834 F.2d 583 (6th Cir. 1987), 86-1239, Michigan Road Builders Ass'n, Inc. v. Milliken

• Docket Number: 86-1239.
• Citation: 834 F.2d 583
• Date: 25 November 1987
• Parties: Dec. P 37,874, MICHIGAN ROAD BUILDERS ASSOCIATION, INC., et al., Plaintiffs-Appellants, v. William G. MILLIKEN, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

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834 F.2d 583 (6th Cir. 1987)

Dec. P 37,874,

MICHIGAN ROAD BUILDERS ASSOCIATION, INC., et al.,

Plaintiffs-Appellants,

v.

William G. MILLIKEN, et al., Defendants-Appellees.

No. 86-1239.

United States Court of Appeals, Sixth Circuit

November 25, 1987

Argued May 4, 1987.

Rehearing and Rehearing En Banc Denied Feb. 23, 1988.

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John B. Weaver (argued), Butzel, Long, Gust, Klein, and Van Zile, Detroit, Mich., for plaintiffs-appellants.

Brent E. Simmons (argued), Lansing, Mich., for defendants-appellees.

Before LIVELY, Chief Judge, and ENGEL and KRUPANSKY, Circuit Judges.

KRUPANSKY, Circuit Judge.

Plaintiffs-appellants Michigan Road Builders Association, et al. (Michigan Road Builders or plaintiffs) appealed from the district court's order granting summary judgment in favor of the defendants-appellees, (defendants) in this civil rights action commenced for the purpose of challenging the constitutional validity of 1980 Mich.Pub.Acts 428 (Public Act 428), Mich.Comp.Laws Sec. 450.771, et seq. ¹ In particular, the Michigan Road Builders charge that Public Act 428 which "set aside" a portion of state contracts for minority owned businesses (MBEs) and woman owned businesses (WBEs) impinges upon the Equal Protection Clause of the Fourteenth Amendment to the Constitution. Section 2 of Public Act 428, Mich.Comp.Laws Sec. 450.772 provides that after the 1984-85 fiscal year, each state department must award not less than 7% of its expenditures for construction, goods, and services to MBEs and not less than 5% to WBEs. ² Under Public Act

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428, a "minority" is a "person who is black, hispanic, oriental, eskimo, or an American Indian," Mich.Comp.Laws Sec. 450.771(e), and a "minority owned business" is "a business enterprise of which more than 50% of the voting shares or interest in the business is owned, controlled, and operated by individuals who are members of a minority and with respect to which more than 50% of the net profit or loss attributable to the business accrues to shareholders who are members of a minority." Mich.Comp.Laws Sec. 450.771(f). A "woman owned business" is "a business of which more than 50% of the voting shares or interest in the business is owned, controlled, and operated by women and with respect to which more than 50% of the net profit or loss attributable to the business accrues to the women shareholders." Mich.Comp.Laws Sec. 450.771(j).

The Michigan Road Builders commenced the present action on July 8, 1981 in the United States District Court for the Eastern District of Michigan seeking declaratory and injunctive relief against the enforcement of the set-aside provisions of Public Act 428. In particular, the plaintiffs charged that the set-aside provisions of Public Act 428 violated the Equal Protection Clause of the Fourteenth Amendment, as well as 42 U.S.C. Secs. 1981, 1983 and 2000d, ³ by according racial and ethnic minorities and women a preference in competing for state expenditures. After discovery

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had been completed, the parties filed cross motions for summary judgment, and on August 12, 1983, the district court determined that Public Act 428 did not violate the Equal Protection Clause of the Fourteenth Amendment and granted defendants' motion for summary judgment. Michigan Road Builders Ass'n v. Milliken, 571 F.Supp. 173 (E.D.Mich.1983). Michigan Road Builders appealed, and this court dismissed the appeal because the district court had not decided all of the claims against the Michigan Department of Transportation. Michigan Road Builders Ass'n v. Milliken, 742 F.2d 1456 (6th Cir.1984). Thereafter, the district court entered an order disposing of the remaining charges against the Department of Transportation, Michigan Road Builders Ass'n v. Milliken, 654 F.Supp. 3 (E.D.Mich.1986), and the Michigan Road Builders commenced this timely appeal. On appeal, the plaintiffs argued that the district court applied the incorrect legal standard to determine the constitutional validity of Public Act 428.

In addressing equal protection claims, the Supreme Court has employed differing levels of judicial review depending upon the type of imposed classification under constitutional attack. ⁴ "Racial and ethnic distinctions of any sort are inherently suspect and thus call for the most exacting judicial examination." Regents of Univ. of Cal. v. Bakke, 438 U.S. 265, 291, 98 S.Ct. 2733, 2748, 57 L.Ed.2d 750 (1978) (plurality opinion) (concluding that state medical school's admission program which reserved a specified number of student positions for racial and ethnic minority applicants violated the Equal Protection Clause). This "most exacting judicial examination" has been labeled by the Supreme Court as "strict scrutiny." Id. at 287, 98 S.Ct. at 2747 (plurality opinion).

When a classification denies an individual opportunities or benefits enjoyed by others solely because of his race or ethnic background, it must be regarded as suspect.

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We have held that in "order to justify the use of a suspect classification, a State must show that its purpose or interest is both constitutionally permissible and substantial, and that its use of the classification is 'necessary ... to the accomplishment' of its purpose or the safeguarding of its interest."

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Preferring members of any one group for no reason other than race or ethnic origin is discrimination for its own sake. This the Constitution forbids.

Id. at 305-07, 98 S.Ct. at 2756-57 (plurality opinion) (citations omitted).

In Fullilove v. Klutznick, 448 U.S. 448, 100 S.Ct. 2758, 65 L.Ed.2d 902 (1980), the Supreme Court probed a congressionally enacted affirmative action plan embodied in the Public Works Employment Act of 1977, 42 U.S.C. Sec. 6701 et seq. The constitutional attack in that case was lodged against the "Minority Business Enterprise" set aside provision of the act, Sec. 103(f)(2), 42 U.S.C. Sec. 6705(f)(2), which required local governmental units receiving funds under public works programs to use 10% of the funds to procure services or supplies from MBEs. The court determined that "Congress had abundant evidence from which it could conclude that minority businesses have been denied effective participation in public contracting

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opportunities by procurement practices that perpetuated the effects of prior discrimination," id. at 477-78, 100 S.Ct. at 2774, and that the set aside provision therein at issue was "narrowly tailored to the achievement of [the] goal" of ameliorating the effects of that past discrimination. Id. at 480, 100 S.Ct. at 2776. Justice Powell, author of the Bakke opinion, concurred in the Court's opinion and filed an opinion in which he stated:

Section 103(f)(2) [of the Public Works Employment Act of 1977] employs a racial classification that is constitutionally prohibited unless it is a necessary means of advancing a compelling governmental interest.

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The Equal Protection Clause, and the equal protection component of the Due Process Clause of the Fifth Amendment, demand that any governmental distinction among groups must be justifiable. Different standards of review applied to different sorts of classifications simply illustrate the principle that some classifications are less likely to be legitimate than others. Racial classifications must be assessed under the most stringent level of review because immutable characteristics, which bear no relation to individual merit or need, are irrelevant to almost every governmental decision.

448 U.S. at 496, 100 S.Ct. at 2783-84 (Powell, J. concurring).

Subsequent to the Bakke and Fullilove decisions, this circuit considered constitutional attacks on state and local government mandated affirmative action plans. In assessing the constitutional validity of the affirmative action plans at issue in the post-Bakke and Fullilove cases, this circuit redefined the term "strict scrutiny" as it applied in affirmative action cases:

[T]he first stage in our approach to affirmative action programs entails an analysis of the need for such remedial measures--i.e., with the presence of a governmental interest in their implementation. It is uncontested that the government has a significant interest in ameliorating the disabling effects of identified discrimination.

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Once the governmental interest in some remedial action is thus established, we must proceed to determine whether the remedial measures employed are reasonable.

Bratton v. City of Detroit, 704 F.2d 878, 886-87 (6th Cir.1983) (footnote omitted), cert. denied, 464 U.S. 1040, 104 S.Ct. 703, 79 L.Ed.2d 168 (1984). See also Detroit Police Officers' Ass'n v. Young, 608 F.2d 671 (6th Cir.1979) (determining that no "direct showing of past intentional discrimination" by the governmental unit imposing the affirmative action plan was necessary and that the plan need only be a "reasonable" means of serving the governmental interest of eradicating the effects of past discrimination), cert. denied, 452 U.S. 938, 101 S.Ct. 3079, 69 L.Ed.2d 951 (1981); Ohio Contractors Ass'n v. Keip, 713 F.2d 167 (6th Cir.1983) (where compelling interest of state in ameliorating the past effects of its prior discrimination was clear, the affirmative action plan adopted need only be "reasonably calculated" to serve that interest). In these decisions, this court essentially relaxed the strict scrutiny standard enunciated by the Supreme Court in Bakke and Fullilove. Thus, this circuit essentially required that affirmative action plans be a "reasonable" means of furthering a "significant" governmental interest rather than a "narrowly tailored" or "necessary" means of furthering a "compelling" governmental interest. ⁵

In Wygant v. Jackson Bd. of Educ., 746 F.2d 1152 (6th Cir.1984), this circuit again

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applied its relaxed standard of review to uphold an affirmative action layoff plan embodied in a collective bargaining...