High Court Deals a Major Setback to Minority Firms

The Supreme Court, dealing a serious blow to some forms of affirmative action, today struck down a Richmond, Va., program aimed at helping construction industry businesses owned by minorities.

By a 6-3 vote, the court ruled the plan is an unlawful form of reverse discrimination.

Justice Sandra Day O’Connor, writing for the court, said, “Under Richmond’s scheme, a successful black, Hispanic or Oriental entrepreneur from anywhere in the country enjoys an absolute preference over other citizens based solely on their race.”

“We think it obvious that such a program is not narrowly tailored to remedy the effects of prior discrimination,” she said.

The Richmond plan would require the prime contractor on any city building contract to subcontract at least 30% of the value of the project to firms that are at least one-half minority-owned.

O’Connor said, “The 30% quota cannot be said to be narrowly tailored to any goal, except perhaps outright racial balancing. It rests upon the completely unrealistic assumption that minorities will choose a particular trade in lock-step proportion to their representation in the local population.”

The ruling is expected to have far-reaching impact on the use of so-called set-aside programs by states and cities. Most states and more than 190 local governments have such programs, according to a study by the Minority Business Enterprise Legal Defense Education Fund.

In California, a state law effective this month requires all state contractors to use best efforts to subcontract at least 15% of the project to firms controlled by minorities and 5% to firms controlled by women.

California Deputy Atty. Gen. Marian Johnston said that the law differs from the Richmond program in one important respect: “It establishes goals, not monetary requirements.” But she said today’s ruling will be reviewed to determine whether it would invalidate the state measure.

Attorney John Findley of the Pacific Legal Foundation said the high court’s ruling could apply to the California law because the state, like Richmond, has not justified the law with findings of past discrimination.

sh Marshall in Dissent

In a stinging dissent, Justice Thurgood Marshall said the Richmond ruling “marks a deliberate and giant step backward in this court’s affirmative action jurisprudence. Cynical of one municipality’s attempt to redress the effects of past racial discrimination in a particular industry, the majority launches a grapeshot attack on race-conscious remedies in general.”

Marshall said the “harsh reality” of today’s ruling will be to discourage or prevent cities and states from “acting to rectify the scourge of past discrimination.”

He was joined by Justices William J. Brennan and Harry A. Blackmun.

O’Connor drew a distinction between Richmond’s plan and one enacted by Congress that the court upheld in 1980. The congressional plan requires 10% of federal public works contracts be earmarked for minority-controlled businesses.

O’Connor said Richmond officials are not entitled to rely on a finding by Congress that there has been nationwide discrimination in the construction industry.