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Western Legal Foundation Praises Ruling in Racial Preference Case

May 16, 2017 | by William Perry Pendley


May 16, 2017 – DENVER, CO.  A western legal foundation with decades of experience and multiple appearances at the Supreme Court of the United States challenging the use of racial preferences or quotas today celebrated the decision of a federal appeals court that overturned the ruling of a Montana federal district court upholding the use of racial preferences in highway contracting.  Mountain States Legal Foundation (MSLF) had advised the U.S. Court of Appeals for the Ninth Circuit in a friend of the court brief that the Supreme Court’s ruling in 1995 in Adarand Constructors, Inc. v. Peña renders use of the racial quotas in the federal program as implemented by Montana unconstitutional.  MSLF prevailed in the Adarand lawsuit in a 5-4 ruling that Time labeled “a legal earthquake.”  MSLF’s legal brief came in support of Mountain West Holding Company, a Montana firm that does construction specific traffic planning for projects.  In 2012, it submitted the low bid on three separate contracts; all three were rejected because of the owner’s race given Montana’s 5.83% racial quota.  In response to an equal protection challenge the company filed, a Montana federal district court upheld the program’s constitutionality in November of 2014.  The three-judge panel returned the case to Montana.

“We are gratified both by the Ninth Circuit citation to our victory before the Supreme Court and by its holding that summary judgment in favor of Montana was improper in light of factual disputes regarding the so-called expert report and because the evidence relied on by the federal district court failed to prove a history of discrimination,” said William Perry Pendley, president of MSLF.

U.S. Department of Transportation (USDOT) regulations require that any state receiving federal highway funds must have a federally-approved Disadvantaged Business Enterprise (DBE) Program.  DBE programs are purportedly designed to ensure non-discrimination in public contracting and to promote the use of DBEs in federally assisted contracts.  A DBE is a small business “owned and controlled by socially and economically disadvantaged individuals.”  State DBE programs “must rebuttably presume that citizens of the [USA] (or lawfully admitted permanent residents) who are women, Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian Americans, or other minorities found to be disadvantaged by the SBA, are socially and economically disadvantaged individuals.”  States must establish an “overall goal” for DBE participation in federally assisted contracts.  The overall goal is based on the availability of “ready, willing and able to participate” DBEs compared to all businesses ready, willing, and able to complete contracts.  After determining a “base level” of eligible DBEs, the state must determine what percentage of all Federal-aid highway funds the state receives will go to DBEs in the forthcoming three fiscal years.  Overall goals “must provide for participation by all certified DBEs and must not be subdivided into group-specific goals.”  If a state establishes or implements its goals in a way different from that provided in the regulations, it is ineligible to receive USDOT funds.

Mountain States Legal Foundation, created in 1977, is a nonprofit, public-interest legal foundation dedicated to individual liberty, the right to own and use property, limited and ethical government, and the free enterprise system. Its offices are in suburban Denver, Colorado.

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