187 F.3d 743 (7th Cir. 1999), 98-2267, Indianapolis Minority Ass'n v Wiley

Docket Nº:98-2267
Citation:187 F.3d 743
Party Name:INDIANAPOLIS MINORITY CONTRACTORS ASSOCIATION, INCORPORATED, an Indiana not for profit corporation, LENZO HARRIS, FRAN SCOTT, et al., Plaintiffs-Appellants, v. CURTIS WILEY, in his capacity as Commissioner of the Indiana State Department of Transportation, INDIANA DEPARTMENT OF TRANSPORTATION, BETTY Page 744 COCKRUM, in her capacity as Commission
Case Date:August 13, 1999
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 743

187 F.3d 743 (7th Cir. 1999)

INDIANAPOLIS MINORITY CONTRACTORS ASSOCIATION, INCORPORATED, an Indiana not for profit corporation, LENZO HARRIS, FRAN SCOTT, et al., Plaintiffs-Appellants,


CURTIS WILEY, in his capacity as Commissioner of the Indiana State Department of Transportation, INDIANA DEPARTMENT OF TRANSPORTATION, BETTY

Page 744

COCKRUM, in her capacity as Commissioner of the Indiana Department of Administration, et al., Defendants-Appellees.

No. 98-2267

United States Court of Appeals, Seventh Circuit

August 13, 1999

Argued November 13, 1998

Rehearing En Banc Denied October 13, 1999

Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 94 C 1175--John D. Tinder, Judge.

Page 745

[Copyrighted Material Omitted]

Page 746

Before BAUER, RIPPLE and EVANS, Circuit Judges.

RIPPLE, Circuit Judge.

The plaintiffs brought this action under 42 U.S.C. sec. 1983, 42 U.S.C. sec. 1985, and Title VI of the Civil Rights Act of 1964 (42 U.S.C. sec. 2000d) to challenge the manner in which Indiana administers the program for minority-owned business participation required by federal statutes and regulations providing federal funding for highway construction. The plaintiffs appeal the district court's decision to grant summary judgment in favor of the defendants as well as various evidentiary rulings made by the district court prior to its summary judgment ruling. For the reasons set forth in the following opinion, we affirm the judgment of the district court.



A. The Statutory Scheme

In various highway funding statutes, Congress has established participation goals for minority- owned contractors. Under the Surface Transportation Assistance Act of 1982 ("STAA"),1 the Surface Transportation and Uniform Relocation Assistance Act of 1987 ("STURAA"),2 and the Intermodal Surface Transportation Efficiency Act of 1991 ("ISTEA"),3 each recipient of federal highway funds must expend at least 10% of such funds with small business concerns owned and controlled by socially and economically disadvantaged individuals.

The Department of Transportation ("DOT") has promulgated regulations to implement these statutes. See 49 C.F.R. Pt. 23 (1998). These regulations require states receiving federal funds to submit to the DOT a disadvantaged business enterprise affirmative action program. See id. sec. 23.43(b). The regulations also establish eligibility standards that a business must meet to be certified as a disadvantaged business enterprise ("DBE"). See id. sec. 23.62. The governing statutes provide that Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and women are rebuttably presumed

Page 747

to be "socially and economically disadvantaged." When certifying companies as DBEs, a state may apply this presumption without investigating the situation of particular applicants. See id. sec. 23.69 & App. A to Subpt. D. However, the regulations allow third parties to challenge the certification of a particular business by presenting evidence to rebut the presumption of disadvantage. See id.

The statutory scheme does not provide specific goals or quotas for participation by any particular disadvantaged group but instead establishes an overall goal of DBE participation of 10% for all groups combined. See id. sec.sec. 23.61, 23.62. The Secretary of Transportation is authorized to approve an overall goal of less than 10% if a state provides sufficient justification for a lower percentage. See id. sec. 23.65. The DBE requirements apply to all contracts funded in whole or in part by federal highway money. See id. sec. 23.43.

B. Proceedings in the District Court

The plaintiffs4 brought suit in district court, alleging that Indiana5 has not fulfilled its responsibilities under the statutory scheme. Their primary claim is that Indiana has improperly satisfied the 10% DBE participation requirement by certifying and giving business to various "sham" or "front" companies that are not truly disadvantaged, thus diverting business from legitimate DBEs. The plaintiffs also assert that certain aspects of Indiana's DBE program do not comply with federal requirements. In particular, the plaintiffs complain of the manner in which Indiana conducts the certification process, its failure to provide a bonding, finance, and technical assistance program, and its failure to meet the 10% DBE requirements legitimately. The plaintiffs seek relief under sec. 1983 for alleged violations of the federal statutes and the Fourteenth Amendment's Equal Protection Clause, under Title VI (42 U.S.C. sec. 2000d) for the defendants' allegedly discriminatory administration of a federally funded program, and under 42 U.S.C. sec. 1985(3) for conspiracy to violate the plaintiffs' civil rights.

In prior stages of this litigation, the district court dismissed on Eleventh Amendment grounds all claims against the State of Indiana, INDOT, and DOA, except for the Title VI claim. The district court also dismissed all sec. 1983 claims for money damages against the individual state officers sued in their official capacities. The claims that remained at the summary judgment stage are 1) the sec. 1983 claim for prospective relief against the individual state officials for alleged violations of STURAA and ISTEA, 2) the sec. 1983 claim for prospective relief against the individual state officials for alleged violations of equal protection, 3) the Title VI claim against the State of Indiana, INDOT, DOA, and the individual defendants, and 4) the sec. 1985 claim against the individual defendants.

C. Holding of the District Court

In a comprehensive and thoughtful opinion, the district court addressed the parties'

Page 748

cross motions for summary judgment.6


The district court first addressed the plaintiffs' sec. 1983 claim for alleged violations of STURAA, ISTEA, and the implementing regulations. Relying on the Supreme Court's decision in Blessing v. Freestone, 117 S.Ct. 1353 (1997), the court concluded that the statutory scheme does not give rise to individual rights enforceable under sec. 1983. The court explained that, because the statutory scheme only prescribes a course of conduct for states to follow in structuring their DBE programs but does not confer any particular benefits on any particular individuals, the plaintiffs have no individual rights enforceable under sec. 1983. The court nevertheless did conclude that, under the reasoning in Mallett v. Wisconsin Division of Vocational Rehabilitation, 130 F.3d 1245, 1252-53 (7th Cir. 1997), the plaintiffs could utilize sec. 1983 to sue for a DBE plan that complies with

Page 749

federal requirements for the receipt of highway funding. The court emphasized that the plaintiffs do not, however, have an individual right to sue under sec. 1983 to remedy isolated violations of an otherwise compliant plan.


Turning next to the plaintiffs' sec. 1983 claim for a statewide plan that complies with federal requirements, the district court determined that Indiana's program meets all federal requirements. The district court conducted a detailed review of Indiana's DBE plan in light of the program components required under 49 C.F.R. sec. 23.45 and concluded that the plan satisfies the regulatory requirements. The court noted that Indiana's plan was first approved by the Federal Highway Administration in 1983 and has been re- approved periodically since then.

The district court then addressed specifically the plaintiffs' three arguments that Indiana's program violates federal requirements: 1) the lack of a bonding and financial assistance program, 2) the alleged failure to conduct site visits during the certification process, and 3) the alleged failure to meet the 10% DBE goal. First, the district court concluded that there was no issue for trial on the plaintiffs' first contention, because the federal regulations do not require a bonding program. The court explained that 49 C.F.R. sec. 23.41 requires states to implement a DBE plan that incorporates the elements listed in sec. 23.45(e) through (i), which do not include a bonding and financial assistance program. Next, the court held that the plaintiffs had not adequately shown that the defendants failed to conduct site visits, because the plaintiffs' key witness testified only that she was unaware of any site visit to her company. Moreover, the court held, the use of post office box numbers rather than street addresses for many firms listed in the DBE directories was not probative of the state's alleged noncompliance with the site visit requirement. Finally, the district court found no genuine issue as to the plaintiffs' third contention--that Indiana never met the 10% DBE goal--because it was not supported by any facts. The plaintiffs' key argument is that Indiana uses front companies to fulfill the DBE requirements. However, the plaintiffs never challenged the DBE certifications of any of these companies, as provided for in 49 C.F.R. sec. 23.69; nor have the plaintiffs made any showing that Indiana had any information in its possession that would rebut the presumption of these companies' DBE eligibility. The district court therefore granted summary judgment for the defendants on this sec. 1983 claim.


The district court then turned to the plaintiffs' sec. 1983 claim for...

To continue reading