Central Alabama Paving, Inc. v. James

499 F. Supp. 629, 28 Cont. Cas. Fed. 80,875, 1980 U.S. Dist. LEXIS 17137, 24 Empl. Prac. Dec. (CCH) 31,353
CourtDistrict Court, M.D. Alabama
DecidedOctober 10, 1980
DocketCiv. A. 80-358-N
StatusPublished
Cited by19 cases

This text of 499 F. Supp. 629 (Central Alabama Paving, Inc. v. James) is published on Counsel Stack Legal Research, covering District Court, M.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Central Alabama Paving, Inc. v. James, 499 F. Supp. 629, 28 Cont. Cas. Fed. 80,875, 1980 U.S. Dist. LEXIS 17137, 24 Empl. Prac. Dec. (CCH) 31,353 (M.D. Ala. 1980).

Opinion

MEMORANDUM OPINION

HOBBS, District Judge.

This action was commenced on August 29, 1980 by the filing by plaintiff contractors of a motion for a temporary restraining order seeking to have the Court enjoin the Governor of the State of Alabama, the State of Alabama Highway Department and its Director, and Jerome Kelley, as the Minority Business Enterprise Liaison Officer, from implementing and enforcing provisions of the State of Alabama Highway Department Minority Business Enterprise program which required that only bids which had a percentage of the work awarded to Minority Business Enterprises or Women Business Enterprises (hereinafter referred to as MBEs and WBEs, respectively) would be considered in awarding State highway contracts. Plaintiffs contended that this program of the State of Alabama Highway Department violated their rights under the Fourteenth Amendment to the United States Constitution, §§ 1981 and 1983 of Title 42 of the United States Code, as well as Title VI of the Civil Rights Act of 1964. The program was also challenged as violative of the Federal Highway Act, 23 U.S.C. § 101 et seq. Finally, plaintiffs contended the regulations of the United States Department of Transportation (hereinafter referred to as DOT) violated their rights under the Fifth Amendment of the Constitution.

The challenged MBE and WBE program was promulgated pursuant to directives of DOT.

A hearing was held on September 2,1980 on plaintiffs’ motion for a temporary restraining order. Because the challenge to the Alabama Highway Department MBE and WBE program was an attack on the regulations of DOT and because DOT was not represented at that hearing, this Court denied plaintiffs’ motion for a temporary restraining order, and set plaintiffs’ motion for a preliminary injunction for a hearing on September 26, 1980. Parties were directed to file briefs prior to the hearing and the Court granted leave to the parties to proceed with the taking of depositions on an expedited basis pursuant to Rule 30(a) of the Federal Rules of Civil Procedure.

The Alabama defendants filed a third party complaint on September 2, 1980, which in effect asserted that its MBE and WBE program was required by DOT in order for the State of Alabama to participate in the federal funding of Alabama highways, and the Alabama defendants made DOT and Mr. Goldschmidt as its Director, and Mr. MacDonald as its Division Administrator, third party defendants. By an amendment to their third party complaint which was filed on September 23, 1980, the Alabama defendants prayed that this Court enjoin the third party defendants from enforcing the DOT rules and regulations and require the third party defendants to fund Alabama highway projects without *632 certain of the MBE and WBE requirements. The third party complaint filed by the Alabama defendants asserts, as does the complaint of the original party plaintiffs, that the DOT rules and regulations violate the United States Constitution by requiring a preference based on race, sex and national origin. The third party complaint also charges that DOT’s regulations violate federal statutes and Executive Orders.

At the hearing on September 26,1980, all parties were present and participated in the argument. Numerous depositions, affidavits and exhibits were admitted in evidence. Exhaustive briefs have been filed.

On consideration of the evidence, the briefs, and the arguments of counsel, the Court concludes that the preliminary injunction should be granted.

FACTS

In 1980, DOT adopted new rules and regulations which required the state highway departments to submit percentage “goals” for fiscal year 1981 for MBEs and WBEs by October 1, 1980. 1 An MBE is defined in the DOT regulations as a business which is at least owned 51 per cent by one or more minorities or women. Minorities are defined as Blacks, Hispanics, Asian Americans, American Indians, Alaskan natives, or members of other groups found to be economically or socially disadvantaged.

The Alabama Highway Department has been advised by appropriate representatives of DOT that if fixed percentage goals are not submitted by October 1,1980, no federal funding will be available for future highway projects in Alabama. DOT set the goals for each region in the country by equating each region’s percentage of the 1979 fiscal year federal aid dollars and applying that percentage to the fiscal year 1980 MBE goal. (Ex. 5 to Stump depo.) No attempt was made to allocate the goals on the basis of any finding of discrimination in the letting of highway projects. (Brooks depo., pp. 24-25) At the hearing, counsel for DOT conceded that DOT had made no findings of any past discrimination against WBEs insofar as highway contracts were concerned. The basis for the requirement that a percentage of contracts be awarded WBEs was based solely on the statistics which show nationwide an underrepresentation of WBEs receiving contracts for highway construction.

The first MBE program submitted by the Alabama Highway Department was rejected by DOT. Under the DOT requirement of having its goal approved or receiving no federal funds, the Alabama Highway Department has submitted a second MBE program. Alabama defendants were advised that unless its plan had minimum goals of 2.75 per cent for MBEs and 1 per cent for WBEs, it would not be approved. (Kelley depo., pp. 13-14; Ex. 5 to Quick depo.; Ex. 21 to MacDonald depo.; Kemp depo., pp. 100-102).

For the first time the DOT regulations promulgated March 31, 1980, provided that if any contractor offering a reasonable price “meets the MBE contract goal,” then “the recipient (the State Highway Department) shall presume conclusively that all competitors that fail to meet the goal have failed to exert sufficiently reasonable efforts and consequently are ineligible to be awarded the contract.” Fed.Reg. Vol. 45, No. 63, p. 21188.

Although the regulations expressly state that they constitute a “major change in approach” to the selection of successful bidders, no new notice of proposed rulemaking was published on the final regulations to allow public comment or input in the new contract selection approach. It is conceded that the belated edition of Title VI as a statutory basis for the regulations was not approved as required by Title VI. (Stipula *633 tion of counsel in Horton’s deposition at page 145)

The necessary components of each MBE program which must be submitted by each state’s highway department are set out in the DOT regulations. For example, the program must contain a policy statement expressing a commitment to the use of minority business. It must contain procedures to assure that affirmative action techniques will be employed to facilitate MBE participation. It must contain assurances that participants will encourage prime contractors to use minority owned banks or banks owned by women. It must insure that the recipient has a directory to identify MBEs which is available to bidders. The regulations forbid any discrimination based on race or sex and impose sanctions. None of these requirements of the program is challenged.

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499 F. Supp. 629, 28 Cont. Cas. Fed. 80,875, 1980 U.S. Dist. LEXIS 17137, 24 Empl. Prac. Dec. (CCH) 31,353, Counsel Stack Legal Research, https://law.counselstack.com/opinion/central-alabama-paving-inc-v-james-almd-1980.