Webster v. Fulton County, Ga., CIV. A. 196-CV-2399-TWT.

• Decision Date: 11 June 1999
• Docket Number: No. CIV. A. 196-CV-2399-TWT.,CIV. A. 196-CV-2399-TWT.
• Parties: Daniel WEBSTER, et al., Plaintiffs, v. FULTON COUNTY, GEORGIA, et al., Defendants.
• Court: U.S. District Court — Northern District of Georgia

51 F.Supp.2d 1354

Daniel WEBSTER, et al., Plaintiffs, v. FULTON COUNTY, GEORGIA, et al., Defendants.

No. CIV. A. 196-CV-2399-TWT.

United States District Court, N.D. Georgia, Atlanta Division.

June 11, 1999.

COPYRIGHT MATERIAL OMITTED

Richmond Mason Barge, Parks Chesin & Miller, Patrick W. McKee, McKee & Barge, Atlanta, for Daniel Webster, Peggy Webster, Webster Green Thumb Company, and others similarly situated, plaintiffs.

Linda T. Walker, Office of Fulton County Attorney, Keith Mark Wiener, Holland & Knight, J. Scott Carr, Altman Kritzer & Levick, Atlanta, for Fulton County, Georgia, Mitch J. Skandalakis, Michael Hightower, Nancy A. Boxill, Emma I. Darnell, Gordon L. Joyner, Tom Lowe, Robert E. Fulton, individually and in their official capacities as members of the Fulton County Board of Commissioners, Michael Cooper, individually and in his official capacity as Director of Contract Compliance, defendants.

ORDER

THRASH, District Judge.

This is a race and sex discrimination case brought pursuant to 42 U.S.C. §§ 1981 and 1983, and the Equal Protection Clause of the Fourteenth Amendment. Beginning on May 11, 1999, the Court conducted a bench trial spanning over six days on the issue of whether Defendant Fulton County's 1994 Minority and Female Business Enterprise ("MFBE") Program is in violation of the Equal Protection Clause. The trial was then adjourned for two days for the Court to review the documentary evidence. The Court heard closing arguments on May 24, 1999. Based on the evidence admitted at trial and the Court's findings of facts and conclusions of law as set forth below, the Court concludes that the 1994 MFBE Program violates the Equal Protection Clause and is therefore unconstitutional.

I. BACKGROUND

The remaining named Plaintiffs in this case are Daniel Webster (white male), Peggy Webster (white female), and The Webster Green Thumb Company ("Green Thumb"). Plaintiff Daniel Webster is the current owner of Green Thumb, a landscaping and tree removal service. The remaining Defendants are Fulton County and Michael Cooper, former Director of the Department of Contract Compliance and Equal Employment Opportunity ("Department") for Fulton County. As part of their discrimination action, the Plaintiffs allege that Fulton County has operated since September 16, 1994, an unconstitutional affirmative action program, the 1994 MFBE Program. Plaintiffs assert that the 1994 MFBE Program unreasonably and unlawfully burdens and discriminates against businesses based solely on the race and/or sex of the businesses' owners. The Plaintiffs' principal claim is that Fulton County operates an illegal MFBE program that favors minorities and females in the award of contracts for goods and services. The Plaintiffs request a declaratory ruling from this Court that Fulton County's 1994 MFBE Program is unconstitutional. (Doc. 35). They further seek an injunction to forbid further implementation of the 1994 MFBE Program, together with affirmative injunctive relief.

Fulton County adopted its first minority business enterprise program in 1979. The Fulton County Board of Commissioners at that time resolved to begin an affirmative action program with a goal that at least 20% of all County public contracts be awarded to minority bidders. The Board passed resolutions continuing the program in 1984 and 1987. The 1987 resolution established the Office of Contract Compliance and Equal Employment Opportunity. In 1988, Defendant Cooper was hired as its first Director. In September, 1988, the Board adopted a Female Business Enterprise Resolution and requested a study of discrimination against female business owners. This resulted in the February, 1989, Fulton County Female Business Enterprise Study by Beth Shapiro & Associates and the Coalition of 100 Black Women ("Shapiro Study"). (Def.Exh.214). In the Shapiro Study, it was noted that "[n]o historical data are available from any source within Fulton County regarding the extent of usage of female businesses by the Purchasing Department because the vendor list does not distinguish female businesses." (Id. at iii). This data was not available from any other source within Fulton County. (Id. at 24). The Shapiro Study did provide extensive anecdotal evidence of barriers to female businesses in doing business with the County. This evidence included the testimony at a public hearing in October, 1989. At this hearing it was revealed that most of the participants never considered County contracts as a viable source of business for a variety of reasons. These reasons ranged from the types of services female-owned business typically provide and the difficulty in mainstreaming these professional services through the purchasing and contracting process to the difficulties associated with any small business such as bonding requirements. (Id. at 31). The Shapiro Study recommended the adoption of specific numerical contract goals. (Id. at 32). It recommended a goal of 5% without any real explanation as to the goal's calculation. (Id. at 33).

In January, 1989, the Supreme Court struck down a municipal minority set-aside program and adopted a strict scrutiny standard of review for such programs in the future. In response, the Board and the City of Atlanta commissioned Dr. Andrew F. Brimmer and Dr. Ray Marshall to conduct a fact-finding study relating to the participation of minorities and females in the City of Atlanta and Fulton County marketplace. The purpose of the study was to allow the City of Atlanta to reintroduce its minority and female business development program. Drs. Brimmer and Marshall also studied whether discrimination against minority-owned and female-owned business enterprises ("MFBEs") has reduced their participation in the public and private sector contracting and procurement activities in the Atlanta and Fulton County marketplace. In 1990, Drs. Brimmer and Marshall produced and submitted to the County and City of Atlanta the Brimmer-Marshall Study which consisted of eight volumes entitled "Public Policy and Promotion of Minority Economic Development: City of Atlanta and Fulton County." (Def.Exh. 146). Dr. Thomas Boston, an economics professor, prepared a report included in the Brimmer-Marshall Study entitled "Discrimination and Economic Development: Effects on Minority and Female Business Enterprises."

In April and June, 1992, Fulton County conducted open public hearings in which numerous individuals provided further anecdotal evidence regarding their experiences in the Fulton County contracting and procurement activities and practices in the Atlanta/Fulton County marketplace. On October 21, 1992, the Board passed a resolution accepting the findings of the Brimmer-Marshall Study. This resolution also authorized a Female Business Enterprise Program and adopted the 5% goal recommended by the Shapiro Study. The Board then passed another Resolution that authorized the implementation of a MFBE Program under the auspices of Defendant Cooper as the Director of the Department. (Def.Exh. 200). The 1992 MFBE Program utilized minority and female participation goals of 25% for African-Americans, 1% for Hispanics, 1% for Asian-Americans, 1% for Native Americans and 5% for female business enterprises. (Def.Exh. 204, p. 19).

In 1994, the Board engaged Dr. Boston to conduct a post-disparity study. Dr. Boston submitted this Post-Disparity Study to the Board in June, 1994. (Def.Exh. 21). On June 15, 1994, the Board approved and adopted Dr. Boston's Post-Disparity Study on June 15, 1994. The Board then directed that the Department implement amendments to the MFBE Program based on the Post-Disparity Study. On July 20, 1994, the Board passed a resolution adopting certain amendments to the MFBE Program based upon the Post-Disparity Study. The Program became effective on September 16, 1994.

The stated purpose of the 1994 MFBE Program was to alleviate the effects of past and present discrimination against minority and female business enterprises and to enhance contracting opportunities for minority and female businesses. (Pl. Exh. 1 at 1, 10). The 1994 MFBE Program provides that it shall expire five years from its effective date. (Id. at 55). As stated in the 1994 MFBE Program, the Board "considered and determined that there are no reasonable race and gender neutral alternatives or policies available which alone will accomplish the amelioration and remedy the effects of past and present discrimination." (Id. at 9). The 1994 MFBE Program sets forth the following annual business participation goals for the following groups: (1) African-American business enterprises — 26%; (2) Hispanic business enterprises — 1%; (3) Asian-American business enterprises — 1%; (4) Native American business enterprises —1%; and (5) Female business enterprises — 6%. (Id. at 16-17).

The 1994 MFBE Program provides that these goals are in effect for five years and are subject to an annual review and adjustment by the Department and approval by the Fulton County manager and Board. (Id. at 17). Pursuant to the MFBE Program, the participation goals for minority and female business enterprises are not considered to be fixed quotas. (Id. at 19). The participation goals for each project or contract are set by the Department's Director based on the following non-exclusive list of factors: (1) the number of minority and female business enterprises known to be available for the type and value of service to be obtained; (2) a forecast of all eligible contracts to be awarded within the coming fiscal year, specifying the type and value of goods and services to be obtained; (3) the minority and female business enterprise percentages of the total number of business entities known to be available for the type and value of goods and services to be obtained; (4) the statistical and data sources by which each goal was calculated; and (5) the statistical and data sources from the 1994 Post-Disparity Study. (Id. at 18-19).

The 1994 MFBE...