Michigan Road Builders Ass'n, Inc. v. Blanchard
| Decision Date | 11 April 1991 |
| Docket Number | No. 5:90-CV-37.,5:90-CV-37. |
| Citation | 761 F. Supp. 1303 |
| Parties | MICHIGAN ROAD BUILDERS ASSOCIATION, INC., a Michigan corporation; Ajax Paving Industries, a Michigan corporation; Argersinger-Morse Construction Company, a Michigan corporation; Bacco Construction Company, a Michigan corporation; Basile Sons, Inc., Peter A., a Michigan corporation; Bolen Asphalt Paving, Inc., a Michigan corporation; Cadillac Asphalt Paving Co., a Michigan corporation; Doan Construction Company, a Michigan corporation; Forsberg, Inc., T.A., a Michigan corporation; Hull Company, Inc., C.A., a Michigan corporation; Interstate Highway Construction, Inc., a Michigan corporation; Kelcris Corporation, a Michigan corporation; Maclean Construction Company, a Michigan corporation; Midwest Bridge Company, a Michigan corporation; Milbocker & Sons, Inc., a Michigan corporation; Molesworth Contracting Company, a Michigan corporation; J. Slagter & Son Construction Company, a Michigan corporation; Spartan Sign, Inc., a Michigan corporation; Walter Toebe Construction Company, a Michigan corporation; Ward and Van Nuck, Inc., a Michigan corporation, Plaintiffs, v. James J. BLANCHARD, as Governor of the State of Michigan; The Department of Transportation of the State of Michigan; James P. Pitz, as Director of the Department of Transportation; The Michigan State Transportation Commission; William C. Marshall, Rodger D. Young, Hannes Meyers, Jr., Stephen F. Adamini, Shirley E. Zeller, Nansi I. Rowe, Individually in their official capacity as members of the Michigan State Transportation Commission, Defendants. |
| Court | U.S. District Court — Western District of Michigan |
COPYRIGHT MATERIAL OMITTED
Barry R. Powers, Leonard M. Niehoff, John B. Weaver, Butzel, Long, Gust, Klein & Vanzile, P.C., Detroit, Mich., for plaintiffs.
David L. Balas, Patrick F. Isom and Larry F. Brya, Asst. Attys. Gen., Frank J. Kelley, Atty. Gen. Transp. Div., Lansing, Mich., for defendants.
In this action for declaratory and injunctive relief, plaintiffs claim that defendants have violated their constitutional rights by discriminating against them in awarding road construction projects. In granting contracts containing federal funds, the State of Michigan has set aside 1.32% of the dollars awarded for Disadvantaged Business Enterprises ("DBEs"). Plaintiffs contend that the state is unlawfully aiding women and minorities at the expense of white males.
Plaintiffs are the Michigan Road Builders Association, Inc. and a group of individual road contractors and subcontractors. Defendants are James J. Blanchard, Michigan's former governor; the Michigan Department of Transportation ("MDOT"); James J. Pitz, former Director of MDOT; the Michigan State Transportation Commission ("the Commission"); and the individual members of the Commission: William C. Marshall, Roger D. Young, Hannes Meyers, Jr., Stephen F. Adamini, Shirley E. Zeller, and Nansi I. Rowe.
For fiscal year 1991, MDOT established a goal that 15% of the total dollar amount of all construction contracts containing federal funds be awarded to DBEs. Of the total dollar amount awarded, approximately 1.32% was set-aside to be exclusively bid upon by, and thus awarded to, DBEs. Only woman- and minority-owned businesses, plaintiffs assert, may qualify as DBEs. Plaintiffs maintain that members of its association are precluded from bidding on and being awarded set-aside contracts because their businesses are owned by white males. Therefore, defendants' use of set-aside contracts, plaintiffs argue, unconstitutionally discriminates against plaintiffs based upon their race and sex.
It is undisputed that defendants have made no findings of prior discrimination in the construction industry in Michigan. Defendants respond that they are merely implementing a federal construction statute authorizing state recipients of federal funds to utilize set-asides. Plaintiffs do not challenge the constitutionality of the federal authorization statute. The gravamen of plaintiff's complaint is the charge that defendants are unconstitutionally implementing the federal statute by the use of set-aside contracts.
In their Third Amended Complaint, plaintiffs claim that defendants have violated the Fourteenth Amendment of the United States Constitution, 42 U.S.C. § 1981, 42 U.S.C. § 1983, and 42 U.S.C. § 2000d et seq., Title VI of the Civil Rights Act of 1964. A bench trial was held on November 7 and 8, 1990 and post-trial arguments were heard on December 20, 1990. The parties have thoroughly briefed the issues. After careful consideration of the record, the court holds that plaintiffs have not carried their burden of establishing standing. Further, the court holds that even if plaintiffs had established standing, defendants have not acted unconstitutionally. Consequently, plaintiff's prayer for declaratory and injunctive relief is denied.
1. Plaintiff Michigan Road Builders Association, Inc. ("Road Builders") is an association of contractors whose members perform highway construction contracts in the State of Michigan. Among the association's purposes, according to its constitution, is "to combat unfair practices." Road Builders' Constitution, art. II, Pl.Exh. 15. Another purpose is to "conduct only those activities which are for the common good and benefit alike for all members." Id.
Approximately 75% of the dollar volume of all state and federal road contracts in Michigan is performed by Road Builders' members. Tr. at 49. The association has approximately 120 members, approximately six of whom are certified Disadvantaged Business Enterprises ("DBEs"). Tr. at 49. The Executive Director of Road Builders, Lawrence Martin, testified that members of his association desire to bid on MDOT set-aside projects but are prohibited from bidding on such projects. Tr. at 45-46.
2. Individual plaintiffs are contractor and subcontractor firms. The only individual plaintiff who testified was Dorset Goff ("Goff"), owner of Spartan Sign, Inc. ("Spartan"). Spartan fabricates and erects highway traffic control signs and is a member of the Road Builders. Tr. at 312.
At trial, Goff was shown two advertisements from issues of the magazine, Michigan Roads and Construction. Tr. at 313; Pl.Exh. 22 and 23. Both of the advertisements were for MDOT contracts in which the bidder was required to be a DBE. Pl. Exh. 22 at 14; Pl.Exh. 23 at 14. Goff testified that his company would have bid on the projects if the advertised projects had not been set aside for DBE firms. Tr. at 313. Apparently, Goff would have bid on such projects because his company is capable of doing the work described in the advertisements. Tr. at 312. However, Goff testified that Spartan has not applied for certification as a DBE. Tr. at 314.
3. Defendant James J. Blanchard was the governor of Michigan at the time this action was initiated. Defendant Michigan Department of Transportation ("MDOT") is a department of the executive branch of the state of Michigan. Defendant Pitz was the executive officer of MDOT and was responsible for executing the policy of the Michigan Transportation Commission. Defendant Commission is a constitutionally established body charged with establishing policy for MDOT. Mich. Const. art. 5, § 28. Defendants William C. Marshall, Rodger D. Young, Hannes Meyers, Jr. Stephen F. Adamini, Shirley E. Zeller, and Nansi I. Rowe, were members of the Commission and were officially responsible for establishing policy for MDOT.
4. In 1983, the United States Congress enacted a transportation authorization act entitled the Surface Transportation Assistance Act of 1982 ("STAA"), Pub.L. No. 97-424, 96 Stat. 2097. Section 105(f) of STAA provided:
Except to the extent that the Secretary 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 as defined by section 8(d) of the Small Business Act (15 U.S.C. § 637(d)) and relevant subcontracting regulations promulgated thereto.
The United States Department of Transportation promulgated regulations implementing this section. 48 Fed.Reg. 33432 et seq., (codified at 49 C.F.R. § 23 (1986)). STAA incorporated the definitions of social and economic disadvantage of section 28 of the Small Business Act, 15 U.S.C. § 637(d), and the regulations promulgated pursuant to it. 49 C.F.R. § 23.
In 1987, Congress passed a subsequent transportation authorization act, the Surface Transportation and Uniform Relocation Assistance Act of 1987 ("STURAA"). Pub.L. 100-17, 101 Stat. 132.
Section 106(c) of STURAA contained essentially identical language to section 105(f) of STAA. STURAA also provided that not less than 10 percent of the funds authorized under the statute shall be awarded to disadvantaged businesses. 101 Stat. at 145. In addition, STURAA included women as a group presumed to be disadvantaged, refined the definition of small business, and required the Secretary of Transportation to establish minimum uniform criteria for states to use in determining whether a business can be certified as disadvantaged. 101 Stat. at 145-46.
5. Section 106(c) of STURAA applies to programs under the Federal Highway Administration ("FHWA"). The FHWA and MDOT mutually administer contracts involving federal highway funds in Michigan. As a condition of receiving federal funds for highway construction projects, Michigan must comply with federal regulations implementing STURAA, and specifically, those federal regulations relating to Disadvantaged Business Enterprises ("DBEs"). 49 C.F.R. § 23.68.
STURAA, as did its predecessor STAA, requires that "not less than 10 percent" of the funds authorized for the entire United States shall be awarded to DBEs. Pub.L. No. 100-17, § 106(c)(1), 101 Stat. at 145. In order to achieve the national minimum 10% mark, the...
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