Concrete Works of Colorado, Inc. v. City and County of Denver, 93-1095

• Decision Date: 23 September 1994
• Docket Number: No. 93-1095,93-1095
• Citation: 36 F.3d 1513
• Parties: CONCRETE WORKS OF COLORADO, INC., a Colorado corporation, Plaintiff-Appellant, v. DENVER, CITY AND COUNTY OF, a municipal corporation, Defendant-Appellee, Associated General Contractors of America, Inc.; Colorado Building Industry Coalition; and Hispanic Contractors of Colorado, Amici Curiae.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1513

36 F.3d 1513

CONCRETE WORKS OF COLORADO, INC., a Colorado corporation Plaintiff-Appellant, v. DENVER, CITY AND COUNTY OF, a municipal corporation Defendant-Appellee Associated General Contractors of America, Inc.; Colorado Building Industry Coalition; and Hispanic Contractors of Colorado, Amici Curiae.

No. 93-1095.

United States Court of Appeals Tenth Circuit.

Sept. 23, 1994.

Rehearing Denied Oct. 17, 1994.

Todd S. Welch of Mountain States Legal Foundation, Denver, CO (William Perry Pendley and John G. Nelson, with him on the brief), for plaintiff-appellant.

Angelina Irizarry of Irizarry & McCall, Denver, CO (Raymond D. McCall of Irizarry & McCall, and Daniel E. Muse, John R. Gross, Norman R. Bangeman, and Victoria Ortega of Denver City Attorney's Office, with her on the brief), for defendant-appellee.

Wm. Bradford Reynolds of Dickstein, Shapiro & Morin, Washington, DC, for amicus curiae Associated General Contractors of America, Inc.

Michael J. Glade of Inman Flynn & Biesterfeld, P.C., Denver, CO, for amicus curiae Colorado Bldg. Industry Coalition (Hispanic Contractors of Colorado also join in this Brief).

Before WHITE, Associate Justice (Ret.), ^* LOGAN and EBEL, Circuit Judges.

EBEL, Circuit Judge.

In this appeal, we consider whether the City and County of Denver's race- and gender-conscious public contract award program complies with the Fourteenth Amendment's guarantee of equal protection of the laws. Plaintiff-Appellant Concrete Works of Colorado, Inc. ("Concrete Works") appeals the district court's summary judgment order upholding the constitutionality of Denver's public contract program. We conclude that genuine issues of material fact exist with regard to the evidentiary support that Denver presents to demonstrate that its program satisfies the requirements of City of Richmond v. J.A. Croson Co., 488 U.S. 469, 109 S.Ct. 706, 102 L.Ed.2d 854 (1989). Accordingly, we reverse and remand.

I. Background

On September 4, 1990, the Denver City Council enacted Ordinance No. 513 ("Ordinance") to enable certified racial minority business enterprises ("MBEs") ¹ and women-owned business enterprises ("WBEs") to participate in public works projects "to an extent approximating the level of [their] availability and capacity." Denver, Co., Rev.Mun.Code ch. 28, art. III, Sec. 28-53 (Supp.1990). This Ordinance is the most recent in a series of provisions that the Denver City Council has adopted since 1983 to remedy perceived race and gender discrimination in the distribution of public and private construction contracts. ²

The Ordinance imposes five requirements for a business to obtain certification as an MBE or WBE: (1) that it be 51 percent owned by one or more eligible racial minorities or women; (2) that it be managed and controlled by one or more eligible racial minorities or women; (3) that it has been actively in business for at least three months; (4) that the business demonstrate, by written documentation or affidavit, that it has suffered from past race or gender discrimination in Denver's construction industry; and (5) that it has not generated annual revenues that exceed $10 million for "building construction" or "heavy construction," $5 million for "special trade contractors," or $3 million for "engineering, accounting, research management and related services." Ordinance Sec. 28-54; Sec. 28-73(b)-(c); Sec. 28-74. To maintain eligibility, an MBE or WBE must annually submit a renewal application that updates and reaffirms these certification requirements. Sec. 28-73(d).

The Ordinance directs the Office of Contract Compliance ("OCC") to establish goals, on a project-by-project basis, for the participation level of MBEs and WBEs in city projects. Ordinance Sec. 28-56. Prior to the solicitation of bids for a specified project, an MBE and/or WBE participation goal (measured as a percent of each project's design and construction cost) is set according to the OCC's assessment of the capacity and availability of MBEs and WBEs for the project. The statutory goals for total annual "construction" expenditures are 16 percent for MBEs and 12 percent for WBEs; the goal for "design services" is 10 percent for both MBEs and WBEs. Ordinance Sec. 28-55(a). The Ordinance does not require the OCC to set participation goals for every project and the OCC often sets individual project goals below the annual goals levels.

If the OCC establishes a project goal, all bidders must demonstrate either how they intend to satisfy that goal or that they have made a good faith effort to do so. Satisfaction of one of these two standards renders a bidder eligible to compete, and the contract is then awarded to the lowest eligible bidder, regardless of the race or gender of that bidder.

To satisfy a project's goal, the bidder may: (1) itself be a certified MBE or WBE; (2) form a joint venture with a certified MBE or WBE; or (3) enlist certified MBEs and WBEs as subcontractors or suppliers. Ordinance Sec. 28-57. ³ If the bidder cannot meet the project goal by one of these stated means, then it must submit a statement addressing the Ordinance's ten requirements to establish good faith. ⁴ Consistent with this good-faith standard, the prime contractor is not required to hire MBE or WBE subcontractors who are not the lowest bidders or who are unqualified. In other words, the project goals do not impose unyielding numerical quotas.

The Ordinance empowers the OCC to assess the credibility of a bidder's good-faith showing. If the OCC determines that the bidder has failed to comply with the Ordinance's requirements, the bid is deemed "nonresponsive" and the bidder is ineligible to receive the contract award. Ordinance Sec. 28-59; Sec. 28-64. However, the contractor may petition the OCC Director to conduct a hearing to review the finding of nonresponsiveness. Sec. 28-33(a). If the contractor remains unsatisfied with the final ruling issued after the hearing, it may seek judicial review in state court pursuant to Col.R.Civ.P. 106(a)(4). Sec. 28-33(d)-(e).

On January 6, 1992, Concrete Works, a nonminority and male-owned construction firm, commenced this Equal Protection Clause challenge to the Ordinance. Concrete Works alleged that the Ordinance caused it to lose three construction contracts for failure to comply with either the stated MBE and WBE participation goals or the good-faith requirements. Rather than pursuing administrative or state court review of the OCC's findings, Concrete Works initiated this action, seeking a permanent injunction against enforcement of the Ordinance and damages for lost contracts.

On February 26, 1993, and after extensive discovery, the district court granted Denver's summary judgment motion. Concrete Works, Inc. v. City and County of Denver, 823 F.Supp. 821 (D.Colo.1993). The court concluded, albeit not without reservations, that Concrete Works had standing to bring this claim. With respect to the merits, the court held that Denver's program satisfied the strict scrutiny standard embraced by a majority of the Supreme Court in Croson because it was narrowly tailored to achieve a compelling government interest. First, the court determined that Denver's factual showing of past race and gender discrimination justified its compelling government interest in remedying such discrimination. Id. at 831-41. Second, the court reasoned that the program was narrowly tailored to meet that end because: (1) Denver first considered race- and gender-neutral means of increasing MBE and WBE participation; (2) the Ordinance creates a flexible scheme rather than a rigid numerical quota; (3) the Ordinance does not require prime contractors to hire an MBE or WBE subcontractor who fails to submit the lowest bid; and (4) the Ordinance applies only to contracts awarded by Denver for public works projects within the City and County of Denver. Id. at 841-45. Concrete Works timely appealed the court's summary judgment order.

II. Procedural Posture and Standards of Review

A. Standard of Review

We review de novo the grant of summary judgment and apply the same standard used by the district court. Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir.1990). Summary judgment is appropriate only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). We examine the factual record and reasonable inferences therefrom in the light most favorable to Concrete Works, the party opposing summary judgment. Applied Genetics, 912 F.2d at 1241.

Denver, as the moving party, has the initial burden to show "that there is an absence of evidence to support the nonmoving party's case." Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir.1991) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986)). Once the moving party meets this burden, the burden shifts to the nonmoving party to demonstrate a genuine issue for trial on a material matter. Id. In so doing, the nonmoving party may not rest solely on the allegations in its pleadings, but must instead, by its "own affidavits, or by the 'depositions, answers to interrogatories, and admissions on file,' designate 'specific facts showing that there is a genuine issue for trial.' " Celotex Corp., 477 U.S. at 324, 106 S.Ct. at 2553 (quoting Fed.R.Civ.P. 56(e)).

At the summary judgment stage, the judge's function is not to weigh the evidence and determine the truth of the matter. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). Nonetheless, "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party," summary judgment in favor of the moving party is proper. Matsushita Elec. Indus....