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Folder Title:
National Urban League Annual Conference 8/8/89 [OA 6267] [3]
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26
19
2
7
Asta
THE WHITE HOUSE
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Amer dreams depends on
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way. can lead you, the instill way You prements volues educ.
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Jocobs THE Wosh. WHITE HOUSE Came Cember
Mc. (212) Ben WASHINGTON
re-ettirm commit. to Civil
Rights Det 6/30/89
Quoyle text
Withdrawal/Redaction Sheet
(George Bush Library)
Document No.
Subject/Title of Document
Date
Restriction
Class.
and Type
01. Memo
Hans Kuttner to Dan McGroarty and Stephanie Blessie, re:
07/25/89
P.S
Urban League Speech -- August 9. (5 pp.)
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National Urban League Annual Conference 8/8/89 [3]
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10/8/2004
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06267
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THE WHITE HOUSE
WASHINGTON
July 25, 1989
MEMORANDUM FOR DAN McGROARTY
STEPHANIE BLESSIE
FROM:
HANNS KUTTNER X
SUBJECT:
Urban League Speech -- August 9
Overall
I would recommend that the speech seek a balance between defense of our
position (urban problems can't be solved primarily through federal dollars) and
the "work to be done" theme from the Inaugural Address.¹
Points to Hit
The field is rich with possibilities, in part because the themes involved
haven't been touched on much in the President's speeches. I offer a menu of the
topics that could be included.
Showing Awareness of Minority Concerns
In discussing the speech at our staff meeting, we concluded the typical
listener would want to have the sense that the President is aware of
minority concerns and issues. Emily Mead will be providing you with a
National Research Council report on the current standing of blacks in
American life. One key point is that ours is still a residentially
segregated country. A strong push for fair housing will bring applause
Also, Secretary Sullivan has as one of his priorities lessening the health
disparities between blacks and whites. T have a lot of statistics on this
if you want to pursue it.
The Mess at HUD
Some of the revelations about what has happened in the administration of
HUD's programs are an outrage. The President has full confidence in
Secretary Kemp's effort to make things right. Secretary Kemp has kept the
1 "My friends, we have work to do. There are the homeless,
lost and roaming, there are the children who have nothing -- no
love and no normalcy -- there are those who cannot free
themselves of enslavement to whatever addiction -- drugs,
welfare, the demoralization that rules the slums."
2
President abreast of developments. The Justice Department is involved, and
where crimes have been committed, there will be prosecutions. Also, OMB
Director Darman is reviewing financial controls in other federal programs to
assure there not problems elsewhere.
Michael Jackson from Cabinet Affairs should be sending you more on this.
Another point: this is another reason why housing vouchers for the poor are
our approach to providing housing assistance to the poor. We want to
promote choice all over, in education, in health care, and in housing,
because we want to empower consumers rather than the bureaucrats who run
housing authorities or the developers who seek to make profits from federal
programs.
Urban Prosperity
The best program ever for urban America is economic prosperity. The
investment and growth in income during the current economic recovery have
frankly done more for the cities than any federal program by increasing
municipal revenues. (There must be stats on growth of city budgets in real
terms, since 1982 V previous five years.)
Ships that Don't Rise with the Rising Tide
We realize that a general upward trend will not raise all boats equally.
Kemp is fond of playing with this metaphor, and there's probably a good "As
Jack Kemp tells me" that has something to do with a rising tide swamping
boats that are stuck on the bottom. That's why we hope for a kinder and
gentler America, and support programs (like enterprise zones and help for
the homeless) to help boats stuck on the bottom. (The metaphor works better
with "boats with holes in their hulls" because it brings out the notion that
we want to give people the tools needed to repair those holes.)
We also need to be wary of overpromising. (This was something on which
Darman expressed concern at yesterday's DPC meeting on welfare strategy --
the phenomenal budget reduction target we face in the FY 91 budget.) I
would suggest direct criticism of the overpromising of what the Great
Society programs would bring. (see, e.g., LBJ's late-August 64 remarks at
the signing ceremony for the Economic Opportunity Act saying that we will
end poverty.) By contrast, we should have the humility to accept the
Biblical injunction that the poor are always with us.
Enterprise Zones
The President today (July 25) sent up to the Hill a letter calling for
action on enterprise zones. I'll provide whatever we have on this.
Homeless
In Building a Better America the President called for (1) full funding for
programs in the Stewart B. McKinney Homeless Assistance Act and (2) a $50
million initiative to figure out ways to better coordinate services to be
3
delivered to the homeless.
We need to clarify what we mean by leadership in this area. We don't mean
nationalizing the problem, either with us taking over or pumping in cash
because, frankly, we don't have the cash. Leadership means figuring out
what works best in helping the different parts of the homeless population --
the chronically mentally ill, alcoholics, families in welfare hotels -- and
creating the flexibility in federal programs so that people who make
programs work at the local level can make them solve the problems of
individual homeless people.
Also, we have an Interagency Council on the Homeless to work with service
providers and coordinate federal programs. We have more than $1 billion
going into programs targeted at the homeless, spread through more than ten
agencies.
We don't need to be defensive here, and saying something like "We've failed
these people" would win big points with the audience.
Welfare/Bush Anti-Poverty Agenda
Line to leave them: We want to work with you to make our welfare programs
lift people from dependency, not keep them there.
The Domestic Policy Council spent today's meeting talking about welfare
reform and the Bush Administration. I'd think it would be fair to say that
we believe:
The task of reform is not yet finished.
While some think of last year's Family Support Act (welfare reform) as
a conclusion, we believe it is only a stepping stone to learning more
about how to end dependency. That's why we want the States to continue
initiating demonstrations of innovative approaches.
We have a Low-Income Opportunity Board to work with the states on
shepherding through the federal approval process new ideas states want
to demonstrate. We plan to show greater flexibility in approving
demonstrations to increase state interest in demonstrations. (Unless
this gets into the NGA speech, this counts as a policy announcement.)
Bush Anti-Poverty Principles
Choice "Give us the tools and we will do the job" (approximating
Churchill) should apply to low-income people as well as international
relations.
Example of this notion at work: proposal to encourage magnet schools, our
child care proposal that would give money to parents so that they, not
bureaucrats, can figure out what to do.
Flexibility We want programs to fit local situations. Thus the Low Income
4
Board as a means to allow federal programs to have the flexibility to meet
local needs.
Opportunity We believe in an open society where those who are motivated
and assume the responsibility can move themselves upward. We want to remove
impediments to this, thus an emphasis on literacy and basic skills, not
because it is Barbara Bush's pet project but because it is right for
America. Also Pinkerton's anti-credentialism fits under this heading.
Kemp likes the word empowerment to combine the notions of choice and
opportunity. He makes the point that the goal of poverty-related programs
should be to empower people to help themselves out of poverty, not to pay
them to stay where they are.
Task Force on Urban America
This is something we have been kicking around with Richard Nathan, Dean of
the Rockefeller School at SUNY Albany. See attached background memo.
If things can be worked out, this Task Force can be announced as part of the
speech.
Removing Barriers to Opportunity
I think you have Pinkerton's memo on this subject.
In this speech, the subject can be approached through the notion of the
federal work force as a model for employers.
"Too many Americans lose out on job opportunities because while they can do
the job, they don't have the formal credentials or because they do poorly on
irrelevant tests. [Example of Missouri cosmetology laws; blacks pass
practical at same rate as whites, but only 3% of blacks pass written
tests.
In this speech, the President could:
1. Attack these barriers as doubly insidious, holding back minorities and
suppressing the desire to get ahead in life.
2. Say that he wants the Commission on Civil Rights to be more active in
identifying these barriers.
3.
Announce that the federal government wants to be a model employer, and
that he is commissioning the Director of OPM, Connie Newman, to study how
barriers to federal employment can be reduced. Connie Newman's own story is
an example of opportunity working -- she started as a GS3 typist at USDA.
The President could praise her and say she's fit for most any job he can
think of, but credentialism means the Federal government thinks she could
never do many federal jobs.
5
Finally, this year is the 25th anniversary of LBJ's launching the Great
Society, something that should at least be mentioned in the speech.
CC: Bill Roper
Jim Pinkerton
Emily Mead
No. 88-3578
TN THE UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
JOE CARPENTER, et al,
Plaintiffs-Appellants
SAMUEL K. SKINNER, Secretary of Transportation, et al.,
Defendants-Appellees
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
BRIEF FOR THE FEDERAL AND STATE APPELLEES
LACY H. THORNBURG
JAMES P. TURNER
Attorney General
Acting Assistant Attorney General
State of North Carolina
ROGER CLEGG
Deputy Assistant Attorney General
GRAYSON G. KELLEY
DAVID K. FLYNN
Assistant Attorney
MARK In GROSS
General
Attorneye
State of North Carolina
Department of Justice
P.O. Box 66076
Washington, D.C. 20035-6078
(202) 633-2195
TABLE OF CONTENTS
PAGE
QUESTIONS PRESENTED
1
STATEMENT
2
1. Procedural history
2
2. Facts
3
a. The Federal Program
3
b. The State Program
6
c. Plaintiff's Business
11
3. Decisions of the District Court
14
a. "Facial" challenge
14
b. "As applied" challenge
18
SUMMARY OF ARGUMENT
20
ARGUMENT:
I. PLAINTIFFS LACK STANDING
22
II. ONCE CONGRESS HAS DETERMINED THAT A NATIONWIDE
PROGRAM IS NECESSARY TO REMEDY THE EFFECTS OF
PAST DISCRIMINATION IN A SPECIFIC AREA, AND
ENACTS SUCH A PROGRAM BY STATUTE, A STATE
NEED NOT MAKE ADDITIONAL AND INDEPENDENT
FINDINGS
27
A. Congress Had A Sufficient Remedial
Predicate For The DBE Program It
Enacted in 1982 and Re-Enacted in
1987
28
B. Once Congress Acts With A Sufficient
Evidentiary Predicate For A Nationwide
Race-Conscious Remedy, A State Need
Not Make Additional Findings Before
Implementing The Federal Program
35
III. NORTH CAROLINA HAS PROPERLY IMPLEMENTED THE
FEDERAL REGULATORY REQUIREMENTS FOR OPERATION
OF A DBE PROGRAM, THEREBY INSURING THAT THE
PROGRAM IS NARROWLY TAILORED AND DOES NOT
UNFAIRLY AFFECT ANY ONE TYPE OF CONSTRUCTION
OR CONTRACTOR
41
CONCLUSION
50
- i -
TABLE OF AUTHORITIES
CASES:
PAGE
Anderson V. City of Bessemer City, 470 U.S. 564
(1985)
25
Associated General Contractors of Cal. V. City and
County of San Francisco, 813 F.2d 922 (9th Cir. 1987)
34-35
Association of Data Processing Service Org. V. Camp,
397 U.S. 150 (1970)
23
Barlow V. Collins, 397 U.S. 159 (1970)
23
Central Alabama Paving, Inc. V. James, 499 F. Supp. 629
(M.D. Ala. 1980)
33
City of Richmond V. J.A. Croson. 109 S. Ct. 706 (1989)
passim
Duke Power Co. V. Carolina Environmental Study Group,
438 U.S. 59 (1978)
24
J. Edinger V. Louisville, 802 F.2d 213 (6th Cir. 1986)
35
Fullilove V. Klutznick, 448 U.S. 448 (1980)
passim
Hampton V. Mow Sung Wong, 426 U.S. 88 (1976)
33
Katzenbach V. Morgan, 384 U.S. 641 (1966)
37, 38
Linda R.S. V. Richard D., 410 U.S. 614 (1973)
23
W.F. Magann Corp. V. Diamond Mfg. Co., 775 F.2d 1202
(4th Cir. 1985)
25
Michigan Real Builders V. Milliken, 834 F.2d 583
(6th Cir. 1987)
35
Milwaukee County Pavers V. Fiedler, No. 89-C-0177-C
(W.D. Wis. April 7, 1989), slip op. 15
37
Oregon V. Mitchell, 400 U.S. 112 (1970)
38, 39
H.K. Porter Co. V. Metropolitan Dade County, 825
F.2d 324 (11th cir. 1987)
40
Shrader V. White, 761 F.2d 975 (4th Cir. 1985)
25
Shurberg Broadcasting of Hartford V. FCC, No. 84-1600
(D.C. cir. March 30, 1989, slip op.)
35, 44
- ii -
CASES (cont'd) :
Simon V. Eastern Kentucky Welfare Rights Org.,
426 U.S. 26 (1976)
21, 23
South Florida Chapter of Assoc. Contractors v.
Metropolitan Dade County, 723 F.2d 846 (11th cir.),
cert. denied, 469 U.S. 871 (1984)
35
United States V. SCRAP, 412 U.S. 669 (1973)
24
Warth V. Seldin, 422 U.S. 490 (1975)
23
Webster V. Reproductive Health Services, No. 88-605
(July 3, 1989)
24
Wygant v. Jackson Board of Educ., 106 S. Ct. 1842
(1986)
33, 50
CONSTITUTIONS, STATUTES AND REGULATIONS:
United States Constitution:
Article III
23
Fifth Amendment
2
Fourteenth Amendment
2
Sec. 5
38
Equal Protection Clause
38
North Carolina Constitution:
Due Process Clause
2
Equal Protection Clause
2
Public Works Employment Act of 1977, Pub. L. No. 95-28,
91 Stat. 116
passim
Surface Transportation Assistance Act of 1982, Pub. L.
No. 95-28, 91 Stat. 116
passim
Section 105 (f)
passim
Surface Transportation and Uniform Relocation
Assistance Act of 1987, Pub. L. 100-17, 101 Stat 144
...
4, 10
Section 106 (c)
4, 28, 32,
33
Section 106 (c) (2) (b)
4
Section 106 (c) (2) (A)
4
42 U.S.C. 1973 b(e)
37
42 U.S.C. 1981
2
42 U.S.C. 1983
2
42 U.S.C. 2000d
2
42 U.S.C. 2000e
2
- iii -
REGULATIONS (cont'd) :
49 C.F.R. Subpart D.
4, 5, 45,
46
49 C.F.R. 23.41
5
49 C.F.R. 23.62
4, 5, 46
49 C.F.R. 23.64
5, 47
49 C.F.R. 23.64 (d)
5
49 C.F.R. 23.64 (e)
5
49 C.F.R. 23.66 (b) (1)
5
49 C.F.R. 23.66 (b) (2)
5
49 C.F.R. 23.68 (e) (1)
6
49 C.F.R. 23.69
5
49 C.F.R. 23.45 (g)
5, 44, 45
49 C.F.R. 23.45 (g) (2) (i)
5
49 C.F.R. 23.45 (g) (5) (i)
5
49 C.F.R. 23.45 (g) (7)
5
MISCELLANEOUS:
52 Fed. Reg. 39220 - 39231 (October 21, 1987)
4
128 Cong. Rec. 8954 (1982)
31
Hearings on H.R. 5612, To amend the Small Business
Act to Extend the Current SBA 8 (a) Pilot Program
Before the Senate Select Commmitte on Small Business,
96th Cong., 1st Sess. (1980)
30
Small and Minority Business in the Decade of the
1980's, Pts. I. and II., Hearings Before the House
Committee on Small Business, 97th Cong.,
1st Sess. (1981, 1982)
30, 31
Minority Enterprise and General Small Business Problems,
Hearings on the Small Business Administration 8 (a)
Program, Before the House Committee on Small Business,
97th Cong., 1st Sess. (1981)
30
Minority Business and Its Contribution to the U. S.
Economy, Hearing Before the Senate Committee on Small
Business, 97th Cong., 2d Sess. (1982)
31
Federal Contracting Opportunities for Minority and
Women-Owned Businesses: An Examination of the 8 (d)
Subcontracting Program, Hearing Before the Senate
Committee on Small Business, 98th Cong., 1st Sess.
(1983)
32
Minority Business Enterprise and General Small Business
Problems, Hearing Before the House Committee on Small
Business, 99th Cong., 2d Sess. (1986)
31, 32
- iv -
MISCELLANEOUS (cont'd) :
The State of Hispanic Small Business in America,
Hearing Before the House Committee on Small Business,
99th Cong., 1st Sess. (1985)
32
Women Entrepreneurs: Their Success and Problems,
Hearing Before the Senate Committee on Small Business,
98th Cong., 2d Sess. (1984)
32
S. Rep. No. 100-4, Federal-Aid Highway Safety Act of
1987, 100th Cong., 1st Sess. (1987)
32
- V -
IN THE UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 88-3578
JOE CARPENTER, et al.,
Plaintiffs-Appellants
V.
SAMUEL K. SKINNER, Secretary of Transportation, et al.,
Defendants-Appellees
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
BRIEF FOR THE FEDERAL AND STATE APPELLEES
QUESTIONS PRESENTED
1. Whether appellants lack standing in light of their
failure to show redressable injury.
2. Whether, after Congress has lawfully established a
program requiring that a proportion of the federal funds used in
state highway projects be contracted with disadvantaged business
enterprises (DBE), a state must make further findings sufficient
to sustain a state sponsored set-aside before accepting federal
highway funds.
3. Whether North Carolina's implementation of the DBE
program is narrowly tailored.
- 2 -
STATEMENT
1. Procedural history.
Joe Carpenter, Executive Vice-President of Landmasters,
Inc., a landscape contractor in Gaston County, North Carolina,
filed this suit on April 3, 1985 (R. 1).1 Carpenter and
Landmasters (also a plaintiff) named as defendants various
federal officials, including the Secretary of the United States
Department of Transportation, and state officials responsible for
administration of federally-assisted state highway construction
projects in North Carolina (R. 1, pp. 3-4).
Plaintiffs challenged the constitutionality of Section
105(f) of the Surface Transportation Assistance Act (STAA) of
1982, which provides that no less than 10% of funds authorized
under the Act should be expended on socially and economically
disadvantaged businesses. Plaintiffs alleged that federal and
state enforcement of Section 105(f) deprived nonminority
landscaping contractors of a "meaningful opportunity" to bid on
federally funded state highway projects solely because of their
race (R. 1, p. 11), violating 42 U.S.C. 1981, 42 U.S.C. 1983, 42
U.S.C. 2000d, 42 U.S.C. 2000e, the Fifth and Fourteenth
Amendments, and the Due Process and Equal Protection Clauses of
the North Carolina Constitution (R. 1, pp. 15-17). Plaintiffs
sought a declaration that Section 105(f), and the federal and
state regulations enforcing that provision, are unconstitutional,
1 A second plaintiff, Lanny Thornburg, another landscape
contractor, was also a plaintiff. Thornburg was later dismissed
from the case, and is no longer a party.
- 3 -
and an injunction restraining federal and state defendants from
"discriminating on the basis of race in the administration of
minority and disadvantaged business enterprise regulations of the
Federal and State Departments of Transportation.
All parties sought summary judgment in September of 1986 (R.
51 (state defendants' motion), R. 53 (federal defendants' motion
for partial summary judgment), R. 56 (plaintiffs' motion for
partial summary judgment)). On March 9, 1987, the district court
found Section 105(f) and the federal regulations implementing it,
to be facially constitutional (R. 70), and granted federal
defendants' motion for partial summary judgment (ibid.).
Following that order, trial was held from November 4-6,
1987, to determine whether the program was discriminatorily
applied. On June 16, 1988, the district court entered judgment
for defendants and denied plaintiffs all relief (R. 93).
2. Facts.
As stated above, the trial focused only on the application
of the federal disadvantaged business enterprise (DBE) program to
federally financed state highway projects in North Carolina.
a. The Federal Program. In 1982, Congress enacted the
Surface Transportation Assistance Act of 1982 (STAA),
Pub. L. No. 95-28, 91 Stat. 116. This legislation authorized
federal funds for interstate highway construction projects, and
2 Plaintiffs subsequently moved to file an amended
complaint and for certification of a plaintiff class (R. 28).
The court denied the motion on July 11, 1986 (R. 46). Plaintiff
has not appealed this decision.
- 4 -
established that "not less than 10 per centum of the amounts
authorized to be appropriated under this Act shall be expended
with small business concerns owned and controlled by socially and
economically disadvantaged individuals as defined by section 8 (d)
of the Small Business Act (15 U.S.C section 637 (d))
3
The Department of Transportation promulgated regulations to
implement Section 105(f). 49 C.F.R. Subpart D. The regulations
defined "disadvantaged business" as a business at least 51% owned
and managed by socially and economically disadvantaged
individuals, id. at 23.62, and stated that members of several
ethnic groups -- blacks, hispanics, Native-Americans, Asian-
Pacific Americans -- or any other minorities or individuals found
by the Small Business Administration to be disadvantaged shall be
"presume[d]" to be "socially and economically disadvantaged
individuals" for purposes of the DBE program.4 The regulations
also stated that "recipients [of federal funds] may determine, on
3 In 1987 Congress enacted Section 106 (c) of the Surface
Transportation and Uniform Relocation Assistance Act of 1987
(STURRA), Pub. L. No. 100-17, 101 Stat. 144. STURRA authorized
federal funds for highway construction projects, and Section
106(c) stated that "Except to the extent that the Secretary
determines otherwise, less than 10 percent of the amounts
authorized * * shall be expended with small business concerns
owned and controlled by socially and economically disadvantaged
individuals." Section 106(c) changed the program which Section
105 (f) of the 1982 Act established by adding "women" to the
categories of those groups presumed to be socially and
economically disadvantaged, see Sec. 106(c) (2) (B), and by
establishing that no business may be certified as a small
business for purposes of social and economic disadvantage if the
business has had gross receipts over the preceding three years in
excess of $14,000,000. Sec. 106 (c) (2) (A).
4 "Women" was added after the 1987 legislation. 52 Fed.
Reg. 39320-39321 (October 21, 1987).
- 5 -
a case-by-case basis, that individuals who are not [members of
one of the designated groups] are socially and economically
disadvantaged." Ibid.
Federal regulations require each recipient of funds to have
a federally approved minority business enterprise program, id. at
23.41, and to set annual goals for the use of disadvantaged
businesses in federally assisted highway construction projects.
Id. at 23.64. The regulations require that goals be based on the
availability of minority or disadvantaged businesses to compete
for a portion of the federally funded contract. Id. at 23.64 (d)
23.45(g). Goals should be set both on an annual basis, and on a
contract-by-contract basis, id. at 23.45 (g) (2) (i), and the
availability of DBEs must be calculated with respect to both
types of goals. Id. at 23.45 (g) (5) (i), 23.45 (g) (7). The
regulations also require the recipient to justify to DOT any
proposed annual goals below the 10% figure of the STAA. Id. at
23.64(e). Federal officials may approve the lower goal if the
recipient is making appropriate efforts to reach the 10% goal,
and the lower goal represents a reasonable assessment of
availability of disadvantaged businesses presently eligible to
work on federally assisted projects. Id. at 23.66 (b) (1), (2).
The regulations also require the recipient to establish a
"challenge procedure," which permit a third party to challenge an
individual's qualifications as "socially and economically
disadvantaged." Id. at 23.69. Finally, the regulations state
- 6 -
that a recipient that fails to provide a proper program is
subject to a withholding of federal funds. Id. at 23.68 (e) (1).
b. The State Program. North Carolina officials
testified that their DBE program was established to comply with
the United States Department of Transportation's requirements for
recipients of federal highway funds (Tr. 32). As explained in
the state's "Program for Participation by Minority Business
Enterprises in the North Carolina Department of Transportation's
Federally Assisted Programs" (Pl. Ex. 62), the state's program
"was developed to comply with the regulations (49 CFR Part 23)
issued by the United States Department of Transportation * * **
(ibid.).
State officials testified that their program adopted the
Department of Transportation's standards for "disadvantage" for
purposes of determining which businesses should be certified as
DBEs (Tr. 32, 181). As required by the federal regulations,
firms which were 51% owned and operated by members of the
minority groups set forth in the federal regulations were
presumed to be "disadvantaged businesses" for certifying DBEs
under the state program (Tr. 32). Also as required by federal
regulations, the state program permitted individuals not members
of the designated minority groups to attempt to qualify for
certification as socially and economically disadvantaged; thus
far, North Carolina had certified three businesses, all owned and
operated by members of groups not presumed by the statute to be
socially and economically disadvantaged, as DBEs (Tr. 77).
- 7 -
The state also permits third party challenges to the
certification of a DBE firm, as required by federal regulations
(Tr. 189, 236). As of the trial, however, there had been no such
challenges (ibid.). The state also refused to qualify a firm as
a DBE if it had average annual receipts of over $14,000,000 over
the preceding three year period, also as required by federal
standards (Tr. 69, 184). The state investigated DBE firms to
insure that those certified as DBEs based on the minority
presumption were actually minority owned and controlled, and
decertified nine firms between 1984 and 1986 (Pl. Ex. 26).
State officials testified that they set the state's annual
goal after assessing the overall capability of DBEs in the state
to perform portions of highway projects and estimating the amount
of federal assistance for highway projects the state likely would
receive that year (Tr. 34-35). State officials surveyed DBEs to
determine approximate capabilities (see Tr. 199 (concerning 1985
survey); see also Pl. Ex. 87 (1987 survey)). State officials
stated that there were only two DBE firms which were certified as
prime contractors, so that the process of approximating goals
assumed that the goals would be met through prime contractors
subcontracting portions of projects to qualified DBEs (Tr. 52-
53), but that there were DBEs certified in "just about every area
associated with highway [construction]" (Tr. 208).
In 1985, state officials estimated that while the state
would receive about $400,000,000 in federal funds, DBEs were
capable of performing only between $18,000,000 and $23,000,000
- 8 -
worth of work (Pl. Ex. 8, Tr. 203). As a result, North Carolina
highway officials recommended to the Governor that they seek a
waiver of the 10% goal mandated by the STAA, and seek approval of
a 6.5% goal (Pl. Ex. 8). The Governor (for reasons not in the
record) rejected the recommendation, and kept the state committed
to a 10% goal (Tr. 45, 203). The federal funds the state
received that fiscal year were not the expected $400,000,000, but
rather a little more than $200,000,000 (Tr. 229) i the DBEs' share
over that fiscal year was about $20,500,000 (Tr. 230), about 9.7%
of the total federal assistance (Tr. 72). The United States
Department of Transportation accepted the state's explanation for
its inability for that year to achieve the 10% goal (Tr. 72).
The state's 1987 DBE survey apparently concluded that the goal
should remain at 10% (Pl. Ex. 87, 88).
James Murphy, North Carolina's Assistant State Highway
Engineer for Construction and Materials, testified that when
setting a goal for a particular contract, the state looks to the
subcontracting opportunities in the particular type of project,
along with the capabilities of DBEs in the area of the project to
perform the sorts of subcontracting opportunities the project
would include (Tr. 206-207). He stated (Tr. 209):
Some of the items which we look at when we set the
goals are: clearing and grubbing, trucking or hauling;
some grading work; storm drains; the term I call
incidental concrete for lack of a better description,
which would include drainage structures, paved ditch,
curb and gutter, sidewalk, et cetera; guardrail,
utility work, water and sewer type installations. We
have a fair amount of that on projects; seeding and
mulching and the associated items; reinforcing steel
for structures; fencing, electrical; some pavement
- 9 -
marking, but usually that is not a very big factor.
There are probably some other areas, but that is about
all I can think of right now.
Murphy also stated that after the range of DBEs is assessed,
the goal is set at a level that would allow the prime contractor
flexibility in his use of DBEs: "we would feel like that we
could set a goal so the contractor would have some options as to
what he sublet. As a matter of practice, 15 percent is about as
high a goal that we ever set on a project. And a lot of times
the items that we consider in setting the goals might total 25,
30, 35 percent of the project" (Tr. 210).
Murphy testified regarding the state's assessment of an
individual contractor's "good faith efforts" which may excuse a
failure to meet a goal (Tr. 193-196; see Def. Ex. 6). The state
imposes several requirements on contractors to insure efforts to
locate and to solicit bids from minority subcontractors. The
letters included in Def. Ex. 6 indicated that a prime contractor
could be excused from meeting a specific goal when, after
soliciting DBE participation in the manner required by the
contract, the contractor had not received sufficient bids from
available and qualified firms to meet the goal.
There was some testimony from state officials concerning the
term "specialty" projects, as it relates to the types of
subcontracting opportunities available on the state's federally
assisted highway projects. Barry Jenkins, the state's Highway
Engineer for Construction and Materials, testified that while
drainage, pipe laying, and clearing and grubbing would not be
- 10 -
considered "specialty" items, seeding and mulching, guardrails,
signs, and pavement marking would be. He defined specialty items
as those that would not be performed by the prime contractor or
require specialized equipment or labor force (Tr. 53-54).
Plaintiffs presented testimony by Henry Clegg, from the
Carolinas Branch of Associated General Contractors of America,
and a former employee of the North Carolina Department of
Transportation (Tr. 84-86). Clegg testified, as had the state
officials, that the DBE goals are met through subcontracting
opportunities (Tr. 96), and stated that those subcontracting
opportunities are usually "specialty" projects (Tr. 97).
Clegg testified that he had reviewed state forms covering a
period from July of 1986 to June of 1987 (Tr. 112), which report
the amount of subcontracting by DBEs on each federally assisted
project (Tr. 109-110). Clegg testified that he reviewed records
of 80 projects, and found that 75 had DBE or WBE⁵ goals in them
(Tr. 117). He testified that there were 71 projects with
subcontracts in what he referred to as "specialty items"
subcontracted to DBEs or WBES (Tr. 119-121).
Clegg stated that he had not determined whether there were
subcontracts awarded to non-DBEs in any of these projects, as the
forms he reviewed indicated only subcontracts to DBEs or WBEs
5 WBE stands for "Women's Business Enterprise" which was,
until enactment of the STURRA in 1987 (see n.3, supra),
classified by North Carolina as a separate category of business
to which the set-aside would apply. After 1987, women's
businesses were included in the category of DBE's by federal
statute.
- 11 -
(Tr. 122). Clegg stated that the forms did not indicate to what
extent non-DBE firms were awarded some subcontracts, and did not
reveal the pool of subcontractors that had offered bids on the
subcontracts, so he could not determine whether any non-DBE firms
had bid on the subcontracts (Tr. 124). In fact, Clegg stated
that "there is a predominance of DBEs who are engaged in this
particular area in North Carolina. There are not that many non-
DBEs who are in this business at the present time in this
particular specialty area that are actively seeking highway type
work" (Tr. 124-125). Clegg also stated that, in addition to not
knowing the amount of work subcontracted to non-DBE firms in
those projects, he could not determine how much of the highway
funds were allocated to specialty items (Tr. 154).
Clegg also stated that his definition of "specialty items"
and North Carolina's definition may not be the same. He stated
that he would not define clearing and grubbing, hauling,
incidental concrete, masonry, drainage structures, or structural
steel as traditional "specialty items" (Tr. 158) 6
c. Plaintiff's Business. Plaintiff Carpenter stated
that he is in the landscaping business (Landmasters is the name
of his company), and that landscape planting and construction and
6 Pl. Ex. 74 was a quarterly report for the first quarter
of 1987 which identified the DBE and WBE subcontracts awarded
during the quarter. The document showed that 100 contracts or
subcontracts had been awarded to DBEs or WBES in the following
categories: architectural services, grading and drainage,
structures and buildings, materials, trucking, traffic control,
and landscaping, as well as 15 labeled "other."
- 12 -
seeding and mulching are the types of jobs he would perform on
state highway projects (Tr. 316). He stated that he did
subcontracting, as well as a "good bit" of "second tier" work,
which is work for which he is hired by a subcontractor but which
is exempt from DBE requirements (Tr. 319).
Mr. Carpenter reviewed the extent of his income traceable to
state highway projects over the last several years. He stated
that in 1978, 15.8% of his income was from state highway
projects; 40.6% in 1978-79; 49.5% in 1979-80; 60.4% in 1980-81;
37.5% in 1981-82; 68.7% in 1982-83; and 43.7% in 1983-84 (Tr.
325) 7 He did not distinguish between highway projects that were
totally state projects and those that were federally assisted.
The pretrial order stated that Mr. Carpenter was awarded
subcontracts on federally assisted projects in the following
totals: $31,691 in 1981; none in 1982; $38,906 in 1983; and
$8,735 in 1984. Mr. Carpenter also testified that from April
1985 to February 1987, he received $308,989 in subcontracts for
7
He testified to the following income and percentages (Tr.
325-330; Def. Ex. 8):
Fiscal
Total income
% from state
Total from state
year
highway projects
highway projects
1978-1979
$ 395,901
40.6%
$160,750
1979-1980
561,660
49.5%
227,854
1980-1981
1,125,985
60.0%
679,700
1981-1982
624,265
37.5%
234,092
1982-1983
526,740
68.7%
361,734
1983-1984
723,235
43.7%
316,378
- 13 -
work on federally assisted contracts (Tr. 330; see also pretrial
order at 7). This evidence apparently did not include any second
tier work Mr. Carpenter may have done during this period
(Tr. 335). Mr. Carpenter stated that two projects he was awarded
between 1985 and 1987, which were bid without goal requirements,
totalled approximately $221,102.55 (Tr. 333), leaving the amount
of his other subcontracts in federally assisted projects over
that period at about $86,000. Regarding the two main projects,
Mr. Carpenter stated, "Because of the set aside program, I had
not quoted on certain jobs because I don't like to do an exercise
in futility. But on those particular jobs, I was told that there
was no [goal] requirement (Tr. 331). Mr. Carpenter
testified that he thought the DBE program limited the opportunity
to bid on certain types of jobs, and stated that "within the last
couple of years
I have only went after the jobs I felt like
I had any meaningful opportunity to get" (Tr. 337).
The pretrial stipulations stated that Mr. Carpenter's wife
purchased a landscaping business in 1986, and bids on the same
sort of highway projects on which he would bid (pretrial order at
6). Mrs. Carpenter's business is certified as a WBE. When Mrs.
Carpenter bids on a state highway project, Mr. Carpenter does not
bid; the pretrial stipulations also stated that Mrs. Carpenter's
business has an agreement with Mr. Carpenter's business to rent
equipment "needed to perform its operations" (ibid.).
Mr. Carpenter testified that he had been told by some prime
contractors that they could not use his bid in order to meet a
- 14 -
DBE goal (Tr. 343), but he had no records, or other supporting
documentation, of any such projects (ibid.). He also testified
that he did not know whether a bid he offered which was rejected
was a low bid, as the prime contractor has no obligation to
inform a bidder of the reason the bid was not selected (Tr. 341).
3. Decisions of the District Court.
a. "Facial" challenge. The district court's first
decision in this case, entered on March 9, 1987, granted the
federal defendants' motion for partial summary judgment on the
issue of the facial constitutionality of Section 105(f) of the
STAA and the Department of Transportation regulations.
The court rejected plaintiff's allegation that Section
105 (f) established an unconstitutional racial preference, holding
that Section 105(f) satisfied the careful scrutiny which the
Supreme Court held in Fullilove V. Klutznick, 448 U.S. 448
(1980), was required for set-aside programs with racial
preferences (R. 70 at 17). Fullilove, the court stated, required
analysis of the authority and findings of the body establishing
the preferential program, and a limited use of racial
classifications which extend no further than is necessary to
remedy the effects of past discrimination (R. 70 at 17).
Under this analysis, the district court held Section 105(f)
was a proper exercise of Congress's authority to remedy the
effects of past discrimination. With regard to the existence of
an adequate remedial predicate in this case, the district court
pointed out that "the Supreme Court clearly affords Congress
- 15 -
greater deference as regards the necessity of compiling a
'record' to demonstrate the historical necessity of race-
conscious remedial measures that it does to other
'legislative' [state] bodies." Id. at 27. Thus, the district
court looked to the record Congress had before it when it enacted
the 10% set aside in the Public Works Employment Act of 1977,
which was upheld by the Supreme Court in Fullilove V. Klutznick,
448 U.S. 448 (1980) (R. 70 at 20-23). In enacting the STAA, the
district court held, Congress was relying on evidence similar to
that which supported the 10% set-aside upheld in Fullilove (id.
at 24) The court also found that Section 105 (f) is not over-
inclusive because Congress had made findings, when enacting the
Small Business Act, about discrimination against small businesses
owned by minorities, and that Congress properly left to the
agency the task of limiting participation in the STAA DBE program
to legitimate disadvantaged businesses.
The court rejected plaintiff's argument that Congress had to
make specific findings about discrimination in North Carolina
before that state could adopt the federal program (id. at 25).
"It is axiomatic that Congress legislates for the nation as a
whole. A requirement that Congress must make specific findings
regarding practices in discrete industries and individual states
before it could pass legislation affecting the states would put
an end to congressional lawmaking" (id. at 25-26).
The court held that the North Carolina Department of
Transportation need not make independent findings of past
- 16 -
discrimination in that state before it could accept federal funds
and implement the federal program (id. at 26). The court found
that the Section 105(f) DBE program "is national in scope, and
applies to all states through the operation of the supremacy
clause of the Constitution. The federal findings supporting
Section 105(f) are also national in scope. Plaintiffs do not
explain why, absent a specific showing to the contrary, Congress
was not entitled to presume that the incidence of past
discrimination in North Carolina followed the pattern in the
nation as a whole" (id. at 28).
The court found that the presumption of social and economic
disadvantage contained in Section 105(f) does not create an
impermissible racial preference. Indeed, the court concluded
that "the language and legislative history of Section 105(f) do
not indicate that Congress intended to enact legislation that
would guarantee minority business owners who are not, in fact,
socially and economically disadvantaged an unassailable status as
socially and economically disadvantaged individuals." Id. at 33
(citation omitted). The court found that Section 105(f) attempts
to identify "socially and economically disadvantaged
individuals," and uses a rebuttable presumption that members of
certain ethnic groups are socially and economically disadvantaged
"in order to facilitate fund recipients identification of
eligible participants" (id. at 34). The regulatory provisions
which permit individuals to challenge the "disadvantaged" status
of minority individuals who may not actually be socially and
- 17 -
economically disadvantaged, and the provisions that permit non-
minority individuals who may be socially and economically
disadvantaged to qualify for participation in the program (id. at
35), help further limit the program legitimately only to
"disadvantaged" individuals. The court also noted that the goals
used in this program are not inflexible, and that a failure to
meet a goal despite good faith efforts to do SO will not result
in a loss of funding or other sanctions (id. at 37).
The court held that the greater flexibility that exists
under this program than under the programs upheld in Fullilove is
further support for the program's constitutionality. The court
stated that the Fullilove program relied more on racial
classifications than does this program, which uses the racial
criterion as only one factor in the ultimate determination of
"disadvantage" (id. at 39-41). The court also held that the
flexible goals, and "good faith efforts" provisions, further
support the conclusion that Section 105(f) does not create an
inflexible racial preference.
Finally, the court held that Section 105 (f) was narrowly
tailored (id. at 43). The court first noted that plaintiffs
failed to demonstrate an alternative to Congress's program (id.
at 45) ; the court then pointed out that the appropriations under
the STAA had been continually monitored by Congress, which had
held hearings on the application of Section 105(f), "and
continues to monitor its enforcement" (id. at 45) ; the court
viewed this congressional oversight as insuring that Section
- 18 -
105(f) will not "require preferential treatment for DBEs after
such treatment becomes unnecessary" (id. at 46).
The court held that the effect of the 10% goal in the STAA
does not establish that it is facially unconstitutional because
of its impact on non-DBE subcontractors. The court stated that
the program's goals were much like hiring goals, and that the 10%
goal left 90% or more of STAA funds available for non-DBE
contractors (id. at 47). Plaintiffs' allegation that "specialty
subcontractors" suffered a "greatly disproportionate adverse
impact" under North Carolina's program (id. at 47), the court
held, would have to await development of a record when the
application of the program would be addressed.
b. "As applied" challenge. On June 16, 1988, the
district court also rejected plaintiffs' "as applied" challenge
to the DBE program. While rejecting at the outset plaintiffs'
contention that "federal and state highway officers have a
responsibility to second guess the regulatory scheme and make
independent, individual determinations as to whether each would-
be DBE in fact is socially or economically disadvantaged"
(R. 93 at 3-14), the district court's decision rested on its
holding that plaintiffs failed to prove that the DBE program had
had any appreciable impact on them as specialty contractors (R.
93 at 14-20)
After briefly reviewing the state program, and its reliance
on and compliance with the federal regulations, the court
reviewed the evidence relating to the DBE program's effect on
- 19 -
Carpenter's and Landmaster's business. The court noted that
Carpenter's business has four divisions, and "only [the] erosion
control division sought regularly to work as a subcontractor on
federally-assisted highway construction projects" (id. at 8).
The court found that although Carpenter once bid aggressively on
projects in South Carolina, he no longer does so, and had ceased
regularly to bid on projects in North Carolina in 1983 (id. at
9). The court also found that Carpenter no longer bids regularly
in part because his wife, who "owns a competing business" that
qualifies as a DBE, bids on highway projects of the same kind as
Carpenter's business performs. Carpenter's wife's business rents
equipment from Carpenter, who, the court found, "benefits from
profits generated by" his wife's firm (id. at 10).
The court also found that Carpenter did not know whether his
quotes for subcontracting jobs were used by unsuccessful prime
contractors, or whether his quotes were lower than accepted
quotes, as prime contractors usually do not reveal quotations of
proposed subcontractors. The court found that Carpenter was
unable to identify any specific contracts that were denied him
due to the DBE program, and that "from the implementation of the
DBE program in 1982, until the end of fiscal year 1984, neither
Carpenter nor Landmasters suffered any adverse economic effects
which were attributed at trial by competent evidence to the DBE
program" (id. at 11). The court concluded that plaintiff failed
to put on any evidence demonstrating that he has suffered any
economic loss caused by the DBE program (ibid.), and found that
- 20 -
plaintiffs had "prospered" since the program was implemented in
1982, and had failed to suggest what injury was suffered.
The court concluded that plaintiffs failed to put on
competent evidence demonstrating the DBE program's effect on
contracting opportunities of specialty contractors. The court
noted that Henry Clegg, plaintiffs' primary witness, failed to
consider the extent to which non-DBEs are awarded specialty
subcontracts, the total amount of "highway dollars" awarded to
specialty subcontracts, or the characteristics of the "pool" of
specialty subcontractors, and that Clegg had admitted that there
were not many non-DBEs seeking specialty subcontracts at the
present time. The court concluded that "although there certainly
appears to be the potential for a 'disproportionate impact type'
claim by specialty subcontractors who wish to participate in
federally-funded North Carolina highway construction projects,
these plaintiffs have not proved theirs" (id. at 20).
SUMMARY OF ARGUMENT
In this appeal, plaintiffs mount a limited challenge to the
district court's opinions upholding the constitutionality of
Section 105(f) of the STAA and the federal regulations
implementing that section, as well as to the implementation of
the STAA program within North Carolina by state officials.
Specifically, plaintiffs, relying primarily on the Supreme
Court's recent decision in City of Richmond V. Croson, 109 S. Ct.
706 (1989), argue that North Carolina may implement the federal
- 21 -
DBE program only after making findings that would, under Croson,
support a state-sponsored set-aside program.
First, appellants lack standing because they have not shown
the requisite "injury in fact" and redressable harm necessary for
judicial review. See, e.g., Simon V. Eastern Kentucky Welfare
Rights Organization, 426 U.S. 26 (1976). The district court made
detailed and well-supported findings that the DBE program at
issue here had no detrimental effect whatsoever on plaintiffs.
Second, the district court properly held the federal statute
constitutional, finding that the record before Congress when it
enacted Section 105(f) of the STAA was adequate to support the
limited race-conscious remedy contained in that statute. As the
district court recounted at some length, Congress made the
necessary findings to establish a legitimate remedial predicate
for the program. Those findings having been made on a national
scale, it is not necessary for each state to duplicate them, any
more than a county would have to duplicate a state's findings, or
a city a county's. Such a requirement cannot be squared with
Fullilove and is in no way required by Croson.
Thus, the critical question in this case is whether the
implementation of the program has been narrowly tailored to
Congress's demonstrated remedial purpose. It clearly has been.
The most critical aspect of ensuring that a racial classification
is narrowly tailored to its remedial purpose is, logically, that
the classification not unnecessarily afford a remedy to those of
a favored group who are not in fact suffering the effects of past
- 22 -
discrimination and, conversely, that it not bar relief to those
of unfavored groups who are suffering those effects. This
requirement is met in this case. The program has only a
rebuttable presumption that certain minorities have been socially
and economically disadvantaged; there is in place a flexible and
workable opportunity for third parties to show that minority-
owned DBEs are ineligible because the owners are not in fact
socially and economically disadvantaged. Conversely, non-
minority-owned DBEs can demonstrate eligibility by showing that
they are socially and economically disadvantaged. The program's
narrow tailoring is also supported by the flexibility of the
goals set and their relationship to the available pool of
eligible DBEs, and by the defendants' periodic review of those
goals and the program as a whole.
ARGUMENT
I
PLAINTIFFS LACK STANDING
The government asserted before trial that plaintiffs lacked
standing to assert that the DBE was unconstitutionally applied
(R. 93 at 3), due to their inability to show that the program had
caused them any harm. The district court stated that, due to
plaintiffs' failure to show any injury traceable to the DBE
program, there was presented a "very real question whether these
plaintiffs even have standing to assert the constitutional
challenge" (id. at 15), and the court ultimately concluded that
"Plaintiffs Carpenter and Landmasters failed to prove that they
- 23 -
suffered a cognizable injury for which the relief they seek --
invalidation of the DBE program -- may provide redress w
(R. 93 at 21). See also id. at 13 (The court finds no merit to
plaintiffs' position "that they have suffered economic injury as
a result of the implementation in North Carolina of a DBE
program"). We agree that plaintiffs' failure of proof
demonstrates that they lack standing.
Plaintiffs here must demonstrate a redressable "injury in
fact" in order to have standing to seek judicial review in
federal court, and without such injury there is no justiciable
controversy as required by Article III of the Constitution.
Simon V. Eastern Kentucky Welfare Rights org., 426 U.S. 26
(1976) ; Warth V. Seldin, 422 U.S. 490, 499 (1975) ; Linda R.S. V.
Richard D., 410 U.S. 614, 617 (1973) ; Association of Data
Processing Service Org. V. Camp, 397 U.S. 150 (1970) ; Barlow V.
Collins, 397 U.S. 159 (1970). In this case, plaintiffs failed to
show any such injury. The district court's findings8 made clear
that the prejudicial program the complaint described did not
exist, had no adverse impact on appellants, and that any change
made in the administration of the program would redress no harm
suffered by plaintiffs. See Warth, 422 U.S. at 515 ("to justify
any relief [plaintiff] must show that it has suffered harm") i and
Simon, 426 U.S. at 38 ("the relevant inquiry is whether * * * the
8 The district court appears to have used the evidence of
lack of impact on plaintiffs to support both a finding of no
standing and its finding of a narrowly tailored program
(R. 93 at 15). We do likewise. See page 50, infra.
- 24 -
plaintiff has shown an injury to himself that is likely to be
redressed by a favorable decision") i Duke Power Co. V. Carolina
Environmental Study Group, 438 U.S. 59, 79 (1978) (standing
requirements are generally to "demonstrate * * * injury in fact
and a substantial likelihood that the judicial relief requested
will prevent or redress the claimed injury") i see also Webster V.
Reproductive Health Services, No. 88-605 (July 3, 1989) ("this
Court is not empowered to decide * * * abstract propositions, or
to declare for the government of future cases, principles or
rules of law which cannot affect the result as to the thing in
issue in the case before it" (citation omitted). Plaintiffs were
properly required to make allegations that were "true and capable
of proof at trial" in order to demonstrate standing, and they
failed to do so here. United States V. SCRAP, 412 U.S. 669, 689
(1973)
The district court found that plaintiffs' claim that the DBE
program caused Carpenter, or specialty contractors generally, to
lose contracts, simply was not proved. The district court found
Carpenter stopped submitting quotes on North Carolina projects in
1983 or 1984 (R. 93 at 9). The court found that one reason
Carpenter no longer bids on projects regularly is that his wife,
who is certified as a WBE landscape business, does bid on those
contracts. Carpenter benefits financially when she receives a
contract; indeed, his wife's company leases equipment from him
(id. at 9-10). The court also found Carpenter could not identify
any contracts lost to him because of the DBE program (id. at 11),
- 25 -
and that he suffered no detrimental economic effects through 1984
(ibid.) 9 and concluded that the evidence did not disclose that
the DBE program has had any detrimental economic effect on him
(id. at 11-12, 15). "[T]he competent evidence set forth at trial
and the facts as found by the court, supra, fail to support any
claim that plaintiffs have suffered economic injury. If
anything, plaintiffs have prospered since implementation of the
DBE program in 1982" (ibid.). These findings -- which are well
documented by the district court's opinion and are discussed at
length there -- are not clearly erroneous. 10
With regard to specialty contracting generally, the court
also noted that plaintiffs failed to put on evidence of the
"overall construction contracting opportunities" available to
specialty subcontractors, or those which have been withheld due
to operation of the DBE program, "so that a calculation could be
made of the percentage of the total annual expenditure for
landscaping and erosion control projects -- public and private --
in North Carolina which was represented by the 10% DBE annual
9 The court rejected plaintiffs' evidence relating to
economic effects after 1984 for failing to provide accurate
responses to defendant's interrogatories (id. at 11-12).
Appellants do not dispute this ruling in their brief.
10 This Court may reverse a trial court's findings of fact
only after determining that the findings are "clearly erroneous."
Shrader V. White, 761 F.2d 975, 980 (4th cir. 1985) i W.F. Magann
Corp. V. Diamond Mfg. Co., 775 F.2d 1202 (4th cir. 1985). This
in turn requires this Court to determine that the district
court's findings and conclusions relating to the factual record
are not "plausible." Anderson V. City of Bessemer City, 470 U.S.
564, 575 (1985). In our view, the district court's findings
regarding appellants' failure of proof are well beyond
"plausible," and indeed are compelled by the record.
- 26 -
participation goal" (id. at 17-18). The court rejected
plaintiffs' primary evidence -- Henry Clegg's testimony --
relating to specialty subcontractors. The court found that Mr.
Clegg's conclusion that the DBE program had a detrimental effect
on specialty subcontractors was unsupported. The court noted
that while Mr. Clegg reviewed documents that listed subcontracts
to DBEs on state projects from July 1986 to June 1987, he had no
information about the subcontracts awarded to non-DBEs, and no
information about the pool of subcontractors who were bidding on
the jobs which were awarded by subcontract. Thus, he could not
determine whether non-DBE firms were continually losing projects
to DBE firms. Id. at 18 n.10. The court found Mr. Clegg did not
know the amount of money involved in subcontracts to specialty
subcontractors (ibid.), and would not permit Mr. Clegg to express
an opinion on the effect of the DBE program on specialty
subcontractors "because plaintiffs failed to lay a proper
foundation -- statistical or factual -- for such an opinion"
(ibid.)
11 In fact, state officials testified that DBEs are
certified in nearly every form of subcontracting work (see p. 7,
supra), and the record also established that DBEs receive
subcontractor opportunities other than those referred to as
specialty items (see pp. 8-9, supra). In light of the lack of
11 In fact, the district court noted that appellants'
counsel, when asked whether he was going to offer a statistical
proof of the effect of the DBE program on specialty
subcontractors, responded, "We don't have the type of statistical
analysis that one would seek to have in a disparate impact case"
(R. 93 at 20).
- 27 -
evidence that specialty contracting in general was adversely
affected by the DBE program, it is unsurprising that the district
court also concluded that plaintiffs' specifically suffered no
redressable harm.
Plaintiffs fail to argue here that the district court erred
when making its findings of fact concerning their failure to
prove that operation of the DBE had a detrimental effect on
Carpenter specifically, or, more generally, on specialty
contractors. In all events, the record fully supports the
court's findings of fact. Accordingly, plaintiffs do not have
standing.
II
ONCE CONGRESS HAS DETERMINED THAT A NATIONWIDE PROGRAM
IS NECESSARY TO REMEDY THE EFFECTS OF PAST DISCRIMINATION
IN A SPECIFIC AREA, AND ENACTS SUCH A PROGRAM BY STATUTE, A STATE
NEED NOT MAKE ADDITIONAL AND INDEPENDENT FINDINGS
As the district court recognized, the constitutionality of
Section 105(f) is determined by reference to the two inquiries
set out by the Supreme Court's decision in Fullilove, which
upheld the constitutionality of a similar federal, race-
conscious, remedial program: first, whether Congress had before
it sufficient evidence to support its determination that there
was a problem of racial discrimination justifying national
legislation and, second, whether the program Congress enacted is
narrowly tailored to tie the remedy to the effects of
discrimination. As shown below, the record Congress had before
it is sufficient to sustain Section 105(f), and the federal and
- 28 -
state implementation of the statute is sufficiently narrowly
tailored to satisfy Fullilove standards. 12
A. Congress Had A Sufficient Remedial Predicate For The
DBE Program It Enacted In 1982 And Re-Enacted In 1987.
1. Appellants argue (Br. 39-43) that in this case Congress
did not make sufficient findings to support a race-conscious
remedy either in 1982 when it enacted Section 105(f), nor in 1987
when it re-enacted the DBE program as Section 106(c) of the
Surface Transportation and Uniform Relocation Assistance Act of
1987 (STURRA), Pub. L. No. 100-17, 101 Stat. 144. 13 The
12 Plaintiffs devote the initial portion of their argument
to the proposition that strict scrutiny applies to racial
classifications (see Br. 15-22). The United States does not
dispute that the program challenged here contains, as the
district court held, a racial classification: specifically, a
presumption of eligibility for the program is afforded those who
belong to particular racial groups. The Supreme Court in its
recent decision in City of Richmond V. J.A. Croson Co. has held
that such state-sponsored classifications must withstand "strict
scrutiny," i.e., must be "narrowly tailored" to a "compelling
governmental interest." Id. at 727, 728 (plurality opinion) ; id.
at 735-739 (Scalia, J., concurring). The analysis in Croson, and
in the Supreme Court's earlier decision in Fullilove V.
Klutznick, 448 U.S. 448 (1980), also demonstrate, however, that
in any consideration of the constitutionality of a race-conscious
remedy, the Court must substantially defer to Congress's finding
that a factual predicate -- establishing the "compelling
government interest" in remedying discrimination -- exists, while
a similar determination by a state or local government is due
less deference. In this case, the district court correctly
analyzed Congress's enactment of Section 105 (f) with the
appropriate deference to Congressional fact findings established
in Fullilove. In our view, then, the district court's analysis
was the correct one: it was in all essentials strict scrutiny,
but with greater deference to Congress's determination of a
remedial predicate.
13 Section 106(c) of STURRA added "women" to the list of
minority group members presumed to be economically and socially
disadvantaged, and limited "small business concerns" to those
with gross receipts under $14,000,000 for the preceding three
years.
- 29 -
district court rejected this argument, holding that Congress was
familiar with the problem of discrimination against minority
businesses through enactment in 1977 of the PWEA, and that
subsequent evidence relating to minority firms justified
Congress's decision to continue, through the STAA and later the
STURRA, the kind of program begun in the PWEA (R. 70 at 28-32).
We believe that the district court correctly concluded that
Congress had a sufficient record to establish a remedial
predicate for the DBE program challenged here.
In Fullilove, Chief Justice Burger stated that, in 1977,
"Congress had abundant evidence from which it could conclude that
minority businesses have been denied effective participation in
public contracting opportunities by procurement practices that
perpetuated the effects of prior discrimination. *** [T]here
was direct evidence before the Congress that this pattern of
disadvantage and discrimination existed with respect to state and
local construction contracting as well." 448 U.S. at 478; see
also id. at 461-467, summarizing the evidence before Congress.
The Court noted that although Congress did not, and need not,
make the kind of "findings" which would be required of an
adjudicatory body, "we are satisfied that Congress had abundant
historical basis from which it could conclude that traditional
procurement practices, when applied to minority businesses,
could perpetuate the effects of prior discrimination." Id. at
478. Chief Justice Burger also noted that the PWEA was a
temporary "pilot project," id. at 489, subject to "reassessment
- 30 -
and reevaluation" by the Congress prior to any extension or re-
enactment. Ibid.
Thus, when Congress enacted Section 105(f) of the STAA in
1982, it was quite familiar with the problems of discrimination
against minority businesses in public contracting, and had
several times examined and re-examined those problems. In 1980,
the Senate Select Committee on Small Business held hearings on
legislation to amend the Small Business Act regarding the Section
8(a) program, which also benefits disadvantaged businesses. 14
Evidence was presented there regarding the tiny percentage of
construction dollars ($3 billion of $200 billion) which was going
to minority-owned firms. Hearing at 16-17. The hearing also
described the continuing effects of discrimination faced by
minority firms in getting subcontracts, even on Section 8(a)
projects. Id. at 19-23. In 1981, the House Committee on Small
Business held hearings on the Small Business Administration's
8 (a) program, where witnesses further documented the problem,
discussing the difficulties minority businesses had in achieving
a competitive foothold. 15 The House Committee on Small Business
also held hearings in 1981 and 1982 on Small and Minority
14 See Hearings on H.R. 5612, To Amend the Small Business
Act To Extend The Current SBA 8 (a) Pilot Program before the
Senate Select Committee on Small Business, 96th Cong. (August 4,
1980).
15 Hearings on the Small Business Administration 8(a)
Program, before the Subcommittee on SBA and SBIC Authority,
Minority Enterprise and General Small Business Problems of the
Committee on Small Business, House of Representatives, 97th
Cong., 1st Sess. (May 21, June 4, and June 10, 1981).
- 31 -
Business in the Decade of the 1980's," 97th Cong., 1st Sess. In
those hearings, the House heard evidence concerning disadvantage
caused by larger firms refusing to contract with newer minority
businesses (id. at 26) ; difficulties minority firms had breaking
into the "old boy" network that controlled much contracting (id.
at 34, 260) ; the lengthy process of raising minority businesses
into competitive positions (id. at 239) ; and the lack of access
of minority firms to capital (id. at 209-211). Similar
difficulties were described in the 1982 "Hearings on Minority
Business and its Contributions to the U.S. Economy, held by the
Senate Committee on Small Business," (97th Cong., 2d Sess. (June
23, 1982). See id. at 45 (difficulty breaking into the "old boy
contracting network, at 80 (difficulties on minority access to
capital).
Rep. Parren Mitchell, in sponsoring the legislation which
became Section 105(f), referred Congress both to the history of
the enactment of the PWEA, and the need to continue the success
of that program. See 128 Cong. Rec. H8954 (Dec. 6, 1982).
After 1982, additional hearings were held recounting the
continuing difficulties minority firms had in gaining a
competitive contracting position. Congress held oversight
hearings on the effects of Section 105(f). See, e.g., Hearings
before the Subcommittee on SBA and SBIC Authority, Minority
Business Enterprise and General Small Business Problems of the
House Committee on Small Business, 99th Cong., 1st Sess. (April
17, June 5, and October 22, 1985). Those hearings provided
- 32 -
extensive information concerning the operation of Section 105(f),
and convinced Congress that its extension was justified. See,
e.g., Oct. 22, 1985 hearings at 2-3, 85-86 (discussing conditions
in North Carolina) i 121-125 (in Pennsylvania) i 194 (in
Wisconsin) ; 215 (in Indiana). Other hearings similarly evidenced
the continuing difficulty of establishing minority-firm
opportunities after years of discrimination. 16
In 1987, before Congress enacted Section 106(c) of STURRA,
the Senate Committee on Environment and Public Works issued its
Report on the Federal-Aid Highway Act of 1987. That Report
discussed the implementation of Section 105(f), and stated that
the Committee had "considered extensive testimony" and had
concluded that a DBE provision "is necessary to remedy the
discrimination faced by socially and economically disadvantaged
persons attempting to compete in the highway and mass transit
construction industry." The Committee referred to Section 105 (f)
16 See, e.g., Hearings on Federal Contracting Opportunities
for Minority and Women-Owned Businesses: An Examination of the
8 (d) Subcontracting Program before the Committee on Small
Business, United States Senate, 98th Cong., 1st Sess. (Dec. 19-
23, 1983) ; Hearings on Minority Enterprise and General Small
Business Problems before the Subcommittee on SBA and SBIC
Authority, Minority Enterprise and General Small Business
Problems of the Committee on Small Business, House of
Representatives, 99th Cong., 2d Sess. (Sept. 8, 1986) i Hearings
on the State of Hispanic Small Business in America before the
Subcommittee on SBA and SBIC Authority, Minority Enterprise and
General Small Business Problems of the Committee on Small
Business, House of Representatives, 99th Cong., 1st Sess. (Sept.
17, 1985) i Hearings of Women Entrepreneurs: Their Success and
Problems before the Committee on Small Business, United States
Senate, 98th Cong., 2d Sess. (May 30, 1984). The factors
enumerated at these hearings are quite similar to the evidence
before Congress which Chief Justice Burger enumerated in his
opinion in Fullilove. See 448 U.S. at 456-472.
- 33 -
of the STAA, and concluded that while the statutory DBE program
had helped reduce barriers to the effects of discrimination,
continued use of a program in this area of contracting was
necessary. Id. at 11.
In sum, Congress has over a long period of time carefully
scrutinized conditions in public contracting to determine whether
continued use of programs for minority and disadvantaged
businesses is necessary. In so doing, it established, as in
Fullilove, 448 U.S. at 478, an "abundant historical basis from
which is could conclude" that remedial action was necessary (see
also Croson, 109 S. Ct. at 724, requiring a "'strong basis in
evidence for [Richmond's] conclusion that remedial actions was
necessary" (quoting Wygant V. Jackson Board of Educ., 476 U.S.
267 (1986) and demonstrated a more than sufficient factual
predicate for enacting the Section 105(f) program in 1982 and the
Section 106(c) program in 1987.
2. We would also contend that greater deference is due the
findings made by Congress than by state or local legislative
bodies. 17 Thus, assuming arguendo, that the evidence here might
have been insufficient to sustain a state or local program, it is
more than adequate to sustain a congressional program.
The breadth of Congress's remedial power was critical in
Fullilove, of course, and strongly reaffirmed in Croson. Indeed,
17 In this case, there is no doubt that Congress itself, by
the express terms of the statute, authorized the racial
preferences at issue. Compare Hampton V. Mow Sung Wong, 426 U.S.
88, 114-116 (1976) ; Central Alabama Paving, Inc. V. James, 499 F.
Supp. 629, 634-639 (M.D. Ala. 1980).
- 34 -
Justice O'Connor in Croson, 109 S. Ct. at 718, quotes Chief
Justice Burger's opinion in Fullilove, 448 U.S. at 483, that "in
no organ of government state or federal, does there repose a more
comprehensive remedial power than in Congress." See also Croson
at 719 ("Justice Powell [in Fullilove] made it clear that other
governmental entities might have to show more than Congress
before undertaking race-conscious measures") i id. at 719-720;
Fullilove, 448 U.S. at 472, 473, 483 (opinion of Burger, C.J.)
(stressing deference due Congress in light of this "comprehensive
remedial power") ; id. at 515-516 & n.14 (Powell, J., concurring)
(stressing Congress's "unique" role, and stating, "Nor do I
conclude * * * that the selection of a set-aside by any other
governmental body would be constitutional") 18
Justice O'Connor's opinion in Croson (in part II, where she
was joined by Chief Justice Rehnquist and Justice White) also
endorses greater deference to Congress's findings ability.
Justice O'Connor wrote that "Congress may identify and redress
the effects of society-wide discrimination" (109 S. Ct. at 719),
and quoted favorably from Associated General Contractors of Cal.
18 Chief Justice Burger's opinion in Fullilove indicates
that Congress may pass a law broadly requiring states to use set-
asides as necessary to undo the remaining effects of past
discrimination, so long as in its implementation the statute is
neither overbroad nor underinclusive. In concluding that the
statute in Fullilove withstood a "facial" attack, the Chief
Justice indicated that Congress had authority to define in rather
broad terms the predicate for its action, and reviewed in some
detail the facts Congress had before it, but stated that
implementation of the program in a concrete factual setting,
particularly with regard to whether it was narrowly tailored, was
still open to review. This approach also appears to be the one
taken by Justice Powell in his concurrence in Fullilove.
- 35 -
V. City & cty, of San Francisco, 813 F.2d 922, 929 (9th Cir.
1987) : "The city is not just like the federal government with
regard to the findings it must make to justify race-conscious
remedial action" (ibid., emphasis added). Similarly, in Shurberg
Broadcasting of Hartford V. FCC, No. 84-1600 (D.C. cir. March 30,
1989, slip op. 20-21), Judge Silberman differentiated between
Fullilove and Croson by stating that the cases established that:
The nature of the evidence required to establish the
existence of prior discrimination varies with the authority
of the governmental body imposing the remedial preference.
See Fullilove, 448 U.S. at 515 n.14 (Powell, J.,
concurring). Congress is clearly the institution with the
most latitude to make findings of discrimination and
authorize remedies on the basis of the evidence before it.
See Croson, 57 U.S.L.W. at 4137-38; Fullilove, 448 U.S. at
472, 483; id. at 499-502 (Powell, J., concurring). A state
or local government must have stronger evidence of
discrimination before it can employ racial classifications,
Croson, 57 U.S.L.W. at 4138, and that evidence must approach
a prima facie case of a constitutional or statutory
violation.
Conversely, the court of appeals cases appellant cites (Br. 37)
all involve state or local programs, 19 none involve a federal
program of the type in this case.
B. Once Congress Acts With A Sufficient Evidentiary
Predicate For A Nationwide Race-Conscious Remedy,
A State Need Not Make Additional Findings Before
Implementing The Federal Program.
Plaintiffs suggest that North Carolina may implement the
federal program only if it first makes findings -- beyond those
made by Congress -- which the Supreme Court in Croson recently
19 South Florida Chapter of Assoc. Contractors V.
Metropolitan Dade County, 723 F.2d 846 (11th cir.), cert. denied,
469 U.S. 871 (1984) i Michigan Real Builders V. Milliken, 834 F.2d
583 (6th cir. 1987) i J. Edinger V. Louisville, 802 F.2d 213 (6th
Cir. 1986).
- 36 -
held were necessary to support state-sponsored race-conscious
legislation. As the district court held (R. 70 at 27), there is
simply no support, and plaintiffs effectively cite none here, for
that argument.
1. In Fullilove, the Supreme Court upheld the 10% minority
set-aside Congress enacted in the Public Works Employment Act
(PWEA) of 1977, Pub. L. No. 95-28, 91 Stat. 116. The PWEA
program worked in a manner almost identical to the STAA program
at issue in this case; Congress appropriated money for
construction projects, which would be distributed to state and
local grantees. Those grantees, who would then approve projects
and award contracts paid for in whole or in part with the federal
assistance, id. at 453, would require of its contractors that 10%
of each grant should be spent on minority business enterprises.
In upholding the PWEA set-aside, the Fullilove Court relied
in part on Congress's authority under Section 5 of the Fourteenth
Amendment to enforce the Equal Protection Clause, and its
determination that there was a problem of nationwide scope
requiring a nationwide remedy. "[T]here was direct evidence
before the Congress that this pattern of disadvantage and
discrimination existed with respect to state and local
construction contracting as well. In relation to the MBE
provisions, Congress acted within its competence to determine
that the problem was national in scope." Id. at 478. Once
Congress concluded that existing public contracting practices
would be "perpetuating the prevailing impaired access by minority
- 37 -
businesses to public contracting opportunities," the Court found
that Congress had the authority to establish a nationwide remedy.
Id. at 475.
In upholding the PWEA in Fullilove, therefore, the Supreme
Court clearly understood that Congress's decision to require all
states and localities accepting PWEA funds to require a 10% set-
aside did not depend on findings by a particular state or local
grantee. 20.
2. The Supreme Court has rejected the limitation on
Congress's power suggested by plaintiffs in no uncertain terms,
holding that once Congress had constitutionally exercised its
authority to determine that nationwide legislation is
necessary,
21 no further findings by any locality is necessary.
In Katzenbach V. Morgan, 384 U.S. 641 (1966), Congress had
enacted legislation prohibiting states from denying the right to
vote to any individual because of the individual's inability to
read English if the individual had finished the sixth grade in an
"American flag" school. 42 U.S.C. 1973b(e). The State of New
20 See also Milwaukee County Pavers V. Fiedler, No. 89-C-
0177-C (W.D. Wis. Apr. 7, 1989), slip op. 30 (district court
holds that a local entity implementing the STAA program need not
make independent findings, but rather may rely on Congress's
findings). This is not to state, however, that local conditions
are entirely irrelevant to implementation of the set-aside. As
explained below, at 47, infra, local conditions may be relevant
when determining whether implementation of the required set-aside
is narrowly tailored.
21 We do not suggest, of course, that Congress could
authorize an unconstitutional racial classification in any area
of the country. As we have seen, the DBE program is clearly
constitutional.
- 38 -
York sued the federal government, alleging that Congress,
exercising its authority under Section 5 of the Fourteenth
Amendment to enforce the Equal Protection Clause, could require a
state to alter its laws only to the extent that application of
those laws would violate the Equal Protection Clause. The Court
rejected such a limiting construction of Congress's power
(Katzenbach V. Morgan, 384 U.S. at 648-649). Congress's
authority in this area was further delineated in Oregon V.
Mitchell, 400 U.S. 112 (1970). In that case, Congress had, inter
alia, barred the use of literacy tests nationwide for five years.
The State of Arizona argued that application of the ban to its
state was improper, since the racial discrimination Congress was
prohibiting was caused "by governmental bodies elsewhere in the
country." 400 U.S. at 233 (opinion of Brennan, White, Marshall
J.J.). The Court unanimously refused to require findings that
circumstances in a particular state met with Congress's
assessment of a national problem before the law could be applied
to that state (id. at 284):
Nationwide application may be reasonably thought
appropriate when Congress acts against an evil such as
racial discrimination which in varying degrees
manifests itself in every part of the country. A
remedy for racial discrimination which applies in all
the States underlines an awareness that the problem is
a national one and reflects a national commitment to
its solution.
Because the justification for extending the ban on
literacy tests to the entire Nation need not turn
on whether literacy tests unfairly discriminate
against Negroes in every State in the Union,
Congress was not required to make state-by-state
findings concerning either the equality of
educational opportunity or actual impact of
- 39 -
literacy requirements on the Negro citizens'
access to the ballot box. In the interests of
uniformity, Congress may paint with a much broader
brush than may this Court, which must confine
itself to the judicial function of deciding
individual cases and controversies upon individual
records.
Thus, the Supreme Court has made clear that when Congress
determines that a particular problem has national ramifications
and requires a nationwide remedy, additional findings are not
required by any entity -- Congress or, a fortiori, anyone else.
Appellants' argument that North Carolina was required to make
findings sufficient to justify application of a set-aside within
the state before it could enforce the set-aside Congress
established in the STAA is meritless.
3. In addition, plaintiffs' argument that a state should be
required to make additional, localized findings notwithstanding
Congress's nationwide findings has no logical stopping point. It
would require a county, next, to make county-wide findings if a
state has made adequate statewide findings, and a city then to
make citywide findings, and so on. Plaintiffs appear to
recognize the absurdity of this argument when they at one point
concede that there is only "a requirement that the compelling
state interest required for the use of race be firmly established
at some level" (Br. 42, emphasis added).
In addition, the principal purpose of the first prong of
strict scrutiny is to ensure that the racial classification is
rooted in legitimate remedial aims. See Croson, 109 S. Ct. at
727 (majority opinion), quoting Fullilove, 448 U.S. at 533-535
- 40 -
(Stevens, J., dissenting) i see also appellants' Br. 34-35.
Congress's findings establish this. It is nowhere alleged that
the state's motives for participating in the program are
discriminatory. On the contrary, they are clearly monetary. For
these reasons, too, additional filings and the state level are
unnecessary here. 22
4. Finally, plaintiffs assert that the Supreme Court's
recent Croson decision establishes that North Carolina needed to
make findings of local discrimination before adopting the federal
program. There is nothing in Croson, however, to support this.
Justice O'Connor's opinion made clear numerous times that it was
addressing a program established by a state or local government,
and not by Congress. The Court specifically rejected Richmond's
reliance on the PWEA set-aside upheld in Fullilove, for its own
program, stating, "What [Richmond] ignores is that Congress,
unlike any State or political subdivision, has a specific
constitutional mandate to enforce the dictates of the Fourteenth
Amendment. The power to 'enforce' may at times also include the
power to define situations which Congress determines threaten
principles of equality and to adopt prophylactic rules to deal
22 Appellants refer (Br. 38-39) to the Justice Department's
amicus brief, written before Croson and submitted to the Supreme
Court when the Court was considering the petition for a writ of
certiorari in H.K. Porter Co. v. Metropolitan Dade County, No.
87-1001, as support for its position that local findings are
necessary in this case. That reliance is unavailing. The issue
presented in Porter, see 825 F.2d 324 (11th cir. 1987), did not
involve a statute specifically mandating a set-aside program.
Here, Congress clearly has made a nationwide determination, and
that determination controls in this case.
- 41 -
with those situations." 109 S. Ct. at 719 (emphasis in
original). Thus, not only did Croson not address the situation
where Congress had already made the necessary findings, Justice
O'Connor's discussion of Congress's authority indicates that,
once Congress has made such findings and enacted a program,
additional state findings are unnecessary.
III
NORTH CAROLINA HAS PROPERLY IMPLEMENTED THE
FEDERAL REGULATORY REQUIREMENTS FOR OPERATION
OF A DBE PROGRAM, THEREBY INSURING THAT THE
PROGRAM IS NARROWLY TAILORED AND DOES NOT UNFAIRLY
AFFECT ANY ONE TYPE OF CONSTRUCTION OR CONTRACTOR
Plaintiffs argue here that evidence presented below shows
that North Carolina's implementation of the program violated the
Supreme Court's standards for narrow tailoring (Br. 45-57). To
the contrary, the evidence showed that North Carolina's
implementation of the program is precisely what the regulations
require, and what Fullilove and Croson approved as narrow
tailoring. As the district court found, appellants put on
virtually no convincing evidence demonstrating their claim that
the plan, as administered by North Carolina, was not narrowly
tailored or had a disparate effect on specialty subcontractors or
Mr. Carpenter. 23
23 Fullilove itself cited several factors to consider in
determining whether a program is narrowly tailored. First, the
Court noted that the PWEA program contained an "administrative
mechanism, including a complaint procedure, to ensure that only
bona fide MBE's are encompassed by the remedial program, and to
prevent unjust participation in the program by those minority
firms whose access to public contracting opportunities is not
impaired by the effects of prior discrimination." 448 U.S. at
(continued...)
- 42 -
1. The most critical aspect of ensuring that a racial
classification is "narrowly tailored" to its remedial purpose is,
logically, that the classification not unnecessarily afford a
remedy to those of a favored group who are not in fact suffering
the effects of past discrimination and, conversely, that it not
bar relief to those of unfavored groups who in fact are suffering
those effects.
Thus, Chief Justice Burger's opinion in Fullilove stressed
that "the MBE provision cannot past muster unless * * * it
provides a reasonable assurance that application of racial or
ethnic criteria will be limited to accomplishing the remedial
objectives of Congress and that misapplication of the program
will be promptly and adequately remedied administratively" (448
23 continued)
482. The Court also noted that the PWEA program assumed that the
grantee who sought available, bona fide minority MBEs would
achieve the 10% level of minority participation, and that the
grantee who failed to reach the required 10% goal has available
an "administrative waiver" of the goal should the grantee
demonstrate that it cannot reach that level of minority
participation "without departing from the objectives of the
program" by using firms which are charging unreasonable prices or
are otherwise attempting improperly to benefit from a program
designed to remedy disadvantages stemming from racial
discrimination. Id. at 481-482. The Court further noted that
the administrative mechanism permits the elimination of spurious
minority front firms to prevent abuses of the program. Id. at
488. The Court also relied on the fact that the federal program
would be "subject to reassessment and reevaluation by Congress
prior to any extension or re-enactment." Id. at 489. Finally,
the Court determined that the actual effects of the program on
the contracting expectations of "nonminority firms is relatively
light in this connection when we consider the scope of this
public works program as compared with overall construction
contracting opportunities." Id. at 484; see also id. at 514-515
(Powell, J.). As is discussed in the text below, each of these
elements of narrow tailoring is met in this case.
- 43 -
U.S at 487). The Chief Justice then explained that the program's
racial presumption "may be rebutted" (ibid.), that there was
available a "complaint procedure * * * for reporting 'unjust
participation by an enterprise or individuals in the MBE
program" and that no MBE may "exploit the remedial aspects of
the program by charging an unreasonable price, i.e., a price not
attributable to the present effects of past discrimination" (id.
at 488)
Justice O'Connor's opinion in Croson similarly stressed this
aspect of the program in Fullilove, noting that "[t]he Chief
Justice indicated that without this fine tuning to remedial
purpose, the statute would not have 'pass[ed] muster'" (109 S.
Ct. at 718) (plurality), and that in the Richmond program "there
is no inquiry into whether or not the particular MBE seeking a
racial preference has suffered from the effects of past
discrimination by the city or prime contractors" (id. at 729)
(opinion for the Court). Justices Stevens, Kennedy, and Scalia
also acknowledged in their concurring opinions the necessity of
this fine tuning to a remedial purpose. Id. at 730, n.1
(Stevens, J.) ("Unless the legislature can identify both the
particular victims, and the particular perpetrators of past
discrimination, * * * a remedial justification for race-based
legislation will almost certainly sweep too broadly") (emphasis
in original) : id. at 734 (Kennedy, J.) ("the rule suggested in
[Justice Scalia's] opinion, which would strike down all
preferences which are not necessary remedies, to victims of
- 44 -
unlawful discrimination, would serve important structural
goals") ; id. at 735-739 (Scalia, J.). See also Shurberg
Broadcasting Co. of Hartford, Inc. V. FCC, No. 84-1600 (D.C. Cir.
Mar. 31, 1989), slip op. 18, 20, 21 (opinion of Silberman, J.) ;
id. at 9-11 (opinion of MacKinnon, J.).
The federal program at issue in the present case is entirely
consistent with this fundamental remedial principle. Plaintiffs
concede that the district court made essentially this very
determination (Br. 22), and those findings are not clearly
erroneous. North Carolina certifies disadvantaged business
enterprises in a manner consistent with the federal regulations,
and in a manner more attuned to disadvantage than the strict
racial classification which Fullilove upheld. As Congress
required in Section 105(f), minority status serves only as a
"presumption" of entitlement to status as a "socially and
economically disadvantaged business." As required by federal
regulations (49 C.F.R. 23.69), North Carolina has procedures
which permit individuals to challenge the designation of certain
minority firms as disadvantaged (see p. 7, supra) to help limit
certification to those firms owned and operated by individuals
who legitimately are economically and socially disadvantaged.
Thus, there is ample opportunity for examination of these
facts that underpin social and economic disadvantage if questions
arise either through a self-initiated investigation or by a third
party challenge. As to the former, Roger Lewis, Assistant FHWA
Division Administrator, testified that should information be
- 45 -
received that calls into question the social or economic
disadvantage of a member of the presumed groups, then NCDOT would
have an obligation to conduct an appropriate investigation. In
determining whether such individuals are in fact socially and
economically disadvantaged, NCDOT would apply the criteria set
forth in 49 C.F.R. Part 23, Subpart D (Tr. 299-300). To date
NCDOT has had no reason to question the validity of the
presumption of social and economic disadvantage as applied to any
participant in the DBE program (Tr. 234). And there is not the
slightest hint in the record before the Court that businesses
owned by minorities who are not in fact socially and economically
disadvantaged participate in the DBE program in North Carolina.
Thus, plaintiffs' argument that the DBE program as applied in
North Carolina is "overinclusive" is pure speculation.
As to the third party challenge process, competing DBE and
non-DBE firms have ample incentive to challenge the bona fides of
any firm whose certification they have reason to question. The
fact that no challenge has been filed by plaintiff Carpenter or
anybody else does not render the program unconstitutional and is
not evidence that the procedure is illusory or that the
presumption is conclusive. On the contrary, the absence of third
party challenges, combined with the absence of any suggestion
that nondisadvantaged firms are participating in the NCDOT
program, is evidence that there is an effective mechanism for
ensuring that participants in the program are truly
disadvantaged. Thus, the procedures in place in North Carolina
- 46 -
are consistent with DOT's regulations and Congressional intent.
Indeed, ensuring that only bona fide businesses participate in
the DBE program is of utmost importance to maintaining the
integrity of the program. To maintain this level of integrity,
NCDOT created a task force to investigate previously certified
DBEs that had been identified as not in fact eligible for
certification. Furthermore, NCDOT monitors the bona fides of all
firms annually as part of the recertification process (Tr. 226).
Conversely, the state also allows people who do not qualify
for the minority presumption to demonstrate that they share
attributes of disadvantage sufficient to be certified as DBEs,
and has certified as DBEs three firms owned by handicapped
individuals (see p. 6, supra). See also 49 C.F.R. Pt. 23,
Subpart D, App. A (Sec. 23.62). Thus, this record shows that
there is in place a workable and flexible procedure to decertify
minorities who should not be certified as DBES, and to permit
nonminorities who should be certified as DBEs to be granted such
status. 24
24 When accepting applications from individual firms
seeking certification as DBEs, the state considered membership of
the firm's owner and manager in one of the minority groups set
forth in the federal regulation, 49 C.F.R. 23.62, to establish a
"rebuttable presumption" that the individual was economically and
socially disadvantaged, and therefore eligible for certification.
Appellant criticizes this approach, suggesting that the state is
improperly using race as a "conclusive" presumption of
disadvantaged status (Br. 22), and that the program permits
certification of individuals belonging to minority groups not
located in North Carolina (Br. 28 n.5).
Appellants failed to prove, however, that the state's
processes have actually resulted in unfair certifications.
(continued..)
- 47 -
2. There is abundant other evidence of narrow tailoring as
well.
To begin with, federal regulations require that a grantee
set goals based on the availability of existing DBEs to do the
required project work required by the project, 49 C.F.R. 23.64,
23.45, and the record shows that North Carolina did exactly that;
it calculated its annual goal based on the probable workload
capability of DBEs within the state, and probable level of
federal funding (pp. 7-8, supra). In addition, state officials
testified that goals for individual contracts were based on the
availability of existing and qualified DBEs to do the kind of
subcontracting work the project would permit, and were set in
such a way that the prime contractor would have flexibility to
choose among several types of subcontracting projects for which
there were qualified DBEs (p. 9, supra). This effectively
insures that the goal is less of a "set-aside" than a requirement
that the prime contractor insure that available DBEs become aware
of contracting opportunities and participate in the contracting
process. In addition, by setting a goal at a level below the
availability of DBEs in a particular area, and by insuring that
24 ( ...continued)
Appellants failed to put on any evidence that individuals have
been certified for DBE status who should not have been. State
officials testified that, again as required by federal
regulations, the state permits a third party, like Mr. Carpenter,
to challenge the certification of any individual, minority or
not. Federal regulations suggest just such an approach. See
App. c to 49 C.F.R. Pt. 23. There have been no such challenges
filed to date. Accordingly, there is simply no evidence in this
record that the state has been certifying individual firms for
DBE status which should not have been certified.
- 48 -
DBEs are available in many areas of subcontracting opportunities
(see pp. 8-9, supra), the state permits a prime contractor to
determine competitively which area of the contract he will
subcontract to an available and qualified DBE; the goal will not
require a contractor to reserve one particular area of the
contract only for a minority firm.
In addition, the record shows that North Carolina had a
method of determining whether a prime contractor unable to meet a
goal should be excused from compliance. Specifically, the
contractor may show that a good faith effort to meet the goal
would fail due to unavailability of sufficient DBEs seeking to
participate in the project (see p. 9, supra). Similarly, North
Carolina officials testified that they investigate DBE firms to
insure that those which state that they are 51% owned and
operated by minorities are actually so controlled, and have
decertified at least nine firms after discovering that the firms
were actually not controlled by minorities (see p. 7, supra).
Accordingly, North Carolina's method of setting goals, and
of evaluating good faith efforts to achieve a goal, are precisely
what the federal regulations require, and are more flexible,
waivable, and less onerous than the program approved in
Fullilove.
Appellants suggest North Carolina misapplied its authority
to set goals when in 1985 the Governor rejected a suggestion from
state highway officials to seek a 6.5% goal. The state
officials' suggestion was based on an assumption of receipt of
- 49 -
over $400,000,000 in federal assistance and potential use of DBEs
of $20,000,000 worth of work. As it turned out, the level of
federal assistance was lower than $400,000,000, so that the
actual use of DBEs was 9.7% of that year's federal assistance.
The state's explanation that its failure to meet the 10% goal was
based upon a lack of sufficient DBEs was accepted by the federal
officials. Accordingly, contrary to appellants' suggestion that
the annual goal was "not tied to the relevant labor market," it
was precisely so assessed. Despite the governor's rejection of a
lower percentage goal, the actual DBE use was the same as the
level of projected DBE use in the state officials' initial
recommendation. The percentage goal fluctuated based on the
amount of federal assistance North Carolina received. The result
was that the state handled calculation of the annual goal
perfectly well, did not use DBEs in a manner beyond what the
state officials determined was their overall capability, and was
excused from its inability to meet the goal.
The district court correctly pointed out that appropriations
under the STAA have been continually monitored by Congress, which
has held hearings on the application of Section 105(f), and which
"continues to monitor its enforcement" (R. 70 at 45) ; this
oversight is evidence that the DBE program will not "require
preferential treatment for DBEs after such treatment becomes
unnecessary" (id. at 46). Without such continuous Congressional
re-examination, the remedial predicate can, of course, at some
point become stale, but that is not the case here.
- 50 -
Finally, the fact that the program had no appreciable impact
on specialty contractors generally or on plaintiffs in particular
(see part I, pages 22-26, supra), also demonstrates the program's
minimal impact on innocent third parties and, therefore, its
narrow tailoring. See, e.g., Wygant V. Jackson Board of Educ,,
476 U.S. 267 (1986).
CONCLUSION
For the reasons stated herein, the district court's judgment
denying relief in this case should be affirmed.
Respectfully submitted,
LACY H. THORNBURG
JAMES P. TURNER
Attorney General
Acting Assistant Attorney General
State of North Carolina
ROGER CLEGG
Deputy Assistant Attorney General
Grapa GRAYSON G. KELLEY
MDD DAVID K. FLYNN
Assistant Attorney
MARK L. GROSS
General
Attorneys
State of North Carolina
Department of Justice
P.O. Box 66078
Washington, D.C. 20035-6078
(202) 633-2195
CERTIFICATE OF SERVICE
I hereby certify that I served all parties with the
foregoing Brief for Federal and State Appellees by mailing two
copies to each of the following addressees:
G. Stephen Parker, Esq.
Southeastern Legal Foundation, Inc.
2900 Chamblee-Tucker Road
Building 4
Atlanta, Georgia 30341
Frank P. Ward, Jr., Esq.
Maupin, Taylor, Ellis & Adams, P.A.
3201 Glenwood Avenue
Raleigh, NC 27612-5008
Grayson Kelley, Esq.
Department of Justice
State of North Carolina
P.O. Box 25201
Raleigh, NC 27611
This 12th day of July 1989
ML2D
MARK L. GROSS
Attorney
10 pen
7/28
Chriss:
MAY be able to build a news element
into Urban League regarding President's
Enveryment Zones Program ( 6 Ha of transmettal
to Congless July 25). Proposal includes
not just details of how zones would
work - not just another "we support
E. Zones" statement.
Catch: Kemp speaks to Urban
League day before Pres. Bush. Can we
make sine Pres. has option to "announce "??
Dan mr.
Dear Chriss
Do not release
WK
OFFICE OF THE VICE PRESIDENT
Embargoed until delivery -- approx. 10:30 AM, July 12, 1989
TEXT OF REMARKS BY THE VICE PRESIDENT
80TH ANNUAL CONVENTION OF THE NAACP
COBO HALL, DETROIT, MICHIGAN
JULY 12, 1988 - 10:30 A.M.
It is an honor for me to be here today as you
commemorate the 80th anriversary of the NAACP. The
President regrets that he could not be here, as he is
traveling in Europe. He asked me to extend his highest
personal regards to you, Dr. Hooks, Dr. Gibson, Mrs.
Mcmillen, the NAACP Executive Board, and the NAACP
membership.
I'd like to begin by echoing the remarks of
President Bush at your 79th annual convention last year.
The President promised that this Administration would have
"a positive civil rights agenda." He also promised that he
would be "personally involved in protecting the civil
rights of all Americans."
The NAACP can be proud of the fact that, over the
last eight decades, it has made an immeasurable
contribution to the betterment of our society. In 1909,
when the NAACP was organized, America was a segregated
society. Black citizens could not work as public servants
in some states, could not use public accommodations, could
2
not attend many of the nation's finest colleges and
universities. Blacks were forced to attend segregated
public schools and had to drink from "colored" water
fountains.
You could pay your taxes, but you could not use the
public restrooms in some city halls. You could fight in
the Army during periods of war, but you could not buy a
home outside of the black community, or use public
hospitals to treat black soldiers' wounds. You could cook
the food in the kitchen, but you could not eat the food
that you cooked at a table in a restaurant in which you
worked. Largely because of the work of the NAACP over the
past 80 years, these and many other racial barriers have
been struck down.
But as your theme says: "the struggle continues."
Our society today is less steeped in intolerance, but there
is still intolerance in the land. Our society is less
racist today, but there is still racism. Our society is
less bigoted today, but there is still bigotry and there
are still bigots. And SO long as this is so in America,
there will be a need for the NAACP.
I mentioned earlier the Civil Rights Act of 1964.
Two weeks ago, we held a White House ceremony marking the
25th anniversary of its passage. Dr. Hooks was there, as
were other civil rights leaders. I think the President's
3
remarks at that ceremony bear repeating before this
audience. He asked that we, as a nation, "rededicate
ourselves to that most American of dreams: a society in
which individuals are judged not 'by the color of their
skin, but by the content of their character. The
President also went on to say that "we must move beyond the
protection of rights to the creation of opportunity."
The current situation for black Americans is a
mixture of progress and continuing struggle.
I understand that the black middle class has grown
by a third in the 1980s. This according to black
sociologist Bart Landry of the Joint Center for
Political Studies.
I understand that average black family income is at
the highest level in history.
I understand that the black employment rate -- the
number of working-age black Americans holding jobs
-- is at the highest level in history.
I understand that the number of black professionals
has increased by nearly one-half.
I understand that the black business sector has
almost doubled in size over the course of the
decade.
But, then, I also understand that nearly a third of
black Americans have family incomes that place them below
4
the poverty line.
I understand that the black infant mortality rate is
twice that of whites.
I understand that homicide is the leading cause of
death for young black males.
And I understand that the high school drop out rate
in many of our black inner cities is as high as 50%
in some places.
These are not just black problems. They are
America's problems. They are problems that we -- as a
nation -- must work together to solve.
of course, these problems are very complex and very
painful. They have no easy answers. But I think that the
NAACP was on to something when it co-sponsored the Black
Family Summit in 1984 at Fisk University in Nashville. I
think most of us realize that strong families -- be they
black, white, yellow or brown -- produce progress. Parents
instill values in their kids. They emphasize the
importance of education. They preach the work ethic. They
encourage personal responsibility.
Broken families, as we know, often have to work hard
every day just to survive. With all the pressures such
families face in their daily lives, is it any wonder that
family members might sink into despair? When we talk about
drug abuse, when we talk about teen-age pregnancy, when we
5
talk about joblessness, when we talk about crime, when we
talk about high school drop-outs, we are not simply talking
about statistics.
We are talking about human beings, whose lives are
important to their families, to their communities and to
this society. Because when a person succumbs to these and
other problems it not only represents a personal tragedy,
but a loss to family, to community, and to society. It
means missed opportunity. It means unrealized potential.
And it means that a national resource -- human in this case
-- has been under-utilized. With the world growing
increasingly competitive, America cannot afford such losses
in human capital.
This Administration has set out to pursue
initiatives that are meant to offer hope and opportunity to
the disadvantaged.
You heard Monday from Jack Kemp, our Secretary of
Housing and Urban Development. He is putting
forward some very innovative ideas to improve the
lives of residents of the Nation's public housing
communities.
Tomorrow you will hear from Louis Sullivan, our
Secretary for Health and Human Services, who intends
to bring to bear the resources of his department to
deal with the health problems of black Americans.
6
Our Labor Department, under Secretary Elizabeth
Dole, will continue to offer help to those who are
unemployed and lacking job skills through the Job
Training Partnership Act Program. I am particularly
proud of this program, since I helped to create it
when I was in the Senate. Earlier this morning, I
toured a JTPA site at Wayne State University. This
site happens to be one of the best in the country.
Overall, 68% of those who go through JTPA are placed
in jobs. Those are results that no other job
training program has equaled. And we are working to
make the program even better. Most important, by
improving our targeting of jobless people from the
most disadvantaged backgrounds.
On the education front, this Administration, under
George Bush -- who has stated on numerous occasions
that he intends to be the "Education President" --
intends to push forward with our reform agenda, with
the object being to provide a genuine quality
education for our school children.
This Administration has laid out four key principles
on education:
1)
Excellence and success in education should be
recognized and rewarded.
2)
Federal funding should be targeted to those who need
7
it most.
3)
Choice and flexibility -- for educators, parents,
and students -- are important to educational reform
and to achieving excellence.
4)
Greater accountability is needed in the education
system to assure that students are actually
receiving the highest quality education. Success
should be rewarded; programs which do not work
should be changed.
We intend to recognize merit schools, whose students
make significant educational progress over time, with
special emphasis on schools that enroll substantial numbers
of disadvantaged students.
We are going to assist in the creation and
development of magnet schools, which offer students and
parents wider educational choices. Many of these magnet
schools, as you may know, are being created in black
neighborhoods. And we are creating a special fund of $60
million -- over four years -- to help build the endowments
of historically black colleges and universities. As you
know, President Bush is strongly committed to black
colleges. And I stand with him in that commitment.
This past may, I had the honor of delivering the
commencement message at Fisk University -- the same campus
on which the NAACP held its Family Summit five years ago.
8
The point was brought home to me that if Fisk did not
exist, many of the students that graduated that day might
not ever have received a college diploma. And I'm sure the
same could be said of the other black colleges and
universities as well.
We must stress education because -- as we all know
-- it is the key to upward mobility. Now a good education
does not guarantee that you will have a full and prosperous
life. But a poor education almost certainly guarantees
that you won't.
And quality education can happen anywhere. Even in
a decaying neighborhood infested with drugs and overrun by
crime and violence. I visited a school in such a
neighborhood last February. Charles Drew Elementary School
in the Liberty City section of Miami. This black public
school was exemplary in practically every way. Attendance
was nearly perfect. The students were well behaved. The
teachers were enthusiastic.
As a result, test scores had improved dramatically
over the past few years. And the school and its Principal,
Frederick Morley, have been cited for numerous awards.
This is the kind of progress that can be achieved when
families, when communities come together for a good
purpose. It is the self-help ethic in full bloom.
9
When I think of self-help, I am reminded of a famous
figure in black history who spent a considerable part of
her life in my home state of Indiana -- Madame C. J.
Walker. Madame Walker -- as most of you probably know --
founded a multimillion dollar business employing several
thousand workers at the turn of the century. She was a
philanthropist. She gave freely to the cld and the needy.
And she contributed generously to this organization -- the
naacp -- because she believed strongly in its mission.
It is because of what Madame C. J. Walker
represented -- enterprise and philanthropy -- that I,
along with Senator Richard Lugar, helped to make funds
available for the creation of the Madame Walker Urban Life
Center in Indianapolis.
The Center stands today as a symbol of black
achievement. It is a place where cultural and educational
activities are carried out for the benefit of the entire
Indianapolis Community. And it is also a place that offers
job training and employment opportunities for those from
disadvantaged backgrounds.
This, it seems to me, is a model that deserves to be
replicated, much like the various, important self-help
programs that the NAACP sponsors. I commend you on your
act-so program, which motivates black high schoolers to
excel in academic, scientific and cultural endeavors, your
10
back-to-school/stay-in-school program, and your program
addressing the problem of teenage pregnancy. These are the
kinds of illuminating programs that the President was
thinking about, when he spoke of the need for 1,000 points
of light.
If we have learned anything over the last quarter-
century, it is that government can do a lot to improve the
lives of the disadvantaged but it can not do it all, and it
cannot do it alone. We must have a partnership between the
government and organizations like the naacp to deal with
the social problems that confront this Nation.
I'd like to see other private organizations -- non-
profits, philanthropies, corporations, churches, academic
institutions -- join together in a new spirit of
volunteerism. If we as a Nation come together, with a
sense of purpose, there is no problem -- drugs, crime,
poverty that we cannot overcome.
I'd like to speak personally for a moment if I may.
I want you to know that I am committed, just as the
President is committed, to fostering good relations with
the civil rights community. In his remarks earlier in the
convention, Dr. Hooks noted "a fresh spirit of openness and
reason" in the White House. He said that while the NAACP
differs with the Administration on a number of issues, "we
can differ and still maintain an open line of
11
communications free of bitterness and rancor."
Dr. Hooks went on to say that the word to describe
this new relationship is "civility." And I heartily
concur. I want to say to you today, Dr. Hooks, that my
door is always open to you whenever you have something on
your mind. We may differ as to the course that this Nation
must travel, but we do not differ on the goal of one
america where opportunity is not an elusive goal, but a
concrete reality. We should work together. Not only for
the good of black Americans, but for the good of the
Nation.
While we are speaking of civility, let me also say
that I would like to see better relations between black
Americans and the Republican Party. We have had our
differences in the past. But now is the time to put them
aside. I invite you all here to give us a fresh look, to
join us, to help shape our agenda. The new Republican
Party stands for hope and opportunity. I think you will
find that you are welcome in the party of Lincoln.
In closing, let me thank you for the welcome you
have given me here. I feel confident that we can work
together to build an America that we all envision. And,
finally, I hope that you will see fit to invite me back
some time in the future.
Thank you very much.
GO OFHOUS
SING s'n AND OF URBAN
Remarks
at
the
NAACP Annual Convention
Detroit, Michigan
July 10, 1989
DEPARTMENT AND U.S. URBAN DEVELOPMENT OF HOUSING
"I want to help every man, woman, and child
share the American Dream."
Jack Kemp
July 10, 1989
Ladies and gentleman, I'm honored and thrilled to be here
with you at the annual NAACP convention. On this eightieth
birthday of your founding, I'm proud to share the dais with your
fellow warriors in the continuing battle for civil rights. I'm
proud to share this moment with you and with Mrs. Aminda Wilkins,
with your Chairman of the Board, Dr. William Gibson; with
Nathaniel Colley, who chairs your Special Contributions Fund;
with Mrs. Enolia McMillan, President of the National Board; with
your Vice Chairman, Rev. Edward Hailes, with Mrs. Myrlie Evers,
who is presiding; with Hazel Dukes of the New York State NAACP
and Dan Acker of the Buffalo NAACP; with Althea Simmons, Director
of the NAACP's Washington Bureau, and of course, with your
Executive Director, Dr. Benjamin L. Hooks.
I want to thank Ben Hooks for that warm and generous
introduction. I want to thank him, too, for the unstinting
leadership he has delivered to your organization
and our
country
in the march for liberty and justice.
Thirty-two years ago this month, I came to Detroit as the
17th round draft choice. It's good to be back.
And frankly, folks, if it weren't for Ben Hooks
without
his early support
Ben, I might not be Secretary of HUD. When
people were wondering what kind of a Secretary I might be, he
said I was a liberal with a big 'L' on relations between the
races.
And, Ben, I won't let you down!
A few days ago, Ben came by my office to talk about a
national campaign styled somewhat after the "clean-up, paint-up,
fix-up" programs common to many local communities. He mentioned
that the Detroit Baptist Council has such a program, that the
Baltimore Afro-American newspaper has such a program, and that in
Charlotte, North Carolina, there is a massive clean-up program
with hundreds of citizens clearing the shoulders of the
expressway -- a major campaign for cleanliness.
Well, I agreed that we should start working with Ben Hooks
and the NAACP to make this a national project, and right now, I
am announcing that the planning for this program will start
immediately. Through this and similar efforts, religious groups,
civic groups, labor unions, old, young, teenagers, and all kinds
of community organizations can be involved in a massive effort to
make our neighborhoods more liveable. I want HUD to work with
them and with you to do it. Let's start with those 15,000
abandoned houses in Detroit; and let's get GM, Ford, Chrysler,
and Labor to work with us.
On the day President Bush nominated me, I was proud to
choose as my motto the beautiful words Martin Luther King
expressed upon receiving the Nobel Peace Prize. He said he had
"
an abiding faith in America and an audacious faith in the
2
future of mankind." I, too, have that audacious faith in the
future of mankind.
What a thrill it was the other day to sit next to Ben Hooks
at the White House, as President Bush and distinguished civil
rights leaders and Members of Congress celebrated the 25th
anniversary of the Civil Rights Act of 1964, a milestone on the
road to freedom and justice. You helped lay that milestone.
Vernon Jordan, John Jacob, John Lewis, Joseph Lowery, Jesse
Jackson, Floyd McKissick, and Martin Luther King III were there,
too; and what an honor it was to meet the great lady of
inspiration, Rosa Parks, in the East Room ceremony.
I couldn't help thinking that the modern civil rights
movement really started in earnest nine years before the '64 Act.
It started on Cleveland Avenue in Montgomery, Alabama, on
December 1, 1955 when a local official of the NAACP, Rosa Parks,
said she just wasn't about to move to the back of that bus. That
was a profoundly courageous thing she did, and it helped inspire
sweeping changes in the South and throughout America.
Ben, I've always admired the wisdom of your thought, the
eloquent clarity of your ideas -- as so well expressed in the
words I read in last month's issue of Crisis. You wrote:
"America can only be great if she extends to all of her citizens
a chance to make a difference, an opportunity to make a
significant contribution to the collective good
Those words crystallize our challenge! A chance to make a
difference. An opportunity to contribute to the collective good.
This is the American quest. In one simple, yet profound,
statement, Ben Hooks has captured its meaning. He has defined
our quest
our common objective.
That objective has been ennobled by the lives of patriots
and martyrs, by students and workers, by black and white. It has
been bought dearly by the sacrifices of those who came before us.
Martin Luther King, writing from the Birmingham jail,
personified those sacrifices. He said the civil rights
protesters "were in reality standing up for what is best in the
Judaeo-Christian heritage, thereby bringing our nation back to
those great wells of democracy which were dug deep by the
founding fathers in their formulation of the Constitution and the
Declaration of Independence."
Ladies and gentlemen, they sacrificed so we might succeed.
The road we travel to basic human rights, to dignity and justice,
has been carved through the wilderness of ignorance and bigotry,
of racism and prejudice. Our way was cleared by the sweat and
blood of our ancestors. And by so many people in this room. The
3
road we follow was laid out by Thomas Jefferson and Crispus
Attucks, by Abraham Lincoln and Frederick Douglass, by Hubert
Humphrey and Martin Luther King. It was paved and advanced by
DuBois and White and Wilkins.
We're following that same road today
Ben, you, me. Men
and women of good will everywhere. It's never an easy journey,
but we'll keep on going until we reach our destination until we
reach that blessed America so many have struggled, fought, and
died for.
We're going to keep on that road. We dare not leave it.
For the road to freedom and justice is not yet complete. Our job
is to complete it
not just for ourselves
but for those who
come after us -- for your children and mine.
Finishing that job
traveling and advancing that
road
that is our greatest challenge. For this is the Glory
Road
the road that leads to a truly great America in which none
are left out
no one is left behind
and all have a chance to
contribute. We're going to meet that challenge
we're going to
complete this Glory Road by shaping an America that offers each
of us
every man, woman, and child
the freedom to reach the
outermost limits of our capabilities.
This is a momentous time in our Nation's history. It's our
chance to take what our forefathers knew America could
become
to take that idea, that dream, that promise
and
transform the promise into reality for all.
We can do it. We must do it. We must extend that road into
every ghetto and barrio, into every impoverished corner in urban
and rural America. We can open that road to those left out or
left behind. We can clear the way so they, too, may follow that
road to hope and dreams, to self-determination, to opportunity,
homeownership, and economic independence.
Ladies and gentlemen, I'm a believer. I believe we can
build that Glory Road. I believe that, working together, we will
build it.
We can build it because we know the way. It's clearly laid
out for us. America's Glory Road has been well-marked by the
signposts of history.
Just think. Two hundred and thirteen years ago last week,
Thomas Jefferson wrote the immortal words: "We hold these truths
to be self-evident: that all men are created equal; that they
are endowed by their Creator with certain inalienable rights;
that among these are life, liberty, and the pursuit of
happiness
4
Some people thought those words were written for white
folks. But they were written for all folks. Some thought they
were written just for Americans. But they were written for all
people. Some thought they were written for one moment in
history. But they were written for all time.
Those words inspired not only the students in Selma, but the
students in Beijing. Not only factory workers in America, but
factory workers in Poland. They inspired not only the struggle
for civil rights for blacks in America, but the fight for
democracy and human rights for blacks in South Africa.
Those words have guided our country throughout the course of
its history. We accept them not simply as an ideal, but as a
worthy and realistic goal; recognizing, all the same, that it is
a goal we have yet to achieve in full for all our people.
More than a century and a quarter ago, Abraham Lincoln
engaged in a magnificent debate with the "Little Giant,' Senator
Stephen Douglas. In what became known as the "Peoria speech,"
Lincoln said:
"I cannot but hate slavery. I hate it because of the
monstrous injustice of slavery itself. I hate it because it
deprives our American example of its just influence in the world;
enables the enemies of free institutions, with plausibility, to
taunt us as hypocrites; causes the real friends of freedom to
doubt our sincerity; and especially because it forces so many
good men among ourselves into an open war with the very
fundamental principles of civil liberty, criticizing the
Declaration of Independence, and insisting that there is no right
principle of action but self-interest
I object to it because it
assumes that there can be moral right in the enslaving of one man
by another
we began by declaring that all men are created
equal; but now, from that beginning, we have run down to the
other declaration, that for some men to enslave others is a
`sacred right of self-government." These principles cannot stand
together. They are as opposite as God and Mammon.'
Lincoln's eloquence
his thorough understanding of the
fundamental moral imperative underlying the issue
was
formidable. And, do you know what Douglas did? He capitulated.
He begged for a truce, saying: "Lincoln, you understand this
question of prohibiting slavery
better than all the opposition
in the Senate of the United States. I cannot make anything by
debating it with you.
Freedom. An inalienable right. An idea so powerful that
the "Little Giant" was forced to concede the issue and begged for
a truce.
In the nineteenth century, a house divided against itself,
5
half free and half slave, could not stand. And today we cannot
allow our nation to stand divided between prosperity and poverty.
How can we tell the world that democracy and freedom work, if we
can't make them work for those left out and left behind in
America?
Freedom and justice are never easily won.
That's why we needed the NAACP eighty years ago. And that's
why we need the NAACP today: to make America live up to itself.
Through your efforts, our country has made great strides in basic
human rights.
You helped pass the Voting Rights Act, the Civil Rights Act.
You helped abolish municipal housing segregation ordinances. And
you brought an end to school segregation.
The NAACP successfully pushed for the Open Housing Act and
other fair housing laws, including the one passed last year. I
want to thank Ben Hooks and Althea Simmons, the Director of the
NAACP's Washington bureau, who worked so. hard to get it passed.
I have the duty and the privilege of administering those laws
and, only a few days ago, I brought the first charge of racial
discrimination under the Fair Housing Amendments Act of 1988.
I want you to know that President Bush will not tolerate
housing discrimination. And neither will I.
The boycotts, the sit-ins, the marches, the legal
challenges
all punctuated a message of moral outrage -- a
message that became a testament of fierce commitment to freedom
and justice. You were there then and you are here now,
continuing the struggle.
I wasn't there, but I wish I had been.
The 1950's and 60's were an awesome period of expanding
civil and human rights in American history -- a time of powerful
and necessary changes in the law. It was the dramatic high point
of Chapter One in the struggle for civil rights.
Chapter One was written by those who led the fight for basic
human rights, for legal rights, voting rights. It was written by
Rosa Parks, Martin Luther King, Jr. and Whitney Young. It was
written by Andy Young, Morris Abram, Ella Baker, and John Lewis.
It was written by Fred Shuttlesworth and Ralph Abernathy, by
Thurgood Marshall and Roy Wilkins. By Vernon Jordan, John Jacob,
Dr. Leon Sullivan, Ben Hooks
and so many of you here.
Chapter One is a proud part of our country's history
a
chapter of commitment and sacrifice, of determination to achieve
justice and equality for all our people. But, Chapter One would
6
not have been possible without the work begun 80 years ago by the
NAACP. The relentless drive for freedom and justice has lived
within us for as long as history can recall; but this chapter was
largely written by those who joined forces in 1909 to forge an
alliance against racism
and by all of you who followed in their
footsteps.
Chapter One was about freedom and justice, about removing
legal barriers, about full rights for each and every one of us as
American citizens.
And, I must give credit to some great leaders of the
Democratic Party who were marching at the head of the civil
rights revolution in the '60s when many in the party of Lincoln
were nowhere to be found. But I'd be remiss not to say that the
Republican Party's roots were not dug by Herbert Hoover. The
Republican Party began as a great civil rights movement in the
1850s that included breakaway Democrats, anti-slavery Whigs,
abolitionists and Free-soilers. Abe Lincoln called it the
Republican Party to remind folks that it was an extension of
Thomas Jefferson's old Democratic/Republican Party. As Tony
Brown's Journal has recalled, the radical Republicans were the
best friends blacks had during Reconstruction, and I hope a
modern-day radical Republican Party competes effectively for the
minority vote.
President Bush and I look forward to the day when both major
political parties compete for the votes of African-Americans. We
must remind people that the entire civil rights revolution is the
continuing saga of the first American Revolution.
And now, at the dawn of a new millennium, we are engaged in
a new chapter of this ongoing revolution, for as you in the NAACP
have said so well, 'The Struggle Continues."
Let us dedicate this chapter to realizing the dream of
homeownership
of opportunity
of prosperity
for everyone
That's what HOPE spells.
This chapter is about economic prosperity, about jobs for
everyone, and growth, and a bigger pie and more seats at the
table.
And this chapter is about more than that. Not only about a
chance to drive a truck, but a chance to own the truck
not just
a chance to have a job, but a chance to own the company
not
only a chance to live in decent and drug-free public housing but
a chance to homestead and manage, and, ultimately, own the
housing.
And, as we move into Chapter Two, we need to know how far we
have come so we may appreciate how far we have yet to go.
7
It's a good sign that some 40 percent of black American
households are considered middle income, a category that has
grown by more than 25 percent during the recent economic
expansion. The receipts of black American businesses have been
growing at an average rate of eight percent every year since
1982. Over 2.5 million new jobs have been filled by black
Americans in the last five to six years.
Yet, clearly, this is not enough. It only serves to remind
us how far we have to go. Over half a century ago, Franklin D.
Roosevelt saw one-third of a nation ill-clad, ill-housed, and
ill-fed. By 1987, the GNP had increased eightfold; and still --
56 years after FDR's statement -- one-third of black Americans
remained below the official poverty line
ill-clad, ill-housed,
ill-fed.
According to the Good Shepherd (Matt. 25:40) those who
"inherit the kingdom" are those who feed, clothe, and house "the
least of these my brothers."
Well, our American economic growth has not yet reached the
least of our brothers and sisters. We must reach the least, the
lost, and the last
that's what we must do in Chapter Two. As
my Chief of Staff, Wendell Gunn, says, "We've got the ticket.
After 200 years we can finally get on the train. Now let's get
the train moving."
That's what President Bush wants to do and wants me to do at
HUD. We want to get the train of growth in jobs and opportunity
for decent and affordable housing moving through Watts and Boyle
Heights, through Newark and Bed-Stuy, through Liberty City and
Vine City, through Overtown and Motown
through every place
where the least, the lost, and the last need to get on that
train.
That's why I'm proud to be in the President's Cabinet,
because he wants to create an "opportunity society
an economy,"
he said, "that's thriving and creating jobs; cities that are
filled with enterprise and offer residents a good life and a good
living; neighborhoods that are vibrant and safe, with affordable
houses going up; old ones being restored."
President Bush said, "it means giving people -- working
people, poor people, all our citizens -- control over their own
lives. And it means a commitment to civil rights and economic
opportunity for every American."
I'm proud to accept that mission because those are exactly
my goals, as well. And I want you to know that even though the
President is in Poland today
he is here because I'm here to say
it for him.
8
And I promise you what I promised him. We are going to
reform HUD from top to bottom. We are going to make our programs
work for the people in need, not those motivated by greed.
Saturday night, I had the honor to speak to the League of
United Latin American Citizens, LULAC. I shared a story with
them that I'd like to share with you. This is a lesson I learned
from Luis Munoz Marin, the great governor of Puerto Rico, the
leader of the Popular Democratic Party, and the originator of
Operation Bootstrap. When his political party was out of power,
he used to talk about the need to redistribute wealth among the
people, to slice the loaf so everyone gets a piece in the name of
social justice. But, when he became Governor of Puerto Rico, he
soon realized that if all he had to distribute was the same loaf
of bread, the slices would get pretty thin before too long. He
realized what he needed weren't just better ways to slice that
one loaf, what was really needed was to create new bakeries.
That's what we must do -- create more bakeries in the
ghettoes and barrios all over America.
We can start by passing enterprise zones now, so we can
begin the process of "green-lining" the inner city areas for
entrepreneurship and jobs
areas that have been "red-lined" for
despair. Enterprise zones can help unleash the creative energies
of minority entrepreneurs in the urban areas of America to create
opportunity for those who have been left behind. I will work
closely with the Congress to ensure its passage so we can replace
pockets of poverty with jobs and opportunity.
In 1929, on the eve of the Great Depression, blacks owned
65,000 businesses nationwide. I am struck by the number --
65,000 black owned businesses -- because, as John Jacob tells us
in The State of Black America 1989, there were just 301,000
black-owned businesses in 1982.
As I told Coretta and Dexter King at Paschal's Restaurant in
Atlanta -- on the day after my swearing-in -- we must commit
America to doubling or tripling that number by the middle of the
next decade.
Enterprise zones will be of little help in doing that if
there is no capital available to invest in new businesses in the
zones. The people who cannot afford high capital gains taxes are
not the rich, ladies and gentlemen. Capital gains taxes have
their most important effect on people's power to find "seed corn"
to start up new businesses.
Publisher John Johnson, a true entrepreneur, just wrote a
deeply inspiring book called Succeeding Against the Odds. The
seed capital he needed to begin publishing in 1942 amounted to
just $500 -- so near, yet so far. Unable to get a loan from
Chicago's biggest bank, his only solution came from his mom who
9
put up her new furniture as collateral for a $500 loan from a
small thrift. So risky was that venture that Mrs. Johnson prayed
and cried for days before she felt she could take the chance on
losing every piece of furniture she had.
Not every potential entrepreneur is lucky enough to have a
mom with even $500 worth of furniture to put up. But somebody
has to invest the seed corn when an idea-rich but money-poor man
or woman in a ghetto or barrio wants to imitate the John Johnsons
and Mr. Paschals by putting their dreams to work. And that
somebody should not be stopped because the capital gains tax is
too high to make the risk worth taking.
In his book John Johnson says of success in business, "Can
it be done again? "Yes," " he says, "it can be done again. I
could do it again. So could you. So could any man or woman who
comes up with an idea that provides a service no one else is
meeting and who is willing to subordinate everything to the idea
and the dream.'
If we are ever going to turn the page -- if we are ever
going to begin Chapter Two in earnest -- if we are serious about
unlocking the door to opportunity -- we have to unlock the seed
capital for black and hispanic and minority and women's
enterprises. We must convince Congress to cut the capital gains
tax to fifteen percent nationwide and to eliminate it in our
rural and urban enterprise zones.
We can also help entrepreneurs with another incentive. I
strongly support Congressman Charlie Rangel's proposal to give
investors an upfront tax deduction for the first $100,000 they
put into enterprise zone businesses.
There is more we can do. We need to increase the earned
income tax credit to hold down the enormous effective marginal
tax rates on the poor just struggling to get on the first rung of
that ladder of opportunity. The supplemental earned income tax
credit would give eligible families a credit to supplement their
earnings. There should be no tax on workers' wages up to 160 or
170 percent of the poverty level.
As you can see, I favor using the tax code to achieve
socially desirable goals and what's more socially desirable
than jobs and adequate, decent, and affordable housing for low-
income Americans? I think the low-income housing tax credit fits
that "desirable" criterion. It expires this year; but I'm
pleased that it has bipartisan support, and I'm working with
Congressman Rangel and Senator Mitchell to extend it and make it
work better for low-income people and low-income communities.
And, there's another extremely valuable tool available right
now, the Community Reinvestment Act. In March, 1978, the
10
Comptroller's office approved the first non-profit Community
Development Corporation, dedicated to the "revitalization of
inner-city residential neighborhoods." Today, more than 130
banks are investing in communities sponsoring low- and moderate-
income housing.
This month, the Comptroller will make public all information
on all lending decisions which involve CRA-related conditional
approvals, denials and CRA protests. This will enable the public
-- you -- to help the Comptroller's office scrutinize bank
practices to insure that the Community Reinvestment Act is being
complied with. I strongly support this Act and all efforts to
end, once and for all, the disgrace of red-lining in America. We
must encourage the flow of seed capital and lending to develop
our low-income communities and to produce low-income housing. We
want to encourage investment by banks and thrifts and pension
plans -- profit and non-profit -- with Federal, State and local
support.
These are some of the ideas we're working on at HUD and
within the Administration to extend jobs, opportunity and hope to
every American. But those are not the only ideas. I've had a
look at your plan for the year 2000 and beyond, and it calls for:
*
developing and implementing programs to increase black
homeownership and home retention among blacks;
*
increasing black family wealth from its presently
disproportionate low level;
increasing black self-employment;
*
ensuring that substantial numbers of blacks are employed
in growth industries and occupations;
and there are other proposals.
I have one problem with this plan. Why wait for the year
2000? I want to start now.
I want to help the NAACP integrate the economy. I want to
help every man, woman, and child share the American Dream.
Ladies and gentlemen, I have to tell you something.
I wasn't there when Rosa Parks integrated the buses. I
wasn't there when the students integrated the lunch counters. I
wasn't there when the schools were integrated. I wasn't there at
the Lincoln Memorial, when Dr. King spoke of "the dream."
But, I'm here now.
Let's get started!
U.S. GOVERNMENT PRINTING OFFICE: 1989 0-940-168
Withdrawal/Redaction Sheet
(George Bush Library)
Document No.
Subject/Title of Document
Date
Restriction
Class.
and Type
02. Memo
Hans Kuttner to Dan McGroarty and Stephanie Blessie, re:
07/25/89
P-5
Urban League Speech -- August 9. (5 pp.)
Collection:
Record Group:
Bush Presidential Records
Open on Expiration of PRA
Office:
Speechwriting, White House Office of
(Document Follows)
Series:
Speech File, Backup
Subseries:
By SN (NLGB) on 4/5/2005
WHORM Cat.:
File Location:
National Urban League Annual Conference 8/8/89 [3]
Date Closed:
10/8/2004
OA/ID Number:
06267
FOIA/SYS Case #:
Re-review Case #:
2004-2265-S
P-2/P-5 Review Case #:
MR Case #:
Appeal Case #:
MR Disposition:
Appeal Disposition:
Disposition Date:
Disposition Date:
RESTRICTION CODES
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(b)(1) National security classified information [(b)(1) of the FOIA]
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(b)(2) Release would disclose internal personnel rules and practices of an
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agency [(b)(2) of the FOIA]
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financial information [(a)(4) of the PRA]
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and his advisors, or between such advisors [a)(5) of the PRA]
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C. Closed in accordance with restrictions contained in donor's deed of
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July 26, 1989
THE WHITE HOUSE
WASHINGTON
July 25, 1989
MEMORANDUM FOR DAN McGROARTY
STEPHANIE BLESSIE
FROM:
HANNS KUTTNER A
SUBJECT:
Urban League Speech -- August 9
Overall
I would recommend that the speech seek a balance between defense of our
position (urban problems can't be solved primarily through federal dollars) and
the "work to be done" theme from the Inaugural Address.¹
Points to Hit
The field is rich with possibilities, in part because the themes involved
haven't been touched on much in the President's speeches. I offer a menu of the
topics that could be included.
Showing Awareness of Minority Concerns
In discussing the speech at our staff meeting, we concluded the typical
listener would want to have the sense that the President is aware of
minority concerns and issues. Emily Mead will be providing you with a
National Research Council report on the current standing of blacks in
American life. One key point is that ours is still a residentially
segregated country. A strong push for fair housing will bring applause
Also, Secretary Sullivan has as one of his priorities lessening the health
disparities between blacks and whites. T have a lot of statistics on this
if you want to pursue it.
The Mess at HUD
Some of the revelations about what has happened in the administration of
HUD's programs are an outrage. The President has full confidence in
Secretary Kemp's effort to make things right. Secretary Kemp has kept the
1 "My friends, we have work to do. There are the homeless,
lost and roaming, there are the children who have nothing -- no
love and no normalcy -- there are those who cannot free
themselves of enslavement to whatever addiction -- drugs,
welfare, the demoralization that rules the slums."
2
President abreast of developments. The Justice Department is involved, and
where crimes have been committed, there will be prosecutions. Also, OMB
Director Darman is reviewing financial controls in other federal programs to
assure there not problems elsewhere.
Michael Jackson from Cabinet Affairs should be sending you more on this.
Another point: this is another reason why housing vouchers for the poor are
our approach to providing housing assistance to the poor. We want to
promote choice all over, in education, in health care, and in housing,
because we want to empower consumers rather than the bureaucrats who run
housing authorities or the developers who seek to make profits from federal
programs.
Urban Prosperity
The best program ever for urban America is economic prosperity. The
investment and growth in income during the current economic recovery have
frankly done more for the cities than any federal program by increasing
municipal revenues. (There must be stats on growth of city budgets in real
terms, since 1982 V previous five years.)
Ships that Don't Rise with the Rising Tide
We realize that a general upward trend will not raise all boats equally.
Kemp is fond of playing with this metaphor, and there's probably a good "As
Jack Kemp tells me" that has something to do with a rising tide swamping
boats that are stuck on the bottom. That's why we hope for a kinder and
gentler America, and support programs (like enterprise zones and help for
the homeless) to help boats stuck on the bottom. (The metaphor works better
with "boats with holes in their hulls" because it brings out the notion that
we want to give people the tools needed to repair those holes.)
We also need to be wary of overpromising. (This was something on which
Darman expressed concern at yesterday's DPC meeting on welfare strategy --
the phenomenal budget reduction target we face in the FY 91 budget.) I
would suggest direct criticism of the overpromising of what the Great
Society programs would bring. (see, e.g., LBJ's late-August 64 remarks at
the signing ceremony for the Economic Opportunity Act saying that we will
end poverty.) By contrast, we should have the humility to accept the
Biblical injunction that the poor are always with us.
Enterprise Zones
The President today (July 25) sent up to the Hill a letter calling for
action on enterprise zones. I'll provide whatever we have on this.
Homeless
In Building a Better America the President called for (1) full funding for
programs in the Stewart B. McKinney Homeless Assistance Act and (2) a $50
million initiative to figure out ways to better coordinate services to be
5
3
delivered to the homeless.
We need to clarify what we mean by leadership in this area. We don't mean
nationalizing the problem, either with us taking over or pumping in cash
because, frankly, we don't have the cash. Leadership means figuring out
what works best in helping the different parts of the homeless population --
the chronically mentally ill, alcoholics, families in welfare hotels -- and
creating the flexibility in federal programs so that people who make
programs work at the local level can make them solve the problems of
individual homeless people.
Also, we have an Interagency Council on the Homeless to work with service
providers and coordinate federal programs. We have more than $1 billion
going agencies. into programs targeted at the homeless, spread through more than ten
We don't need to be defensive here, and saying something like "We've failed
these people" would win big points with the audience.
Welfare/Bush Anti-Poverty Agenda
Line to leave them: We want to work with you to make our welfare programs
lift people from dependency, not keep them there.
The Domestic Policy Council spent today's meeting talking about welfare
reform and the Bush Administration. I'd think it would be fair to say that
we believe:
o
The task of reform is not yet finished.
While some think of last year's Family Support Act (welfare reform) as
a conclusion, we believe it is only a stepping stone to learning more
about how to end dependency. That's why we want the States to continue
initiating demonstrations of innovative approaches.
We have a Low-Income Opportunity Board to work with the states on
shepherding through the federal approval process new ideas states want
to demonstrate. We plan to show greater flexibility in approving
demonstrations to increase state interest in demonstrations. (Unless
this gets into the NGA speech, this counts as a policy announcement.)
Bush Anti-Poverty Principles
Choice "Give us the tools and we will do the job" (approximating
Churchill) relations. should apply to low-income people as well as international
Example of this notion at work: proposal to encourage magnet schools, our
child care proposal that would give money to parents so that they, not
bureaucrats, can figure out what to do.
Flexibility We want programs to fit loçal situations. Thus the Low Income
4
Board as a means to allow federal programs to have the flexibility to meet
local needs.
Opportunity We believe in an open society where those who are motivated
and assume the responsibility can move themselves upward. We want to remove
impediments to this, thus an emphasis on literacy and basic skills, not
Chicago
because it is Barbara Bush's pet project but because it is right for
America. Also Pinkerton's anti-credentialism fits under this heading.
Kemp likes the word empowerment to combine the notions of choice and
opportunity. He makes the point that the goal of poverty-related programs
should be to empower people to help themselves out of poverty, not to pay
them to stay where they are.
Task Force on Urban America
This is something we have been kicking around with Richard Nathan, Dean of
the Rockefeller School at SUNY Albany. See attached background memo.
speech. If things can be worked out, this Task Force can be announced as part of the
Removing Barriers to Opportunity
I think you have Pinkerton's memo on this subject.
In this speech, the subject can be approached through the notion of the
federal work force as a model for employers.
"Too many Americans lose out on job opportunities because while they can do
the job, they don't have the formal credentials or because they do poorly on
irrelevant tests. [Example of Missouri cosmetology laws; blacks pass
practical at same rate as whites, but only 3% of blacks pass written
tests 14
In this speech, the President could:
1. Attack these barriers as doubly insidious, holding back minorities and
suppressing the desire to get ahead in life.
2. Say that he wants the Commission on Civil Rights to be more active in
identifying these barriers.
3. Announce that the federal government wants to be a model employer, and
that he is commissioning the Director of OPM, Connie Newman, to study how
barriers to federal employment can be reduced. Connie Newman's own story is
an example of opportunity working -- she started as a GS3 typist at USDA.
The President could praise her and say she's fit for most any job he can
think of, but credentialism means the Federal government thinks she could
never do many federal jobs.
5
Finally, this year is the 25th anniversary of LBJ's launching the Great
Society, something that should at least be mentioned in the speech.
CC: Bill Roper
Jim Pinkerton
Emily Mead
CHR] :06-16-89
Curbs on Anti-Bias Cases
High court rulings on racial hiring practices likely to open floodgate
of lawsuits claiming affirmative action discriminates against whites
122/17
By Marshall Ingwerson
Staff writer of The Christian Science Monitor
WASHINGTON
T
HE United States Supreme
Court has virtually assured
a new political confronta-
T
HE Supreme Court ap-
pears to be so deeply divid-
tion over affirmative action.
ed philosophically on the
affirmative-action issue that it is
In the past two weeks, the jus-
tices have attacked two of the most
difficult to draw patterns, say
scholars of the court and civil
controversial aspects of a program
that is designed to bring relief to
rights law.
women and racial minorities who
But a majority of justices "now
have been victims of job discrimi-
seem to be very close to a color-
nation. These are: standards on
blind standard," says Alex
which bias is determined and the
Aleinikoff of the University of
ability of white workers to chal-
Michigan.
Among the justices, Associate
lenge rulings that give preferences
to minorities in the workplace.
Justice Antonin Scalia most clearly
In both instances, the court by
opposes the principle of racial
a 5-to-4 margin - opted to place a
preferences and favors racially col-
or-blind programs, judging from
greater burden on workers to
his court opinions and earlier writ-
prove discrimination than on em-
ings. The most recently appointed
ployers to show the lack of it. It
further gave legal standing to
associate justice. Anthony
Kennedy, has also expressed seri-
white employees who say they
have been innocent victims of
ous doubts about the principles
In practice, government agen-
plans that detail racial quotas.
underlying quotas.
cies all over the country that either
Two results are likely: The
"I don't think they [Scalia and
settled or avoided politically
dropping of many lawsuits by
Kennedy] have five votes yet" in
charged discrimination suits by
workers whose claims of bias can-
support of a completely color-
creating court-sanctioned affirma-
not be substantiated; and a new
blind standard, says University of
tive action plans now fear that
wave of cases charging that affirm-
Virginia law professor George
white employees can challenge
ative action discriminates against
Rutherglen.
them, even years later.
nonminorities.
The principle that remedies for
In a decision a week earlier, the
To some. including civil-liber-
past discrimination can apply to
court shifted some of the burden
ties groups, the high court has tak-
people who were not themselves
of proof onto the plaintiffs in dis-
en a major step backward in this
crimination suits. Employees can
area of civil rights - one they trace
still sue their employers, showing
directly to the conservative stances
'I don't think they [Scalia
"disparate impact" - that jobs or
of Reagan appointees to the
bench. To others, this action is a
and Kennedy] have five
promotions are not going propor-
tionately to minorities or women.
midcourse correction to what they
votes yet' in support of a
But for the past 18 years, the
see as abuses in affirmative-action
completely color-blind
court precedent was that the em-
litigation, which has unfairly bur-
dened employers and nonminori-
standard.
ployer had to prove the disparate
impact was the result of business
ty workers.
- George Rutherglen,
necessity, not discriminatory prac-
The upshot is that the battle is
The University of
tice.
returning to Congress. Legislators
The June 5 decision concern-
are watching for another key court
Virginia
ing an Alaskan cannery shifted the
decision that may come down be-
burden of proving discriminatory
fore the session ends. That case,
practice onto the employee.
Patterson V. McClean Credit
directly discriminated against still
Neither of these decisions ap-
Union, involves a Civl War-era law
stands, Dr. Aleinikoff says, but on
proaches the scope, however, of
very narrow legal ground.
forbidding discrimination in con-
the late-January decision that
The latest case was a reverse
tracts. The case is expected to fur-
struck down a Richmond, Va., re-
discrimination case against Bir-
ther define the high court's views.
quirement that 30 percent of the
Lawmakers are already plan-
mingham, Ala., brought by white
city's contracts go to black-owned
firefighters. The court decision on
ning to counter the two recent de-
companies, either as contractors
Monday was procedural: It did
or subcontractors.
cisions with legislation.
not rule on the standards or sub-
That decision demanded much
Local governments with affirm-
stance of the case. But it did allow
ative-action plans in place are al-
stricter standards for justifying
ready concerned that political pas-
the white firefighters to challenge
such programs. Scholars and local
sions over once-settled issues will
an affirmative-action program on
governments struggling to forge
the grounds that they were not a
reignite. Most communities had
legal affirmative-action programs
largely moved past inflammatory,
party to the legal agreement that
are still debating exactly what the
led to it.
contentious confrontations over
court required.
racial quotas, says National
League of Cities spokesman
Randy Arndt. "The courts are
straining that tremendouslv."
WASH.POST:06-17-89
Rights Groups Plan Hill Counterattack
Supreme Court No Longer Seen as Ally in Fighting Discrimination
"This court is a radical court that
that it may be difficult to resolve
By Al Kamen
Washington Post Staff Writer
is going out of its way to undermine
some of the anti-discrimination
well-established civil rights stat-
questions without dealing with af-
Civil rights groups plan to launch
utes," said Ralph Neas, executive
firmative action, a political mine-
a legislative counterattack after
director of the Leadership Confer-
field Congress has avoided for
stinging defeats at the Supreme
ence on Civil Rights. "It is impor-
years.
Court that they see as marking a
tant to understand that we have had
"They [civil rights groups] are in
historic shift in the court's role in
a conservative court for two dec-
a box," said Fein, "What they have
discrimination cases.
ades, but in the last 11 days the
got to do now is go out and argue
They said, however, that any ef-
court has run amok and totally ig-
why race preferences are good
fort to reverse recent rulings must
nored judicial restraint."
things."
be waged on a radically different
Popeo, however, said it is "foolish
Several civil rights lawyers said
political and legal battleground and
to suggest that now that we have a
some court rulings, such as one last
could be overruled by the high
court that leans away from liberal
week making it harder to use sta-
court on constitutional grounds.
activism that it is tilted toward a
tistical evidence to prove discrim-
For the last four decades, the
conservative path."
ination, may be easier to correct
civil rights community generally
Civil rights lawyers say future
than others. The decision in January
has been able to count on the court
legislative battles will be different
that struck down a Richmond mi-
as an ally, willing to fill in gaps
from past fights. During the Reagan
nority business set-aside program
when necessary where Congress
years, with the court as an ally, civil
may be more difficult to handle,
neglected-or couldn't muster the
rights groups successfully fended
those lawyers said, because it was
votes-to fully define the scope of
off efforts to reverse previous lib-
based on the Constitution rather
civil rights laws.
eral victories, and managed to keep
than on a federal law.
But the court, with a cohesive
one conservative nominee, Robert
With the new conservative court,
conservative majority now in con-
H. Bork, off the high court. Bork's
anything Congress does rests on
trol, has served notice that it will
replacement, Anthony M. Kennedy,
shakier ground.
no longer tilt in favor of civil rights
has added a solid and pivotal vote
For example, the court, looking
against them, and shifted the
at the federal rules of civil proce-
groups.
"The party is over for liberal ac-
court's balance.
dures, decided Monday that white
tivists," said Daniel J. Popeo, gen-
Neas said that during the 1980s
men adversely affected by affirm-
the Reagan administration, led by
ative action consent decrees must
eral counsel for the conservative
Washington Legal Foundation. Li-
then-Attorney General Edwin
have the right to challenge those
Meese III and his aide, William
decrees in court.
berals "have had radical legislating
at the Supreme Court for years.
Bradford Reynolds, "forced the civil
Congress could pass a bill chang-
rights community and Congress to
ing the federal rules, Scanlon said,
Now they can't look to the Supreme
Court as a vehicle for political and
refight the civil rights battles that
but that in turn could be overruled
were won in the 1960s and '70s."
if the court decides the right to sue
social change."
Prior civil rights victories on vot-
is also protected by the Constitu-
Conservative court expert Bruce
ing rights, affirmative action, hous-
tion.
Fein agreed. "For 34 years, since
ing and in other areas "all were
"We're hopeful that Congress will
Brown v. Board of Education, the
threatened by the Reagan Depart-
react quickly," Scanlon said, "but
court's approach to civil rights laws
ment of Justice," he said, "but there
there is a possibility that it will not.
bent the ordinary rules of [inter-
was a reaffirmation of civil rights by
We're going to need a legislative
preting laws] so that almost invari-
Congress and the Supreme Court
package and it is something that
ably minorities would win. Now
and a bipartisan repudiation of the
may take a while."
what has happened is for the first
extremism of the Reagan-Meese
Neas, pointing to past legislative
time" the court is saying "no longer
agenda."
successes, said the battles in the
are we going to give an advantage,
"What the court has done recent-
1980s have been won by 70 percent
a golf handicap
We are going
ly, Neas said, "is forcing the civil
bipartisan majorities in both houses
to treat the civil rights laws like
rights community to fight those
of Congress. "We're confident that
other laws, no special favors for
same battles for a third time," but
those battles will be won again-
anyone."
this time without the court as an
but they should not have to be
Conservatives say the court's re-
ally.
fought."
cent rulings involving minority busi-
Given the court's actions, any
ness set-asides and the use of sta-
proposed legislation "must be crys-
tistical evidence to prove discrim-
tal clear," said Kerry Scanlon, an
ination and its decision Thursday
attorney with the Washington Law-
scaling back on the reach of a key
yers Committee for Civil Rights
Reconstruction-era law all were
Under Law.
necessary correctives to earlier
That clarity is needed, he said,
liberal rulings.
because "this court seems to be
To civil rights lawyers, the de-
willing to restrict the coverage of
cisions, most on 5 to 4 votes, con-
civil rights laws whenever and
stitute the conservative judicial ac-
wherever possible."
tivism of a court dominated by four
An added complication to new
Reagan appointees.
legislation, one attorney said, is
PHIL. INQ. 06-18-89
Court narrows thrust
of civil rights laws
By Aaron Epstein
Inquirer Washington Bureau
ASHINGTON - For more than
Businesses are expected to re-ex-
W
view of the law - as if there's noth-
three decades, the Supreme Court
amine questionable plans but are be-
ing special about civil rights."
championed the cause of racial
ing advised not to abandon carefully
minorities confronted by dis-
Claudia Withers, a lawyer for the
drawn programs that are designed to
Women's Legal Defense Fund, per-
crimination, protecting them with generous
help minorities and women without
interpretations of civil rights laws and the
ceives "an unwillingness to acknowl-
resorting to quotas.
Constitution's promise of equality.
edge that there is still racism and
"The business community worked
sexism in our society."
No longer.
long and hard to come up with these
In a series of rulings through Thursday,
But conservative William Bradford
plans, and now the Supreme Court
the court's newly entrenched conservative
majority has narrowed the scope of civil
Reynolds, head of the Justice Depart-
says they can be opened up again to
rights protections and come to the rescue of
ment's civil rights division during
new challenges - with no end in
employers and whites who believed that
the Reagan administration, said that
sight," said Robin S. Conrad, director
court-approved remedies for discrimination
the new court majority is "looking at
of litigation for the U.S. Chamber of
treated them unfairly.
a civil rights landscape that is differ-
Commerce.
The court made it tougher for minorities
ent from what it was 20 years ago.
and women to prove discrimination in the
Twenty years ago, we had a black-
workplace, easier for white males to chal-
white problem, and we did a lot of
The major cases
lenge job preferences for minorities and
good things to remove the barriers
for blacks.
decided this term
women, and riskier for state and local gov-
ernments to set aside contracts for minority-
"But now the court is looking at
favored treatment for certain dis-
Associated Press
owned enterprises.
And while the court conservatives have
crete groups that was put in without
Here are major civil rights rulings
refused to throw out established precedents
thinking of what it does to other
by the Supreme Court this term:
in discrimination cases and insist that they
groups, and this new court majority
Richmond V. Croson: The court,
are not "signaling one inch of retreat," they
is making sure that the law works in
by a 6-3 vote Jan. 23, struck down a
are making it clear that civil rights laws will
an evenhanded way so no group has
Richmond, Va., program requiring
be read narrowly rather than broadly.
an advantage."
contractors on city building projects
"In the past, there was a tendency
to set aside at least 30 percent of the
Now lawyers, legal scholars and women's
of the court to stretch laws to fit new
value of the project for firms at least
groups wonder whether, in the next two
situations. This court is saying that's
half minority owned. The court said
weeks, the court will follow a similar pattern
not the job of the judiciary."
the quota is reverse discrimination.
in a long-awaited ruling on the validity of Roe
With the Supreme Court no longer
. Price Waterhouse V Hopkins:
v. Wade, the 1973 landmark that gave women
in their corner, civil rights leaders
The court, by a 6-3 vote May 1, ruled
a constitutional right to choose abortion.
are turning to Congress for relief.
that employers have the burden of
The betting is that it will - by declining to
House and Senate staffs are drafting
disproving bias when there is evi-
overrule Roe but limiting how it can be
legislation.
dence it played a part in personnel
applied.
Already, Rep. Tom Campbell (R.,
decisions. The court ruled for a
The recent civil rights rulings are likely to
Calif.), has introduced legislation to
woman who said she was denied pro-
lead to fewer successful discrimination suits
undo a court ruling that makes it
motion to partnership because she
more difficult for minorities and
acted too much like a man.
by minorities and women - and an outburst
women to win job discrimination
of litigation by whites and males challenging
Wards Cove Packing V. Atonio:
cases.
affirmative action programs that prevented
The court, by a 54 vote on June 5,
"The reality is that discrimination
them from being hired or promoted.
erected significant new barriers for
in the workplace exists and that it
President Ronald Reagan's appointments
workers who try to prove with statis-
hurts.
of Justices Sandra Day O'Connor, Antonin
Unless we give plaintiffs
tical evidence they are victims of
[minorities and women) a reasonable
racial bias.
Scalia and Anthony M. Kennedy made the
chance in the courtroom, we're not
new conservative majority possible. But
Martin V. Wilks: The court, by a S-
going to be able to put an end to it,"
what is the rationale underlying the recent
4 vote Monday, allowed white men to
Campbell said.
spate of civil rights rulings?
challenge court-approved affirma-
Harvard law Professor Laurence Tribe be-
tive action programs even years af-
lieves that the new court majority simply
Employers are caught in a dilem-
ter they take effect.
does not consider civil rights to be the ur-
ma. They must correct past discrimi-
Patterson V. McLean Credit
gent matter it once was.
nation by taking steps to hire and
Union: The court Thursday unani-
Tribe, an authority on constitutional law,
promote minorities and women. Yet,
mously upheld the Civil Rights Act
if they go too far toward those aims,
of 1866 to bar discrimination in hir-
said the Supreme Court seems to be saying
that it no longer will put flesh on the bones
they expose themselves to lawsuits
ing but ruled, 5-4, that it could not be
of civil rights statutes. From now on. if
filed by whites and men claiming to
used to fight racial harassment on
be victims of the remedies.
Congress wants stronger protections for mi-
the job.
norities and women, it must write them into
the lawbooks.
And if Congress doesn't do that, Tribe said,
"the courts will take a narrow and technical
BALT. SUN 06-18-89
Emerging majority
Among privately filed cases that will be affected is
one brought this year by the Mexican American Legal
on court reverses
Defense and Educational Fund alleging blas at the U.S.
Customs Service. which the group charged has unlaw-
fully allowed Its ranks of senior Hispanic managers to
rights ruling trends
shrink from nine to three. In the past, the agency would
have been required to prove that its employment prac-
tices were a "business necessity." Under the new ruling.
122\127
the Customs Service will be able to defend Itself by
By Ted Gest
asserting that its procedures are reasonable. an argu-
ment that the Hispanics can overcome only If they can
Washington
afford to employ experts to conduct studies and convince
hen Edwin Meese told an audience at
a court that the agency violated the Civil Rights Act.
W
Pennsylvania's Dickinson College in
Business interests had argued that the old rules,
1985 that affirmative action "in the form
which stemmed from a well-known 1971 Supreme
of racially preferential quotas, goals and
Court case called Griggs vs. Duke Power Co., made It too
set-asides" was a "legal. moral and con-
easy for plaintiffs to win job blas remedies "by the num-
stitutional tragedy." the conservative attorney general's
bers" - asserting that a lack of minorities on a firm's
views appeared to be in the minority. Civil rights groups
payroll was compelling evidence of discrimination. "Now
had been prevailing consistently in courts and legisla-
It won't be enough just to say that the numbers seem out
tures on racial bias questions despite the Reagan admin-
of whack." said Alan Slobodin of the Washington Legal
istration campaign to end what Mr. Meese called dis-
Foundation, a conservative legal group.
crimination in favor of minorities under a "new version
Civil rights forces are also taking their licks in the
of the separate but equal doctrine."
lower federal courts. which are packed with Reagan
A mere four years later, the theories of Mr. Meese and
conservatives. A study by Kansas political scientist C. K.
other Reaganites are far closer to holding the decisive
Rowland found that 3 in 5 people who file bias suits
edge. The shift is due largely to personnel changes on
received favorable rulings from judges named by Jimmy
the Supreme Court and the lower federal courts, where
Carter. compared with only 1 in 8 from Reagan judges.
Mr. Reagan was able to appoint half the judges during
Plaintiffs who lose these days risk stiffer sanctions in
his eight-year term. Three decisions last week by the
a crackdown on lawsuits that judges deem frivolous.
Supreme Court completed a quintet of disastrous rulings
When minorities charged employment blas at Fort
for civil rights advocates in only six months. "This is the
Bragg, N.C., a judge dismissed the case and ordered a
worst Supreme Court term we can recall in 25 years,"
prominent civil rights lawyer to pay the government's
says Penda Hair of the NAACP Legal Defense and Edu-
cational Fund.
$80,000 legal fees. A study of court rulings in Pennsyl-
Within a few minutes last Monday morning, bare
vania, Delaware and New Jersey concluded that such
majorities of justices struck two blows. Voting 5-4, the
penalties are five times as common in civil rights cases
court allowed white firefighters in Birmingham, Ala., to
as in other lawsuits.
challenge an anti-bias plan they said amounted to re-
Little change seems in the offing from the Bush ad-
verse discrimination. In the second 5-4 ruling Monday.
ministration. Although the new president seems on bet-
the court said female workers at AT&T Technologies Inc.
ter terms with black leaders than was Mr. Reagan, civil
waited too long to contest a new seniority system they
rights groups are disappointed with his early personnel
charged was blased against women.
moves. Many have registered opposition to former Michi-
Then on Thursday. another 5-4 majority held that a
gan Sheriff William Lucas, the Bush choice to head the
Civil War-era federal law could not be used to recover
Justice Department's civil rights division. And the White
damages in suits charging private employers with racial
House seems set to nominate Clarence Thomas, EEOC
harassment. It did not go as far as critics had feared.
chairman and staunch opponent of quotas, to a seat on
however: it did not reverse an earlier finding that the
the influential federal appeals court based in Washing-
century-old law bars discrimination in private contracts.
ton.
A week earlier, the court made it easier for employers
"We have seen no positive sign that there will be any
to rebut job bias charges. and just five months earlier it
departure from the Reagan civil rights policies," said Nan
had restricted government-contract "set-asides" for mi-
Aron of the Alliance for Justice. a Washington coalition
norities.
of liberal interest groups.
The court has been split 5-4 on many civil rights
In the face of such setbacks, minority advocates are
issues for years. But what seems to have tipped the
taking a different course. Perhaps their safest tactic is
balance for conservatives is the arrival of Anthony M.
sticking to cases with direct evidence of bias. The
Kennedy. the California judge who replaced the retired
NAACP Legal Defense and Educational Fund, for ex-
Lewis F. Powell Jr. last year. after President Reagan's
ample. is pressing a suit against the Nashville-based
nomination of Robert H. Bork was defeated.
Shoney restaurant chain. where one manager asserts he
Justice Kennedy has proved to be a reliable ally of
was ordered "to get rid of the black employees and
to
Chief Justice William H. Rehnquist, Reagan appointees
hire white instead." But such dramatic and direct evi-
Sandra Day O'Connor and Antonin Scalia. and John F.
dence is difficult to turn up. More typical nowadays are
Kennedy appointee Byron R. White. who has joined the
squabbles over subjective hiring and promotion deci-
court's conservative wing on many issues. Justice Pow-
sions that are difficult to contest under the new Supreme
ell staked more of a middle-ground position, voting in the
Court standards.
1978 Bakke case, for example, against fixed racial quo-
Conservatives, meanwhile. are testing approaches
tas but in favor of the use of race as a factor in university
that they contend will promote "economic liberties" of
admissions decisions.
minorities without the use of quotas. A suit filed by the
The new wave of civil rights rulings already is having
Washington-based Landmark Center for Civil Rights led
an impact. Since the January decision against set-asides
to a ruling that voided a District of Columbia law prohib-
that guarantee a percentage of government contracts to
iting street-corner shoeshine stands. The group also has
minority firms. courts have struck down such plans in a
filed suit against a Houston ban on "jitney" taxi services
half-dozen places. while nine other jurisdictions have
that often are operated by minorities.
voluntarily suspended their programs. according to the
Washington-based Minority Business Enterprise Legal
"Quotas have been a superficial solution" in bias
Defense and Educational Fund. Advocates insist that
cases, declared the center's director, Clint Bolick, who
many set-aside arrangements will survive. but only after
contended that the new Supreme Court rulings will "give
proof is compiled that the remedy was justified by specif-
us impetus to look at the real reasons blacks fail. pri-
marily a shortage of human capital development." That
ic acts of discrimination.
theory may get a wider hearing as the federal courts
Class-action lawsuits that can benefit large employee
continue their march to the right.
groups are likely to suffer as a result of the high court's
June 5 decision shifting the burden of proof in discrimi-
nation cases. The number of such suits already had
fallen from 1.174 in 1976 to fewer than 50 last year. It is
not that such cases are unwinnable. In fact. Charles
Shanor. general counsel of the U.S. Equal Employment
Opportunity Commission. promises that his agency
"won't throw in the towel" and drop class actions. But
civil rights lawyers say the odds have shifted so marked-
ly against them that they are less likely to have the
resources necessary to sustain complex cases. Mr. Shan-
or says the EEOC may seek a budget increase to handle
the load.
A Changed Court Revises Rules on Civil Rights
law, known as Section 1981, giving it a new in-
Congress to overturn the 1984 decision on
N.Y.TIMES:06-18-89
By LINDA GREENHOUSE
122\121
terpretation that civil rights leaders said
Federal funds. The Congressional effort to
overturn that decision, Grove City College V.
Critics of the
would severely weaken it as a tool against job
discrimination. Justice Kennedy's majority
WASHINGTON
Bell, became mired in a debate over its possi-
ITH a recent burst of discrimina-
ble Impact on abortion rights, opening painful
latest rulings
opinion said that Section 1981 covered dis-
crimination in the initial hiring process but
W
tion rulings, the Supreme Court
fissures in the civil rights coalition before the
not discriminatory treatment on the job. The
did something more than provide
Civil Rights Restoration Act finally became
newly confining definitions to
hope Congress
Congressional brief, aimed at preserving the
law over President Reagan's veto in 1988.
law, did not focus on its particular applica-
widely used civil rights laws. The Court all
A brief filed on behalf of 66 Senators and
but guaranteed that civil rights would leap to
145 Representatives in one of the cases de-
will provide relief.
tion, but that must now be the focus of any
Congressional debate to overturn the ruling.
the forefront of domestic politics.
cided last week, Patterson V. McLean Credit
Of all the decisions, the ruling last Monday
Three decisions this month, each by the
Union, noted, in asking the Court not to
in Martin V. Wilks may be the most unsettling
same 5-to-4 conservative majority that now
tamper with the precedent, that "any con-
dominates the Court on civil rights issues, re-
gressional effort to change a decision of this
Lawyers representing blacks and W
for civil rights leaders. The Court ruled that
wrote long-settled ground rules of proof and
Court could prove divisive" and could "con-
in job discrimination suits said the Wards
white firefighters in Birmingham, Ala., could
procedure in employment discrimination
Cove decision gave plaintiffs an onerous bur-
sue to reopen an affirmative-action settle-
front grave difficulties addressing the nu-
cases. The decisions, plus a fourth that set
ances that have arisen from case-by-case
den, while employer groups greeted the re-
ment, approved by the Federal District Court
Strict time limits on challenges to discrimi-
elaboration of the statute."
sult as overdue relief from a set of rules that
there eight years ago to remedy discrimina-
natory seniority systems, make discrimina-
they viewed as stacked against them.
tion that had kept blacks out of all senior
The point is telling because it was the su-
tion suits harder to bring, harder to win and
Charles Fried, the Solicitor General during
positions in the department. Because Chief
perstructure of judicial interpretation, not
more vulnerable to attack If successfully con-
the statutory foundations, that the majority
the last four years of the Reagan Administra-
Justice Rehnquist's majority opinion was
knocked loose in the recent decisions.
tion, called the decision a welcome develop-
based not on a particular statute but on an in-
cluded.
The decisions left no doubt that Ronald
ment that would help end the "sinister pres-
terpretation of the procedural rules that gov-
Reagan, out of office five months, finally suc-
Filling In the Law
sure" for quotas.
ern the Federal courts, it may have the effect
ceeded in a goal that had appeared to elude
For example, Title VII of the Civil Rights
Wards Cove may be the most difficult of
of reopening many cases long believed
him for much of his eight years in the White
Act of 1964 forbids, in rather spare language,
the decisions for Congress to overrule, be-
closed.
House: to shift the Supreme Court's direction
discrimination in employment on the basis of
cause any debate over the structure of Title
The timing of the decisions in a two-week
on civil rights. The new majority consists of
race, sex and some other categories. It was
VII almost inevitably invites messy debate
period, while perhaps coincidental, gave an
his three appointees, Justices Sandra Day 0'-
the Court that gave life and force to the'stat-
about affirmative action.
added sense of drama to the Court's shift.
Connor, Antonin Scalia and Anthony M. Ken-
Congress is much more comfortable paint-
"The second Reconstruction period has
ute's words. In a 1971 case called Griggs V.
nedy; Chief Justice William H. Rehnquist,
ing with a broad brush - "discrimination is
ended," Richard Cohen, a Washington Post
Duke Power, the Court ruled unanimously
whom he elevated to that position; and Jus-
that Title VII prohibited not just purposeful
forbidden" - than in filling in the details.
columnist, wrote on Friday, dating the period
tice Byron R. White, who started taking con-
discrimination but also job requirements and
The Court's approach this month was essen-
from the Court's 1954 school desegregation
servative positions on civil rights years ago.
practices that had the effect of discriminat-
tially the opposite: to rearrange the details
ruling until this month.
The new majority appeared to be aware of
Civil rights leaders, reeling from the string
ing. In those kinds of cases, the Griggs opin-
while leaving the broad Image, at least at
of defeats, turned immediately to Congress,
first glance, untouched.
a firestorm of criticism. "Neither our words
Ion said, employers had the burden of justify-
where liberals vowed to restore what had
ing the necessity for such practices.
In the Patterson case, decided on Thurs-
nor our decisions should be interpreted as
been lost. That worked earlier in the decade,
day, the Court unanimously did what the 211
signaling one inch of retreat from Congress'
In its June 5 opinion in Wards Cove Pack-
when Congress overturned a Supreme Court
ing V. Atonio, written by Justice White, the
Senators and Representatives who filed the
policy to forbid discrimination," Justice Ken-
ruling on voting rights and another concern-
Court shifted that burden to employees, who
brief had asked it to do: retained its decision
nedy wrote at the end of his opinion in the
ing discrimination by institutions that re-
in a 1976 case, Runyon V. McCrary, that inter-
Patterson case. From one perspective it was
must now prove that the challenged prac-
celve Federal funds.
preted a Reconstruction-era civil rights law
a statement of the obvious. Others, hearing a
tices are in fact not necessary. The shift
But such efforts rarely prove as straight-
might appear to be a technical matter, but
to bar private as well as officially sponsored
defensive tone in Justice Kennedy's words,
forward or cost-free as they might appear at
the outcome of lawsuits is often determined
acts of racial discrimination.
prepared to do uncertain battle to hold Con-
the start. For example, it took four years for
by standards and burdens of proof.
But then a 5-to-4 majority revisited the old
gress, if not the Court, to their promise.
L.A.TIMES:06-16-89
It's Up to Congress Now
122/127
The Supreme Court has handed Congress its civil
it could attempt to define racial harassment so it
rights agenda for the 1990s. In three out of four
too is covered by civil rights laws, as clearly M
decisions fust handed down, the court weakened
should be. Congress may see & need to act more
the rights of minorities and women. It is now up to
broadly as well. The civil rights community had
Congress to reaffirm the nation's commitment to
been reluctant to open Title VII of the 1964 Civil
stamp out discrimination based on race or sex.
Rights Act to any restructuring, fearing that its
In the 1960s and 1970s Congress and the federal
manifold protections might be weakened, As the
courts moved largely in the same direction on
Supreme Court now has done just that, according
discrimination cases. Congress was disposed to act
to one attorney, "Everything is on the table."
against bias in elections, employment, education
Rewriting the law to accommodate both women
and the economy, and the courts did not oppose
and minorities as well as white men who inevitably
those actions. Judges and justices seemed to
will feel that they have lost while others have
understand the spirit and intent of the legislation.
gained will not be easy. But Congress has no ehoice
That has now changed.
but to find the words to express its overarching
First, in Wards Cove vs. Atonio, the Supreme
concern that civil rights laws be interpreted to
Court reversed a unanimous ruling that had
take the side of those who are trying to eradicate
allowed aggrieved employees to sue when statis-
race and sex discrimination.
tics indicated a pattern of discrimination, even if an
The record of the past few years says that
individual could not point to specific signs of
Congress is up to the task. Through the Reagan
prejudice.
years, the lawmakers repeatedly reinforced voting
This week the court said employees-usually
rights, fair housing laws and affirmative action
white males-who felt their rights had. been
requirements for federal contractors. It rejected
limited by affirmative action court settlements in
key Reagan appointees like William Bradford
favor of women or minorities could sue to throw
Reynolds of the Justice Department because they
out those agreements. That decision, Martin VS.
opposed civil rights protections. Congress also
Wilks, threatens to invalidate dozens of settle-
overturned the Supreme Court Grove City decision
ments involving police, firefighters and other
that weakened sanctions against discrimination on
public employees. California was among 32 states
campuses that receive federal money. Congress
that had asked the court not to tamper with the
acted as it did not only to provide protections
body of law as it stood. Los Angeles is one of the
guaranteed by the Constitution but also because
cities with agreements that could be affected.
growing numbers of voters are minorities and
Finally, in Patterson VS. McLean Credit Union,
because women remain vocal about their rights.
the court held that an 1866 civil rights law did not
During the debate, Congress must use the
cover racial harassment. The only bright spot in
opportunity to remind Americans of the impor-
the picture is the court's unanimous decision in the
tance of civil rights laws, especially Americans too
same case not to overturn Runyon vs. McCrary, a
young to remember the civil rights and women's
decision that permits lawsuits against private
movements of the 1960s and early 1970s.
individuals who discriminate against minorities.
The United States has not yet achieved either a
At a minimum, Congress should sweep aside all
color-blind society or one free of gender bias.
three 5-4 decisions. It could, for example, specifi-
Reaching that goal requires the support of the
cally address use of statistics to determine patterns
courts enforcing the law as Congress intended it be
of job discrimination. It could set limits on
interpreted. Congress must now spell out its intent
intervention in affirmative action agreements. And
to shield all citizens from bias.
Justices Reaffirm
06-16-89
For more than
1866 Lawon Bias
Civil Rights
largely unused. BUL in
Supreme
Court
holding black
against a white
but Reduce Scope
who refused to
clear language of the the court
said then, bars recial discrimination
By DAVID SAVAGE, Times Staff Writer
122/127
across the board
misday case centered
WASHINGTON Supreme
Newer eivil rights laws specifi-
with Bled in 1982 by
Court, acting in the most closely
cally cover blas in employ ment,
black bank teller from North
watched civil rights case of the
housing and public education, but
lina, who alleged that for more than
year, Thursday cut back the reach
leave gaps in such areas as private
10 years she had been insulted by
of the nation's oldest law barring
school enrollment, admission to
her supervisor, given mental du-
racial discrimination, but stopped
nightclubs and treatment of cus-
ties, and told that "blacks are
short of overturning itentirely.
tomers by businesses.
known to work slower."
On a 5-4 vote, the conservative
The bank denied that she was
majority said a black person who is
Awards Limited
racially harassed and contended
harassed on the job because of his
Also, the newer laws generally
the law did not apply to her
race cannot sue his employer for
limit awards that can be collected
complaint.
damages under the Civil Rights Act
to actual damages, such as back
A federal judge in North Carolina
of 1866.
pay.
ruled that her case could not go
However, in a unanimous find-
Under the 1866 law, plaintiffs
before a jury because the 1866 law
ing, the justices did not follow
sued for almost any type of racial
did not cover harassment. But
through on a prospect raised last
discrimination, and could seek
when Patterson appealed to the
year to rule that the bedrock civil
large punitive damage awards as
Supreme Court, attorneys for the
rights law cannot be used at all
well as "pain and suffering" com-
Ronald Reagan Administration
against racial discrimination in pri-
pensation. For the past 20 years,
sided with her. Such "racially mo-
vate schools and businesses.
courts have tended to allow such
expansive use of the law.
tivated" mistreatment, if true, vio-
Draws Angry Reaction
With Thursday's ruling, civil
lates the 1868 law, the Justice
Civil rights lawyers nevertheless
rights experts said, more plaintiffs
Department said.
may see their complaints fall
However, two months after
reacted angrily, citing the ruling as
through the cracks between anti-
hearing Patterson's appeal last
the fifth high court setback so far
this year for minority protections
discrimination laws or find their
year, the Supreme Court issued a
against discrimination.
options for awards more limited.
stunning announcement. The five
"It is another underhanded way
The high court's liberals disa-
conservatives said they wanted to
to erode a settled civil rights law,"
greed sharply with the new inter-
reconsider the entire landmark
said Penda Hair, an attorney for the
pretation.
1968 interpretation covering virtu-
NAACP Legal Defense Fund, who
Said Justice William J. Brennan
ally all forms of racial discrimina-
Jr. for the four dissenters, "What
tion.
represented a black bank teller
The announcement set off a
involved in the case. "They haven't
the court declines to snatch away
with one hand, it takes with the
storm of protest in Congress and
explicitly overruled [the post-Civil
other."
among civil rights groups. Two-
War doctrine], but we're left with a
Calling the majority's view
thirds of the U.S. Senate, 47 of the
shell of a law."
Writing for the court, Justice
"heedlessly cramped," he said an
50 state attorneys general and
Anthony M. Kennedy asserted that
employer, in imposing unfair terms
dozens of civil rights organizations
the decision to reject the case of
on blacks on the job, "has not
filed briefs urging the justices to
Brenda Patterson, who claimed
allowed blacks to make a contract
leave the law as it was.
longstanding mistreatment by her
on an equal basis."
employer, should not be "inter-
While the ruling outraged civil
Hirings, Premetions
preted as signaling one inch of
rights lawyers, it did not surprise
In one sense, the court did just
retreat" against racism.
them.
that Thursday. "We now reaffirm
"Discrimination based on the
So far this year, the court, with
that [the 1866 law] prohibits racial
color of one's skin is a profound
its new conservative majority, has
discrimination in the making and
wrong of tragic dimension," Ken-
ruled that cities may not set aside a
enforcement of private contracts,"
nedy wrote.
fixed percentage of public contracts
Kennedy said. To the relief of the
However, he said the scope of
for minorities; that civil rights
civil rights community, the majori-
the 1866 law as written was limited.
plaintiffs may not use statistics on
ty did not restrict it to literally only
In forbidding that race be used as a
job segregation to prove illegal
contracts and granted that it ap-
factor in "making private con-
discrimination; that white males
plied to hiring and promotions by
tracts" or denying them, he said,
may file reverse discrimination
private businesses and admission
the law bars employers or schools
challenges against court-approved
by private schools.
from denying jobs, promotions or
affirmative action programs, and
But it drew the line there. Noth-
enrollment to blacks, Latinos or
that minorities or women may not
ing that can be construed as the
others because of their race. But it
challenge an unfair seniority policy
making of a contract exists in
does-not cover general discrimina-
after it has been in force for 300
days.
conditions at the job or school after
tion or abusive treatment once they
are on the job or in school, he
"It's bothersome that this comes
that point, the majority said.
at a time when we are seeing ugly
Kennedy's opinion in Patterson
added.
VS. McLean Credit Union, 87-107,
In narrowing the interpretation
aspects of racism reappearing in
this country," said Washington
was joined by Chief Justice William
of the 1866 law, the court did not
civil rights attorney John Payton.
H. Rehnquist and Justices Byron R.
totally eliminate Patterson's
White, Antonin Scalia and Sandra
chances of pursuing her case. If she
The law at issue took shape in
Day O'Connor.
the months after the Civil War
can convince a jury she was denied
ended in 1865. Alarmed by reports
Thursday's ruling supplied new
a promotion because of her race,
that newly freed slaves were being
impetus to civil rights advocates
she can still win damages, Kennedy
harassed, beaten and intimidated
and liberal members of Congress
said.
hoping to pass new laws to counter
But civil rights experts said the
by their former masters, the Re-
the effects of the court's recent
narrowing was crucial because the
construction-era Congress passed a
law saying that "citizens of every
race-related rulings.
1866 law has been considered the
race and color
shall have the
Sen. Edward M. Kennedy (D-
broadest prohibition against vari-
ous forms of racial discrimination
same rights" as whites to buy and
Mass.) said Thursday's ruling was
across the span of American life.
sell property and "to make and
the "fourth straight decision in 11
enforce contracts." Victims were
days" that deals "a significant
setback to civil rights laws. Con-
gress must not let these decisions
stand."
06-16-89
112
Excerpts From Opinions on Scope of Rights Act
1221127
from
the
volvi
dissenting opinions in Patterson can Credit Union, in which
preme Court today into preted the scope of the Civil Rights Act of 1806. Juliet
Anthony M. Kennedy he majority opinion Opinions dissenting
were filed by Justices William: Brennan Jr. and John Paul Stevens
FROM THE OPINION
By Justice Kennedy
In this case, we consider important
Our decision in Runyus has DOC been
issues respecting the meaning and
undermined by subsequent changes
coverage of one of our oldest civil
or development in the law.
rights statutes, 42 U.S.C.Sec. 1981,
We granted certiorari to decide
Whether Runyon's interpreta-
whether petitioner's claim of racial
tion of Sec. 1981 as prohibiting racial
harassment in her employment is ac-
discrimination in the making and en-
tionable under Sec. 1981, and whether
forcement of private contracts is
the jury instruction given by the Dis-
right or wrong as an original matter,
it is certain that it is not inconsistent
trict Court on petitioner's Sec. 1981
promotion claim was error. After
with the prevailing sense of justice in
oral argument on these issues, we re-
this country. To the contrary, Runyon
quested the parties to brief and argue
is entirely consistent with our soci-
ety's deep commitment to the cradi-
an additional question:
cation of discrimination based on a
"Whether or not the interpretation
of 42 U.S.C. Sec. 1981 adopted by this
person's race or the color of his or her
skin.
Court in Runyon V. McCrary, 427 U.S.
160 (1976), should be reconsidered."
Precedents 'Not Sanerosanet'
Section 1981 reads as follows:
"All persons within the jurisdiction
We now decline to overrule our
of the United States shall have the
decision in Runyon V. McCrary. We
same right in every State and Terri-
hold further that racial harassment
tory to make and enforce contracts,
relating to the conditions of employ-
to sue, be parties, give evidence, and
ment is not actionable under Sec. 1981
to the full and equal benefit of all laws
because that provision does not apply
and proceedings for the security of
to conduct which occurs after the
formation of a contract and which
persons and property as is enjoyed by
white citizens, and shall be subject to
does not interfere with the right to en-
like punishment, pains, penalties,
force established contract obliga-
taxes, ficenses, and exactions of
tions. Finally, we hold that the Dis-
every kind, and to no other."
trict Court erred in instructing the
jury regarding petitioner's burden in
Bias in Contracts
proving her discriminatory promo-
tion claim.
The most obvious feature of the
provision is the restriction of its
scope to forbidding discrimination in
the "making and enforcement" of
Our precedents are not sacrosanct,
contracts alone. Where an alleged act
for we have overruled prior decisions
of discrimination does not involve the
where the necessity and propriety of
impairment of one of these specific
doing so has been established.
rights, Sec. 1981 provides no relief.
Nonetheless, we have held that "any
Section 1981 cannot be construed as a
departure from the doctrine of stare
general proscription of racial dis-
decisis demands special justifica-
tion." We have said also that the bur-
crimination in all aspects of contract
den borne by the party advocating the
relations, for it expressly prohibits
abandonment of an established
discrimination only in the making
and enforcement of contracts
precedent is greater where the Court
is asked to overrule a point of statu-
The statute prohibits, when
tory construction. Considerations of
based on race, the refusal to enter
stare decisis have special force in the
into a contract with someone, as well
area of statutory interpretation, for
as the offer to make a contract only
here, unlike in the context of constitu-
on discriminatory terms. But the
tional interpretation, the legislative
right to make contracts does not ex-
power is implicated, and Congress re-
tend, as à matter of either logic or se-
mains free to alter what we have
mantics, to conduct by the employer
done
after the contract relation has been
established, including breach of the
We conclude, upon direct consider-
terms of the contract or imposition of
ation of the issue, that no special jus-
discriminatory working conditions.
tification has been shown for overrul-
Such postformation conduct does not
ing Runyon. In cases where statutory
involve the right to make a contract,
precedents have been overruled, the
but rather implicates the perform-
primary reason for the Court's shift
ance of established contract obliga-
in position has been the intervening
tions and the conditions of continuing
development of the law, through ei-
employment; matters more naturally
ther the growth of judicial doctrine or
governed by state contract law and
further action taken by Congress.
Title VII.
TIMES 06-16-89
2pm
FROM DISSENTING OPINIONS
By Justice Bronnan
What the Court declines to snatch
vides for the recovery of attorneys'
away with one hand, it takes with the
fees in Sec. 1981 actions.
Though Court today re-
manue for
affirms Sec. 1981's applicability to
wivate
conduct,
#
The Court holds that Sec.
gives this landmark civil rights stat-
far as this
tate a needlessly cramped Interpreta-
a contract, "covers only conduct at
tion: The Court list to strain hard to
the initial formation of the contract.'
Justify this choice to confine Sec. 1981
This narrow interpretation is not, as
within the narrowest possible scope,
the Court would have us believe, the
selecting the most pinched reading of
Inevitable result of the statutory
the phrase same right to make a
grant of an equal right *te conv?
contract," ignoring powerful histori-
tracts." On the coutrary, the lan-:
cal evidence about the Reconstruc-
guage of Sec: 1981 is quite naturally
tion Congress's concerns, and bol-
read as extending to cover postfor
stering its parsimonious rendering by
mation conduct that demonstrates
reference to a statute enacted nearly
that the contract was not really made
a century after Sec. 1981, and plainly
on equal terms at all.
In
my
view,
not intended to affect its reach. When
harassment is properly actionable:
It comes to deciding whether a civil
under the language of Sec. 1981 man-
rights statute should be construed to
dating that all persons "shall have"
further our nation's commitment to
the same right to make con-,
the eradication of racial discrimina-
tracts as is enjoyed by white citize
tion, the Court adopts a formalistic
zens" if it demonstrates that the em-
method of interpretation antithetical
ployer has in fact imposed discrimi-
to Congress's vision of a society in
natory terms and hence has not al-
which contractual opportunities are
lowed blacks to make a contract on
equal. I dissent from the Court's hold-
an equal basis.
ing that Sec. 1981 does not encompass
The question in a case in which an
Patterson's racial harassment claim.
employee makes a Sec. 1981 claim al-
leging racial harassment should be
whether the acts constituting harass-
In the past, this Court has over-
ment were sufficiently severe or per-
ruled decisions antagonistic to our
vasive as effectively to belie any
nation's commitment to the ideal of a
claim that the contract was entered
society in which a person's opportuni-
into in a racially neutral manner:
ties do not depend on her race, e.g.,
Where a black employee demon-
Brown V. Board of Education (1954)
strates that she has worked in condi-
(overruling Plessy V. Ferguson
tions substantially different from
(1896), and I find it disturbing that
those enjoyed by similarly situated
the Court has in this case chosen to
white employees, and can show the
reconsider, without any request from
necessary racial animus, a jury may
the parties, a statutory construction
infer that the black employee has not
so in harmony with that ideal.
been afforded the same right to make
Having decided, however, to recon-
an employment contract as white em-
sider Runyon, and now to reaffirm it
ployees.
by appeal to stare decisis, the Court
glosses over what are in my view two
very obvious reasons for refusing to
By Justice Stevens
overrule this interpretation of Sec.
1981: that Runyon was correctly de-
In Runyon we held that Sec. 1981
cided, and that in any event Congress
prohibits a private school from ex-
has ratified our construction of the
cluding qualified children because,
statute.
they are not white citizens. Just as a
qualified nonwhite child has a statu-
Even were there doubts as to the
tory right to equal access to a private
correctness of Runyon, Congress has
school, so does a nonwhite applicant
in effect ratified our interpretation of
for employment have a statutory
Sec. 1981, a fact to which the Court
right to enter into a personal service
pays no attention. We have justified
contract with a private employer on
our practice of according special
the same terms as a white citizen. If
weight to statutory precedents by
an employer should place special ob-
reference to Congress's ability to cor-
stacles in the path of a black job ap-
rect our interpretations when we
plicant - perhaps by requiring her to
have erred.
confront an openly biased and hostile
There is no cause, though, to con-
interviewer - the interference with
sider the precise weight to attach to
the statutory right to make contracts
the fact that Congress has not over-
to the same extent "as is enjoyed by
turned or otherwise undermined Run-
white citizens" would be plain.
yon. For in this case we have more
positive signs of Congress's views.
It is also difficult to discern why an
Congress has considered and re-
employer who does not decide to treat
jected an amendment that would
black employees less favorably than
have rendered Sec. 1981 unavailable
white employees until after the con-
in most cases as a remedy for private
tract of employment is first con-
employment discrimination, which is
ceived is any less guilty of discrimi-
evidence of Congressional acquies-
nating in the "making" of a contract:
cence that is "something other than
A contract is not just a piece of paper.
mere Congressional silence and pas-
Just as a single word is the skin of a
sivity." In addition, Congress has
living thought, so is a contract evi-
built upon our interpretation of Sec.
dence of a vital, ongoing relationship
1981 in enacting a statute that pro-
between human beings.