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By
John W. Ralls
Thelen Reid Brown Raysman & Steiner LLP
In
April 2001, the U.S. Supreme Court "granted certiorari
to review for a second time whether the Court of Appeals
was correct when it concluded that the Department of Transportation's
(DOT's) disadvantaged business enterprise (DBE) program
is consistent with the constitutional guarantee of equal
protection."
On
November 28, 2001, in a per curiam opinion, the court dismissed
the writ of certiorari as improvidently granted. Adarand
Constructors, Inc. v. Mineta, 2001 DJ DAR 12363, 534
U.S. ____ (2001)
In
Adarand Constructors, Inc. v. Pena, 515 U.S. 200
(1995) (Adarand I), the Supreme Court held that strict
scrutiny governs whether race-based classifications violate
federal equal protection. After remand and an intervening
trip to the Supreme Court to address a standing issue, the
10th U.S. Circuit Court of Appeals found that "the
automatic use of financial incentives to encourage the award
of subcontracts to DBEs, as originally contemplated by the
DOT's subcontractor compensation clause (SCC) program, was
'unconstitutional under Adarand [I]'s strict standard
of scrutiny.' " However, the 10th Circuit "held
that, by virtue of the new regulatory framework under which
the DOT's state and local DBE program now operates, that
program passed constitutional muster under Adarand I."
"The…
Court of Appeals [for the 10th Circuit] confined its opinion
to the constitutionality of the DOT's DBE program as it
pertains to procurement of federal funds for highway projects
let by states and localities." The 10th Circuit found
that Adarand did not have standing to attack the DOT's DBE
program for "direct procurement" projects on federal
lands. "Petitioner now asserts, however, that it is
not challenging any part of DOT's state and local procurement
program. Instead it claims to be challenging only the statutes
and regulations that pertain to direct procurement of DOT
funds for highway construction on federal lands." These
regulations were not reviewed by the Court of Appeals.
The
Supreme Court reasoned that it ordinarily does not decide
in the first instance issues not decided below. Also, the
Supreme Court said it would not examine standing simply
to reach an issue for which standing had been denied below.
" 'Mindful that this is a court of final review and
not first review'… we thus decline to reach the merits
of petitioner's present challenge."
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For more information about the issues covered in this report, please contact John Ralls in our San Francisco office at 415-369-7210 or at jralls@thelen.com or contact your Thelen attorney. For more information about Thelen's Construction and Government Contracts Department, click here.
©2002 Thelen Reid Brown Raysman & Steiner LLP
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