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May 27, 1977

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Brief Collection, LDF Court Filings. Richmond v JA Croson Company Reply Brief of Appellant, 1988. 7122ee55-c29a-ee11-be36-6045bdeb8873. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/e642278e-b6f6-49d4-bc23-cdf737d3bd50/richmond-v-ja-croson-company-reply-brief-of-appellant. Accessed August 19, 2025.
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(2 La— ^ No. 87-998 In the Supreme fflnurt nf the Unit zb States October Term, 1987 CITY OF RICHMOND, Appellant, J. A. CROSON COMPANY, Appellee. ON APPEAL FROM THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT BRIEF OF THE MINORITY BUSINESS ENTERPRISE LEGAL DEFENSE AND EDUCATION FUND, INC. (“MBELDEF”) AND THE LOUISIANA ASSOCIATION OF MINORITY AND WOMEN OWNED BUSINESSES, INC. (“LAMWOB”) AS AMICI CURIAE IN SUPPORT OF APPELLANT Anthony W. Robinson* President Franklin M. Lee Chief Counsel MBELDEF Suite 200 300 “I” Street, N.E. Washington, D .C . 20002 (202) 543-0040 * Counsel of Record for the Amici Curiae (For Further Appearances, See Reverse Side of Cover) LAMWOB 2920 Earhart Boulevard New Orleans. Louisiana 70125 Of Counsel: H . Russell Frisby, Jr . M elnicove, Kaufm an , W einer, Smouse & Garbis 36 South Charles Street Baltimore, Maryland 21201 (301) 332-8534 A ndrew L Sandler 1440 New York Avenue, N.W . Washington, D.C. 20005 (202) 371-7103 Irwin B. Schwartz 919 Third Avenue 45th Floor New York, New York 10022 (212) 735-3842 Attorneys for Amicus Curiae MBELDEF M arc H. M orial One Poydras Plaza, Suite 1610 639 Loyola Avenue New Orleans, Louisiana 70113 (504) 588-9171 Attorney for Amicus Curiae LAMWOB No. 87-998 In The (tart of % Hnitefr BMtn October Term, 1988 Cit y of R ich m o n d , Appellant, J.A. Croson C o m p a n y , Appellee. On Appeal from the United States Court of Appeals for the Fourth Circuit REPLY BRIEF OF APPELLANT CITY OF RICHMOND Of Counsel: John H. Pickering Wilmer, Cutler & Pickering 2445 “ M” Street, N.W. Washington, D.C. 20037 July 8,1988 John Payton * Mark S. Hersh Michael C. Small Wilmer, Cutler & Pickering 2445 “M” Street, N.W. Washington, D.C. 20037 (202) 663-6000 Drew St. J. Carneal City Attorney Michael L. Sarahan Assistant City Attorney Michael K. Jackson Assistant City Attorney Room 300, City Hall 900 E. Broad Street Richmond, Virginia 23219 (804) 780-7940 Attorneys for Appellant * Counsel of Record W il s o n - Ep e s P r in t in g C o . , In c . - 7 8 9 -0 0 9 6 - W a s h in g t o n , D .C . 2 0 0 0 1 TABLE OF CONTENTS Page TABLE OF A U T H O R IT IE S ....................................... ii INTRODUCTION......................................................................... 1 AR G U M E N T........ .................. 3 I. THE PRINCIPLES ESTABLISHED IN FULLILOVE v. KLUTZNICK ARE FULLY APPLICABLE TO THIS CASE ...... ................ . 3 II. RICHMOND HAS A COMPELLING INTER EST IN ITS REM EDIAL O R D IN A N C E .......... . 7 A . Local Industry Discrimination Is Not “ So cietal Discrimination” And Provides A Proper Predicate For Richmond’s Remedial Ordinance................................................ 7 B. Richmond Had Sufficient Evidence of Local Construction Industry Discrimination To Support Its Remedial Ordinance.................. 10 III. t h e RICHMOND ORDINANCE IS N AR ROW LY TAILORED TO ACH IEVE ITS REM EDIAL P U R P O SE ......................... 15 A. The Ordinance Does Not Unnecessarily Bur den Third Parties................... 15 B. Richmond Selected A Reasonable Means Of Attaining Its Remedial Goal .................. 16 C. The Thirty Percent Minority Subcontracting Requirement Is Flexible And Reasonable.... 18 C O N C LU SIO N .............................................................................. 20 TABLE OF AUTHORITIES CASES Page Blodgett v. Holden, 275 U.S. 142 (1927)............... . 6 Bob Jones University v. United States, 461 U.S. 574 (1983) ________________ ___ ______ ____________ 1 Bolling v. Sharpe, 347 U.S. 497 (1954)..................... 6 Buckley v. Valeo, 424 U.S. 1 (1976)________ ____ 6 Firefighters Local Union No. 178U v. Stotts, 467 U.S, 561 (1984) ___________________ _______ _ 15, 16 Fullilove v. Klutznick, 448 U.S. 448 (1980) ........ passim Hampton v. Mow Sun Wong, 426 U.S. 88 (1976).. 5 Hutchinson Human Relations Commission v. Mid land Credit Management, Inc., 213 Kan. 308, 517 P.2d 158 (1 9 7 3 )................ .............. ................. . 4 Johnson v. Transportation Agency, Santa Clara County, 107 S. Ct. 1442 (1987) ............ ............ . 14,16 Local 28 of Sheet Metal Workers’ International Association v. EEOC, 478 U.S. 421, 106 S. Ct. 3019 (1986) ................................ .................. .......... . 7 Minnesota v. Clover Leaf Creamery Co., 449 U.S 456 (1 9 8 1 )___ _____________ _______________________ 13 Regents of the University of California v. Bakke, 438 U.S. 265 (1978).......................... ......................... . 1 , 5 , 8 Roberts v. United States Jaycees, 468 U.S. 609 (1 9 8 4 )............ ............. ............................ .................. ..... . 5 San Francisco Arts & Athletics, Inc. v. United States Olympic Committee, 107 S. Ct. 2971 (1987) _________________________ __________ ,_____ 6 Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208 (1 9 7 4 )__________ __________ _ 5 Southwest Washington Chapter, National Elec tric Contractors Association v. Pierce County, 100 Wash. 2d 109, 667 P.2d 1092 (1983)____ 4 International Brotherhood of Teamsters v. United States, 431 U.S. 324 (1977) ........ ..................... . 18 United States v. Paradise, 107 S. Ct. 1053 (1987) . .passim United Steel Workers of America v. Weber, 443 U.S. 193 (1979) ...................... ............................ .......... 9 Weinberger v. Wiesenfeld, 420 U.S. 636 (1975).... 6 Wygant v. Jackson Board of Education, 476 U.S. 267 (1986) ..................................................................... passim I l l TABLE OF AUTHORITIES— Continued STATUTES Page Human Rights, Richmond, Va. Code § 17.2 (1975).. 18 LEGISLATIVE MATERIALS H.R. Rep. No. 1791, 94th Cong., 2d Sess. (1 9 7 7 )- 10 BRIEFS Brief Amicus Curiae of the American Civil Lib erties Union et al. in Support of Appellant_____ 6 Brief of Amici Curiae Lawyers’ Committee for Civil Rights Under Law et al. in Support of the Appellant—............................................ ............................ 7 ,18 Brief of the Maryland Legislative Black Caucus as Amicus Curiae in Support of Appellant........ 11 Brief of the Minority Business Enterprise Legal Defense and Education Fund et al. as Amici Curiae in Support of Appellant................................ 9 Brief of the National League of Cities et al. as Amici Curiae in Support of Appellant__________ 4 Brief of the States of New York et al. as Amici Curiae in Support of Appellant.............................. 11 Brief for the United States as Amicus Curiae Sup porting Appellee......................... passim Brief of Amici Curiae the Washington Legal Foundation and the Lincoln Institute for Re search and Education................................................... 14,15 OTHER AUTHORITIES R. Glover, Minority Enterprise in Construction (1977) ...................... 17 The Non-Perpetuation of Discrimination in Pub lic Contracting: A Justification for State and Local Minority Business Set-Asides A fter Wygant, 101 Harv. L. Rev. 1797 (1988)________ 9 U.S. Civil Rights Commission, Selected Affirma tive Action Topics in Employment and Business Set-Asides, Vol. 1 (1 9 8 5 ).......................................... 18 U.S. Bureau of the Census, 1982 Survey of Mi nority-Owned Business Enterprises: Black (1985) ........ ..................... .................................................. 14 I n T h e duurt of tliT States October T e r m , 1988 No. 87-998 Cit y of R ich m o n d , v. Appellant, J.A . Croson Co m p a n y , Appellee. On Appeal from the United States Court of Appeals for the Fourth Circuit REPLY BRIEF OF APPELLANT CITY OF RICHMOND INTRODUCTION Eliminating racial discrimination and its effects is a “fundamental policy” of our Nation,1 and there is today no question that cities and states, as well as the federal government, have the power to implement this policy.2 The exercise of this power is particularly important where racial discrimination has precluded or impaired 1 Bob Jones TJniv. v. United States, 461 U.S. 574, 595 (1983). 2 Regents of Univ. of California v. Bakke, 438 U.S. 265, 307 (1978) (opinion of Powell, J . ) ; id. at 324-25 (opinion of Brennan, White, Marshall and Blackmun, J.J.). 2 minority access to commercial opportunities created by the government itself through its award of public contracts. Appellee and its supporting amici would deny cities and states the power they need to remedy that racial discrimination. On the one hand, they would require leg islatures to sit as courts, obligated to make judicial-like findings of discrimination in order to justify their re medial actions. On the other hand, they would require courts to sit as legislatures, deciding whether affirmative action plans are desirable as policy and reviewing all the details of the plans to determine whether they agree with the legislature about their potential effectiveness. This reflects a fundamental misunderstanding of the appro priate roles of the legislature and the courts in our sys tem of government and demands from state and local legislatures far more than is necessary to ensure the re sponsible use of affirmative action to remedy past dis crimination. Under any defensible level of scrutiny, and under any fair reading of this Court’s precedents, the Richmond ordinance is constitutional. In this reply, appellant City of Richmond responds to the primary points made by appellee and its amici. First, they argue that Fullilove v. KlutznicJc, 448 U.S. 448 (1980), does not apply to this case. Their attempts to distinguish Fullilove are unpersuasive; the principles established there are fully applicable to this case. Second, they characterize the factual predicate for the Richmond ordinance as “ societal discrimination.” That is incorrect. The Richmond ordinance is predicated on local construc tion industry discrimination that, as in Fullilove, has been sufficiently identified to support remedial action. Third, they attack the evidence of construction industry discrimination. Those attacks reflect a misunderstanding of the evidentiary issues in this case. Fourth, they argue that the Richmond ordinance places a great burden on non-minority contractors. This argument is at odds with 3 Fullilove, which establishes that the burden is acceptable. Fifth, they contend that Richmond was required to ex haust alternatives before resorting to an affirmative ac tion plan. This requirement is unsupported by policy or precedent, and in any event Richmond did consider alternatives. Finally, they criticize the thirty percent minority subcontracting requirement as unreasonable and arbitrary. This criticism is unfounded. The thirty per cent figure was reasonable in light of the virtual absence of minority participation in city contracts, as well as the waiver provision in the ordinance and the limited dura tion of the remedy.3 ARGUMENT L t h e p r i n c i p l e s e s t a b l i s h e d i n f u l l il o v e v. KLUTZNICK ARE FULLY APPLICABLE TO THIS CASE Fullilove v. Klutznick established that there is a com pelling governmental interest in creating for minority businesses opportunities in public contracting that had been impaired or foreclosed by the effects of past dis crimination.4 More particularly, Fullilove upheld the use of a race-conscious set-aside plan upon evidence that minority-owned businesses were receiving only a neglig ible portion of public construction contracts as a result of racial discrimination in the construction industry. The 8 Appellee also contends that the ordinance was inflexibly and unfairly applied to it. Brief of Appellee at 3. The district court decided this issue in the City’s favor after hearing testimony and taking other evidence. See J.S. Supp. App. 209-15. It explicitly found that a minority business enterprise, Continental, was available to perform on the contract and was not taking advantage of the ordinance to charge excessive prices. J.S. Supp. App. 231, n.20. The court concluded that the City’s decision to deny appellee’s waiver request and re-bid the contract “was not only reasonable, but ap pears to have been absolutely correct.” Id. 4 448 U.S. at 475-78; id. at 508, 515 (Powell, J., concurring). 4 attempts of appellee and its amici to limit the clear prec edential value of Fullilove are strained and unpersuasive. They contend that Fullilove concerned only the power of Congress and has no application to states or localities.® Although Chief Justice Burger did state that no organ of government has more comprehensive remedial powers than Congress, 448 U.S. at 483 (plurality opinion), noth ing in Fullilove indicates that only Congress may remedy the eifects of discrimination on public contracting. The focus on congressional power served two purposes, neither of which confines the principles established in Fullilove to federal affirmative action programs. First, the discussion of congressional power was neces sary because the Court could not uphold the federal set- aside unless it found that Congress was exercising some authority granted to it under the Constitution. 448 U.S. at 473-80 (plurality opinion). A similar constitutional analysis is unnecessary here, because state and local governments have the authority to remedy discrimina tion pursuant to their police powers, subject to the re straints of state law and the Fourteenth Amendment.5 6 The district court found that Richmond’s City Council had the authority under state law to enact its ordinance,7 and the court of appeals did not disturb this finding. 5 See, e.g., Brief for the United States as Amicus Curiae Sup porting- Appellee at 27-28 (hereinafter “ Brief for the United States” ). 6 See, e.g., Southwest Washington Chapter, Nat’l Elec. Contrac tors Ass’n v. Pierce County, 100 Wash. 2d 109, 123, 667 P.2d 1092, 1099 (1983) (en bane); Hutchinson Human Relations Comm’n v. Midland Credit Mgmt., Inc., 213 Kan. 308, 311-12, 517 P.2d 158, 162 (1973). Indeed, remedying identified discrimination in local indus tries is a problem more amenable to solutions at the state and local level than at the federal level. See Brief of the National League of Cities et al. as Amici Curiae in Support of Appellant at 10-14, 7 J.S. Supp. App. 141-154, 5 The second reason for the discussion of congressional power in Fullilove was to emphasize that because Con gress is a legislative body, its remedial powers are broader than those of courts and other non-legislative bodies. Chief Justice Burger stated: “ Here we are not dealing with a remedial decree of a court but with the legislative authority of Congress.” 448 U.S. at 480 (plu rality opinion). Of course, a national legislature neces sarily has more comprehensive remedial powers than a local one, in the sense that only it may legislate on a national scale. But a local legislature is still a legisla ture; like Congress, its role is “ to make policy rather than to apply settled principles of law.” 8 Where, as here, a local legislature has acted to remedy the effects of local construction industry discrimination on its own public works program, Fullilove provides a highly relevant prec edent for such action. The United States also suggests that Fullilove is in apposite here because there are greater equal protection constraints on state and local governments than on the federal government.9 This argument directly contradicts the well-established principle that the reach of the equal protection guarantee of the Fifth Amendment is co 8 Fullilove, 448 U.S. at 502 (Powell, J., concurring). See also Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208, 221 n.10 (1974) ( “ The legislative function is inherently general rather than particular” ). 9 See Brief for the United States at 27-28. The United States ar gues that overriding national interests” allow Congress to enact re medial race-preferential legislation that would be impermissible as state or local enactments, citing Hampton v. Mow Sun Wong, 426 U.S. 88 (1976). Hampton is inapplicable here because it involved the authority to control immigration, which is “vested solely in the Federal Government, rather than the States.” Hampton, 426 U.S. at 101 n.21. In contrast, state and local governments have “a legiti mate and substantial interest in ameliorating, or eliminating where feasible, the disabling effects of identified discrimination.” Bakke, 438 U.S. at 307 (opinion of Powell, J.). See also Roberts v. United States Jaycees, 468 U.S. 609, 624 (1984). 6 extensive with that of the Fourteenth.10 The Court has found no reason to hold the states to a higher constitu tional standard than the federal government.11 12 In fact, the Fvllilove plurality led by Chief Justice Burger held the federal government to a very high stand ard. It stressed that while reviewing an act of Congress is a “delicate duty,” 13 “ [a]ny preference based on racial or ethnic criteria must necessarily receive a most search ing examination to make sure that it does not conflict with constitutional guarantees.” 448 U.S. at 491. It explicitly stated that the federal plan survived even the strictest standard of judicial review articulated in Bakke. Id. at 492. Justice Powell wrote separately in Fvllilove to emphasize that the federal set-aside plan was constitu tional “under the most stringent level of review.” Id. at 496 (Powell, J., concurring).113 Finally, the United States attempts to limit Fullilove on the ground that it involved only a facial challenge to the federal plan. It argues that Fullilove left open the question of whether an affirmative action plan may be applied to those who are not shown to be actual victims 10 See, e.g., San Francisco Arts & Athletics, Inc. v. United States Olympic Committee, 107 S. Ct. 2971, 2984 n.21 (1987); United States v. Paradise, 107 S. Ct. 1053, 1064 n.16 (1987) (plurality opinion); Buckley v. Valeo, 424 U.S. 1, 93 (1976); Weinberger v. Wiesenfeld, 420 U.S. 636, 638 n.2 (1975); Bolling v. Sharpe, 347 U.S. 497, 499 (1954). 11 Bolling v. Sharpe, 347 U.S. at 500. 12 448 U.S. at 472 (plurality opinion) (quoting Blodgett v. Holden, 275 U.S. 142,148 (1927)). 13 While the Minority Business Utilization Plan also survives strict scrutiny, appellant submits that an intermediate level of scrutiny is more appropriate for race-conscious remedial legislation. See Brief of Appellant at 17-18. See also Brief Amicus Curiae of the American Civil Liberties Union et al. in Support of Appellant at 6-17. 7 of discrimination. Brief for the United States at 26. However, the Court since has answered this question in the affirmative. In the Sheet Metal Workers case, six members of the Court agreed that race-conscious relief may benefit individuals who are not the actual victims of discrimination.114 As Justice O’Connor observed in Wy- gant v. Jackson, Board of Education, the Court “ is agreed that a plan [for affirmative action] need not be limited to the remedying of specific instances of identified discrim ination . . .” 115 II. RICHMOND HAS A COMPELLING INTEREST IN ITS REMEDIAL ORDINANCE A. Local Industry Discrimination Is Not “Societal Dis crimination” And Provides A Proper Predicate For Richmond’s Remedial Ordinance As Richmond argued in its opening brief to this Court, the City was not required to present evidence of its own discrimination in order to justify its remedial ordinance. See Brief of Appellant at 33-38. Although appellee and some of its amici have disagreed with this position, they have offered no principled reason that a city may rem edy only its own discrimination. The United States has agreed with Richmond that “ it is permissible for a state or local government, in appropriate circumstances, to seek to remedy unlawful discrimination by others.” 14 * 16 * 18 14 Local 28 of Sheet Metal Workers’ Int’l Ass’n v. EEOC, 106 S. Ct. 3019, 3034, 3054 (1986) (plurality opinion); id. at 3054 (Powell, J., concurring-) ; id. at 3062 (White, J., dissenting). 1,5 Wygant v. Jackson Bd. of Educ., 476 U.S. 267, 287 (1986) (O’Connor, J., concurring in part and concurring in the judgment). 18 Brief for the United States at 13. See also Brief of Amici Curiae Lawyers’ Committee for Civil Rights Under Law et al. in Support of the Appellant at 8-13 (arguing that limiting states and localities to remedying identified discrimination reflects a balance of competing interests, and that further limiting them to remedying only their own discrimination is unnecessary and upsets this balance). 8 The central issue is not whether the City perpetrated the discrimination supporting its remedial ordinance, but whether, as the United States argues, that discrimination is so amorphous as to constitute an inadequate basis for remedial action. In other words, assuming that “ societal discrimination” alone does not constitute an adequate predicate for a government’s affirmative action plan,1'7 the question is whether the discrimination in Richmond’s local construction industry constitutes “ societal discrim ination.” Based on Fullilove and other precedents of this Court, the answer must be no. While this Court has never actually defined the term “ societal discrimination,” its meaning is discernible. As the United States points out,118 the term has been fea tured most prominently in the opinions authored by Jus tice Powell. In Bakke, Justice Powell characterized “ so cietal discrimination” as “an amorphous concept of in jury that may be ageless in its reach into the past.” 438 U.S. at 307. Permitting it to serve as a basis for remedial action, he stated, would turn the affirmative action remedy “ into a privilege that all institutions throughout the Nation could grant at their pleasure to whatever groups are perceived as victims of societal dis crimination.” Id. at 310. In Wygant, Justice Powell continued in this vein. He stated: “ No one doubts that there has been serious racial discrimination in this coun try. But as the basis for imposing discriminatory legal remedies that work against innocent people, societal dis crimination is insufficient and over-expansive.” 476 U.S. at 276 (plurality opinion) (emphasis in original). Indeed, all discrimination that has occurred in our society could be said to be part of societal discrimination. 17 18 17 A plurality of this Court so stated in Wygant, 476 U.S. at 276, but the question has not been decided by a majority of the Court. 18 See Brief for the United States at 15. 9 Only when it is “ identified” does it become something more. See Fullilove, 448 U.S. at 497 (Powell, J., con curring). In other words, societal discrimination simply means discrimination that has not been identified with any degree of particularity. As Fullilove makes clear, an identified pattern of discrimination in a particular industry does not constitute societal discrimination.11® Like Congress, the Richmond City Council did not predicate its legislation on general discrimination within our society and leave it at that. It had ample evidence of actual discrimination in its local construction indus try. See infra at 10-14. The discrimination that the City identified was not a collection of “ discrete and isolated decisions,” 00 but a pattern of intentional behavior de signed to ensure whites a superior position in the indus try. There is nothing amorphous about the systematic exclusion of blacks from the construction trades,01 or the 19 20 21 19 Justice Powell did not consider the discrimination at issue in Fullilove to be “societal.” He explicitly upheld the federal plan as a remedy for “ the continuing effects of past discrimination identi fied by Congress.” 448 U.S. at 496 (footnote omitted). He also recognized that the discriminatory activities could not be expected to be “ identified with the exactitude expected in judicial or admin istrative adjudication.” Id. at 506. See also Note, The Non- Perpetuation of Discrimination in Public Contracting: A Justifica tion for State and Local Minority Business Set-Asides After Wygant, 101 Harv. L. Eev. 1797, 1805-06 (1988). 20 Brief for the United States at 17. 21 “Judicial findings of exclusion from crafts on racial grounds are so numerous as to make such exclusion a proper subject for judicial notice.” United Steelworkers of Am. v. Weber, 443 U.S. 193, 198 n.l (1979). Congress found that the exclusion of minorities from the construction trades had prevented them from gaining experience in the construction industry. See Fullilove, 448 U.S. at 511-12 (Powell, J., concurring). See also Brief of the Minority Business Enterprise Legal Defense and Education Fund et al. as Amici Curiae in Support of Appellant at 10-12 (“ Pervasive employment discrimination in the construction trades has prevented minorities from following the traditional path from laborer to entrepreneur” ) . 10 purposeful maintenance of a “business system which has traditionally excluded measurable minority participa tion.” 22 23 The effects of this discrimination, the virtual absence of blacks from city contracting and from Rich mond’s major construction trade associations— the main stream of the construction industry— are also quite con crete, as is the City’s role in perpetuating those effects through its award of city contracts. In short, the City was not trying to remedy discrimi nation in society generally, but was addressing the spe cific problem of discrimination in a local industry and its effects on the City’s own public works program. The discrimination that it sought to remedy was no less “ iden tified” than that supporting the federal plan in Fullilove. A city must be permitted to take remedial action in such circumstances. B. Richmond Had Sufficient Evidence Of Local Con struction Industry Discrimination To Support Its Remedial Ordinance Appellee and supporting amici spend a substantial por tion of their briefs attempting to pick apart the evidence of construction industry discrimination supporting the Richmond ordinance.08 In so doing, they reveal their mis understanding of the evidentiary issues in this case. 22 H.R. Rep. No. 1791, 94th Cong-., 2d Sess. 182 (1977) (quoted in Fullilove, 448 U.S. at 466 n.48 (plurality opinion) and at 505 (Powell, J., concurring)). 23 Appellee suggests that the idea that the Richmond ordi nance was a remedy for construction industry discrimination is being raised now for the first time. See Brief of Appellee at 10 n.3, 12. This is untrue. The district court explicitly upheld the ordinance as a remedy for the “present adverse effects of past discrimination in the construction industry.” J.S. Supp. App. 163. In addition, the City Attorney stated at the City Council hearing that the City was relying on a Supreme Court decision (Fullilove) that had permitted remedial legislation based on industry discrimi nation. J .A. 15. The City’s briefs in the lower courts also refer to industry discrimination. See, e.g., Defendant’s Brief in Support of Motion for Partial Summary Judgment at 32, 34. 11 The central evidentiary question is not whether there has been a factual finding of discrimination of the sort necessary to prevail on a discrimination claim, but whether the City had “ sufficient evidence to justify the conclusion that there has been prior discrimination.” 24 25 This evidentiary requirement reflects the well-settled principle that legislatures, whether they be local, state or federal, are not expected to act like courts. In reviewing the sufficiency of the evidence of discrimination in Fulli- love, for example, this Court stressed that “ Congress, of course, may legislate without compiling the kind of ‘rec ord’ appropriate with respect to judicial or administra tive proceedings.” 215 The “ sufficient evidence” requirement should be ap plied in light of its purpose, which is to ensure that an affirmative action plan that purports to be remedial is in fact a response to discrimination, rather than an attempt to use racial classifications to achieve racial balance for its own sake or for some other impermissible purpose. Accordingly, a government need only have evidence of discrimination sufficient to ensure that its plan is truly remedial and need not prove specific acts of discrimina tion. The evidence supporting Richmond’s ordinance eas ily satisfies this test. Appellant has never contended that any one fact con clusively proves that there has been discrimination in 24Wygant, 476 U.S. at 277 (plurality opinion). See also id. (“ a strong basis in evidence” is needed); id. at 286 (O’Connor, J., con curring in part and concurring in the judgment) (government needs “ firm basis to believe that remedial action is required” ). 25 448 U.S. at 478 (plurality opinion). See also id. at 502 (Powell, J., concurring) (“ Congress is not expected to act as though it were duty bound to find facts and make conclusions of law” ). See also Brief of the States of New York et al. as Amici Curiae in Support of Appellant at 7; Brief of the Maryland Legislative Black Caucus as Amicus Curiae in Support of Appellant at 21-28. 12 Richmond’s local construction industry. Conceivably, the fact that a city half black had been awarding more than 99 percent of its construction contracts to white-owned contractors could be due to other causes.26 27 Similarly, the fact that Richmond’s chapter of the Associated General Contractors counted no blacks among its 130 members, and the fact that other major trade associations also had very few or no black members, may not by themselves necessarily reflect industry discrimination. It is also theoretically possible that the well-known and well- documented history of discrimination in the nation’s con struction industry127 somehow has not infected Richmond. When these facts are viewed as a whole, however, the conclusion that there has been racial discrimination in Richmond’s local construction industry is unavoidable. The City Council did not enact the Minority Business Utilization Plan based on speculation or assumptions about past discrimination. It -was familiar with the his 26 This is not, however, because the statistic does not reflect the number of city contracting dollars reaching minority firms through subcontracts, as appellee suggests. See Brief of Appellee at 13. As the district court found, see J.S. Supp. App. 167-69, there is no reason to believe that minority firms were faring much better on subcontracts. Appellee’s statement that white prime contractors in fact were making significant use of minority subcontractors is misleading. Brief of Appellee at 8. Richmond’s City Manager did state at the public hearing that overall minority participation in city contracts was 7 or 8 percent, but he was referring to all city contracts, not construction contracts, J.A. 16. Similarly, this Court should give no weight to appellee’s reference to unidentified documents not in the record of the case that it claims show that minority firms were awarded 10.5 percent of the City’s construction purchase orders (under $10,000) during an unspecified time period. Brief of Ap pellee at 10 n.3. Even if the represented fact were in the record, it is irrelevant since it would not change the fact that minority firms were receiving less than one percent of the more valuable city construction contracts, 27 See Brief of Appellant at 23-25 & n.38. 13 tory of race relations in Richmond generally and with the local construction industry in particular. The City Coun cil knew that discrimination in the local construction in dustry substantially had foreclosed minority access to city construction contracts. While the need for judicial review of race-conscious legislative action is clear, a legislature’s view of facts should be upheld if it is so obviously reasonable and supported by the record.38 Appellee also fails to recognize that the critical stage for establishing an affirmative action plan’s factual pred icate is when the plan is challenged in court;28 29 appellee erroneously treats the City Council’s hearing as though it were the entire record in the case.30 Moreover, appellee does not appreciate that it bears the burden of proof in challenging Richmond’s remedial plan. Although the gov ernment must present evidence of discrimination to sup port its plan, it does not bear the ultimate burden of per suasion: “ [I]t is incumbent upon the non-minority [plaintiffs] to prove their case; they continue to bear the ultimate burden of persuading the court that the [gov ernment’s] evidence did not support an inference of prior discrimination and thus a remedial purpose.” 31 28 See Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 470 (1981) (courts should not “ substitute their evaluation of legislative facts for that of the legislature” ) . 29 Wygant, 476 U.S. at 277 (plurality opinion). See also id. at 286 (O’Connor, J., concurring in part and concurring in the judgment). 30 Appellee ignores the fact that the City Council’s public hear ing was just the final step in the process by which the Minority Business Utilization Plan became law. For example, it incorrectly suggests that prior to the hearing the City Council members had no statistics on minority participation in city construction contracts. Brief of Appellee at 8. In fact, prior to the public hearing council members were well aware of the negligible number of contracts awarded to minority firms and were involved in developing the remedial plan with the City Attorney. J.A. 26-27. 31 Wygant, 476 U.S. at 293 (O’Connor, J., concurring in part and concurring in the judgment). See also id. at 277-78 (plurality 14 One amici group also would like to rewrite the facts of this case. The Washington Legal Foundation and the Lincoln Institute have questioned the previously undis puted fact that the number of minority contractors in Richmond is “quite small.” J.S. App. 7a. They have attempted to introduce into the record statistics of the United States Census Bureau indicating that in 1982 there were 144 black-owned construction firms in Rich mond.* 32 They fail to mention, however, that the same statistical table from the Census Bureau survey indicates that only 30 of those 144 “ firms” had paid employees, and that the gross annual sales and receipts of the 144 firms totaled only $3.3 million, or less than $24,000 per “ firm.” Even the 30 firms with paid employees had only 77 em ployees among them and averaged gross receipts of only $70,000 annually.33 The Census Bureau information thus tends to confirm what the City has known all along: that there are minority-owned construction firms in Rich mond, but that most are small, struggling operations that are outside the mainstream of the local construction in dustry and have been precluded from competing with more established firms for city contracts.34 opinion) ; Johnson v. Transportation Agency, Santa Clara County, 107 S. Ct. 1442, 1449 (1987). 32 Brief of Amici Curiae the Washington Legal Foundation and the Lincoln Institute for Research and Education at 9-10 (here inafter “ Brief of the Washington Legal Foundation” ). 33 U.S. Bureau of the Census, 1982 Survey of Minority-Owned Business Enterprises: Black at 88 (1985). 34 The Washington Legal Foundation and the Lincoln Institute also suggest that the fact that minority businesses received only .67 percent of the value of city construction contracts is misleading because minority firms might have received a large number of small contracts, while white-owned firms received a few large con tracts that would skew the statistics. See Brief of the Washington Legal Foundation at 15. They are incorrect. Had they reviewed the list of the $124 million in construction contracts that Richmond awarded between 1978 and early 1983, which is part of the record 15 III. THE RICHMOND ORDINANCE IS NARROWLY TAILORED TO ACHIEVE ITS REMEDIAL PUR POSE A. The Ordinance Does Not Unnecessarily Burden Third Parties Appellee and its amici claim that the ordinance unduly burdens non-minority contractors. Their argument is in consistent with this Court’s precedents.35 36 White con tractors are not like the white teachers laid off in Wygant, or the white firefighters discharged in the Stotts case.88 They do not have a legitimate proprietary interest in receiving any particular public contract, or for that matter, in maintaining their existing market share of in this case, they would have known that there were 215 contracts awarded, that 14 were for more than $1 million, and that these 14 contracts accounted for approximately $65 million of the $124 million total, or approximately half. See Def. Ex. D. This means that even if contracts over $1 million are not considered, minority firms still received well under two percent of the City’s construction contracts. Amici Washington Legal Foundation and Lincoln Institute also state that it is their “understanding that the current experience under the Richmond plan is that in order to satisfy the 30 percent set-aside provision, there is extensive use of minority firms located in Atlanta and Philadelphia.” Brief of the Washington Legal Foun dation at 22. Not only is this not in the record, it is erroneous, 35 To support its argument that the ordinance “ imposefs] an unduly harsh competitive burden on non-minority contractors,” ap pellee states that it was denied the ability to perform the work on the public contract on which it had bid because of the City’s sub contracting requirement. Brief of Appellee at 28-29. This ignores the fact that appellee simply could have re-bid on the contract. See supra note 3. In addition, it conflicts with this Court’s recognition that “ [a]s part of this Nation’s dedication to eradicating racial discrimination . . . innocent persons may be called upon to bear some of the burden of [a race conscious] remedy.” Wygant, 476 U.S. at 280-81 (plurality opinion). 36 Firefighters Local Union No. 1784 v. Stotts, 467 U.S. 561 (1984). 16 public contracts. Thus, the ordinance “unsettle [s] no legitimate firmly rooted expectation[s].” 37 In addition, the ordinance does not single out any in dividual non-minority contractor. The impact of the or dinance is “ limited and so widely dispersed that its use is consistent with fundamental fairness.” Fullilove, 448 U.S. at 515 (Powell, J., concurring). In fact, the Wy- gant plurality contrasted the indirect “ light burden” imposed on white contractors by the comparable minor ity set-aside requirement in Fullilove with the heavy bur den of the layoffs that fell directly on white teachers in Wygant. 476 U.S. at 282-83.®8 B. Richmond Selected A Reasonable Means Of Attain ing Its Remedial Goal The United States contends that before resorting to the ordinance the City was required to show that “non-race- specific remedies ha[d] been or clearly would [have] been unavailing,” and that such alternatives were in fact available to the City. Brief for the United States at 21. It is wrong on both counts.39 37 Johnson, 107 S. Ct. at 1455. 38 The United States’ argument that the ordinance “may require the layoff of innocent workers” is strained. Brief for the United States at 23. It offers no reason to believe that the ordinance will in fact have such a direct impact on non-minorities. 38 The United States’ suggestion that the availability of alterna tives is the “critical factor” in the “narrowly tailored” analysis also is unsupported. Brief for the United States at 21. If one factor has been the most telling, it is not the availability of alternatives, but the impact of race-conscious relief on third parties. Indeed, this proved to be the dispositive factor in the only two decisions of this Court during this decade striking down affirmative action plans. See Wygant, 476 U.S. at 278, 283-84 (plurality opinion); id. at 294 (White, J., concurring); Stotts, 467 U.S. at 574-76, 578- 79. See also Paradise, 107 S. Ct. at 1076 (Powell, J., concurring) ( “particularly important” that the race-conscious measure did not unduly burden innocent whites). 17 The United States’ proposed requirement would strip the City of any discretion in selecting an appropriate remedy for identified discrimination. Even under strict scrutiny, this Court has not “ in all situations ‘required remedial plans to be limited to the least restrictive means of implementation. . . .’ ” Paradise, 107 S. Ct. at 1073 (plurality opinion) (quoting Fullilove, 448 U.S. at 508 (Powell, J., concurring)). Instead, the question of alter native remedies is viewed in conjunction with the other factors that comprise the narrowly tailored test. Further more, the availability of alternatives bears on the ques tion of whether the means actually employed were “neces sary.” See Paradise, 107 S. Ct. at 1067 (plurality opinion). Therefore, although “ less intrusive means might serve the ends, [the] choice of remedy should be upheld . . . if the means selected are equitable and reasonably necessary to the redress of identified discrimination.” Fullilove, 448 U.S. at 510 (Powell, J., concurring). Richmond’s ordinance not only has a minimal impact on third parties, see supra at 15-16, but it is a reasonable means of remedying the identified problem. The problem the City faced was that minority contractors had been excluded from the mainstream of the construction indus try and were not participating in public contracting. The ordinance was designed to team up minority firms as subcontractors with established white-owned firms. This served to remove some of the practical obstacles that had kept minority firms out of public contracting, such as access to financing. It also was designed to give minority businesses experience in public contracting, which would familiarize them with the contracting system and provide them with an opportunity to develop a track record.40 This approach was particularly appropriate because “ the subcontracting system offers entrepreneurs a training 40 See R. Glover, Minority Enterprise in Construction 73 (1977) ( “a contractor can build his business through public work” ). 18 ground in which to develop the skills necessary to become a successful contractor.” 41 The City did consider alternatives. Based on its past experience, however, the City determined that these meas ures either had not been or would not be efficacious. Prior to enacting the ordinance, the City had passed legislation banning discrimination in its public contracting.42 43 In ad dition, as the district court found, minority businesses had been receiving different kinds of federal, state and local assistance, but “ continued to participate in minis cule proportion as prime contractors in the City’s con struction contracts. . . .” J.S. Supp. App. 193. The dis trict court determined that the City was aware of “ other governmental efforts at various levels to promote minor ity business development,” but considered a minority sub contracting requirement to be the most appropriate means to address its problem. Id. at 194. C. The Thirty Percent Minority Subcontracting Re quirement Is Flexible And Reasonable Appellee and its amici criticize the thirty percent sub contracting requirement as arbitrary and unreasonable. Their criticism is unfounded. The thirty percent figure “necessarily involve [d] a degree of approximation and imprecision.” 413 However, it would not have been sensible for the City to tie the subcontracting requirement to the 41 U.S. Civil Rights Commission, Selected Affirmative Action Topics in Employment and Business Set-Asides, Vol. 1, at 90 (1985) (testimony of John W. Sroka, Executive Director, Occupational Divisions of the Associated General Contractors of America). 42 Human Rights, Richmond, Va. Code § 17.2. (1975) (attached as Appendix No. 2 to Brief of Amici Curiae Lawyers’ Committee for Civil Rights Under Law et al.). This ordinance banned both discrimination in the award of public contracts and employment discrimination by public contractors. 43 Paradise, 107 S. Ct. at 1072 (quoting International Brotherhood of Teamsters v. United States, 431 U.S. 324, 372 (1977)). 19 number of minority contractors in Richmond, as the United States argues,44 since that number was artificially low because of discrimination. J.S. Supp. App. 167. It was reasonable for the City to conclude that some greater number of minorities should and would have participated in public contracts but for industry discrimination.415 The thirty percent figure represents a “ halfway” mark between the minority population of Richmond and the existing number of minority contractors doing business with the City, and thus parallels the approach adopted by Congress and upheld by this Court in Fullilove. 448 U.S. at 513-14 (Powell, J., concurring). Furthermore, the thirty percent subcontracting re quirement is not rigid. The inclusion of a provision per mitting the requirement to be lowered or waived in dicates that the thirty percent figure “ contains signifi cant elements of flexibility . . . .” Paradise, 107 S. Ct. at 1076 (Powell, J., concurring). In addition, the lim ited duration of the subcontracting requirement enhances its reasonableness. 44 Brief for the United States at 22. 46 The United States attacks the ordinance as overbroad because it includes groups such as Aleuts and Eskimos as eligible minori ties. Brief for the United States at 22. This point is irrelevant as a practical matter, however, since such groups are highly unlikely actually to benefit from the plan, 20 CONCLUSION For the reasons stated herein and in appellant’s open ing brief, this Court should reverse the decision of the court of appeals and uphold the constitutionality of Rich mond’s Minority Business Utilization Plan. Respectfully submitted, Of Counsel: John H. Pickering Wilmer, Cutler & Pickering 2445 “ M” Street, N.W. Washington, D.C. 20037 July 8,1988 John Payton * Mark S. Hersh Michael C. Small W ilmer, Cutler & Pickering 2445 “ M” Street, N.W. Washington, D.C. 20037 (202) 663-6000 Drew St . J. Carneal City Attorney Michael L. Sarahan Assistant City Attorney Michael K. Jackson Assistant City Attorney Room 300, City Hall 900 E. Broad Street Richmond, Virginia 23219 (804) 780-7940 Attorneys for Appellant * Counsel of Record TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES............. ii INTEREST OF AMICI CURIAE ........ 1 SUMMARY OF ARGUMENT ............... 3 ARGUMENT ......................... 7 I. THE COURT OF AP PEALS DISREGARDED THE SIGNIFICANT AND COMPELLING GOVERNMENTAL PUR POSES SERVED BY MINORITY BUSINESS OPPORTUNITY PRO GRAMS SUCH AS THE MBU P L A N ................. 7 A. Readily Iden tifiable Pri vate and Pub lic Discrimi nation Has Impaired Mi nority Busi nesses' Access To Public Contracting Opportunities ........ 7 B. Minority Busi ness Opportu nity Programs Seek to Remedy Procurement Practices PAGE Which Perpetu ate the Ef fects of Dis crimination . . . . . . 13 II. RICHMOND'S MBU PLAN IS CONSTITU TIONAL ................... 25 A. Richmond Had A Compelling Interest In Remedying Discrimination In Construc tion Contract ing . . . . .......... 26 B. The MBU Plan Is Narrowly Tailored to Remedy Dis crimination In Construct ion Contracting in R i c h m o n d ............. 34 III . IF THIS COURT AFFIRMS THE FOURTH CIRCUIT THE PRAC TICAL RESULT WILL BE TO RENDER MI NORITY BUSINESS OPPORTUNITY PRO GRAMS INEFFECTIVE........ 3 9 CONCLUSION 43 1 X 1 TABLE OF AUTHORITIES CASES PAGE(S) Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975)....................... 37 Anderson v. Bessemer City, 470 U.S. 564 (1985) . . . . . 30,31 Associated General Con tractors of California v. City and County of San Francisco, 813 F.2d 922 ( 9th Cir. 1 9 8 7 ) .......... 2 Bradley v. School Board of Richmond, Virqinia, 462 F.2d 1058 (4th Cir. 1972) ....................... 33 Dothard v. Rawlinson, 433 U.S. 321 (1977) 7 .......... 29 Fullilove v. Klutznick, 448 U.S. 448 ( 1 9 8 0 ) .......... passim Hazelwood School District v. United States, 433 U.S. 299 ( 1 9 7 7 ) ............. 27 Icicle Seafoods, Inc, v. Worthinqton, 475 U.S. 709 ( 1986)................... 31 Int'l Brotherhood of Teamsters v. United States, 431 U.S. 324 ( 1977) . . ................. 35 IV CASES PAGE(S ) J .A. Croson Co. v. City of Richmond, 822 F.2d 1355 (4th Cir. 1987) . . . . . . . 14, 32, 41 Johnson v. Transportation Agency, Santa Clara County, California, 107 S. Ct. 1442 (1987).......... 39, 41 Local 28 of Sheet Metal Workers' International Association v. E.E.O.C., 478 U.S. 421 (1986) . . . 10 McDaniel v. Barresi, 402 U.S. 39 (1971) ............. 28 Michigan Road Builders Association, Inc, v. Mi 11iken, 571 F. Supp. 173 (E.D. Mich. 1983) . . . . 12 Pullman-Standard v. Swint, 456 U.S. 273 (1982) T". . . . 30 Regents of the University of California v. Bakke, 438 U.S. 265 (1978) T . . . . 26 Rogers v. Lodge, 458 U.S. 613 ( 1982) ................. 30 South Florida Chapter of the Associated General Contractors of America, Inc, v. Metropolitan Dade County, Florida, 723 F.2d 846 (11th Cir.) . . . 13 V CASES PAGE(S) Tennessee Asphalt Co. v. Farris, No. 87-5588 (6th Cir. argued Mar. 31, 1988) ............. 2 Texas Dept, of Community Affairs v. Burdine, 450 U.S. 248 (1981) 7 . . . . 35 Toney v. Block, 705 F.2d 1364 (D.C. Cir. 1983) . . . . 35 United Jewish Orqaniza- tions of Wi11iamsburqh, Inc. v. Carey, 430 U.S. 144 (1977) .......... 28, 37 United Steelworkers v. Weber, 443 U.S. 193 (1979) ................. 10, 39 Wyqant v. Jackson Board of Education, 476 U.S. 267 (1986) ................. passim STATUTES AND LEGISLATIVE, ADMINISTRATIVE AND EXECUTIVE MATERIALS Exec. Order No. 11,625, 3 C.F.R. § 616 (1971) ........ 15 Fed. R. Civ. P. 52(a) . . . . 30 N.J. Stat. Ann. § 52-32 (West 1986) . . . . 16 VI STATUTES AND LEGISLATIVE, ADMINISTRATIVE AND EXECUTIVE MATERIALS * S Wis. Stat. Ann. SS 16.75(3)(3m)(a), 16.87(2), 84.075 (West 1957) 16 Md. State Fin. & Proc. Code Ann. § 18-601 (1985)....................... 13 Ohio Rev. Code Ann. S§ 122.71-122.89 (Ander son 1984) 13 Public Works Employment Act of 1977, S 103(f)(2), 91 Stat. 116, 42 U.S.C. § 6705(f)(2) (Supp. II 1976) ....................... 26 Public Works Employment Act of 1977, Pub. L. 95- 28, 91 Stat. 116, 42 U.S.C. § 6701 15, 20 S. Rep. No. 1070, 95th Cong., 2d Sess. 7 (1978), reprinted in 1978, U.S. Code Cong. & Admin. News 3835 ............ 15 Small Business Act of 1953, as amended 15 U.S.C. § 637 (1988) Section 8(a) 15, 19 VI 1 STATUTES AND LEGISLATIVE, ADMINISTRATIVE AND EXECUTIVE MATERIALS Surface Transportation Assistance Act of 1982, Pub. L. 97-424, 96 Stat. 2098, 23 U.S.C. S 104 ( 19 8 3 ) ....................... 15, 16, 20 OTHER AUTHORITIES Affirmative Action Report of Consolidated Rail Corporation Ethics Com mittee ....................... 24 An Assessment of Program Impacts of the Disadvan taged Business Enter prise (DBE) Requirement in the Federal-Aid High way Construction Pro gram, (Draft Report, U.S. Dep't of Transpor tation, Federal Highway Admin. March 1986) .......... 17, 21 Bates, Minority Business Set-Asides: Theory and Practice, in Volume 1, Selected Affirmative Action Topics in Employ ment and Business Set- Asides, United States Commission on Civil Rights (1985) 8, 9, 11, 14 VI 1 1 OTHER AUTHORITIES Betts and Giles, Dole Advocates Greater Busi ness Opportunities, Foresees Minority Entre preneurs Becoming Inte gral Part of the Trans- portation Industry, Minority Business Today (July 1986) (Minority Business Development Agency, U.S. Department of Commerce)............... . 21 Executive Summary: 1986 Office of Contract Com pliance Annual Report (March 31, 19 8 7 ) ............. 23 Minority Business Enter prises Legal Defense and Education Fund, Minority Business Enterprises: Programs of State and Local Governments, Acad emy for State and Local Government (Jan. 1988) . . . . 3,8, 13 Minority Business Program FY87 Annual Report (Feb. 1, 19 8 8 )........ ............ 22 G. Myrdal, An American Dilemma (1944) ̂ ̂ T ........ 9 Senate Committee on Small Business, Survey of the Graduates of the Small Business Administration IX OTHER AUTHORITIES Section 8(a) Minority Business Development Program (1987) ............... R. Suggs, Recent Changes in Black-Owned Business, Joint Center for Politi- cal Studies (1986) .......... United States Commission on Civil Rights, Greater Baltimore Commitment; A Study of Urban Minori~ty~ Economic Development 11983) . . . . . . . ........ United States Commission on Civil Rights, Minor ities and Women as Gov ernment Contractors ( Mav 1975] T r T T T " T ~ . . . 17, 20 20 10, 12 18 No. 87 -998 In The SUPREME COURT OF THE UNITED STATES October Term, 1987 City of Richmond, Appellant, v. J. A. Croson Company, Appellee. On Appeal from the United States Court of Appeals for the Fourth Circuit BRIEF OF THE MINORITY BUSINESS ENTERPRISE LEGAL DEFENSE AND EDUCATION FUND, INC. AND THE LOUISIANA ASSOCIATION OF MINORITY AND WOMEN OWNED BUSINESSES, INC. AS AMICI CURIAE IN SUPPORT OF APPELLANTi Amici MBELDEF and LAMWOB file this brief pursuant to the letters of consent lodged with the Clerk of the Court. INTEREST OF AMICI CURIAE Amicus Minority Business Enter prise Legal Defense and Education Fund, Inc. ("MBELDEF"), a non-profit corpora tion, was founded in 1980 by former Mary land Congressman Parren J. Mitchell. The primary purpose of MBELDEF is to promote minority business opportunity programs. MBELDEF is comprised of over 800 minority businesses nationwide, many of which, in their efforts to become successful com mercial enterprises, have benefited from federal, state, and local minority busi ness opportunity programs. MBELDEF has provided numerous state and'local govern ments with legal guidance in the adoption of such programs and has participated in 2 significant litigation concerning these programs.2 Amicus Louisiana Association of Minority and Women Owned Businesses, Inc. ("LAMWOB") is a not-for-profit corpora tion organized in 1988 to promote minor ity business opportunity programs within the State of Louisiana. LAMWOB's member ship consists of, but is not limited to, contractors that have been certified to participate in a federal program for socially and economically disadvantaged businesses and therefore derive their livelihood, at least in part, from minor- Most recently, MBELDEF has appeared as in- tervenor-appellee before the United States Court of Appeals for the Sixth Circuit in Tennessee Asphalt Co. v. Farris, No. 87-5588 (6th Cir. argued Mar. 31, 1988) and as ami cus curiae before the United States Court of Appeals for the Ninth Circuit in Associated General Contractors of California v. City and County of San Francisco, 813 F.2d 922 (9th Cir. 1987) (petition for rehearing en banc pending). 3 ity business opportunity programs. LAM- WOB has supported minority business par ticipation programs in New Orleans. Amici MBELDEF and LAMWOB there fore have a significant interest in this Court's determination concerning the constitutionality of the Richmond Minor ity Business Utilization ("MBU") Plan.3 SUMMARY OF ARGUMENT The remedial concept of minor ity business opportunity programs was born of the compelling interest of gov ernment to purge the final vestiges of There are currently in excess of 160 state and local government minority business op portunity plans in effect nationwide that might be affected by the outcome of this case. See Minority Business Enterprise Le gal Defense and Education Fund, Minority Business Enterprises: Programs of State and Local Governments, Academy for State and Local Government 2 (Jan. 1988) [hereinafter MBELDEF Report] (lodged with the Clerk of the Court and sent to the parties). 4 identified racial discrimination. Feder al, state, and local minority business opportunity programs are aimed at meeting that goal by taking affirmative steps to create a level playing field in the realm of public procurement. The Richmond MBU Plan represents just such an effort by a responsible municipality to address per vasive discrimination within its public sector marketplace. The district court found that the evidence before the Richmond City Council was sufficient to establish a compelling interest in remedying dis crimination in public sector construction contracting. It also found that the MBU Plan was an appropriate means of address ing that interest. Finally, it found that plaintiff had failed to demonstrate that the plan would place an excessive burden on non-minority contractors in 5 contravention of their constitutional equal protection rights. The Fourth Circuit committed legal error in reversing this well- reasoned district court opinion. First, it misinterpreted Wyqant v. Jackson Bd. of Educ., 476 U.S. 267 (1986) to require that the Richmond City Council should have found past discrimination by Rich mond against minority contractors in order to establish the City's compelling interest in remedying such discrimina- tion. Wyqant imposes no such condition. Rather, it requires only that Richmond had convincing evidence to support its conclusion that there was prior discrimi nation. The Fourth Circuit also failed to grant due deference to the district court's findings of facts and erroneously ascribed the burden of proof to Richmond notwithstanding plaintiff's failure to 6 introduce any evidence to rebut Rich mond's showing of past discrimination. Second, the Fourth Circuit erroneously concluded that the MBU Plan was not tailored narrowly enough to avoid violating the equal protection rights of non-minority contractors. In reaching this conclusion, the Fourth Circuit in correctly applied scrutiny crafted for judicial review of layoff plans, with their direct and substantial harm to non minority individuals, rather than the test this Court has adopted for review of minority business opportunity programs. In fact, as the district court properly concluded, the MBU Plan is narrowly tai lored to the remedial goal of addressing discrimination in construction contract ing. The limited burdens imposed on non minority contractors are not violative of 7 the Fourteenth Amendment to the Constitu tion. ARGUMENT I . THE COURT OF APPEALS DISREGARDED THE SIGNIFICANT AND COMPELLING GOVERNMENTAL PURPOSES SERVED BY MINORITY BUSINESS OPPORTUNITY PROGRAMS SUCH AS THE MBU PLAN A. Readily Identifiable Private and Public Discrimination Has Impaired Minority Businesses' Access To Public Contracting Opportunities It is uncontroverted that the combined effects of past and present, private and public discrimination have denied public contracting opportunities to minority-owned businesses. Although the discrimination at issue here may, at first glance, appear to be less direct than the more renowned Jim Crow segrega tion of public facilities — it is not. The barriers to access resulting from private and public discrimination in the marketplace, and the accompanying fore 8 closure of public contracting opportuni ties for minorities, are as real, and of the same invidious intent, as the notori ous "For Whites Only" signs once found in public bathrooms and waiting rooms. At the national level, empiri cal tests consistently indicate that discrimination has continued to injure the minority business community.4 For example, although the nation's population is approximately fifteen percent minor ity, the most recent economic figures indicate that only five percent of the nation's businesses are minority-owned and that they receive only one-half per cent of all contracting gross receipts.5 Minority entrepreneurs still earn signif- See Bates, Minority Business Set-Asides: Theory and Practice, 1 United States Commis sion On Civil Rights, Selected Affirmative Action Topics in Employment and Business Set-Asides 142, 147 (1985). See MBELDEF Report, supra note 2, at 2. 9 icantly less than non-minority entrepre neurs. Bates, supra note 4, at 149-150. Additionally, minority-owned businesses are less profitable, more highly lever aged and are much more likely to be un dercapitalized. 6 But for the effects of racial discrimination, a free competitive market would not produce such varying levels of market performance along racial 1ines. In 1944, Gunnar Myrdal observed: The Negro businessman, furthermore encounters greater difficulties [than whites] in securing credit. This is particularly due to the marginal position of negro busi ness. It is also partly due to prejudiced opinions among whites concerning the business ability and personal reliability of Ne groes. In either case a vicious circle is in operation keeping Negro business down. Gunnar Myrdal, An American Dilemma 309 ( 1944) . 10 Discriminatory barriers to minority-owned business participation have been particularly oppressive in the construction industry. Pervasive employ ment discrimination in the construction trades has prevented minorities from following the traditional path from la borer to entrepreneur.7 The construction industry is characterized by an "old-boy network" in which white male general contractors work with a closely knit group of white male subcontractors to the exclusion of others.» The result of this "Judicial findings of exclusion from crafts on racial grounds are so numerous as to make such exclusion a proper subject for judicial notice." United Steelworkers v, Weber, 443 U.S. 193, 198 n.l reh'q denied, 444 U.S. 889 (1979). See also Local 28 of Sheet Metal Workers' Int'l Ass'n v. E.E.O.C., 478 U.S. 421 (1986). United States Commission on Civil Rights, Greater Baltimore Commitment: A Study of Urban Minority Economic Development, 31 (1983) (quoting from G. Douglas Pugh, "Bond ing Minority Contractors," in Black Economic Development 138-39 (W.F. Hoddard & G. D. (Footnote continued) 11 exclusionary network is that, in the absence of governmental remedy, minority firms are precluded from significant participation in public contracting op portunities. Bates, supra note 4, at (Footnote 8 continued from previous page) Pugh, eds. 1969)) (Black contractors have been the victims of exclusionary practices of the construction craft unions, which have, in the past, denied them entry into the construction trades. . . . These exclu sionary practices have made it almost impos sible for black workers to acquire construc tion skills and to enter the construction business through the normal channel of grad uating from skilled worker and foreman into small scale contracting and then, with the accumulation of experience and capital, into larger and more complex work. It has also made it impossible for black contractors to have available to them the quantities of skilled workers needed for larger enter prise. When to this pattern, is added lack of access to financing, the result is an almost total inability of black contractors to qualify for surety bonds needed for par ticipation in most . . . public construction work. . . . Thus, black contractors find themselves in a kind of circular trap where their lack of experience in bonded work makes it virtually impossible to obtain surety bonds for construction work requiring such bonds and thereby gain experience on this type of work, even though they might otherwise have the ability to perform.). 12 148, 156.9 Since much of this discrimi nation is localized, city and state gov ernments have a particularly strong interest in structuring corrective pro grams . The fact that "past impairment of minority- firm access to public contracting opportuni ties may have been an incidental consequence of 'business as usual' by public contracting agencies" is not sufficient to detract from a government's authority to take remedial action to remedy the impairment. Fullilove v. Klutznick, 448 U.S. 448, 484 (1980). Further, a 1974 Michigan sponsored study, "disclosed unfounded negative attitudes to wards minority contractors by those [state] departments charged with the responsibility of awarding an enormous variety of contacts" even though the officials "had not had any actual experience with minority vendors." Michigan Road Builders Ass'n, Inc, v. Milli- ken, 571 F.Supp. 173, 179 (E.D. Mich. 1983), rev'd, 834 F.2d 583 (6th Cir. 1987). Based on this finding, the study concluded that absent formal state action the "negative attitude of State purchasing authorities toward minority vendors would cripple any steps toward achieving equity in the State's purchasing policies." Id. at 181. 13 B. Minority Business Opportunity Programs Seek to Remedy Procurement Practices Which Perpetuate the Effects of Discrimination______________ Minority business opportunity programs are intended to redress dis criminatory barriers which have impaired opportunities for minorities in public procurement.10 These programs are sub stantially related to the achievement of this goal: first, by attempting to place * 2 Thirty-two states and 160 local governments have adopted minority business opportunity programs. MBELDEF Report, supra note 2, at 2. These programs can generally be divided into three categories. Some, such as Rich mond's, require contractors to attempt to meet a goal for utilization of minority- owned subcontractors. Others establish sheltered markets for minority-owned busi nesses under certain limited circumstances. See, e.g., South Florida Chapter of the As soc. Gen. Contractors of Am., Inc, v. Metro politan Dade County, Fla., 723 F.2d 846, 848-49 (11th Cir.), cert. denied, 469 U.S. 871 (1984). Still others award points or credits for minority participation in deter mining contract awards, or provide financial and technical assistance. See, e.g., Ohio Rev. Code Ann. §§ 122.71-122.89 (Anderson 1984); Md. State Fin. & Proc. Code Ann. § 18-601 (1988). 14 minority-owned businesses on a more equi table footing with respect to public contracting opportunities, see, e .g ., Fullilove, 448 U.S. at 485-86; and sec ond, by fostering viable minority-owned businesses which, in turn, spur economic growth. Bates, supra note 4, at 142. Contrary to the notion implicit in the Fourth Circuit's majority opinion, state and local minority business oppor tunity programs, such as Richmond's MBU Plan, have not been adopted in a lacka daisical fashion and do not reflect "the most casual deployment of race in the dispensation of public benefits." J .A. Croson Co. v. City of Richmond, 822 F.2d 1355, 1362 (4th Cir. 1987), jur. noted 108 S.Ct. 1010 (1988) (No. 87-998). To the contrary, these programs are modeled after longstanding federal efforts, such as the Section 8(a) program of the Small 15 Business Act of 1953 ("SBA"), as amended, 15 U.S.C. § 637 (1988);11 minority busi ness programs developed by federal de partments and agencies; 12 ancj federal legislation such as the Surface Transpor tation Assistance Act of 1982, Pub. L. 97-424, 96 Stat. 2098, 23 U.S.C. § 104, (1983) ("STAA") and the Public Works Employment Act of 1977, Pub. L. 95-28, 91 Under the SBA Section 8(a) program, federal contracts are directed to small businesses owned and controlled by "socially or econom ically disadvantaged" persons in order to assist these persons in achieving a competi tive position in the economy. See Fulli- love, 448 U.S. at 463-64. See also S. Rep. No. 1070, 95th Cong., 2d Sess. 7 (1978), reprinted in 1978 U.S. Code Cong. & Admin. News 3835, 3842. Although the federal programs differ from agency to agency, they have originated largely from a series of executive orders. See, e.q,, Exec. Order No. 11,625, 3 C.F.R. § 616 (1971) (adopted as part of President Nixon's attempt to foster "black capital ism" ) . 16 Stat. 116, 42 U.S.C. § 6701 ("PWEA").i3 As demonstrated by the STAA and PWEA, and the large number of state and local programs that they fostered,13 14 public construction contracts have been a particular area of emphasis for minority business opportunity programs. The em phasis on construction is appropriate because: (1) a sufficient number of mi nority-owned firms are available to per 13 Section 105(f) of the STAA required, subject to certain waivers, that at least 10 percent of the funds appropriated under the Act be expended with small business concerns owned and controlled by socially and economically disadvantaged individuals as defined by the Small Business Act. See, e.q,, N.J. Stat. Ann. § 52.32-17, (West 1986 & Supp. 1987); Wis. Stat. Ann. §§ 16.75(3)(3m)(a), 16.87(2), 84.075 (West 1957 ) . 17 form the required government contracts;15 (2) the large volume and size of public construction contracts yields ample op portunity for minorities to obtain sig nificant subcontracts and prime contracts See, e.q., Senate Committee on Small Busi ness, Survey of the Graduates of the Small Business Administration Section 8(a) Minor ity Business Development Program (1987) [hereinafter Senate Small Business Report] (40 percent of respondents to survey of Sec tion 8(a) graduate companies listed con struction and related fields as their prima ry service at initial certification and 42 percent listed construction and related fields as their primary service after gradu ation from the program.) See also An As sessment of Program Impacts of the Disadvan taged Business Enterprise (DBE) Requirement in the Federal-Aid Highway Construction Pro gram, (Draft Report, U.S. Department of Transportation, Federal Highway Administra tion, March 1986) [hereinafter Draft Report to D.O.T.] at 72-73 (43 percent of state transportation officials surveyed indicated that in 1982, prior to enactment of STAA, there were sufficient minority firms in their states to meet the Act's 10 percent goal, and more than 75 percent indicated that availability of minority firms in creased after implementation of the STAA) (a copy is attached at tab A to the Compendium of Minority Business Opportunity Plan Re ports lodged with the Clerk of the Court and sent to the parties). 18 without inappropriate burdens on non minority-owned firms; and (3) minority business development efforts in the con struction industry have a great potential for success because non-discriminatory barriers to entry in the subcontracting business are relatively low.16 When measured in terms of the number of contracts awarded and jobs created, the benefits to program partici pants, and the overall growth in the number of minority-owned firms, minority business opportunity programs have proven The use of subcontracting with its lesser demand on capital and expertise than prime contracting is an appropriate means of ef fectuating the goal of remedying the effects of discrimination. It is a particularly appropriate means where the objective, as well as the anticipated result, is that suc cessful minority-owned companies will emerge as effective competitors for prime con tracts. See also U.S. Commission on Civil Rights, Minorities and Women as Government Contractors 122 (1975). 19 effective. These programs have aided in the creation and expansion of thousands of minority enterprises in such fields as wholesaling, general construction, busi ness services and large scale manufactur ing.17 The positive effects of these remedial programs have been produced at all levels of government and, more re cently, have been duplicated in the pri vate sector. For example, the SBA Section 8(a) program has been highly successful. A survey of Section 8(a) graduate compa nies revealed: (1) the majority of the firms fell within the top quartile of the nation's minority-owned firms, see Senate The success of minority business opportunity programs has been somewhat remarkable given the degree of resistance that the programs have engendered and the fact that the pro grams are new and still evolving. Conse quently, some types of programs have proven more successful than others. 20 Small Business Report, supra note 15, at 15; and (2) more than one half of the firms continued to receive government and commercial contracts even when required to participate in competitive bidding, many from their previous Section 8(a) sources. Id. at 25, 33. The Disadvantaged Business Enterprise ("DBE") requirement of STAA has proven equally effective.18 From the three years immediately preceding STAA's passage to the three years immediately following, contract awards to disadvan taged business enterprises more than tripled from 9,450 to 32,500 with corre PWEA also was successful. Employment by black heavy construction contractors rose 122.5 percent from 1977 to 1982. Among black highway and street construction firms, receipts increased during the same period by 223.7 percent. These increases have been linked to PWEA. R. Suggs, Recent Changes in Black-Owned Business, Joint Center for Po litical Studies 12-13 (1986). 21 sponding values soaring from $1.03 bil lion to more than $3.26 billion.19 Most states reported a doubling or tripling of the number of DBE firms certified for highway construction work between 1983 and 1984.2 0 In Massachusetts, an executive- ordered minority business opportunity plan containing set-aside provisions has produced spectacular results in only three years. From 1985 to 1987, procure ment from minority firms more than dou See Betts and Giles, Dole Advocates Greater Business Opportunities, Foresees Minority Entrepreneurs Becoming Integral Part of the Transportation Industry, Minority Business Today, July, 1986, at 17, 18. (Minority Business Development Agency, U.S. Department of Commerce). See Draft Report of D.O.T., supra note 15, at 70 (including both existing firms which may not have previously been engaged in highway construction and new companies formed in response to the program). 22 bled.21 As of 1987, Massachusetts let $146.5 million worth of business to mi nority-owned firms constituting 10.4 percent of all discretionary services purchased and 9.4 percent of all discre tionary construction work purchased. Mass. Report at 1. Massachusetts con tracting with minority-owned vendors increased from 368 firms in fiscal year 1984 to 813 firms in fiscal year 1987. Id. at 6. Atlanta's adoption of a minor ity business opportunity plan is viewed as a vehicle for all its citizens to participate fully in the economic devel opment of the Metropolitan Atlanta area. See Minority Business Program FY87 Annual Report at 1 [hereinafter Mass. Report] (a copy is attached at tab B in the Compendium of Minority Business Opportunity Plan Re ports lodged with the Clerk of the Court and sent to the parties). 23 Prior to Atlanta's adoption of a 25 per cent minority-owned business participa tion goal in 1982, minority business participation in city contracting aver aged about two percent. In 1987, minor ity-owned business participation exceeded 36 percent of all Atlanta city contracts.2 2 These programs have been emu lated by quasi-public and private sector entities. Conrail's voluntary minority- owned business opportunity program graph ically demonstrates the long-term compet itive benefits derived from such pro grams. For calendar years 1982, 1983, 1984 and the first nine months of 1985 See Executive Summary: 1986 Office of Con tract Compliance Annual Report (March 31, 1987) (a copy is attached at tab C to the Compendium of Minority Business Opportunity Plan Reports lodged with the Clerk of the Court and sent to the parties). 24 Conrail obtained savings of $3,589,727 on purchases from minority—owned businesses totalling $127,747,765.23 Accordingly, minority business opportunity programs have a demonstrated record of success as an important tool in eliminating the remaining barriers to equality in the marketplace. They create a positive environment in which minority- owned businesses can flourish and grow into viable competitive enterprises. The Fourth Circuit's flawed analysis should not be permitted to eviscerate these necessary measures. jjffirmative Action Report of Consolidat- ed-Rail Corporation Ethics Commift-PP (com paring similar purchasing from non-minority- owned business for a similar study period preceeding the affirmative action program) (a copy is attached as tab D to the Compen dium of Minority Business Opportunity Plan Reports lodged with the Clerk of the Court and sent to the parties). 25 II. RICHMOND'S MBU PLAN IS CONSTITUTIONAL The Richmond Minority Business Utilization Plan represents a good faith effort by a responsible municipal govern ment to address pervasive discrimination within its jurisdiction. Richmond acted in a manner mindful of the constitutional rights of non-minority contractors, such as Appellee Croson, who would be required to share the light burdens imposed to effectuate the MBU Plan's affirmative action goals. After determining that it had the authority and a compelling inter est to enact a remedial program to ad dress discrimination in public sector construction contracting, the Richmond City Council carefully studied the per missible parameters of affirmative action 26 programs as defined in Fullilove2 4 and Bakke. 2 5 It then crafted a narrowly- tailored minority business opportunity program — the MBU Plan. Contrary to the Fourth Circuit's opinion, that Plan is entirely consistent with the standards established by this Court governing the constitutionality of such programs. A. Richmond Had A Compel ling Interest In Remedying Discrimination In Construc- tion Contracting___________ The first requirement of a state-sponsored minority preference pro gram is that it "must be justified by a There, the Court found the Minority Business Enterprise provision, § 103(f)(2), of the Public Works Employment Act of 1977, 91 Stat. 116, 42 U.S.C. § 6705(f)(2) (Supp. II 1976) an appropriate balancing of the feder al government's competing obligations to remedy pervasive discrimination in the con struction industry nationwide and to treat non-minority contractors fairly. 448 U.S. at 480-89. 25 Regents of the Univ. of Cal, v. Bakke, 438 U.S. 265 (1978). 27 compelling governmental interest." Wy- gant v. Jackson Bd. of Educ., 476 U.S. at 274 (1986) (quoting Palmore v. Sidoti, 466 U.S. 429, 432 (1984)). Wygant re quires only that the state "ensure that, before it embarks on an affirmative- action program, it has convincing evi dence that remedial action is warranted. That is, it must have sufficient evidence to justify the conclusion that there has been prior discrimination." Id. at 277. Statistical disparities, among other indicia, may be sufficient to provide convincing evidence of prior discrimina tion. Id̂ _ at 292 (O'Connor, J., concur ring). See also Hazelwood School Dist. v. United States, 433 U.S. 299, 307-08 (1977).26 26 26 Contrary to the Fourth Circuit's interpreta tion, Wygant does not require an express contemporaneous finding by the state that it previously had engaged in discrimination. Justice O'Connor, concurring, stated that "a (Footnote continued) 28 In this case, the district court found that the Richmond City Coun cil had "ample evidence" of discrimina tion in public sector construction con tracting to support its compelling inter est in enacting a minority business op portunity plan. Supplemental Appendices to Jurisdictional Statement [hereinafter Supp. App.] at 172. It made this finding after reviewing the evidence considered by the City Council, including: (1) a statistical disparity between Richmond's (Footnote 26 continued from previous page) contemporaneous or antecedent finding of past discrimination by a court or other com petent body is not a constitutional prereq uisite to a public employer's voluntary agreement to an affirmative action plan." Wygant, 476 U.S. at 289. See also United Jewish Orgs. of Williamsburgh, Inc, v. Ca_rey, 430 U.S. 144, 165-166 (1977); McDan- iel v. Barresi. 402 U.S. 39, 41 ( 1971K Ac cordingly, the Fourth Circuit is wrong as a matter of law in finding the plan unconsti tutional on the basis that Richmond did not admit and document its culpability for past discrimination against minority contractors. 29 50 percent minority population and its award of only 0.67 percent of its con struction-contract dollars, over five years, to minority contractors;27 (2 ) representations by construction trade associations that there were very few minority-owned businesses in their indus try; (3) testimony by a city councillor and the city manager that there was dis crimination on the basis of race in Rich mond public sector construction contract ing; and (4) congressional findings of A similar statistical comparison was ap proved by this Court in Fullilove. There, the percentage of blacks in the United States population was compared with the per centage of black-owned businesses obtaining government construction contracts. Fulli love, 448 U.S. at 478. Such statistics are indicative of an environment in which "oth erwise qualified" minority individuals and businesses are actively discouraged from participating as a result of a "self- recognized inability" to surmount the barri er of race. Dothard v. Rawlinson, 433 U.S. 321, 330 (1977). 30 nationwide discrimination in the con struction industry. Supp. App. at 164- 165. The district court also took judi cial notice of historical barriers to entry by minority-owned businesses into the construction industry: The fact that very few minority construction businesses even exist is consistent with, not opposedto, a finding that minorities have suffered past discrimination in the [Rich mond] area's construction in dustry. It suggests, of course, that past discrimina tion has stymied minority entry into the construction industry in general, as well as partici pation in [Richmond] government construction contracting in particular. Supp. App. at 167. Such findings may not be dis turbed by an appellate court unless clearly erroneous. 28 In the instant See Wygant, 476 U.S. at 277; Anderson v. Bessemer City, 470 U.S. 564, 573 (1985); Rogers v. Lodge, 458 U.S. 613, 623 (1982); Pullman-Standard v. Swint. 456 U.S. 273, 287-88 (1982); Fed. R. Civ. P. 52(a). 31 case, however, the Fourth Circuit failed to accord any deference to the district court's findings. Instead, it revisited the City Council's deliberations and substituted its own reactions to that record.29 It did not, however, cite any evidence in the record — and there is none — establishing that the district court's findings were clearly erroneous. For example, the district court found the statistical comparison between Richmond's minority population and minor ity participation in City construction "If the district court's account of the evi dence is plausible in light of the record viewed in its entirety, the court of appeals may not reverse it even though convinced that had it been sitting as trier of fact, it would have weighed the evidence differ ently." Anderson v, Bessemer City, 470 U.S. at 573-74 (1985). Moreover, if factual findings of a district court are inadequate a court of appeals should not find fact on its own, but rather should remand for fur ther fact finding. Icicle Seafoods, Inc, v. Worthington, 475 U.S. 709, 714 (1986). 32 contracts to be persuasive evidence of discrimination. 30 strikingly, the Fourth Circuit declared the same statistical evidence "spurious." Croson, 822 F.2d at 1359. Additionally, the district court found that the testimony before the City Council supported the conclusion that "there was discrimination and exclusion on the basis of race in the construction industry, in both Richmond and the state." Supp. App. at 164-65. The Fourth Circuit found the same testimony "nearly weightless." Croson, 822 F.2d at 1359. Finally, the Fourth Circuit im properly disregarded the district court’s judicial notice of barriers to entry and 3 0 Supp. App. at 168-69 ("dismally low level of minority business participation in City's prime contracts"). 33 historical discrimination in Richmond. Supp. App. at 166.31 Accordingly, the district court's holding that there was ample evidence to establish that Richmond had a compelling interest in enacting the MBU Plan meets applicable legal standards and is supported by the record. The Fourth Circuit's contrary conclusion was based on an erroneous reading of Wygant and its own improper findings of fact. There can be no doubt that Richmond commit ted such discrimination. For example, in Richmond "there has been state (also feder al) action tending to perpetuate apartheid of the races. . . . " Bradley v. School Board of Richmond, 462 F.2d 1058, 1065 (4th Cir. 1972), aff'd, 412 U.S. 92 (by an equal ly divided court; Powell took no part in the consideration or decision), reh'g denied, 414 U.S. 884 (1973). After a "sordid histo ry" of attempts to "circumvent, defeat, and nullify the holding of Brown I," Richmond did not take even "feeble steps" to imple ment school desegregation until 1963. Id. at 1074-75. 34 B. The MBU Plan Is Narrowly Tailored to Remedy Discrimina tion In Construction Contract- inq in Richmond ______ The second requirement of a state-sponsored affirmative action plan is that it "be 'narrowly tailored to the achievement of that goal.'" Wyqant, 476 U.S. at 274; Fullilove, 448 U.S. at 480. When the state has demonstrated a compel ling interest in remedying such discrimi nation, it is entitled to a presumption that the remedial action chosen is a proper method to address the discrimina- tion. Wyqant, 476 U.S. at 293 (O’Connor, J., concurring). Thus, "[t]he ultimate burden remains with the [plaintiff] to demonstrate the unconstitutionality of an affirmative-action program." Wyqant, 476 35 U.S. at 277-78.3 2 That presumption may be overcome only when the trial court, in its sound discretion, finds that the remedies selected "impose disproportion ate harm on the interests, or unnecessar ily trammel the rights, of innocent indi viduals directly and adversely affected." Id. at 287. In the instant case, the dis trict court concluded that "[p]laintiffs have not shown in any way how the burdens that the Plan may place on innocent third parties would be excessive as a constitu- As this Court and others have recognized, it is of crucial importance to place the bur dens of proof on the appropriate parties. See e. g., Texas Dept, of Community Affairs v. Burdine, 450 U.S. 248 (1981) (reversing on wrong burden); Int'l Brotherhood of Team sters v. United States, 431 U.S. 324, 358 (1977); Toney v. Block, 705 F.2d 1364, 1367 (D.C. Cir. 1983). 36 tional matter." Supp. App. at 197.33 The district court's analysis is well reasoned and reflected a proper exercise of its abundant discretion. It also is fully consistent with this Court's rea soning in Fullilove that by its objective of remedying the historical impairment of access, the [minority business opportunity program] can have the effect of awarding some contracts to [minority-owned businesses] which otherwise might be awarded to other busi nesses . . . . It is not a constitutional defect in [the In reaching this conclusion the court bal anced the reasonableness of a 30 percent set-aside in light of a 50 percent minority population, Supp. App. 173-80; the flexibil ity of the Plan given its "meaningful waiver provision," Supp. App. 181-93; the City Council's consideration of "the efficacy of alternative responses," Supp. App. 193-95; and the temporary nature of the Plan, Supp. App. 195; against "the burden on non-MBE prime contractors of seeking out MBE's to participate as subcontractors on City con struction projects; and the burden on non- MBE subcontractors who would have received some of the City's construction contracting business but for the City’s Plan." Supp. App. at 196-98. 37 program] that it may disappoint the expectations of nonminority firms . . . such "a sharing of the burden" by innocent parties is not impermissible. 448 U.S. at 484 (quoting Franks v. Bowman Transp. Co., 424 U.S. 747, 777 (1976)). See also United Jewish Orqs. of Williams- burgh, Inc, v. Carey, 430 U.S. 144 (1977); Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975). The Fourth Circuit disregarded this line of authority and mistakenly patterned its analysis of the MBU Plan's constitutionality on this Court's holding in Wygant that the Jackson Board of Edu cations's layoff plan violated the Four teenth Amendment.34 State-sponsored 3 3 4 The Fourth Circuit also misplaced the burden of proof regarding the constitutionality of the MBU Plan on Richmond. Once the state demonstrates a compelling interest, the plaintiff must prove the government's evidence did not support an infer ence of prior discrimination and thus a remedial purpose, or that (Footnote continued) 38 layoff plans present special circum stances in which the State must "meet a heavy burden of justification." Wyqant, 476 U.S. at 282 n.10. Accordingly, the scrutiny applied to layoff plans which "impose the entire burden of achieving racial equality on particular individ- uais," Wyqant, 476 U.S. at 282-283, is very different from that applied to mi nority business opportunity plans where the "actual burden shouldered by nonmi nority firms is relatively light." Wy- (Footnote 34 continued from previous page) the plan instituted on the basis of this evidence was not suffi ciently "narrowly tailored." Only by meeting this burden could the plaintiff's establish a violation of their constitutional rights, and thereby defeat the presumption that the [state's] assertedly re medial action based on the statis tical evidence was justified. Wygant, 476 U.S. at 293 (O'Connor, J., cur ring). con- 39 gant, 476 U.S. at 282 (quoting Fullilove, 448 U.S. at 484); see also Johnson v. Transp. Agency, 107 S.Ct. 1442, 1451 (1987); Weber, 443 U.S. at 208. As a result of its failure to recognize this distinction, the Fourth Circuit applied the wrong standard in analyzing the constitutionality of the MBU Plan. Its conclusion that the bur dens imposed by the Plan on non-minority contractors deprives those contractors of equal protection under the law directly conflicts with well established author ity. The Fourth Circuit's decision therefore should be reversed. Ill IF THIS COURT AFFIRMS THE FOURTH CIRCUIT THE PRACTICAL RESULT WILL BE TO RENDER MINORITY BUSINESS OPPORTUNITY PROGRAMS INEFFECTIVE As demonstrated above, minority business opportunity programs are an 40 effective tool in state and local efforts to eradicate discrimination-based barri ers which have impaired the access of minority-owned firms to public contracts. An affirmance of the court of appeal's decision will have a chilling impact on the continuing effectiveness of these necessary programs. The Fourth Circuit's majority opinion would effectively preclude state and local governments from adopting any minority business opportunity program absent an admission of prior discrimina tion. Such a requirement is likely to thwart governmental efforts to remedy past discrimination. As Justice O'Connor explained: "[T]he imposition of a re quirement that public employers make findings that they have engaged in ille gal discrimination before they engage in affirmative action programs would severe 41 ly undermine public employers' incentive to meet voluntarily their civil rights obligations." Wygant, 476 U.S. at 290 (O'Connor, J., concurring). See, e.q ., Johnson, 107 S.Ct. at 1451 n.8. In addition, if the Court up holds the notion that set-aside provi sions in minority business opportunity programs must be based on the small per centage of existing minority-owned firms, such programs will perpetuate, rather than remedy, discrimination. As Judge Sprouse argued in dissent below, under such a limited scope for minority oppor tunity programs, "truly pernicious dis crimination could have the compound ef fect of blocking remedial action." Cro- son, 822 F.2d at 1365 n.ll (Sprouse, J., dissenting). Finally, if the same "heavy burden for justification" is placed on 42 minority business opportunity programs as is placed on layoff plans, it will be virtually impossible to draft a minority business opportunity plan which can both remedy discrimination effectively and withstand constitutional scrutiny. Accordingly, a decision by this Court to affirm the Fourth Circuit will, as a practical matter, deprive state and local government of effective use of minority business opportunity plans to remedy economic discrimination within their jurisdictions. 43 CONCLUSION For the foregoing reasons, the judgment of the United States Court of Appeals for the Fourth Circuit should be reversed. Respectfully submitted, Anthony Robinson Franklin M. Lee MBELDEF, Inc. Suite 200 300 "I" Street, N.E. Washington, D.C. 20002 (202) 543-0040 H. Russell Frisby, Jg. Melnicove, Kaufman, Weiner, Smouse & Garbis 36 South Charles Street Baltimore, Maryland 21201 ^A'AsJa±LUAndrew L Sandler 1440 New York Avenue, N.W. Washington, D.C. 20005 44 919 Third Avenue 45th Floor New York, New York 10022 Marc H. Morial LAMWOB, Inc. One Pydras Plaza Suite 1610 639 Loyola Avenue New Orleans, Louisiana 70113 Counsel wish to acknowledge Gabriel J. Chin, a law student at the University of Michigan Law School for his assistance in the writing of this brief. COUNSEL PRESS INC. 11 EAST 36TH STREET, NEW YORK, NEW YORK 10016 (212) 685-9800; (516) 222-1021; (914) 682-0992 (104103)