La. Associated Gen. Contractors, Inc. v. STATE EX REL. DIV. OF ADMINI.

669 So. 2d 1185
CourtSupreme Court of Louisiana
DecidedMarch 8, 1996
Docket95-CA-2105
StatusPublished
Cited by1 cases

This text of 669 So. 2d 1185 (La. Associated Gen. Contractors, Inc. v. STATE EX REL. DIV. OF ADMINI.) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
La. Associated Gen. Contractors, Inc. v. STATE EX REL. DIV. OF ADMINI., 669 So. 2d 1185 (La. 1996).

Opinion

669 So.2d 1185 (1996)

LOUISIANA ASSOCIATED GENERAL CONTRACTORS, INC.
v.
STATE of Louisiana, through the DIVISION OF ADMINISTRATION, OFFICE OF STATE PURCHASING; Raymond LaBorde, Commissioner of Administration; Virgie O. Leblanc, Director of the Office of State Purchasing; Louisiana Health Care Authority; and Dr. William Cherry, Chief Executive Officer of the Louisiana Health Care Authority.

No. 95-CA-2105.

Supreme Court of Louisiana.

March 8, 1996.

*1188 Nadine Michele Ramsey, Terry Ford Hessick, Amy Waters Phillips, George John Grazioso, Kevin Paul Torres, Pamela Miller Perkins, Baton Rouge, for Applicant.

W.P. Wray, Jr., Christopher Paul Pierce, Eric Alan Kracht, Wray & Kracht, Baton Rouge, for Respondent.

Richard P. Ieyoub, Attorney General, Roy Achille Mongrue, Jr., Baton Rouge, for the State of Louisiana.

Michael Charles Darnell, New Orleans, for Amicus Curiae Delta Export Pharmacy, Inc., and Lafayette Medical Inc.

Terry E. Allbritton, New Orleans, for Amicus Curiae Coalition of Minority Contractors of Louisiana.

KIMBALL, Justice.[*]

THE ISSUE

The Louisiana Minority and Women's Business Enterprise Act, La.R.S. 39:1951 et seq., enacted by Act 653, Section 1 in 1984 and later amended and reenacted by Act 797, Section 2 in 1992, [hereinafter "the Act"] was declared unconstitutional by a trial court under Art. I, Sec. 3 of the Louisiana Constitution of 1974. Pursuant to La. Const. Art. V, Sec. 5(D), the defendants were entitled to a direct appeal to this court. Upon extensive review of the law and the record in this case, we affirm the trial court's conclusion that portions of the Act unconstitutionally discriminate on the basis of race. We additionally affirm his finding that the remaining portions of the Act are not severable because the unconstitutional portions of the Act are so interrelated and connected with the remaining parts that they cannot be separated without destroying the intent of the legislature in enacting the Act. Therefore, we affirm the trial judge's declaration that the Act is unconstitutional in its entirety.

THE ACT

The Louisiana Minority and Women's Business Enterprise Act was created by the legislature to:

provide the maximum practical opportunity for increased participation by the broadest number of minority-owned businesses in public works and the increased participation by minority-owned businesses and women's business enterprises in the process by which goods and services are procured by state agencies and educational institutions from the private sector. This purpose will be accomplished by encouraging the full use of the broadest number of existing minority-owned businesses and women's business enterprises into the marketplace and the entry of new and diversified minority-owned businesses and women's business enterprises into the marketplace.
La.R.S. 39:1951.

Generally, the Act requires that a certain percentage of funds expected to be expended on public works and procurement contracts be designated solely for participation by "certified" minority business enterprises and women's business enterprises. La.R.S. 13:1955. The percentage applicable to each state agency is set each year by the Executive Director of the Division of Minority and Women's Business Enterprise, an entity created by this Act, with the concurrence of the Commissioner of Administration, and cannot exceed 10% for minority business enterprises and 2% for women's business enterprises. Id. Each agency "shall" file a yearly plan showing its strategy to set aside contracts sufficient to meet its required percentages and quarterly reports indicating compliance with the set goals and the yearly plan. La. R.S. 33:1956.A and B. If the agency fails or declines to formulate a plan, the governor, through the Division of Administration, "shall formulate a plan for that state agency or educational institution." La.R.S. 33:1956.C. The Act is mandatory on each state agency, and applies to all public works contracts and all contracts for the procurement of goods and services by state agencies and educational institutions. La.R.S. 39:1954. Each agency "shall" comply with the overall annual participation goals established for the individual agency under the Act. Id. If the Division fails to establish and enforce the participation goals, any person aggrieved by this inaction may "seek judicial relief by a *1189 writ of mandamus or by injunction." La.R.S. 39:1968.

In order to meet the goals set for participation by minority and women's business enterprises, the agencies set aside public works or procurement contracts solely for bidding by certified business enterprises. Additionally, the Act mandates that "preferences" be used in certain limited situations. One example is where a contract for the construction of public works is to be awarded by the facility planning and control section of the Division of Administration and the amount of the contract is $200,000 or more. In such cases, the award "shall be made to a minority-owned business ... when the price bid by such business is within five percent of the otherwise lowest responsive and responsible bidder" and where the minority business enterprise agrees to adjust its bid to that of the lowest bidder, as long as the minority business enterprise's original bid was within 5% of that bid. Contracts awarded under this provision to minority business enterprises shall not exceed 10% of the total dollar amount of the contracts awarded that year. La.R.S. 39:1962.[1]

In sum, the Act mandates that state agencies employ a system of set-asides and preferences with regard to procurement and public works contracts from which only certified minority business enterprises and women's business enterprises benefit.[2] Specifically, a "minority business enterprise" is defined in the Act as a small business which is at least 51% owned by one or more minority individuals who also control and operate the business. La.R.S. 39:1952(15). A "minority" is defined as:

... a citizen of the United States residing in Louisiana and who is:
(a) Black: having origins in any of the black racial groups of Africa.
(b) Hispanic: of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish or Portuguese culture or origin regardless of race.
(c) Asian American: having origin in any of the original peoples of the Far East, Southeast Asia, the Indian subcontinent, or the Pacific Islands.
(d) American Indian or Alaskan Native: having origins in any of the original peoples of North America.
La.R.S. 39:1952(14).

Therefore, while certified minority businesses are able to bid on approximately 100% of the public works and procurement contracts let by the state, non-minority businesses are only able to bid equally on approximately 90% of such contracts put out to bid by state agencies.

FACTS AND PROCEDURAL HISTORY

In August of 1994, the Louisiana Health Care Authority (LHCA) published an advertisement for bids for a capital renovation project to renovate the Perdido Clinic of University Hospital in New Orleans, Louisiana. The project was designated in the ad as a minority set-aside project in accordance with La.R.S. 39:1951 et seq., such that only minority business enterprise contractors could bid on the project. Bids were to be received on or before August 17, 1994.

On August 15, 1994, plaintiff Louisiana Associated General Contractors, Inc.

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State v. Granger
982 So. 2d 779 (Supreme Court of Louisiana, 2008)

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669 So. 2d 1185, Counsel Stack Legal Research, https://law.counselstack.com/opinion/la-associated-gen-contractors-inc-v-state-ex-rel-div-of-admini-la-1996.