Houston Contractors Ass'n v. METRO. TRANSIT AUTH. OF HARRIS CTY., Civil Action No. H-93-3651.
| Citation | 993 F.Supp. 545 |
| Decision Date | 13 November 1997 |
| Docket Number | Civil Action No. H-93-3651. |
| Parties | HOUSTON CONTRACTORS ASSOCIATION, Plaintiff, v. METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY, Defendant. |
| Court | United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas |
Thomas C. Fitzhugh, III, Houston, TX, for plaintiff.
Rex D. VanMiddlesworth, Houston, TX, for defendant.
Stuart M. Nelkin, Houston, TX, for intervenor-defendant Menendez-Donnell.
Opinion On Summary Judgment
Race is politics not biology. Who is who and what happens to them depends entirely on political decisions about society and economics — not on genetics.
Because race is inescapably arbitrary, basing governmental action on race offends the American Constitution. Race is arbitrary because it is unrelated to the accomplishment of a public service and because the categories are hollow. Assigning governmental benefits to people by their skin color does not quit being arbitrary because the advocates claim that a program has a progressive purpose; a principle wrong for Eugene Talmadge is wrong for Jesse Jackson.
Because it must operate under the Constitution, the Metropolitan Transit Authority may not use its power to treat similar people differently unless the distinction is directly related to an objective function of its legitimate responsibility for transportation. Nothing about transportation depends on the race of the person — not employees, officers, taxpayers, riders, suppliers, or contractors.
An individual may reliably be identified by sex, eliminating the problem of imprecise categories, but sex remains unrelated to the provision of public transportation.
Created in 1978, Metropolitan Transit Authority of Harris County is a dependent governmental district furnishing transportation to the Houston metropolitan area, as authorized by the Texas legislature. Its policy is set by a board appointed by its constituent city governments. In 1996, Metro had a capital budget of $500 million, much of which is equipment. The construction budget for roads, bridges, terminals, and similar projects is about $200 million, representing in recent years about 25% of that kind of construction in Houston.
Metro derives its funds from four sources: fares, local sales tax, Texas grants, and federal grants. State and federal grants tend to be project-specific, and they carry requirements about social responsiveness. Metro uses subcontractors' race and sex to allocate 21% of its purchases.
Houston Contractors Association is a private voluntary group of construction-related businesses. Some of its members bid frequently on jobs with Metro.
An association may bring a lawsuit if its member contractors are directly harmed by the program. To be a party to what the Constitution calls a the association must show that (a) one of its members suffered harm directly from Metro's program and (b) a decision in its favor would alleviate the harm. Simply put, the Constitution does not permit suits by mere bystanders or if the result will be an empty gesture.
Houston Contractors Association may bring this action about the constitutionality of the program; it stands in a direct relation to the program and its injurious consequences because:
The United States Department of Transportation administers grants to state and local transit agencies through its component known as the Federal Transit Authority. FedTran must approve a transit agency's program for helping minority businesses before it can receive a grant under the federal program. FedTran treats the program as a legal obligation, with a failure to follow it being a violation of the grant's conditions.
For preference purposes the federal program defines minority-group membership as an individual who claims membership as a minority and who is "so regarded by that particular minority group."1
The difference between the two programs is relatively minor; the federal program uses "minority," "socially and economically disadvantaged individuals," "small business concern," and "disadvantaged" interchangeably while Metro uses "disadvantaged business enterprise." The essential commonality between them is that they require awarding contracts to people defined by sex, race, and ethnicity. The federal program requires the grant recipient to maintain a disadvantaged program with "practical" numerical goals as a condition for federal grants.2 At least 10% of the Department of Transportation's budget is devoted to designated beneficiaries.3
Since 1987, Texas has had a law encouraging participation in contracts for businesses owned by minorities or disadvantaged people. By 1993, the state set recommended shares of the segments of project expenditures and defined categories it considered disadvantaged.
It declares that a "minority business" includes entities more than 50% owned and controlled by members of minorities or majority ownership and control by females.
In 1990, Metro adopted its Disadvantaged Business Enterprise Program. The program requires bidders on Metro's contracts to use qualifying disadvantaged subcontractors and suppliers for at least 21% of the gross contract price. The program speaks of "good faith efforts," but when a bid is submitted, the contractor must identify the DBEs, their work, and their prices.
According to Metro, a disadvantaged business enterprise is a small business, managed and owned over 50% by socially and economically disadvantaged individuals.
Metro says that a person through whom an enterprise may qualify is someone who has suffered actual social disadvantage but not someone who merely has membership in a socially disadvantaged class. Metro says it considers whether the person individually has suffered disadvantage in education, employment, and business, but it does not examine the actual status of people in these categories: Black, Hispanic, Native American, Asian-Pacific, Asian-Indian, and female. Metro presumes that every member of these groups is socially and economically disadvantaged.
The program requires that these groups in the aggregate receive subcontracts at a rate of 21% of the dollar value.
Metro says that the goals in the program are purely aspirational, but the terms of the program and the practice under it are quotas. The section of the plan with the "goals" is called "Set Asides." When a contractor's bid is the lowest, it is reviewed for technical and fiscal compliance. For instance, a bid that appears unreasonably low is reviewed for errors in arithmetic, materials, and labor or other oversights that might cause problems later. Beyond engineering and financial double-checking, no bid is sent to the board for approval until the Affirmative Action Office has approved it.
The Affirmative Action Office reviews the contractor's certification, including Metro's form letters, that it intends to use specific minority subcontractors for specific dollar amounts. Metro corresponds about the program through the actual contract administration officer. It is expressed in mandatory terms, like:
For some contracts, the program requires Metro to consider only bids made by DBEs, which effectively segregates part of Metro's third-party work to those officially-favored contractors, meaning that the disfavored ones will never have an opportunity to receive some of the contracts.6
The program administrator testified that minority participation was a contract term, fully enforceable by Metro. His department is called affirmative action, not equal opportunity. Contractors are forced to complete detailed forms showing the precise payments to approved subcontractors and suppliers. These forms have no function within Metro except to "ensure compliance" with the program as the Metro staffers "closely monitor" the contractors.7
The program administrator testified that Metro treats the DBE commitment just like other contract terms, converting a moral obligation to use good faith into a legal obligation of the contract. He also said that Metro has at least one secret motive in requiring an identification of subcontractors; that purpose is to prevent bid shopping among subcontractors by prime contractors. This particular policy has no relation to the DBE program, and it protects prime contractors from one form of competition by other prime contractors.
It is not reasonably disputable that Metro imposes directly on contractors to obtain subcontracts for its officially-favored groups.
An aspiration to do wrong is wrong. A government run by arbitrary hope is still arbitrary. To test the logic that stating...
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...at hand. SeeHessel v. O'Hearn, 977 F.2d 299, 305 (7th Cir. 1992) (search and seizure); Hous. Contractors Ass'n v. Metro. Transit Auth. of Harris Cnty., 993 F. Supp. 545, 558 (S.D. Tex. 1997) (equal protection). We therefore decline to overturn the district court's imposition of joint and se......
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