994)). | Consideration of post-enactment evidence is
appropriate when scrutinizing race or gender preference
programs because a violation of either federal statutory or
constitutional requirements arises when the wrong is
committed, and not with the making of a finding.
20a
Engineering Contractors, 122 F.3d at 911 (citing Wygant v.
Jackson Bd. Of Educ., 476 U.S. 267, 289, 106 S. Ct. 1842,
1855, 90 L. Ed. 2d 260 (1986) (O’Connor, J., concurring)).
Consideration of post-enactment evidence is especially
appropriate where the principal relief sought is injunctive
relief. Engineering Contractors, 122 F.3d at 911.
The Defendants bear the initial burden of production to
demonstrate a “strong basis in evidence” or “sufficient
probative evidence” that the race, nic or gender preference
program aims to remedy past or present discrimination and is
constitutional under the Fourteenth Amendment. Engineering
Contractors, 122 F.3d at 916; Concrete Works of Colorado,
Inc. v. City And County of Denver, 36 F.3d 1513, 1522 (10th
Cir. 1994), cert. denied, 514 U.S. 1004, 115 S. Ct. 1315, 131
L. Ed. 2d 196 (1995). Notwithstanding this initial burden of
proof, “[t]he ultimate burden [of proof] remains with [the
challenging party] to demonstrate the unconstitutionality of
an affirmative-action program.” Concrete Works, 36 F.3d at
1522 (quoting Wygant, 476 U.S. at 277-78, 106 S. Ct. at
1849). As explained by the Eleventh Circuit in the context of
public employment, once the proponent of a race preference
plan:
introduces its statistical proof as evidence of its remedial
purpose, thereby supplying the [district] court with the
means for determining that [it] had a firm basis for
concluding that remedial action was appropriate, it is
incumbent upon the nonminority [employees] to prove their
case; they continue to bear the ultimate burden of
persuading the [district] court that the [public employer’s]
evidence did not support an inference of prior
discrimination and thus a remedial purpose, or that the plan
21a
instituted on the basis of this evidence was not sufficiently
“narrowly tailored.”
Howard v. McLucas, 871 F.2d 1000, 1007 (11th Cir. 1989)
(quoting Wygant, 476 U.S. at 293, 106 S. Ct. at 1856
(O’Connor, J., concurring)). When statistical evidence is
sufficient to support an inference of discrimination, the
Plaintiff has at least the following three methods to rebut the
inference of discrimination with a neutral explanation:
(1) demonstrate that the statistics are flawed; (2) demonstrate
that the disparities shown by the statistics are not significant
or actionable; or (3) present conflicting statistical data.
Engineering Contractors, 122 F.3d at 916.
Before examining whether the 1994 MFBE Program passes
constitutional muster based on.the admitted evidence, it is
instructive to analyze the decisions in Croson and
Engineering Contractors. In those cases, the Supreme Court
and the Eleventh Circuit analyzed programs with some
similar characteristics to the 1994 MFBE Program. In
Croson, the Supreme Court struck down the City of
Richmond’s minority set-aside program because the City
failed to provide a strong basis in evidence establishing past
or present discrimination. Croson, 488 U.S. at 498-506, 109
S. Ct. at 723-28. The minority set-aside program required
majority-owned prime contractors to whom the City awarded
construction contracts to subcontract at least 30% of the
dollar amount to one or more MBEs. /d. at 477-78, 109 S. Ct.
at 713. The Supreme Court first found unpersuasive the
City’s mere declaration that the set-aside program was
“remedial.” Jd. at 500, 109 S. Ct. at 725. The Court then
discredited the statistical pool used by the City to demonstrate
discrimination in the construction industry. Although the
City established a disparity between the number of prime
22a
contracts awarded to minority firms and the City’s minority
population, the Supreme Court found that a more appropriate
comparison would be between the number of contracts
awarded to minority firms and the number of qualified
minority contractors. Jd. at 501-02, 109 S. Ct. at 725-26.
The Supreme Court stated that:
Where there is a significant statistical disparity between the
number of qualified minority contractors willing and able to
perform a particular service and the number of such
contractors actually engaged by the locality or the locality’s
prime contractors, an inference of discriminatory exclusion
could arise. Under such circumstances, the [locality] could
act to dismantle the closed business system by taking
appropriate measures against those who discriminate on the
basis of race or other illegitimate criteria. In the extreme
case, some form of narrowly tailored racial preference
might be necessary to break down patterns of deliberate
exclusion.
Id. at 509, 109 S. Ct. at 730 (citations omitted). The Supreme
Court further found that national data about discrimination in
the construction industry offered little insight into the
particular conditions in the City of Richmond. /d. at 504, 109
S. Ct. at 727.
Following Croson, the Eleventh Circuit in Engineering
Contractors affirmed the district court’s decision declaring
the Dade County, Florida’s race, ethnic and gender preference
programs to be unconstitutional. Engineering Contractors,
122 F.3d at 900. Dade County’s programs, referred to
collectively as MWBE programs, set participation goals of
15% for black business enterprises (“BBEs”), 19% for
Hispanic business enterprises (“HBEs”), and 11% for women
23a
business enterprises (“WBEs”). The MWBE programs
applied only to construction contracts, the only classes of
contracts having participation goals. To justify its programs,
Dade County advanced substantial statistical and anecdotal
evidence. Jd. at 911-26. The heart of its statistical analysis
consisted of Dade County contracting statistics that compared
three factors for its nonprocurement construction contracts:
(1) the percentage of bidders that were MWBE firms; (2) the
percentage of awardees that were MWBE firms; and (3) the
proportion of Dade County contracts that were awarded to
MWBE firms. /d. at 912. The analysis covered two time
periods, 1989-1991 and 1993. The Eleventh Circuit
concluded that the district court did not err by failing to find a
strong basis in evidence of racial and ethnic discrimination
based on the disparities between bidder and awardee
percentages. Id. at 913. Likewise, the Eleventh Circuit found
no error with regard to the district court’s finding of no
sufficiently probative evidence of gender discrimination. Jd.
Dade County also calculated disparity indexes with regard to
the utilization of BBEs, HBEs, and WBEs in the Dade
County market by comparing the amount of contract awards a
particular group received to the amount it would be expected
to receive based on that group’s bidding activity and awardee
success rate. The Eleventh Circuit found statistically
significant underutilization of BBEs, less dramatic
underutilization of HBEs, and mixed results as to the
utilization of WBEs. Jd. at 914-16. The Plaintiffs introduced
evidence that the disparities in the utilization of MWBEs are
better explained by firm size than by discrimination. Dade
County then conducted regression analysis to control for firm
size. Despite a few unexplained disparities that remained
after controlling for firm size, the district court concluded that
the demonstrated disparities were better explained by firm
24a
size than by discrimination. Jd. at 917-18. The Eleventh
Circuit did not find this conclusion to be clearly erroneous.
Id. at 918-19.
Dade County also submitted its statistics to measure the
participation of each MWBE group in the County’s
subcontracting business. The district court found the
subcontracting study “insufficiently probative to support the
use of race and ethnic preferences and inadequate to support a
gender classification.” /d. at 919-20. The Eleventh Circuit
concluded that this finding was not clearly erroneous. /d. at
920. Dade County also introduced marketplace data statistics
to determine whether meaningful relationships existed
between (1) the race, ethnicity and gender of the surveyed
firm owners, and (2) the reported sales and receipts of those
firms. The study was based on a sample of 586 contractors
that had filed a “certificate of competency” with Dade
County. The Eleventh Circuit noted that the parameters of
the studies’ universe necessarily included firms that were
unwilling, unable or unqualified to perform Dade County
construction contracts. Jd. at 920-91. The study found
statistical unfavorable disparities only with respect to HBEs.
The district court found, however, these disparities not to be
controlling based on the entirety of the evidence. /d. at 921.
The Eleventh Circuit did not find the district court’s
conclusion to be clearly erroneous in light of the problems
with the statistical pool. Jd.
\
Next, Dade County introduced a statistical analysis of Jon
Wainwright which compared construction business
ownership rates of MWBEs to those of non-MWBEs and
analyzed the disparities in the personal income between
MWBE and non-MWBE owners. The study concluded that
blacks, Hispanics and women are less likely to own
25a
and MWBEs in the construction business earn less money
that similarly situated white males. The Eleventh Circuit
found this evidence insufficient to show discrimination in
light of evidence indicating the tremendous growth of
MWBE firms and the fact that firm size better explained the
identified disparities. Jd. at 922-23. Finally, Dade County
presented a study by Dr. Andrew Brimmer which was a
historical analysis of black-owned construction firms. The
study demonstrated the existence of substantial disparities for
black-owned construction business receipts for some years,
but not others. The Eleventh Circuit noted that the district
court had discounted the significance of the unfavorable
disparities because the Brimmer Study failed to account for
firm size. Jd. at 923-24. Again, the Eleventh Circuit did not
find the district court’s view to be implausible. Jd. at 924.
With regard to the entire body of statistical evidence, the
Eleventh Circuit stated that it “cannot hold that the district
court clearly erred in finding that the statistical evidence was
too weak an evidentiary foundation to bear the weight of any
of the MWBE programs under the standards of review
applicable to them.” Jd. The Eleventh Circuit also concluded
that the anecdotal evidence was insufficient to support the
MWBE programs especially without the requisite statistical
foundation. Jd. at 926. Thus, the Eleventh Circuit affirmed
the district court’s judgment enjoining the operation of the
MWBE programs on the grounds that Dade County’s failure
to establish a constitutionally sufficient evidentiary
foundation for the race, ethnic and gender conscious
programs. Jd.
The Eleventh Circuit further concluded that the BBE and
HBE programs were not sufficiently narrowly tailored. /d. at
26a
927-29. The Eleventh Circuit found that Dade County did
not give serious and good-faith consideration to the use of
race and ethnicity neutral measures to increase BBE and HBE
participation. /d. Finally, the Eleventh Circuit noted that the
district court erred by drawing “no distinction between its
analysis of whether [Dade] County’s BBE and HBE programs
were narrowly tailored and whether the WBE program bore a
substantial relationship to [Dade] County’s stated rationale
for implementing gender-conscious affirmative action, in
response to perceived discrimination against women-owned
contractors.” Jd. at 929. The court stated that:
If the WBE program rested on a sufficient evidentiary
foundation, we could not conclude that it would fail the
substantial relationship prong of the intermediate scrutiny
analysis. However, because the district court did not clearly
err in finding that [Dade] County had failed to present
sufficient probative evidence in support of its stated
rationale for implementing a gender preference program,
the district court’s error in applying the substantial
relationship test does not change the result.
Id.
This Court is bound to follow the precedents set by the
Supreme Court and the Eleventh Circuit in this area. The
Court is not at liberty to apply its own notions of what is
good public policy or its own notions of the appropriate
standard for reviewing minority and gender preference
programs. The Court’s duty is to follow the Constitution and
the law as interpreted by the Supreme Court and the Eleventh
Circuit. With this understanding of the controlling decisions
in Croson and Engineering Contractors, the Court now turns
to the evidence admitted at trial to determine whether the
27a
Fulton County 1994 MFBE Program violates the Equal
Protection Clause.
C. “STRONG BASIS IN EVIDENCE” AND
“SUFFICIENT PROBATIVE EVIDENCE”
The Defendants have presented two types of evidence in
support of the 1994 MFBE Program: (1) statistical evidence
and (2) anecdotal evidence. The Court will review the
evidence to determine whether the Defendants have
demonstrated both the “strong basis in evidence” standard in
connection with the race preference program and the less
stringent “sufficient probative evidence” standard in
connection with the gender preference program.
1. STATISTICAL EVIDENCE
There have been three basic categories of statistical evidence
presented to the Court: (1) the 1990 Brimmer-Marshall
Study; (2) the 1994 Post-Disparity Study prepared by Dr.
Boston; and (3) various statistical studies covering the years
1994-1997.2 The Court will summarize and analyze each of
these categories. Whether considered individually or
together, the statistical evidence presented by the Defendants
fails to establish a either a strong basis in evidence for a race
or ethnic preference or sufficient probative evidence of
gender discrimination.
? The Court gives no weight to the purchase order data contained in
Def. Exh. 226. The inclusion in this data of purchase orders to public
agencies and charities makes the minority to non-minority comparisons
meaningless. The figures also do not include minority subcontracts.
28a
a. The 1990 Brimmer-Marshall Study
In 1990, Drs. Brimmer and Marshall produced and submitted
to Fulton County and City of Atlanta the Brimmer-Marshall
Study. The Study consisted of eight volumes entitled “Public
Policy and Promotion of Minority Economic Development:
City of Atlanta and Fulton County.” (Def. Exh. 146).
Overal!, the eight-volume study details discrimination against
minorities and females based on historical, statistical and
anecdotal evidence. In Part I, Drs. Brimmer and Marshall
summarize their findings of discrimination in both the private
and public Atlanta business sectors. They noted wide-spread
discrimination in the larger more lucrative private sector.
They found large disparities in public and private contracting
opportunities between minority and majority firms. (Def.
Exh. 146, Brimmer-Marshall Study, Part I at 88). According
to the study, minority firms derived most of their revenue
from the public sector, while public firms derived most of
their revenues from the private sector. The Brimmer-
Marshall Study further noted that there was low participation
by minority business enterprises in the City of Atlanta
contracting relative to the value of the contracts awarded to
non-minority business enterprises. (/d. at 99). Dr. Boston
prepared Part III of the Brimmer-Marshall Study. He
concluded that MFBEs have not experienced equity in private
and public markets for the procurement of contracts in
Atlanta and Fulton County.
Part I of the study also contained a summary of the statistical
analysis comparing the amount of contract dollars going to
minority firms to the availability of minority firms in the
same year. In the Brimmer-Marshall Study this was
presented as a statistical relationship known as_ the
Utilization-Percentage Ratio (“UPR”), or disparity index.
29a
This index is calculated by dividing the utilization of a certain
ethnic or gender group by the availability of the same group.”
It is the ratio of two percentages: the percentage of contracts
actually awarded to minority businesses by the percentage of —
all businesses qualified and wiiling to perform contracts for
Fulton County, who belong to a specific racial, ethnic or
gender group. Underutilization is shown by a number smaller
than one, and overutiiization by a number greater than one. A
UPR of .5 means that the racial or gender group in question is
only receiving 50% of the contract awards or contract dollars
that one would expect; that is, if a race had an availability of
20% and received only 10% of the contract awards or
contract dollars, this would generate a disparity index of 0.5,
and show underutilization. If an ethnic group had availability
of 10% and utilization of 20%, this would generate a
disparity index of 2.0 and show overutilization. The Eleventh
Circuit has recognized that disparity indexes greater than
80%, or .8, are generally not considered indications of
discrimination. Engineering Contractors, 122 F.3d at 914.
In the years 1972, 1977 and 1982, the UPRs, or disparity
indexes, for black-owned businesses for United States,
Georgia, the Atlanta Standard Metropolitan Statistical Area
(“SMSA”) and Fulton County computed under 20% for all
industries and under 27% for construction and developers.
(Id. at 103).
In Part V of the Brimmer-Marshall Study, the authors
provided additional statistical analysis in the form of UPR
calculations covering the years 1972, 1977 and 1982 for five
geographic regions (United States, Georgia, Atlanta SMSA,
> Utilization can be measured in at least two ways: (1) dollars
awarded, or (2) number of contracts awarded.
30a
Fulton County, and City of Atlanta). The study analyzed
primarily black and minority-owned firms and covered six
industrial classifications, including construction, general
contractors, trade contractors and land developers. The data
was collected from the U.S. Census Bureau’s Survey of
Minority-Owned Business Enterprises (“SMOBE”). Dr. Jon
Wainwright testified at trial that he prepared this part of the
Brimmer-Marshall Study. The Brimmer-Marshall Study
found consistently low UPR values across all industries in the
Atlanta SMSA and Fulton County, even lower than the
corresponding UPRs for Georgia and the United States. It
must be emphasized that all of this data looks at the
marketplace as a whole.
After reviewing the Brimmer-Marshall Study, the Court
finds that it is insufficient to establish a strong basis in
evidence for the 1994 MFBE Program.- There are two flaws
in the analysis that are insurmountable. First, the analysis in
the Brimmer-Marshall Study proceeds on the premise that a
Statistical showing of underutilization of minorities in the
marketplace as a whole is sufficient proof of discrimination
to justify a program of racial preferences by a local
government in whatever area is involved. This assumption is
directly contrary to Justice O’Connor’s analysis in Croson. If
a Statistical showing of underutilization of minorities in the
marketplace as a whole is sufficient proof of discrimination
to justify a program of racial preferences, such a showing as
to the United States as a whole would justify racial
preferences by every governing entity in the United States.
General claims of societal discrimination in the marketplace
are not enough to justify a race or ethnic-conscious program.
See Croson, 488 U.S. at 499, 109 S. Ct. at 724. In Croson,
Justice O’Connor was clear that the focus must be on
3la
contracting by the entity that is considering the preference
program:
In the case at hand, the city has not ascertained how many
minority enterprises are present in the local construction
market nor the level of their participation in city
construction projects. The city points to no evidence that
qualified minority contractors have been passed over for
city contracts or subcontracts, either as a group or in any
individual case. Under such circumstances, it is simply
impossible to say that the city has demonstrated “a strong
basis in evidence for its conclusion that remedial action was
necessary.” Proper findings in this regard are necessary to
define both the scope of the injury and the extent of the
remedy necessary to cure its effects.
Id. at 510, 109 S. Ct. at 730. Dr. Boston has testified that
historically minorities have sought public sector work more
than majority contractors. The existence of minority
preference programs will have the effect of further
concentrating minority business efforts in a sector where they
have an advantage. For all of these reasons, statistical
evidence of underutilization of minorities in the general
Atlanta marketplace alone does not show discrimination by
Fulton County according to Croson.
There is no statistical evidence in the Brimmer-Marshall
Study of discrimination by Fulton County government in the
award of contracts. Therefore, in order to justify racial
preferences, the County must show that it is a “passive
participant” in discrimination by the private sector. Croson,
488 U.S. at 492, 109 S. Ct. at 721; Engineering Contractors,
122 F.3d at 911. The Court coes not accept Dr. Marshall’s
concept of “passive participation” as meaning any
32a
governmental contracting in a marketplace where there is
discrimination. On the other hand, the County could take
remedial action if it had evidence that non-minority
contractors were systematically excluding minority
businesses from subcontracting opportunities. Croson, 488
U.S. at 509, 109 S. Ct. at 730. The County could take
remedial action if it had evidence that its spending practices
are “exacerbating a pattern of prior discrimination” that can
be identified with specificity. Jd. at 504, 109 S. Ct. at 727.
The Brimmer-Marshall Study contains no statistical data
regarding the utilization of minority subcontractors by prime
contractors doing business with Fulton County It does not
show that the County’s spending practices are exacerbating
identified discrimination in the private sector. The County
may rely upon a showing of discrimination in the private
sector if it provides a linkage between private sector
discrimination and the County’s contracting policies.
Concrete Works, 36 F.3d at 1529. No such linkage is
provided by the data in the Brimmer-Marshall Study.
The second flaw is there is no statistical analysis of other
factors that may affect minority business enterprise
availability and utilization. Dr. Marshall testified at trial that
the trouble with statistics is that they frequently conceal as
much as they reveal. The Brimmer-Marshall Study does set
forth statistical analysis showing disparities in the availability
of minority and black-owned firms compared to their
utilization in terms of dollars awarded. Nevertheless, the
study contains no attempt to explain whether the disparity is
due to discrimination or other neutral reasons, such as firm
“ Such studies have been done. For example, Dr. Boston testified that
he has performed such a study for the Georgia Department of
Transportation.
33a
size and the ability of a firm to obtain financing and bonding.
In Part [Iil, Dr. Boston identifies some of these factors as
having a significant impact with regard to the acquisition of
public or private contracts. By contrast, Dade County in
Engineering Contractors sought to explain through
regression analyses that the disparities were due to
discrimination and not due to any neutral explanations such
as firm size. Engineering Contractors, 122 F.3d at 917-18.
Regression analysis is a statistical procedure for determining
the relationship between a dependent and independent
variable. The purpose of a regression analysis is to determine
which of a number of possible factors (‘independent
variables”) are responsible for a given outcome. The
Brimmer-Marshall Study did not utilize regression analysis to
determine the cause of the disparities between minority
availability and utilization in the marketplace as a whole.
The data to do a regression analysis was not available. Dr.
Marshall, in his trial testimony, dismissed this issue by saying
that there is some residuum of underutilization that is not
accounted for by neutral factors. The problem with this
response is that the residuum remains unidentified and,
following Croson, race specific goals cannot be implemented
on the basis of generalizations about the existence of and the
degree of disw?imination. Finally, it is questionable whether
Fulton County could rely upon disparities in 1972, 1977 and
1982 to enact a preference program in 1994 when more
current data should have been and was available.
At trial, Dr. Marshall submitted into evidence a report
showing disparity indices for 1987 and 1992, based on census
and SMOBE data. This statistical study, however, was never
considered by the Board in implementing the 1994 MFBE
Program. This study repeats the flaws of the original
Brimmer-Marshall Study by assuming that a showing of
34a
discrimination in the marketplace as a whole is sufficient to
comply with Croson. The disparity indexes reported cover
the United States, Georgia, and Atlanta SMSA regions. They
are based on data that examine minority business
participation in the overall economy and not just the private
sector. (Def. Exh. 235 at 21). The study only reports
disparity indexes as to African-American firms and does not
reference any other minority group. Again, statistical
analysis, like a regression analysis, was not performed to
determine whether factors other than discrimination played
any role in the underutilization of African-American firms.
Applying Croson correctly, this data has the same inadequacy
as the original Brimmer-Marshall Study. It is apparent from
his report and his testimony at trial that Dr. Marshall
disagrees with the implications of the Croson decision. (Def.
Exh. 235 at 32). His criticism of the decision may be valid
from a public policy perspective. However, this Court, unlike
Dr. Marshall, is bound to follow Supreme Court precedent
whatever doubts it may have about the wisdom of its
decision.
Overall, the Court finds and concludes that the statistical
evidence presented in the Brimmer-Marshall Study fails to
provide a strong basis in evidence of discrimination against
MBEs to justify Fulton County’s racial and ethnic preference
program. Given the flaws identified in these statistics, this
study fails to show “gross statistical disparities” between the
proportion of MBEs hired for projects or contracts, and the
proportion of minorities willing and able to do the work for
Fulton County. See Engineering Contractors, 122 F.3d at
908. Further, the Court finds and concludes that the
Brimmer-Marshall Study, which primarily offers statistical
evidence as to minority-owned firms, fails to offer sufficient
35a
probative evidence of gender discrimination to justify Fulton
County’s gender preference program.
b. The 1994 Post-Disparity Study
At the heart of Fulton County’s statistical evidence in
justifying the 1994 MFBE program is Dr. Boston’s 1994
Post-Disparity Study. (Def. Exh. 21). In this Study, Dr.
Boston tried to do what was not done in the Brimmer-
Marshall Study, that is, to analyze Fulton County’s utilization
of female and minority contractors in relation to their
availability. The 1994 MFBE Program states that the
percentage goals for minority and female participation were
based in part on methodology suggested by this study. (PI.
Exh. | at 17). The 1994 Post-Disparity study evaluated the
utilization of minority or female vendors by Fulton County
from 1990-1993, the four years immediately preceding the
implementation of the program. In the 1994 Post-Disparity
Study, Dr. Boston addresses whether there was a significant
“disparity index” or “UPT’, showing that Fulton County had
underutilized minority and female contractors during that
period. The conclusion of the study was that “(t]he current
goals and utilization percentages are still below the levels that
are warranted by the availability of minority and female
vendors and by the extent of historical discrimination.” (Def.
Exh. 21).
The overall disparity index in evidence for the period 1990-
93 is reflected in a document entitled “Fulton’s UPI
Calculation,” created by Dr. Boston. (Def. Exh. 2). To
calculate disparity indexes for Fulton County contracts, Dr.
Boston sets out to determine the availability and utilization of
minority and female firms. Two methods may be used to
calculate availability: (1) bid analysis; or (2) bidder analysis.
36a
In a bid analysis, the analyst counts the number of bids
submitted by minority or female firms over a period of time
and divides it by the total number of bids submitted in the
same period. In a bidder analysis, the analyst counts the
number of minority or female firms submitting bids and
divides it by the total number of firms which submitted bids
during the same period. Dr. Boston’s availability calculations
relied on the number of firms submitting bids rather than the
gross number of bids.
In arriving at his availability percentages, Dr. Boston did not
consider any data from Fulton County concerning the race
and gender of firms who actually bid for contracts with
Fulton County. He wanted to use Fulton County bid data, but
he considered the data the County had to be faulty and
inaccurate. Instead, he took the results of two previous
studies he had performed for the City of Atlanta and the
Atlanta School System and averaged them together. Dr.
Boston used data covering the years 1978 through 1988 to
compute the City of Atlanta availability. The availability
figures for the City of Atlanta were derived from the number
of different bid applicants over the ten-year period. He then
used data for the years 1982 through 1992 to compute the
Atlanta School System availability. The availability figures
for the Atlanta School System were derived from the number
of vendor applicants over the ten-year period. Dr. Boston
found that the overall MFBE availability for the City of
Atlanta was 28.3% and for the Atlanta School System 42.6%.
Thus, the average availability was 35.45%. Dr. Boston then
adjusted the availability results by the number of certified
MFBE firms certified in Fulton County in 1994, the total
number being 699. Dr. Boston’s “adjusted” availability for
African-Americans was 28.6%, for White Females 3.55%, for
Hispanics 1.22%, for Asians 1.83%, and for Native
37a
Americans 0.25%. (Def. Exh. 2; Def. Exh. 21 at Table
19(a)). ;
In measuring utilization, Dr. Boston relied on data collected
from the Fulton County Uniform Contract Sign-Off Sheets.
(Def. Exh. 21 at 21, Table 1). Table 1 in the 1994 Post-
Disparity Study shows minority utilization of 13.50% in
1990, 24.03% in 1991, 19.12% in 1992, and 23.22% in 1993.
This table further shows female utilization of .22% in 1990,
.03% in 1991, 1.63% in 1992, and 4.33% in 1993. The table
contains the following caveat:
Women vendors ... means women who are not elsewhere
classified, primarily white women. However, a small
number of minority women vendors are also included in
this total. These women and are [sic] not also included in
the minority total.
(Id. at Table 1). The utilization figures in this table were
calculated by dividing the dollar awards to either minority or
women vendors by the total dollar awards that year. Dr.
Boston’s 1994 Post-Disparity and his “Fulton’s UPI
Calculation” document reflect that the “Average utilization
1990-93” was 19.63% for “Minority” and 1.43% for
“Females”. (/d. at Table 19(b)).
Table 19(a)-(f) lists the relevant availability and utilization
figures used by Dr. Boston to develop the methodology for
deriving the one and five year goals of Fulton County. In
dividing total minority average utilization by total adjusted
minority availability (19.63%/3 1.90%), Dr. Boston calculates
a UPI for the years 1990-1993 of 61.54%. The UPI for
majority women (1.43%/3.55%) is calculated to be 40.28%.
From these calculations, Dr. Boston sets forth his
38a
recommended goal for minorities at “29% starting in 1995
and increasing by one percentage point over the next five
years to 33%.” (id. at Table 19(d)). His recommended goal
for females is 6% beginning in 1995 and increasing by one
percentage point over each of the next five years to 10%.
(/d.). In order to determine whether Dr. Boston’s Study
provides a strong basis in evidence to justify a racial
preference program, the Court must examine both the data
utilized by Dr. Boston and the methodology employed by him
in analyzing the data. The evidence introduced at trial reveals
serious flaws in both the data and the methodology employed
by Dr. Boston.
First, following Croson, Fulton County is justified in
adopting a program of racial preferences if it can show a
strong statistical disparity between the availability of minority
firms and their utilization by Fulton County. The two crucial
numbers then are availability and utilization. Dr. Boston’s
availability numbers are set forth in Table 19(a) as follows:
Blacks 28.60%
White Females 3.55%
Hispanics 1.22%
Asians 1.83%
Native Americans 0.25%
Percent of all available firms 35.45%
No explanation is given in the Study itself as to the source of
these numbers or any indication of their accuracy or
reliability. Given the critical importance of the availability
figures, the absence of any explanation as to their origin is
39a
very troubling. Dr. Boston’s utilization numbers are set forth
in Table 19(c) as follows:
Average utilization of minorities, 1977-93 18.90%
Average utilization of minorities, 1990-93 19.63%
Average utilization of majority females, 1990-93 1.43%
Dr. Boston explained that he obtained these numbers from
examining the uniform contract sign off sheets employed by
Fulton County for all contracts. He also explained the
differences between his numbers and the numbers reported to
the Board that included only contracts exceeding $20,000.
(Def. Exh. 21, Table 2). Using these numbers. Dr. Boston
obtains the following disparity ratios:
Minorities, 1977-93 59.25%
Minorities, 1990-93 61.54%
Majority females, 1990-93 40.28%
Using these disparity ratios, Dr. Boston arrived at five year
goals of 33% for minorities and 10% for females. His
explanation for his methodology in reaching this overall goal
of 43% was as follows:
The goals in Table 19(d) have been derived through the use
of a proprietary methodology developed by Dr. Boston.
This method has also been used to derive goals for the City
of Atlanta and The Atlanta School System. It takes into
consideration the disparity that firms have/are encountering,
their availability in the market place and the awards they
would have received but for discrimination. The
recommended goal for minorities is 29% starting in 1995
and increasing by one percentage point over the next five
40a
years to 33% (see Tables 19 d & e). The recommended
goal for females is 6% starting in 1995 and increasing by
one percentage point each year for the next five years to
10%.
(Def. Exh. 21 at 37-38). On June 15, 1994, Dr. Boston
presented his Study to the Fulton County Board of
Commissioners. The Board voted to adopt the Study without
any discussion of the validity of his data or his analysis. The
1994 MFBE Program contains the minority and female
preference goals recommended by Dr. Boston for 1995.
At trial, Dr. Boston testified as to the source of his
availability data. He testified that the data was derived in part
from a study that he did that was incorporated in an
Addendum to the Brimmer-Marshall Study. (Def. Exh. 14).
No evidence was offered that this study was ever presented to
or considered by Fulton County in adopting its MFBE
Program. Therefore, the Court admitted the study only for
the limited purpose of serving as a foundation to Dr. Boston’s
expert testimony. Based upon his analysis of the number of
companies submitting bids to the City of Atlanta from 1978
to 1989, Dr. Boston determined that total MFBE availability
was 28.30%. At trial, he testified that he did another study of
availability for the Atlanta School System and found total
MFBE availability of 42.60%. He averaged those two figures
to get the total 35% MFBE availability that is contained in
Table 19(a) of the Post-Disparity Study.
The Court finds that Dr. Boston’s 35% MFBE availability
number is unreliable for numerous reasons. It is based upon
the assumption that there is at least a close approximation
between the availability of MFBEs to the City of Atlanta and
the Atlanta School System and the availability of such firms
4la
to Fulton County. Based on the evidence at trial, the Court is
not willing to make that assumption. Only 50% of the
minority firms certified by the City of Atlanta were also
certified by Fulton County. The geographical bounds and the
populations of Atlanta and Fulton County are different.
Although there is a geographic overlap of roughly 50%
between the City and Fulton County, the part of the County
that lies outside the city limits has a substantially different
racial composition than the City. The undisputed evidence
showed that roughly 90% of all African-American businesses
in Fulton County lie inside the City of Atlanta. The
businesses located in areas of north Fulton County range
between 81% and 100% white. Common sense suggests that
the percentage of African-American businesses available to
Fulton County is likely lower than the percentage available to
- the City of Atlanta or the Atlanta School System.
Another problem arises when Dr. Boston’s availability, as
measured by bidders, is compared with utilization, as
measured by contract dollars, to produce a disparity ratio.
The cross examination of Dr. Boston persuades the Court that
counting bidders greatly overstates the true availability of
minority firms to the City of Atlanta during the period of the
Study because it does not take into account the actual relative
unavailability of minority firms to bid on and obtain large
construction contracts. Furthermore, the services provided by
Fulton County are very different from those provided by the
Atlanta School System. For all of these reasons, the Court
concludes that the availability numbers contained in the Post-
Disparity Study are not reliable.
Furthermore, more reliable data is available to indicate that
Dr. Boston has vastly overstated the availability of minority
firms in the Atlanta metropolitan area. Dr. Marshall has
42a
described the Census Bureau’s 1987 and 1992 SMOBE and
the 1990 decennial census microdata as “the most recent and
comprehensive data available that allow direct comparisons
between minority and non-minority male-owned businesses
and business owners.” (Def. Exh. 235 at 21). Dr. Marshall
testified at trial that “these are numbers that are produced by
official government services and are very reliable and if they
are not reliable, they give you information to tell you why
they are not.” Dr. Wainwright at trial described the SMOBE
data as “one of the finest sources available.” This data
indicates availability in the Atlanta SMSA of all African-
American firms of 7.4% in 1987 and 9.9% in 1992. (Def.
Exh. 235, Exh. A, Tables D and E). This compares with Dr.
Boston’s availability figure of 28.60% for African American
firms. (Def. Exh. 21, Table 19(a)). The reasons given by Dr.
Boston for not using census data are not persuasive. This is
the same data that Dr. Marshall and Dr. Wainwright relied
upon in the Brimmer-Marshall Study and their later reports.
If anything, the census data overstates minority availability
because publicly-owned corporations are not included. For
all of these reasons, the Court declines to accept Dr. Boston’s
measure of the availability of MFBE firms to Fulton County.
With flawed availability data, Dr. Boston’s disparity ratios
collapse as well.
Even if the disparity ratios were valid, the Court rejects Dr.
Boston’s methodology for using them to arrive at goals for
minority participation. Dr. Boston’s goals are derived
through a methodology developed by him in connection with
a similar project to derive minority and female goals for the
City of Atlanta. (Def. Exh. 14). Dr. Boston’s goal
methodology is set forth in a letter to Rodney Strong,
Director of the City of Atlanta’s Office of Contract
Compliance. (/d.). Dr. Boston’s methodology is rather
43a
complex. Dr. Boston examined City of Atlanta contract data
that spanned a ten-year period to determine the average
availability and utilization of African-Americans, females,
Hispanics, Asians, and Native-Americans in the City of
Atlanta. Thus, the ten-year average UPI was calculated to be
.56 for African-Americans, .08 for females, .0!7 for
Hispanics, .122 for Asians, and .017 for Native-Americans.
Dr. Boston then calculated the ten-year average disparity,
which is formulated as (1-UPI). Thus, using African-
Americans as the primary example, the ten-year average
disparity was reported as .44.
In the next part of Dr. Boston’s methodology, he sets forth a
method to determine the average percentage of the disparity
due to discrimination. To make this determination, Dr.
Boston lists ten adjustment or discriminatory factors that
might cause a disparity in minority contracting in the City of
Atlanta: (1) anecdotal evidence of discrimination;
(2) historical/descriptive documentation of discrimination;
(3) contract disparity before the MFBE program;
(4) exclusion from trade organizations; (5) discrimination in
local income and employment; (6) exclusion from private
sector; (7) discrimination in lending; (8) discrimination in
bonding; (9) market UPI; and (10) public testimony. He
weighted each of these factors equally at 10% each. He then
assigned each of these factors a number between 1.00 and 0,
representing in effect a percentage between 0% and 100%.
Dr. Boston then added up the ten percentages. If the total
percent equaled 100, then Boston concluded that the disparity
was caused entirely by discrimination. Dr. Boston testified
that he, along with Rodney Strong and one other, assigned
each adjustment factor. After making each assignment, Dr.
Boston determined the average percentage of disparity due to
discrimination to be 73% for African-Americans, 6% for
rr
44a
women, 12% for Hispanics, 10% for Asians and 4% for
Native-Americans.
Dr. Boston then multiplied the ten-year average disparity by
the average percentage of disparity due to discrimination to
reach a ten-year average disparity due to discrimination. For
African-Americans, this number was .32. The ten-year
average disparity due to discrimination was added to the ten-
year average UPI to arrive at the ten-year average UPI but for
discrimination. Dr. Boston determined this number to be 88
regarding African-Americans. Dr. Boston then multiplied .88
by the ten year average availability percentage to calculate the
ten-year utilization but for discrimination, which was .23.
Dr. Boston subtracted the ten-year average utilization
percentage from .23 to arrive at the ten-year average
underutilization due to discrimination. Finally, Dr. Boston
added the ten-year utilization but for discrimination (.23) to
the ten-year average underutilization due to discrimination to
arrive at the final recommended goal for the City of Atlanta
of 31% for African-Americans. In contrast to the City of
Atlanta Study, the 1994-Post-Disparity Study does not detail
this methodology in computing Fulton County’s MFBE goals
for the years 1994-1999.
The Court finds Dr. Boston’s methodology for determining
the degree of disparity due to discrimination to be an
unacceptable basis for making this determination. The
accepted method of controlling for independent variables is a
Statistical regression analysis. Instead of that, Dr. Boston
utilized this novel method of listing ten ways of proving
discrimination, weighing them equally according to the
subjective assessment of three individuals and then using the
average as the amount of disparity due to discrimination. No
explanation is given for the enormous differences that are
Das
45a
produced, for example, between African-Americans and
Hispanics. The Court is not persuaded that this methodology
produces any reliable information.
Although Dr. Boston followed the same methodology in the
Fulton County study as in the City of Atlanta study, he did
not give the same amount of detail. For overall minority
amounts, he transferred the African-American result of 73%
from the City of Atlanta study and applied it to all minorities,
even though the City of Atlanta Study concluded that
minorities other than African-Americans had much lower
disparities due to discrimination than African-Americans.
The subjective nature of the analysis is illustrated by the fact
that Dr. Boston changed the adjustment factor for females
based upon a “conversation” with Mr. Cooper about the
public hearing on discrimination against females in the
marketplace. The goal of 35% MFBE participation is based
on a subjective process rather than sound statistical methods.
Moreover, Dr. Boston’s recommendation to increase the
MBE participation by 1% a year without a sound statistical
foundation further illustrates the arbitrariness and
unreliability of Nr. Boston’s methodology. In conclusion, the
goal setting methodology referenced in the 1994 MFBE
Program is arbitrary and completely unreliable.
The third basic flaw is that Dr. Boston did not use scientific
methods to account for disparities for reasons other than
discrimination. In connection with his post-disparity study,
Dr. Boston never conducted a regression analysis to see
whether the underutilization of MFBEs was due to
discrimination or was due primarily to other neutral factors
such as firm size, inability to obtain bonding, or inability to
obtain financing. The Court has before it no sound statistical
method to show that the disparity in the years 1990-1993
46a
were due either to discrimination or neutral factors. It is
worth noting that Dr. Boston’s study only calculates
utilization figures for MBEs as a group and does not calculate
separate utilization figures for African-Americans, Asians,
Hispanics, and Native-Americans. Finally, in arriving at the
utilization results based on the amount of dollars awarded,
Dr. Boston relied on Fulton County records. These records
show that in contract awards under $40,000, MBEs received
an average of 35% in the years 1990, 1991, and 1993. When
you factor in 1992, the average utilization falls to 32%. In
contracts between $40,000 and $100,000, the average
utilization of MBEs for the years 1990-1993 is approximately
29%. In contracts between $100,000 and $1 million, the
average utilization of MBEs for the years 1990-1993 is 39%. -
Overall, MBE utilization on contracts less than $1 million,
based on dollars awarded, is approximately 33%. In contracts
over $1 million, the average utilization of MBEs for the years
1990-1993 dips to under 17%. Thus, when you factor in the
high dollar contract awards going to majority firms, the
overall utilization of MBEs based on the dollar of contract
awards would naturally decrease. The evidence suggests,
however, that there are simply few minority bidders for the
largest contracts due to the smaller average size of minority
firms. A review of the evidence regarding bids on City of
Atlanta contracts reveals that as the size of the contract
awards increase to $20 million or more, the amount of MBEs
even placing bids dips dramatically in comparison to majority
firm bids. Even if there was a differential between the
percent of minority firms bidding for these huge construction
contracts and utilization of them, Fulton County would bear
the burden of proving that the difference was due to its own
discrimination, rather than other factors. Dr. Boston has
performed no regression analysis to show that the disparities
were either due to discrimination or other neutral grounds.
47a
The evidence supports an inference that MBEs are not
available to perform these contracts for reasons other than
active or passive discrimination by the City of Atlanta or
Fulton County. In the Brimmer-Marshall Study, a sample of
construction firms in the Atlanta area indicated that 19% of
the majority-owned firms had unlimited bonding capacity,
while 0% of minority owned firms had unlimited capacity.
(Def. Exh. 146, Part III at 237). In his report in the Brimmer-
Marshall Study, Dr. Boston concluded that “(t]he greatest
problems among MFBEs [seeking construction contracts]
appear to be a low success rate at securing bonding and the
inability to secure large or unlimited bonding capacity.” (/d.
at 138). Overall, the Court finds and concludes that the
methodology and statistics outlined in the 1994 Post-
Disparity Study fail to provide a strong basis in evidence of
discrimination against MBEs to justify Fulton County’s race
and ethnic preference program. Given the flaws identified in
his methodology, Dr. Boston’s study fails to show “gross
statistical disparities” between the proportion of MBEs hired
for projects or contracts,:and the proportion of minorities
willing and able to do the work. See Engineering
Contractors, 122 F.3d at 908.
The Court also finds that the 1994 Post-Disparity Study fails
to demonstrate probative evidence sufficient to justify the 6%
female participation goal. Dr. Boston’s Post-Disparity Study
fails to document proper utilization figures for Fulton County
firms owned by females. In calculating utilization, most
minority females are aggregated in the general minority
category with some minority females added in the category of
“Female NEC.” (Def. Exh. 21 at Table 1). Thus, the
utilization of FBEs appears to be entirely speculative. In
taking availability data from the City of Atlanta and the
Atlanta School System, Dr. Boston calculated an adjusted
GM Re ee a GE A ee
48a
availability of 3.55%. To calculate participation goals for
FBEs, Dr. Boston applies his fatally-flawed goal setting
methodology. It is unclear from a document entitled
“Fulton’s UPI Calculation” whether Dr. Boston used the
adjustment factors calculated with respect to determining
disparity due to racial discrimination to the FBE goal
calculation. (Def. Exh. 2). Nevertheless, the Court finds that
the 6% FBE goal was arbitrarily reached based on the
statistical methodology employed by Dr. Boston. In short,
the 1994 Post-Disparity Study fails to provide sufficient
probative evidence of gender discrimination to justify the
preference goals of 6% for FBEs.
c. The 1994-1997 Statistical Evidence
Both the Plaintiff and the Defendants have submitted
statistical studies of data collected for the years 1994-1997.
At the outset, the Court notes that the statistical conclusions
reached in these studies are potentially skewed by the
presence and active implementation of the 1994 MFBE
Program. Some of the numbers are mote likely to be affected
by the operation of the program than others. For example, the
number of contracts awarded is most likely to be affected by
the Program; the number of bids submitted less so.
Accordingly, the Court accords these studies less weight than
it would give to studies performed closely before the program
became effective. Nevertheless, these studies lend more
credence to the Court’s conclusion that the Defendants have
failed to demonstrate a strong basis in evidence justifying
Fulton County’s race and ethnic preference program.
The Plaintiff has submitted into evidence a study conducted
by their expert, Dr. George Easton. (PI. Exh. 208). Dr.
Easton teaches statistics at the Emory Business School. In his
49a
Report, he found that MFBE had an average availability
percentage of around 16% (9% African-American and 7%
other minorities) for MBEs in the years 1994-1997. His
figures were based on SMOBE census data. A special
tabulation of the data by the Census Bureau showed 14.6% of
small firms (i.e., proprietorships, partnerships and non-
publicly held corporations) in the Atlanta SMSA were
minority owned.* He assumed that minority and non-
minority firms were equally willing and qualified to bid on
Fulton County contracts. His analysis indicates that
nonminorities are receiving from 11% to 17% less in Fulton
County contract dollars than they should receive based upon
their availability. Minorities are receiving an amount more
than they should be receiving based upon availability. Dr.
Eason’s data results in disparity ratios of greater than 1.0 for
minorities for each year in the period 1994-1997. The
disparity ratios for majority firms exceed .80 for each year in
question. Therefore, his data shows no discrimination against
minorities and possible discrimination against nonminorities.
Although the Defendants have identified potential flaws in
his statistical significance calculations, the study supports the
finding that no strong basis in evidence exists to justify
Fulton County’s race and ethnic program. If anything, Dr.
Easton’s data overstates the availability of minorities because
the numbers exclude all corporations except Chapter S
Corporations (those with 35 or fewer owners). Certainly, Dr.
Easton’s study is inconsistent with any gross statistical
* Dr. Easton, Dr. Marshall and Dr. Wainright ali agree that the
appropriate marketplace to study availability is the Atlanta SMSA. Dr.
Wainwright also agrees with Dr. Easton that the SMOBE data provides
reliable estimates for the number of minority-owned firms in the Atlanta
SMSA.
50a
disparities in the availability and utilization of minorities by
Fulton County.
Fulton County responded to Dr. Easton’s study by producing
the testimony contained in Dr. Boston’s Amended Rebuttal
Report. (Def. Exh. 17). Dr. Boston has performed a number
of statistical studies with regard to the data collected for the
years 1994-1997. In his Amendment to the Rebuttal Report,
Dr. Boston performed a study in which he concluded that
between 1994 and 1997 there was neither statistically
significant underutilization of non-MFBEs nor overutilization
of MFBEs in Fulton County’s contracting activities. (Def.
Exh. 19). At the bench trial, Dr. Boston stated that the
statistical analysis in this report updated a previous report and
was particularly reliable. Dr. Boston relied on the following
Fulton County data in performing his statistical analysis:
(1) the Board’s Post-Agenda/Preliminary minutes; (2) Fulton
County Purchasing Department Bid Tabulation Sheets for
1997; and (3) Request for Approval of Lowest Responsible
Bidder data.
In computing MFBE and non-MFBE availability for the
years 1994-1997, Dr. Boston relies on the number of bids
submitted as opposed to the number of bidders. With regard
to the award of contracts less than $20,000, he reported
MFBE availability of 25.1% in 1994, 29.9% in 1995, 25.8%
in 1996, and 23.1% in 1997. The average of these
availability figures is 25.9%. The report further reflects
utilization percentages of 26.8% in 1994, 32.1% in 1995,
37.2% in 1996, and 34.6% in 1997. Significantly, these
figures produce disparity ratios of 1.06, 1.07, 1.44, and 1.49.
Dr. Boston then performed standard deviation analysis based
on the utilization and availability percentages. This analysis
describes the probability that the measured disparity is the
5la
result of chance. The Eleventh Circuit has stated that
scientists consider a finding of two standard deviations to be
significant, which means that “there is about one chance in 20
that the explanation for the deviation could be random and
the deviation must be accounted for by some factor other than
chance.” Peightal v. Metropolitan Dade County, 26 F.3d
1545, 1556 n. 16 (11th Cir. 1994). According to Dr. Boston,
the standard deviation calculations for each year indicate that
non-MFBEs were not underutilized and MFBEs were not
overutilized. Dr. Boston also conducted an analysis of
contract awards over $20,000, but the Court can discern no
availability figures for MFBEs and non-MFBEs.
The Court finds that Dr. Boston’s rebuttal study fails to
provide a strong basis in evidence for the 1994 MFBE
Program. It also fails to provide sufficient probative evidence
to justify the gender preferences contained in the program.
The study reports an average availability based on a liberal
bid analysis of 25.9%. The study shows that from 1994-
1997, MFBEs were overutilized to some extent, if not a
statistically significant extent. The disparity ratios are all
much greater than the .80 recognized as indicating significant
disparity. Engineering Contractors, 122 F.3d at 914. The
Court fails to see how such a finding could support a finding
of discrimination against MFBEs sufficient to justify a 35%
preference program for MFBEs. The County has also failed
to submit any credible statistical analysis showing a gross
disparity between the availability of minority and female
firms and their utilization by Fulton County.
2. Anecdotal Evidence
The Court now turns to examine the anecdotal evidence
presented by the Defendants to justify the 1994 MFBE
52a
Program. Fulton County has introduced a substantial amount
of anecdotal evidence in connection with the Brimmer-
Marshall Study and the 1994 Post-Disparity Study. As
discussed above, anecdotal evidence may be used to establish
discrimination, especially if buttressed by relevant statistical
evidence. Engineering Contractors, 122 F.3d at 907. The
Eleventh Circuit stated that:
Anecdotal evidence can play an important role in bolstering
statistical evidence, but that only in the rare case will
anecdotal evidence suffice standing alone. While such
evidence can doubtless show the perception and, on
occasion, the existence of discrimination, it needs statistical
underpinnings or comparable proof to show that substantial
amounts of business were actually lost to minority or
female contractors as the result of the discrimination.
Id. at 925-26. As Dr. Marshall acknowledged at trial, the
problem with anecdotal evidence is that it is subject to “all
kinds of biases.” That is why it needs, in the words of the
Eleventh Circuit, statistical underpinnings.
In Part II of the Brimmer-Marshall Study, the authors
presented anecdotal evidence through confidential in-depth
interviews of 76 individuals regarding the ongoing effects of
past and present race and gender discrimination. (Def. Exh.
146, Brimmer-Marshall Study, Part II). The individuals
interviewed included trade association representatives, MBE
representatives, civic organization representatives, and public
administrators who played some role in the development and
implementation of MFBE programs. The interviewers
painted a bleak picture of discriminatory practices in the
Atlanta area, especially with regard to private sector
discrimination. The interviewees reported difficulties and
53a
unfavorable experiences of racial, ethnic and gender
discrimination in several areas, including (1) discrimination
in bonding; (2) discrimination in financing;
(3) discrimination in munities; (4) doubl
standards in performance and qualifications; (5) limited
access to private sector markets; and (6) stereotypical
attitudes on the part of customers and buyers.
Further, Fulton County conducted open public hearings in
1992 in connection with the Board’s acceptance of the
findings in the Brimmer-Marshall Study. At those hearings,
numerous individuals provided further anecdotal evidence
regarding their experiences in the Fulton County contracting
and procurement activities and practices in the Atlanta/Fulton
County marketplace. (Statement of Michael Cooper at 3).
The individuals included construction contractors, MFBE
owners, laborers, professionals, representatives from the City
of Atlanta, and representatives of government agencies. The
Court has reviewed the tapes of the hearing. Only two
individuals testified to having experienced discrimination by
Fulton County. One of these was a Native-American
designer who complained bitterly that Fulton County uses the
MFBE Program to benefit only African-Americans. The
most common complaints were about bonding, insurance and
other contract requirements that made it difficult for small or
newer businesses to compete; the failure of County officials
to return phone calls and other communication problems; the
lack of capital and inability to obtain financing; slow
payments by prime contractors; and minority and female
businesses used as fronts for majority contractors. One
minority contractor recognized that the desire of existing
businesses to keep established clients is not in itself
discrimination. The last witness, speaking on behalf of the
National Association for Minority Contractors, testified that
54a
the MFBE Program should be used to transfer wealth to the
black community. The anecdotal evidence presented at the
public hearings is insufficient to support racial and ethnic
preferences subject to strict scrutiny.
In the 1994 Post-Disparity Study, Dr. Boston conducted a
random survey of 183 minority and female firms certified by
Fulton County. (Def. Exh. 21 at 33). The number of total
responses to the survey was 73. The distribution of
respondents to the survey is as follows: (1) 72.7% African-
American; (2) 16.7% majority female; (3) 4.2% Asian;
(4) 1.4% Hispanic; and (5) 4.2% Native-American. In his
survey, Dr. Boston found that 16% of those responding
agreed or strongly agreed that they have encountered
discrimination at Fulton County in the past. (/d. at 34, Table
14). Approximately 12% agreed or strongly agreed that they
are still encountering discrimination at Fulton County. The
survey also found that (1) 52% agreed or strongly agreed that
they have encountered discrimination in pursuing financing
and credit in the last five years; (2) 20% agreed or strongly
agreed that they have encountered bonding discrimination in
the last five years; and (3) 53% agreed or strongly disagreed
that they have encountered discrimination by majority-owned
firms in the last five years. Overall, MBEs report that they
still feel discriminated against, especially by majority firms.
Dr. Boston also reports that there is a feeling that the MFBE
programs are skewed to assist African-American vendors.
(/d. at 35, Table 16).
The anecdotal evidence reflects the honest and concerned
beliefs of many in the Atlanta and Fulton County area that
they have been or are the victims of discriminatory practices.
However, the anecdotal evidence alone is insufficient to
provide the strong basis in evidence to justify the racial and
55a
ethnic preferences or sufficient probative evidence to justify
the gender preferences of the 1994 MFBE Program. It is
insufficient to offset the weaknesses of Fulton County’s
Statistical evidence. The Court notes that much of the
anecdotal evidence offered supports the identification of
discrimination in the private sector and not by Fuiton County.
This is clearly not the exceptional case where anecdotal
evidence standing alone may justify a race, ethnic or gender
preference program.
D. NARROW TAILORING AND SUBSTANTIAL
RELATIONSHIP
As the Eleventh Circuit did in Engineering Contractors, the
Court will proceed with the narrow tailoring analysis
notwithstanding the finding that the 1994 MFBE program
does not rest on an adequate evidentiary foundation. The
Eleventh Circuit has made it clear that the essence of this
inquiry is whether racial preferences were adopted only as a
“last resort.” Engineering Contractors, 122 F.3d at 926. The
Eleventh Circuit has identified four factors that should be
taken into account: (1) the necessity for the relief and the
efficacy of alternative remedies; (2) the flexibility and
duration of the relief, including the availability of waiver
provisions; (3) the relationship of numerical goals to the
relevant market; and (4) the impact of the relief on the rights
of innocent third parties. Jd. at 927 (citing Ensley Branch, 31
F.3d at 1569).
Fulton Couuty’s 1994 MFBE Program fails this test on
several grounds. First, it is not the law in the Eleventh
Circuit that the existence of a race-based problem necessitates
a race-based remedy. “If a race-neutral remedy is sufficient
to’cure a race-based problem, then a race-conscious remedy
56a
can never be narrowly tailored to that problem.” Engineering
Contractors, 122 F.3d at 927. There is no evidence that the
Fulton County government has itself discriminated against
minorities or females in the decades of the 1980s and 1990s.
It has had available to it the race-neutral remedies identified
by the Supreme Court in Croson, 488 U.S. at 509-10, 109 S.
Ct. at 730-31, and by the Eleventh Circuit in Engineering
Contractors, 122 F.3d at 928. During this period, a majority
of the Commissioners on the Board have been African-
American. However, Fulton County has been operating a
racial and ethnic preference program for most of the last two
decades. The program is now defended entirely on the basis
of discrimination in the private sector. While it has paid lip
service since Croson, the Court is not persuaded that it has
seriously considered race-neutral remedies. There is no
~—~evidence in the record that any Commissioner has offered a
resolution during this period substituting a program of race-
neutral measures as an alternative to numerical set asides
based upon race and ethnicity. There is no evidence in the
record of any proposal by the staff of Fulton County of
substituting a program of race-neutral measures as an
alternative to numerical set asides based upon race and
ethnicity. There has been no evidence offered of any debate
within the Commission about substituting a program of race-
neutral measures as an alternative to numerical set asides
based upon race and ethnicity. Dr. Marshall and Dr. Boston
both testified that they were not asked to study the efficacy of
race-neutral measures. Dr. Marshall’s argument at trial that
race neutral measures are more expensive than preferences is
entitled to no weight in light of Croson. It is instructive to
return to Croson where Justice O’Connor stated:
Where there is a significant statistical disparity between the
number of qualified minority contractors willing and able to
57a
perform a particular service and the number of such
contractors actually engaged by the locality or the locality’s
prime contractors, an inference of discriminatory exclusion
could arise. Under such circumstances, the city could act to
dismantle the closed business system by taking appropriate
measures against those who discriminate on the basis of
race or other illegitimate criteria.
Croson, 488 U.S. at 509, 109 S. Ct. at 730 (citations omitted).
There_is no evidence that Fulton County has made any
attempt to identify majority contractors, lenders, bonding
companies, or others who discriminate against minority
business enterprises. Thus, those who are disfavored by the
program are not those who have engaged in discrimination. —
Similarly, those who are favored by the program are not
necessarily those who have suffered from discrimination.
The “random inclusion” of ethnic or racial groups who may
never have suffered from discrimination further suggests that
Fulton County’s remedy for discrimination is not narrowly
tailored to a remedial purpose. Croson, 488 U.S. at 506, 109
S. Ct. at 728. It appears that participation goals for
Hispanics, Asians and Native-Americans were added to the
program solely to boost the overall minority participation
percentage. There is no evidence that Fulton County
considered alternatives to ethnic preferences with respect to
minorities other than African-Americans. As in Engineering
Contractors, “[i]t is clear as window glass that the County
gave not the slightest consideration to any alternative to a
Hispanic affirmative action program. Awarding construction
contracts based upon ethnicity is what the County wanted to
do, and all it considered doing, insofar as Hispanics were
concemed.” Engineering Contractors, 122 F.3d at 928.
There is no evidence that race neutral measures were initiated
58a
on a trial basis and failed. See Cone Corporation v.
Hillsborough County, 908 F.2d 908 (11th Cir.), cert. denied,
498 U.S. 983, 111 S. Ct. 516, 112 L. Ed. 2d 528 (1990).
Fulton County offered no evidence to refute the testimony of
former Chairman Skandalakis that no consideration was ever
given to substituting a program of race neutral measures as an
alternative to numerical set asides based upon race and
ethnicity. Accordingly, the Court has no alternative but to
accept that testimony as credible and worthy of belief. Mr.
Skandalakis further testified that he voted in favor of the
1994 MFBE program to advance his own political agenda by
accommodating the African-American majority on the Board
rather than to remedy the effects of past discrimination. This
is the sort of “racial politics” condemned by Justice
O’Connor in Croson. The racial and ethnic preferences
adopted in the 1994 MFBE program were not adopted as a
“last resort” and fail the “narrow tailoring” test for this
reason.
Second, for all of the reasons set forth above, there is no
substantial relationship between the numerical goals and the
relevant market. There is no credible evidence that minorities
and women accounted for 35% of the business enterprises
ready and willing to bid on and perform contracts for Fulton
County in 1994 or in any subsequent year. Dr. Boston
testified that the 35% goal that he recommended was arrived .
at only by adding to current availability some conjectural
percentage to compensate minorities for past discrimination.
Dr. Marshall testified that minority participation goals must
be set higher than current availability in order to compensate
minorities for past discrimination and lack of opportunity in
the private sector. This may be good public policy.
However, itis inconsistent with Justice O’Connor’s analysis
59a
in Croson as followed by the Eleventh Circuit in Engineering
Contractors.
With respect to the narrow tailoring analysis, the County
contends that the program should be upheld because it sets
“goals” rather than mandatory quotas and that it has liberal
waiver provisions. The Fulton County 1994 MFBE program
is in all significant respects identical to the Dade County
program struck down in Engineering Contractors. The Dade
County program also utilized participation “goals” and had a
waiver provision. In this regard, the Court accepts as credible
the testimony of Thomas Bruns that various contracting
procedures were employed by Fulton County department
heads, buyers and the Office of Contract Compliance to
award contracts to minorities in order to achieve the
numerical percentages established by the
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