Court upholds state set-aside law Highway contractors fail to show law cost them jobs.

May 24, 1991|By Michelle Singletary | Michelle Singletary,Evening Sun Staff

A federal appeals court has upheld a lower court's ruling dismissing a suit challenging the legality of Maryland's minority set-aside law.

That makes Maryland the 15th state or local government that has successfully fought legal challenges to set-aside laws, according to Ralph C. Thomas, executive director of the National Association of Minority Contractors, which is keeping score on how the courts are ruling on such statutes.

Thomas said yesterday the ruling proves wrong claims by opponents of set-aside laws that such statues would fall like dominoes following a 1989 U.S. Supreme Court ruling that an affirmative action program in the city of Richmond, Va., was unconstitutional.

"The people challenging these law, white contractors, can't show that they were harmed by these programs," Thomas said.

The U.S. Fourth Circuit Court of Appeals in Richmond issued a ruling Monday dismissing an appeal brought by the Maryland Highway Contractors Association, which represents union and non-union firms both large and small.

The association filed suit in U.S. District Court in Baltimore in 1989 claiming the Maryland Minority Business Enterprises statue was unconstitutional because it discriminated against its members on the basis of race.

The statute, enacted in 1978, sets a goal for the state to award 10 percent of its purchasing contracts to certified minority-owned businesses.

"We are disappointed that this suit went on for two years without getting to the central point of whether the law is constitutional," said Robert E. Latham, executive director of the contractors association.

Latham said the association's board of directors will vote next week on what, if any, further legal action they will take.

The contractors filed suit just eight months after the Supreme Court ruled that Richmond's set-aside program was unconstitutional because there was not clear proof of past discrimination against minority firms. The court limited the ability of state and local governments to reserve a portion of contracts for minority businesses without such evidence.

U.S. District Court Judge Norman P. Ramsey in Baltimore ruled last year that the contractors' group had no legal right to challenge Maryland's law. Ramsey said no evidence had been presented to show how any members were injured as a result of the statue.

The appellate court agreed with Ramsey and added that the issue was moot since the legislature has revised the law.

In 1990, the Maryland legislature adopted a new statute to comply with the Supreme Court's ruling that municipalities had to show they discriminated against minority groups before enacting corrective legislation.

Maryland commissioned a study that determined the state had discriminated against American Indians, Asians, blacks, Hispanics, women and the physically and mentally disabled. Alaskan natives and Pacific Islanders were eliminated from the law, according to Andrew H. Baida, an assistant Maryland attorney general.

"We believed all along that the statute was both constitutional and that this plaintiff was not a proper party to challenge it," said Maryland Attorney General J. Joseph Curran Jr. However, attorneys for the association said the decision was flawed.

"I think the opinions are fundamentally wrong," said Leslie R. Stellman, one of the attorneys representing the association.

Michael E. Kennedy, special counsel for the Associated General Contractors of America, which opposes set-aside statues, said at least 16 set-aside laws have been struck down or have been suspended as a result of legal challenges.

At least 32 states and 190 local governments have minority set-aside programs, according to a survey by the National League of Cities. About 35 of those laws are being legally challenged.

Del. Elijah E. Cummings, D-City, said he wasn't surprised that the courts have upheld the Maryland law.

"It sends a message to other groups that might want to challenge the law that, unless you have suffered, the suit is going to be looked upon as frivolous," Cummings said.

The appeals court said the association admitted it had no information that any member may have lost a bid or contract or lost profits as a result of the set-aside statute.

The appeals court also held that the association could not sue on behalf of its members because some members of the association are certified minority firms that benefit from the law.

The court also noted that the association's board decided to file suit before telling members.

"This secrecy raises suspicion regarding the motives of the association," the court decision stated.

Latham said the group has about250 members, 15 percent of whom are minorities, and none of the minority members resigned because of, or objected, to the suit. In fact, he said, some contributed to the legal costs.

Latham said challenging the Maryland law has cost the group more than $50,000, most of which has been raised by private contributions.

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