Maryland Highways Contractors Ass'n, Inc. v. State of Md.

• Decision Date: 20 May 1991
• Docket Number: No. 90-3102,90-3102
• Citation: 933 F.2d 1246
• Parties: 56 Empl. Prac. Dec. P 40,768 The MARYLAND HIGHWAYS CONTRACTORS ASSOCIATION, INCORPORATED, Plaintiff-Appellant, v. STATE OF MARYLAND; James J. McGinty, Secretary, Board of Public Works; Earl F. Seboda, Secretary, Department of General Services; Richard H. Trainor, Secretary, Department of Transportation; Joseph I. Shilling, Chairman, Interagency Committee on School Construction; Henry L. Hein, Chairman, Maryland Food Center Authority; Herbert J. Belgrad, Chairman, Maryland Stadium Authority; John S. Toll, Chancellor, the University of Maryland System; Charles L. Benton, Director, Department of Budget and Fiscal Planning, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1246

933 F.2d 1246

56 Empl. Prac. Dec. P 40,768

The MARYLAND HIGHWAYS CONTRACTORS ASSOCIATION, INCORPORATED Plaintiff-Appellant, v. STATE OF MARYLAND; James J. McGinty, Secretary, Board of Public Works; Earl F. Seboda, Secretary, Department of General Services; Richard H. Trainor, Secretary, Department of Transportation; Joseph I. Shilling, Chairman Interagency Committee on School Construction; Henry L Hein, Chairman, Maryland Food Center Authority; Herbert J Belgrad, Chairman, Maryland Stadium Authority; John S. Toll, Chancellor, the University of Maryland System; Charles L. Benton, Director, Department of Budget and Fiscal Planning, Defendants-Appellees.

No. 90-3102.

United States Court of Appeals, Fourth Circuit.

Argued Jan. 8, 1991.

Decided May 20, 1991.

Leslie Robert Stellman, argued (John William Kyle, on brief), Littler, Mendelson, Fastiff & Tichy, Baltimore, Md., and Walter Howard Ryland, argued (Waylund E. Hundley, on brief), Williams, Mullen, Christian & Dobbins, P.C., Richmond, Va., for plaintiff-appellant.

Ralph S. Tyler, Asst. Atty. Gen., argued (J. Joseph Curran, Jr., Atty. Gen., and Andrew H. Baida, Asst. Atty. Gen., on brief), Baltimore, Md., for defendants-appellees.

Before ERVIN, Chief Judge, and PHILLIPS and MURNAGHAN, Circuit Judges.

ERVIN, Chief Judge:

The Maryland Highway Contractors Association, Inc. ("Association") sought declaratory and injunctive relief against the State of Maryland ("Maryland") and several state officials in their official capacities in the United States District Court for the District of Maryland. Specifically, the Association wanted a determination that Maryland's Minority Business Enterprise ¹ ("MBE") statute and accompanying regulations violated the constitutional and statutory rights of the Association and its members. By a motion for summary judgment, Maryland challenged the Association's standing to sue, and the district court granted the motion, finding no standing.

In the interim between the district court's decision and this appeal, the Maryland legislature repealed the MBE statute at issue here and replaced it with a new one. We find that this repeal and subsequent enactment rendered this case moot, and so we hereby vacate the district court's decision and remand to the district court with instructions to dismiss.

I.

The Association is an organization of contracting firms whose members regularly bid on highway construction projects. The Association brought suit alleging that the 1988 MBE statute and accompanying regulations violate the Constitution and federal statutes. The Association claimed that the statute and regulations violate the Equal Protection Clause of the Fourteenth Amendment, 42 U.S.C. Sec. 2000d, and 42 U.S.C. Sec. 1983.

Maryland moved for summary judgment on the ground that the Association had no standing to sue. Extensive discovery was conducted on the issue of standing, and the district court held a hearing to resolve the issue. After oral argument, the district court agreed with Maryland that the Association lacked standing to sue and granted Maryland's motion for summary judgment on that basis. This appeal followed.

II.

In 1978, Maryland adopted a statutory and regulatory scheme designed to encourage participation by MBEs certified by state law and to provide a fair share of contracts to MBEs for the procurement of supplies and services. The version of the statute in effect at the start of these proceedings was Md. State Fin. & Procurement Code Ann. Sec. 14-302(a)(1), (2) (1988) (repealed by 1990 Md. Laws Ch. 708). The 1988 MBE scheme set a goal for several Maryland departments to award 10% of their total dollar of procurement contracts either directly or indirectly to certified MBEs. The departments included: The Department of General Services; the Interagency Committee on School Construction; the Maryland Food Center Authority; the Maryland Stadium Authority; and the University of Maryland System. Md. State Fin. & Procurement Code Ann. Sec. 14-302(b)(1) (1988) (repealed by 1990 Md. Laws Ch. 708). The Department of Transportation was supposed to achieve the same goal, but only with respect to procurement contracts totalling $100,000 or more. Md. State Fin. & Procurement Code Ann. Sec. 14-302(b)(2) (1988) (repealed by 1990 Md. Laws Ch. 708).

The 1988 MBE statute directed the Maryland Board of Public Works to adopt regulations to achieve the goals of the statute. See Code of Maryland Regulations (COMAR) 21.11.03.01 et seq. The regulations adopted set forth the following requirements: (1) each contract solicitation must set out the expected degree of MBE participation; (2) the relevant state agency must provide a list of certified MBEs to each prospective contractor. The regulations also set out provisions that ensure the uniformity of requests for bids; provisions that ensure the timing of requests and submissions of bids on subcontracts; and provisions that ensure that the State is not fiscally disadvantaged by inadequate responses by MBEs to requests for bids. COMAR 21.11.03.01 et seq.

The regulations also provided that MBE participation may be waived under certain circumstances. COMAR 21.11.03.11. Waiver might be obtained if the contract bidder could make a reasonable demonstration that MBE participation was not obtainable, or was not obtainable at a reasonable price, but only if the state procurement agency decided that the public interest would be served by the waiver. Id.

III.

On July 1, 1990, after the decision by the district court in this case, the Maryland legislature repealed the MBE statute and enacted a new and revised MBE statute to replace it. See Md. State Fin. & Procurement Code Ann. Secs. 14-301 et seq. (1990). The new statute, by its terms, attempts to comply with the Supreme Court's holding regarding MBE statutes in City of Richmond v. Croson, 488 U.S. 469, 109 S.Ct. 706, 102 L.Ed.2d 854 (1989). ²

Maryland commissioned a Minority Business Utilization Study, held legislative hearings, and determined that Maryland had engaged in discrimination against certain groups. See 1990 Md. Laws Ch. 708, preamble. As a result of the study, the Maryland legislature enacted a new MBE statute protecting those classes of minorities which the study showed Maryland had discriminated against: American Indians; Asians; Blacks; Hispanics; women; and physically or mentally disabled individuals. Md. State Fin. & Procurement Code Ann. Sec. 14-301(f) (1990). The legislature thus repealed the former portion of the statute which protected Alaskan natives and Pacific Islanders. Compare Md. State Fin. & Procurement Code Ann. Sec. 14-301(f) (1990) with Md. State Fin. & Procurement Code Ann. Sec. 14-301(e) (1988) (repealed by 1990 Md. Laws Ch. 708). Most of the remaining provisions in the MBE statute were not changed by the new MBE law.

IV.

The district court held that the Association lacked standing to sue in this case. We must review the court's holding "in light of [the state] law as it now stands, not as it stood when the judgment below was entered." Diffenderfer v. Central Baptist Church, 404 U.S. 412, 414, 92 S.Ct. 574, 575, 30 L.Ed.2d 567 (1972) (per curiam); Fusari v. Steinberg, 419 U.S. 379, 387, 95 S.Ct. 533, 538, 42 L.Ed.2d 521 (1975). As noted above, the Maryland legislature repealed the MBE statute which was effective when the district court rendered its decision, replacing the old MBE statute with a new one. The actions by the Maryland legislature had the effect of rendering the Association's case moot.

A case is moot when it has "lost its character as a present, live controversy of the kind that must exist if we are to avoid advisory opinions on abstract propositions of law." Diffenderfer, 404 U.S. at 414, 92 S.Ct. at 575 (quoting Hall v. Beals, 396 U.S. 45, 48, 90 S.Ct. 200, 201, 24 L.Ed.2d 214 (1969)). Here, we would be rendering an advisory opinion if we reached the merits of this case. The statute challenged by the Association no longer exists; a new statute replaced it. In order to determine if someone has been injured by the new statute, we would need more information about the new statute than is presently before us. "We are unable meaningfully to assess the issues in this appeal on the present record." Fusari, 419 U.S. at 387, 95 S.Ct. at 539.

The Association asserts that the new statute has "only minor, insignificant modifications" from the old one. We disagree. The new statute was enacted after an independent study was conducted to ascertain whether Maryland participated in discrimination. As a result of the study, the new statute eliminated two of the groups previously protected by the MBE statute. These facts show that Maryland was attempting to meet the requirements of the Supreme Court's holding in City of Richmond v. Croson, 488 U.S. 469, 109 S.Ct. 706, 102 L.Ed.2d 854 (1989). Whether Maryland's new statute meets the requirements of Croson will likely be the subject of a challenge to the new statute. However, we do not have enough facts before us in this case to evaluate the new statute in light of Croson. As a result, the present case is moot.

When a case is rendered moot while on appeal, the established practice is to reverse or vacate the judgment below and remand with a direction to dismiss. United States v. Munsingwear, 340 U.S. 36, 39, 71 S.Ct. 104, 106, 95 L.Ed. 36 (1950). Because we hold that the Association's claim against Maryland is moot, we vacate the district court's order granting summary judgment to Maryland, and we direct that court to dismiss this case as moot.

V.

Because of the likelihood of a new attack upon the constitutionality of the present Maryland MBE statute, we elect to address the issue of standing in order to guide subsequent litigation.

Standing is a component of a federal court's limited jurisdiction. Article III of the Constitution limits the "judicial power" of the United States to the resolution of "cases" and "controversies." U.S. Const. art. III...