Fullilove v. Klutznick - Further Readings

Petitioners
H. Earl Fullilove, et al.
Respondent
Philip M. Klutznick, U.S. Secretary of Commerce
Petitioners' Claim
That a provision in the law requiring that ten percent of all federal funds for local public works projects go to minority-owned businesses violates the U.S. Constitution.
Chief Lawyers for Petitioners
Robert G. Benisch, Robert J. Hickey
Chief Lawyer for Respondent
Drew S. Days III
Justices for the Court
Harry A. Blackmun, William J. Brennan, Jr., Warren E. Burger (writing for theCourt), Thurgood Marshall, Lewis F. Powell, Jr., Byron R. White
Justices Dissenting
William H. Rehnquist, John Paul Stevens, Potter Stewart
Place
Washington, D.C.
Date of Decision
2 July 1980
Decision
Affirmed lower court rulings rejecting the petitioners' claim that minority "set-asides" were unconstitutional.
Significance
The decision in Fullilove v. Klutznick clarified the U.S. Supreme Court's position on the constitutionality of minority set-aside programs. This directly impacted Congress' ability to craft future laws designed to address discrimination in a variety of industries.
The Facts of the Case
Congress had long struggled with the problem of discrimination within the construction industry. Although they made up over ten percent of the population,minority business owners often found themselves shut out of the building trades sector in favor of their white counterparts. In 1977, Congress enacted the Public Works Employment Act to address these grievances. The law provided for a "set-aside" of ten percent of all federal monies for construction to goto minority-owned businesses. This provision was challenged in court by H. Earl Fullilove and a group of non-minority contractors. They claimed that theyhad sustained economic injury due to the enforcement of the 10 percent set-aside provision. In their view, the program violated their rights under the Equal Protection Clause of the Fifth Amendment to the U.S. Constitution, as wellas their right not to be discriminated against under Title VI of the Civil Rights Act of 1964. Named as the respondent in their suit was Philip M. Klutznick, U.S. Secretary of Commerce.
Fullilove and the other contractors first took their case to the U.S. district court. They sought to have the Public Works Employment Act declared unconstitutional and an injunction invoked to prohibit dispersal of more federal money to minority contractors. The district court dismissed these claims, decreeing the set-aside program valid under the Constitution. The case then proceeded to the U.S. Court of Appeals for the Second Circuit. The court of appealsaffirmed the district court's judgment on all counts. Fullilove and his co-petitioners had one last avenue of recourse: the U.S. Supreme Court.
The Supreme Court Decides
On 2 July 1980, the Supreme Court issued its decision. A 6-3 plurality of justices affirmed the rulings of the lower courts and rejected Fullilove's claims. While it differed in its reasoning, the six-justice plurality did agree that the set-aside program did not violate either the Equal Protection Clause or the Civil Rights Act.
In his majority opinion, Chief Justice Burger invoked Congress' authority under the Spending Power provision of Article I of the Constitution to justify the set-aside initiative. "Congress has frequently employed the Spending Powerto further broaden policy objectives by conditioning receipt of federal moneys upon compliance by the recipient with federal statutory and administrativedirectives," Burger wrote. He went on to find justification for the law under the clause allowing Congress to regulate commerce as well.
But the crux of Burger's ruling lay in his conclusion that Congress could useracial and ethnic criteria in crafting federal laws designed to remedy discrimination. "[W]e reject the contention that in the remedial context the Congress must act in a wholly `color-blind' fashion," Burger wrote. He went on toobserve:

It is fundamental that in no organ of government, stateor federal, does there repose a more comprehensive remedial power than in theCongress, expressly charged by the Constitution with competence and authority to enforce equal protection guarantees. Congress not only may induce voluntary action to assure compliance with existing federal statutory or constitutional antidiscrimination provisions, but also, where Congress has authority todeclare certain conduct unlawful, it may, as here, authorize and induce state action to avoid such conduct.

Justices Powell and Marshall, joined by Brennan and Blackmun, wrote separateconcurring opinions in which they stated their own reasons for declaring theset-aside provision constitutional.
The Dissenting Opinion
Dissent in the case came from Justice Stewart, joined in his opinion by Justice Rehnquist. They expressed the view that the set-aside provision was unconstitutional on its face because it elevated one class of citizens above another, in violation of equal protection requirements. Stewart wrote:

The Fourteenth Amendment was adopted to ensure that every person must be treated equally by each State regardless of the color of his skin. The Amendment promised to carry to its necessary conclusion a fundamental principle upon which this Nation had been founded--that the law would honor no preference basedon lineage . . . Today, the Court derails this achievement and places its imprimatur on the creation once again by government of privileges based on birth.

In a separate dissent, Justice John Paul Stevens decried the absence of hearings to determine where the discrimination was taking place within the construction industry, and which minority groups actually deserved government help.
Impact
In the wake of the Fullilove v. Klutznick decision, Congress enacted anumber of new minority set-aside programs. State and local governments followed suit, although a number of those laws were later struck down in court.
Related Cases

• South Dakota v. Dole, 483 U.S. 203 (1987).
  
• Richmond v. J. A. Croson Co., 488 U.S. 469 (1989).
  
• Adarand Constructors, Inc. v. Pena, 512 U.S. 200 (1995).

Public Works Employment Act
In May of 1977, Congress passed the Public Works Employment Act, which allocated an additional $4 billion for federal grants to be made by the Secretary of Commerce through the Economic Development Administration, to state and local governments for public works programs.
The Public Works Employment Act in a section designated "minority business enterprises" or "MBE" stipulated that no money would be granted to state and local governments, unless at least 10 percent of the projects were awarded to minority businesses. Under the act, minority groups were defined as "Negroes,Spanish-speaking, Orientals, Indians, Eskimos, and Aleuts."
To qualify as a minority business enterprise, at least 50 percent of the business had to be minority owned, and for publicly held businesses, at least 51percent of the stock had to be minority owned.
Under the act, MBE's could be awarded contracts even if they were not the lowest bidders, if their bids resulted from attempts to overcome a prior disadvantage or discrimination.
Sources
Constitutional Law, 13th ed. New York: The Foundation Press Inc., 1997.