Coral Const. Co. v. King County

• Citation: 729 F. Supp. 734
• Decision Date: 04 December 1989
• Docket Number: No. C89-1488WD.,C89-1488WD.
• Parties: CORAL CONSTRUCTION COMPANY, et al., Plaintiffs, v. KING COUNTY, Defendant.
• Court: U.S. District Court — Western District of Washington

729 F. Supp. 734

CORAL CONSTRUCTION COMPANY, et al., Plaintiffs, v. KING COUNTY, Defendant.

No. C89-1488WD.

United States District Court, W.D. Washington, at Seattle.

December 4, 1989.

Jack Gaylord Johnson, Seattle, Wash., for defendant.

John F. Bradach, Stoel, Rives, Boley, Jones & Grey, Seattle, Wash., and Paul A. D'Aloisio, Stoel, Rives, Boley, Jones & Grey, Portland, Or., for plaintiffs.

ORDER ON MOTIONS FOR SUMMARY JUDGMENT

DWYER, District Judge.

Plaintiffs and defendant have filed cross-motions for summary judgment. The parties agree that no disputes of fact exist and that this case will be fully decided on the present record. The court has considered all materials filed by the parties and has heard oral argument of counsel. A number of letters from non-parties have been received; these cannot be considered and have been placed in the chambers file. Being fully advised, the court now finds and rules as follows:

I. BACKGROUND

On May 1, 1989, the King County Council passed an ordinance amending the county's set-aside program for minority- and women-owned business enterprises ("MWBE's"). Proceedings of the King County Council Regular Meeting, Record at 1, 2 (May 1, 1989); King County, Wash., Code ch. 4.18. The program provides two methods by which MWBE's may receive preferences in bidding on county contracts. Under one method, contractors whose bids are within five percent of the lowest responsive bid are given preference in the award of the contract if their bids show that they are MWBE's or will use MWBE's on the project. King County, Wash., Code § 4.18.060(A)(1) ("percentage preference method"). Thus, an MWBE whose bid was five percent higher than the lowest responsive bid could nevertheless be awarded the contract over a low bidder who was not a MWBE.

Under the other set-aside method, contractors for county contracts of more than $10,000 must, with certain exceptions and limitations, use MWBE's for particular percentages of work on those contracts. King County, Wash., Code § 4.18.060(A)(2).

Plaintiff Coral Construction Company was the low bidder on a King County guardrail construction contract. Applying the percentage preference method,¹ the county awarded the contract to a minority business enterprise ("MBE"), whose bid was higher than that of Coral Construction.

Coral Construction and an Oregon chapter of the Associated General Contractors of America, Inc., brought this suit claiming that King County's set-aside program, on its face and as applied to Coral Construction, violates plaintiffs' equal protection rights. Plaintiffs rely on a recent case, City of Richmond v. J.A. Croson Co., 488 U.S. 469, 109 S.Ct. 706, 102 L.Ed.2d 854 (1989), in which the Supreme Court ruled that a municipal set-aside program violated the equal protection clause.²

In Croson the Court examined a set-aside program adopted by the city of Richmond, Virginia. The Richmond program required prime contractors to award at least 30 percent of the dollar amount of each city construction contract to MBE's. Id. at ___, 109 S.Ct. at 707.

Government classifications based on race may be employed only if justified by compelling government interests, and if their use is necessary to accomplishing their legitimate purpose. Palmore v. Sidoti, 466 U.S. 429, 432-33, 104 S.Ct. 1879, 1882, 80 L.Ed.2d 421 (1984). Remedying the effects of past discrimination can represent such a compelling interest. See Croson, 488 U.S. at ___, 109 S.Ct. at 720 (plurality opinion). A majority³ of the Court in Croson agreed that strict scrutiny is required in judicial review of race-based affirmative action programs, in order to "`smoke out' illegitimate uses of race by assuring that the legislative body is pursuing a goal important enough to warrant use of a highly suspect tool." Id. at ___, 109 S.Ct. at 721 (plurality opinion); id. at ___, 109 S.Ct. at 735 (Scalia, J., concurring in the judgment). In other words, courts must strictly scrutinize the use of racial classifications to determine whether the compelling interest relied upon by the government actually exists and suffices.

Applying this standard, the Court found that Richmond's set-aside program (1) was not supported by adequate evidence of past discrimination to establish Richmond's compelling interest; and (2) was not tailored narrowly enough to its goal of remedying the effects of past discrimination. Id. at ___, 109 S.Ct. at 723-29.

The Croson Court did not, however, conclude that race-based set-aside programs violate the equal protection clause per se. Justice O'Connor stated: "Nothing we say today precludes a state or local entity from taking action to rectify the effects of identified discrimination within its jurisdiction.... In the extreme case, some form of narrowly tailored racial preference might be necessary to break down patterns of deliberate exclusion." Id. at ___, 109 S.Ct. at 729 (plurality opinion). A majority of the court agreed with this statement. See id. at ___, 109 S.Ct. at 734 (Kennedy, J., concurring); id. at ___, 109 S.Ct. at 739 passim (Marshall, dissenting); see also Joint Statement, Constitutional Scholars' Statement on Affirmative Action After City of Richmond v. J.A. Croson Co., 98 Yale L.J. 1711, 1712 (1989) hereinafter Constitutional Scholars' Statement ("On at least four noteworthy occasions ... the Supreme Court has made clear that affirmative action remedies, if carefully devised, can be entirely constitutional.").

The Richmond program did not include preferences for women-owned business enterprises ("WBE's"), so the Croson Court did not address such programs. The Ninth Circuit has held that WBE set-aside programs are subject to "mid-level review" — a standard less searching than "strict scrutiny." WBE programs must demonstrate "exceedingly persuasive justification" to survive mid-level review. Associated Gen. Contractors v. City & County of San Francisco, 813 F.2d 922, 939-40 (9th Cir.1987) ("AGC") (quoting Mississippi Univ. for Women v. Hogan, 458 U.S. 718, 724, 102 S.Ct. 3331, 3336, 73 L.Ed.2d 1090 (1982)), petition for mandamus dismissed, ___ U.S. ___, 110 S.Ct. 296, 107 L.Ed.2d 276 (1989). Also, the means used to further the goal of remedying the effects of past discrimination against women must be "substantially related" to the achievement of that goal. Id. at 941.

II. DISCUSSION

Plaintiffs contend that King County's MBE set-aside program suffers from the same two defects found fatal to Richmond's program. They also argue that the WBE aspects of the program do not satisfy the standards set forth in AGC.

In Croson, virtually no evidence of past discrimination had been presented to support the rigid quota imposed by the Richmond set-aside program. The disparity in that case between the evidence of the harm and the breadth of the remedy has no parallel in the King County set-aside program. King County has evidence of greater weight, detail, and specificity to support the adoption of its more flexible MWBE set-aside program. Applying strict scrutiny to the MBE aspect of the program, the evidence supporting King County's program is sufficient under the Croson requirements, and the program is narrowly tailored. The WBE set-aside program survives the less intense scrutiny applied to gender-based programs.

A. Basis in Evidence for King County's Program

The Croson Court found that the Richmond City Council lacked the required "`strong basis in evidence for the council's conclusion that remedial action was necessary.'" Croson, 488 U.S. at ___, 109 S.Ct. at 724 (quoting Wygant v. Jackson Bd. of Educ., 476 U.S. 267, 277, 106 S.Ct. 1842, 1848, 90 L.Ed.2d 260 (1986) (plurality opinion)). Although the Court did not specify the quantity of evidence that would be sufficient, it rejected Richmond's evidence as not "approaching a prima facie case of a constitutional or statutory violation by anyone in the Richmond construction industry." Id. (emphasis in original).

The set-aside program at issue here is supported by a strong basis in evidence of past discrimination in the King County construction industry. Several dozen people gave written or oral descriptions of such discrimination. See, e.g., Letter of Reginald S. Frye, Record at 230, 232-33; Affidavit of Dianne M. Strobel, Record at 430; Affidavit of Rigo Vela, Record at 468. Many of the sources relied upon by the County Council provided specific examples of past discrimination in the construction industry in King County.

The contrast between the evidence in Croson and that before the King County Council is striking. The Croson Court found: "There was no direct evidence of race discrimination on the part of the city in letting contracts or any evidence that the city's prime contractors had discriminated against minority-owned subcontractors." Id. 488 U.S. at ___, 109 S.Ct. at 714. The district court that approved the Richmond plan based its findings of past discrimination on several factors, including statements by a few proponents of the set-aside program that there had been discrimination in the construction industry, and reports of a significant disparity between the percentage of minorities receiving contracts from the city and the percentage of minorities in the city population. See id. at ___, 109 S.Ct. at 724. The detailed and specific descriptions of discrimination found in the King County record, on the other hand, are not the type of "generalized assertions" of past discrimination criticized by the Croson Court. See id. at ___, 109 S.Ct. at 723.⁴

Moreover, in Croson much of the evidence was found to be of "little probative value" because it did not apply specifically to discrimination in the local construction industry. Id. at ___, 109 S.Ct. at 714, 723-24. The Court thus found Richmond's evidence inadequate to identify past discrimination sufficiently to support the "rigid quota" prescribed by the set-aside program. Id. at ___, 109 S.Ct. at 727. In contrast, nearly all of King County's...