Rothe Development Corp. v. U.S. Dept. of Defense

• Court: U.S. District Court — Western District of Texas
• Writing for the Court: RODRIGUE2
• Citation: Rothe Development Corp. v. U.S. Dept. of Defense, 499 F.Supp.2d 775 (W.D. Tex. 2007)
• Decision Date: 10 August 2007
• Docket Number: No. CIV.A. SA-98-CV-1011.,CIV.A. SA-98-CV-1011.
• Parties: ROTHE DEVELOPMENT CORPORATION, Plaintiff, v. The U.S. DEPARTMENT OF DEFENSE and The U.S. Department of Air Force, Defendants.

499 F.Supp.2d 775

ROTHE DEVELOPMENT CORPORATION, Plaintiff, v. The U.S. DEPARTMENT OF DEFENSE and The U.S. Department of Air Force, Defendants.

No. CIV.A. SA-98-CV-1011.

United States District Court, W.D. Texas, San Antonio Division.

August 10, 2007.

COPYRIGHT MATERIAL OMITTED

David Frank in Barton, The Gardner Law Firm, San Antonio, TX, for Plaintiff.

Kristofor J. Hammond, U.S. Dept. of Justice, Employment Litigation Section, Karen D. Woodard, U.S. Department of Justice, Washington, DC, Britannia Hobbs, United States Attorney, San Antonio, TX, for Defendants.

ORDER

RODRIGUE2, District Judge.

On this date, the Court considered Plaintiffs motion for summary judgment (Docket No. 301) and Defendants' joint motion for summary judgment (Docket No. 318). For the reasons discussed below, Defendants' joint motion for summary judgment is GRANTED, and Plaintiffs motion for summary judgment is DENIED. The Clerk is instructed to keep this case open.

The 1207 Program was originally enacted by Congress on November 14, 1986. It was reauthorized in 1989, 1992, 1999, and 2002, the last reauthorization being January 6, 2006. The Court finds that the 2006 Reauthorization of the 1207 Program satisfies the requirements of strict scrutiny. Congress had a compelling interest when it reauthorized the 1207 Program in 2006, and that compelling interest was supported by a strong basis in the evidence. Furthermore, the Court finds that the 2006 Reauthorization of the 1207 Program is narrowly tailored.

TABLE OF CONTENTS
                I.  FACTUAL & PROCEDURAL BACKGROUND.................................................780
                      A.  Introduction................................................................780
                      B.  Facts.......................................................................781
                      C.  Relief requested by Rothe in its motion for summary judgment................783
                      D.  The 2006 Reauthorization of the 1207 Program................................783
                          1.  The 1207 Program, 10 U.S.C. § 2323.................................784
                          2.  The 1207 Program cross-references Section 8(a) and 8(d) of the
                Small Business Act, 15 U.S.C. § 637...............................786
                          3.  Title 13 of the Code of Federal Regulations, "Business and Credit
                Assistance"............................................................786
                          4.  Title 48 of the Code of Federal Regulations, "Federal Acquisitions
                Regulations System"....................................................789
                          5.  Intervening regulatory changes to the 1207 Program......................790
                              a.  PEA Regulations.....................................................791
                              b.  Economic disadvantage regulations were amended to require
                an individualized showing of economic disadvantage for all
                SDB applicants.....................................................793
                              c.  Social disadvantage regulations were amended to lower the
                burden of proof required for non-minority small businesses
                to qualify as SDBs.................................................793
                      E.  Procedural History..........................................................794
                          1.  Plaintiff's First Amended Complaint.....................................794
                          2. Rothe I, 49 F.Supp.2d 937 (W.D.Tex.1999) (Prado,).......................795
                          3. Rothe II, 194 F.3d 622 (5th Cir.1999)...................................800
                

4. Rothe III, 262 F.3d 1306 (Fed.Cir.2001).................................801
                          5. Rothe IV, 324 F.Supp.2d 840 (W.D.Tex.2004) (Rodriguez, J.)..............805
                          6. Rothe V, 413 F.3d 1327 (Fed.Cir.2005)...................................811
                          7.  Procedural history after the Rothe V remand.............................813
                 II.  LEGAL ANALYSIS..................................................................815
                      A.  Summary Judgment Standard of Review.........................................815
                      B.  Little Tucker Act Claim.....................................................816
                      C.  The Court will not consider the facial constitutionality of the 1999
                and 2002 Reauthorizations of the 1207 Program because those
                claims are moot. Those claims have also been waived on appeal
                and are outside the scope of remand. Furthermore, consideration
                of those claims is barred by the law of the case doctrine..................818
                          1.  Rothe's claims regarding the constitutionality of the 1999 and
                2002 Reauthorizations are moot.........................................819
                          2.  Rothe's claims regarding the constitutionality of the 1999 and
                2002 Reauthorizations are outside the scope of remand. Consideration
                of those claims is barred by the doctrines of waiver
                and law of the case.....................................................823
                      D.  The Eighth, Ninth, and Tenth Circuits have evaluated similar affirmative
                action programs under Croson, and the legal analysis contained
                in those opinions is relevant to this Court's evaluation of the
                facial constitutionality of the 2006 Reauthorization to the extent
                that their holdings do not conflict with the law of the case...............825
                          1. Concrete Works of Colorado, Inc. v. City and County of Denver, 36
                F.3d 1513 (10th Cir.1994) ("Concrete Works II")........................828
                          2. Concrete Works of Colorado, Inc. v. City and County of Denver, 321
                F.3d 950 (10th Cir.2003) ("Concrete Works IV").........................830
                          3. Adarand Constructors, Inc. v. Slater, 228 F.3d 1147 (10th Cir.2000)
                ("Adarand VII"), cert. denied as improvidently granted, 534
                U.S. 103 (2001)........................................................832
                          4. Sherbrooke Turf, Inc. v. Minnesota Dep't of Transp., 345 F.3d 964
                (8th Cir.2003), cert. denied 541 U.S. 1041 (2004)......................832
                          5. Western States Paving Co., Inc. v. Washington State Dep't of
                Trans., 407 F.3d 983 (tb Cir.2005), cent denied 126 S.Ct. 1332
                (2006).................................................................832
                          6.  Inter-circuit conflict regarding strict scrutiny analysis...............832
                          7.  Recent Supreme Court Cases: Carhart & Parents Involved..................833
                              a. Gonzales v. Carhart, 127 S.Ct. 1610 (April 18, 2007)................834
                              b. Parents Involved in Community Schs. v. Seattle Sch. Dist. No
                1, 127 S.Ct. 2738 (June 28, 2007)..................................835
                      E.  Congress had a compelling interest in reauthorizing the 1207
                Program in 2006, which was supported by a strong basis in the
                evidence...................................................................835
                          1.  Six state and local disparity studies were before Congress prior to
                the 2006 Reauthorization of the 1207 Program...........................835
                          2.  City of New York Disparity Study, Mason Tillman Associates
                Ltd. (January 2005)....................................................840
                               a.  Availability Analysis..............................................840
                               b.  Introduction: Disparity Analysis...................................842
                               c.  Disparity Analysis: Construction Prime Contractors.................843
                               d.  Disparity Analysis: Architecture and Engineering Prime
                                    Contracts.........................................................843
                               e.  Disparity Analysis: Professional Services Prime Contracts..........844
                               f.  Disparity Analysis: Standard Services Prime Contracts..............844
                               g.  Disparity Analysis: Goods Prime Contracts..........................845
                               h.  Disparity Analysis Summary: Prime Construction, Architecture
                and Engineering Contracts under $50,000 and Prime
                

                    Professional Services, Standard Services, and Goods
                                    Contracts under $25,000...........................................845
                               i.  Disparity Analysis Summary: Subcontracts...........................845
                               j.  Anecdotal evidence.................................................846
                               k.  Rothe's rebuttal evidence concerning the New York Study............846
                          3.  Alameda County Availability Study, Mason Tillman Associates
                Ltd. (October 2004)....................................................848
                              a.  Disparity Analysis: Construction Prime Contracts....................849
                              b.  Disparity Analysis: Architecture and Engineering Prime
                Contracts..........................................................849
                              c.  Disparity Analysis: Professional Services Prime Contracts...........849
                              d.  Disparity Analysis: Goods and Other Services Prime
                Contracts..........................................................850
                              e.  Disparity Analysis: Construction Subcontracts.......................850
                              f.  Disparity Analysis: Architecture and Engineering
                Subcontracts.......................................................850
                              g.  Disparity Analysis: Professional Services Subcontracts..............851
                          4.  Ohio Multi-Jurisdictional Disparity Studies, Mason Tillman
                Associates, Ltd. (October 2003)........................................851
                              a.  Disparity Analysis: Vertical Construction Prime Contracts
                under $500,000 and under $15,000...................................851
                              b.  Disparity Analysis: Horizontal Construction Prime Contracts
                under $500,000 and under $15,000...................................852
                              c.  Disparity Analysis: Architecture and Engineering Prime
                Contracts under $500,000 and under $25,000.........................852
                              d.  Disparity Analysis: Professional Services Prime Contracts
                under $500,000 and under $15,000...................................853
                              e.

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