Adarand Constructors, Inc. v. Slater, 97-1304

• Decision Date: 04 March 1999
• Docket Number: No. 97-1304,97-1304
• Citation: 169 F.3d 1292
• Parties: 1999 CJ C.A.R. 1853 ADARAND CONSTRUCTORS, INC., a Colorado corporation, Plaintiff-Appellee, v. Rodney E. SLATER, Secretary of the Department of Transportation; Kenneth R. Wykle, Administrator of the Federal Highway Administration; Vincent F. Schimmoller, Administrator of Region VIII of the Federal Highway Administration; Larry C. Smith, Engineer of the Central Federal Lands Highway Division, Defendants-Appellants. Pacific Legal Foundation; Employment Law Center; Minority Business Enterprise Legal Defense and Education Fund, Inc., Amici Curiae.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1292

169 F.3d 1292

1999 CJ C.A.R. 1853

ADARAND CONSTRUCTORS, INC., a Colorado corporation, Plaintiff-Appellee, v. Rodney E. SLATER, Secretary of the Department of

Transportation; Kenneth R. Wykle, Administrator of the

Federal Highway Administration; Vincent F. Schimmoller,

Administrator of Region VIII of the Federal Highway

Administration; Larry C. Smith, Engineer of the Central

Federal Lands Highway Division, Defendants-Appellants.

Pacific Legal Foundation; Employment Law Center; Minority

Business Enterprise Legal Defense and Education

Fund, Inc., Amici Curiae.

No. 97-1304.

United States Court of Appeals,

Tenth Circuit.

March 4, 1999.

Leslie A. Simon, Department of Justice (Mark L. Gross, Department of Justice; Nancy E. McFadden, General Counsel, Paul M. Geier, Assistant General Counsel for Litigation, Sara McAndrew, Trial Attorney, Edward V.A. Kussy, Acting Chief Counsel, Federal Highway Administration, Department of Transportation; Isabelle Katz Pinzler, Acting Assistant Attorney General; Thomas E. Perez, Deputy Assistant Attorney General; and William R. Yeomans, Acting Deputy Assistant Attorney General, with her on the briefs), Washington, D.C., for Defendants-Appellants.

William Perry Pendley (Todd S. Welch, with him on the brief), Mountain States Legal Foundation, Denver, Colorado, for Plaintiff-Appellee.

Robin L. Rivett, Sharon L. Browne, and Stephen R. McCutcheon, Jr., Pacific Legal Foundation, Sacramento, California, filed an amicus curiae brief.

William C. McNeill, III and Julian A. Gross for the Employment Law Center, San Francisco, California, and Franklin M. Lee and Tracie A. Watkins for the Minority Business Enterprise Legal Defense and Education Fund, Inc., Washington, D.C., filed an amicus curiae brief.

Michael E. Kennedy, General Counsel for Associated General Contractors of America, Inc., and John G. Roberts, Jr., David G. Leitch, and H. Christopher Bartolomucci of Hogan & Hartson, L.L.P., Washington, D.C., filed an amicus curiae brief for Associated General Contractors of America, Inc.

Before LUCERO, McKAY and MURPHY, Circuit Judges.

LUCERO, Circuit Judge.

This case began when plaintiff Adarand Constructors, Inc., challenged the constitutionality, under the Equal Protection Clause of the Fifth Amendment, of certain subcontractor compensation clauses (SCCs) used by the Department of Transportation to enhance government contracting opportunities for small businesses that are owned and controlled by socially and economically disadvantaged individuals. A panel of this court previously upheld these same SCCs under "intermediate scrutiny." See Adarand Constructors, Inc. v. Pena, 16 F.3d 1537 (10th Cir.1994) (Adarand II ). ¹ Holding that "all racial classifications, imposed by whatever federal, state, or local governmental actor, must be analyzed by a reviewing court under strict scrutiny," the Supreme Court reversed, see Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 227, 237, 115 S.Ct. 2097, 132 L.Ed.2d 158 (1995) (Adarand III ) (overruling Metro Broadcasting v. FCC, 497 U.S. 547, 110 S.Ct. 2997, 111 L.Ed.2d 445 (1990)), and remanded the case to district court for a determination of whether the SCCs are narrowly tailored to serve a compelling governmental interest. Applying strict scrutiny, the district court granted summary judgment for plaintiffs. See Adarand Constructors, Inc. v. Pena, 965 F.Supp. 1556 (D.Colo.1997) (Adarand IV ).

The government now appeals, arguing that the district court incorrectly found that the subcontractor compensation clause (SCC) program was not sufficiently narrowly tailored to a compelling governmental interest as to survive strict scrutiny. Additionally, the government argues that the district court erred in ruling the use of the SCC program to be unconstitutional not only in the direct federal contracting program administered by the Department of Transportation, but also in federal aid programs operated by the State of Colorado with federal financial assistance. However, as we find this case has become moot, we do not resolve those issues, but rather remand and direct the district court to vacate its judgment below, pursuant to United States v. Munsingwear, Inc., 340 U.S. 36, 71 S.Ct. 104, 95 L.Ed. 36 (1950).

I

The facts of this case and the program at issue have been set out in numerous judicial opinions, see, e.g., Adarand III, 515 U.S. at 205-10, 115 S.Ct. 2097, and we need not repeat them in detail. The essential matter relevant to our disposition is that Adarand seeks declaratory and injunctive relief against the use of SCCs that provide additional compensation to federal government contractors employing subcontractors that qualify as Disadvantaged Business Enterprises (DBEs). The company claims that the various routes to DBE certification incorporate impermissible presumptions of social disadvantage based on race. The Supreme Court held that Adarand alleged a concrete and particularized injury sufficient to grant standing to pursue its challenge, in that the classification at issue "prevent[s] the plaintiff from competing on an equal footing." Id. at 211, 115 S.Ct. 2097 (quoting Northeastern Fla. Chapter of the Associated Gen. Contractors of Am. v. Jacksonville, 508 U.S. 656, 667, 113 S.Ct. 2297, 124 L.Ed.2d 586 (1993)). The Court held Adarand's injury sufficiently actual or imminent to satisfy standing requirements because Adarand had shown that it was "very likely" to bid, within a year, on another federal contract offering incentives for hiring small disadvantaged subcontractors. Adarand III, 515 U.S. at 211, 115 S.Ct. 2097.

Since the district court's grant of judgment in this case, however, the Colorado Department of Regulatory Agencies has certified Adarand as a DBE, which certification entitles Adarand to the benefit of the SCC under challenge. The clause at issue provides that "[a] small business concern will be considered a DBE after it has been certified as such by the U.S. Small Business Administration or by any State's Department of Highways/Transportation." See Appellant's Br., Addendum 3, at 1 (Federal Lands Highway DBE/WBE Subcontract Compensation Clause) (emphasis added).

The circumstances leading to Adarand's DBE certification are as follows. After issuance of Adarand IV, Adarand filed suit against state officials challenging Colorado's use of DBE guidelines in administering federally assisted highway programs. Colorado subsequently modified its DBE regulations to eliminate the presumption of social and economic disadvantage for racial and ethnic minorities, and to condition the social disadvantage branch of its DBE inquiry solely on the applicant's certification that he or she is socially disadvantaged.

Following this modification, the district court denied Adarand's motion for a preliminary injunction for lack of standing. The court apparently reasoned that as a result of the SCC program and the racial presumptions employed in awarding DBE status, Randy Pech, Adarand's principal, had been socially disadvantaged as a white male. According to the court, Adarand Constructors therefore possessed an adequate remedy at law through inclusion in the DBE program, and thus lacked standing to obtain a preliminary injunction against the state's use of the SCC in question. When Adarand applied for DBE status after the court's ruling, Pech certified that he was socially disadvantaged, and Adarand was granted the status.

II

As Adarand is now entitled to the preference it challenges, it can no longer assert a cognizable constitutional injury. "To qualify as a party with standing to litigate, a person must show, first and foremost, 'an invasion of a legally protected interest' that is 'concrete and particularized' and 'actual or imminent.' " Arizonans for Official English v. Arizona, 520 U.S. 43, 64, 117 S.Ct. 1055, 1067, 137 L.Ed.2d 170 (1997) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). These requirements apply equally to cases on appeal. See id. To qualify for adjudication in the federal courts, "an actual controversy must be extant at all stages of review, not merely at the time the complaint is filed." Id. at 1068 (citations omitted). Adarand seeks prospective relief invalidating the use of the SCC, and must therefore demonstrate a " 'real and immediate threat that [it] would again' suffer similar injury in the future." Adarand III, 515 U.S. at 211, 115 S.Ct. 2097 (quoting Los Angeles v. Lyons, 461 U.S. 95, 105, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983)); see also Buchwald v. University of New Mexico Sch. of Med., 159 F.3d 487, 493 (10th Cir.1998) (concluding that plaintiff has no standing to seek prospective injunction and declaratory relief against consideration of residency in medical school admissions without showing threat of similar injury in future). As a DBE itself, Adarand cannot make that showing, and hence the case before us is moot.

Adarand raises several arguments as to why the case should not be considered moot. First, it argues that it received DBE status only as a result of the decision below, which led the Transportation Commission of Colorado to adopt the DBE policy under which Adarand was subsequently certified. This possibility does not defeat mootness. We have previously held that a city's withdrawal of a policy struck down by a district court rendered plaintiffs's challenge to that policy moot, notwithstanding the fact that the policy had been withdrawn because it had been ruled unconstitutional. See 19 Solid Waste Dep't Mechanics v. Albuquerque, 76 F.3d 1142, 1143-44 (10th Cir.1996). Although the district court's comments in denying Adarand's motion for a preliminary injunction in Adarand Constructors, Inc. v. Romer may have prompted Pech's application for DBE status, the dispositive fact for our standing analysis is that he now has that status. Further, Adarand faces no collateral legal consequences from the SCC program. Cf. Sibron v. New York,...