No. 00-730
In The
SupremeCourt of the United States
ADARAND CONSTRUCTORS, INC.,
Petitioner,
v.
NORMAN Y. MINETA, Secretary
of the United States Department
of Transportation, et al.
Respondents.
On Petition For Writ Of Certiorari
To The United States Court Of Appeals
For The Tenth Circuit
BRIEF AMICUS CURIAE OF
GEOD CORPORATION AND
ATLANTIC LEGAL FOUNDATION
IN SUPPORT OF PETITIONER
AND URGING REVERSAL
Martin S. KAUFMAN*
BriscoeR. Smith
AtlanticLegal Foundation
205East 42nd Street, 9th Floor
NewYork, New York 10017
(212)573-1960
Attorneysfor Amicus Curiae
*Counsel of Record
TABLE OF CONTENTS
PageTABLE OF AUTHORITIES.................................................. iiiINTEREST OF AMICI CURIAE.............................................. 2SUMMARY OF ARGUMENT................................................... 3ARGUMENT I. The Court of Appeals Improperly Used "Judicial Notice" in Granting Summary Judgment to Defendants Based Solely On A Document Created By a Litigant During the Course of Litigation................................ 4II. Appendix A Does Not Constitute A "Strong Basis In Evidence” That There Was Racial Discrimination In Highway Construction Justifying A Race-Conscious Remedy. ........................... 12 A. The Respondents Did Not Show That Discrimination Caused Any Observed Disparity In Highway Construction.............................. 16 B. The Appendix Fails to Demonstrate That Government Participated In The Discriminatory Pattern of Exclusion........................................... 22CONCLUSION............................................................ 25APPENDIX.............................................................. A1
TABLE OF AUTHORITIES
CASES
PageAdarand Constructors v. Slater, 228 F.3d 1147 (10th Cir. 2000).................................................... passimAssoc'd Gen. Contractors of Ohio v. Drabik, 214 F.3d 730 (6th Cir. 2000)............................. 19 Bazemore v. Friday, 478 U.S. 385 (1986)............................... 19Bd. of Trustees of the Univ. of Ala. v. Garrett, 531 U.S. 356 (2001)................................................. 16, n.12Carley v. Wheeled Coach, 991 F.2d 1117 (3rd Cir.), cert. denied, 510 U.S. 868 (1993)................................... 11Celotex Corp. v. Catrett, 477 U.S. 317 (1986)......................... 8City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989)................................................. passim Engineering Contractors of S. Fla.. v. Metropolitan Dade County, 122 F.3rd 895 (11th Cir. 1997)...................................... 12, 16,n.13, 21, 22, n.15 Fallis v. Kerr-McGee Corp., 944 F.2d 743 (10th Cir. 1991).................................................... 19Fullilove v. Klutznick, 448 U.S. 448 (1980)........................... 23, n.16General Electric Co. v. Joiner, 522 U.S. 136, 140 (1997)............................................ 5, n.2, 18Koger v. Reno, 98 F.3d 631, 637 (D.C. Cir. 1996).......................... 19Melong v. Micronesian Claims Commission, 643 F.2d 10 (D.C. Cir 1980)......................................... 11Metro Broadcasting, Inc. v. FCC, 497 U.S. 547 (1990)................................................. 23, n.16Mid-State Fertilizer Co. v. Exchange Nat'l Bank, 877 F.2d 1333 (1989)................................................ 18Siderius, Inc. v. M.V. Amilla, 880 F.2d 662 (2d Cir. 1989)...................................................... 9Snell v. Suffolk Co., 782 F.2d 1094 (2nd Cir. 1986)................... 10Southern Louisiana Area Rate Cases v. Federal Power Commission, 428 F.2d 407 (5th Cir. 1970)..................................................... 11United States v. Bonds, 12 F.3d 540, 553 (6th Cir. 1993)..................................................... 11United States v. Morrison, 529 U.S. 598, 120 S.Ct. 1740 (2000)............................................... 15, n.12Walker v. City of Mesquite, 169 F.3d 973 (5th Cir. 1999), cert. denied, 120 S.Ct. 969 (2000)................. 19Webster v. Fulton County, 51 F.Supp.2d 1359 (N.D. Ga. 2000), aff'd 218 F.2d 1276 (11th Cir. 2000)................................................... 21, n.15Wessmann v. Gittens, 160 F.3d 790 (1st Cir. 1998)..................... 19York v. American Telephone & Telegraph Co., 95 F.3d 948 (10th Cir. 1996)........................................ 8-9STATUTES and RULES
Fed. R. Evid. 201..................................................... 8, 9, 10, 11Fed R. Evid. 201(a), Advisory Committee Notes......................... 10Fed. R. Civ. P. 56(e)................................................. 8Pub. L. 105-178 § 1101(b)(6); 112 Stat. 107, 114-15 (1998)........................................ 17, n.14MISCELLANEOUS
Black's Law Dictionary (7th ed.)...................................... 9Roger Clegg and John Sullivan, “No Compelling Interest,” National Review Online, May 25, 2001, www.nationalreview.com/ contributors/clegg052501.shtml....................................... 6, n.4 and n.62 Davis, Administrative Law §353...................................... 10Deposition of Mark Gross, in Gross Seed Company v. Nebraska Department of Roads, 4:00CV3073 (D.Neb.) and Sherbrooke Turf v. Minnesota Department of Transportation, 00-CV-1026 (JMR/RLE) (D. Minn.)................................................ 6, n.4 and n.6Enchautegui, Maria E., et al., Do Minority Owned Businesses Get a Fair Share of Government Contracts? The Urban Institute , (available online at www.urban.org/authors/enchautegui.html)................... 5, n.2General Accounting Office, Report to Congressional Committees, "Disadvantaged Business Enterprises: Critical Information Is Needed to Understand Program Impact," GAO-01-586 (June 2001).............................................. 17, 18, 20, 21Patrick D. Halligan, "Minority Business Preferences and Ad Hoc Hypotheses: A Comment on Coral Construction v. King County." 10 Construction Law 26 (November 1990).............................. 22, n.15 George R. LaNoue, "Local Officials Guide to Minority Business Programs and Disparity Studies: Responding to The Supreme Court's Mandate in City of Richmond v. Croson," National League of Cities (1st ed. 1991, 2nd ed. 1994)........................................ 22, n.15George R. LaNoue, "Standards for the Second Generation of Croson Inspired Disparity Studies," 26 The Urban Lawyer 485 (Summer 1994)............................... 22, n.15George R. LaNoue and John Sullivan, "But for Discrimination How Many Minority Businesses Would There Be?" 24 Columbia Human Rights Law Review (Winter 1992)....................................................... 22, n.15John Lunn and Huey L. Perry, "Justifying Affirmative Action: Highway Construction in Louisiana," 46 Industrial and Labor Relations Review, 464-479 (April 1993)........................................................ 22, n.15Proposed Reforms to Affirmative Action In Federal Procurement, Appendix A, The Compelling Interest for Affirmative Action in Federal Procurement: A Preliminary Survey.'" 61 Fed. Reg. 26041, 26050 (May 23, 1996)............................ passimRice, Government Set-Asides, Minority Business Programs and the Court, Public Administration Review, March/April, 1991, 114-122.......................................... 22, n.15Weinsteins's Federal Evidence, §§201.02 [1], [2] (2nd ed.)......................................... 9 9 Wigmore, Evidence § 2571 (Chadbourn rev. 1981)...................... 921 C. Wright & K. Graham, Federal Practice and Procedure §5103 (2001 supp.).................................... 10
No. 00-730
In The
SupremeCourt of the United States
ADARAND CONSTRUCTORS, INC.,
Petitioner,
v.
NORMAN Y. MINETA, Secretary
of the United States Department
of Transportation, et al.
Respondents.
On Petition For Writ Of Certiorari
To The United States Court Of Appeals
For The Tenth Circuit
BRIEF AMICUS CURIAE OF
GEOD CORPORATION AND
ATLANTIC LEGAL FOUNDATION
IN SUPPORT OF PETITIONER
AND URGING REVERSAL
INTEREST OF AMICI CURIAE
GEODCorporation is a closely held corporation, with its headquarters in NewJersey. Its principals are whitemales. GEOD has acted as a"sub-consultant," providing aerial photography, topographic mapping,surveying, and photogrammetric services to prime consultants and subconsultantson numerous large scale road, bridge, tunnel, airport and other infrastructureconstruction projects for the State of New Jersey, the New Jersey Department ofTransportation, other New Jersey agencies, and agencies of other states andmunicipalities, as well as for the private sector. GEOD is currently suing the State of New Jersey, itofficials, and the New Jersey Department of Transportation, claiming that NewJersey's public contracting affirmative action programs have unlawfullydeprived GEOD of opportunities to work on state and federally-fundedconstruction projects. AtlanticLegal Foundation (ALF) is a non-profit public interest law firm, whose mandateis to advocate principles of limited and responsible government and individualrights. It is representing GEOD inits lawsuit against New Jersey; in the past it has represented other firmssuing other government instrumentalities in cases involving unlawfulrace-conscious "affirmative action programs. The staff of ALF is familiar with many of the"disparity studies" at issue in this case.[1]
Amici believe that the Court of Appeals for the TenthCircuit improperly applied judicial notice in relying on a document prepared byone of the litigants as evidfence for the central issue in this case. Amici also believe that the document itself, if carefully examined, does notconstitute the requisite “strong basis in evidence” required tosupport a government program that gives preferences to certain groups based onrace, ethnicity and gender, and invidiously discriminates against others.
SUMMARY OF ARGUMENT
TheCourt of Appeals' sole basis for finding a compelling government interestin enacting the Department of Transportation's DBE program was"judicial notice" of Appendix A -- "The Compelling Interest,",a document prepared by one of the litigants. Appendix A consists entirely of hearsay, double hearsay andeven more remote hearsay. TheCourt of Appeals did not examine the underlying documents on which Appendix Awas purportedly based.
AppendixA is an insufficient basis in evidence on which to grant summary judgment infavor of Respondents.
TheCourt of Appeals' attempt to make Appendix A “evidence” by takingjudicial notice of its contents should be reversed because the truth of thematters in Appendix A is the at the very heart of the issue in controversy andAppendix A is not a proper subject of judicial notice.
Even if Appendix A wereproperly susceptible of judicial notice, it does not support a finding thatthere is the "strong basis in evidence" required to uphold a raciallydiscriminatory government program because its statistical and anecdotal basesare flawed. The Court of Appealsfailed to analyze whether there was a valid basis for finding a statisticaldisparity, and whether a pattern of discrimination caused any disparity. The Court of Appeals also failed to inquire whether thegovernment participated in discrimination, and Appendix A does not establishsuch government complicity.
ARGUMENT
I. TheCourt of Appeals Improperly Used "Judicial Notice" in GrantingSummary Judgment to Defendants Based Solely On A Document Created By a LitigantDuring the Course of Litigation.
TheTenth Circuit Panel correctly recognized that, under City of Richmond v.J.A. Croson Co., 488 U.S. 469, 486-92, 500 (1989), the criticalinquiry for strict scrutiny purposes is whether there is a "strong basisin evidence" for the legislative conclusion that "remedial action wasnecessary," see AdarandConstructors v. Slater, 228 F.3d1147, 1167 (10th Cir. 2000). However, rather than analyzing the evidence, as Justice O'Connordid in Croson, the Panel found thelegislative conclusion by taking judicial notice of the ultimate fact raised bythe summary judgment motions. 228 F.3d 1147 at 1168, n. 12.
ThePanel took “judicial notice of the content of hearings and testimonybefore the congressional committees and subcommittees cited by thegovernment” and deemed “the disparity studies were . . . introducedinto evidence . . . via [Appendix A].”[2] 228 F.3d1147 at 1168, Pet. App. 33-34 & n.12, 47 n.14, 54. This single document of approximately15 pages[3], was prepared, while this case was in litigation, bya then unidentified employee of the Department of Justice.
Pursuantto Federal Rule of Civil Procedure Rule 56(c) and (e), on a motion for summaryjudgment, evidence in support of or in opposition to the motion must certainvital criteria: First, the evidence must be in the form of admissions,depositions, answers to interrogatories, affidavits, or other sworn testimony. SeeCelotex Corp. v. Catrett, 477 U.S.317, 324 (1986); second, any such sworn testimony “shall be made onpersonal knowledge [and] shall set forth such facts as would be admissible inevidence . . . .” Fed. R. Civ. P. 56(e). Appendix A satisfies neithercriterion. It was not submittedwith an affidavit by anyone. It is not answers to interrogatories or depositiontestimony. It was prepared by aparty's attorneys (or the attorneys' employee) for the purposes of this verycase. It was obviously not basedon their personal knowledge. Itconsists entirely of hearsay within hearsay, all of which the Panel used forthe truth of the matters asserted, and which therefore would be inadmissible.
Wesubmit that the Panel's use of judicial notice under these circumstancesdisregarded not only the substantive rule of Croson but also well established rules of evidence. If this Court countenances suchpractice, the Government, anytime it is a litigant, can create evidence thatwill "prove" the essential elements of its case. That would be a clear miscarriage ofjustice.
Bothat common law and under Rule 201 of the Federal Rules of Evidence, judicialnotice, properly applied, is a procedural device for eliminating the need forformal proof. See, e.g., York v. American Telephone & Telegraph Co., 95 F.3d. 948, 958 (10th Cir. 1996);Weinsteins's Federal Evidence§§201.02 [1], [2] (2nd ed.); Black's LawDictionary (7th ed.) ("A court's acceptancefor purposes of convenience and without requiring a party's proof, of awell-know and indisputable fact.")
Onenoted commentator provides a succinct summary of the several applications ofjudicial notice:
The scope of facts that may be noticed includes:
(1) Matterswhich are actually so notorious to all that the production of evidence would beunnecessary;
(2) Matterswhich the judicial function supposes the judge to be acquainted with, in theoryat least;
(3) Sundrymatters not included under either of these heads; they are subject for the mostpart to the consideration that though they are neither actually notorious norbound to be judicially known, yet they would be capable of such instant andunquestionable demonstration, if desired, that no party would think of imposinga falsity on the tribunal in the face of an intelligent adversary."
9 Wigmore, Evidence § 2571 (Chadbourn rev. 1981).
Theseparameters are codified in the Rule 201 of the Federal Rules of Evidence which,by its terms, operates only as to adjudicative facts. Fed R. Evid. 201(a),Advisory Committee Notes; Siderius, Inc. v. M.V. Amilla, 880 F.2d 662, 666 (2d Cir. 1989).
Adjudicative facts are “the ultimate facts inthe case, plus those evidential facts that are sufficiently central to thecontroversy that they should be left to the jury unless clearlyindisputable.” 21 C. Wright & K. Graham, Federal Practice andProcedure §5103 (2001 supp.),cited in Snell v. Suffolk Co., 782F.2d 1094, 1105 (2nd Cir. 1986). Another description of adjudicative facts focuses on thosefacts which directly relate to the litigants: "when a court . . . findsfacts concerning the immediate parties – who did what, where, when, howand with what motive and intent – the court. . . is performing anadjudicative function, and the facts are conveniently called adjudicative facts. . . ." Fed. Rule Evid.201(a), Advisory Committee notes, citing 2 Davis, Administrative Law §353.
Intaking judicial notice of adjudicative facts to establish theRespondents' compelling interest in remedying racial discrimination, theCourt of Appeals panel disregarded straightforward language of Rule201(b). Rule 201(b) permitsjudicial notice only of a fact"not subject to reasonable dispute in that it is either (1) generallyknown within the territorial jurisdiction of the trial court or (2) capable ofaccurate and ready determination by resort to sources whose accuracy cannotreasonably be questioned." Neither "The Compelling Interest" nor the sources it catalogsmeet the criteria of Rule 201(b).
First,the issue of Respondents' compelling interest here was the central factin dispute. Judicial notice of theultimate fact to be determined in the litigation, transforming the disputedinto the conclusive by joint operation of Rule 201 (b) and (g) in a civilmatter, is unprecedented.
Second,the Panel's resort to judicial notice cannot be saved because the"facts" taken out of contention were contained in statements or indocuments which found their way into the legislative record. The Panel conceded as much: "Wecannot merely recite statements made by members of Congress alleging a findingof discriminating effects . . . ." 228 F.3d. at 1167. The mere fact that a witness testifiesin a congressional hearing or prepares a report that is filed with a governmentagency does not negate or dilute the purpose of judicial notice or the requirements of Rule 201. See, e.g., United States v. Bonds, 12 F.3d 540, 553 (6th Cir. 1993); Carley v. Wheeled Coach, 991 F.2d 1117, 1126 (3rd Cir.), cert.denied, 510 U.S. 868 (1993); Melong v. Micronesian ClaimsCommission, 643 F.2d 10, 12 n.5 (D.C.Cir 1980); Southern Louisiana Area Rate Cases v. Federal Power Commission, 428 F.2d 407, 438 n. 98 (5th Cir. (1970).
ThePanel evaded the "searching judicial inquiry into the justification forsuch race-based measures" required by Croson (488 U.S. at 493) by its misuse of judicialnotice. If the Panel's misuse of judicial notice werecountenanced by this Court, the Government could, in almost any civil case towhich it was a party, create “facts” that would determine theoutcome. This would be a seriousthreat to the independent adjudicatory role of the judicial branch.
II. AppendixA Does Not Constitute A "Strong Basis In Evidence” That There WasRacial Discrimination In Highway Construction Justifying A Race-ConsciousRemedy.
Itis settled law that the use of a racial classification by a governmental actormust be supported by a “strong basis in evidence” of a compellinggovernmental interest in remedying particularized discrimination in which thatgovernment somehow participated. Croson, 488 U.S. at 500. “[T]he true test of an affirmative action program is . . . theadequacy of the evidence of discrimination offered to show thatinterest.” Engineering Contractors of S. Fla.. v. Metropolitan DadeCounty, 122 F.3rd 895, 906 (11thCir. 1997)[8] Id..
In this case, relyingexclusively on the content of Appendix A, the Panel concluded that thefollowing phenomena constitute the required strong basis in evidence:
- Ownership of companies is often inherited by family members. 228 F.3d 1147, 1168.
- Individuals with no experience have difficulty joining a union in order to gain the experienceneeded to compete with established non-minority companies. 228 F.3d 1147, 1169.
- Firms or individuals who have no credit history or collateral have difficulty ofobtaining access to capital. 228 F.3d 1147, 1169.
- Prime contractors prefer to work with subcontractors they already know and trust because theypreviously worked with those subcontractors. 228 F.3d 1147, 1170.
- “Bid shopping,” a practice by which prime contractors allow trustedsubcontractors to see and beat any lower bid from new, untested firms trying toreplace the established subcontractors. 228 F.3d 1147, 1171.
- The inability of new market entrants to receive special pricing arrangements from suppliers withwhom they have not previously dealt. 228 F.3d 1147, 1171.
- The inability of new enterprises to obtain bonding because they lack experience. 228 F.3d 1147,1171-72.
However,these examples may constitute nothing more than normal commercial or social practicesbased on rational business or economic judgments; none are evidence of racial,ethnic or gender discrimination, let alone discrimination in which anygovernmental unit is implicated.[10]
Ifthe purpose of the Appendix were only to demonstrate that there has been racialand ethnic discrimination in American society and the economy, this potpourriof documents would be sufficient, even redundant, because any basic knowledgeof American history demonstrates historical "societal discrimination."
Problemsof working capital, bonding, track record, and understanding the complexitiesof the procurement process affect many small and new firms. Whether these are currently distinctiveproblems for minority firms has not been subject to serious evaluation. If there are current examples ofpreselection or other types of discretion exercised by government procurementofficers that exhibit bias against minority firms because of the race,ethnicity or gender of their owners, they have not been identified in theAppendix or by the Panel. If suchpractices exist, the first responsibility of DOT and state and local highway orother contracting agencies wouldbe to correct them and, if they were purposeful, to punish those involved.
Alegally adequate "strong basis in evidence" must consist of logicallyand mathematically sound analysis which demonstrates that there is astatistically significant disparity in the utilization of minority contractorsor subcontractors in highway construction, traces that disparity to deliberatediscrimination, and demonstrates at that government was at least a"passive participant" in that discrimination. See Croson at 492.
Neitherthe Appendix nor the Panel have demonstrated the requisite "strong basisin evidence."
A. The Respondents Did Not Show That Discrimination Caused Any Observed Disparity In Highway Construction.
Crosonteaches that a “grossstatistical disparity,” if properly calculated, can raise an inference ofracial discrimination, but that statistical disparity alone, is not asufficient strong basis in evidence. 488 U.S. at 501. As the Panel recognized, anecdotal evidence ofdiscrimination may be considered only after a the necessary statisticalshowing.[13] In orderto conclude that there is a compelling interest, a court must have validstatistical evidence of “patterns of deliberate exclusion." Croson, 488 U.S. 509. The statistical evidence must meet at least four criteria.
Statisticalevidence must be derived from the proper sample pool. That pool consists ofthose contractors who have the necessary expertise and experience to performthe work in question and who meet any legitimate qualifications, such asbonding requirements and capitalization, and who are not otherwise engaged atthe time. Croson, at 502, 509. This Court called such contractors“qualified,” “willing and able.” Croson at 509. In the absence of statistical evidence derived from the proper pool,this Court found, any finding of racial animus would rest on only “thecompletely unrealistic assumption that minorities will choose to enterconstruction in lockstep proportion to their representation in the localpopulation.” Croson at507. In this case, the Panel didnot even inquire whether the statistics it relied on from Appendix A (which inturn were derived from untested and unexamined variety of "disparitystudies") were derived from the proper pool of qualified, willing and ablecontractors. The GeneralAccounting Office, in its Report to Congressional Committees required by TEA-21
Taken as a whole, these [disparity] studies suggestthat disparities exist; however, we found significant weaknesses in thedisparity studies we reviewed. Forexample, the studies consistently overstated the number of qualified, willingand able firms or understated firms' utilization in transportationcontracts. The weaknesses we haveidentified create uncertainties about the studies' findings . . . .
GAO Report at 6.
Disparitystudies conducted for state and local governments usually rely on census datafor calculating the number of “available” minority or woman-ownedbusinesses. These census-basedheadcounts, however, provide no information about the qualification, ability,or willingness of the minority or woman-owned firms to perform work ongovernment contracts in general or the particular public works projects“on offer.” Othersources of “headcounts” of minority and woman-owned firms havesimilar or other serious problems. See GAO Report at 30-31.
Statisticalevidence must also contain detailed explanation of the methods by which it wasderived. Numerous “disparitystudies” manipulate the census or other data in ways that are far from“transparent,” and often not consistent with the realities of the particularindustry segment involved, with the apparent goal of inflating the“availability” of minority or woman-owned firms, As the Seventh Circuit observed,“an expert who supplies nothing but a bottom line supplies nothing ofvalue to the judicial process.” Mid-State Fertilizer Co. v. ExchangeNat'l Bank, 877 F.2d 1333, 1339(1989). As this Court has said"[N]othing in . . . the Federal Rules of Evidence requires a districtcourt to admit opinion evidence which is connected to existing data only by theipse dixit of the expert." General Electric Co. v. Joiner, 522 U.S. 136, 140 (1997). The Panel merely parroted the conclusions of the Appendix,without inquiring into its methods or the methodology of the underlying studiescited in the Appendix.
Statisticalevidence must also utilize proper analytical tools to account for all the majorvariables, so that deliberate discrimination, if actually involved, may beidentified as the cause of any calculated disparity. This Court has held that "[t]o draw an inference ofdiscrimination from statistical disparities, while all ‘measurablevariables' need not be accounted for, all ‘major variables,'must be controlled and accounted for." and that an analysis that does notcontrol for at least major variables may be inadmissible. Bazemore v. Friday, 478 U.S. 385 at 400 and n.10 (1986). "[I]n order for statisticalevidence to create an inference of discrimination, the statistics must show asignificant disparity and eliminate nondiscriminatory explanations for thedisparity . . . . statistical evidence must focus on eliminating nondiscriminatoryexplanations for disparate treatmentbetween comparable individuals.”Fallis v. Kerr-McGee Corp., 944F.2d 743, 746 (10th Cir. 1991) (italics in original); accord, Koger v. Reno, 98 F.3d 631, 637 (D.C. Cir. 1996). "Croson .. . reaffirmed the Court's longstanding teaching that we must staunchlyresist attempts to substitute speculation and correlation for evidence ofcausation." Wessmann v. Gittens,160 F.3d 790, 804 (1st Cir. 1998); accord Assoc'd Gen. Contractors of Ohio v. Drabik, 214 F.3d 730, 736 (6th Cir. 2000); Walkerv. City of Mesquite, 169 F.3d 973,985 n.33 (5th Cir. 1999), cert. denied, 120 S.Ct. 969 (2000). The Panel's most glaring failure in this case was notto make any attempt whatsoever to investigate whether the statistical data inthe Appendix was the product of proper analyses to account for causes other than discrimination and deliberateexclusion. The Panel made noeffort to ensure that the Appendix and the underlying studies consideredrelevant non-discriminatory factors.
Thestatistics must be collected separately for prime contracts andsubcontracts. Unlesssubcontracting statistics are collected and analyzed separately it isimpossible to discern whether there was in fact underutilization or whether thegovernment passively participated in discrimination, because minorityrepresentation in subcontracts could make up for any observed disparity inprime contracts. In this case, thePanel not inquire, and Appendix A does indicate, whether subcontractor statisticswere collected separately from prime contractor statistics. As the GAO Report noted:
[S]everal studies we reviewed did not include anyanalyses of subcontracting and therefore may understate the utilization of[MBE/WBE] firms. Because MBE/WBEsare more likely to be awarded subcontracts than prime contracts, MBE/WBEs inparticular may appear underutilized when the focus remains on prime contractdata. Furthermore, although somestudies did include calculations based on the number of contracts, all but twobased their determination of disparities on only the dollar amounts ofcontracts. Because MBE/WBEs tendto be smaller than non-MBE/WBEs, they are often unable to perform largercontracts . . . . A more complete indicator of utilization would consider boththe dollar amount and the number of contracts awarded or to control fordifferences in contract dollar amounts.
GAO Report at 32. See also EngineeringContractors of S. Fla.. v. Metropolitan Dade County, 122 F.3rd 895 (11th Cir. 1997).
Thepanel's failure to investigate whether Appendix A met these four criteriais, we submit, both apparent and fatal.
B. The Appendix Fails to Demonstrate That Government Participated In The Discriminatory Pattern ofExclusion.
Inorder to conclude that there is strong evidence of a compelling interest, acourt must find evidence that the government participated, actively, or atleast passively, in the any deliberate patterns of racial exclusion it finds. Croson, 488 U.S. at 492. The Appendix does not provide any evidence that DOT had"essentially become a 'passive participant' in a system of racialexclusion practiced by elements of the . . . construction industry.
Althoughthe Panel stated, for example, that “subcontractors' unions placebefore minority firms a plethora of barriers to membership,” (for whichit relied on testimony before a Congressional Committee by civil rights activists and the Appendix[16] Uncriticaldeference to Congressional statements, apparently a pillar of the reasoningunderlying the Appendix, is not consistent with the skepticism required by Adarand, where constitutionalrights are concerned. Moreover, the Appendix seems to rely on cases, such as Fullilovev. Klutznick, 448 U.S.448 (1980) and Metro Broadcasting, Inc. v. FCC, 497 U.S. 547 (1990), which are nolonger good law. This Court saidin Adarand " . .. to the extent (if any) that Fullilove held federal racial classifications to be subjected to aless rigorous standard, it is no longer controlling." Adarand III, 515 U.S. 200, 235., which refers to that problem existing in"several cities and states" (but not nationwide)) 228 F.3d 1147 at1168, Pet App. 35, it failed to indicate how government was involved with thatdiscrimination. Indeed, the Panelseems to have ignored efforts by the federal government, through legislation,regulations, executive orders, litigation and other enforcement action, to openunion apprenticeship programs to participation by minorities. The Panel also ignored this Court'sstatement in Croson that "the exclusion of blacks from skilledconstruction trade unions and training programs . . . . [which] pastdiscrimination has prevented them 'from following the traditional path from laborerto entrepreneur' . . . .that the sorry history of both private and publicdiscrimination in this country has contributed to a lack of opportunities forblack entrepreneurs, this observation, standing alone, cannot justify a rigidracial quota in the awarding of public contracts. . . ." Croson at 498-499.
Instead,the Panel relies on the circular reasoning that because the federal governmentfunds the vast majority of highway projects, and that the bulk of the contractdollars were paid to non-minority firms, this "is in and of itself a formof passive participation in discrimination that Congress is entitled to seek toavoid." 228 F.3d 1147 at 1182. By that reasoning, all government activities involving interaction withthe public could be deemed "participation" in a pattern ofdiscriminatory exclusion.
CONCLUSION
Amici respectfully submit that the Appendix utterly failsto provide the required "strong basis in evidence" and that thePanel's reliance on the Appendix was wrong as a matter of evidentiaryprinciples and as a matter of allocation of the burden of persuasion.
Thejudgment of the Court of Appeals for the Tenth Circuit should be reversed.
June 11, 2001
Respectfully submitted,
MartinS. Kaufman*
BriscoeR. Smith
*Counsel of Record
AtlanticLegal Foundation
205East 42nd Street
NewYork, New York 10017
(212)573-1960
Counselfor Amici Curiae
GEODCorporation and
AtlanticLegal Foundation
[1] Counsel for the parties have consented to the filingof this brief. Letters of consenthave been filed with the Clerk of the Court. Pursuantto Supreme Court Rule 37.6, amici curiae state that this brief was not prepared, written, funded orproduced by any person or entity other than amici curiae or their counsel.
[2] The Panel relied on Appendix A itself,not the studies, hearings and other materials Appendix A purports tosummarize. This is obvious from aperusal of the Panel's opinion and its constant reference to "statistical andanecdotal evidence" as reported in "The CompellingInterest."
One example of the Panel's failure to search behind the self-servingAppendix is the Panel's reliance on an early draft of a study by the UrbanInstitute,which was completed in December 1997, more than 18 months afterAppendix A was published. 61 Fed. Reg. 26061 n.128. The final Urban Institute study (Enchautegui, Maria E., etal., Do MinorityOwned Businesses Get a Fair Share of Government Contracts? (available online atwww.urban.org/authors/enchautegui.html). The final Urban Institute study, issued more than two years beforethe Court of Appeal's opiniondecision was handed down, concluded that there was no statistically significantunderutilization of minority construction subcontractors. Id. at 15 and n.6. The final Urban Institute study alsostates that whatever disparities it did detect “do not necessarilytranslate into proof of discrimination on the part of state and localgovernments.” Id.at xiv. This is itself a reasonthe Panel's reliance on the Appendix is incorrect: When the author of a studyasserts that the data is not statistically significant, the study does notsupport the conclusion that this data is statistically significant. See General Electric Co. v. Joiner, 522 U.S. 136, 144 (1997).
The existence of each [of] the programs,including all of its component parts, must withstand the appropriate level ofconstitutional scrutiny if that program is to be upheld. Either a program is grounded on a proper evidentiaryfactual predicate or it is not. If it is, then that program sails on to thenext stage of the analysis, where each component contract measure is testedagainst the "narrow tailoring" and "substantialrelationship" requirements. On the other hand, if a program is notgrounded on a proper evidentiary basis, then all of the contract measures godown with the ship, irrespective of any narrow tailoring or substantialrelationship analysis.
[D]eficienciesin working capital, inability to meet bonding requirements, disabilities causedby an inadequate ‘track record,' lack of awareness of biddingopportunities, unfamiliarity with the bidding procedures, preselection beforethe formal advertising process, and the exercise of discretion by governmentprocurement officers to disfavor minority businesses.
Anumber of other disparity studies on which the Appendix relies (because theywere surveyed in the Urban Institute report - an prime example of double ortriple or even more remote hearsay) have been found invalid as a predicate forlocal or state race-conscious remedies and have been heavily criticized by thecourts that have reviewed them. For example, three months before the Urban Institute's report wasissued, a federal district court in Columbus, Ohio overturned a proposed MWBEordinance, finding that the disparity study was not only flawed conceptually,but was an example of research aimed at proving a particular result the Citydesired in commissioning the study. (AGC v. Columbus, 936 F.Supp. 1363, 1431 (S.D. Ohio1996)). Nevertheless, the UrbanInstitute's report, and by extension the Appendix and the Panel, relied on theColumbus study, as well as 14 other studies completed by the same disparitystudy contractor, BBC, and which used essentially the same flawedmethodology. A month before theUrban Institute report was released, a federal court in Miami struck down aDade County MWBE program and criticized the disparity study produced by MRDConsulting, which is also relied on in the Urban Institute report. The Court said:
Plaintiffs have produced both evidence ofrace-neutral explanations for the disparities reflected in defendants'statistical analyses and evidence of flaws in the data and methodology thatunderlie defendant's statistics and make the numerical disparities neithersignificant nor actionable.
(EngineeringContractors Association of South Florida, Inc. v. Metropolitan Dade County, 943 F.Supp. 1546, 1584 (S.D. Fla. 1996), aff'd 122 F.3rd 895 (11th Cir. 1997). Many other disparitystudies are currently the focus of litigation.
Fordiscussions of post-Croson disparity studies see Mitchell Rice, Government Set-Asides,Minority Business Programs and the Court, Public Administration Review, March/April, 1991, 114-122; Patrick D.Halligan, "Minority Business Preferences and Ad Hoc Hypotheses: A Comment on Coral Construction V.King County." 10 ConstructionLaw 26 (November 1990);John Lunn and Huey L. Perry, "Justifying Affirmative Action: HighwayConstruction in Louisiana," 46 Industrial and Labor Relations Review, 464-479 (April 1993); George R. LaNoueand John Sullivan. "But for Discrimination How Many Minority BusinessesWould There Be?" 24 Columbia Human Rights Law Review (Winter 1992); George R. LaNoue,"Local Officials Guide to Minority Business Programs and DisparityStudies: Responding to The Supreme Court's Mandate in City of Richmond v.Croson," publishedby the National League of Cities (1st ed. 1991, 2nd ed. 1994) and George R.LaNoue, "Standards for the Second Generation of Croson Inspired Disparity Studies," 26 TheUrban Lawyer 485 (Summer1994). Neither the UrbanInstitute's report's nor the Appendix cite any of these works, which critiquethe methodology of almost all of the disparity studies so far completed, andthe Panel seems to have been blithely ignorant of them.
[16] While the Appendix makes reference to 29Congressional hearings held between 1980 and 1995, and occasionally quotestestimony at those hearings, the Appendix makes no distinction between findingsthat represent a Congressional consensus, the views of a single committee or thepartisan majority on a particular committee or subcommittee, the views of asingle Congressman representing constituents who are not objective ordisinterested, or the views of advocacy organizations and individuals. No attempt was made, either by theauthor of the Appendix or the Panel, to verify the accuracy of the statementwhen made. Nor does the Appendixor the Panel distinguish between statements that may have been accurate 15years ago, but are no longer correct.
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