MC West, Inc. v. Lewis

• Decision Date: 24 August 1981
• Docket Number: No. 80-1049.,80-1049.
• Parties: M. C. WEST, INC., et al., Plaintiffs, v. Andrew L. LEWIS, Jr., Secretary, United States Department of Transportation et al., Defendants.
• Court: U.S. District Court — Middle District of Tennessee

522 F. Supp. 338

M. C. WEST, INC., et al., Plaintiffs, v. Andrew L. LEWIS, Jr., Secretary, United States Department of Transportation et al., Defendants.

No. 80-1049.

United States District Court, M. D. Tennessee, Columbia Division.

August 24, 1981.

Edward C. Blank, II, N. Houston Parks, Columbia, Tenn., for plaintiffs.

Hal D. Hardin, U. S. Atty., William M. Leech, Jr., State Atty. Gen., Donald L. Corlew, Deputy Atty. Gen., Nashville, Tenn., M. Taylor Aspinwall, U. S. Dept. of Justice, Civ. Rights Div., Kenneth N. Weinstein, U. S. Dept. of Transp., Washington, D. C., Richard S. Ugelow, Civ. Rights Div., U. S. Dept. of Justice, Washington, D. C., for defendants.

MEMORANDUM

WISEMAN, District Judge.

Plaintiffs, highway construction contractors, claim that Department of Transportation regulations, which provide for use of Minority Business Enterprise MBE contract goals, 49 C.F.R. § 23.45 as amended on April 27, 1981, violate their constitutional rights to due process and equal protection under the fifth and fourteenth amendments and their statutory rights under 23 U.S.C. § 112 (1976), 42 U.S.C. § 1983, (Supp. III 1979) and 42 U.S.C. § 2000d (1976). Plaintiffs seek a preliminary injunction against federal and state officials to restrain them from enforcing the Department of Transportation's regulations and a declaratory judgment that the regulations are unconstitutional. This Court has jurisdiction under 28 U.S.C. § 1331.

The case was filed on December 15, 1980. By stipulation and order on March 9, 1981, the parties agreed to delay hearing of the preliminary injunction request until after the Secretary of Transportation finished revising the challenged regulations;¹ this Court is now concerned only with the regulations as amended on April 27, 1981.

The amended regulation, in pertinent part, provides as follows:

(h) A means to ensure that competitors make good faith efforts to meet MBE² contract goals:

(1) For all contracts for which contract goals have been established, the recipient ³ shall, in the solicitation, inform competitors that the apparent successful competitor will be required to submit MBE participation information to the recipient and that the award of the contract will be conditioned upon satisfaction of the requirements established by the recipient pursuant to this subsection.

(i) The apparent successful competitor's submission shall include the following information:

(A) The names and addresses of MBE firms that will participate in the contract;

(B) A description of the work each named MBE firm will perform;

(C) The dollar amount of participation by each named MBE firm.

....

(II) The recipient may select the time at which it requires MBE information to be submitted. Provided, that the time of submission shall be before the recipient commits itself to the performance of the contract by the apparent successful competitor.

(2) If the MBE participation submitted in response to paragraph (h)(1) of this section does not meet the MBE contract goals, the apparent successful competitor shall satisfy the recipient that the competitor has made good faith efforts to meet the goals.

....

(3) Meeting MBE contract goals, making good faith efforts as provided in paragraph (h)(2) of this section, or meeting requirements established by recipients in lieu of good faith efforts, is a condition of receiving a DOT-assisted contract for which contract goals have been established.

46 Fed.Reg. 23461 (April 27, 1981), amending 49 C.F.R. § 23.45 (1980) (emphasis in original).

In the appendix to the amended regulation, the Secretary attempts to provide guidance concerning the achievement of good faith efforts. "Efforts that are merely pro forma are not good faith efforts to meet the goals. Efforts to obtain MBE participation are not good faith efforts to meet the goals, even if they are sincerely motivated, if, given all the circumstances, they could not reasonably be expected to produce a level of participation sufficient to meet the goals." 46 Fed.Reg. 23461 (April 27, 1981).

During the hearing held by this Court on plaintiffs' motion for a preliminary injunction, the Court tried to determine what would be considered good faith efforts. The parties were unable to agree who determined whether good faith efforts had been made. The Government said that the recipient made the sole determination. The recipient, here the State of Tennessee, acknowledged that it may be the formal decision maker, but recognized that a federal agency would be looking over their shoulder.

In any event the Department includes in its appendix a list of efforts that recipients may consider as evidence of good faith compliance. Some of the efforts include attendance at presolicitation or prebid meetings; advertisement in minority-focus media; written notice to specific MBEs; follow-ups after initial solicitations of MBEs; provision of adequate information to MBEs; good faith negotiation with interested MBEs; assistance in obtaining bonding, credit, or insurance for MBEs; and use of available minority community organizations and the like in the recruitment and placement of MBEs. Id. at 23461-62.⁴ The contract goals for Tennessee highway projects, which were set by the Atlanta Regional Administrator, are two and one-half percent for MBEs and one percent for WBEs.

Plaintiffs have moved for a preliminary injunction. In determining whether a preliminary injunction should be granted "`no single factor is determinative.'" Roth v. Bank of the Commonwealth, 583 F.2d 527, 537 (6th Cir. 1978) cert. dismissed 442 U.S. 925, 99 S.Ct. 2852, 61 L.Ed.2d 292 (1979) (quoting Metropolitan Detroit Plumbing and Mechanical Contractors Association v. HEW, 418 F.Supp. 585, 586 (E.D.Mich. 1976)).

In addition to assessing 1 the likelihood of success on the merits, the court must consider 2 the irreparability of any harm to the plaintiff, 3 the balance of any injury as between the parties, and 4 the impact of the ruling on the public interest. In general the likelihood of success that need be shown will vary inversely with the degree of injury the plaintiff will suffer absent an injunction.

Id. at 537-38.

Irreparable Harm

Defendants assert that plaintiffs have not shown that enforcement of the regulations will cause irreparable injury during the pendency of this litigation. To be sure, plaintiffs have been unable to prove that any contracts were awarded to a contractor other than the low bidder because of the MBE regulations.⁵

Plaintiffs most basic claim is that their rights to equal protection of the laws have been violated by these regulations. In a case challenging the former, more stringent regulations the district judge held that equal protection rights are "so fundamental to our legal system and to our society that any violation thereof will cause irreparable harm irrespective of the financial impact." Central Alabama Paving, Inc. v. James, 499 F.Supp. 629, 639 (M.D.Ala.1980). This Court is in complete agreement with that approach and therefore no further inquiry into the financial effect of the regulations is necessary.

Likelihood of Success on the Merits

Plaintiffs claim that the regulations violate the competitive bidding requirement of the Federal Highway Act, 23 U.S.C. § 112(b), which provides that "contracts for the construction of each project shall be awarded only on the basis of the lowest responsive bid submitted by a bidder meeting established criteria of responsibility." Id. (emphasis added). Because the Secretary's regulations are in themselves definitions of responsiveness, plaintiffs' challenge to the regulations as violative of this statute is without merit. See Central Alabama Paving, Inc. v. James, supra, at 633.

Plaintiffs challenge the Secretary's regulations under Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d. In Regents of University of California v. Bakke, 438 U.S. 265, 98 S.Ct. 2733, 57 L.Ed.2d 750 (1978), four Justices of the Supreme Court opined that the affirmative action plan at the Davis Medical School violated Title VI because it clearly prohibits discrimination on the grounds of race, color, or national origin under any program receiving federal financial assistance. Id. at 408-421, 98 S.Ct. at 2808-2815, 57 L.Ed.2d 845-53. Five of the Justices, however, believed that Title VI and the equal protection clause were coextensive. Id. at 283, 325, 98 S.Ct. at 2744, 2766, 57 L.Ed.2d at 766-67, 793. Therefore, this Court will review the remainder of plaintiffs' challenge under constitutional standards.⁶

In Bakke, supra, the Court struck the medical school's special admissions program, but held that race could be considered in the admissions process. The admissions program was held unlawful as a result of four Justices opinion that Title VI of the Civil Rights Act of 1964 was violated and Justice Powell's opinion that the process violated the equal protection clause of the fourteenth amendment. According to Justice Powell, race can be considered in admissions programs that were tailored to remedy present effects of past discrimination. Id. at 299, 307, 98 S.Ct. at 2752-53, 2757, 57 L.Ed.2d at 777, 782. The medical school's program, however, had not undertaken to correct the effects of specific, identified discrimination; countering the effects of "societal discrimination" was the goal. 438 U.S. at 307, 98 S.Ct. at 2757, 57 L.Ed.2d at 782.

The State certainly has a legitimate and substantial interest in ameliorating, or eliminating where feasible, the disabling effects of identified discrimination.... The goal in the school desegregation cases was far more focused than the remedying of the effects of "societal discrimination," an amorphous concept of injury that may be ageless in its reach into the past.

We have never approved a classification that aids persons perceived as members of relatively victimized groups at the expense of other innocent individuals in the absence of judicial, legislative, or

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