WASHINGTON -- The Supreme Court on Monday refused to revive a reverse-discrimination challenge to a federal program used in Utah that gives companies owned by disadvantaged people extra help in winning contracts for federal highway projects.
The justices, without comment, turned away arguments that the affirmative action program adopted by Congress unlawfully discriminates against companies owned by white men.The action in a case from Utah was not a decision and should not be read as a court endorsement of the federal program. The justices merely refused to review the dispute and thereby left intact a lower court's ruling.
The Disadvantaged Business Enterprise program requires that no less than 10 percent of all federally funded highway construction contracts be awarded to "small business concerns . . . owned and controlled by socially and economically disadvantaged individuals."
One of the federal laws encompassing the program defines "small business concern" as one with less than $16.6 million in annual average gross revenue for the preceding three years. The program also presumes that racial minorities and women who own small businesses are "socially and economically disadvantaged."
That presumption was challenged by Cache Valley Electrical Co. after it lost out on two 1995 contracts for work on federally funded highway projects in Utah. Both times, the company submitted the lowest bids, but contractors awarded electrical subcontracts to disadvantaged business enterprises.
Cache Valley Electrical is owned by Jack Laub, who is white. His company sued the Utah Department of Transportation, which was supervising the projects.
U.S. District Judge David Winder threw out the lawsuit after ruling that Cache Valley Electrical lacked the legal standing to sue because it could not prove that the program's challenged presumptions in favor of women and racial minorities had hurt it.
Laub's company is not a "small" business because its annual gross revenues are about $41 million, the judge noted, so it could not have participated in the program even if the challenged presumptions were struck down.
The judge discounted as "too speculative" Laub's contention that striking down the presumptions would mean many fewer businesses could qualify as disadvantaged and would force more waivers from the federal 10 percent set-aside requirement.
The 10th U.S. Circuit Court of Appeals upheld the lawsuit's dismissal last July.
In the appeal acted on Monday, Cache Valley Electrical was represented by William Perry Pendley of Denver, the winning lawyer in a 1995 Supreme Court decision that endangered many federal affirmative action programs by curtailing the special help offered to racial minorities.
In that ruling, the justices said courts must hold Congress and the president to the same strict standards as state and local governments when determining whether they have discriminated against whites.
Justice Department lawyers urged the court to reject Cache Valley Electrical's appeal, saying those who mounted the challenge leading to the 1995 decision could prove they had been hurt by a federal set-aside program.
The case is Cache Valley Electrical Co. vs. Utah Department of Transportation, 98-579.