L. Feriozzi Concrete Company v. Casino Reinvestment Development Authority Notice of Motion for Leave to Appear as Amicus Curiae

    LOWENSTEIN SANDLER pc
Attorneys At Law 
65 Livingston Avenue 
Roseland, New Jersey 07068
973.597.2500 
Attorneys for Plaintiff

Amicus Curiae Utility and Transportation 
Contractors Association of New Jersey, Inc.

SUPERIOR COURT OF NEW JERSEY 
APPELLATE DIVISION 
DOCKET NO. A-005057-99T5

L. FERIOZZI CONCRETE COMPANY. INC., 
NEW JERSEY CORPORATION, AND 
CONCETTA FERIOZZI,

P1 ainti ffs/Respondents

vs.
CASINO REINVESTMENT DEVELOPMENT 
AUTHORITY AND JAMES B. KENNEDY, 
EXECUTIVE DIRECTOR OF THE CASINO 
REINVESTMENT DEVELOPMENT 
AUTHORITY

CIVIL ACTION 
ON APPEAL FROM:

Superior Court of New Jersey
Law Division, Atlantic County
Docket No. ATL-L-2003-99
Sat Below: Hon. Michael Winkelstein, 
A.J.S.C.

NOTICE OF MOTION FOR LEAVE TO 
APPEAR AS AMICUS CURIAE
(XI: 13-9)

Defendants/Appellants.

TO: Salvatore Perillo, Esq.
PERSKIE, NEHMAD & PERILLO, P.C. 
1125 Atlantic Avenue, Suite 711 
Atlantic City, NJ 08401 
Attorneys for Plaintiffs/Respondents

Patrick J. McAuley, Esq.
CONNELL FOLEY, LLP 
85 Livingston Avenue 
Roseland, NJ 07068 
Attorneys for Defendants/Appellants

12392/5
05/24/2001 1041288.01



John J. Gibbons, Esq.
GIBBONS, DEL DEO, DOLAN. GRIFFINGER & VECCHIONE. P.C.
One Riverfront Plaza
Newark, NJ 07102-5497
Attorneys for Amicus Curiae
NAACP Legal Defense and Educational Fund

PLEASE TAKE NOTICE that the Utility and Transportation Contractors Association of New 

Jersey, Inc., through its attorneys, Lowenstein Sandler PC, hereby applies to the above Court for an 

order granting leave to appear as amicus curiae in the within action, pursuant to R. 1:13-9, and to 

participate in this matter as permitted by the Court, including participation in oral argument.

In support of its application movant shall rely upon the Certification of Robert A. Briant, Sr. and 

its Brief, filed herewith. A proposed form of Order is submitted herewith.

COUNSEL:

LOWENSTEIN SANDLER PC
Attorneys for Amicus Curiae
Utility and Transportation Contractors Association
of New Jersey, Inc.

By:
AU KJtN IN fc  L. ISAVU hh , FSO-

Dated: May 24, 2001



LOWENSTEIN SANDLER pc
Attorneys At Law 
65 Livingston Avenue 
Roseland. New Jersey 07068
973.597.2500 
Attorneys for Plaintiff

Amicus Curiae Utility and Transportation 
Contractors Association of New Jersey, Inc.

SUPERIOR COURT OF NEW JERSEY 
APPELLATE DIVISION 
DOCKET NO. A-005057-99T5

L. FERIOZZI CONCRETE COMPANY, INC., A 
NEW JERSEY CORPORATION, AND 
CONCETTA FERIOZZI,

Plaintiffs/Respondents

CIVIL ACTION 
ON APPEAL FROM:

Superior Court of New Jersey
Law Division, Atlantic County
Docket No. ATL-L-2003-99
Sat Below: Hon. Michael Winkelstein, 
A.J.S.C.

vs.
CASINO REINVESTMENT DEVELOPMENT 
AUTHORITY AND JAMES B. KENNEDY, 
EXECUTIVE DIRECTOR OF THE CASINO 
REINVESTMENT DEVELOPMENT 
AUTHORITY

Defendants/Appellants.

ORDER GRANTING LEAVE TO 
APPEAR AS AMICUS CURIAE
(R. 1:13-9)

THIS MATTER being opened to the Court by Lowenstein Sandler PC, attorneys for the Utility 

and Transportation Contractors Association of New Jersey, Inc., for an Order seeking leave to appear in 

this matter as amicus curiae; and the Court having considered said application and the proofs and 

arguments submitted in support thereof and in opposition thereto, if any, and being of the opinion that 

the relief sought should be granted; and good cause having been shown;

IT IS on this day of ,2001

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05/23/2001 1041343.01



ORDERED that the application by the Utility and Transportation Contractors Association of 

New Jersey, Inc. to appear in this matter as amicus curiae be and same is hereby granted; and it is 

further

ORDERED that said amicus curiae be and same is hereby given leave to participate in this 

matter as permitted by the Court; including participation in oral argument, and it is further

ORDERED that a copy of the within Order be served upon all counsel of record within 

___________days of the date hereof.

J.A.D.



SUPERIOR COURT OF NEW JERSEY 
APPELLATE DIVISION 

DOCKET NO.: A-005057-99T5

L. FERIOZZI CONCRETE COMPANY, 
INC., a New Jersey Corporation, 
and CONCETTA FERIOZZI,

Plaintiffs/Respondents,

vs .

ON APPEAL FROM:
SUPERIOR COURT OF NEW JERSEY 
ATLANTIC COUNTY: LAW DIVISION 
DOCKET NO.: ATL-L-2003-99

CASINO REINVESTMENT DEVELOPMENT SAT BELOW: HON. MICHAEL 
AUTHORITY and JAMES B. KENNEDY, WINKELSTEIN, A.J.S.C. 
Executive Director of the 
Casino Reinvestment Development 
Authority,

Defendants/Appellants.

BRIEF IN SUPPORT OF MOTION FOR LEAVE TO APPEAR AS AMICUS CURIAE
AND ON THE MERITS

Of Counsel
STEVEN E. BRAWER, ESQ.

On the Brief:
CECELIA E. HANEY, ESQ. 
ADRIENNE L. ISACOFF, ESQ.

LOWENSTEIN SANDLER PC
Attorneys At Law 
65 Livingston Avenue 
Roseland, New Jersey 07068
973.597.2500
Attorneys for Amicus Curiae 

Utility and Transportation 
Contractors Association of New 
Jersey, Inc.



TABLE OF CONTENTS
Page

TABLE OF AUTHORITIES......................................... iii
PRELIMINARY STATEMENT .........................................  1
PROCEDURAL HISTORY AND STATEMENT OF FACTS ......................  4
ARGUMENT ......................................................  5
POINT I ........................................................ 5

THE SET-ASIDE PROGRAM ADVERSELY AFFECTS THE 
ABILITY OF CONTRACTORS TO ENGAGE IN UNFETTERED 
COMPETITION FOR CRDA-FUNDED PROGRAMS, IN 
DEROGATION OF THE PUBLIC POLICY OF THIS STATE .............  5
THE APPELLATE DIVISION SHOULD AFFIRM THE TRIAL 
COURT'S DECISION BECAUSE THE RECORD LACKS THE 
PARTICULARIZED EVIDENCE OF DISCRIMINATION BY 
EITHER CRDA OR THE STATE REQUIRED TO JUSTIFY THE 
ADOPTION OF THE RACE-BASED REMEDIES AT ISSUE ............  17

A. The Set-Aside Provisions Of The CRDA
Enabling Act Are Unconstitutional As 
They Were Adopted Without Any Evidence 
That CRDA Had Engaged In Prior Racial 
Discrimination..................................20

B. The Race Based Set-Aside Provisions Of
The Set-Aside Act Are Unconstitutional 
Because CRDA Cannot Show That The 
Legislature Considered Evidence Of 
Prior Discrimination By The State When 
Enacting The State Set-Aside Act............... 25
1. The Set-Aside Act Cannot Be 

Sustained Merely On An Assertion 
That It Is Remedial In Nature Or 
On A Generalized Assertion Of 
Discrimination In The "Overall 
Economy"...................................2 6

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2. In The Absence Of Any Valid Pre- 
Enactment Evidence, The Findings 
Of The Study Commission Report 
Cannot Serve As Sole Evidence Of 
Prior Discrimination By The State 
Sufficient To Satisfy Croson............. 29

POINT III.................................................... 32
NEITHER THE SET ASIDE PROVISIONS OF CRDA'S 
ENABLING LEGISLATION, NOR THE PROVISIONS OF THE 
STATE SET-ASIDE ACT ARE SUFFICIENTLY NARROWLY 
TAILORED TO SURVIVE STRICT SCRUTINY ANALYSIS ............  32

A. Both The CRDA Enabling Legislation And 
The State Set-Aside Act Rely On Fatally 
Overbroad Definitions Of "Minorities." ........  33

B. The Legislature Did Not Adequately
Pursue Race-Neutral Measures To Remedy 
Alleged Racial Discrimination Prior To 
The Enactment Of The Set-Aside
Provisions Contained In The CRDA
Enabling Legislation And The Set-Aside
Act............................................34

CONCLUSION................................................... 39

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TABLE OF AUTHORITIES
Cases Page
Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995) ... 1, 14,

17, 18, 
22

Associated General Contractors of Ohio v. Drabik, 214
F. 3d 730 (6th Cir. 2000) ................................  18

Associated Utility Contractors of Maryland v. Mayor, 83
F. Supp. 2d 613 (D.Md. 2000) ............................  31

Association for Fairness in Business v. New Jersey,
82 F. Supp. 2d 353 (D.N.J. 2000) ....................  24, 25

Brill v. Guardian Life Insurance Co. of America, 142 N.J.
520 (1995) ..............................................  37

City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989) .. 1, 13,
14, 17, 18, 
20, 26, 27, 
28, 30, 31, 
33, 24, 34, 

35, 37

Concrete Works of Colorado, Inc. v. Denver, 36 F.3d 1513
(10th Cir. 1994) ........................................  30

Contractors Association of Eastern Pennsylvania, Inc.,
91 F. 3d 586 (3rd Cir. 1996) .........................  18, 23

Coral Construction Co. v. King County, 941 F.2d 910
(9th Cir. 1991) ....................................  13, 23,

30, 32, 
34, 35

George Harms Construction Co., Inc. v. New Jersey
Turnpike Authority, 137 N.J. 8 (1994) ...............  9, 10,

11, 12,
15, 35

Northeastern Florida Chapter of the Association of 
General Contractors of America v. City of 
Jacksonville, Florida, 508 U.S. 656, 1993) ...

-iii-

8 , 9



Skalel v. Township of North Bergen, 37 N.J. 369 (1962)

Terminal Construction Corp. v. Atlantic County Sewerage
Authority, 67 N.J. 403 (1975) .......................  9, 10,

35

Tormee Construction, Inc. v. Mercer County Improvement
Authority, 143 N.J. 143 (1996) ......................  9, 10,

11, 12, 
15, 35

Utilimatic, Inc. v. Brick Township Municipal Utility 
Authority, 267 N.J. Super. 139 (Law Div. 1993) .

Wygant v. Jackson Board of Education, 476 U.S. 267 
(1986) (emphasis supplied) ................... 23, 27 

28, 32

Statutes
N.J. Const. Art IV, §7, 5 9 ................................... 11

Miscellaneous
N.J.S.A. 5:12-181(b) ......................................  6, 20

N.J.S.A. 34:IB-47 (c) ..........................................26

N.J.S.A. 40A:11-1 ............................................ 10

N.J.S.A. 52:32-17, et seq........................................1

N.J.A.C. 19:65-4.1 ............................................  6

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PRELIMINARY STATEMENT
In a comprehensive and well-reasoned thirty-five page 

decision which is now before this Tribunal for review, the 
Honorable Michael Winkelstein declared unconstitutional the set- 
aside program ("CRDA Set-Aside Program") imposed by the New 
Jersey Casino Reinvestment Development Authority ("CRDA" or
"Authority") in connection with a project known as the Civil 
Rights Garden component of the Authority's Carnegie Library 
Project (the "Project" or "Contract") . The CRDA Set-Aside 
Program provides for the use of racial preferences under 
applicable provisions of CRDA's enabling legislation [N.J.S.A. 
5:12-181, hereinafter "CRDA Act"] and/or the State Set-Aside Act 
for Small Businesses, Female Businesses and Minority Businesses 
[N.J.S.A. 52:32-17, et seq., hereinafter "Set-Aside Act"].

In arriving at the decision that the CRDA Set-Aside 
Program did not pass constitutional muster under either statute, 
the Trial Judge undertook an expansive review of the line of 
cases that followed City of Richmond v. J.A. Croson Co., 488
U.S. 469 (1989) ("Croson") and Adarand Constructors, Inc. v.

Pena, 515 U.S. 200 (1995) ("Adarand"), wherein the United States
Supreme Court reaffirmed that "[r]ace based measures to
ameliorate past discrimination contradict the basic tenets of 
the Fourteenth Amendment to the federal constitution which 
guarantees equal treatment to all citizens." See Opinion at 
Da29, citing Croson, supra, 488 U.S. at 476-77. Applying the
strict scrutiny analysis mandated by those cases, Judge

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Winkelstein held that CRDA's race-based Set-Aside Program 
violates the Equal Protection provisions of the Fifth and 
Fourteenth Amendments to the United State Constitution.

The Utility and Transportation Contractors Association 
of New Jersey, Inc. ("UTCA" or "Association") seeks leave to 
appear as amicus in the within appeal because of the industry­
wide impact generated by mandatory set-aside programs. 
Particularly in view of the fact that the rationale and holding 
of the Trial Court's decision may have application to a whole 
range of other race-based preference programs that affect the 
way in which public contracts are awarded and administered on 
both the State and local levels, this case has broad 
significance to the contracting community in this State. Indeed, 
as shall be discussed in greater detail in the Argument, infra, 
a series of Executive Orders issued by Governor Whitman in the 
last few months preceding her resignation reflect the State's 
awareness that more study is needed regarding evidence of 
discrimination in the arena of public construction contracts 
(see Executive Order No. 112) and that race neutral programs 
could be established to support the worthy goal of increasing 
the participation of underrepresented groups in the industry 
(see Executive Order No. 123) .

For these reasons, and in light of the public policy 
concerns that have been reiterated by this State's Highest Court 
regarding the significance of promoting unfettered competition 
in the arena of public bidding, the Association seeks leave to

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appear as amicus in the within appeal and files this Brief both 
in support of that application and on the merits.

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The Association adopts the Procedural History and 
Statement of Facts set forth at length in the Brief of
Respondents and adds the following:

As set forth in the Certification of Robert A. Briant, 
Sr., Executive Director of the Association, filed herewith, the 
UTCA is a Not-For-Profit Corporation established in 1965 which 
presently consists of some 1300 contractor and affiliated
members and is the largest heavy construction industry trade
association in New Jersey. The Association seeks amicus status 
in the within appeal in order to advance its members abiding 
interest in the maintenance of a free, open and unfettered
public bidding process in which all interested and qualified 
contractors are able to compete.

PROCEDURAL HISTORY AND STATEMENT OF FACTS

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ARGUMENT
POINT I

THE SET-ASIDE PROGRAM ADVERSELY AFFECTS THE 
ABILITY OF CONTRACTORS TO ENGAGE IN UNFETTERED 
COMPETITION FOR CRDA-FUNDED PROGRAMS, IN 
DEROGATION OF THE PUBLIC POLICY OF THIS STATE_____

For the reasons explicated in Points II and III, 
infra, the UTCA supports the analysis by the Trial Judge that 
the CRDA Set-Aside Program does not pass constitutional muster. 
In addition, and in consonance with that reasoning, the 
Association believes that while CRDA's efforts to guarantee 
minority business enterprise ("MBE") and women business
enterprise "WBE"’ participation in the Project serve laudable
goals, the specific plan set forth in the Contract is 
inconsonant with the basic tenets of New Jersey bidding law and 
policy.

It may first be noted that various aspects of the CRDA 
Set-Aside Program impinge upon the ability of contractors to 
freely compete for award of the Project. The Advertisement for 
Bids provided that "the contract will require the bidder to have 
30% of the total contract value set aside for [MBE] 
participation. It is the contractors (sic) responsibility to 
identify the vendor and work which will be set side for MBE 
participation." Dal5. By contrast, the Set-Aside Act and the 
regulations promulgated thereunder provide for the attainment of 
a far less restrictive goal: seven percent for MBEs and three 
percent for women's business enterprises on an annualized basis. 
N.J.S.A. 52:32-21. See Opinion at Da246 and see Dal5. Indeed,

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the thirty percent goal which the successful bidder was required 
to achieve if awarded a contract for the Project even exceeds 
the twenty percent goal required by the Authority's own enabling 
legislation. N.J.S.A. 5:12-181(b). Moreover, notwithstanding the 
fact that the underlying statute has not been amended in this 
regard, the Authority's set-aside regulations were revised in 
1997 to require that contractors make a good faith effort to 
award only seven percent of their subcontracts to MBEs and three 
percent to WBEs, mirroring the goals established by the Set- 
Aside Act. See N.J.A.C. 19:65-4.1. In light of this statutory 
and regulatory framework, the thirty percent requirement imposed 
by the Contract as a practical matter imposes a draconian burden 
upon contractors vying for and undertaking the work.

Apart from the percentage of minority participation 
specified for the Project, the affirmative action requirements 
embodied in CRDA's enabling legislation adversely affect the 
ability of contractors on CRDA projects to bid for the work in a 
competitive fashion. For example, the CRDA Act provides that:

[t]he borrower or licensee and those of its 
contractors which will make subcontracts 
with or purchase substantial supplies from 
or seek engineering or design services from 
other firms must seek out all available 
minority and women's businesses and make 
every effort to use as many of them as 
possible on the project, in order to satisfy 
the set-aside requirement.

N.J.S.A. 5:12-181 (b) (2) .
Moreover, the Authority shall "require borrowers,

licensees and prime contractors to engage minority and

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women's



businesses from as wide a market area as is economically 
feasible." N.J.S.A. 5:12-181(b)(2). Borrowers, licensees and 
prime contractors are required to use minority and women's 
businesses with less experience than available nonminority 
enterprises and shall provide technical assistance to minority 
and women's business. Id. Waiver of up to ten percent of the
twenty percent set-aside requirement will only be granted under 
exceptional circumstances. Id.

As noted by Judge Winkelstein in his ruling that
Feriozzi had standing to challenge N.J.S.A. 5:12-181(b), 
“[1]icensees and contractors that are parties to projects funded 
by the Authority, even where the Authority is not a direct 
party, are still required to provide technical assistance to 
WBEs and MBEs, and to hire minority businesses with less 
experience than nonminorities in an effort to meet the set-aside 
goals." Opinion at Da266, and see N.J. S. A. 181(b) (2) . In ruling 
that CRDA's set-aside plan is "more akin to a quota than a
goal," Judge Winkelstein pointed out that the Authority's 1999
set-aside plan, Section 4, Compliance, requires prospective
bidders and contractors to take affirmative steps to locate and 
contract with qualified MBE firms, to keep a record of all such 
efforts and to negotiate with potential subcontractors who
submit higher than acceptable price quotes. In addition, Section 
3, Establishing Percentage Goals, requires the applicants and
contractors to make "every effort to use as many minority and/or 
women-owned businesses from as wide a market area as

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economically feasible to satisfy the set-aside goals of the 
Authority." Opinion at Da278.

Moreover, the Trial Court found that "Feriozzi, as a 
regular bidder on Authority construction projects, is a member 
of a group that would suffer injury if racial preferences were 
used as a factor in deciding to whom contracts should be 
awarded," citing Northeastern Florida Chapter of the Association 
of General Contractors of America v. City of Jacksonville, 
Florida, 508 U.S. 656, 666, 113 S. Ct. 2297, 124 L.Ed. 586
(1993). Opinion at Da266. Judge Winkelstein took specific note 
of the fact that Feriozzi argued that it has and will suffer 
harm from the imposition of the MBE set-asides in a number of 
ways :

• The MBE requirements imposed by the Authority substantially 

increase cost of bidding public projects because of the 

need to solicit MBE contractors;

• In order to comply with the set-aside requirements, 

Feriozzi is required to utilize less experienced 

contractors; and

• Less experienced workers result in increased bonding costs, 

increased insurance costs and significantly increased risks 

either because of the quality of the work or the completion 

time of the project.

Opinion at Da267.

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As determined by the Trial Court, "[a]11 of these 
factors serve to increase the uncertainty of the process and the 
cost to any nonminority bidder such as Feriozzi. Id. (emphasis 
supplied).

Patently, the factors recognized by the Trial Court in 
establishing Feriozzi's standing to attack the Set-Aside Program 
may have a chilling effect on the competitive bid-and-award 
process that underpins all public work projects in this State. 
The policy reasons underlying competitive bidding statutes has 
been explicated in numerous decisions of our state's Highest 
Court. In George Harms Construction Co., Inc. v. New Jersey 
Turnpike Authority, 137 N.J. 8 (1994) {"Harms") and in Tormee 
Construction, Inc. v. Mercer County Improvement Authority, 143
N.J. 143 (1996) {"Tormee"), the Court reiterated the principles
that have guided the bid and award process of both State and 
local construction projects over the past century. Both those 
cases considered whether public entities may require contractors 
to enter into project labor agreements. In each instance, the 
Court ruled that such a requirement was in derogation of public 
bidding law. See Harms, supra, 137 N.J. at 43 and Tormee, supra, 
143 N.J. at 150.In Harms, the Court quoted at length from the 
seminal case of Terminal Construction Corp. v. Atlantic County 
Sewerage Authority, 67 N.J. 403 (1975) {"Terminal"), which set
forth the policy reasons that inform the public bidding system:

Bidding statutes are for the benefit of the 
taxpayers and are construed as nearly as 
possible with sole reference to the public 
good. Their objects are to guard against

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favoritism, improvidence, extravagance and 
corruption; their aim is to secure for the 
public the benefits of unfettered 
competition.

Harms, 137 N.J. at 91, quoting Terminal (emphasis supplied), 67 
N.J. at 409-410.

The Court noted that although Terminal concerned 
competitive bidding under the Local Public Contracts Law, 
N.J.S.A. 40A:11-1, the operation and policy of that law are 
identical to that of N.J.S.A. 27:23-6.1 (a) , which governed the 
Harms case. Indeed, while there are certain differences among 
the various statutory bidding schemes that govern State, quasi­
state and local entities, they all share the salutary goal of 
encouraging and insuring that unfettered competition attends the 
bid-and-award process. See, e.g., N.J.S.A. 52 :32-2(which governs 
bids awarded by the Department of Treasury for the repair or 
construction of public buildings); N.J.S.A. 27:27-7-30(which 
governs contracts awarded by the Department of Transportation ); 
N.J.S.A. 18A:18A-15 (which governs contracts awarded by the 
Boards of Education); and N.J.S.A. 5:10-21.1 (which governs 
contracts awarded by the New Jersey Sports & Exposition 
Authority).

Noting that "contracts for public improvements are 
among the most important contracts that public entities enter 
into," Tormee, supra, 143 N.J. at 147, our Supreme Court 
reasoned that:

[c]ompetitive public bidding obviously
fosters competition among bidders. The more 
companies that can bid on a project, the

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greater the likelihood that the public 
entity will receive the lowest possible 
contract price from responsible bidders.
Skalel v. Township of North Bergen, 37 N.J.
369, 378 (1962) (emphasis supplied).
The notion that competition should be broadly based 

and must be free of unjustified constraints led the Court in 
Harms and Tormee to determine that the project labor agreements 
required by the contract documents at issue in those cases were 
"contrary to public bidding laws [in that they] impermissibly 
restrict contractors to a union-only work force. Tormee, supra, 
143 N.J. at 150.

Likewise, the Harms Court noted that under public 
bidding laws a public entity may not specify a sole source of 
labor on its projects. Harms, supra, 137 N.J. at 19. In 
analyzing this issue the Court analogized the sole source issue 
to a consideration of franchise law:

Our constitutional traditions bespeak a 
denial of legislative power to create 
monopolies, making the acquisition of 
franchises open to all. N.J. Const. Art IV, 
§7, SI9. In passing only general laws, the 
Legislature benefits the public by creating 
a healthy competition among those who seek 
franchises.
The Justices in Harms then cited with approval the 

decision in Utilimatic, Inc. v. Brick Township Mun. Util Auth., 
267 N.J. Super. 139, 145 (Law Div. 1993), which held that "the 
specifications cannot be so precise as to knowingly exclude all 
but one prospective bidder." The response by the Harms Court to 
the argument that concern about a sole-source bidding

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specification is misguided because the subject bid was "open to 
all" is instructive:

That is like saying that a bid specification 
that requires a contractor to use 'Smith 
Family Steel' would be acceptable because 
'anyone can bid on the job.' True enough,
but does real competition exist?

Harms, supra, 137 N.J. at 42.
As in the case sub judice, the Court in Harms and

Tormee was cognizant of the "important public purposes" that
project labor agreements serve and the balancing of competing
interests which necessarily attends such matters. See, Harms,

supra, 137 N.J. Super, at 45 and Tormee, supra, 143 N.J. at 148.
Nevertheless, the Court noted that ”[o]ur function is not to
make the policy choice; our function is to assess whether the
[public entity's] choice is consistent with the existing State
public-bidding policy to foster competition." Harms, supra, 137
N.J. at 44. See, also, Tormee, supra, 143 N.J. at 151.

Although Harms and Tormee concerned project labor
agreements, our Highest Court's embrace of the principle that
the promotion of free and unfettered competition is the hallmark
of the public bidding system has significant bearing on an
analysis of whether the CRDA Set-Aside Program undermines the
competitive bidding process for public work. Indeed, the
determination of Judge Winkelstein that one of the
constitutional deficiencies in CRDA's Set-Aside Program is " ***
the failure of the Authority to satisfactorily demonstrate that
it has used race neutral means to effect minority participation"

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is, perhaps, the most significant holding from the Association's 
perspective.

The UTCA vigorously supports programs that expand 
opportunity for all groups to fully participate in the arena of 
public construction. In this regard, the Association agrees with 
the Trial Court's conclusion that "another reason for finding 
the Authority's racial preference program unconstitutional is 
the failure of the Authority to satisfactorily demonstrate that 
is has used race neutral means to effect minority
participation." Opinion at Da275. Citing Coral Constr. Co. v. 
King County, 941 F.2d 910 (9th Cir. 1991) ["Coral Constr."] and 
Croson, the Trial Court noted that race neutral measures include 
hosting training sessions for small businesses; providing 
information on accessing small business assistance programs; and 
providing financing for small business enterprises. Opinion at 
31, Da275. The Trial Judge also cited the 1993 Final Report: 
State of New Jersey Governor's Study Commission on 
Discrimination in Public Works Procurement and Construction 
Contracts ("Commission Report") which suggested, inter alia, the 
use of bid preferences which allow for the award of a contract 
to a qualified minority bidder if the bid is within a certain 
percentage of the lowest bid; enforcing the State's anti red­
lining statute to increase minority participation; 
simplification of bidding procedures; and relaxation of bonding 
requirements. See Commission Report at 86 and see Opinion at 32, 
Da27 6.

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Toward the end of her tenure in office, in response to 
the concerns about the constitutionality of the State's MBE and 
WBE participation programs, then-Governor Whitman issued 
Executive Orders Nos. 112 and 123 that sought to address the 
need to increase minority participation in public construction 
projects, in a manner consistent with the principles enunciated 
in Croson, Adarand and their progeny. Executive Order No. 112, 
issued on April 6, 2000, established the "Study Commission on 
Discrimination in State Employment and Contracting" which has 
been organized to "investigate, research and report on the 
nature and scope of any past or present discrimination in State 
employment and contracting. Where the Study Commission finds 
evidence of such discrimination, it shall identify and evaluate 
remedies, consistent with guidelines established by law."1

In addition to the initiating that study, by Executive 
Order No. 123, signed on January 30, 2001, Governor Whitman 
established the "Construction Trade Training Council" 
("Council"). The Council's duties include, inter alia, the 
oversight of a publicly sponsored construction training program 
and a review of such programs "to determine the availability of 
support services for its participants such as childcare and 
transportation." Executive Order NO. 123 also established within 
the New Jersey Commerce and Economic Growth Commission a

As discussed at length in Point II, infra, strict scrutiny 
analysis requires the identification of past discrimination 
prior to the establishment of programs intended to remedy that 
societal evil. Adarand Constructors, Inc. v. Pena, 515 US 200, 
227 (1995)

-14-



"Business Opportunity Center" to function as a "one-stop shop, 
business access center for New Jersey emerging small 
businesses." The Business Opportunity Center was conceived as a 
resource center to provide "emerging small business enterprises 
with procurement information, technical bidding assistance, 
marketing services, business mentoring, and access to financing 
and management consultation." In addition, the Business 
Opportunity Center shall "[i]mplement an Emerging Small Business 
Pilot Program that is targeted at creating new business 
opportunities for construction and engineering small 
businesses."

Clearly, the concerns expressed by Judge Winkelstein 
regarding the constitutionality of the CRDA Set-Aside Program 
are shared by the State in regard to all such similar programs; 
consequently, the State has undertaken a thorough review of past 
discrimination and is making a concerted effort to adopt race 
neutral means of increasing minority participation in government 
contracting programs, two initiatives which are central to the 
goal of enabling such programs to pass constitutional muster. 
The UTCA and its members applaud these efforts by the State to 
increase MBE and WBE participation in public contracting and 
procurement contracts. Such an approach is consonant with the 
broad prophylactic principles enunciated by the Court in Harms 
and Tormee wherein the goal of encouraging unfettered 
competition in public construction is insured.

In light of the Association's strong interest in 
assuring that all public solicitations be designed to encourage

-15-



the greatest number of qualified participants to compete for 
award of a contract, and considering the principles of expansive 
competition that have been the cornerstone of this State's 
public bidding system for over a century, the UTCA supports the 
decision of the Trial Judge, and believes that Judge Winkelstein 
properly held that, "as a matter of law, the Authority's set- 
aside program which provides for the use of racial preferences 
pursuant to N.J.S.A. 5:12-181 and/or N.J.S.A. 52:32-17 is 
violative of the Equal Protection clauses of the Fifth and 
Fourteenth Amendments of the U.S. Constitution".

-16-



POINT II
THE APPELLATE DIVISION SHOULD AFFIRM THE TRIAL 
COURT'S DECISION BECAUSE THE RECORD LACKS THE 
PARTICULARIZED EVIDENCE OF DISCRIMINATION BY 
EITHER CRDA OR THE STATE REQUIRED TO JUSTIFY THE 
ADOPTION OF THE RACE-BASED REMEDIES AT ISSUE______

As noted in Point I, supra, the UTCA supports State 
and agency efforts to provide guidance and assistance to small 
businesses, as well as MBEs and WBEs, when such efforts are 
designed to help such entities compete for public contracts on a 
level playing field, in consonance with the well-settled 
principles which underlie free, open and unfettered competition 
for public work. While commending the goals that the CRDA Set- 
Aside Program seeks to achieve, however, the Association has 
significant concerns about the anti-competitive impact of its 
racially-based restrictions and preferential treatments in 
connection with the bid-and-award process. Indeed, the effect of 
the CRDA Set-Aside Program is to undermine the important public 
policy goal of encouraging the broadest base of competition for 
public works as reflected in all state and local bidding laws. 
That negative impact is particularly troubling in view of the 
fact that CRDA has not established the necessary factual 
foundation to justify such a remedy.

Both the CRDA Set-Aside Program and the State Set- 
Aside Act represent race-based preference programs which must be 
subjected to "strict scrutiny" in light of the United States 
Supreme Court's decisions in Croson, supra, and Adarand, supra. 
Under strict scrutiny analysis a race-based preference scheme

-17-



may withstand a constitutional challenge only if it is narrowly
tailored to serve a compelling state interest. Adarand, supra, 
515 U.S. at 227.

The Third Circuit in Contractors Association of 
Eastern Pennsylvania, Inc., 91 F.3d. 586, 596 (3ra Cir. 1996),
clarified Supreme Court precedent by stating that a government 
entity "has a compelling state interest that can justify race- 
based preferences only when it has acted to remedy identified 
present or past discrimination in which it engaged or was a 
'passive participant;' race-based preferences cannot be
justified by reference to past 'societal' discrimination in 
which the [government actor] played no material role." More 
recently, the Sixth Circuit, interpreting Croson in Associated 
General Contractors of Ohio v. Drabik, 214 F.3d 730, 735 (6th
Cir. 2000), held that, in asserting existence of past 
discrimination to demonstrate a "compelling state interest" in 
remedial legislation,:

a state cannot rely on mere speculation, or 
legislative pronouncements, of racial 
discrimination. Rather the Supreme Court 
has told us that the state bears the burden 
of demonstrating a "strong basis in evidence 
for its conclusion that remedial action was 
necessary" by proving either that the state 
itself discriminated in the past or was a 
passive participant in private industry's 
discriminatory practices. [ Id. at 735, 
citing Croson, 488 U.S. at 486-92, 500, 109
S. Ct. 706.]
Accordingly, in order to survive strict scrutiny under 

Croson, the enactment of the race-based preference programs

-18-



applicable to CRDA must have been premised on, and preceded by, 
specific legislative findings of racial discrimination by the 
entity promulgating the particular race-based remedies at issue. 
Judge Winkelstein found, however, that the record did not 
disclose specific Legislative findings of discrimination by CRDA 
prior to the enactment of either the CRDA Act or the Set-Aside 
Act; consequently, there was no constitutional "compelling 
interest" to be remedied by CRDA's use of racial preferences, 
regardless of which statutory scheme could be looked to by the 
Authority to provide authority for its Set-Aside Program.

CRDA has challenged the Trial Court's opinion for 
limiting the examination of prior discriminatory history to 
CRDA's actions, In asserting that its use of racial preferences 
is in furtherance of the provisions of the State Set-Aside Act, 
the Authority posits that the "relevant entity" for analysis of 
prior discrimination was the State, not CRDA. The Authority's 
position appears to concede that the provisions of its enabling 
legislation are both unenforced and unenforceable.

CRDA further asserts that, as the State is the 
relevant entity for analysis of past discriminatory acts, any 
discrimination by the State which may have been asserted by the 
1993 Commission Report justifies the remedial measures of CRDA's 
race-based preferences.2 However, this position fails to

2 As noted in Point I, supra, by Executive Order No. 112, then- 
Governor Whitman determined that "it is advisable for the 
State to create a study commission charged with updating and 
expanding the earlier (Commission Study), through a review of 
data and information concerning the past and present nature 
and scope of discrimination in State employment and

-19-



recognize that the Commission Report cannot constitute an 
adequate basis for the establishment of the race-based remedies 
of the Set-Aside Act enacted in 1985, eight years before the 
Study Commission's report was released.

UTCA submits that, as discussed below, regardless of 
whether this Tribunal determines that CRDA is acting under color 
of its own enabling legislation or pursuant to the State Set- 
Aside Act, the racially-based CRDA Set-Aside Program remains 
unconstitutional, since neither CRDA's enabling legislation nor 
the State Set-Aside Act were adopted pursuant to specific pre­
enactment evidence of discrimination sufficient to satisfy the 
Croson standard.

A. The Set-Aside Provisions Of The CRDA 
Enabling Act Are Unconstitutional As 
They Were Adopted Without Any Evidence 
That CRDA Had Engaged In Prior Racial 
Discrimination.

The State Legislature created CRDA in 1984. In its 
enabling legislation, the Legislature required that "the 
authority shall ensure that minority or women's businesses which 
are in the construction industry or related industries or 
services . . . shall receive at least 20 percent of the total
expenditures on the total number of eligible projects financed 
each year by the authority." N.J.S.A. 5:12-181(b). That twenty 
percent requirement was established without reference to any

contracting." The establishment of this new study may be 
evidence of the State's own uncertainty of the sufficiency of 
the 1993 Commission Report to establish past discrimination in 
the arena of public works projects.

-20-



prior examination or analysis of availability of minority or 
women-owned businesses. Moreover, inasmuch as those set-aside
provisions were adopted simultaneously with CRDA's founding, the 
set-asides obviously were not established in response to any 
demonstrated evidence of prior discrimination by CRDA. After 
several permutations, CRDA promulgated regulations which reflect 
the preference standards incorporated in the regulations
implementing the State Set-Aside Act.

The Trial Court, in examining the factual predicate 
for the set-aside provisions in the CRDA enabling legislation, 
found the following:

At the time the [CRDA] legislation was 
passed in 1984 there were no studies or any 
other evidence showing discrimination in the 
construction or related industries in New 
Jersey which would have warranted enactment 
of racial preferences. Such a conclusion 
was implicitly recognized by the Authority 
itself when it readopted its regulations in 
October 1992. The purpose for using the 
preferences was made clear in the statute; 
it was to ensure that minority and women's 
businesses received a specific percentage of 
the Authority's contracts, not to remedy 
past discrimination.

* * *

There is not now, nor has there ever been, 
identifiable evidence of discrimination by 
the Authority, the casino licensees, their 
contractors or others who benefit by
Authority funding. Obviously, it goes
without saying that before 1984, when the 
Authority came into existence, neither the 
Authority nor its contractors or licensees 
could have been involved in any

-21-



discriminatory conduct in Authority 
projects. There were none.

★ ★ ★

The Authority has also recognized that its 
MBE regulations "do not seek to remedy past 
discrimination and do not assume engagement 
in unlawful discrimination by an applicant, 
contractor or subcontractor." [Da267-68 
(citations omitted).]
Consistent with these findings, Judge Winkelstem 

correctly held that "[wjithout specific evidence of prior 
discrimination, the racial preferences as authorized by N.J.S.A. 
5:12-181 when it was first enacted evidence no more than 'a 
desire to foster equality in society,' which is an insufficient 
basis upon which to establish a set-aside program." Da268, 
citing Adarand, supra, 515 U.S. at 241 (Thomas, J., concurring). 
The Trial Court also rejected the findings of the 1993 
Commission Report as "a sufficient basis upon which to support a 
preference program by the use of racial classifications." Da257- 
58. The Study Commission findings, while arguably indicating 
"discrimination in the construction industry in State bid 
projects," nevertheless did not "specifically study or rely upon 
any statistics concerning minority participation in contracts to 
which the Casino Control Commission, the Authority, the casino 
industry or beneficiaries of Authority funding or guarantees 
were parties." Id.

The findings of the Study Commission, promulgated nine 
years after CRDA's establishment and compiled without reference 
to any data concerning the Authority or the casino industry,

-22-



were neither timely nor relevant to the Legislature's imposition 
of the twenty percent set-aside required by the CRDA Act. 
Consequently, the Trial Court's rejection of that post-enactment 
evidence as sufficient justification for CRDA's set-aside 
provisions is both logical and consistent with Supreme Court and 
Circuit Court analysis of this issue. See Wygant v. Jackson Bd. 
of Educ, 476 U.S. 267, 274 (1986) (race based measures must be 
justified by a "showing of prior discrimination by the 

governmental unit involved") (emphasis supplied); Contractors 
Association of Eastern Pennsylvania Inc., supra, 91 F. 3d. at 
596 (holding that a municipality's race-based remedial measures
can only be j ustified by "identified present or past
discrimination in which it engaged or was a 'passive

participant;' race-based preferences cannot be justified by 
reference to past 'societal' discrimination in which the 

municipality played no material role") (emphasis supplied); Coral 

Construction Co. v. King County, 941 F. 2d 910, 916 (9 th Cir. 
1991) {"the governmental actor enacting the set-aside program 
must have somehow perpetuated the discrimination to be remedied 
by the program")(emphasis supplied). Because CRDA's racial set- 
aside provisions were enacted upon its inception, there is no 
prior history of past discrimination perpetrated or permitted by 
CRDA which would justify the use of set-asides in CRDA's 
administration of its public contracts.

In addition, to the extent that the CRDA enabling 
statute extends the application of set-asides beyond the limits 
of state government in that it authorizes the application of

-23-



set-asides to the casino industry at large (through the 
obligation to apply set-asides to projects which are contracted 
by private entities which receive CRDA funding), the Commission 
Report, which focuses only on actions of state entities, is too 
narrow in scope to justify the use of CRDA's set-asides in 
private casino industry projects funded, but not owned, by CRDA. 
Significantly, in Association for Fairness in Business v. New 
Jersey, 82 F.Supp.2d 353, 361 (D.N.J. 2000) the District Court, 
in deciding to issue a preliminary injunction, held that the 
findings of the Study Commission Report regarding evidence of
discrimination by state agencies in construction contracts was 
of little relevance to the set-aside program applicable to 
casino licensees under the Casino Control Act:

(T)he Commission's mandate was to evaluate 
discrimination by the State against minority 
and women business enterprises, and the 
Commission's conclusions concerning
discrimination were based on an evaluation 
of the State's purchasing practices. The 
Casino Control Act, however, targets 
discrimination by casino licensees, not the 
State. Thus, the Commission's report offers 
little support for the proposition that 
casino licensees have engaged in 
discrimination in a way that justifies the 
set-aside program established by the Casino 
Control Act. Because this report fails to 
establish discrimination on the part of 
casino licensees, the State, in relying on 
it, has failed to establish a compelling

remedying that alleged 
[Id.] '

interest in 
discrimination.
As noted by the Trial Judge, t)he Study Commission

relied upon no data which evidenced any discriminatory conduct

-24-



by the Authority, or any of the casino licensees, their 
contractors, subcontractors, or materialmen involved in any 
Authority owned or financed project." Da 269. Thus, as in 
Association for Fairness, to the extent CRDA's application of 
its preference programs extends beyond government entities to 
private casino industry entities pursuing projects funded by 
CRDA dollars, the limited scope of the Study Commission Report's 
finding of discrimination by the State and its branches is 
inadequate to justify CRDA's extension of its set-asides to 
private entities in the casino industry, under Croson.

B. The Race Based Set-Aside Provisions Of 
The Set-Aside Act Are Unconstitutional 
Because CRDA Cannot Show That The 
Legislature Considered Evidence Of 
Prior Discrimination By The State When 
Enacting The State Set-Aside Act.

As previously discussed, CRDA has argued that its 
imposition of race-based set-asides is authorized by the State 
Set-Aside Act and, thus, that the State is the "relevant entity" 
for analysis of whether CRDA's Set Aside Act was enacted in 
response to specific factual evidence of prior discrimination. 
Even if the Appellate Division was to agree with this position, 
the Set Aside Act would not pass constitutional muster since 
CRDA cannot demonstrate that the Legislature considered factual 
evidence of discrimination by the State prior to or 
contemporaneous with the enactment of the State Set-Aside Act.

-25-



1. The Set-Aside Act Cannot Be 
Sustained Merely On An Assertion 
That It Is Remedial In Nature Or 
On A Generalized Assertion Of 
Discrimination In The "Overall 
Economy."

The Trial Court held that the State Set-Aside Act was 
adopted without any factual evidence of prior discrimination in 
the construction field. Da256. Indeed, the Study Commission 
Report itself noted in its introduction that the State Set-Aside 
program was temporarily suspended after Croson, because it " *** 
had been enacted without the benefit of a full and formal 
evidentiary investigation into the existence of discrimination." 
Da44. Notwithstanding this concession by the Study Commission, 
CRDA challenges Judge Winkelstein's finding, asserting that the 
Court had an obligation to consider the "remedial nature" of the 
Set-Aside Act in light of certain language contained in other 
contemporaneously-enacted statutes. Db37-39. In that related 
statutory language, the Legislature declared that women and 
minorities were "excluded from the mainstream of the overall 
economy" due to a "historical legacy of disregard and 
discrimination." N.J.S.A. 34:lB-47(c). CRDA asserts that
viewing the Set-Aside Act in pari materia to this language 
serves to define that legislation as "remedial in nature;" as 
such, the Authority asserts that the Set Aside Act satisfies the 
Croson requirement of explicit findings of past discrimination 
to justify race-based remedial programs. Db41-42_.

CRDA's argument on this point fails, however, since 
the statement upon which it relies -- that minorities and women

-26-



were "excluded from the mainstream of the overall economy" due 
to a "historical legacy of disregard and discrimination" - is 
precisely the type of generalized, speculative legislative 
proclamation that was rejected by the Supreme Court in Croson as 
an insufficient factual basis for race-based preference 
programs. Indeed, the Supreme Court held that "[w]hile the 
States and their subdivisions may take remedial - action when they 
possess evidence that their own spending practices are 
exacerbating a pattern of prior discrimination, they must 
identify that discrimination, public or private, with some
specificity before they may use race-conscious relief." Croson, 
4 88 U.S. 469, 504. The purpose of this specific finding or 
recognition of discrimination is to allow the Legislature to 
fashion remedial relief narrowly constructed to suit the 
parameters of the observed discrimination. To this end the 
Supreme Court recognized that

a generalized assertion that there has been 
past discrimination in an entire industry 
provides no guidance to the legislative body 
to determine the precise scope of the injury 
it seeks to remedy. It "has no logical 
stopping point." Wygant, supra, at 275, 90 
L. Ed. 2d 260, 106 S.Ct. 1842 (plurality
opinion) . "Relief" for such an ill-defined 
wrong could extend until the percentage of 
public contracts awarded to MBE's in 
Richmond mirrored the percentage of 
minorities as a whole. [Id. at 498 , 102
L.Ed. 2d 854, 109 S.Ct. 706] .
In light of this analysis, the Croson Court rejected 

several alleged factual findings which were offered as 
justification for the remedial measures promulgated by the City

-27-



of Richmond. Specifically, the Court examined the findings that 
"the ordinance declared itself to be remedial" and that "several 
proponents of the measure stated their views that there had been 
past discrimination in the construction industry." With respect 
to these "predicate facts," the Court held that "none of these 
"findings" singly or together, provide the City of Richmond with 
a "strong basis in evidence for its conclusion that remedial 
action was necessary." Id. at 500, citing Wygant, supra, 476 
U.S. at 277 (plurality opinion) . The Court elaborated on this 
issue as follows:

The factfinding process of legislative 
bodies is generally entitled to a 
presumption of regularity and deferential 
review by the judiciary.
But when a legislative body chooses to 
employ a suspect classification, it cannot 
rest upon a generalized assertion as to the 
classification's relevance to its goals. ***
The history of racial classifications in 
this country suggests that blind judicial 
deference to legislative or executive 
pronouncements of necessity has no place in 
equal protection analysis. [Id. at 501.]
According to the standards articulated above, CRDA's

attempt to justify the race-based remedies of the Set Aside Act
-- resting solely on an assertion that the Act is "remedial" and
on a contemporaneous enactment's recognition that women and
minorities were "excluded from the mainstream of the overall
economy" due to a "historical legacy of disregard and
discrimination" -- fails as woefully insufficient. The Croson

Court rejected nearly identical assertions that "the ordinance

-28-



declared itself to be remedial" and "there had been past 
discrimination in the construction industry." Indeed, the 
"findings" offered by CRDA are even more general than those 
cited in Croson; the Legislative assertion that women and 
minorities suffered exclusion, disadvantage and disregard was 
not made with specific reference to the construction industry 
but, rather, referred generally to "the overall economy." 
N.J.S.A. 34:lB-47(c). Accordingly, CRDA cannot claim that the 
Set Aside Act was based on any pre-enactment evidence of 
discrimination sufficient to pass Constitutional muster.

2. In The Absence Of Any Valid Pre- 
Enactment Evidence, The Findings 
Of The Study Commission Report 
Cannot Serve As Sole Evidence Of 
Prior Discrimination By The State 
Sufficient To Satisfy Croson.

Likewise, the findings of the Study Commission Report 
cannot save the State Set-Aside Program from constitutional 
infirmity. That Report, which was promulgated in 1993, eight 
years after the enactment of the State Set-Aside Act, cannot 
serve as an after-the-fact rationalization for a statutory 
scheme which had no evidentiary basis at the time of its 
enactment.

CRDA and amicus NAACP assert that the Trial Court 
erred in not considering the Study Commission Report as evidence 
of prior discrimination by the State sufficient to justify the 
enactment of the Set-Aside Act. While CRDA and its amicus are 
correct that courts have regularly admitted similar post­
enactment evidence of discrimination in support of race-based

-29-



remedies, there is a distinct and dispositive difference between 
finding post-enactment evidence admissible, and finding such 
evidence solely sufficient to demonstrate the Legislature's 
consideration of evidence of prior discrimination. In each of 
the cases admitting post-enactment evidence there has been some 
showing that the Legislature had considered some pre-enactment 
evidence of discrimination which was clarified or amplified by 
the post-enactment evidence submitted. None of the cases cited 
by CRDA or its amicus have relied on post-enactment evidence as 
the sole justification for a race-based remedial scheme. Such a 
position would be radically at odds with the Croson requirement 
that a State "must identify [the] discrimination with some 
specificity before [it] may use race-conscious relief."

The significance of this holding was explicitly 
recognized by the Tenth Circuit Court of Appeals in Concrete 
Works of Colorado, Inc. v. Denver, 36 F.3d 1513 (10th Cir. 1994) 
which opined that while "we do not read Croson's evidentiary 
requirement as foreclosing the consideration of post-enactment 
evidence," such evidence could not be considered alone as 
justification for a race-based program: " [a]bsent any pre­
enactment evidence of discrimination, a municipality would be 
unable to satisfy Croson." Id. at 1521. See, also, Coral 
Construction Co. v. King County, 941 F.2d 910, 920 (9th Cir. 
1991) ("a municipality must have some concrete evidence of 
discrimination in a particular industry before it may adopt a 
remedial program. * * * Thus, any program adopted without some 
legitimate evidence of discrimination is presumptively

-30-



invalid"); Associated Utility Contractors of Maryland v. Mayor, 
83 F. Supp.2d 613, 620-21 (D.Md. 2000) (invalidating city's set- 
aside program on the basis of a total absence of pre-enactment 
evidence of discrimination, and rejecting request to extend case 
to allow post-enactment study to be completed; holding: "The 
Supreme Court holding in Shaw confirms that the plurality 
opinion in Wygant established the standard that pre-enactment 
evidence must provide the "strong basis in evidence" that race- 
based remedial action is necessary"). Here, where the post­
enactment Study Commission Report is the only evidence the State 
has mustered in support of its set-aside program, the absence of 
any showing that the Legislature considered evidence of past 
discrimination at the time of enactment renders the program 
invalid under Croson.

-31-



POINT III
NEITHER THE SET ASIDE PROVISIONS OF CRDA'S 
ENABLING LEGISLATION, NOR THE PROVISIONS OF THE 
STATE SET-ASIDE ACT ARE SUFFICIENTLY NARROWLY 
TAILORED TO SURVIVE STRICT SCRUTINY ANALYSIS

The Supreme Court recognized in Wygant that the 
process of remedying past discrimination may require that 
innocent persons shoulder some of the burden. Wygant, supra, 
476 U.S. at 280-281. However, the Court has also recognized 
that race-based programs must be designed to minimize- if not 
avoid- burdens on non-culpable third parties by requiring that 
remedial efforts be narrowly tailored to address the specific 
discrimination found. See Coral Coast Co. v. King Country, 941

Cir 1991) (citing United States v. Paradise,2d 910, 917 (9th
U. S . 149, 183

scious decreie at
erests, or unne
i vidual s". ) As

legislative efforts to increase the participation of small 
business enterprises and of minority and women-owned contractors 
in the public construction sector. As an organization which 
represents many of the "innocent individuals" affected by set- 
aside programs like the one adopted by CRDA, however, the 
Association has serious concerns about legislative schemes which 
are not narrowly tailored and, therefore, place a heavy burden 
on contractors Moreover, UTCA members, who are required to 
implement and comply with CRDA's set-aside plan, are entitled to

-32-



be furnished with clear parameters and definitions which define 
their obligations under the Program.

To that end, the UTCA agrees with the Trial Court's 
determination that the CRDA Set-Aside Program is not narrowly 
tailored because it relies on differing and contradictory 
definitions of "minority" which are far too broad to be 
constitutionally valid and which create serious confusion 
regarding eligibility for and compliance with the Set-Aside
Program.

A. Both The CRDA Enabling Legislation And 
The State Set-Aside Act Rely On Fatally 
Overbroad Definitions Of "Minorities."

Judge Winkelstein's opinion traced the convoluted 
history of the varying definitions of "minority" presented in 
the CRDA enabling legislation, the Set-Aside Act, and the
various regulations implementing those statutes. Rather than 
recount that history, it is sufficient to note here that after 
the Croson decision, and in reliance on the findings of the 
Study Commission Report, the agencies charged with implementing 
the set-aside programs under the CRDA legislation and the State 
Set-Aside Act adopted amended regulations which were intended to 
remedy the overly broad and conflicting definitions of 
"minority" provided in those statutes and regulations. However, 
the amended regulations still included racial or ethnic groups 
which had not experienced discrimination by the State or its
agencies, as recognized by the Study Commission. More
importantly, despite these changes in the implementing

33-



regulations, the original language of the statutes remained 
unchanged. As a result, both the CRDA Act and the Set-Aside Act 
contain definitions of "minority" which conflict with the 
definitions included in the implementing regulations and which 
are clearly overbroad under Croson and in light of the findings 
of the Study Commission Report.

Thus, as noted by Judge Winkelstein, the regulatory
framework that underlies the CRDA Set-Aside Program forms a 
"hodgepodge of statutory and regulatory definitions." These 
overbroad, ambiguous and conflicting set of categories create an 
unnecessary burden on contractors who work within the public
arena. In light of these circumstances, the policy concerns 
enunciated by our Courts in cases such as Coral Coast Co. v. 
King Country, supra, 941 F.2d at 917, are shared by the UTCA. 
The Association respectfully submits that the impact on public 
works contractors, the constituency which is most affected by
the strictures of the Set-Aside Program, should properly be
considered by this Tribunal, as it was by the Court below.

B. The Legislature Did Not Adequately
Pursue Race-Neutral Measures To Remedy 
Alleged Racial Discrimination Prior To 
The Enactment Of The Set-Aside
Provisions Contained In The CRDA
Enabling Legislation And The Set-Aside 
Act.

As noted in Point I, supra, the facet of the CRDA Set- 
Aside Program which most concerns the UTCA is the failure to 
implement race-neutral measures to increase minority and female 
participation in the public construction sector prior to the

-34-



adoption of- race-based alternatives. Judge Winkelstein's 
articulation of the constitutional implications of that failure 
illuminates the significance of this issue.

Public programs which provide financial aid, 
assistance in the preparation of bid documents, education, 
training and other initiatives all serve to help MBEs and WBEs 
to overcome the difficulties encountered as a result of their 
relatively new entry into established construction markets. 
Initiatives such as the recently established Construction Trade 
Training Council and the Business Opportunity Center serve the 
important public policy of increasing competition, a goal 
embraced by our state's Highest Court. See Terminal, supra, 67 
N.J. at 409; Harms, supra, 137 N.J. at 91.

Unfortunately, these type of steps were not 
implemented by the Authority prior to the establishment of the 
CRDA Set-Aside Program. Indeed, that Program was established 
simultaneously with the creation of the Authority. For this 
reason, there can be no dispute that the Legislature did not 

consider any race-neutral remedies prior to its adoption. 
Consequently, the Trial Court correctly determined that the CRDA 
Set-Aside Program fails to survive strict scrutiny, in part, due 
to that failure. See Opinion at Da31; and see Croson, supra, 488 
U.S. 469 (where the Court discussed city financing for small 
firms as a race neutral means of increasing minority 
participation); and Coral Construction, 941 F.2d at 922 (where 
the county adopted race neutral measures that included annually

-35-



hosting training sessions for small businesses and providing 
information on accessing small business assistance programs).

The UTCA is cognizant of the fact that if the
"relevant entity" for the CRDA Set-Aside Program is deemed to be 
the State, then the issue of consideration of race-neutral 
measures becomes a closer question. As CRDA asserts in its
papers, the State has adopted numerous programs designed to 
support and assist small businesses as well as minority-owned 
and women-owned businesses. See Db23-31. Notably, the
Authority points to the establishment of the Office of Small 
Business Assistance, and the Inter-Agency Procurement Committee, 
both established prior to the enactment of the Set-Aside 
Program. In addition, CRDA cites to the post-enactment creation 
of the New Jersey Development Authority for Small Businesses, 
and the Division of Development for Small Businesses and Women's 
and Minorities' Businesses, as well as the adoption of certain 
race-neutral changes to bonding requirements. The above-cited 
programs and bonding amendments offer assistance to small
businesses and minority-owned and women-owned businesses by 
removing hurdles that prevent effective competition, thereby
expanding the pool of available competitors for public bidding, 
rather than artificially limiting bidding, or excluding certain 
types of firms from competition. The UTCA strongly supports 
these programs, as well as the more recent initiatives adopted 
by the State, inasmuch as they broaden the competitive pool of 
contractors vying for public sector jobs.

-36-



It is apparent, however, that the State has itself 
determined that the programs cited by CRDA in its Brief were 
insufficient to serve the important public objective of 
increasing minority and female participation in the arena of 
public works. Indeed, Executive Order 123, signed by then- 
Governor Whitman on January 30, 2001, notes that the Cabinet 
Task Force on Economic Opportunity issued a preliminary report 
recommending the creation of the Construction Trade Council "to 
facilitate access by members of underrepresented groups to 
employment in the construction trades," as well as the creation 
of the Business Opportunity Center "to function as a business 
access center for New Jersey emerging small businesses." These 
recently adopted measures indicate that the State has 
acknowledged the need to do more to insure full participation in 
the public works sector by MBEs, WBEs and other disadvantaged 
groups and the Association commends these new efforts to achieve 
an important public objective.

The question remains whether the sufficiency and 
efficacy of State efforts to ameliorate any actual 
discrimination that were put in place prior to the establishment 
of the CRDA Set-Aside Program are sufficient to meet the 
constitutional criteria established by Croson. In this regard, 
it should be noted that the present action proceeds from a 
summary judgment motion and, consequently, any factual disputes 
must be resolved against the moving party. Brill v. Guardian 
Life Ins. Co. of America, 142 N.J. 520 (1995).

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In the final analysis, however, regardless of whether 
the race-neutral programs cited constitute sufficient 
consideration of race-neutral measures, the CRDA Set-Aside 
Program is still constitutionally flawed in numerous other 
respects, as previously described, thus justifying the 
affirmance of the Trial Court opinion.

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CONCLUSION

There can be no doubt that the CRDA Set-Aside Program 

and similar initiatives have a profound impact on the ability of 

contractors to freely compete for public works projects. In 

light of the public policy concerns that have been reiterated by 

this State's Highest Court regarding the significance of 

promoting unfettered competition in the arena of public bidding, 

the UTCA respectfully submits that it should be granted leave to 

participate in the within action as amicus curiae. 

Substantively, the Association believes that the Program is 

constitutionally flawed and, therefore, that the opinion below 

should be affirmed.

Respectfully submitted,

LOWENSTEIN SANDLER PC 
Attorney for Amicus Curiae 
Utility and Transportation 
Contractors Association of New 
Jersey, Inc.

Dated: May 22, 2001

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