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Court Order Enjoining Local DBE Program

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Court Order Enjoining Local DBE Program Case 1:07-cv-00019-BAE-WLB Document 19 Filed 03/14/07 Page 1 of 10 FILED E ,!"T COURT UNITED STATES DISTRICT COURT 0 V. SOUTHERN DISTRICT OF GEORGIA AUGUSTA DIVISIO N 7 !T 1 4 P}1 3: 32 THOMPSON BUILDING WRECKING COMPANY, INC., PAULETTE TUCKER ENTERPRISES, INC., ;~J; C L d/b/a TUCKER GRADING AND HAULING, S0. D S) -. OF GA . RICHARD CALDWELL, d/b/a CLASSIC ROCK HAULING, SIDNEY CULLARS, d/b/a SIDNEY CULLARS TRUCKING, The plaintiffs allege that prime contract bids Plaintiffs , containing DBE participation at the subcontract level are treated more favorably than bids V. 107CV019 without DBE participation at the subcontract ; in other words, the DBE Program AUGUSTA, GEORGIA, level encourages prime contractors to discriminate Defendant. against subcontractors on the basis of race, gender, and relative economic advantage . Doc. ORDER # 1 at 14-15 ; see doc. # 5, exh. C at 1-66 (AUGUSTA CODE § 1-10-62(b)(9)) ; see also doc. 1. INTRODUCTIO N # 13 at 1 (the parties have stipulated that the City currently adds up to "20 points" to a In this civil rights action, various plaintiffs proposal or bid that utilizes DBEs) . According challenge the City of Augusta, Georgia's Disadvantaged Business Enterprises ("DBE") Program as unconstitutionally discriminatory. Doc. # 1 . They claim that the Program violates for a project to demolish the Candy Factory Buildings in Augusta . See doc. # 1 at 5-8 (describing facts surrounding the Equal Protection Clause of the Fourteenth the bidding for the Candy Factory Buildings demolition Amendment to the United States Constitution, as contract) . At a 2/13/07 hearing, however, the parties well as various provisions of the Georgia represented that the Candy Factory Buildings contract was Constitution. Id. Because the Georgia being litigated in state court, so the issue is not before this Constitution claims raise novel issues of Georgia Court. Doc. # 14. Thus, the plaintiffs here attack the DBE Program facially, rather than based on an individual past law -- whether the Augusta ordinance violates application. the Georgia Constitution -- this Court declines to exercise any jurisdiction it may have over them . Additionally, the plaintiffs' complaint discusses alleged 28 U.S .C. § 1367(c)(1); see Parker v. Scrap violations of the DBE Program by the City. E.g. doc. # 1 Metal Processors, Inc ., 468 F.3d 733, 643 (11th at 15-16 (discussing businesses that were given DBE advantages despite not meeting DBE criteria and not Cir. 2006) ("Any one of the section 1367(c) being registered with the City) . This seems relevant only factors is sufficient to give the district court to what could be read as an invocation of the due process discretion to dismiss a case's supplemental state "void for vagueness" doctrine . Id. at 19. law claims") . The only issue now before the Court, then, is whether Augusta's DBE Program The challenge is that because the ordinance lacks adequate objective criteria for awarding contracts, city should be enjoined because it violates the United officials are acting arbitrarily and capriciously in violation States Constitution.' of due process . See generally Note, The Void-for- Vagueness Doctrine in the Supreme Court, 109 U. PA. L. REV. 67 (1960) ; Andrew E. Goldsmith, The Void-for- Vagueness Doctrine in the Supreme Court, ' Much of plaintiff's complaint could also be read as a Revisited, 30 Am. J. CRIM. L. 279 (2003) . The plaintiffs challenge to the DBE Program as applied during bidding ignore this argument in their TRO briefing. Case 1:07-cv-00019-BAE-WLB Document 19 Filed 03/14/07 Page 2 of 10 to the plaintiffs, this places them at a The Study examines the disparity in competitive disadvantage in bidding on Augusta socioeconomic status among the various races.' projects. Doc. # 1 at 15 . Among the findings : On 2/13/07, this Court heard arguments on • The Richmond County population whether a temporary restraining order (TRO) was 55 .1% white, 42% black, .3% should issue. The next day, it entered a 30-day Native American, 1 .7% Asian, and 2% restraining order requiring that any contracts Hispanic, id. at vii; entered by the City of Augusta be made without reference to the challenged DBE Program . Doc. • "Black families in Richmond County # 6. With bids before it, the City of Augusta has [in 1994 were] nearly four times more stopped awarding contracts rather than award likely to have incomes below the contracts without reference to the DBE Program. poverty level, [sic] than white families," Doc. # 12 at 3 ("nine contract awards have been id. at vi, 23; delayed since the entry of the Court's Order") . Of course, nothing in the Court's 2/14/07 Order • Black unemployment was more than requires the City to stop entering contracts; it twice that of whites, id. at vi, 22; simply requires that the City treat all companies the same, regardless of DBE status or DBE • The white high school graduation rate participation in a bid. was 76. 8%, whereas the black high school graduation rate was 61 .2%, id. ; In any event, the parties have now briefed the Court on whether that Order should be • The white college graduation rate was extended or dissolved . Doc. ## 8-9. Meanwhile, 21 .7%, whereas the black college the plaintiffs move for a contempt order, graduation rate was 9.8%, id. ; claiming that the City has violated the TRO, doc. # 16, but the Court will not pass on that until the • White median family income was City responds. $35,181, while black median family income was $21,543 ; and whites are II. BACKGROUND more likely to be employed in management positions, id at vi, 23 . In 1994, concerned about the present effects of past discrimination in Augusta, the City These socioeconomic differences, the Study commissioned the "Richmond County Disparity concludes, "have a significant impact on the Study" (Study) -- Augusta being the county seat ability of blacks to start and grow businesses of Richmond County . Doc. # 5, exh. A. The because they reduce the financial resources and Study makes numerous factual findings, market size and strength." Id. at vi. including "compelling evidence of a large disparity between the utilization of minority and women vendors and their availability in the Richmond County market area ... much of 2 The study compared the socioeconomic status of whites, blacks , Hispanics , Asians, and Native Americans . [which] is attributable to the past and present Doc. # 5, exh. A at 22-23, 24-35. The conclusions drawn effects of discrimination. " Id. at vi. all refer only to the disparity between whites and blacks . Id. at vi-viii. 2 Case 1:07-cv-00019-BAE-WLB Document 19 Filed 03/14/07 Page 3 of 10 The Study next compares black-owned "purchase orders under $1,500 .00" in 1993 . Id. businesses in Augusta to those owned in other at ix. The City fielded three telephone quotes regions and those owned by other racial groups . for each such order . Id. Only 8% of the quotes Id. at vii, 43-45. According to the Study, the were fielded from minority vendors in 1993, and 925 black-owned businesses had a mean annual only 1% of the dollar value went to minority revenue of $29,787 . Id. at 44. This figure was vendors. Id. ; see xxii-xxiii (Charts 4 .2 & 4.3). statistically disparate from annual revenue of Minorities and women received 1 .7% of black businesses in the rest ofthe state ($55,443) contracts over $5,000 in 1992 and 3 .7% of such and country ($46,593) . Id. The 197 non-black contracts in 1993 . Id. minority firms had a mean annual revenue of $86,603, and the 1,900 female-owned firms had The City had 1,608 vendors available . Id. a mean annual revenue of $70,280 . Id. The Minority and women firms constituted 12% mean annual revenue of all Georgia firms was (187) of them. Id. at ix-x. Of those 187, there $159,859, and the mean annual revenue of all were 88% black (85% male; 3% female) ; 8% U.S. firms was $145,654 . Id. at 44-45 . A key white women; 3% Asian; and 1% Hispanic . Of datum, the mean annual revenue of all the minority firms, 81 % of those that responded businesses in Richmond County, is missing. to a survey never received a contract from the County, 47% believed white-male vendors were The Study then discusses Georgia's racist favored, 23% agreed or strongly agreed that history as it relates to contracting, including their business had been discriminated against, antebellum legislation making it illegal to 48% agreed that they had faced discrimination contract with blacks "for the erection of in seeking financing, and 36% agreed that they buildings, or for the repair of buildings ." Id. at had encountered discrimination in pursuing vii-viii, 49-61 . contracts with majority firms. Id. at xi. Next, the Study describes the County's Finally, the Study includes anecdotal contracting outlays between 1992 and 1994 . Id. evidence of discrimination from 22 interviews at viii-x; id at xvi-xxviii (charts of data). In conducted with minority and women vendors . 1992, the County awarded over $27 million in Id. ; see also id., app. VIII (separately paginated contracts, of which 1 .25% (around $350,000) section containing interview evidence) . The went to minority and women vendors . The Study characterizes the three types of percentages in 1993 and 1994 were 1 .72% and discrimination encountered by the vendors as 4.33% respectively. Id. at ix. The Study also "Discrimination denying market access to noted a disparity in the "skew in awards," 28 for competitive [vendors]," "Discrimination white firms, 5 for minority.
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