Milwaukee County Pavers Assoc. v. Fiedler

• Decision Date: 06 March 1990
• Docket Number: No. 89-C-177-C.,89-C-177-C.
• Parties: MILWAUKEE COUNTY PAVERS ASSOC., a Wisconsin corporation, B.R. Amon & Sons, Inc., a Wisconsin corporation, Barricade Flasher Service, Inc., a Wisconsin corporation, Rodie Beaudoin & Sons, Inc., 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, Tom Kuehne Landscape Contractor, Inc., a Wisconsin corporation, La Londe Contractors, Inc., a Wisconsin corporation, Milwaukee General Construction Co., Inc., a Wisconsin corporation, A.W. Oakes, a Wisconsin corporation, Pac-Sac Construction, a Wisconsin corporation, Paving Mix & Construction Co., Inc., 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 Grading 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, 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

731 F. Supp. 1395

MILWAUKEE COUNTY PAVERS ASSOC., a Wisconsin corporation, B.R. Amon & Sons, Inc., a Wisconsin corporation, Barricade Flasher Service, Inc., a Wisconsin corporation, Rodie Beaudoin & Sons, Inc., 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, Tom Kuehne Landscape Contractor, Inc., a Wisconsin corporation, La Londe Contractors, Inc., a Wisconsin corporation, Milwaukee General Construction Co., Inc., a Wisconsin corporation, A.W. Oakes, a Wisconsin corporation, Pac-Sac Construction, a Wisconsin corporation, Paving Mix & Construction Co., Inc., 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 Grading 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, 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.

No. 89-C-177-C.

United States District Court, W.D. Wisconsin.

March 6, 1990.

COPYRIGHT MATERIAL OMITTED

Joseph W. Melli, John R. Sweeney, Philip J. Bradbury, Melli, Walker, Pease & Ruhly, Madison, Wis., for plaintiffs.

David C. Rice, Office of the Atty. Gen., Madison, Wis., for defendants.

Brady C. Williamson, Linda M. Clifford, La Follette & Sinykin, Madison, Wis., for amici curiae, Wis Minority Contractors Assoc., Lakeside Pavers, Inc., Platt Constr., Bowles Contracting, Inc., Mews Co's, Inc., Underground Pipeline, Inc.

ORDER

CRABB, Chief Judge.

Plaintiffs, construction companies in Wisconsin, brought this action challenging the constitutionality of the Wisconsin Department of Transportation's Disadvantaged Business Development and Training Program, Wis.Stat. § 84.076. In an order entered February 27, 1989, I granted plaintiffs' motion for a preliminary injunction enjoining defendants' implementation of Wis.Stat. § 84.076. Milwaukee County Pavers Ass'n v. Fiedler (Milwaukee County Pavers I), 707 F.Supp. 1016 (W.D.Wis. 1989). On April 7, 1989, the February order was modified to dissolve the preliminary injunction insofar as it enjoined contracts that were primarily federally funded. Milwaukee County Pavers v. Fiedler (Milwaukee County Pavers II), 710 F.Supp. 1532 (W.D.Wis.1989).

On June 16, 1989, plaintiffs filed an amended complaint. In Count I, plaintiffs repeat the contention that the disadvantaged business set-aside program in Wis. Stat. § 84.076 violates the equal protection clause of the Constitution by creating classifications based on race, sex and national origin. In Count II, plaintiffs contend that the set-aside program is not permitted under the federal regulations implementing the Surface Transportation and Uniform Relocation Assistance Act of 1987 because the set-aside program violates state law, and because it is not needed to satisfy any goals under federal law.¹ (For simplicity, I will refer to the Surface Transportation and Uniform Relocation Assistance Act as the 1987 Surface Transportation Act and its predecessor as the 1982 Surface Transportation Act.) In Count III, plaintiffs challenge Wis.Stat. § 84.075 for the first time on an equal protection ground. This statute governs construction contracts with minority businesses (as opposed to disadvantaged businesses) and requires the Wisconsin Department of Transportation to ensure that 5% of the total amount expended on awarding construction contracts is paid to businesses certified by the department as minority businesses. In Count IV, plaintiffs contend that Wisconsin's efforts to meet its goals under the 1987 Surface Transportation Act are unconstitutional. These efforts include the establishment of the disadvantaged business set-aside program in Wis.Stat. § 84.076 but are not limited to that program. They also include the setting of goals for disadvantaged business subcontractor participation in projects that are not set aside for disadvantaged business prime contractors. Plaintiffs contend that defendants have set an arbitrary goal of 10% expenditure on disadvantaged business contracts which is unrelated to the effects of past discrimination in Wisconsin. They also contend defendants have denied or threatened to deny good faith waivers to contractors from individual project goals despite reasonable efforts by the contractors to secure bids from qualified disadvantaged business contractors. Finally, plaintiffs contend that because state law prohibits defendants from discriminating or from granting contracts to other than the lowest bidder, defendants must seek a waiver from the presumptive 1987 Surface Transportation Act goal of 10% disadvantaged business participation in federally funded projects.² Plaintiffs stated in their amended complaint that they would seek to proceed as a class, but have since advised the court they would not pursue class certification.

This case is now before the court on the parties' cross-motions for summary judgment.

In their motion for summary judgment, defendants contend first that this case should be dismissed for failure to join the federal government as an indispensable party. Second, they challenge the justiciability of some of the issues raised in plaintiffs' amended complaint, contending that there is no case or controversy with respect to minority business, as opposed to disadvantaged business preferences, because the statutes enacting these minority preferences have never been implemented. Further, they assert that there is no case or controversy regarding their past practice of setting goals for disadvantaged business subcontractor participation on exclusively state funded projects because they ceased that practice in March 1989. Finally, defendants contend that this court lacks jurisdiction under the Eleventh Amendment to entertain plaintiffs' challenges based on rights created by state law.

Both parties have re-argued legal issues that were resolved in earlier rulings in this case, but without presenting additional facts that bear on these issues. I will not reconsider the ruling that the Wisconsin statute creates irrebuttable race, sex and national origin classifications. Milwaukee County Pavers I, 707 F.Supp. at 1031. I continue to hold that the Wisconsin set-aside program, as it has been applied thus far, is a subsidiary of the federal program under the 1987 Surface Transportation Act. Milwaukee County Pavers II, 710 F.Supp. at 1544.

The following issues remain for resolution on the parties' cross motions for summary judgment: (1) whether this case should be dismissed for plaintiffs' failure to join the federal government as an indispensable party; (2) whether there is any justiciable case or controversy regarding Wisconsin statutes that the state has never implemented or has represented it no longer implements; (3) whether defendants must make findings of past discrimination in Wisconsin to ensure that primarily federally funded set-aside projects are a narrowly tailored remedy for Congressional findings of past discrimination; (4) whether in fact the defendants administer their disadvantaged business set-aside program constitutionally in certifying disadvantaged businesses, in expending state funds, in setting goals for disadvantaged business subcontractors on projects set aside for disadvantaged prime contractors, and in extending the set-aside program to June 30, 1995; and (5) whether this court has jurisdiction over claims that the set-aside program violates Wisconsin statutory and constitutional law.

For the reasons that follow, I conclude first that plaintiffs' failure to join the federal government as a party does not constitute a ground for dismissal because the federal government has no legally cognizable interest in this case. Second, there is no case or controversy with regard to the minority business goals in Wis.Stat. §§ 84.075 and 84.076(2) because it is undisputed that these sections have never been implemented. However, defendants' voluntary cessation of the practice of setting disadvantaged business enterprise participation goals on projects funded exclusively by the state does not deprive this court of jurisdiction over plaintiffs' challenge to the constitutionality of that practice. Third, it would be inconsistent with Fullilove v. Klutznick, 448 U.S. 448, 100 S.Ct. 2758, 65 L.Ed.2d 902 (1980), to require states to make findings of prior discrimination to ensure that their implementation of the federal 1987 Surface Transportation Act requirements is narrowly tailored.

Fourth, insofar as defendants are required by federal law to spend state funds on primarily federally funded projects, the use of state funds does not alter the fact that the state is implementing a constitutional federal affirmative action program. However, the state's use of race-conscious relief is outside the bounds of federal authority and therefore unconstitutional in three respects: (1) in setting goals for disadvantaged business subcontractor participation in projects funded exclusively by the state, (2) in requiring disadvantaged business prime contractors to make good faith efforts to use disadvantaged business subcontractors, and (3) in extending the Wisconsin set-aside program past the date for which the 1987 Surface Transportation Act disadvantaged business enterprise program is authorized. Finally, this court...