Constructors Ass'n of Western Pennsylvania v. Kreps, 77-2335

• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
• Citation: 573 F.2d 811
• Docket Number: No. 77-2335,77-2335
• Parties: CONSTRUCTORS ASSOCIATION OF WESTERN PENNSYLVANIA, Appellant, v. Juanita KREPS, Secretary of Commerce of the United States of America, Milton J. Shapp, Governor of the Commonwealth of Pennsylvania and Richard Caliguiri, Mayor of the City of Pittsburgh.
• Decision Date: 07 March 1978

Page 811

573 F.2d 811

CONSTRUCTORS ASSOCIATION OF WESTERN PENNSYLVANIA, Appellant, v. Juanita KREPS, Secretary of Commerce of the United States of

America, Milton J. Shapp, Governor of the

Commonwealth of Pennsylvania and Richard

Caliguiri, Mayor of the City

of Pittsburgh.

No. 77-2335.

United States Court of Appeals,

Third Circuit.

Argued Jan. 3, 1978.

Decided March 7, 1978.

Charles R. Volk, Jane A. Lewis, Joseph Mack, III, Thorp, Reed & Armstrong, Pittsburgh, Pa., for appellant.

Blair A. Griffith, U. S. Atty., Pittsburgh, Pa., Robert J. Hickey, G. Brocjwek Heylin, Kirlin, Campbell & Keating, Washington, D. C., for Associated General Contractors of America, amicus curiae.

Robert J. Bray, Jr., Walter H. Flamm, Jr., Alfred J. D'Angelo, Jr., Cunniff, Bray & McAleese, Bala Cynwyd, Pa., for General Building Contractors Association, Inc., amicus curiae.

John W. Finley, Jr., Brashich & Finley, New York City, for The Mid-Atlantic Legal Foundation, amicus curiae.

Edward C. First, Jr., Jason S. Shapiro, McNees, Wallace & Nurick, Harrisburg, Pa., for The Associated Pennsylvania Constructors, amicus curiae.

Drew S. Days, III, Asst. Atty. Gen., Brian K. Landsberg, Jessica Dunsay Silver, Vincent F. O'Rourke, Jr., Attys. Dept. of Justice,

Washington, D. C., Robert S. Fastov, Kenneth Oestreicher, Dayle Ginsburg, Attys., Economic Development Administration, U. S. Dept. of Commerce, Washington, D. C., for appellee, Juanita Kreps

Patricia G. Miller, Asst. Atty. Gen., Michael Louik, Deputy Atty. Gen., Robert P. Kane, Atty. Gen., Pittsburgh, Pa., for appellee, Milton J. Shapp.

Eugene B. Strassburger, III, Deputy City Sol. Mead J. Mulvihill, Jr., City Sol., Pittsburgh, Pa., for appellee, Richard S. Caliguiri.

Bolger & Picker, Philadelphia, Pa., for The Roofing Sheet Metal Contractors' Association of Philadelphia and Vicinity, amicus curiae; Steven R. Waxman, Philadelphia, Pa., of counsel.

Before ADAMS, GIBBONS and GARTH, Circuit Judges.

OPINION OF THE COURT

ADAMS, Circuit Judge.

The question in this case is whether the district court abused its discretion in declining to issue a preliminary injunction enjoining the United States Department of Commerce, the Commonwealth of Pennsylvania and the City of Pittsburgh from complying with a federal statute which requires 10% of all federal funds in specified public works projects to be expended on bids tendered by "minority business enterprises."

A. FACTS

In July of 1976, Congress enacted the Local Public Works Capital Development and Investment Act (LPW). ¹ The LPW established a program to distribute two billion dollars to state and local governments for public works projects in order to stimulate the national economy. In January of 1977, legislation was introduced to provide additional funding of the LPW, denominated "Round II." Because under "Round I" only 1% of the funds allocated to state and local governments had reached minority contractors, the LPW was amended in mid-1977 to require that 10% of the amount of each LPW grant be expended in connection with contracts with "minority business enterprises" (MBEs), unless the Secretary of Commerce waives the requirement. ²

Under the LPW program, the City of Pittsburgh requested grants totaling $11,000,000, and the Department of Transportation, of the Commonwealth of Pennsylvania, applied for a similar amount of funds. By September 30, 1977, Pittsburgh had received approval for approximately $9,000,000 worth of projects, and the Department of Transportation had received approval of seven projects costing over $11,000,000. Since the LPW required that construction on any project begin within 90 days of the allocation of a grant, bidding for the Pittsburgh and the Department of Transportation projects proceeded on accelerated schedules.

On September 8, 1977, the Constructors Association of Western Pennsylvania, a 95-member non-profit association of heavy construction contractors, filed a complaint in the District Court for the Western District of Pennsylvania attacking the legislation on the ground that the MBE requirement discriminated against its members, who were all white, in violation of the equal protection components of the Fifth and Fourteenth Amendments. The Association sought a temporary restraining order to prohibit Pittsburgh, the Transportation Department of the Commonwealth of Pennsylvania, and the Secretary of Commerce from enforcing or taking action to solicit or to accept bids based on the MBE requirement. The Association also requested injunctive and declaratory relief.

After notice and hearing, Judge Daniel J. Snyder on September 12, 1977, denied the request for a temporary restraining order. He held a hearing on September 30, 1977, regarding the plaintiff's request for a preliminary injunction. In an opinion dated October 13, 1977, Judge Snyder denied the request for a preliminary injunction. This appeal from that denial followed. ³

B. THE STANDARDS

The narrow issue before us is whether the district court abused its discretion in refusing to grant the preliminary injunction sought by the plaintiff. ⁴ Our analysis of the plaintiff's contention that such an abuse did, in fact, occur is framed initially by the factors which the district court was required to take into account in evaluating an application for a preliminary injunction. "The traditional standard for granting a preliminary injunction requires the plaintiff to show that in the absence of its issuance, he will suffer irreparable injury and also that he is likely to prevail on the merits." ⁵ More specifically, this Court has consistently identified four factors which must be examined in ascertaining the propriety of a preliminary injunction . . . the moving party must generally show (1) a reasonable probability of eventual success in the litigation and (2) that the movant will be irreparably injured pendente lite if relief is not granted. Delaware River Port Auth. v. Transamerican Trailer Transp. Inc., supra, (501 F.2d 917,) at 919-20 (3d Cir.); see A. L. K. Corp. v. Columbia Pictures, Inc., 440 F.2d 761, 763 (3d Cir. 1971). Moreover, while the burden rests upon the moving party to make these two requisite showings, the district court "should take into account, when they are relevant, (3) the possibility of harm to other interested persons from the grant or denial of the injunction, and (4) the public interest." Delaware River (Port) Auth. v. Transamerican Trailer Transp., Inc., supra at 920. ⁶

While these factors structure the inquiry, however, no one aspect will necessarily determine its outcome. Rather, proper judgment entails a " delicate balancing" of all elements. ⁷ On the basis of the data before it, the district court must attempt to minimize the probable harm to legally protected interests between the time that the motion for a preliminary injunction is filed and the time of the final hearing. ⁸

Thus, for example, in a situation where factors of irreparable harm, interests of third parties and public considerations strongly favor the moving party, an injunction might be appropriate "even though plaintiffs did not demonstrate as strong a likelihood of ultimate success as would generally be required." ⁹ In contrast, where the threatened irreparable injury is limited or is balanced to a substantial degree by countervailing injuries which would result to third parties, or to the public interest from the issuance of an injunction, "greater significance must be placed upon the likelihood that the party will ultimately succeed on the merits of the litigation." ¹⁰

This Court's analysis is further constrained by the standard of review appropriate to appellate examination of a decision to deny a preliminary injunction. Absent an obvious error of law or a serious mistake in the consideration of proof, the trial court's decision will be reversed only for an abuse of discretion. ¹¹

In view of this test, we turn to an examination of the four components which guide judgment regarding the issuance of a preliminary injunction.

C. LIKELIHOOD OF SUCCESS ON THE MERITS

We accept, as did Judge Snyder, the plaintiff's contention that racial classifications by government are not to be taken lightly. Such governmental actions are in tension with fundamental ideals of our society, and run the risk of both devisiveness and oppression. Racial classifications may be upheld only in limited circumstances, and are subject, in constitutional parlance, to "strict scrutiny." ¹²

The fact that the MBE provision embodies a racial classification, however, is not sufficient to guarantee the plaintiff in this case a likelihood of success, for the courts have upheld the use of racial classification by government in attempts to remedy the effects of past discrimination. Thus, for example, in E.E.O.C. v. American Telephone and Telegraph Co., ¹³ this Court rejected a constitutional challenge to the propriety of a consent decree which provided for the overriding of a seniority system when hiring failed to meet specified racial, sexual and ethnic "targets." We noted that the federal interest in "remedying the effect of a particular pattern of employment discrimination" and in "having all groups fairly represented in employment" was sufficient to justify the use of quotas to accomplish those goals. ¹⁴

Likewise, in Contractors Assn. of Erie, Pa. v. Secretary of Labor, 442 F.2d 159, 176-77 (3d Cir. 1971), we upheld the remedial use of racial employment "goals" by the executive without a prior adjudication that discrimination existed. ¹⁵ Most recently, in United Jewish Organizations v. Carey, ¹⁶ the Supreme Court sustained a deliberate use of race by government officials in drawing voting districts so as to achieve 65% majorities of nonwhite voters in such districts. Three Justices held that even aside from the commands of the Voting Rights Act, such a use of racial criteria was permissible where it produced no stigma, and "did not minimize or unfairly cancel out white...