Harrison & Burrowes Bridge Constructors v. Cuomo

• Citation: 743 F. Supp. 977
• Decision Date: 02 August 1990
• Docket Number: No. 89-CV-447.,89-CV-447.
• Parties: HARRISON AND BURROWES BRIDGE CONSTRUCTORS, INC., and Laquidara, Inc., Plaintiff, v. Mario M. CUOMO, as Governor of the State of New York, and Franklin E. White, as Commissioner of the New York Department of Transportation, et al., Defendants.
• Court: U.S. District Court — Northern District of New York

743 F. Supp. 977

HARRISON AND BURROWES BRIDGE CONSTRUCTORS, INC., and Laquidara, Inc., Plaintiff, v. Mario M. CUOMO, as Governor of the State of New York, and Franklin E. White, as Commissioner of the New York Department of Transportation, et al., Defendants.

No. 89-CV-447.

United States District Court, N.D. New York.

August 2, 1990.

Hayes & Hayes, Albany, N.Y., for plaintiff; Harry R. Hayes, III, of counsel.

Robert Abrams, Atty. Gen., State of N.Y., New York City, for defendants; Suzanne M. Lynn, Sanford M. Cohen, Robert Siegfried, Marla Tepper, Asst. Attys. Gen., of counsel.

MEMORANDUM-DECISION AND ORDER

McCURN, Chief Judge.

I. Introduction

This is an action pursuant to 42 U.S.C. § 1983 in which the plaintiffs are challenging the constitutionality of two affirmative action programs administered by the State of New York with respect to certain highway construction projects. The plaintiff in the present motion for a preliminary injunction is Harrison and Burrowes Bridge Constructors, Inc. ("Harrison") — a corporation engaged almost entirely in the business of constructing and renovating bridges on New York State highway projects. Harrison seeks a preliminary injunction barring the State Department of Transportation ("State DOT") from enforcing these state and federal programs which act to pressure prime contractors to employ subcontractors that are owned and controlled by minorities and women.

The plaintiff has raised both a facial and as applied equal protection challenge to the State DOT's enforcement of the state and federal set-aside programs. The constitutionality of government-sponsored affirmative action programs has been hotly debated within the Supreme Court in four cases which have produced twenty-three separate opinions. See Regents of the University of California v. Bakke, 438 U.S. 265, 98 S.Ct. 2733, 57 L.Ed.2d 750 (1978); Fullilove v. Klutznick, 448 U.S. 448, 100 S.Ct. 2758, 65 L.Ed.2d 902 (1980); Wygant v. Jackson Board of Education, 476 U.S. 267, 106 S.Ct. 1842, 90 L.Ed.2d 260 (1986); City of Richmond v. J.A. Croson Co., 488 U.S. 469, 109 S.Ct. 706, 102 L.Ed.2d 854 (1989). On this issue the Court has spoken as a majority only in certain portions of Justice O'Connor's opinion in the Croson decision. These divergent and lengthy opinions make the task of lower federal courts faced with constitutional challenges to affirmative action programs all the more difficult.

This court held a hearing on May 9, 1989, at which time the parties engaged in oral argument — neither party desiring to present witnesses. The court denied the plaintiff's request for a temporary restraining order and held the preliminary injunction motion in abeyance pending the submission of further legal briefing and affidavits. Both parties to this motion have been permitted to make numerous post-hearing submissions.

The State of New York is to be lauded for its efforts to increase the opportunities of minority and women-owned businesses to participate in state funded contracts. However, as will be discussed below, the state has not put forward the evidentiary showing which is now required to find the state's affirmative action program constitutional. On the other hand, the court is not satisfied that the federal affirmative action program, as administered by the State DOT, is constitutionally suspect in a manner which would permit this court to issue a preliminary injunction barring the State DOT from administering the federal program. The following constitutes the court's findings of facts and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure.

II. The Challenged Programs and Conduct

The State DOT administers two programs which are aimed at increasing the level of participation of businesses which are owned and operated by women, minorities, and disadvantaged individuals on state and federally funded transportation construction contracts. Though styled as a § 1983 action, the plaintiff has challenged both programs — requiring this court to undertake a review of the federal legislation and regulations as they are administered by the State DOT.

A. The Program Applicable to State Funded Projects

(i) The Statute. The New York State Legislature has enacted a comprehensive program designed to increase the participation of minority and women-owned business enterprises (termed "MBE's" and "WBE's") in contracts awarded by the State and its agencies; included within the scope of this program are state-funded construction contracts awarded by the Department of Transportation. See generally, Article 15-A of New York Executive Law, §§ 310-18; 1988 Session Laws, Ch. 261 § 63 ("Article 15-A"). The program, entitled "Participation by Minority Group Members and Women With Respect to State Contracts," became effective on July 19, 1988.¹ The provisions of Article 15-A supersede any prior enacted state law which was developed to increase the participation of women and minority-owned businesses in state contracts. N.Y.Exec.Law § 317. The state legislation does not apply to contracts on which a federal law concerning the participation of W/MBE's is applicable. Id. at § 313(3).

The centerpiece of Article 15-A is the establishment of the Governor's Office of Minority and Women's Business Development. N.Y.Exec.Law § 311. The director of this office, among other things, is required to "encourage and assist contracting state agencies in their efforts to increase participation by minority and women-owned business enterprises on state contracts and subcontracts so as to facilitate the award of a fair share of such contracts to them." Id. at § 311(3)(a) (emphasis added).² One of the duties of the director is to develop a directory of "certified minority and women-owned business enterprises" which are available to be solicited for state contract and subcontract work by either state agencies or general contractors. See id. at §§ 311(3)(f), 310(1), 314.³ The director is required to issue rules and regulations which:

Provide measures and procedures to ensure that certified businesses shall be given the opportunity for meaningful participation in the performance of state contracts and to identify those state contracts for which certified businesses may best bid to actively and affirmatively promote and assist their participation in the performance of state contracts so as to facilitate the award of a fair share of state contracts to such businesses....

Id. at § 313(1). At no point does Article 15-A specify a quota or percentage set-aside of work on state contracts for M/WBE's. Rather, the statute employs less precise phrases such as "participation requirements," id at § 313(5), or "fair share," id. at § 313(1), to designate those portions of a particular state contract which are targeted for W/MBE's.

Article 15-A attempts to "encourage" contractors with state agencies to reach the designated W/MBE participation requirements by requiring contractors to submit a minority and women-owned business "utilization plan"⁴ prior to the award of a state contract. Id. at § 313(4)(a).⁵ The contracting agency must review the utilization plan, notify the contractor in writing of any deficiencies, and require that any deficiencies be remedied. Id. at § 313(4)(a). Failure on the part of a contractor to cure deficiencies may result in the revocation of the contract. However, the contractor has a right to notification of the specific grounds for the revocation, an administrative appeal, and an appeal to the New York State Supreme Court, Appellate Division. Id. at §§ 313(4)(c).

The state statute also contains a provision whereby a contractor can apply for a complete or partial waiver of the W/MBE participation requirements on a state contract. The waiver may be granted if the contractor can show that it cannot, after making "good faith efforts," comply with the W/MBE participation goal. Id. at § 313(5). When deciding whether to grant the requested waiver the contracting agency must consider such things as: the number and type of MBE's and WBE's available to work in the region of the state where the contract is to be performed; the dollar value and scope of the contract; the ability of W/MBE's from outside the region to perform the work; the contractor's solicitation of WBE's and MBE's individually and through appropriate media; whether a WBE or MBE has responded to a bid solicitation in a timely and competitive manner; and whether the contractor has attempted to reorganize the contract work so as to increase the likelihood of W/MBE participation. Id. at § 313(5) and (6).

In the event that a waiver is denied for failure to comply with the participation requirements, both the contractor and contracting agency may file a complaint with the Director of the Governor's Office of Minority and Women's Business Development. Id. at § 313(7) and (8). Thereafter, the director is to attempt to resolve the problem and, if not resolved, refer the matter to arbitration for a report and recommendation. The statute permits the imposition of unspecified "sanctions, fines or penalties" against the contractor or a decision that no sanctions are appropriate. Id. at § 316. However, the assessment of any penalty against a contractor is subject to appeal pursuant to Article 78 of the New York Civil Practice Laws and Rules. Id. (ii) The Regulations. Pursuant to Article 15-A, the Director of the Governor's Office of Minority and Women's Business Development has filed "emergency" regulations with the New York Secretary of State. The present regulations, which apply to the DOT, are codified at N.Y.Comp.Codes R. & Regs. tit. 9 §§ 540-544 (1990). These regulations generally expand upon the language contained in Article 15-A.

State agencies, such as the State DOT, which are covered by the regulations are required to submit to the Director of the Governor's Office of Minority and Women's Business Development an "agency goal plan" which sets the goal for the...