Wright Farms Const., Inc. v. Kreps

• Citation: 444 F. Supp. 1023
• Decision Date: 23 December 1977
• Docket Number: Civ. A. No. 77-260.
• Parties: WRIGHT FARMS CONSTRUCTION, INC. v. Juanita KREPS, Secretary of Commerce.
• Court: U.S. District Court — District of Vermont

444 F. Supp. 1023

WRIGHT FARMS CONSTRUCTION, INC. v. Juanita KREPS, Secretary of Commerce.

Civ. A. No. 77-260.

United States District Court, D. Vermont.

December 23, 1977.

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Fred I. Parker, Langrock, Sperry, Parker and Stahl, Middlebury, Vt., for plaintiff.

Gerald S. Hartman, Civ. Rights Div., Dept. of Justice, Washington, D.C., for defendant.

OPINION

COFFRIN, District Judge.

Plaintiff brings this action for injunctive relief to restrain defendant Secretary of Commerce from enforcing in the future 42 U.S.C. § 6705(f)(2), the minority business enterprise (MBE) provision of the Local Public Works Capital Development and Investment Act of 1976 (LPW Act), as amended by the Public Works Employment Act of 1977 (PWE Act).¹ We find jurisdiction on the basis of 28 U.S.C. § 1331(a). Plaintiff's motion for a temporary restraining order was denied on November 25, 1977, for failure to show irreparable injury. Arguments and testimony on plaintiff's application for a preliminary and permanent injunction were heard together on December 12, 1977, pursuant to Fed.R.Civ.P. 65(a)(2).² At that time defendant had not filed an answer to the complaint but the issues were defined and clearly understood by the parties so that the matter was in posture for ultimate determination. Defendant's motion to dismiss for failure to join an indispensible party was heard on December 12 as well.

Plaintiff is a small construction corporation wholly owned by two caucasians which challenges the MBE provision on the grounds that it violates plaintiff's equal protection rights under the fifth amendment of the United States Constitution³ and violates 42 U.S.C. §§ 6727 (the civil rights section of the LPW Act) and 2000d (Title VI of the Civil Rights Act of 1964).

Defendant Secretary of Commerce argues that the MBE provision is minority-sensitive legislation designed to correct the effects of prior discrimination and therefore does not violate plaintiff's rights under either the fifth amendment or the civil rights sections.

We find that even if the MBE provision does not generally violate the United States Constitution or the pertinent civil rights sections of 42 U.S.C., the provision cannot be applied in cases such as the one before us. To do so would give preferential treatment to some persons on the basis of race without a finding of prior discrimination against those or similarly situated persons, and thus would deny plaintiff its equal protection rights under the fifth amendment.

Standing

Although neither party has specifically raised the question of standing, we consider this issue first because of the defendant's argument at the December 12 hearing that the plaintiff has failed to show any irreparable injury. The defendant bases her argument on the fact that plaintiff failed to show it will be awarded any contract even if it is allowed to bid. The plaintiff argues in opposition that the significant factor is not that it will be awarded a contract but that it has been prevented from bidding.

The plaintiff has presented uncontroverted evidence that but for the MBE provision, it would have received contracts for street improvement projects in Hardwick and Essex Jct., Vermont. Although plaintiff seeks only prospective injunctive relief, this evidence is nevertheless important as an indication of plaintiff's competitive standing on street improvement projects in the state. Fifty to eighty percent of the plaintiff's work is performed for municipalities and the vast majority, if not all, current municipal projects requiring curb and sidewalk work are funded under the provisions of the LPW and PWE Acts. At the present time, plaintiff has been able to contract for much less work than it customarily has obtained by this time of year. In addition, we note that the plaintiff has been in existence only since 1973 and has had an annual gross income of less than $60,000 for every year except 1977 when the gross income is approximately $110,000. In 1976, the gross income from plaintiff's business of its two owners was $7,800.

We believe that it is reasonable to assume that the plaintiff will obtain a contract for at least one of the projects remaining open for bid, and that without this suit, the plaintiff's constitutional claims of denial of equal protection under the fifth amendment will not be heard and decided. Because the plaintiff has a personal stake in the outcome of the litigation, Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962), and because it is attempting to assert rights which a federal court will recognize, we find it has standing to sue.⁴ Norwalk Core v. Norwalk Redevel. Agency, 395 F.2d 920, 927 (2d Cir. 1968).

Motion to Dismiss

Plaintiff elected to bring its action solely against Juanita Kreps, Secretary of Commerce. On the day of trial, defendant moved pursuant to Fed.R.Civ.P. 12(b)(7) for the dismissal of the action for failure to join local grantees under the act (e. g., the municipalities or counties receiving funds), and prime and subcontractors who might wish to bid on projects funded under the act. Defendant argues that these are indispensible parties under Fed.R.Civ.P. 19(a) since their interests would be adversely affected by such injunctive relief as the court might ultimately grant.

Rule 19 contemplates that a person subject to service of process and whose joinder will not deprive the court of jurisdiction shall be joined as an additional party if the person either has an interest in the action which should be protected or is a party without whose presence complete relief cannot be afforded to those who are already parties to the action. See 3A Moore's Federal Practice ¶ 19.07-13, at 2254-55 (2d ed. 1977). Obviously joinder, not dismissal for failure to join, is the proper way to proceed if possible in the circumstances. Nevertheless, an action might have to be dismissed upon motion if the proposed party is indispensible to determination of the matter and joinder is not feasible. Such a motion may be made at the time of trial. Fed.R.Civ.P. 12(h)(2). Under the circumstances of this matter, however, we conclude for reasons stated below that there are no parties in addition to the defendant who are indispensible to a determination of the plaintiff's claim.

An indispensible party is one who must be joined because nonjoinder prejudices his rights and those of the parties already joined such that the action cannot continue without him. Jones Knitting Corp. v. A. M. Pullen & Co., 50 F.R.D. 311, 314 (S.D.N.Y.1970); see also Hill & Range Songs, Inc. v. Fred Rose Music, Inc., 58 F.R.D. 185 (S.D.N.Y.1972); Bond v. Harris, 239 F.Supp. 427 (S.D.N.Y.1964); Grace v. Carroll, 219 F.Supp. 270 (S.D.N.Y.1963).

In the case at hand, Count 1 of the complaint alleges that § 6705(f)(2) discriminates against the plaintiff on the basis of race and national origin and violates plaintiff's equal protection rights under the fifth amendment of the United States Constitution. Specifically, it alleges that bids for sidewalk and curb construction submitted by it as a subcontractor have been rejected by the general contractor on local public works projects funded under the PWE Act because if accepted the general contractor would be unable to meet the MBE requirement of the act. Plaintiff also alleges that bids which it might wish to submit on future projects will be rejected by the general contractor for the same reason. Plaintiff's prayer for relief is not specific and asks only that the defendant be restrained from enforcing § 6705(f)(2). At the trial plaintiff made clear that it was asking for prospective relief limited to itself and to those projects which had not been bid at the time of trial. Essentially plaintiff seeks both not to be denied the right, because it is not an MBE, to bid on future jobs funded under the PWE Act, and not to be prevented for the same reason from being awarded contracts on those projects on which it might be the low bidder.

Thus it is clear that the plaintiff seeks rather narrow relief. Prospective bidders, largely unknown until the bidding takes place,⁵ would not be prevented from bidding nor from having their bids accepted if they were the low bidders. It is equally manifest that there is no necessity for the requested relief to affect in any way the grant of PWE funds for public works projects which already have been approved.⁶

Furthermore, whether an absent party is indispensible is a question which must be decided in the practical context of each particular case. Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 88 S.Ct. 733, 19 L.Ed.2d 936 (1968); see also Kaplan v. International Alliance of Theatrical Stage Emps. and Motion Picture Mach. Operators of U. S. and Canada, 525 F.2d 1354 (9th Cir. 1975); Lynch v. Sperry Rand Corp., 62 F.R.D. 78 (S.D.N.Y.1973). In this regard we must consider, if not give compelling weight to, the time constraints which arise because of the unusual haste with which Congress requires the provisions of the PWE Act to be implemented. The act was enacted May 13, 1977. Within the next four and one-half months, the Economic Development Administration (EDA) was required to promulgate regulations and to process applications for the expenditure of four billion dollars. Pub.L. 95-29 (May 13, 1977). To make certain the act was implemented as rapidly as possible, 42 U.S.C. § 6707(h)(1) provides that unless otherwise indicated, the Secretary of Commerce acting through EDA was not to consider, or approve, or make a grant for any project for which the application was not submitted on Round I of the public works program. Finally, § 6705(d) provides that grantees are required to commence on-site construction within 90 days of project approval.

By the time the plaintiff was able to assess the effect of what it perceived to be an unconstitutional application of the MBE provision, the seven and one-half...