H. K. Porter Co. v. Metropolitan Dade County Brief Amicus Curiae

    No. 87-1001

in  tfje Supreme Court of tf)t Hm'teb sta te s
O c t o b e r  T e r m , 1987

H . K . P o r t e r  C o ., I n c ., p e t it io n e r

v.
M e t r o p o l it a n  D a d e  C o u n t y , e t  a l .

ON PETITION FOR A WRIT OF CERTIORARI TO THE 
UNITED STA TES COURT OF APPEALS 

FOR THE ELEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES AS 
AMICUS CURIAE

Charles Fried 
Solicitor General 

Wm. Bradford Reynolds 
Assistant Attorney General 

Donald B. Ayer 
Deputy Solicitor General

Roger Clegg
Deputy Assistant Attorney General 

Glen D. Nager 
Assistant to the Solicitor General

David K, Flynn 
Attorney
Department o f Justice 
Washington, D.C. 20530 
(202) 633-2217



QUESTIONS PRESENTED

1. Whether the minority business enterprise (MBE) re­
quirements imposed by the Department of Transportation as 
conditions for receiving federal funding under the Surface 
Transportation Assistance Act of 1978, Pub. L. No. 95-599, 92 
Stat. 2689, are unconstitutional on their face.

2. Whether the rejection by a county government of a bid 
on an 80% federally funded construction contract for failure to 
comply with a 5% MBE participation requirement violates the 
Equal Protection Clause of the Fourteenth Amendment, where 
the county government was required by a federal agency to 
establish unspecified goals for MBE participation in order to 
qualify for federal funding, and where the county government 
did not purport either to be remedying discrimination specifi­
cally traceable to its own prior actions or to derive its 5% MBE 
goal from evidence relating to past discrimination.

( I )



TABLE OF CONTENTS

Statement
Discussion
Conclusion

Page
1

10
20

TABLE OF AUTHORITIES

Cases:
Associated Gen. Contractors v. City & County o f  San

Francisco, 813 F.2d 922 (9th Cir. 1987).........................  19
Fullilovev. Klutznick, 448 U.S. 448 (1980)............... ,7, 8, 9, 11

13, 14, 15, 17, 18
Graham v. Richardson, 403 U.S. 365 (1971).....................  12
Hampton v. Mow Sun Wong, 426 U.S. 88 (1976) . . . . . . . .  15
Hirabavashi v. United States, 320 U.S. 81 (1943).............. 11
Hirschey v. FERC, 111 F.2d 1 (D.C. Cir. 1985)................ 14
Int’l Bhd. o f Elec. Wkrs. v. NLRB, 814 F.2d 697 (D.C.

Cir. 1987) ...........................................     14
J.A. Croson Co. v. City o f Richmond, 822 F.2d 1355 

(4th Cir. 1987), prob. juris, noted, No. 87-998 (Feb. 22,
1988) .................. ........................ ............................ • .11, 18, 19

Loving v. Virginia, 388 U.S. 1 (1967) .............. ..................  11
Lyng v. Automobile Workers, No. 86-1471 (Mar. 23,

1988) ......................       12
Memorial Hosp. v, Maricopa County, 415 U.S. 250

(1974) ................................................................................. 12
McDonald v. Santa Fe Trail Transp. Co., 427 U.S. 273

(1976)................................................................................  11
Michigan Road Builders Ass’n v. Milliken, 834 F.2d 583

(6th Cir. 1987)................................................................... 19
NLRB v. Catholic Bishop, 440 U.S. 490 (1979)................ 15
Ohio Contractors Ass’h v . Keip, 713 F.2d 167 (6th Cir.

1983) ................' . . . ........................................................ 18
Papasan v. Attain, No. 85-499 (July 1, 1986)................. . 10, 16
Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1

(1981)............................... ........................................ • • • • 15
Plyler v. Doe, 457 U.S. 202 (1982)................................. .. 12
Regents o f  University o f  California v. Bakke, 438 U.S.

265 (1978) ...................................................... .11, 12, 15, 17

( H I )



IV

Cases —Continued: Page
Schmidt v. Oakland Unified Sch. Dist., 662 F.2d 550

(9th Cir. 1981), vacated, 457 U.S. 594 (1982)................ 18
South Dakota v. Dole, No. 86-260 (June 23, 1987) . . . . . .  16
South Fla. Chapter o f  Assoc. Gen. Contractors v. 

Metropolitan Dade County, 723 F.2d 846 (11th Cir.),
cert, denied, 469 U.S. 871 (1984) .................................... 18

Steelworkers v. Weber, 443 U.S. 193 (1979) . . . . . . . . . . . .  8
United States v. Paradise, No. 85-999 (Feb. 25, 1987) . . . .  17
Wong Yang Sung v. McGrath, 339 U.S. 33 (1950)........... 14
Wygant v. Jackson Bd. o f  Educ., 476 U.S. 267 (1986) . . . .  8, 9,

11, 12, 15, 17

Constitution, statutes and regulations:

U.S. Const. Amend. XIV:
§ 1 (Equal Protection Clause) . . . . . . . . . . . . . . . . . . . .  6, 10
§ 5 ...................... ............. ....................... .....................  15

Civil Rights Act of 1964, Tit. VI, 42 U.S.C. 2000d
et seq............ ................ ......... . . . . . . . . . . . . . . . . . . . . . .  6,11

Public Works Employment Act of 1977, § 103(f)(2),
42 U.S.C. 6705 ................................. ................... .. 13, 15

Surface Transportation Assistance Act of 1978, Pub. L.
No. 95-599, 92 Stat. 2689 ............................................... 1

§ 302(a), 92 Stat. 2735-2736 (49 U.S.C. App.
1602) ...........................................   l

§ 314, 92 Stat. 2750-2751 (49 U.S.C. App. 1615) . . . .  13
§ 314(a)(1), 92 Stat. 2750 (49 U.S.C. App.

1615(a)(1))..........................................................   1
§ 314(a)(2), 92 Stat. 2750 (49 U.S.C. App.

1615(a)(2))..........       2
§ 314(a)(3)(A), 92 Stat. 2750 (49 U.S.C. App.

1615(a)(3)(A))........................................................... 2
§ 315, 92 Stat. 2751 (49 U.S.C. App.

1616) ...................................... ............................. 2
Urban Mass Transportation Act of 1964, 49 U.S.C. App.

(& Supp. Ill) 1601-1618.....................    2
49 U.S.C. App. 1615............... ............. ....................  6, 11

Surface Transportation Act of 1982, Pub. L. No. 97-424,
§ 105(f), 96 Stat. 2100 10



V

Statutes and Regulations — Continued: Page
Surface Transportation and Uniform Relocation Assist­

ance Act of 1987, Pub. L. No. 100-17, § 106(c)(1), 101 
Stat. 145............................................................................  10

15 U.S.C. (& Supp. IV) 637(d)(1) ........................  18
15 U.S.C. 637(d)(6)(A).........................    18
22 U.S.C. 2151 ..................       18
28 U.S.C. 450e(b)...........................................   18
42 U.S.C. 1981 ..................................................................... 6, 11
42 U.S.C. 1983 ...................    6
24 C.F.R.:

Section 570.424(d)(2) ............................................... .. • 18
Section 570.428(d)(2) ................ ................ ................  18

36 C.F.R.:
Section 906.1(a) ...................................................* ■ • • 18
Section 906.1(c) ...................................................   18
Section 906.3(a) .....................................    18

49 C.F.R. Pt. 23 .................. ...............    10

Miscellaneous:
DOT Order 4000.7A, Minority Business Enterprise Pro­

gram (Mar. 6, 1978) ........................ .........................4, 6, 10, 14
48 Fed. Reg. 33432 (1983)..............................................   10
52 Fed. Reg. 39230 (1987) ...................................................  10
H.R. Conf. Rep. 95-1797, 95th Cong., 2d Sess. (1978) . . .  14
H.R. Rep. 95-1485, 95th Cong., 2d Sess. (1978)................ 14
S. Rep. 95-857, 95th Cong., 2d Sess. (1978) ......................  14
UMTA Circular Cl 165.1 (Dec. 30, 1977):

Instructions for the Development o f a Minority 
Business Enterprise Program Pursuant to UMTA
C 1165.1............................................................. 3

Interim Minority Business Enterprise Policy and 
Requirements for Grant Recipients ................ 2, 3, 10, 14

United States Conference of Mayors and United States 
Department of Commerce, 1986 National City Profiles:
Report on Minority Enterprise Development Program 
(1986)................................... ............................................ 18



I n  tf)c Supreme Court of tfje Zimteb states?
O ctober  T e r m , 1987

No, 87-1001

H . K. P orter  C o ., In c ., petitio n er

v .

M etr o po lita n  D ade  C o u n ty , et  a l .

ON PETITION FOR A WRIT OF CERTIORARI TO THE 
UNITED ST A TES COURT OF APPEALS 

FOR THE ELEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES AS 
AMICUS CURIAE

This brief is submitted in response to the Court’s order in­
viting the Solicitor General to express the views of the United 
States.

STATEMENT

1. In the Surface Transportation Assistance Act of 1978 
(ST A A), Pub. L. No. 95-599, 92 Stat. 2689, Congress ap­
propriated federal money to assist state and local public bodies 
in financing the construction of highways and mass transporta­
tion systems. The STAA directed state and local public bodies 
desiring such federal assistance to submit appropriate project 
proposals to the Secretary of Transportation and to have those 
proposals approved by him (§ 302(a), 92 Stat. 2735-2736, 49 
U.S.C. App. 1602). In addition, it provided, in 49 U.S.C. 
1615(a)(1), that “[n]o person in the United States shall on the 
grounds of race, color, creed, national origin, sex, or age be ex­
cluded from participation in, or be denied the benefits of, or be 
subject to discrimination under, any project, program, or activi­

( 1 )



2

ty funded in whole or in part through financial assistance under 
this chapter” and that this non-discrimination requirement was 
“to be in addition to and not in lieu of the provisions of Title VI 
of the Civil Rights Act of 1964 [42 U.S.C. 2000d et seq.]”. Fur­
ther, the Secretary was required to “take affirmative action to 
assure compliance with [Section 1615(a)(1)]” (49 U.S.C. App. 
1615(a)(2)), and, “[w]henever the Secretary determines that any 
person receiving financial assistance * * * has failed to comply 
with * * * [it], * * * the Secretary * * * shall require necessary 
action to be taken to assure compliance * * *” (49 U.S.C. App. 
1615(a)(3)(A)). Finally, the STAA authorized the Secretary “to 
undertake * * * national and local programs that address 
human resource needs as they apply to public transportation ac­
tivities,” including “training and assistance for minority 
business opportunities” (49 U.S.C. App. 1616).

In the wake of the STAA’s enactment, the Urban Mass Tran­
sit Administration (UMTA) of the Department of Transporta­
tion (DOT) required all state and local public bodies seeking 
federal financial assistance for the construction of highway and 
mass transportation projects to comply with UMTA Circular 
1165.1, Interim Minority Business Enterprise Policy and Re­
quirements fo r  Grant Recipients (Dec. 30, 1977) [hereinafter 
Circular], a directive that UMTA had previously issued in con­
nection with its oversight responsibilities under the Urban Mass 
Transportation Act of 1964, 49 U.S.C. App. 1601-1618. The 
Circular obligated applicants for grants in excess of one million 
dollars to establish affirmative action programs for minority 
business enterprise (MBE) participation in order to further 
UMTA’s “policy that MBEs shall have the maximum opportuni­
ty to participate in the performance of contracts financed in 
whole or in part with UMTA funds” (Circular 2). For this pur­
pose, it defined an MBE to be “a business enterprise that is 
owned and controlled by one or more socially or economically 
disadvantaged persons[,j” where “[s]uch disadvantage may arise 
from cultural, racial, chronic economic circumstances or 
background, or other similar cause. Such persons would in-



3

elude, but not be limited to, Blacks (not of Hispanic origin); 
Hispanics; Asians or Pacific Islanders; American Indians or 
Alaskan Natives; and women, regardless of race or ethnicity” 
(id, at 3). Furthermore, the Circular specified that the con­
templated affirmative action plan had to include, inter alia, a 
policy statement concerning the applicant’s commitment to use 
MBEs; a liaison officer and staff, as required, to administer an 
MBE program; procedures to ensure that known MBEs have an 
equitable opportunity to compete for contracts and subcon­
tracts, including access to information and communication pro­
grams to make MBEs aware of opportunities and means by 
which MBEs may be assisted in overcoming barriers to program 
participation; and “[p]ercentage goals for the dollar value of 
work to be awarded to MBEs” (id. at 4). But the Circular did 
not prescribe a methodology for applicants to follow in setting 
the required percentage goals; rather, to ensure “flexibility 
depending on local circumstances,” it left the goal-setting 
responsibility entirely with the state and local public bodies 
seeking the federal funding. See Instructions fo r  the Develop­
ment o f  a Minority Business Enterprise Program Pursuant to 
UMTA C 1165.1, at 6 (Dec. 30, 1977) [hereinafter In­
structions], 1

In addition to requiring compliance with the Circular, the 
UMTA began requiring applicants for federal financial 
assistance in the construction of highway and mass transporta­

1 The Circular made clear, however, that applicants should review and 
evaluate their “transportation improvement program to identify those pro­
curement activities which have the greatest potential for MBE participation,” 
and set goals “which are practical and related to the availability of minority 
firms in desired areas of expertise” (Instructions 6). It further stated that the 
purpose of the goals is to “provide a benchmark for achievement of the MBE 
program within a specified time frame” {ibid.). It identified “several factors
* * * * which contribute to successful goal setting,” including setting the goals 
“related to the availability of MBEs,” setting different goals “by the type of 
proposed procurement,” taking into consideration “other local MBE goals,” 
and requiring prime contractors to provide “adequate documentation and 
justification of failure to meet the goals” {ibid.); the applicant was to review 
the goals at least annually and revise them where appropriate {id. at 7). The 
Circular further stated that requests for proposals should make clear that price 
alone would not be an acceptable basis for rejecting MBE bids (id. at 9).



4

tion projects to comply with DOT Order 4000.7A, Minority 
Business Enterprise Program (Mar. 6, 1978) [hereinafter 
Order], a directive that the Secretary had promulgated to “in­
crease the participation of businesses owned and controlled by 
minorities, including women, (MBEs) in contracts and projects 
funded by the Department,” on the theory that these persons 
“have traditionally been under-represented as owners and 
managers of businesses in this country” (Order 1). The Order 
defined an MBE to be a business that is owned and controlled 
by at least one “individual who [is] Black, Elispanic, Asian 
American, American Indian, Alaskan native, or a woman 
regardless of race or ethnicity” (Order 2). It directed each 
“operating element” within the DOT to require applicants for 
financial assistance “to present for approval * * * an affirmative 
action program to promote minority business enterprise” par­
ticipation (id. at 6), including “[percentage goals for the dollar 
value of work to be awarded to MBEs and reasonable written 
justification for those goals” (id. at 8). Like the Circular, 
however, the Order did not specify the standards that were to be 
used in establishing these MBE participation goals.

2. After the STAA was enacted and the UMTA began con­
ditioning STAA funding on compliance with the Circular and 
the Order, respondent Metropolitan Dade County (MDC) pro­
posed to construct a rapid transit system for the metropolitan 
area of Miami, Florida, and to have the UMTA fund 80% of 
the cost of the electrified third rail of the project with STAA 
monies. See Pet. App. 5; H.K. Porter Co. v. Metropolitan Dade 
County, 650 F.2d 778, 779-780 (5th Cir. 1981). After consulting 
with UMTA, MDC included in its bid specifications a require­
ment that each bidder either involve MBEs in 5% of the con­
tract work or demonstrate that every reasonable effort to con­
tract and negotiate with minority contractors had been made 
and that minority contractors simply were not “qualified” or 
“available” to do the work (Pet. App. 7-8).2 A contractor was

2 Like the Circular and the Order, the bid specification defined MBEs to be 
businesses that are owned or controlled by “individua![s] who [are] Black, 
Hispanic, Asian American, American Indian, Alaskan native, or [] 
wom[e]n[,] regardless of race or ethnicity” (Tr. Ex. 1, Addendum No. 3, App. 
B at 1).



5

“unqualified” if it was legally ineligible to perform specific work 
or did not have the licenses, skills, experience, or manpower 
necessary to comply with MDC’s performance schedule; de­
manding a higher price for doing the work was not necessarily a 
disqualifying factor. See Tr. Ex. 1, Addendum No. 3, App. B at 
2; Tr. Ex. 15, at 24, A contractor was “unavailable” if it was 
qualified to do specific work but did not intend or was unable to 
make a proposal because of a lack of interest, an unwillingness 
to meet specifications, or an unwillingness to work in the perti­
nent geographical area; again, demanding a higher price for do­
ing the work was not necessarily a disqualifying factor. Tr. Ex. 
1, Addendum No. 3, App. B at 2-3; Tr. Ex. 15, at 24.

MDC received three bids in response to its solicitation (Pet. 
App. 8). Petitioner, H.K. Porter Company, submitted the 
lowest bid, but left blank the MBE compliance component of 
the bid form and instead indicated separately that no minority 
firms produced any of the four products that it could not itself 
provide (id. at 8-9).3 The second lowest bidder, Transit Pro­
ducts, Inc., protested that qualified minority contractors were 
available and that it had satisfied the MBE participation re­
quirement (id. at 28). MDC therefore held a compliance pro­
ceeding, on November 28, 1979, before respondent John Dyer, 
the county’s contracting officer (id. at 29). Dyer found that 
qualified MBEs were in fact available and that petitioner had 
failed to make every reasonable effort to negotiate and contract 
with them. See H.K. Porter Co. v. Metropolitan Dade County, 
650 F.2d at 780 n.3. He therefore recommended that the con­
tract be awarded to Transit Products (Pet. App. 29). UMTA 
concurred in Dyer’s decision (650 F.2d at 780-781).

3 Petitioner later explained (Pet. App. 9) that it had recently invested in an 
in-house assembly plant in Chicago and that, due to its in-house assembly 
plant, only four items from outside sources were necessary to fulfill the con­
tract. Petitioner further stated (id. at 9-10) that no minority firms produced 
any of these four items and that, because of the nature of its in-house plant, it 
was “economically impracticable” to break down the contract in an attempt to 
subcontract to MBEs. Petitioner also noted that its Chicago plant employed 
33 workers, all of whom were minorities' (id. at 45).



6

3. Petitioner immediately brought suit against MDC and 
Dyer, seeking a temporary restraining order against the con­
tract’s award, and alleging that the 5% MBE participation re­
quirement exceeded the authority established by the STAA and 
violated the Equal Protection Clause of the Fourteenth Amend­
ment and Title VI of the Civil Rights Act of 1964, 42 U.S.C. 
2000d et seq. (Pet. App. 29-30). In addition, petitioner moved 
for leave to add the Secretary as a party defendant (id. at 30). 
But the district court denied both motions, ruling that the 5% 
MBE contracting goal was consistent with the STAA, Title VI, 
and the Constitution (ibid.), and declining without discussion to 
join the Secretary as a party defendant (ibid.).

Petitioner filed a timely notice of appeal with respect to the 
decision on the merits; the United States, participating as an 
amicus curiae (since petitioner did not appeal the district court’s 
decision on the joinder issue), filed a brief defending the con­
stitutionality of the Circular and the Order. The court of ap­
peals concluded, however, that the case was moot. Pet. App. 
31; H.K. Porter Co. v. Metropolitan Dade County, 650 F.2d 
778 (5th Cir. 1981). It reasoned that petitioner sought only to 
enjoin the awarding of the contract and that, since MDC had 
awarded the contract to Transit Products while the case was 
pending on appeal, it could not grant petitioner such relief (id. 
at 782). It thus vacated and remanded with instructions that the 
district court’s order be treated as having no “precedentialef- 
fect” (id. at 783).

4. Petitioner thereupon instituted this action for damages 
against MDC and Dyer (Pet. App. 10), alleging that the 5% 
MBE participation requirement, on its face and as applied to 
petitioner, violated the Equal Protection Clause of the Four­
teenth Amendment, 42 U.S.C. 1981, 42 U.S.C. 1983, 42 U.S.C. 
2000d, and 49 U.S.C. App. 1615.4 Respondents MDC and Dyer 
answered that the 5% MBE requirement had been imposed only 
to comply with the conditions that UMTA placed on the receipt 
of federal funding and that those conditions were valid under

4 Petitioner also asserted a claim under Florida administrative law, but no 
longer pursues that claim. See Pet. App. 10, 23.



7

this Court’s decision in Fullilove v. Klutznick, 448 U.S. 448 
(1980), Respondents conceded, however, in response to peti­
tioner’s request for admissions, that “ ‘no representative or of­
ficial of the County or of the United States Department of 
Transportation made an investigation to determine whether five 
percent MBE participation was a reasonably obtainable goal or 
quota in connection with [the] [c]ontract * * *’ ” (Pet. App. 32 
(citation omitted)). They further admitted that “ ‘[t]he 5% par­
ticipation requirement * * * was not based upon a previous in­
vestigation or calculation made by [respondents] or UMTA” 
(ibid.).5

On the parties’ cross-motions for summary judgment, the 
district court entered judgment for respondents (Pet. App. 
24-55). It noted (Pet. App. 49) that “[t]he Congress gave the 
Secretary of Transportation the responsibility to take affir­
mative action to assure compliance with [the non-discrimination 
provision] of the [STAA],” and that MDC’s “bid invitation
* * * included * * * the 5% minority business enterprise goal
* * * in response to the Secretary of Transportation’s Order 
400[0],7A and the [UMTA’s] Circular 1165.1.” The court then 
held that, “[i]n light of Congress’ determination that minorities 
were not fully participating in public contracts at the federal, 
state, and local level, Congress had the power to remedy the ef­
fects of past discrimination” and that MDC’s “modest 5% 
minority business enterprise goal — not quota — for the Metrorail 
contract was a valid implementation of Congressional policy” 
(Pet. App. 49). The court added that “the 5% minority business 
enterprise goal provision at issue in this case is less burdensome 
than the 10% minority business enterprise quota upheld against

5 Respondents later moved to withdraw these admissions and to proffer 
evidence allegedly showing that the 5% MBE participation requirement was 
established only after MDC had determined which portions of the contract 
could be subcontracted out and what nationally known minority firms were 
capable of performing such work (Pet. 4; Pet. App. 32). But the district court 
denied the motion, finding that “there was no evidence to contradict the ad­
missions” (ibid.), and that “this information should have been discovered long 
ago and presented to [petitioner], and it would be prejudicial at this late stage 
in the proceeding to allow' the withdrawal” (Tr. 19-20).



constitutional challenge in Fullilove" (id. at 50); that the con­
tract “allowed for a waiver of the 5% minority business enter­
prise goal” (ibid.); and that respondents’ “refusal to waive the 
5°7o minority business enterprise goal [was] justified on these 
facts, particularly in light of the second-lowest bidder’s ability 
to find minority-owned subcontractors” (id. at 51).

5. The court of appeals affirmed (Pet. App. 1-23). It held 
that the MBE participation requirement was constitutional on 
its face and also as applied to petitioner (id. at 11, 23).

As to the facial attack, the court noted its agreement with 
petitioner that “the use of racial, ethnic or sexual preferences as 
a basis to award government contracts appears to be contrary to 
the clear language of the statutes” (Pet. App. 12). It further 
reasoned, however, that “the prohibitions against discrimina­
tion contained in [42 U.S.C.] 2000d and 49 U.S.C. 1615(a)(1) 
[must be analyzed] in light of the legislative and historical con­
text in which the acts arose” (Pet. App. 12-13, relying on 
Steelworkers v. Weber, 443 U.S. 193 (1979)), and that the 
“background giving rise to the promulgation of [Section] 2000d 
and [Section] 1615(a)(1) clearly indicates that Congress was ad­
dressing the need to ensure that minority firms would be provid­
ed with a fair opportunity to participate in federally-funded 
government contracts. Indeed, in § 1615(a)(2) of the Act, Con­
gress delegated to the Secretary of Transportation the respon­
sibility to take affirmative action to assure compliance with 
Congress’ determination that minorities were not fully par­
ticipating in public contracts at the federal, state, and local 
level” (Pet. App. 14). The court thus held that “UMTA had the 
authority * * * to promulgate the MBE program relative to [the] 
contract” and that, under Fullilove v. Klutznick, supra, the 
MBE program was constitutional on its face (Pet. App. 14).

As to petitioner’s argument that the MBE provisions of the 
contracts were unconstitutional as applied, the court initially 
noted that, under Wygant v. Jackson Bd. ofEduc., 476 U.S. 267 
(1986), a preferential classification based upon racial or ethnic 
distinctions “must be justified by a compelling government in­
terest” and “be narrowly tailored to the achievement of that goal”



9

(Pet. App. 17). The court then ruled that, with respect to the 
first prong of the Wygant test, “MDC, in implementing the 
MBE provisions of [the] contract * * *, was acting pursuant to 
Congress’ compelling interest in eradicating the continuing 
effects of past discrimination against minorities in the participa­
tion of government contracts” (id. at 18). Citing Fu/lilove v. 
Klutznick, supra, the court rejected petitioner’s contention that 
“MDC was required to make detailed and specific findings con­
cerning past discrimination” (Pet. App. 20). It reasoned that 
MDC “was relying on Congress’ legislative findings which clear­
ly established that minorities were not participating in govern­
ment contracts” and that, in these circumstances, Congress’s 
“findings provide adequate support for such local projects” 
(ibid.).

The court similarly ruled, with respect to the second prong of 
the Wygant test, that the 5% goal was narrowly tailored to 
achieve the stated goal of fostering greater minority participa­
tion in government contracts (Pet. App. 19). While it was con­
cerned that “[t]he record does not suggest that MDC conducted 
* * * detailed studies regarding past discrimination against 
MBE’s in the awarding of construction contracts or investiga­
tions regarding the availability of MBE’s qualified to participate 
in [the] contract * * * (id. at 21), it rested on the fact that 
“federal courts have upheld affirmative action programs utiliz­
ing figures much higher than the modest 5% figure MDC im­
plemented in this case” (ibid.) and that, indeed, this Court in 
Fullilove “approved the use of a 10% MBE goal as sufficiently 
narrowly tailored to be a constitutionally acceptable means of 
redressing the present effects of past discrimination” (id. at 
21-22). It added that “MDC’s implementation of this af­
firmative action program does not unnecessarily trammel the in­
terest of non-minority contractors or sub-contractors” such as 
petitioner, since “[a]ll that was required * * * was that [peti­
tioner] demonstrate that it had made every reasonable effort to 
meet the 5% MBE provision, or demonstrate that it was unable 
to do so despite such efforts because minority contractors were 
not qualified or were not available” (id. at 22).



10

DISCUSSION

1. Petitioner first asks (Pet. i, 10-11) this Court to decide 
whether the MBE requirements imposed by the DOT as condi­
tions for receiving federal funding under the STAA are un­
constitutional on their face. But petitioner does not suggest that 
there is a conflict among the circuits concerning whether UMTA 
Circular 1165.1 and DOT Order 4000.7A are facially constitu­
tional. Nor can it suggest that the question is likely to recur; as 
respondents note (Br. in Opp. 10-11), Congress has since exten­
sively amended the STAA,6 and the Secretary has replaced the 
Circular and the Order with regulations specifically designed to 
implement the new statutory provisions.7 In any event, peti­
tioner was unsuccessful in his motion to join the Secretary as a 
party defendant in this litigation, and did not pursue that issue 
on appeal. As a result, the Secretary has not been afforded an 
opportunity to develop a record from which to defend the con­
stitutionality of the Circular and the Order (which, prior to 
becoming defunct, implemented other statutes as well). In view 
of all these circumstances, as well as the additional fact that 
petitioner’s constitutional rights can be adequately analyzed and 
protected in the factual context of its challenge to MDC’s 
specific MBE program (see Papasan v. Allain, No. 85-499 (July

- 1, 1986), slip op. 23-24), we submit that the facial challenge to 
the Department of Transportation’s program does not merit 
certiorari review.

2. Petitioner next asks (Pet. i, 11-15) the Court to decide 
whether the rejection of its bid for failure to comply with the 
5% MBE participation requirement of MDC’s bid solicitation 
violates the Equal Protection Clause. As we explain below, this 
is a substantial federal question and, depending upon what the

6 See Surface Transportation Assistance Act of 1982, Pub. L. No. 97-424, 
§ 105(f), 96 Stat. 2100 (establishing 10% contracting goal for “socially and 
economically disadvantaged individuals”); Surface Transportation and 
Uniform Relocation Assistance Act of 1987, Pub. L. No. 100-17, § 106(c)(1), 
101 Stat. 145 (same).

7 See 48 Fed. Reg. 33432 (1983), codified at 49 C.F.R. Pt. 23; 52 Fed. Reg. 
39230 (1987), codified at 49 C.F.R. Pt. 23.



' Court decides in / .  City o f  Richmond v. J.A. Croson Co., prob. 
juris, noted, No. 87-998 (Feb. 22, 1988), may eventually merit 
this Court’s attention.8

This Court has “consistently repudiated ‘[distinctions be­
tween citizens solely because of their ancestry’ as being ‘odious 
to a free people whose institutions are founded upon the doc­
trine of equality’ ” (Loving v. Virginia, 388 U.S. 1,11 (1967), 
quoting Hirabayashi v. United States, 320 U.S. 81, 100 (1943)). 
While a majority of the Court has yet to agree upon the precise 
standard of review applicable in cases challenging governmen- 
tally imposed racial or ethnic classifications that favor groups 
which have-suffered discrimination in the past, the Justices have 
indicated that classifications of this type can be justified only by 
especially weighty governmental interests and must be carefully 
constructed to effectuate those governmental interests.9 Upon 
close review of this Court’s most recent decisions on this sub­

8 The court below treated all of petitioner’s statutory claims as being essen­
tially co-extensive with its constitutional claim. While this approach is sup­
portable with respect to the Title VI claim (see Regents o f  University o f  
California v. Bakke, 438 U.S. 265, 287 (1978) (opinion of Powell, J.); id. at 
348-350 (opinion of Brennan, J., joined by White, J., Marshall, J., and 
Blackmun, J.)), it is less supportable with respect to petitioner’s claims under 
49 U.S.C. App. 1615, which is “in addition to and not in lieu of the provisions 
of Title VI,” and 42 U.S.C. 1981, which prohibits race discrimination against 
individuals in contracting, including discrimination against white persons (see 
McDonald v. Sante Fe Trail Transp. Co., 427 U.S. 273 (1976)). The petition 
does not, however, seek certiorari review of this aspect of the court of appeals’ 
judgment and, accordingly, we do not further address it at this time.

9 See, e.g., Wygant v. Jackson Bd. o f  Educ., 476 U.S. at 274 (opinion of 
Powell, J., joined by Burger, C.J., Rehnquist, J., and O’Connor, J.) (any 
racial classification must be justified by “compelling governmental interest” 
and be “narrowly tailored to the achievement of that goal”); Regents o f  
University o f California v. Bakke, 438 U.S. 265, 291 (1978) (opinion of 
Powell, J., joined by White, J.) (“Racial and ethnic distinctions of any sort are 
inherently suspect and thus call for the most exacting judicial examination.”); 
Fullilove v. Klutznick, 448 U.S. at 537 (Stevens, J., dissenting) (“Any 
preference based on racial or ethnic criteria must necessarily receive a most 
searching examination to make sure that it does not conflict with constitu­
tional guarantees.”); Wygant v. Jackson Bd. o f  Educ., 476 U.S. at 301-302 
(opinion of Marshall, J., joined by Brennan, J., and Blackmun, J.) (“remedial



12

ject, we conclude that the rejection of petitioner’s bid for failure 
to comply with MDC’s 5% MBE participation requirement 
probably cannot withstand such judicial scrutiny.10

Respondents offer no independently compelling or important 
interest on the part of MDC that might reasonably be found to 
justify the race-based rejection of petitioner’s bid. They have 
not suggested that their race-based action was designed to pro­
mote any form of racial diversity viewed by Members of this 
Court as legitimate. See Regents o f University o f  California v. 
Bakke, 438 U.S. 311-315 (opinion of Powell, J.); cf. Wygant v. 
Jackson Bd. ofEduc., 476 U.S. at 314-316 (Stevens, J., dissent­
ing). Nor have they suggested that their race-based action was 
designed to remedy prior discrimination traceable to actions by 
MDC. See id. at 274-278 (opinion of Powell, J., joined by 
Burger, C.J., Rehnquist, J., and O’Connor, J.); id. at 288 
(O’Connor, J., concurring). Rather, they have candidly ad­
mitted that MDC was interested only in ensuring the receipt of 
federal funding. See Tr. Ex. 15, at 24. But, while the interest in 
receiving or saving money is clearly rational (Lyng v. 
Automobile Workers, No. 86-1471 (Mar. 23, 1988), slip op. 12), 
such a governmental purpose is not sufficiently “compelling” or 
“important” to sustain a racial classification. See Plyler v. Doe, 
457 U.S. 202, 227-230 (1982) (preservation of state resources 
does not justify denial of education to children of un­
documented aliens); Memorial Hasp. v. Maricopa County, 415 
U.S. 250, 263 (1974) (“a State may not protect the public fisc by 
drawing an invidious distinction between classes of its citizens”); 
Graham v. Richardson, 403 U.S. 365, 374-375 (1971) (“a con­

use of race is permissible if it serves ‘important governmental objectives’ and is 
‘substantially related to achievement of those objectives’ ”).

10 As noted earlier, when this case first reached the court of appeals in 1981, 
the United States filed an amicus brief defending the facial constitutionality of 
the Circular and the Order. In the course of that defense, the United States 
suggested at various points that MDC’s MBE participation requirement was 
likewise constitutional. See U.S. Br. 12-13, 19-21, 21-26. In light of this 
Court’s more recent cases on this subject, especially Wygant v. Jackson Bd. o f  
Educ., 476 U.S. 267, we have concluded that those suggestions were incorrect.



13

cern for fiscal integrity is no[t] [a] compelling justification” for 
denying welfare benefits to resident aliens).

Rather than rely on a “compelling” or “important” interest on 
the part of MDC, respondents argue (Br. in Opp. 5-9) that the 
governmental purpose necessary to sustain MDC’s 5% MBE 
participation requirement may be derived from the STAA. 
More specifically, respondents contend: (a) that, in the STAA, 
Congress made findings with respect to past discrimination in 
construction contracting nationwide; and (b) that MDC’s MBE 
program is derivatively justifiable as a remedy for this prior 
discrimination found by Congress. But these contentions raise 
more questions than they answer.

First of all, it is quite doubtful that Congress contemplated 
that the 1978 STAA would impose or authorize a percentage 
MBE utilization requirement or that Congress made the find­
ings of prior discrimination necessary to support such a provi­
sion. In contrast to Section 103(0(2) of the Public Works 
Employment Act of 1977 (PWEA), which the Court in Fullilove 
found to be remedial in purpose and supported by a prior 
history of discrimination, no provision of the 1978 STAA on its 
face mandates preferences for MBEs or suggests that the 1978 
STAA was intended to be in any part a race-conscious remedy 
for prior discrimination in the construction industry. On the 
contrary, the STAA explicitly states that “[n]o person * * * shall 
on the grounds of race * * * be subject to discrimination under 
any project * * * funded in whole or in part through financial 
assistance under [the STAA]” (§ 314, 92 Stat. 2750). Moreover, 
while Congress did provide that the Secretary should take “affir­
mative action” in administering the STAA, it specified that the 
object of such affirmative action was to be “compliance with” 
the statute’s non-discrimination requirement (ibid.); it did not 
suggest that the Secretary should take affirmative action to 
remedy discrimination that pre-existed the enactment of the 
statute. Nor does the fact that Congress enacted the STAA’s 
non-discrimination and affirmative action requirements shortly 
after it adopted Section 103(f)(2) of the PWEA, and against the 
same “backdrop of legislative and administrative programs”



14

from which the necessary remedial purpose was derived in 
Fullilove (448 U.S. at 467), suggest that Congress meant im­
plicitly to embody similar MBE utilization requirements in the 
STAA or that an additional racial remedy was justified by the 
prior discrimination. Nothing in the legislative history of the 
STAA indicates that Congress found the PWEA (not to men­
tion Title VI) inadequate fully to remedy the prior discrimina­
tion it had so found or, more importantly, that the STAA was 
to be a remedial supplement to the PWEA program.11

11 To be sure, as the court below noted (Pet. App. 4), “the House report of 
the Committee on Public Works and Transportation acknowledged a depart­
mental initiative on behalf of the Department of Transportation (‘DOT’) to 
encourage the participation of minority business enterprises in the DOT’S pro­
gram.” But nothing in this House report suggests that Congress viewed either 
the STAA or the cited departmental initiative as a remedy for prior, identified 
discrimination in the construction industry. See H.R. Rep. 95-1485, 95th 
Cong., 2d Sess. 71 (1978). Indeed, this passage in the House report is not tied 
to any provision of the House bill, much less to the non-discrimination and af­
firmative action provisions (which originated in the Senate bill as a means for 
consolidating the civil rights enforcement authority of the UMTA). See H.R. 
Conf. Rep. 95-1797, 95th Cong., 2d Sess. 136 (1978); S. Rep. 95-857, 95th 
Cong., 2d Sess. 4, 26 (1978). Thus, the passage in the House report cannot 
fairly serve as evidence of any remedial intent on the part of the enacting Con­
gress. See Wong Yang Sung v. McGrath, 339 U.S. 33, 47-48 (1950); see 
generally Int’l Bhd, o f  Elec. Wkrs. v. NLRB, 814 F.2d 697, 715-718 (D.C. Cir. 
1987) (Buckley, J., concurring); Hirschey v. FERC, 111 F.2d 1, 7-8 (D.C. Cir. 
1985) (Scalia, J., concurring).

Nor can the necessary remedial intent be found in the Circular or the Order. 
While the Circular and Order plainly required applicants for federal financial 
assistance under the STAA to adopt percentage goals for MBE participation, 
they were justified only as a means of increasing the participation of MBEs in 
the performance of contracts financed with federal funds, and not as a remedy 
for prior, identified discrimination. See Circular 2 (affirmative action program 
established in order to ensure that MBEs “have the maximum opportunity to 
participate in the performance of contracts financed in whole or in part with 
UMTA funds”); Order 1 (MBE requirements imposed to “increase the par­
ticipation of businesses owned and controlled by minorities, including women, 
(MBEs) in contracts and projects funded by the Department,” as these persons 
“have traditionally been underrepresented as owners and businesses in this 
country”).

Moreover, even if the Circular or Order had purported to make findings of 
prior discrimination, we note that Members of this Court have raised the



15

Furthermore, it is aiso doubtful that respondents can prop­
erly rely upon any remedial purpose Congress may have had as a 
derivative justification of MDC’s MBE participation require­
ment. In Fullilove, the Court (with no majority opinion and 
three dissenting Justices) held that Congress’s findings of prior 
nationwide discrimination in the construction industry were suf­
ficient to sustain Section 103(f)(2) of the PWEA against facial 
constitutional attack. But the Court had no occasion, and thus 
declined, to address any questions relating to specific applica­
tions of that MBE program, including the question whether 
Congress’s findings of prior discrimination, which were of a 
general type, relieved applicants for federal financial assistance 
of showing that such discrimination was in fact specifically 
traceable to them. See 448 U.S. at 453, 471, 480-481, 486, 
487-488 n.73 (opinion of Burger, C.J.).

Subsequently, however, in Wygant, five Justices apparently 
rejected the argument that a governmental actor may grant 
racial preferences in order to remedy prior “societal” discrimina­
tion— i.e., discrimination that is not traceable to actions by that 
governmental actor. See 476 U.S. at 274-278 (opinion of 
Powell, J., joined by Burger, C.J., Rehnquist, J., and O’Con­
nor, J.); id. at 288 (opinion of O’Connor, J.); id. at 294-295 
(opinion of White, J.). And, more recently, the Court has in­
dicated that a state or local government may rely on a federal 
program in defending against an equal protection challenge only

question whether the head or component of an agency is competent to provide 
racial preferences under the authority of either Section 5 of the Fourteenth 
Amendment or the Spending Power. See, e.g., Fullilove v. Klutznick, 448 
U.S. at 468; id. at 515-516 n. 14 (Powell, J., concurring); Regents o f  University 
o f California v. Bakke, 438 U.S.. at 309-310 (opinion of Powell, J.); cf. 
Wygant v. Jackson Bd. o f Educ., 476 U.S. at 292 (O’Connor, J., concurring) 
(“competent” authority required). This question takes on especially serious 
proportions where, as here, the administrative agency does not have a man­
date from Congress to make such findings or to provide such preferential 
treatment. See Hampton v. Mow Sun Wong, 426 U.S. 88, 114-116 (1976); cf. 
Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 16-18 (1981) (af­
firmative duties may not be imposed on states via Section 5 of the Fourteenth 
Amendment or the Spending Power unless, at a minimum, Congress has 
“unambiguously” spelled out those duties); see generally NLRB  v. Catholic 
Bishop, 440 U.S. 490 (1979).



16

where it had “no choice” but to follow the dictates of the federal 
program. See Papasan v. Allain, slip op. 23. Here, of course, 
MDC was not required to participate in the federal funding pro­
gram, and there is no reason to believe that “the financial in­
ducement offered by Congress [was] * * * so coercive as to pass 
the point at which ‘pressure turns into compulsion5 ” (South 
Dakota v. Dole, No. 86-260 (June 23, 1987), slip op. 7 (citation 
omitted)). Thus, it appears that respondents cannot derive a 
sufficient remedial purpose for their own particular MBE 
utilization program from any national findings of prior 
discrimination that Congress may have made.

In any event, MDC’s 5% MBE participation program also 
fails the requirement that, as a racial classification, it be care­
fully constructed to effectuate its remedial purpose. Neither 
Congress nor the Department of Transportation has undertaken 
in any way to determine the extent to which various minority 
groups or contractors have been victimized by discrimination. 
Indeed, the Circular and the Order expressly decline to prescribe 
a methodology for applicants to follow in setting their percent­
age goals. See Instructions 6; Order 9-10. And, as respondents 
admitted in the district court (Pet. App. 32 (citation omitted)), 
“ ‘no representative or official of the County * * * made an in­
vestigation to determine whether five percent MBE participa­
tion was a reasonably obtainable goal or quota in connection 
with [the] [c]ontract * * *. The 5% participation requirement of 
[the contract] was not based upon a previous investigation or 
calculation made by [respondents] or UMTA.’ ” Indeed, the 
across-the-board percentage preference for all businesses owned 
or controlled by individuals in the favored groups was apparent­
ly imposed without regard to the actual history of prior 
discrimination against all or any of the favored groups, and 
without attention to such issues as whether each group suffered 
prior discrimination to the same degree as the other groups, 
whether the individuals in a particular group had already over­
come the effects of any prior discrimination, or whether the par­
ticular beneficiaries of the preference had actually been victims 
of prior discrimination. Likewise, there has been no claim that



17

respondents considered, in determining the percentage figure 
for each group, the relative strength of non-minority com­
petitors’ qualifications, the efficacy of alternative remedies for 
any prior discrimination that Congress may have found, or the 
problem of identifying the particular minorities who were to be 
benefited. In these circumstances, respondents cannot plausibly 
claim that they carefully constructed their program to achieve 
the asserted purpose of remedying prior discrimination. See 
United States v. Paradise, No. 85-999 (Feb. 25, 1987), slip op. 
19-32 (opinion of Brennan, J.); Wygant v. Jackson Bd. o f  
Educ., 476 U.S. at 284 n.13 (opinion of Powell, J.); id. at 
293-294 (opinion of O’Connor, J.); Regents o f  University o f  
California v. Bakke, 438 U.S. at 315-320 (opinion of Powell, 
J.); Fullilove v. Klutznick, 448 U.S. at 532-554 (Stevens, J., 
dissenting).

Respondents object (Br. in Opp. 4) that they attempted to 
withdraw the above-referenced admissions and to proffer 
evidence showing that MDC established the 5% goal only after 
determining which portions of the contract could be subcon­
tracted out and what nationally known minority firms were 
capable of performing that work. But the district court denied 
this motion (Tr. 19-20), finding that “this information should 
have been discovered long ago,” and that “it would be prej­
udicial at this late stage in the proceeding to allow the 
withdrawal.” It is therefore improper for respondents to raise 
this objection now. In any event, as the district court also found 
(Pet. App. 32), the proffer did not “contradict the admissions.” 
Taking the proffer at face value, the simple comparison of the 
percentage of nationally known minority firms capable of per­
forming the work with the percentage of those retained to do 
the work on this particular contract is no serious effort to iden­
tify the extent of actual discrimination, either present or past. 
Thus, whatever it proves, the proffer does not establish that the 
program was tailored to a remedial purpose.

To be sure, as respondents note (Br. in Opp. 5, 9-10), MDC 
had a waiver provision for bidders that did not meet the 5% 
MBE preference requirement. But the waiver provision only



18

sought to avoid denial of contract awards for failure to retain 
unqualified or unavailable MBEs (where qualifications and 
availability were determined without regard to price). It other­
wise inflexibly required bidders to meet the 5°7o MBE require­
ment (see pages 4-5, supra) and, in any event, did not ensure 
that the minority groups receiving preferences had been prop­
erly identified, that particular minority groups were benefited 
only to the degree of the actual prior discrimination against 
them, or that individuals of minority groups who had already 
overcome the effects of prior discrimination were not benefited. 
Thus, it did not ameliorate the tailoring problem that existed in 
this program.

3. The question remains whether the contrary judgment of 
the court below merits review by the Court at this time. On the 
one hand, dozens of state and local governments, as well as a 
variety of federal statutes and administrative regulations, have 
established set-aside programs — mostly after this Court’s affirm­
ance in Fullilove of the facial constitutionality of the PWEA 
program.12 This fact alone suggests a pressing need for serious 
constitutional reflection. Further, the courts of appeals are 
deeply divided over the constitutionality of these programs.13

12 See, e.g., United States Conference of Mayors and United States Depart­
ment of Commerce, 1986 National City Profiles: Report on Minority Enter­
prise Development Program 1 (1986); 15 U.S.C. (& Supp. IV) 637(d)(1), 
(6)(A); 22 U.S.C. 2151; 28 U.S.C. 450e(b); 24 C.F.R. 570.424(d)(2), 
570.428(d)(2); 36 C.F.R. 906.1(a), (c), 906.3(a).

13 Compare Ohio Contractors Ass’n v. Keip, 713 F.2d 167 (6th Cir. 1983) 
(upholding the facial constitutionality of a state statute that annually reserved 
for minorities set percentages of state contracts); Schmidt v. Oakland Unified 
Sch. Dist., 662 F.2d 550 (9th Cir. 1981), vacated on other grounds, 457 U.S. 
594 (1982) (upholding constitutionality of local government’s set-aside plan 
based on statistical disparity between the minority population of the com­
munity and the minority business enterprises that had benefited from the 
award of school construction contracts); South Fla.. Chapter o f  Assoc. Gen. 
Contractors v. Metropolitan Dade County, 723 F.2d 846 (11th Cir.), cert, 
denied, 469 U.S. 871 (1984) (upholding facial constitutionality of bidding pro­
cedures that required 50% of each contract’s value to be subcontracted to 
black contractors); with J.A. Croson Co. v. City o f Richmond, 822 F.2d 1355 
(4th Cir. 1987), prob. juris, noted, No. 87-998 (Feb. 22, 1988) (holding un-



19

On the other hand, the Court has recently noted probable 
jurisdiction in City o f Richmond v. J.A. Croson Co., prob. 
juris, noted, No. 87-998 (Feb. 22, 1988) and the Court’s decision 
in that case will do much to resolve the conflict and undoubted­
ly shed much light on the burden that state and local govern­
ments bear in justifying their MBE programs. Accordingly, 
although this case is distinguishable from J.A. Croson Co. 
because it involves (a defunct) federal-state (as opposed to a 
purely non-federal) set-aside program, the petition should be 
held pending the decision in J.A. Croson Co. and then disposed 
of as is appropriate in light of the judgment rendered therein.

constitutional set-aside plan that rested on brief statements concerning 
generalized racial discrimination in local construction industry and statistical 
disparity between black population and black-owned businesses); Michigan 
Road Builders Ass’n v. Milliken, 834 F.2d 583 (6th Cir. 1987) (holding un­
constitutional a state set-aside plan that was not a response to prior 
discrimination by the state); and Associated Gen. Contractors v. City & Coun­
ty o f San Francisco, 813 F.2d 922 (9th Cir. 1987) (holding unconstitutional a 
set-aside ordinance that was not based on reliable evidence of prior discrimina­
tion by the enacting city).



20

CONCLUSION

The petition should be held pending the Court’s decision in - 
City o f  Richmond v. J.A. Croson Co., No. 87-998, and disposed 
of as is appropriate in light of the judgment rendered therein.

Respectfully submitted.

April 1988

Charles Fried 
Solicitor General 

Wm. Bradford Reynolds 
Assistant Attorney General

Donald B Ayer 
Deputy Solicitor General

Roger Clegg
Deputy Assistant Attorney General

Glen D. Nager 
Assistant to the Solicitor General

David K. Flynn 
Attorney

*  U.S. GOVERNMENT PRINTING OFFICE: 1988-202-037/60384