Houston Contractors v. Metro Transit Auth

UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 97-20619
HOUSTON CONTRACTORS ASSOCIATION; BEYER CONSTRUCTION, Beyer
Construction, Inc.,
Plaintiffs - Appellees,
versus
METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY; ET AL.,
Defendants,
METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY,
Defendant - Appellee,
versus
UNITED STATES OF AMERICA; U. S. DEPARTMENT OF TRANSPORTATION;
FEDERAL TRANSIT AUTHORITY,
Movants - Appellants,
____________________________________
KOSSMAN CONTRACTING COMPANY INCORPORATED,
Plaintiff-Appellee,
versus
METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY; ET AL.,
Defendants,
METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY,
Defendant-Appellee,
versus
UNITED STATES OF AMERICA; U.S.DEPARTMENT OF TRANSPORTATION;
FEDERAL TRANSIT AUTHORITY,
Movants-Appellants,
_________________
Case No. 98-20002
_________________
HOUSTON CONTRACTORS ASSOCIATION; BEYER CONSTRUCTION, Beyer
Construction, Inc.,
Plaintiffs-Appellees,
versus
METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY; ET AL.
Defendants,
METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY,
Defendant-Appellant,
MENENDEZ-DONNELL & ASSOCIATES INCORPORATED,
Intervenor-Appellant,
________________________________
KOSSMAN CONTRACTING COMPANY INCORPORATED
Plaintiff - Appellee,
versus
METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY; ET AL
Defendants,
METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY,
Defendant - Appellant,
and
MENENDEZ-DONNELL & ASSOCIATES INCORPORATED,
Intervenor - Appellant,
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_________________
Case No. 98-20021
_________________
HOUSTON CONTRACTORS ASSOCIATED; ET AL.,
Plaintiffs,
HOUSTON CONTRACTORS ASSOCIATION,
Plaintiff - Appellee,
versus
METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY; ET AL,
Defendants,
METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY,
Defendant - Appellant,
Appeals from the United States District Court
for the Southern District of Texas
(H-93-CV-3651)
June 28, 1999
Before POLITZ, HIGGINBOTHAM, and DAVIS, Circuit Judges.
DAVIS, Circuit Judge:*
Houston Contractors Association (HCA) filed this suit against
Metropolitan Transit Authority of Harris County, Texas (METRO), a
public agency, to challenge METRO’s disadvantaged business
enterprise (DBE) program as unconstitutional. The United States
sought to intervene in the suit on grounds that the suit called
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
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into question the validity of the Intermodal Surface Transportation
Efficiency Act of 1991 (ISTEA) and the Department of
Transportation’s implementing regulations. The district court
denied the government’s motion to intervene. The district court
later granted HCA’s motion for summary judgment and permanently
enjoined METRO from administering its DBE program. The court also
entered an order awarding HCA $917,724.24 in attorneys’ fees and
costs. We vacate these orders and remand this case to the district
court for further proceedings.
I.
The district court enjoined METRO’s entire DBE program.
METRO’s program was financed in part by federal funds. The federal
regulations conditioned the receipt and use of these funds upon
compliance with the federal DBE program. The federal regulations
only required application of the federal DBE program to contracts
funded in whole or in part by federal funds. METRO applied its DBE
program not just to those federally funded contracts, but to all
METRO contracts.
The United States argues that the district court should have
allowed it to intervene in this lawsuit pursuant to FRCP 24(a)(1)
and 28 U.S.C. § 2403(a), which provide the United States with an
unconditional right to intervene in any lawsuit that challenges the
constitutionality of a federal law. See Fuel Oil Supply &
Terminaling v. Gulf Oil Corp., 762 F.2d 1283, 1286 n.5 (5th Cir.
1985). The United States insists that it had the unconditional
right to intervene because this lawsuit called into question the
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constitutionality of the federal DBE program provided for by ISTEA
and its implementing regulations, pursuant to which METRO received
federal funds.
HCA counters that it never challenged a federal statute; it
simply challenged a local affirmative action program. Therefore,
it never called ISTEA or its regulations into question, so FRCP
24(a)(1) and 28 U.S.C. § 2403(a) do not apply.
The statute does not require METRO to accept the federal funds
and, by doing so, to become subject to federal DBE guidelines. But
the federal statute authorizes METRO to accept the funds on that
condition, “and action pursuant to a valid authorization is valid.”
Milwaukee County Pavers Ass’n v. Fiedler, 922 F.2d 419, 423 (7th
Cir. 1991). We agree with the government that to the extent that
HCA attacked the portion of METRO’s program that assigns DBE
percentage goals to contracts financed in whole or in part with
federal funds, HCA attacked ISTEA and its implementing regulations.
Consequently, the district court should have allowed the United
States to intervene under FRCP 24(a)(1) and 28 U.S.C. § 2403(a).
Because the district court erred by not permitting the
intervention, the summary judgment is vacated and the case remanded
insofar as the judgment enjoined the DBE program as applied to
contracts financed in whole or in part by federal funds. On
remand, the United States should be allowed to intervene and
participate in the case. See Marshall v. Local 299, 617 F.2d 154,
156 (6th Cir. 1980); Miami Health Studios, Inc. v. City of Miami
Beach, 491 F.2d 98, 100 (5th Cir. 1974).
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II.
We turn next to the challenge to the portion of the summary
judgment declaring the DBE program unconstitutional as applied to
non-federally funded contracts.
METRO’s affirmative action program should be analyzed under
the strict scrutiny standard. Under strict scrutiny, affirmative
action programs pass constitutional muster if they are narrowly
tailored to serve a compelling interest. See Adarand Constructors,
Inc. v. Pena, 515 U.S. 200, 227 (1995). The judicial inquiry into
compelling interest is different when a local entity, rather than
Congress, utilizes a racial classification. While Congress has the
authority to address problems of nationwide discrimination with
legislation that is nationwide in application, see City of Richmond
v. Croson, 488 U.S. 469, 504 (1989), a state or local government
has only “the authority to eradicate the effects of []
discrimination within its own legislative jurisdiction.” Id. at
491-92. Thus, in analyzing the purely local component of METRO’s
DBE program, the question to be resolved is whether METRO crafted
a narrowly tailored program to serve the compelling interest
presented in its locality.
Preliminarily, however, this court will not affirm a summary
judgment unless it is “convinced, after an independent review of
the record, that there is no genuine issue as to any material fact
and that the movant is entitled to judgment as a matter of law.”
Clay v. FDIC, 934 F.2d 69, 71 (5th Cir. 1991) (quotation marks and
citations omitted). If any material facts are disputed, summary
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judgment is improper, and it is not the function of this court to
weigh the evidence or resolve material fact disputes. See id.
Our review of the summary judgment record reveals a sharp
conflict regarding how METRO’s DBE program operates in practice.
According to METRO’s evidence, its DBE program is an outreach
program instituted to reach DBE participation goals. That is, all
that is required of the contractors is that they contact DBEs and
give them an opportunity to bid as subcontractors on the project.
HCA’s witnesses, on the other hand, contend that METRO coerced
prime contractors into using race and sex in selecting
subcontractors as a condition to securing METRO contracts. HCA
contends that the participation percentages were not “goals”; they
require contractors to meet a coercive quota. Moreover, according
to HCA, once it receives a METRO contract, if a prime contractor
does not satisfy METRO’s DBE requirements during the course of the
project, it faces serious repercussions.
It is clear from the district court’s order that it based its
decision on HCA’s version of the facts--that Metro’s affirmative
action plan was a coercive quota program. The summary judgment
record contains genuine issues of material fact that preclude this
view of the program. We therefore vacate the summary judgment
declaring Metro’s DBE program unconstitutional as applied to non-
federally funded contracts. We also vacate the injunction
predicated on this conclusion. We remand this case to the district
court for further proceedings consistent with this opinion.
VACATED and REMANDED.
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