West Tenn. Assoc. Builders v. City of Memphis

• Decision Date: 20 December 2000
• Docket Number: No. 99-2001.,99-2001.
• Citation: 138 F.Supp.2d 1015
• Parties: WEST TENNESSEE CHAPTER OF ASSOCIATED BUILDERS AND CONTRACTORS, INC., and Zellner Construction Company, Inc., Plaintiffs, v. CITY OF MEMPHIS, Defendant.
• Court: U.S. District Court — Western District of Tennessee

138 F.Supp.2d 1015

WEST TENNESSEE CHAPTER OF ASSOCIATED BUILDERS AND CONTRACTORS, INC., and Zellner Construction Company, Inc., Plaintiffs, v. CITY OF MEMPHIS, Defendant.

No. 99-2001.

United States District Court, W.D. Tennessee, Western Division.

December 20, 2000.

COPYRIGHT MATERIAL OMITTED

Stephen L. Shields, Jackson Shields Yeiser & Cantrell, Cordova, Ralph D. Golden, Golden Law Firm, Linda Jew Mathis, Golden & Mathis, Memphis, TN, Robert J. Proctor, Bradley A. Hutchins, Proctor Felton & Chambers, Atlanta, GA, for West Tennessee Chapter of Associated Builders and Contractors, Inc., Zellner Construction Company, Inc., plaintiffs.

Robert L.J. Spence, Jr., Felicia Izzard Corbin, Monika Lorice Johnson, Charmiane G. Claxton, City Attorneys Office, Memphis, TN, for City of Memphis, defendants.

ORDER GRANTING DEFENDANT'S MOTION FOR CERTIFICATION OF INTERLOCUTORY APPEAL AND STAY OF PROCEEDINGS

DONALD, District Judge.

In this action, Plaintiffs assert that Defendant City of Memphis's affirmative action plan violates the Fourteenth Amendment's Equal Protection Clause. Pursuant to 28 U.S.C. § 1292(b), Defendant moves for reconsideration of the Court's refusal to certify for appeal its interlocutory order concerning the admissibility of post-enactment studies. In its order the Court found post-enactment evidence inadmissible to show that Defendant had a compelling interest to enact legislation based on racial classifications. In the event the Court certifies its interlocutory order for appeal, Defendant requests a stay of all proceedings. The Court has jurisdiction under 28 U.S.C. § 1331. For the reasons stated herein, the Court GRANTS Defendant's motions.

I. Procedural and Factual Background

The City of Memphis ("City") and other public entities commissioned a study, examining whether racial disparities existed in the procurement of contracts. Based on these statistics, the City passed a Minority and Women Business Enterprise program ("MWBE program") to address the City's alleged passive and active discrimination in its procurement of construction contracts. Caucasian contractors challenged the MWBE program's constitutionality, arguing that under the Equal Protection Clause, the City must have a compelling interest to legislate on the basis of racial classifications. According to Plaintiffs, the City's disparity study did not meet the evidentiary standards required to show a compelling interest. In response, the City proposed to supplement the legislative record with studies commissioned after enacting the MWBE program. The City's post-enactment evidence would cover a five-year period between 1993 and 1998 and supplement the City's original disparity study.

On June 9, 1999, the Court ruled that post-enactment evidence may not be used to demonstrate the City's compelling interest. Defendant timely filed for certification of an interlocutory appeal. On July 14, 1999 the Court denied Defendant's motion for certification.

II. Analysis

A. Defendant's motion for interlocutory appeal

The appellate jurisdiction of circuit courts is generally limited to reviewing a district court's final judgment. 28 U.S.C. § 1291; Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945). Congress recognized, however, that the orderly administration of justice is frustrated when parties are forced to grind forward to final judgment before they can challenge the correctness of some isolated, but determinative, question of law. Iron Workers Local Union No. 17 Ins. Fund v. Philip Morris Inc., 29 F.Supp.2d 825, 831 (N.D.Ohio 1998); 16 Charles Alan Wright, et al., Federal Practice and Procedure, § 3929, at 368 (2d ed.1996) (citing Hadjipateras v. Pacifica, S.A., 290 F.2d 697, 702-03 (5th Cir.1961)). To address these exceptional circumstances, Congress created the interlocutory appeal to permit immediate appellate review of an order that does not dispose of the case on its merits.¹ 28 U.S.C. § 1292(b).

Under 28 U.S.C. § 1292(b), interlocutory appeal is appropriate when the district court's order involves a controlling question of law as to which there is a substantial ground for difference of opinion, and that an immediate appeal from the order would materially advance the litigation's ultimate termination. Vitols v.. Citizens Banking Co., 984 F.2d 168, 170 (6th Cir. 1993) (per curium). Exceptional circumstances must exist or irreparable harm must seem imminent before leave is granted for an interlocutory appeal. Coopers & Lybrand, 437 U.S. 463, 475, 98 S.Ct. 2454, 2461, 57 L.Ed.2d 351 (1978); United States v. Bilsky, 664 F.2d 613, 619 (6th Cir.1981); Orson, Inc. v. Miramax Film Corp., 867 F.Supp. 319, 321 (E.D.Pa.1994). Accordingly, § 1292(b) should be sparingly applied and used only to avoid protracted and expensive litigation. Cardwell v. Chesapeake & Ohio Ry. Co., 504 F.2d 444, 446 (6th Cir.1974).

1. Controlling law

A matter of law is "controlling" if its resolution could materially affect the litigation's outcome. Rafoth v. Nat'l Union Fire Ins. Co., 954 F.2d 1169, 1172 n. 8 (6th Cir.1992); Sokaogon Gaming Enter. Corp. v. Tushie-Montgomery Assocs., Inc., 86 F.3d 656, 658 (7th Cir.1996); North Fork Bank v. Abelson, 207 B.R. 382, 389 (E.D.N.Y.1997). An issue is therefore controlling if its resolution on appeal could result in a reversal of a district court's final judgment. Katz v. Carte Blanche Corp., 496 F.2d 747, 755 (3rd Cir.1974), cert. denied, 419 U.S. 885, 95 S.Ct. 152, 42 L.Ed.2d 125 (1974). In addition, an issue may be considered controlling if its resolution has precedential value, Rafoth, 954 F.2d at 1172 n. 8 (6th Cir.1992); if it is central to liability, Takacs v. Hahn Auto, Corp., No. C-3-95-404, 1999 WL 33117266, at *1 (S.D.Ohio April 23, 1999); or if it would save the Court and the litigants substantial time and resources. Katz, 496 F.2d at 755; 16 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure, § 3929, at 426 (2d ed.1996).

Admissibility of post-enactment evidence is a controlling issue of law. If the Court were to decide the case in Plaintiff's favor on pre-enactment evidence, it's decision would be subject to reversal if the Sixth Circuit found exclusion of post-enactment evidence improper. If the post-enactment evidence is deemed relevant, the Court's final judgment would be vacated and the case remanded.

Moreover, the Sixth Circuit's resolution of this issue would have significant precedential value. First, the issue is important as a matter of law because its resolution would clarify the evidentiary burden necessary to satisfy equal protection principles. See e.g., Shaw v. Hunt, 517 U.S. 899, 909-10, 116 S.Ct. 1894, 1902-03, 135 L.Ed.2d 207 (1996); City of Richmond v. Croson, 488 U.S. 469, 505, 109 S.Ct. 706, 728, 102 L.Ed.2d 854 (1989). Second, the issue affects many litigants, as governmental entities across the nation have sought to use post-enactment evidence to supplement their legislative records.² Resolving this issue would therefore provide guidance to cities and states attempting the delicate task of ending discriminatory practices through the use of racial classifications.

Finally, resolution of this issue is central to determining a city's or state's exposure to liability regarding its affirmative action program. The admissibility of post-enactment evidence has serious repercussions for cities and states throughout the nation that have continually culled new information, are in the process of reevaluating their plans, or, like Defendant, are faced with litigation and realize that the legislative record must be supplemented. Whether or not such post-enactment evidence is admissible can be the lynchpin of a governmental entity's exposure to liability.

In sum, the Court finds the admissibility of post-enactment evidence to be a controlling issue of law because its resolution by the Sixth Circuit (1) could result in the reversal of the Court's final judgment; (2) would possess precedential value; and (3) impacts a government entity's exposure to liability.

2. Substantial grounds for difference of opinion

Substantial grounds for a difference of opinion exist when (1) the issue is difficult and of first impression, Klinghoffer v. S.N.C. Achille Lauro, 921 F.2d 21, 25 (2nd Cir.1990); (2) a difference of opinion exists within the controlling circuit, German v. Federal Home Loan Mortg. Corp., 896 F.Supp. 1385, 1399 (S.D.N.Y. 1995), Brown v. Mesirow Stein Real Estate, Inc., 7 F.Supp.2d 1004, 1008 (N.D.Ill. 1998); or (3) the circuits are split on the issue. Rafoth, 954 F.2d at 1172.

a. Sixth Circuit decisions

There is no Sixth Circuit decision disposing of the present issue. See, e.g., Assoc'd Gen. Contractors of Ohio, Inc. v. Drabik, 214 F.3d 730 (6th Cir.2000). Though the Sixth Circuit in Drabik upheld the lower court's preclusion of post-enactment evidence, the district court barred supplementation on relevance grounds, but not as a matter of law. Id. at 738.

b. Supreme Court's decisions

Like the Sixth Circuit, the Supreme Court has not squarely decided whether and when supplementation of a governmental entity's legislative record is appropriate to defend challenges to an affirmative action plan. In addition, as evidenced by other circuit courts' decisions, the Supreme Court's opinions leave room for a substantial disagreement over their reasoning and results. Slater, 228 F.3d at 1161, 1166-67 (stating that the Supreme Court's declarations in the affirmative action area are driven by plurality and split opinions and by the overruling of precedent).

Laws classifying citizens on the basis of race are constitutionally suspect and must pass the strict scrutiny test. Strict scrutiny applies whether or not the racial classification is remedial and allegedly founded on a benign legislative purpose. Shaw, 517 U.S. at 904, 116 S.Ct. at 1900; Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 228-29, 115 S.Ct. 2097, 2113, 132...