Skeptical Justices Await Affirmative Action Case

The Supreme Court cast new doubt Monday on the future of affirmative action by the government, as it agreed to hear a white contractor’s challenge to federal programs that give an edge to minority-owned businesses.

The case, to be heard in the fall, tests whether race can ever be used as a plus factor for awarding government contracts to such firms.

It also puts the Bush administration on the spot. While conservatives have opposed minority-preference programs, the government’s lawyers are generally obliged to defend federal programs.

Federal transportation law says that “not less than 10%” of the highway and transit funds should go to “disadvantaged business enterprises.” The law presumes businesses headed by “black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans and other minorities” are socially and economically disadvantaged. The 10% set-aside would amount to about $17 billion a year.

But this minority-preference program, and others like it, have a powerful foe in the Supreme Court.

Six years ago, the court’s conservative majority said the U.S. Constitution forbids racial discrimination against whites as well as blacks. “We hold today that all racial classifications, imposed by whatever federal, state or local government actor,” are constitutionally suspect, the 5-4 majority wrote.

At that time, the court did not strike down the federal set-aside programs in the case of Adarand Constructors vs. Pena. Justice Sandra Day O’Connor’s opinion suggested their days were numbered, however. These “affirmative” preferences for racial minorities are unconstitutional, she said, except when they are directed narrowly to make up for actual instances of discrimination against minorities.

The ruling was met with a mixed reaction. Conservatives said the Adarand decision meant the end for these “set-aside” programs. The Clinton administration’s lawyers instead adopted the Rev. Jesse Jackson’s plea: “Mend it. Don’t end it.”

The administration moved to eliminate the wealthy from the “disadvantaged business” program, dropping minority business owners with a net worth of more than $750,000. And whites were told they could qualify as “disadvantaged” if they could show they had suffered various hardships.

The minority-preference program was still needed to counter continuing racial bias in the construction industry, Clinton administration lawyers said. The “old-boy network” effectively excludes minorities and women, they said.

In 1998, when the highway funding law came before the Senate, the conservatives, including then-Sen. John Ashcroft (R-Mo.), moved to kill the set-aside program.

“I find this objectionable as a matter of public policy,” Ashcroft said on the Senate floor. “The notion that every small business owned by racial minorities is somehow economically disadvantaged is nonsense. It flies in the face of reality and . . . is un-American to me,” he said.

Beyond that, the “Adarand decision makes plain the unconstitutionality of [these] set-asides.”

The amendment co-sponsored by Ashcroft went down to defeat on a 58-37 vote. And in September of last year, President Clinton celebrated when the U.S. 10th Circuit Court of Appeals in Denver ruled the government “may use race-conscious means” to make up for past discrimination.

But the white contractors in the original Colorado case appealed to the Supreme Court. And on Monday, the high court announced it will hear a second challenge to the same program (Adarand Constructors vs. Mineta, 00-730).

This time, the defense of the program will be led by the Bush administration’s Justice Department, headed by Atty. Gen. Ashcroft.

In his confirmation hearing, Ashcroft was asked about the new Adarand case. “It would be inappropriate for me to comment on pending litigation,” he said, but added that “it is long-standing policy of the Justice Department to defend any federal law for which a reasonable and conscientious defense can be made.”

The administration’s lawyers have several months to prepare a response. “Where this leaves us is, we have to figure out what our next move is,” a department official said.

The Clinton administration’s solicitor general, Seth Waxman, filed a brief defending the set-aside program on Jan. 19, his last day in office. He argued that the program was now targeted at truly disadvantaged businesses, and it merely set goals, not quotas.

The lawyer for the white contractor disagrees. “Nothing has changed since 1990,” said William Perry Pendley of the Mountain States Legal Foundation in Denver, which has represented Randy Pech, Adarand’s owner.

In his original complaint, Pech said he submitted the low bid to erect guardrails on a stretch of federal highway but lost the contract to the Gonzales Construction Co. Under an earlier version of the federal program, the government offered a cash bonus of $10,000 to the prime contractor for hiring Gonzales, a minority-owned firm.

Although the bonus program has been abolished, the state and regional agencies that distribute highway funds must continue to meet the goals written into law.

“In this region, they have to meet a goal of 15% to 18% per year. So the agency makes sure that a certain percentage of the work goes to these ‘disadvantaged’ businesses,” Pendley said.

The outcome of the case probably depends on O’Connor.

The four most conservative members of the court oppose any use of race-based affirmative action. They are Chief Justice William H. Rehnquist and Justices Antonin Scalia, Anthony M. Kennedy and Clarence Thomas. O’Connor has voted regularly with them, but she also has left the door open to a limited use of affirmative action to deal with continuing discrimination.

In the next few years, the court is also likely to take up a new challenge to affirmative action in college admissions. Several cases are pending in the lower courts.

Meanwhile, the court agreed to take up a follow-up case to last week’s ruling on arbitration.

On a 5-4 vote, the justices ruled that employees who sign arbitration agreements cannot take their bias claims to court. Now, the court will consider whether the U.S. Equal Employment Opportunity Commission can sue on behalf of workers. The case of EEOC vs. Waffle House, 99-1823, will be heard in the fall.

*

Times staff writer Eric Lichtblau contributed to this story.