Builders Assoc v. County of Cook ( 2001 )

In the
United States Court of Appeals
For the Seventh Circuit
Nos. 00-4161 and 00-4175
Builders Association of Greater Chicago,
Plaintiff-Appellee,
v.
County of Cook,
Defendant-Appellant,
and
Association of Asian Construction Enterprises,
et al.,
Intervening-Defendants-Appellants.
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 96 C 1121--John F. Grady, Judge.
Argued May 10, 2001--Decided July 6, 2001
Before Posner, Easterbrook, and Diane P.
Wood, Circuit Judges.
Posner, Circuit Judge. In 1988 Cook
County adopted an ordinance, here
challenged as a denial of equal
protection of the laws, establishing a
"Minority- and Women-Owned Business
Enterprise Program" (the "M/WBE" program,
the parties call it), which requires that
a minimum of 30 percent of the total
value of any construction contract made
by the County be awarded to enterprises
at least 51 percent owned by members of
specified minority groups such as blacks
and Hispanics, and a minimum of 10
percent of the value of the contract to
enterprises at least 51 percent owned by
women. These quotas can be, and usually
are, satisfied by the hiring of minority-
or woman-owned subcontractors by prime
contractors that are not themselves
minority- or woman-owned. After a bench
trial, the district court ruled that the
program was unconstitutional, 123 F. Supp.
2d 1087 (N.D. Ill. 2000), and the County
appeals.
A law that grants preferential treatment
on the basis of race or ethnicity does
not deny the equal protection of the laws
if it is (1) a remedy for (2) intentional
discrimination committed by (3) the
public entity that is according the
preferential treatment (unless, as is not
argued here, the entity has been given
responsibility by the state for enforcing
state or local laws against private
discrimination, City of Richmond v. J.A.
Croson Co., 488 U.S. 469, 491-92 (1989)
(plurality opinion)) and (4)
discriminates no more than is necessary
to accomplish the remedial purpose. E.g.,
Shaw v. Hunt, 517 U.S. 899, 909-10
(1996); Adarand Constructors, Inc. v.
Pena, 515 U.S. 200, 224, 235, 237-38
(1995); Wygant v. Jackson Board of
Education, 476 U.S. 267, 277 (1987)
(plurality opinion); Chicago Firefighters
Local 2 v. City of Chicago, 249 F.3d 649,
654-655 (7th Cir. 2001); Billish v. City
of Chicago, 989 F.2d 890, 893 (7th Cir.
1993) (en banc); Associated General
Contractors of Ohio, Inc. v. Drabik, 214
F.3d 730, 735 (6th Cir. 2000). Whether
nonremedial justifications for "reverse
discrimination" by a public body are ever
possible is unsettled. Hill v. Ross, 183
F.3d 586, 588 (7th Cir. 1999); McNamara
v. City of Chicago, 138 F.3d 1219, 1222
(7th Cir. 1998); Brewer v. West
Irondequoit Central School Dist., 212
F.3d 738, 747-49 (2d Cir. 2000); Wessmann
v. Gittens, 160 F.3d 790, 795 (1st Cir.
1998). This court upheld such a
justification in Wittmer v. Peters, 87
F.3d 916 (7th Cir. 1996), but the Fifth
Circuit has stated flatly that "non-
remedial state interests will never
justify racial classifications." Hopwood
v. Texas, 78 F.3d 931, 942 (5th Cir.
1996). The Supreme Court will have to
decide the question eventually (maybe it
will do so next term in the Slater case,
cited below, in which certiorari has been
granted), but it is of no moment here,
because the County has not advanced any
nonremedial justification for the
minority set-aside program.
Another unresolved issue is whether a
different, and specifically a more
permissive, standard is applicable to
preferential treatment on the basis of
sex rather than race or ethnicity. See
Milwaukee County Pavers Ass’n v. Fiedler,
922 F.2d 419, 422 (7th Cir. 1991). The
Eleventh Circuit held in Engineering
Contractors Ass’n of South Florida Inc.
v. Metropolitan Dade County, 122 F.3d
895, 910 (11th Cir. 1997), that whereas a
discriminatory remedy based on race or
ethnicity is permissible only if the
agency applying the remedy itself engaged
in intentional discrimination against the
group favored by the remedy (unless, to
repeat an earlier qualification, the
agency is a law enforcement agency
charged with eliminating private
discrimination), a discriminatory remedy
based on sex is permissible even if the
agency was innocent of the discrimination
against the favored group. The decision
is an effort to make sense of the fact
that the Supreme Court has so far held
racial discrimination to a stricter
standard than sex discrimination, e.g.,
United States v. Virginia, 518 U.S. 515,
532 and n. 6 (1996); Craig v. Boren, 429
U.S. 190, 197-98 (1976), though the
difference between the applicable
standards has become vanishingly small.
As the Court said in the VMI case,
"parties who seek to defend gender-based
government action must demonstrate
an’exceedingly persuasive’ justification
for that action," United States v.
Virginia, supra, 518 U.S. at 533, and,
realistically, the law can ask no more of
race-based remedies either. Engineering
Contractors Ass’n creates the paradox
that a public agency can provide stronger
remedies for sex discrimination than for
race discrimination; it is difficult to
see what sense that makes. But since
here, as in Milwaukee County Pavers, the
County doesn’t argue for a different
standard for the minority and women’s
set-aside programs, the women’s program
must clear the same four hurdles as the
minority program. Neither clears any of
them.
There is, to begin with, no credible
evidence that Cook County in the award of
construction contracts ever intentionally
(or for that matter unintentionally)
discriminated against any of the groups
favored by the program. See Associated
General Contractors of Ohio, Inc. v.
Drabik, supra, 214 F.3d at 735-37. The
County points to evidence that prime
contractors are more likely to solicit
minority subcontractors to bid for pieces
of public jobs than for pieces of private
jobs. It calls the difference
discriminatory and asks us to infer that
until the enactment of the ordinance
there must have been discrimination
against minority contractors. But that is
a non sequitur. Since the ordinance
requires prime contractors on public
projects to reserve a substantial portion
of the subcontracts for minority
contractors, but is inapplicable to
private projects, it is only to be
expected that there would be more
soliciting of these contractors on public
than on private projects. The alleged
discrimination is an artifact of the
ordinance.
As the district court noted, moreover,
the County "conceded that [it] had no
specific evidence of pre-enactment
discrimination to support the ordinance."
123 F. Supp. 2d at 1093. Although there
was some testimony of minority
subcontractors that they had suffered
discrimination earlier, it was introduced
only to show (see id.) that the later
evidence was persuasive. A public agency
must have a strong evidentiary basis for
thinking a discriminatory remedy
appropriate before it adopts the remedy.
Shaw v. Hunt, supra, 517 U.S at 909-10;
Coral Construction Co. v. King County,
941 F.2d 910, 920 (9th Cir. 1991); cf.
Concrete Works of Colorado, Inc. v. City
& County of Denver, 36 F.3d 1513, 1521
(10th Cir. 1994). A further point is that
private projects in Cook County are on
average smaller than public ones, so
fewer subcontractors are required, so
there is less need to solicit them.
Minority enterprises in the construction
industry tend to be subcontractors,
moreover, because, as the district judge
found not clearly erroneously, 123 F.
Supp. 2d at 1115, they tend to be new and
therefore small and relatively untested--
factors not shown to be attributable to
discrimination by the County.
Nor is there any basis for attributing
to the County any discrimination that
prime contractors may have engaged in.
The County reminds us of the suggestion
in Croson that a state or local
government might be permitted to adopt a
discriminatory remedy if it had been a
"passive participant" in the private
discrimination against which the remedy
is directed. City of Richmond v. J.A.
Croson Co., supra, 488 U.S. at 492
(plurality opinion); see also Adarand
Constructors, Inc. v. Slater, 228 F.3d
1147, 1167, 1175 (10th Cir. 2000), cert.
granted, 121 S. Ct. 1401 (2001);
Associated General Contractors of Ohio,
Inc. v. Drabik, supra, 214 F.3d at 735.
If prime contractors on County projects
were discriminating against minorities
and this was known to the County, whose
funding of the contracts thus knowingly
perpetuated the discrimination, the
County might be deemed sufficiently
complicit (a kind of joint tortfeasor,
coconspirator, or aider and abettor) to
be entitled to take remedial action. But
of that there is no evidence either. See
Contractors Ass’n of Eastern
Pennsylvania, Inc. v. City of
Philadelphia, 91 F.3d 586, 601 (3d Cir.
1996); Concrete Works of Colorado, Inc.
v. City & County of Denver, supra, 36
F.3d at 1529-30.
And if the County had been complicit in
discrimination by prime contractors,
still it would be odd to try to remedy
that discrimination by requiring
discrimination in favor of minority
stockholders, as distinct from employees.
That is a standard feature of minority
set-aside programs, but a puzzling one in
terms of the stated objectives of such
programs. There may have been a time when
prime contractors in parts of Cook County
were unlikely to award subcontracts to
firms whose workforce was black,
Hispanic, or female, but if so it is
doubtful that these prime contractors
would have known what the ownership
structure of the subcontractors was. If
there was prejudice against minority
workers, minority-owned firms could beat
it by salting their workforces with the
number of white males demanded by bigoted
prime contractors.
Even if the record made a case for
remedial action of the general sort found
in the ordinance, it would flunk the con
stitutional test by not being carefully
designed to achieve the ostensible
remedial aim and no more. A state or
local government that has discriminated
just against blacks may not by way of
remedy discriminate in favor of blacks
and Asian-Americans and women. City of
Richmond v. J.A. Croson Co., supra, 488
U.S. at 506; Associated General
Contractors of Ohio, Inc. v. Drabik,
supra, 214 F.3d at 737; Monterey
Mechanical Co. v. Wilson, 125 F.3d 702,
714-15 (9th Cir. 1997). Nor may it
discriminate more than is necessary to
cure the effects of the earlier
discrimination. Majeske v. City of
Chicago, 218 F.3d 816, 820, 823 (7th Cir.
2000); McNamara v. City of Chicago,
supra, 138 F.3d at 1222-23. Nor may it
continue the remedy in force
indefinitely, with no effort to determine
whether, the remedial purpose attained,
continued enforcement of the remedy would
be a gratuitous discrimination against
nonminority persons. Chicago Firefighters
Local 2 v. City of Chicago, supra, 249
F.3d at 654-55; Danskine v. Miami Dade
Fire Dept., 2001 WL 649502, at *12-13
(11th Cir. June 12, 2001); Boston Police
Superior Officers Federation v. City of
Boston, 147 F.3d 13, 24-25 (1st Cir.
1998); Middleton v. City of Flint, 92
F.3d 396, 411-12 (6th Cir. 1996). All
three points are closely related (the
second and third particularly so, as
we’ll see). They amount to a requirement
of a close match between the evil against
which the remedy is directed and the
terms of the remedy. As the cases say,
the remedy must be "narrowly tailored" to
the wrong that it seeks to correct.
The County’s briefs in this court do not
mention the "narrow tailoring" issue,
even though the requirement of narrow
tailoring is an independent one that must
be satisfied for a minority set-aside
program to withstand constitutional
challenge and even though the district
court found that it had not been
satisfied. The plaintiff pointed this out
in its brief and argued that we could
affirm on the basis of the County’s
forfeiture. Arsberry v. Illinois, 244
F.3d 558, 563 (7th Cir. 2001); Georgou v.
Fritzshall, 178 F.3d 453, 456-57 (7th
Cir. 1999); Charter Oil Co. v. American
Employers’ Ins. Co., 69 F.3d 1160, 1170-
71 (D.C. Cir. 1995). The argument appears
in the plaintiff’s summary of argument as
one of twelve alternative arguments for
affirmance, and is not actually made
until page 40 of its brief, and then with
extreme brevity. The plaintiff’s apparent
lack of complete conviction that
forfeiture is an adequate basis for
affirmance may reflect an uncertainty
arising from a persistent theme in the
County’s briefs, which is that if it can
prove that there was discrimination in
the past against minorities and women
that it is entitled to remedy the burden
then shifts to the plaintiff to show that
the remedy is not narrowly tailored. The
plaintiff has not accepted this argument,
but it has devoted a significant portion
of its brief to arguing that, in fact,
the remedy is not narrowly tailored. We
cannot find any merit in the County’s
burden-shifting argument or any support
for it in the case law, but in the rather
confused circumstances we hesitate to
rest our decision on forfeiture,
especially as it is perfectly clear,
regardless of the allocation of the
burden of proof (which can of course be
decisive only in a close case), not only
that the County has failed to establish
the premise for a racial remedy but also
that the remedy goes further than is
necessary to eliminate the evil against
which it is directed.
The County’s laundry list of favored
minorities includes two groups--persons
whose ancestors came to the United States
from Spain or Portugal--that common sense
(not contradicted by any evidence)
instructs have never been subject to
significant discrimination by Cook
County. Even if "Hispanic," the root of
which is the Spanish word for Spain, can
be stretched to include people of
Portuguese origin (most Brazilians, for
example), the concern with discrimination
on the basis of Hispanic ethnicity is
limited to discrimination against people
of South or Central American origin, who
often are racially distinct from persons
of direct European origin because their
ancestors include blacks or Indians or
both; of course they may instead or as
well be ethnically distinct on the basis
of culture or language. The concern with
racial discrimination does not extend to
Spanish or Portuguese people, or the
concern with ethnic discrimination to
persons of Spanish or Portuguese ancestry
born in the United States; but even as to
those born abroad, there is nothing to
differentiate immigrants from Spain or
Portugal from immigrants from Italy,
Greece, or other southern European
countries so far as a history of
discrimination in the United States is
concerned. See Peightal v. Metropolitan
Dade County, 26 F.3d 1545, 1559-61 (11th
Cir. 1994); cf. City of Richmond v. J.A.
Croson Co., supra, 488 U.S. at 506
(plurality opinion); Associated General
Contractors of Ohio, Inc. v. Drabik,
supra, 214 F.3d at 737; Monterey
Mechanical Co. v. Wilson, supra, 125 F.3d
at 714-15. Anyone of recent foreign
origin might be able to demonstrate that
he or she was a victim of ethnic
discrimination, but to presume such
discrimination merely on the basis of
having an ancestor who had been born in
the Iberian peninsula is unreasonable.
So the ordinance is overinclusive. Nor
has the County made any effort to show
that, were it not for a history of
discrimination, minorities would have 30
percent, and women 10 percent, of County
construction contracts. If a state or
local government had in consequence of
its former discrimination limited the
percentage of minority contractors on
public projects to 10 percent, and in the
absence of discrimination the percentage
would have been 20 percent, the
government could not, by way of remedy,
establish a minority quota of 50 percent.
At least it could not do that
indefinitely, so that long after the
minorities had caught up, their
percentage of contracts would continue to
swell, until they ended up with two and a
half times (50 percent divided by 20
percent) more contracts than they would
have had if the government had never
discriminated against them. Chicago
Firefighters Local 2 v. City of Chicago,
supra, 249 F.3d at 655.
We recur in this hypothetical to one of
the most dubious propositions advanced by
the County in this case--that a
comparison of the fraction of minority
subcontractors on public and private
projects established discrimination
against minorities by prime contractors
on the latter type of project. The larger
the quota imposed on prime contractors on
hiring subcontractors for public
projects, the smaller will be the
percentage of subcontractors hired for
private projects even if there is no
discrimination by prime contractors,
simply because the quota will have drawn
minority subcontractors into the public
projects and driven majority
subcontractors out of those projects and
into the private ones.
Affirmed.