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Introduction
Mr. Chairman, Members of the Committee on the Judiciary. I have been thrice honored this year: first, by having been permitted to appear before the United States Supreme Court on behalf of Adarand Constructors, Inc., on January 17; second, by having been present in the Courtroom when Justice Sandra Day O'Connor announced the decision of the Court on June 12; third, by having been asked to appear before you today to address the future of the Constitution's equal protection guarantee in light of the Supreme Court's landmark ruling in Adarand Constructors, Inc. v. Pena.
The Setting
Adarand Constructors, Inc. v. Pena. et al. had its origins in 1969 when President Richard Nixon signed an Executive Order requiring federal agencies to implement what we now call affirmative action. Less then 10 years later, when Congress considered the Public Works Employment Act (PWEA)--a $4 billion economic stimulus program--Congressman Parren Mitchell (D-MD) offered an amendment to set aside a portion of the program for minority business enterprises. As part of his justification for the non-controversial nature of his proposal, he asserted that his program was one building upon prior administrative practice. In the sponsor's words, "The first point in opposition will be that you cannot have a set-aside. Well, Madam Chairman, we have been doing this for the last 10 years in Government."
It may not have been controversial to Congressman Mitchell but it was controversial to many Americans who thought it violated the Constitution's guarantee of equal protection. Less than a month after the regulations implementing the PWEA were finalized, a facial challenged to the statute's constitutionality was filed in New York City. In 1980, that lawsuit--known as Fullilove v. Klutznick-- reached the U.S. Supreme Court. In an opinion by Chief Justice Warren Burger, the Court upheld the set-aside provision, citing both the limited extent and duration of the program as well as its flexibility.
The Year of 1989
Nearly a decade after Fullilove, in the case of J.A. Croson v. City of Richmond, the Supreme Court declared that Richmond's race-based set aside program was unconstitutional. Although Justice O'Connor's majority opinion was deferential as to what Congress might do regarding racial matters given Congress, unique powers, it was clear that states and local governments could not undertake race-based remedies without meeting two very demanding tests: the program had to serve a compelling governmental interest and the remedy selected had to be narrowly tailored.
That same year, Mountain States Legal Foundation (MSLF) was in the process of litigating a challenge to the State of Utah's implementation of a federal highway construction program (Ellis v. Skinner). Litigating on behalf of a highway subcontractor, MSLF took the position that before Utah could implement the 10 percent set aside adopted by Congress, Utah had to determine that the 10 percent quota was justified in Utah. Since Utah's minority population was only 6 percent, MSLF argued that the 10 percent quota could not be justified.
We saw Ellis v. Skinner as falling somewhere between Fullilove--and its holding that Congress could utilize race- based remedies--and Croson--and its holding that state and local governments could not use such race-based programs without fact finding. Although we were ultimately unsuccessful in Ellis v. Skinner, as we studied Croson in preparation for Ellis we reached an inescapable conclusion: the Supreme Court appeared ready to reconsider the result in Fullilove. We decided to find a case that would permit a direct challenge to a congressional race-based program.
Then in the Summer of 1989, the Central Federal Lands Highway Division (CFLHD) of the Federal Highway Administration and the U.S. Department of Transportation issued a solicitation for bids to construct nearly five miles of highway along the West Dolores River in Montezuma and Dolores Counties in extreme southwestern Colorado. Subsequently, the winning bidder sought a subcontractor to perform the guardrail portion of the contract. Although Adarand Constructors, Inc., a small, family-owned business located in Colorado Springs, Colorado, operated by Randy Pech, submitted the lowest bid, it was denied the subcontract.
Instead the guardrail subcontract was awarded to a business certified as a "Disadvantaged Business Enterprise" ("DBE") under a federal program that, in this case, provided a $10,000 bonus to the prime contractor for awarding the contract, not to the lowest bidder, but to the lowest minority bidder. For Randy Pech, the loss of the West Dolores Project was the last straw. He came to MSLF to ask if we would represent him in suing the federal government.
When Randy Pech walked in our door, we realized we had our direct challenge to a federal program. After meeting with Randy and getting to know him, we also realized we had the perfect client--a genuine nice guy who, through no fault of his own, had just finished last. We told Randy we would take his case. We also told him that we were going to lose at the district court; we were going to lose at the court of appeals; but that maybe, just maybe, if we were really lucky, the Supreme Court would hear his case. On August 10, 1990, a year to the day after the CFLHD issued its solicitation on the West Dolores Project, Randy Pech filed his lawsuit.
Pleadings before the Court
Our advice to Randy Pech was right. Both the U.S. District Court for Colorado and the U.S. Court of Appeals for the Tenth Circuit made short work of our lawsuit. As far as they were concerned, the U.S. Supreme Court had answered our challenge with its decisions in 1980 in Fullilove and in 1990 in Metro Broadcasting Corporation v. FCg--in which the Court upheld the federal government's policy of awarding some television broadcast licenses on the basis of race. Those decisions, held the Tenth circuit, required application of intermediate, not strict, scrutiny in reviewing a race-based program adopted by Congress. Under that standard, the program passed. We disagreed. We thought Randy Pech's case deserved a closer look.
Contrary to Chief Justice Burger's opinion in Fullilove, the race-based remedy adopted by Congress in 1977 was limited neither in extent nor duration. For people like Randy Pech, Congress' policy of awarding contracts based on race, which began with the adoption of the PWEA in 1977, continued. In 1982, Congress adopted the Surface Transportation Assistance Act (STAA); superseded in 1987 by the Surface Transportation and Uniform Relocation Assistance Act (STURAA); and in turn replaced in 1991 with the Intermodal Surface Transportation Efficiency Act (ISTEA).
While the Small Business Act (SBA)--which had its own affirmative action program--required the President to set aside at least five percent of all contracts for "socially and economically disadvantaged enterprises" ("DBE's"), STAA, STURAA and ISTEA set the minimum level at 10 percent. In addition, federal agencies were required to provide a "maximum practicable opportunity" for DBEs to participate in government contracts. As a result, the CFLHD set its own DBE goal at between 12 percent and 18 percent of its contracts.
One of the methods the CFLHD utilized to achieve its goals was the Subcontracting compensation Clause ("SCC"). Under the SCC, a prime contractor would be awarded a cash bonus of between 1 1/2 and 2 percent of the amount of the contract if at least 10 percent of the work was performed by a certified DBE. It was the SCC provision that was the inducement for the prime contractor in Adarand to award the guardrail contract, not to Adarand, but to a DBE. In fact, the prime contractor signed an affidavit stating that, "but for" the SCC bonus payment, the guardrail work would have been awarded to Adarand.
Even more troubling than the bonus payment--which was made on the basis of race--was Congress' definition of "socially and economically disadvantaged." Congress presumed that all "Black Americans, Hispanic Americans, Native Americans, (and) Asian Pacific Americans" were "socially and economically disadvantaged" regardless of their social background or economic status. In fact, state agencies were instructed, in certifying businesses as DBEs, to "rel[y] on this presumption" and "not (to] investigate the social or economic status of individuals who fall into one of the presumptive groups."
In Fullilove, Chief Justice Burger wrote that "simply because Congress' program presses the outer limits of congressional authority didn't mean the program should be stricken." In our view, the Congressional program in Adarand went beyond the breaking point. Thus, when we filed our Petition for Writ of Certiorari, we asked three questions: (1) whether "strict scrutiny" rather than "a lenient standard, resembling intermediate scrutiny" is the proper standard to determine the constitutionality of a race-base program adopted by Congress; (2) whether broad-based societal discrimination, rather than clearly identifiable discrimination perpetrated by a government entity, is a sufficient basis for the adoption of a race-based program; and (3) whether the CFLHD was required to conduct a factual inquiry before it adopted a race-based goal in excess of that approved by Congress.
Much to the surprise of the U.S. Government, whose opposition brief gave our petition the back of the hand, on September 26, 1994, the Supreme Court agreed to hear our case.
The Decision in Adarand
In a stunning decision that was the lead story on each of the three major television networks (ABC, CBS, NBC) the night of June 12, 1995, as well as banner headlines the next day on every newspaper in the country, the U.S. Supreme Court ruled in favor of MSLF.
By a vote of 5-4, the Supreme Court ruled that the Constitution requires the Court to apply the same standard in considering race-based decision making, regardless of the unit of government involved, whether federal, state, or local. That standard, held the Court, is one of "strict scrutiny," a test that requires the government to demonstrate both a "compelling governmental interest" in using race and "narrow tailoring" in achieving that interest.
The Court's decision in Adarand overturned its 1990 decision in Metro Broadcasting v. Federal Communications Commission, where the Court upheld the ability of Congress to use race to award television broadcast licenses. The Court also effectively reversed its 1980 decision in Fullilove v. Klutznick where it first held that Congress could use race as a factor in awarding government contracts. Both of the earlier decisions applied a much more lenient standard to race-based decision making by Congress and were the basis for earlier rulings by the federal district court in Colorado and the U.S. Court of Appeals for the Tenth Circuit against Adarand. Those decisions were vacated by the Supreme Court and the case remanded for a decision consistent with the Court's holding in Adarand.
Justice O'Connor, writing for the Court declared:
"Despite lingering uncertainty in the details, however, the Court's cases through Croson had established three general propositions with respect to governmental racial classifications. First, skepticism: '[a]ny preference based on racial or ethnic criteria must necessarily receive a most searching examination'. . . Second, consistency: 'the standard of review under the Equal Protection Clause is not dependent on the race of those burdened or benefitted by a particular classification'. . . . And third, congruence: '[e]qual protection analysis in the Fifth Amendment area is the same as that under the Fourteenth Amendment' . . . .
"Taken together, these three propositions lead to the conclusion that any person, of whatever race, has the right to demand that any governmental actor subject to the Constitution justify any racial classification subjecting that person to unequal treatment under the strictest judicial scrutiny."
"Accordingly, we hold today that all racial classifications, imposed by whatever federal, state, or local governmental actor, must be analyzed by a reviewing court under strict scrutiny. In other words, such classifications are constitutional only if they are narrowly tailored measures that further compelling governmental interests." (Emphasis added.)
"There is nothing new about the notion that Congress, like the States, may treat people differently because of their race only for compelling reasons."
The Supreme Court's decision as to what the Constitution's guarantee of equal protection means, when applied to Congress, now shifts the burden to Congress and the Clinton Administration. Congress must determine whether or not to continue funding racebased programs that may fail to meet the "strict scrutiny" test announced by the Supreme Court. President Clinton, who shortly after oral arguments in Adarand announced a review of affirmative action, to decide what race-based programs currently in place can demonstrate a "narrow tailoring to achieve a compelling governmental interest."
What's Next for Adarand Constructors, Inc.
In MSLF's representation of Adarand Constructors, Inc., the three objectives were achieved: first, Metro Broadcasting was overturned; second, Fullilove was effectively reversed; and third, "strict scrutiny" was applied to Congress. Although the two major impediments to victory for our client Randy Pech--the Fullilove decision and the Metro Broadcasting decision--were removed by the Court's decision in Adarand, we are now back where we began nearly five years ago when on August 10, 1990, we filed our lawsuit.
Randy Pech is still losing contracts because of the policies being examined by this Committee today. Furthermore, despite his victory before the Supreme Court, Randy Pech must return to federal court in Colorado and battle the nation's largest law firm: the U.S. Government. I have absolutely no doubt that U.S. Department of Justice attorneys will fight tooth and nail against Randy Pech and Adarand.
Notwithstanding President Clinton's promise in February to conduct "an intense, urgent review" after which, according to The Washington Post, the Administration would "protect[] those that can be shown to work and jettison[] or alter[] the rest," and notwithstanding the indefensible nature of the program challenged by Adarand, the Department of Justice will fight us every step of the way.
One example of this "take no prisoners" approach is what the Department of Justice did when the Supreme Court agreed to hear our case. In its Brief on the Merits, the Administration raised two new arguments: first, that the statutory presumption that all listed minority group members were "socially and economically disadvantaged" and thus DBEs was rebuttable by Adarand; second, that Adarand lacked standing since it had never shown that the DBE in the case was certified due to the race of the owner, rather than some finding of economic disadvantage.
As to the first, the burden of ensuring the Constitution's guarantee of equal protection should not rest on the backs of men like Randy Pech and his tiny company. When Congress adopts a program, the burden should be upon the U.S. Government to ensure that the program makes distinctions that are constitutionally permissible. At the very least, those who are the beneficiaries of such programs should be required to demonstrate that they possess the necessary qualifications. The Randy Pechs of this country should not be required to prove that a particular DBE is not qualified.
Furthermore, in the real world in which Randy Pech functions, he is incapable of challenging the DBE status of his competitors. Neither does he possess subpoena power to obtain the necessary documents nor is there a forum for him to present those documents or other evidence on the record to challenge the findings of state or federal agencies. (This assumes there is an objective standard upon which to declare an entity "socially (or] economically disadvantaged" and there is not.) Even if Randy Pech could have taken the time out from his guardrail business to engage in such a challenge and was successful in decertifying one DBE, he would have to begin the process over again with the next DBE and the one after that, and on and on.
Moreover, had Randy Pech challenged the DBE status of the firm awarded the guardrail subcontract, the government contracting officer would have issued a stop work order. Thus Randy Pech would have succeeded in infuriating the prime contractor who would find himself with equipment on site and no contract to perform. At the same time, the DBE, accused of a felony--being an illegal DBE--might well file a lawsuit against Pech.
As to the second issue, that of Adarand's standing, the fact that the Department of Justice raised the issue, for the first time before the Supreme Court, demonstrates the lengths to which the government will go to defeat an adversary.
At the federal district court, both sides had filed a motion for summary judgment, agreeing on the facts that presented the court with the legal issues involved. At the Court of Appeals, the facts remained undisputed, the only questions being the constitutional ones we had argued from the beginning. It was stunning, therefore, that the Solicitor General took the position that we had never proven a key aspect of our case: that the racial presumption had been applied to Gonzales. Of course, it had been applied.
Randy Pech had testified during his deposition that Gonzales was certified as "a DBE" because "he is a minority." Moreover, three top federal officials in the CFLHD had testified that they knew of no situation in Colorado where a DBE had been certified on any other basis than the presumption. That testimony was made all the more compelling by the fact that the prime contractor had been required to provide the CFLHD with evidence of the subcontractor's DBE status. Thus, the CFLHD knew, and had in its possession the documents proving, the basis upon which Gonzales had been certified. Finally, there was the fact that state agencies were required, under federal Department of Transportation rules, to certify as a "DBE" anyone who was a member of one of the enumerated racial groups. Since government officials are presumed to perform their duties, that is what happened with Gonzales.
As a legal matter, the Solicitor General's position made no sense. Adarand had demonstrated that at least one of the bases for the federal government's decision in the awarding of the subcontract had been an illegal one--the use of race. As a result, under numerous Supreme Court precedents, the burden of proof had shifted to the federal government. The federal government now had to prove that race was not the reason for awarding the guard rail subcontract to Gonzales. Thus, the government had to show that the presumption had not been applied to Gonzales.
A review of the legal guidance provided by Assistant Attorney General Walter Dellinger demonstrates that the Administration will attempt to weaken the Supreme Court's holding in Adarand.
For example, Mr. Dellinger states that "Adarand basically extends the Croson rules of affirmative action to the federal level--with the caveat that application of those rules might be somewhat less stringent where affirmative action is undertaken pursuant to congressional mandate." (Emphasis added.) Memorandum at 9. Mr. Dellinger finds authority for such a caveat in the following language from the opinion:
It is true that various Members of this Court have taken different views of the authority 5 of the Fourteenth Amendment confers upon Congress to deal with the problem of racial discrimination, and the extent to which courts should defer to Congress's exercise of that authority. (Citations omitted). We need not, and do not, address these differences today.
Adarand at 29.
Mr. Dellinger makes the argument that the deference given to Congress should be greater than that afforded to state and local governments. Mr. Dellinger suggests that "Congress may be able to rely on national figures of discrimination to justify remedial racial and ethnic classifications." Memorandum at 2.
Furthermore, after Congress has developed familiarity with the nature and effects of discrimination, "Congress need not redocument the fact and history of discrimination each time it contemplates adopting a new remedial measure." Memorandum at 31. The most significant ramification is that Congress may be able to redress the effects of society-wide discrimination through the use of racial and ethnic classifications that would be "impermissible if adopted by a state or local government." Memorandum at 32.
I don't believe a fair reading of the Court's holding in Adarand permits the conclusions to which Mr. Dellinger has arrived. The majority in Adarand make it clear that the obligations of the Federal Government (including Congress) is to be "equivalent to that of the States." Adarand at 13-14. The majority opinion held that "all racial classifications, imposed by whatever federal, state or local governmental actor, must be analyzed by a reviewing court under strict scrutiny." Adarand 25-26. Thus, Congress is clearly not exempt from strict scrutiny, a level of scrutiny that is to be "equivalent" between Congress and State and local governments.
The majority opinion cited three key statements that refute Dellinger's view that Congress may be able to rely on national figures or that Congress need not redocument a justification for an affirmative action program. The first one states that an individual is entitled to a judicial determination that the burden he is asked to bear "is precisely tailored to serve a compelling governmental interest." Adarand at 23 (citing Shelley v. Kraemer, 334 U.S. 1, 22 (1948). (Emphasis added.) The second one states that strict scrutiny is a tool to ensure that "the means chosen 'fit' this compelling goal so closely that there is little or no possibility that the motive for the classification was illegitimate racial prejudice or stereotype." Adarand at 24 (citing Croson at 493). The final one is the statement Justice Stevens made in Fullilove declaring that "Unless Congress clearly articulates the need and basis for a racial classification, and also tailors the classification to its justification, the Court should not uphold [an affirmative action statute)". Adarand at 27 (citing Fullilove, 448 U.S. at 545 (dissenting opinion) (Emphasis in Adarand.)
Obviously, given these strong statements, Congress may not rely on past studies or general figures. Moreover, Congress will need to narrowly tailor each and every affirmative action program which it approves.
Yet another example of the lengths to which the U.S. Government will likely go to defeat challenges to the constitutionality of federal race-based decision making is contained in Mr. Dellinger's discussion, at pages 19-20 of the meaning of "narrow tailoring." For example, he suggests that there might be a trade off between compelling governmental interest and narrow tailoring, that is, if there is a strong compelling governmental interest there may be less strict narrow tailoring and vice versa. He makes this assertion, and gives this advise to federal counsels even thought he admits on page 20 that "the Supreme Court has never explicitly recognized any trade-off between" the two.
The Duty of Congress
The Supreme Court's decision as to the meaning of the Constitution's guarantee of equal protection, when applied to Congress, now shifts the burden to Congress and the Clinton Administration. The Dellinger Memorandum and the announcement yesterday by President Clinton demonstrate unequivocally that Randy Pech's long battle is just beginning.
Congress has an obligation as well. An obligation to determine whether or not to continue funding race-based programs that may fail to meet the "strict scrutiny" test announced by the Supreme Court. In light of the manner in which these programs were adopted, with minimal fact finding, and with little of what the Supreme Court demands in the way of "narrow tailoring," it is unlikely that any of them could survive "strict scrutiny."
Thus the question before Congress, beginning with this hearing, is whether the burden will be placed upon the Randy Pech's of the world to ask the federal judiciary to consider these programs on a case-by-case basis, with the enormous cost in money and time that involves, or whether Congress will shoulder the burden. I believe Congress should perform its constitutional responsibility by zeroing out these very questionable programs pending a thorough, thoughtful review at such time Congress considers the reauthorization of programs in which race is a factor in federal decision making.
Randy Pech began his long battle in the Fall of 1989, when few gave his challenge much chance for success. Although most discussions one hears today admit that race-based decision making is wrong, in 1989, when Randy Pech challenged the United States Government, he stood virtually alone. Imagine the surprise of the nation, when, on September 26, 1994, the Supreme Court agreed to hear his case.
But something had happened in America in the weeks and months following the Supreme Court's decision to hear our case. Six weeks after the Court decided to grant certiorari, the American people rendered their decision. One of the issues that played a part in the election--according to pundits like David Frum, author of Dead Right--was the matter of affirmative action. A short time later the California Civil Rights Initiative--which would compel race-neutral decision making by the nation's largest state and is all but guaranteed a place on the ballot in 1996-was announced. Then commentators from both ends of the political spectrum weighed in against race-based decision making. From the left, Richard Cohen of The Washington Post wrote: "(Affirmative action] has outlived its usefulness . . . . [I]t violates the American creed that we must be judged as individuals, not on the basis of race or sex . . . ." From the right, Pat Buchanan said: "[I]t's time to make law in America what it always should have been in the Land of the Free: color blind. Wasn't that the dream?"
There was something else obvious in the vote last November. The fact that the American people are fed up with big government and the tools and toys of big government, what many people call "social engineering." In his 1994 book, Civil Wrongs: What Went wrong with Affirmative Action, Professor Steven Yates sets out the tenets of that philosophy: that there is a social elite that should determine national policies; that those policies should be imposed by the federal government; that American society is systemically flawed; and, that it is permissible to burden individual members of society if it serves group goals.
While anger over federal race-based decision making is, in part, the result of a perception of unfairness and inequity as well as the reality of lost jobs and denied opportunities, something more is at work here. (I would add as well, that it is not just the so-called "angry white men," but their wives and families who have seen, first hand, the destructive impact of race-based social engineering that imposes a destructive burden upon innocent members of our society. One of those individuals is Valerie Pech who has worked side-by-side with her husband Randy to build the company.)
That something is the American peoples' view of the role of the federal government in their lives. More and more Americans are discovering the flawed philosophy upon which big government programs are based and they find it repugnant.
That very same thing is happening on environmental issues. While much of the opposition to environmental policy gone wild flows from regulatory overkill, lost jobs and imperiled property rights, millions of Americans are responding to the philosophy of social engineering that underlies radical environmental policies.
If Congress wishes to be true to the mandate it was given in November 1994, then it must begin now to put an end to big government's use of social engineering to make decisions based on race.
Conclusion
One of the great things about appearing before the U.S. Supreme Court, especially for a word smith, phrase maker, speaker and writer such as myself, is the fact that I didn't have to craft great phrases to address the issue before the Court. The best words and phrases have been developed over the years in opinion after opinion by the nation's greatest legal thinkers. Who could improve, for example, on Justice Harlan's plea, in his powerful and prophetic dissent in Plessy v. Ferguson, for a color blind Constitution? You can't read these opinions and not be struck by the power of the language and the brilliance of the men and women who crafted them.
Perhaps my favorite quote regarding this case appeared in a footnote in Chief Justice Burger's opinion in Fullilove. It was particularly fitting in light of the fact that discrimination on the basis of race has been unconstitutional since 1954, has been illegal since 1964, and has been immoral for millions of people for centuries. Nevertheless, there is one place in America where race-based decision making is still permitted: the federal government. Thus Justice Brandeis' words had particular meaning for me: "Our government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example."
Justice Powell once wrote, "the day cannot come soon enough when we will no longer judge people on the immutable characteristics of race." I hope that day came on June 12, 1995, when the Supreme Court announced its decision in Adarand v. Pena.