April 16, 2003

RALEIGH/ATLANTA: The Southeastern Legal Foundation, along with co-counsel Kevin Parsons from Parks, Chesin, Walbert, P.C. in Charlotte, filed a lawsuit in federal district court in Raleigh challenging the constitutionality of the State of North Carolina's Minority and Women Preference Program for roadway construction projects. The plaintiff, H.B. Rowe Co., Inc., was denied a contract for a road project, despite the fact that it was the low bidder. Instead, the State awarded the contract to a higher bidder because that bidder was able to demonstrate it gave a higher percentage of the contract to minority subcontractors - despite the fact that neither bidder was able to meet the State's unconstitutional quota of ten (10) percent minority participation and five (5) percent female participation. The contract cost state taxpayers an additional $4,000. (H.B. Rowe Co, Inc. v. W. Lyndo Tippett, et al, Civil Action File No. 5:03-cv-(B03)).

"North Carolina's Preference program for public roads is presumptively unconstitutional because it uses race- and gender-quotas to determine the awarding of public contracts," said Phil Kent, SLF President. "Ironically, the winning bidder on the project in question did not meet the ten percent quota, either, which begs the question as to whether sufficient minority-owned companies were even available to meet the government's minority 'preference' goal."

Southeastern Legal Foundation General Counsel Valle Simms Dutcher sent a demand letter to W. Lyndo Tippett, North Carolina's Secretary of Transportation, in March outlining the concerns raised by H.B. Rowe. The State's response rejected the initial offer by SLF that the State could avoid litigation by rescinding race-based state law provisions and regulations governing the award of road construction contracts.

Since 1989's landmark U.S. Supreme Court decision in Croson v. City of Richmond, not one race-based state or local government program for public contracting has withstood court challenge anywhere in the U.S. The U.S. Supreme court has said that racial quotas must be narrowly tailored to remedy past discrimination in fact; but, the court has said that the compelling state interest to remedy past discrimination does not outweigh the duty of the government not to discriminate today based on race. Bottom line - racial and gender quotas are discrimination.

Southeastern Legal Foundation successfully challenged the City of Charlotte's Minority and Women Business Development quota program in 2002. The City, after a month of litigation and public comment, dismantled its program and awarded damages to the plaintiff, United Construction, Inc. (United Construction, Inc. v. City of Charlotte, et al, Civil Action File No. 3:02-cv4-MCK). Southeastern Legal Foundation has been involved in a number of successful high-profile court challenges against local government contracting racial preference programs across the Southeast, including Atlanta and metro Atlanta jurisdictions, Charlotte, Jacksonville, FL, Nashville, TN, and participated as a friend of the court in the 1989 Croson case.

"This is a very well-settled area of the law, and one that affirms our most basic principles as a free nation - equal protection under the law means that governments cannot discriminate against individuals on the basis of race or gender," said Kent. "We intend to enforce this long line of case precedents in what we believe to be the first such challenge to North Carolina's law."

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