Milwaukee County Pavers Ass'n v. Fiedler
| Citation | 710 F. Supp. 1532 |
| Decision Date | 07 April 1989 |
| Docket Number | No. 89-C-0177-C.,89-C-0177-C. |
| Parties | MILWAUKEE COUNTY PAVERS ASSN., a Wisconsin corporation, B.R. Amon & Sons, Inc., a Wisconsin corporation, Barricade Flasher Service, Inc., a Wisconsin corporation, Roddie Beaudoin & Son Co., a Wisconsin corporation, Boulanger Const. Co., Inc., a Wisconsin corporation, Brinkmann Engineering, Inc., a Wisconsin corporation, James Cape & Sons Co., a Wisconsin corporation, Century Fence, a Wisconsin corporation, Earth, Inc., a Wisconsin corporation, Hanz Contractors, Inc., a Wisconsin corporation, Johnson Sand & Gravel, Inc., a Wisconsin corporation, Lalonde Contractors, Inc., a Wisconsin corporation, Milwaukee General Construction Co., Inc., a Wisconsin corporation, A.E. Oakes, a Wisconsin corporation, Pac-Sac Construction, a Wisconsin corporation, Paving Mix & Construction, a Wisconsin corporation, Pheifer Bros. Const. Co., Inc., a Wisconsin corporation, Reliance Construction Co., Inc., a Wisconsin corporation, Rock Road of Wisconsin, Inc., a Wisconsin corporation, Stoehr Granding Co. Inc., a Wisconsin corporation, Super Excavators, Inc., a Wisconsin corporation, Trierweiler Const. & Supply Co., Inc., a Wisconsin corporation, Vinton Construction Co., a Wisconsin corporation, Zignego Company, a Wisconsin corporation, on behalf of themselves and all similarly situated persons, Plaintiffs, v. Ronald R. FIEDLER, individually and in his capacity as Secretary of the Wisconsin Department of Transportation, and David Manning, individually and in his capacity as Wisconsin Department of Transportation Minority Business Programs Director, Defendants. |
| Court | U.S. District Court — Western District of Wisconsin |
COPYRIGHT MATERIAL OMITTED
Philip J. Bradbury, Melli, Walker, Pease & Ruhly, Madison, Wis., for Zignego Co.
Joseph W. Melli, John R. Sweeney, Melli, Walker, Pease & Ruhly, Madison, Wis., for Milwaukee County Pavers Assoc.
Charles D. Hoornstra, Madison, Wis., for Ronald R. Fiedler.
Brady C. Williamson, Madison, Wis., for amicus curiae Wisconsin Dept. of Transp.
This case concerns plaintiffs' constitutional challenge to Wis.Stat. § 84.076 which provides that the State of Wisconsin should reserve $4 million in construction contracts for "disadvantaged" businesses. In an order dated February 27, 1989, 707 F.Supp. 1016, I found for the purpose of deciding plaintiffs' motion for a preliminary injunction that businesses were deemed eligible for the disadvantaged business program on the basis of an irrebuttable presumption that those of a specified race, national origin, and gender were socially disadvantaged. I thus determined that plaintiffs had a better than negligible chance of succeeding on the merits of their constitutional claim that the statute violated the equal protection clause of the Fourteenth Amendment because it made racial and ethnic classifications unsupported by the requisite findings of past discrimination. Because I found that plaintiffs had also shown that they had no adequate remedy at law, that they would suffer irreparable harm if the injunction was not granted, that the harm to them if the injunction was not issued was greater than the harm to defendants if it was issued, and that the injunction would not harm the public interest, their motion for a preliminary injunction was granted.
The preliminary injunction was granted based on my provisional understanding of the case. I noted that my view of the merits of plaintiffs' claim might change if the state could show that the presumption that women and minorities are socially disadvantaged is rebuttable or that the state program is a subsidiary of a federal program and that the state is thus entitled to rely on congressional findings of past discrimination to validate its program.
Now before the court is defendants' motion to dissolve the preliminary injunction or, in the alternative, to modify it. In support of the motion, defendants state they have new arguments and evidence demonstrating that the statutory presumptions are rebuttable and that the state program is the "alter-ego" of a federal program. They also argue that if the injunction is not dissolved it should be modified to clarify certain ambiguities in its language.
Because of the expedited briefing schedule established on plaintiffs' motion for a preliminary injunction, defendants were given little time to prepare their materials in opposition. The injunction that has issued affects many in addition to the parties to this action, in particular, the disadvantaged businesses that would otherwise have received contracts. Furthermore, the constitutionality of a state statute is a matter of public concern that should be resolved promptly and equitably. In such circumstances, the presentation of materials that might lead to a new view of the merits of the case is a justifiable reason for reconsidering the granting of the preliminary injunction. See Canal Authority of State of Florida v. Callaway, 489 F.2d 567 (5th Cir.1974).
The previous order in this case contained extensive and detailed factual findings. I will not repeat them all here but will include only those portions that are relevant to the resolution of this motion. I include additional factual findings that are derived from the undisputed affidavits and exhibits submitted by the parties on the motion to dissolve the injunction and from the testimony at the March 21, 1989 hearing on defendants' motion.
In 1983, Congress enacted a quadrennial transportation authorization act entitled the Surface Transportation Assistance Act of 1982, Pub.L. No. 97-424, 96 Stat. 2097, 2100. Section 105(f) of the Act provided as follows:
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. section 637(d)) and relevant subcontracting regulations promulgated thereto.
The Department of Transportation promulgated detailed regulations implementing this section. 48 Fed.Reg. 33432 et seq., codified at 49 C.F.R. part 23, subpart D (1986).
The subsequent authorization act, the Surface Transportation and Uniform Relocation Assistance Act of 1987, contained a similar provision. Pub.L. 100-17, § 106(c), 101 Stat. 132, 145. Section 106(c) of the Act contained language essentially identical to section 105(f) of the 1982 Act establishing a 10% goal for expenditures with disadvantaged businesses. In addition, it included women as a group presumed to be disadvantaged, refined the definition of small business, required states to compile an annual listing of disadvantaged business enterprises, and required the Secretary of Transportation to establish minimum uniform criteria for states to use in determining whether a business is disadvantaged.
Section 105(f) of the 1982 Act and § 106(c) of the 1987 Act apply only to programs under the Federal Highway Administration and Urban Mass Transit Administration. They do not apply to funds authorized for programs under the Federal Aviation Administration, the Federal Railroad Administration, or the National Highway Traffic Safety Administration.
On October 21, 1987, the Department of Transportation promulgated amendments to the regulations required by the 1987 Act. 52 Fed.Reg. 39225-31. The current regulations are codified at 49 C.F.R. part 23 (1988).
The practice of the Federal Highway Administration in its administration of section 106(c) is to permit states to meet the 10% goal by using disadvantaged businesses either as subcontractors or as prime contractors. When a disadvantaged business is a prime contractor the total dollar amount of the contract may be counted towards the state's required 10% goal even if some of the contract is subcontracted to non-disadvantaged sub-contractors.
49 C.F.R. § 23.45(k), as amended at 52 Fed.Reg. 39229-30, permits states to implement set-aside programs as one portion of an overall program to meet the goals of section 106(c) provided the state demonstrates the need for the set-aside program and provided that adequate competition among disadvantaged businesses is available. The set-aside programs allow certain contracts to be awarded to the successful bidder from a pool of bidders limited exclusively to disadvantaged businesses. The Federal Highway Administration may require states to adopt set-aside programs if the state cannot otherwise meet its 10% goal.
The Wisconsin Department of Transportation receives approximately $200 million each year in federal highway funds. The state's total highway construction budget is approximately $300-350 million a year. The department expects to receive $195 million in fiscal year 1988-89 for contracts administered by the department and $214 million in total federal funding. Receipt of the funds is contingent upon compliance with the statutory and regulatory requirements concerning disadvantaged businesses. 49 C.F.R. 23.68.
In order to comply with the requirements of the 1982 Act and the regulations promulgated thereunder, Wisconsin enacted a general Disadvantaged Business Enterprise Program. The program is currently in place to comply with the requirements of the 1987 Act. Plaintiffs have not challenged the constitutionality of this program. Defendant Manning, the Disadvantaged Business Programs Director for the Wisconsin Department of Transportation, is charged with ensuring compliance with section 105(f) of the 1982 Act and 106(c) of the 1987 Act and is designated as Wisconsin's liaison with the United States Department of Transportation for the disadvantaged business program.
As a recipient of federal highway aid, each year pursuant to the federal requirements and the general disadvantaged business program that the state has enacted to implement those requirements, the ...
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