216
OCTOBER TERM, 1999
Syllabus
on petition for writ of certiorari to the united states court of appeals for the tenth circuit
No. 99-295. Decided January 12, 2000
The Department of Transportation (DOT) favors contracting with companies that employ so-called "disadvantaged business enterprises" that are certified by, inter alios, a state highway agency as owned and controlled by socially and economically disadvantaged individuals. Federal regulations require that the certifying entity presume members of specified minority groups to be socially disadvantaged and allow others to be certified if they can demonstrate social disadvantage. Both third parties and DOT may challenge such findings. Petitioner, whose principal is a white man, submitted the low bid on a portion of a federal highway project, but the prime contractor awarded the subcontract to a company certified by the Colorado Department of Transportation (CDOT) as a disadvantaged enterprise. Petitioner sued various federal officials, alleging that a Subcontractor Compensation Clause required by the Federal Government—which clause rewards prime contractors for sub-contracting with enterprises certified as disadvantaged by a State's highway or transportation department—and in particular the race-based presumption that forms its foundation, violated petitioner's Fifth Amendment equal protection right. Ultimately, under Adarand Constructors, Inc. v. Peña, 515 U. S. 200, the District Court held that the clause and the presumption failed strict scrutiny because they were not narrowly tailored. Adarand Constructors, Inc. v. Peña, 965 F. Supp. 1556 (Adarand II). While respondents' appeal was pending, petitioner filed a second suit in District Court challenging (on the same grounds) the State's use of the federal certification guidelines. Shortly thereafter the State altered its certification program, substituting for the social disadvantage presumption a requirement that all applicants certify on their own account that each of the firm's minority owners has experienced social disadvantage based on the effects of racial, ethnic, or gender discrimination. Taking judicial notice of its holding in Adarand II that the Federal Government had discriminated against petitioner's owner by applying unconstitutional rules and regulations, the District Court reasoned that petitioner likely was eligible for disadvantaged business status under Colorado's system. Petitioner then requested and received that status from CDOT. Upon learning that CDOT had given petitioner disadvantaged business status, the Tenth Circuit held
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