Central Alabama Paving, Inc. v. James
| Decision Date | 10 October 1980 |
| Docket Number | Civ. A. No. 80-358-N. |
| Citation | 499 F. Supp. 629 |
| Parties | CENTRAL ALABAMA PAVING, INC.; Capital City Asphalt Co., Inc.; Morris-Shea Bridge Co., Inc.; Ellard Contracting Company, Inc.; New Mc, Inc.; Harris & Vines Contracting Company; Alabama Road Builders Association, Inc.; and Starr & Sons, Incorporated, Plaintiffs, v. Fob JAMES, Governor of the State of Alabama; The State of Alabama Highway Department; Bobby J. Kemp, Director of the State of Alabama Highway Department; E. Jerome Kelley, Minority Business Enterprise Liaison Officer of the State of Alabama Highway Department, Defendants and Third Party Plaintiffs, v. Neil GOLDSCHMIDT, Secretary, United States Department of Transportation; United States Department of Transportation; and Lewis MacDonald, Division Administrator, Federal Highway Administration, Third Party Defendants. |
| Court | U.S. District Court — Middle District of Alabama |
COPYRIGHT MATERIAL OMITTED
James T. Upchurch, III, Robert A. Huffaker, Rushton, Stakely, Johnston & Garrett, Montgomery, Ala., for plaintiffs.
D. Frank Davis, Joseph W. Letzer, Asst. Attys. Gen. of Alabama, Thomas, Taliaferro, Forman, Burr & Murray, Birmingham, Ala., for all defendants and third party plaintiffs.
Barry E. Teague, U. S. Atty. (Kenneth E. Vines, Asst. U. S. Atty.), Montgomery, Ala. and Richard Ugelow, Federal Enforcement Section, Civil Rights Division, Washington, D. C., for all third party defendants.
This action was commenced on August 29, 1980 by the filing by plaintiff contractors of a motion for a temporary restraining order seeking to have the Court enjoin the Governor of the State of Alabama, the State of Alabama Highway Department and its Director, and Jerome Kelley, as the Minority Business Enterprise Liaison Officer, from implementing and enforcing provisions of the State of Alabama Highway Department Minority Business Enterprise program which required that only bids which had a percentage of the work awarded to Minority Business Enterprises or Women Business Enterprises (hereinafter referred to as MBEs and WBEs, respectively) would be considered in awarding State highway contracts. Plaintiffs contended that this program of the State of Alabama Highway Department violated their rights under the Fourteenth Amendment to the United States Constitution, §§ 1981 and 1983 of Title 42 of the United States Code, as well as Title VI of the Civil Rights Act of 1964. The program was also challenged as violative of the Federal Highway Act, 23 U.S.C. § 101 et seq. Finally, plaintiffs contended the regulations of the United States Department of Transportation (hereinafter referred to as DOT) violated their rights under the Fifth Amendment of the Constitution.
The challenged MBE and WBE program was promulgated pursuant to directives of DOT.
A hearing was held on September 2, 1980 on plaintiffs' motion for a temporary restraining order. Because the challenge to the Alabama Highway Department MBE and WBE program was an attack on the regulations of DOT and because DOT was not represented at that hearing, this Court denied plaintiffs' motion for a temporary restraining order, and set plaintiffs' motion for a preliminary injunction for a hearing on September 26, 1980. Parties were directed to file briefs prior to the hearing and the Court granted leave to the parties to proceed with the taking of depositions on an expedited basis pursuant to Rule 30(a) of the Federal Rules of Civil Procedure.
The Alabama defendants filed a third party complaint on September 2, 1980, which in effect asserted that its MBE and WBE program was required by DOT in order for the State of Alabama to participate in the federal funding of Alabama highways, and the Alabama defendants made DOT and Mr. Goldschmidt as its Director, and Mr. MacDonald as its Division Administrator, third party defendants. By an amendment to their third party complaint which was filed on September 23, 1980, the Alabama defendants prayed that this Court enjoin the third party defendants from enforcing the DOT rules and regulations and require the third party defendants to fund Alabama highway projects without certain of the MBE and WBE requirements. The third party complaint filed by the Alabama defendants asserts, as does the complaint of the original party plaintiffs, that the DOT rules and regulations violate the United States Constitution by requiring a preference based on race, sex and national origin. The third party complaint also charges that DOT's regulations violate federal statutes and Executive Orders.
At the hearing on September 26, 1980, all parties were present and participated in the argument. Numerous depositions, affidavits and exhibits were admitted in evidence. Exhaustive briefs have been filed.
On consideration of the evidence, the briefs, and the arguments of counsel, the Court concludes that the preliminary injunction should be granted.
In 1980, DOT adopted new rules and regulations which required the state highway departments to submit percentage "goals" for fiscal year 1981 for MBEs and WBEs by October 1, 1980.1 An MBE is defined in the DOT regulations as a business which is at least owned 51 per cent by one or more minorities or women. Minorities are defined as Blacks, Hispanics, Asian Americans, American Indians, Alaskan natives, or members of other groups found to be economically or socially disadvantaged.
The Alabama Highway Department has been advised by appropriate representatives of DOT that if fixed percentage goals are not submitted by October 1, 1980, no federal funding will be available for future highway projects in Alabama. DOT set the goals for each region in the country by equating each region's percentage of the 1979 fiscal year federal aid dollars and applying that percentage to the fiscal year 1980 MBE goal. (Ex. 5 to Stump depo.) No attempt was made to allocate the goals on the basis of any finding of discrimination in the letting of highway projects. (Brooks depo., pp. 24-25) At the hearing, counsel for DOT conceded that DOT had made no findings of any past discrimination against WBEs insofar as highway contracts were concerned. The basis for the requirement that a percentage of contracts be awarded WBEs was based solely on the statistics which show nationwide an underrepresentation of WBEs receiving contracts for highway construction.
The first MBE program submitted by the Alabama Highway Department was rejected by DOT. Under the DOT requirement of having its goal approved or receiving no federal funds, the Alabama Highway Department has submitted a second MBE program. Alabama defendants were advised that unless its plan had minimum goals of 2.75 per cent for MBEs and 1 per cent for WBEs, it would not be approved. (Kelley depo., pp. 13-14; Ex. 5 to Quick depo.; Ex. 21 to MacDonald depo.; Kemp depo., pp. 100-102).
For the first time the DOT regulations promulgated March 31, 1980, provided that if any contractor offering a reasonable price "meets the MBE contract goal," then "the recipient (the State Highway Department) shall presume conclusively that all competitors that fail to meet the goal have failed to exert sufficiently reasonable efforts and consequently are ineligible to be awarded the contract." Fed.Reg. Vol. 45, No. 63, p. 21188.
Although the regulations expressly state that they constitute a "major change in approach" to the selection of successful bidders, no new notice of proposed rulemaking was published on the final regulations to allow public comment or input in the new contract selection approach. It is conceded that the belated edition of Title VI as a statutory basis for the regulations was not approved as required by Title VI. (Stipulation of counsel in Horton's deposition at page 145)
The necessary components of each MBE program which must be submitted by each state's highway department are set out in the DOT regulations. For example, the program must contain a policy statement expressing a commitment to the use of minority business. It must contain procedures to assure that affirmative action techniques will be employed to facilitate MBE participation. It must contain assurances that participants will encourage prime contractors to use minority owned banks or banks owned by women. It must insure that the recipient has a directory to identify MBEs which is available to bidders. The regulations forbid any discrimination based on race or sex and impose sanctions. None of these requirements of the program is challenged.
The challenge by the original plaintiffs and the third party plaintiffs is to the requirement of the regulations of an overall fixed percentage goal, and the further requirement that no bid may be considered by a bidder on any specific contract if that bid fails to meet the goal for MBEs and WBEs if another bidder, though its bid is higher, submits a bid deemed reasonable by the DOT.
The State of Alabama has standing to seek declaratory and injunctive relief with respect to the federal regulations which they are here challenging. See, State of Alabama v. Tennessee Valley Authority, 467 F.Supp. 791 (N.D.Ala.1979); Islesboro School Committee v. Califano, 593 F.2d 424 (1st Cir. 1979).
The original party plaintiffs also have standing to challenge the Alabama MBE plan and the federal regulations. In Contractors Ass'n of Eastern Pa. v. Secretary of Labor, 442 F.2d 159 (3rd Cir. 1971), the court stated: "Since the contractor plaintiffs ... as bidders are directly impacted by the requirement that they agree in their bid to comply with the Plan, (they) clearly have standing." 442 F.2d at 166. The Court of Appeals in this case relied on Abbott Lab. v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967). See also Fullilove et al. v. Klutznick etc. et al., ___ U.S. ___, 100 S.Ct. 2758, 65 L.Ed.2d 902, 1980.
Subject to the guidelines and limitations laid...
To continue reading
Request your trial
-
SOUTH FLA. CHAPTER, ETC. v. METROPOLITAN DADE CTY.
...standard to conclude that the defendants had not made the requisite findings of illegal discrimination); Central Alabama Paving, Inc. v. James, 499 F.Supp. 629 (M.D.Ala.1980) (applying strict scrutiny to invalidate MBE set-aside regulations promulgated by the U.S. Department of Transportati......
-
Owen of Georgia, Inc. v. Shelby County
...contract but for enforcement of the MBE provisions. 448 U.S. at 480 n.71, 100 S.Ct. at 2776 n.71. See also Central Alabama Paving, Inc. v. James, 499 F.Supp. 629 (M.D.Ala.1980). In the present Case, Owen alleges that it, as low bidder, would have received the structural steel contract but f......
-
Southwest Washington Chapter, Nat. Elec. Contractors Ass'n v. Pierce County
...§ 29.73a (3d ed. 1981). See also M.C. West, Inc. v. Lewis, 522 F.Supp. 338, 341 (M.D.Tenn.1981); Central Ala. Paving, Inc. v. James, 499 F.Supp. 629, 633 (M.D.Ala.1980); S.N. Nielsen Co. v. Public Bldg. Comm'n, 81 Ill.2d 290, 299, 43 Ill.Dec. 40, 410 N.E.2d 40 (1980); Weiner v. Cuyahoga Com......
-
Louisiana Associated General Contractors, Inc. v. Calcasieu Parish School Bd.
...awards must be to the "lowest responsible bidder." M.C. West Inc. v. Lewis, 522 F.Supp. 338 (M.D.Tenn.1981); Central Alabama Paving, Inc. v. James, 499 F.Supp. 629 (M.D.Ala.1980); S.N. Nielsen Co. v. Public Bldg. Comm'n of Chicago, 81 Ill.2d 290, 43 Ill.Dec. 40, 410 N.E.2d 40 (1980); Southw......