Harrison & Burrowes Bridge Constructors, Inc. v. Cuomo

• Decision Date: 02 December 1992
• Docket Number: D,1059,Nos. 1055,s. 1055
• Citation: 981 F.2d 50
• Parties: 60 Empl. Prac. Dec. P 41,927, 61 USLW 2384 HARRISON & BURROWES BRIDGE CONSTRUCTORS, INCORPORATED; Laquidara, Incorporated, Plaintiff-Appellant, v. Mario M. CUOMO, as Governor of the State of New York; Franklin E. White, as Commissioner of the New York State Department of Transportation; Darrell W. Happ; Kenneth W. Shiatte; Steven F. Lewis, individually and as officials of the New York Department of Transportation, Defendants-Appellees, v. UNITED STATES DEPARTMENT OF TRANSPORTATION, Intervenor-Defendant-Appellee. UNITED FENCE & GUARD RAIL CORPORATION, Plaintiff-Appellant, v. Mario M. CUOMO, Individually and as Governor of the State of New York; Franklin E. White, individually and as Commissioner of Transportation of the State of New York, Horace M. Flowers, Individually and as Director of the Office of Equal Opportunity Development and Compliance of the New York Department of Transportation; Howard L. Sheffey, Individually and as Director of the Affirmative Action Programs Office of the New York Department of Transportation, Defendants-Appellees. ockets 91-9090, 91-9098.
• Court: U.S. Court of Appeals — Second Circuit

Page 50

981 F.2d 50

60 Empl. Prac. Dec. P 41,927, 61 USLW 2384

HARRISON & BURROWES BRIDGE CONSTRUCTORS, INCORPORATED;

Laquidara, Incorporated, Plaintiff-Appellant, v. Mario M. CUOMO, as Governor of the State of New York;

Franklin E. White, as Commissioner of the New York State

Department of Transportation; Darrell W. Happ; Kenneth W.

Shiatte; Steven F. Lewis, individually and as officials of

the New York Department of Transportation, Defendants-Appellees, v. UNITED STATES DEPARTMENT OF TRANSPORTATION,

Intervenor-Defendant-Appellee.

UNITED FENCE & GUARD RAIL CORPORATION, Plaintiff-Appellant, v. Mario M. CUOMO, Individually and as Governor of the State of

New York; Franklin E. White, individually and as

Commissioner of Transportation of the State of New York,

Horace M. Flowers, Individually and as Director of the

Office of Equal Opportunity Development and Compliance of

the New York Department of Transportation; Howard L.

Sheffey, Individually and as Director of the Affirmative

Action Programs Office of the New York Department of

Transportation, Defendants-Appellees.

Nos. 1055, 1059, Dockets 91-9090, 91-9098.

United States Court of Appeals,

Second Circuit.

Argued March 2, 1992.

Decided Dec. 2, 1992.

Harry R. Hayes, III, Albany, N.Y. (Hayes & Hayes, Albany, N.Y., Martin S. Kaufman, Atlantic Legal Foundation, New York City, of counsel), for plaintiffs-appellants.

Sanford M. Cohen, Asst. Atty. Gen. in Charge, Civ. Rights Bureau, New York City (Robert Abrams, Atty. Gen. of the State of N.Y., New York City, of counsel), for defendants-appellees.

David K. Flynn, Civ. Rights Div., U.S. Dept. of Justice, Washington, D.C. (Frederick J. Scullin, Jr., U.S. Atty., Arthur J. Rothkopf, Gen. Counsel, Paul M. Geier, Asst. Gen. Counsel for Litigation, Robert W. Ferguson, Trial Atty., Office of Gen. Counsel, U.S. Dept. of Transp., John R. Dunne, Asst. Atty. Gen., David O. Simon, Acting Deputy Asst. Atty. Gen., Louise A. Lerner, Civ. Rights Div., U.S. Dept. of Justice, Washington, D.C., of counsel), for Federal appellee.

Before CARDAMONE and ALTIMARI, Circuit Judges, and CONNER, District Judge. ^*

CARDAMONE, Circuit Judge:

Fifteen years ago Congress passed the Public Works Employment Act of 1977. That Act contained a provision setting aside ten percent of its funds to be allocated to minority businesses. The Act withstood a constitutional challenge several years later when the Supreme Court held that this affirmative action provision was not reverse discrimination in disguise. The Court stated that nothing in the Constitution required that government actions always be color-blind, and that race-based relief may be appropriate so long as government actions are narrowly tailored to remedy factually demonstrated, identifiable past discrimination. See Fullilove v. Klutznick, 448 U.S. 448, 100 S.Ct. 2758, 65 L.Ed.2d 902 (1980). Subsequent federal statutes carried forward the minority set-aside scheme when federal funds were used to aid state highway construction. New York, along with other states, enacted laws similar to the federal model for state highway projects funded entirely by state funds.

Appellants are two New York corporations, both wholly-owned by white males, that have brought suit against New York Their appeal challenges the constitutionality of the federal set-aside program on state highway construction using federal funds and also challenges New York's law providing a similar set-aside for minority enterprises covering wholly state-funded highway projects. Specifically, appellants allege that these statutes have denied them the equal protection of the laws.

state officials charging that these federal and state statutes in effect mandate quotas and, as applied, have deprived them of contracts for highway construction that they had bid on and reasonably anticipated being awarded, and that instead were awarded to a handful of certified minority enterprises.

One appellant is United Fence and Guard Rail Corporation (United Fence), a Ronkonkoma, New York corporation engaged in the sale and installation of guardrails, signs, fences and related products on highway and bridge projects. It regularly quotes prices as a subcontractor to prime contractors bidding on New York Department of Transportation (NYDOT) construction projects. The other appellant is Harrison and Burrowes Bridge Constructors, Inc. (Harrison), a Glenmont, New York corporation engaged in rehabilitating and constructing bridges. It regularly submits bids as a prime contractor on NYDOT projects.

The United States District Court for the Northern District of New York (McCurn, C.J.) dismissed on the merits both appellants' equal protection attacks to NYDOT's implementation of the federal set-aside program. It also dismissed the objections to the state set-aside program as moot, to the extent that declaratory and injunctive relief was sought, and dismissed plaintiffs' 42 U.S.C. § 1983 claims for damages against various named state officials as barred by qualified immunity. For the reasons discussed below, we affirm.

BACKGROUND

Federal Program

The first issue appellants raise concerns the federally authorized set-aside program implemented by New York. That program originated in 1983 after Congress enacted a five-year transportation act entitled the Surface Transportation Assistance Act of 1982 (Surface Transportation Act), Pub.L. No. 97-424, 96 Stat. 2097 (1983), § 105(f) of which provides,

[e]xcept to the extent that the Secretary [of Transportation] determines otherwise, not less than 10 per centum of the amounts authorized to be appropriated under this Act shall be expended with small business concerns owned and controlled by socially and economically disadvantaged individuals [disadvantaged business enterprises] as defined by section 8(d) of the Small Business Act (15 U.S.C. § 637(d) [ (1988) ] and relevant subcontracting regulations promulgated pursuant thereto.

96 Stat. at 2100. Section 8(d) of the Small Business Act states it is the policy of the United States that disadvantaged business enterprises (minority businesses) "have the maximum practicable opportunity to participate in the performance of contracts let by any Federal agency" and creates a presumption of such status in favor of "Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and other minorities." 15 U.S.C. § 637(d) (1988).

After the Surface Transportation Act funding expired five years later, Congress enacted the Surface Transportation and Uniform Relocation Assistance Act of 1987 (Act or Surface Relocation Act), Pub.L. No. 100-17, 101 Stat. 132 (1987). The two statutes were designed to achieve stated minority business participation goals primarily through the use of set-asides for qualified subcontractors. See S.Rep. No. 4, 100th Cong., 1st Sess. 11-12 (1987), reprinted in 1987 U.S.C.C.A.N. 66, 76. Section 106(c) of the Surface Relocation Act established a ten percent minority businesses goal similar to that in the Surface Transportation Act, 101 Stat. at 145, and added Women-owned Business Enterprises (women-owned businesses) to the presumptive group of minority enterprises. 101 Stat. at 146.

The United States Department of Transportation (USDOT) promulgated detailed regulations to implement the Surface Transportation Act § 105(f). 49 C.F.R. pt. 23 subpart D (1991); 48 Fed.Reg. 33,442 (1983). After passage of this Act, subpart D was amended to reflect the inclusion of women-owned enterprises as presumptive disadvantaged businesses. 49 C.F.R. § 23.62 (1991); 52 Fed.Reg. 39,230 (1987). The implementing regulations define a disadvantaged enterprise as a small business concern (within the meaning of § 3 of the Small Business Act, 15 U.S.C. § 632 (1988)), that is at least 51 percent owned by one or more socially and economically disadvantaged individuals and whose management and daily business operation is controlled by one or more of those owners. 49 C.F.R. § 23.62. These regulations establish a rebuttable presumption that women, Black Americans, Hispanics, Native Americans, Asian-Pacific Americans, Asian-Indian Americans and those individually certified as minority enterprises under § 8(a) of the Small Business Act, 15 U.S.C. § 637(a), are socially and economically disadvantaged. 49 C.F.R. § 23.62. Other individuals may be so classified under certain conditions, see 49 C.F.R. pt. 23 subpart D, and individuals presumptively considered socially and economically disadvantaged may lose that classification upon challenge by a third party. 49 C.F.R. § 23.69 (1991).

The states become involved because recipients of federal funds under either of the federal surface transportation statutes must comply with USDOT regulations concerning minority business participation, that is, a state recipient must establish annual overall minority enterprise participation goals on projects receiving federal funds, 49 C.F.R. § 23.64 (1991), and must ensure that at least ten percent of monies expended on federally-assisted projects go to such enterprises, absent a waiver by the Secretary of Transportation. 49 C.F.R. §§ 23.61(a), 23.63 (1991). The regulations specify how a state sets its annual goal, see 49 C.F.R. § 23.45(g) (1991), and provide that failure to meet an annual goal may be excused upon adequate explanation. 49 C.F.R. § 23.68(c) (1991).

USDOT regulations also require participating states to set individual contract minority enterprise participation goals, 49 C.F.R. § 23.45(g)(2), and regulations detail certain factors to be considered in setting individual contract goals, see 49 C.F.R. § 23.45(g)(1), (7), (8). The regulations further provide that a prime contractor unable to satisfy a particular contract's minority set-aside goal may nevertheless be awarded the contract if its "best efforts" were made to meet the goal. 49 C.F.R. §§ 23.45(g)(2)(ii), 23.45(h). Several elements are considered in determining whether a prime contractor failing to meet its goal in fact...