Decided: July 11, 2003
Summary: In GEOD v. New Jersey (U.S. District Court, New Jersey) the Foundation represented a small aerial surveying firm which had been virtually excluded from participating in New Jersey state construction projects because of the state's "minority and woman owned business enterprise" program, which required prime contractors to subcontract seven percent and three percent, respectively, of the value of the state contract to minority and woman owned businesses. We alleged that this program, embodied both in statute and regulations, violated GEOD's equal protection rights under both the United States Constitution and the New Jersey constitution because the state had no credible evidence that the state or its contractors had ever discriminated against minority or woman-owned firms in connection with state construction projects. Thus the state's reverse discrimination program was neither "remedial" nor "narrowly-tailored," as required under the U. S. Supreme Court's teaching in City of Richmond v. Croson, 488 U.S. 469 (1989) and subsequent cases such as Adarand v. Pena, 515 U.S. 200 (1995).
After more than two years of litigation, including extensive pre-trial discovery and motion practice, in July 2003 the U.S. District Court for New Jersey signed a consent decree in which the State of New Jersey agreed to a permanent injunction against enforcement of the state's Set-Aside Act. New Jersey must also achieve its disadvantaged business enterprise goals on federally-funded projects using race-neutral means, and its submissions to the U.S. Department of Transportation through 2008 must be vetted in advance by GEOD and Atlantic Legal.
As a follow-up to the GEOD v. New Jersey case, Atlantic Legal has filed a similar lawsuit against New Jersey Transit, GEOD v. New Jersey Transit Corporation, also in federal court in New Jersey. On many of its engineering and design contracts, NJ Transit has set "Disadvantaged Business Enterprise" "goals" ranging from 20% to 30%. Some of NJ Transit's funding is derived from the State of New Jersey, and projects funded through state funding would be subject to the consent decree we obtained in GEOD v. New Jersey. The vast majority of NJ Transit's funding is from U.S. Department of Transportation programs, and thus is subject to the U.S. Department of Transportation's DBE criteria. Federal regulations establish an "aspirational" ten percent DBE participation for projects receiving federal funding (49 CFR 26.41 (b)), but leave the calculation of appropriate goals, and the means of achieving them, to state agencies and other entities that receive federal funding.
Our complaint alleges that NJ Transit's program is based on a "disparity study" that is methodologically unsound, that NJ Transit does not have a "compelling interest" in remedying present or past discrimination or its effects, and that NJ Transit's DBE program is not "narrowly tailored," as required by City of Richmond v. Croson. New Jersey Transit's motion to dismiss was denied in most material respects and the case is in pre-trial discovery.
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