DISTRICT OF NEBRASKA
GROSS SEED COMPANY,
a Nebraska Corporation,
NEBRASKA DEPARTMENT OF ROADS,
and JOHN L. CRAIG, in his capacity
as the Director of the Nebraska
Department of Roads,
UNITED STATES OF AMERICA,
UNITED STATES DEPARTMENT OF
TRANSPORTATION, and FEDERAL
Civil Action No. 4:00-CV-3073BRIEF IN SUPPORT OF FEDERAL DEFENDANTS'
MOTION FOR SUMMARY JUDGMENT
ROSALIND A. KNAPP
PAUL M. GEIER
EDWARD V.A. KUSSY
U.S. Dept. of Transportation
400 Seventh Street, S.W.
Washington, D.C. 20590
BILL LANN LEE
Assistant Attorney General
Civil Rights Division
RICHARD S. UGELOW
JANIE ALLISON SITTON
Employment Litigation Section
Civil Rights Division, Rm. 4028
U.S. Department of Justice
P.O. Box 65968
Washington, D.C. 20035-5968
Dated: December 7, 2000
The United States, the United States Department of Transportation, and the Federal Highway Administration (collectively "Federal Defendants"), through their undersigned attorneys, respectfully submit this brief in support of their motion pursuant to Rule 56 of the Federal Rules of Civil Procedure for entry of summary judgment.I. INTRODUCTION
For more than twenty years and through successive Congressional reauthorizations, the Disadvantaged Business Enterprise ("DBE") program of the U.S. Department of Transportation ("DOT") has provided opportunities for disadvantaged businesses to participate in federally-aided highway and transit programs in order to remedy the continuing effects of discrimination. Plaintiff's second amended complaint challenges the constitutionality of that program, facially and as applied by the Nebraska Department of Roads ("NDOR"), alleging that it impermissibly discriminates on the basis of race and gender in the award of federal-aid highway contracts.
Contrary to Plaintiff's allegations, the DBE provisions of the Transportation Equity Act for the 21st Century ("TEA-21"), Pub. L. 105-178, 112 Stat. 107 (1998), and its implementing regulations, 49 C.F.R. Part 26 (2000), are lawful and constitutional. As the Tenth Circuit Court of Appeals recently held, that program is narrowly tailored to further a compelling governmental interest and thus satisfies strict scrutiny, the most rigorous standard of constitutional review. Adarand Constructors, Inc. v. Slater, 228 F.3d 1147, 1155 (10th Cir. Sept. 25), petition for cert. filed, 69 U.S.L.W. 3346 (U.S. Nov. 7, 2000) ( No. 00-730) ("Adarand VII"). (1) Thus, there is no doubt that the program challenged here passes muster under the strictest level of constitutional review. NDOR, as a recipient of federal-aid highway funds, has adopted a DBE program pursuant to and consistent with the regulations at 49 C.F.R. Part 26, and that program has been approved by DOT. As discussed below, NDOR's DBE program is both lawful and constitutional. Accordingly, even assuming the truth of the individual factual allegations contained in Plaintiff's complaint, Plaintiff's facial challenge to the DBE program must be denied. Likewise, Plaintiff's challenge to the constitutionality of the DBE program as applied to it also fails.II. STATEMENT OF MATERIAL FACTS AS TO WHICH\
NO GENUINE ISSUE EXISTS PURSUANT TO LOCAL RULE 56.1
- On June 9, 1998, the President signed into law TEA-21, the current DOT authorization Act for federal highway and transit programs.
- Section 1101(b) of TEA-21 (2) reauthorized the DBE program that had been authorized in earlier DOT statutory provisions. (3)
- DOT adopted a new regulatory program implementing the DBE provisions of TEA-21, which was published at 64 Fed. Reg. 5096 et seq. (February 2, 1999) and codified at 49 C.F.R. Part 26.
- Under 49 C.F.R. Part 26, recipients of federal aid highway funds such as NDOR are required as a condition of receiving such funds to adopt a DBE program consistent with the requirements of Part 26 and to submit that program to the DOT for its review and approval.
- NDOR is now and has been a recipient of federal-aid highway funds authorized by TEA-21.
- NDOR adopted a DBE Program Plan and submitted the plan to DOT for its review and approval on August 30, 1999. See Index of Evidentiary Materials Submitted by Federal Defendants in Support of Their Motion for Summary Judgment ("Evidence Index"), Ex. D at 1.
- Under the DOT regulations in 49 C.F.R. Part 26, NDOR was required, as part of its DBE Program, to conduct an analysis to determine the level of DBE participation that would be expected absent discrimination and to establish an annual overall goal for DBE participation consistent with that level. 49 C.F.R. § 26.45. NDOR also was required to determine what portion of that goal could be achieved through race- and gender-neutral means. 49 C.F.R. § 26.51.
- The NDOR Program Plan set an overall goal for Fiscal Year 2000 of 11% participation by DBEs and stated its intent to meet approximately 21% of that goal (i.e., a total of 2.33% overall) through race- and gender-neutral methods. Evidence Index, Ex. C at 45 and Ex. D at 13-15.
- Under the DOT DBE regulations, DOT must approve NDOR's projection of the portion of the overall goal that it intends to meet through race- and gender-neutral means. 49 C.F.R. § 26.51(c).
- NDOR received final approval of its DBE Program Plan, including the overall goal and the race- and gender-neutral portion of that goal for Fiscal Year 2000, on March 20, 2000. Evidence Index, Ex. D at 1. NDOR continues to use this plan in operating its DBE Program, with periodic revisions of DBE participation goals where appropriate. See, e.g., Evidence Index, Ex. E.
- On October 30, 2000, based on a disparity study conducted by a consultant, MGT of America, NDOR submitted to DOT a proposed overall goal of 9.95% for fiscal year 2001, with a race- and gender- conscious goal of 4.82% and a race- and gender-neutral goal of 5.13%. See Evidence Index, Ex. E. Review of that proposed goal is ongoing.
Congress enacted TEA-21 against the backdrop of the Supreme Court's opinion in Adarand III, which held for the first time that congressionally enacted race-conscious remedial affirmative action programs are subject to review under the strict scrutiny standard. (4) Before passing TEA-21, Congress reviewed the DBE program as it existed under the earlier DOT authorization acts and extensively debated whether to renew the DBE program. During those debates, Congress considered, and soundly rejected by bipartisan votes, two amendments that would have eliminated the program entirely. Congress concluded instead that there was a continued, compelling need for legislative action to remedy the effects of discrimination in the highway construction and transit industries. In particular, it determined that women, African Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and other minorities continue to face barriers preventing them from competing on an equal footing with other groups for federally funded highway and transit construction projects.
In enacting TEA-21, Congress wished to ensure that those race- and gender-conscious portions of the statute have no greater effect than necessary to create equal opportunity. During its debates concerning TEA-21, Congress was aware that DOT was in the process of revising the regulations implementing DOT's existing DBE program to address precisely this concern, as well as other judicial, legislative, and practical considerations and to more narrowly focus the program's application to small firms owned by individuals who are truly socially and economically disadvantaged. (5) See, e.g., H.R. Rep. No. 105-467, pt. 1, at 174 (1998).
As discussed in greater detail below, the new regulatory program implementing TEA-21's DBE provisions incorporates several mechanisms, including waiver provisions, that specifically address narrow tailoring. See Participation by Disadvantaged Business Enterprises in Department of Transportation Programs, 64 Fed. Reg. 5096, 5102-03 (February 2, 1999) (codified at 49 C.F.R. Part 26). Thus, among other things, the new regulations require recipients of DOT funds to make concerted efforts to rely upon race- and gender-neutral measures in setting and meeting annual goals for DBE participation; allow these recipients to tie annual goals to local conditions; and require them to place greater emphasis on contractors' good faith efforts in achieving individual contract goals. The new DBE program also increases flexibility for recipients and contractors, authorizes the creation of mechanisms to address any DBE overconcentration, sets personal net worth restrictions for owners of DBEs, and permits challenges to the presumptions of social and economic disadvantage for specific individuals. A brief summary of this regulatory program follows.
A. Consideration of Race- and Gender-Neutral Measures.
The newly promulgated DOT regulations require recipients of federal highway funds such as NDOR to conduct detailed analyses to determine the level of DBE participation that would be expected absent discrimination. 49 C.F.R. § 26.45(b). After the recipient makes that determination and establishes an overall annual goal consistent with that level, the recipient then must determine the maximum feasible portion of that goal that can be achieved by race- and gender-neutral means. This becomes the race-neutral portion of the overall goal. 49 C.F.R. § 26.51. Under its new DBE regulations, DOT must approve, as consistent with the regulation, the amount of the overall goal designated as race- and gender-neutral and the amount that will be race- and gender-conscious. Id. § 26.51(c). The regulations also recommend the use of particular race- and gender-neutral practices such as arranging solicitations in ways that facilitate participation by all small businesses, including DBEs; assisting small businesses in overcoming limitations such as the inability to obtain bonding or financing; providing technical assistance and services to small businesses; and engaging in outreach efforts. Id. § 26.51(b). Recipients are permitted under these regulations to use race- and gender-conscious measures such as contract goals only if they cannot meet their overall goals through race- and gender-neutral means. Id. C.F.R. § 26.51(d). The DBE regulations further require recipients to reduce their use of race- and gender-conscious measures during the year if it is determined that they can achieve a greater proportion of their overall goal through race- and gender-neutral means. Finally, each recipient must reevaluate its overall goal annually to ensure that it adequately reflects local market conditions. Id. § 26.51(c)-(g).
B. Goal Setting Procedures.
The particular overall goal each recipient selects for DBE participation is not imposed by the federal government, nor do applicable federal regulations permit the recipient to tie the goal to any uniform national percentage. 49 C.F.R. § 26.41(c). Instead, recipients' annual goals are based solely on local market conditions, and each recipient must select its own method for goal setting. Using a two-step process, each recipient may base the goal on the evidence that it believes best reflects its market conditions. Id. § 26.45.
The first step of the current goal selection process requires that each recipient create a baseline figure for the relative availability of ready, willing and able DBEs in that recipient's market. Id. § 26.45(c). The second step of the process requires adjusting the base figure, if possible, to ensure that the annual overall goal reflects the DBE participation that the recipient would expect absent the effects of discrimination. Id. § 26.45(d). For this second step, the recipient may rely on its own knowledge of its unique contracting markets and the extent of local discrimination. After establishing an overall goal, the recipient must project the portion of the goal it expects to meet through race- and gender-neutral means. Id. § 26.51(c). If the recipient projects that it can meet its overall goal for a given year entirely through race- and gender-neutral means, it must implement its program without setting contract goals during that year. Id. § 26.51.
If a recipient determines that contract goals are necessary to meet a portion of its annual overall goal, it has substantial discretion in deciding how and when they will be used. Under 49 C.F.R. § 26.51, recipients are not required to set a goal for each contract. If a recipient elects to use a contract goal, it is free to set the goal at a level it believes is appropriate for the type and location of the specific work involved. Id. § 26.51(e). No penalty is imposed upon recipients that fail to meet their overall goal. Id. § 26.47.
The DBE regulations also provide that even when a contract goal is established, a prime contractor that demonstrates that it has made good faith efforts to achieve the contract goal may be awarded the contract even if it was unable to meet that goal. Id. § 26.53. Recipients are required to give serious consideration to bidders' documentation of their good faith efforts and are strictly prohibited from interpreting the goals as quotas. Id. §§ 26.43, 26.53. Indeed, the federal DBE regulations require recipients to offer administrative reconsideration to bidders whose good faith efforts showings initially are rejected. Id. § 26.53(d).
C. Availability of Waiver Mechanisms.
Under the current DBE regulations, recipients are permitted to react to unique local circumstances and to apply to the DOT for waivers releasing them from many of the specific requirements of the regulations if they believe that they can achieve equal opportunity for DBEs through other approaches. Id. § 26.15. For example, waiver requests could pertain to subjects such as the use of a race- and gender-conscious measure other than a contract goal, different ways of counting DBE participation in certain industries, or the use of separate overall or contract goals to address demonstrated discrimination against specific categories of socially and economically disadvantaged individuals. Participation by Disadvantaged Business Enterprises in Department of Transportation Programs, 64 Fed. Reg. at 5115. Also, recipients may receive exemptions from any provision of the regulations in the event that exceptional circumstances make compliance impractical. 49 C.F.R. § 26.15.
D. Rules for Determining Eligibility as a DBE.
After the Supreme Court's decision in Adarand III, DOT developed enhanced safeguards to ensure that only firms owned and controlled by individuals who are in fact socially and economically disadvantaged can participate in the DBE program. Recipients must now require that each owner of a firm applying to participate as a DBE submit a signed, notarized statement of personal net worth, with appropriate supporting documentation. 49 C.F.R. § 26.67(a). If the individual's personal net worth exceeds $750,000, the presumption of economic disadvantage is conclusively rebutted and the individual is no longer eligible to participate in the DBE program. Id. § 26.67(b).
Although recipients of DOT highway funds must still rebuttably presume that women and members of the statutorily enumerated groups are socially disadvantaged, each individual applicant for DBE certification must submit a signed, notarized certification that each presumptively disadvantaged owner is, in fact, socially disadvantaged. Id. § 26.67(a). If a recipient has a reasonable basis to believe that an individual owner who is a member of one of the designated groups is not, in fact, socially and/or economically disadvantaged, it may at any time commence a proceeding to determine whether the presumption should be regarded as rebutted with respect to that individual. Id. § 26.67(b)(2). Any person, including the DOT, may challenge whether a DBE owner is entitled to the presumption of social and economic disadvantage. Id. § 26.87. The regulations also permit any business owner, including a white male, to demonstrate social and economic disadvantage on an individual basis and thereby receive DBE certification for his business. Id. § 26.67(d). The criteria for determinations of social disadvantage are set forth in Appendix E to 49 C.F.R. Part 26.
Summary judgment is appropriate if "the evidence, viewed in the light most favorable to the nonmoving party, demonstrates that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law." Jauequi v. Carter Manufacturing Co., Inc., 173 F.3d 1076, 1085 (8th Cir. 1999) (citations and internal quotation marks omitted). In this action, each of Plaintiff's claims are essentially legal in nature and thus, to the extent that any factual dispute exists, it is immaterial to the merits of Plaintiff's allegations. Plaintiff alleges that Congress exceeded its legislative power under the U.S. Constitution in enacting TEA-21's DBE provisions; challenges the constitutionality of these federal provisions under the Fifth Amendment, both facially and as applied; and mounts similar challenges to the race- and gender-conscious provisions of NDOR's DBE plan, both facially and as applied, under the Fourteenth Amendment's Equal Protection Clause. These allegations are addressed in turn below.
A. THE FEDERAL DBE PROGRAM IS FACIALLY CONSTITUTIONAL.
1. TEA-21 and Its Implementing Regulations Must be Given a Presumption of Constitutionality.
Facial challenges to the constitutionality of federal statutes and regulations such as Section 1101(b) of TEA-21 and 49 C.F.R. Part 26 are rarely successful, because the statute and regulations are presumed to be constitutional. (6) Hamilton v. Schriro, 74 F.3d 1545, 1559 (8th Cir. 1996). To demonstrate that a legislative Act is facially unconstitutional, Plaintiff must establish that "no set of circumstances exists under which the Act would be valid." United States v. Salerno, 481 U.S. 739, 745 (1987). As demonstrated below, Plaintiff fails to do so here.
2. TEA-21 and its Implementing Regulations Satisfy the Requirements of Strict Scrutiny.
Strict scrutiny analysis requires that governmental action be "narrowly tailored [to] further compelling governmental interests." Adarand III, 515 U.S. at 227 (1995). In discussing the contours of strict scrutiny review, the Supreme Court has emphasized that such review need not prove fatal to governmental action, recognizing that to apply strict scrutiny in a manner that renders it automatically "fatal in fact" would impermissibly restrict Congress' ability to enact legislation alleviating the effects of discrimination. (7) Id. at 237. As the Adarand III Court acknowledged, "[t]he unhappy persistence of both the practice and the lingering effects of racial discrimination against minority groups in this country is an unfortunate reality, and government is not disqualified from acting in response to it." Id.
On September 25, 2000, the United States Court of Appeals for the Tenth Circuit issued a detailed and comprehensive opinion analyzing the constitutionality of the federal statutory and regulatory program now before this Court. Adarand VII, 228 F.3d at 1155. In its decision, the Tenth Circuit held that the current version of DOT's DBE program satisfies strict scrutiny and therefore is constitutional. The Tenth Circuit correctly concluded that "Congress ha[d] a compelling interest in eradicating the economic roots of racial discrimination in highway transportation programs funded by federal monies," id. at 1176, and that the current version of the challenged DBE program is narrowly tailored, id. at 1187. As discussed below, the Tenth Circuit properly applied the standards of strict scrutiny review established by the Supreme Court.
3. Congress Had a Compelling Interest in Enacting TEA-21's DBE Program.
The legislative history of TEA-21 is both persuasive and overwhelming in showing that Congress had a compelling interest in remedying the effects of discrimination in highway construction contracting and opening federal contracting opportunities to members of previously excluded minority groups. In passing TEA-21, Congress considered extensive evidence that private parties, including prime contractors, unions, and lenders have impeded or prevented formation of qualified minority- and women-owned business enterprises in the United States. See, e.g., Proposed Reforms to Affirmative Action in Federal Procurement, Appendix - "The Compelling Interest for Affirmative Action in Federal Procurement," 61 Fed. Reg. 26,042, 26,050-63 & nn. 53, 62, 82-83 (May 23, 1996); see also Evidence Index, Ex. B for a representative set of citations to laws and documents containing or referring to numerous hearings, studies and analyses regarding discrimination in highway contracting and the need for remedial measures.
In this regard, the Tenth Circuit's opinion in Adarand VII is again persuasive. In examining the first prong of strict scrutiny -- whether the government had a compelling interest in enacting race- and gender-conscious legislation to "remedy the effects of racial discrimination and open up federal contracting opportunities to members of previously excluded minority groups" -- the Adarand VII Court explicitly held that Congress had a strong basis in evidence for adopting the DBE provisions of TEA-21. Adarand VII, 228 F.3d at 1167-76. The Tenth Circuit concluded that, among other things, Congress had before it evidence that throughout the United States "prime contractors in the construction industry often refuse to employ minority subcontractors due to 'old boy' networks . . . from which minority firms have traditionally been excluded," id. at 1168; subcontractors' unions had barred membership by minority firms, thereby competitively disadvantaging these minority firms, id. at 1168-69; and minority and female businesses face widespread discrimination in bonding and lending. Id. at 1170-71. Such evidence "more than satisfies" the requirement that the government show a compelling interest for race-conscious legislation. Id. at 1176.
Furthermore, the Supreme Court has made clear that Congress' power to enact legislation that includes race- and gender-conscious measures is unique, and far broader than that of state and local governments. Accordingly, Congress may determine that a compelling interest exists for such legislation by examining conditions in the nation as a whole, without making individualized findings of fact regarding every separate state or territory in which the program might be implemented. As Justice O'Connor explained in City of Richmond v. J.A. Croson Co., 488 U.S. 469, 489 (1989), to support a compelling interest for race-conscious remedial action, Congress need not make specific, localized assessments of discrimination in the manner required of state and local governments when enacting similar programs.
Justice Powell made it clear [in Fullilove] that other governmental entities might have to show more than Congress before undertaking race-conscious measures: "The degree of specificity required in the findings of discrimination and the breadth of discretion in the choice of remedies may vary with the nature and authority of the governmental body."
Croson, 488 U.S. at 489 (quoting Fullilove, 448 U.S. at 515, n.14 (Powell, J., concurring)). Justice O'Connor also stated: "'The City is not just like the federal government with regard to the findings it must make to justify race-conscious remedial action.'" Id. at 491 (quoting Assoc. Gen. Contractors v. City & County of San Francisco, 813 F.2d 922, 929 (9th Cir. 1987)). As Chief Justice Burger recognized in Fullilove, "Congress . . . may legislate without compiling the kind of 'record' appropriate with respect to judicial or administrative proceedings," although its use of race-based remedial measures must stem from some findings that are adequate to make reasonable its determination that such measures are necessary. 448 U.S. at 478; see also id. at 502 (Powell, J., concurring) ("Congress is not expected to act as though it were duty bound to find facts and make conclusions of law").
In Oregon v. Mitchell, 400 U.S. 112 (1970), the Supreme Court affirmed the power of Congress to pass a nationwide ban on literacy requirements to vote, without making state-by-state findings of "an evil such as racial discrimination which in varying degrees manifests itself in every part of the country." Id. at 284 (Stewart, J., concurring). The Court unanimously refused to require independent findings that circumstances in a particular state met with Congress' assessment of a national problem before the law could be applied to that state. Id. Similarly, in Katzenbach v. Morgan, 384 U.S. 641 (1966), the Court held that it was within Congress' Fourteenth Amendment Enforcement Clause power to prohibit all states from limiting the franchise to English speakers even if the specific state law at issue had not been passed for discriminatory reasons. In both cases, the Supreme Court upheld Congress' authority to enact race-conscious remedial legislation without making specific, localized findings. Neither Adarand III nor Croson can be read as requiring that Congress must make localized findings before enacting a remedial race conscious measure intended to remedy what is clearly a nationwide problem.
In sum, this Court need not determine whether there is a compelling governmental interest in Nebraska, or any other United States jurisdiction, standing alone, for implementing the Congressionally authorized race-conscious remedial measures at issue here. Instead, it should look to the Congress' extensive findings of discrimination in the construction industry nationwide, which is uniquely Congress' area of jurisdiction. The deference owed Congress' legislative power does not, however, prevent this Court from considering whether TEA-21 and its implementing regulations properly take into account possible differences between various regions within the United States. Rather, as discussed in greater detail in Part IV.A.4., such consideration is properly addressed under the narrow-tailoring prong of strict scrutiny.
4. The Federal DBE Program is Narrowly Tailored.
In Adarand III the Supreme Court stated that "[w]hen race-based action is necessary to further a compelling interest, such action is within constitutional constraints if it satisfies the 'narrow tailoring' test this Court has set out in previous cases." 515 U.S. at 237. The Court has suggested consideration of the following factors for determining whether race- and gender-conscious remedies are narrowly tailored: (a) the necessity for relief and efficacy of alternative remedies; (b) the flexibility of the relief, including the availability of waiver provisions; (c) the duration of the planned relief; (d) the relationship of numerical goals to the relevant labor market; and (e) the impact of the relief on third parties. United States v. Paradise, 480 U.S. 149, 171 (1987) (plurality opinion of Brennan, J.). Justice O'Connor's opinion in Adarand III mentions two additional questions that are relevant to whether a federal DBE program is narrowly tailored: whether there was any consideration of the use of race- and gender-neutral means to increase minority and women-owned businesses' participation in government contracting, and whether the program was appropriately limited such that it will last no longer than the discriminatory effects it is designed to eliminate. 515 U.S. at 237-38 (citing Fullilove, 448 U.S. at 496). TEA-21 and its implementing regulations satisfy each of these elements of narrow tailoring. (8) See Adarand VII, 228 F.3d 1147, 1176-78.
a. Consideration of Race- and Gender-Neutral Alternative Remedies.
TEA-21's legislative history demonstrates that Congress considered creating an entirely race- and gender-neutral program through the proposed highway legislation in lieu of the DBE provisions that ultimately were adopted. Id., 228 F.3d 1147, 1178. Some of the most pertinent evidence that race- and gender-neutral programs are not effective to combat discrimination in the construction industry nationwide included the dramatic drop-off in DBE participation in jurisdictions where goal-oriented (race-conscious) state programs were eliminated or curtailed (e.g., the rate fell to zero in Michigan), compared to participation rates in the federal DBE program where race-conscious measures were still in use. See, e.g., 64 Fed. Reg. 5096, 5101 (citing 144 Cong. Rec. S1395, S1404 (statement of Sen. Baucus); id. at S1409-10 (statement of Sen. Kerry); id. at S1420-21 (statement of Sen. Moseley-Braun); id. at S1429-30, S1482 (statement of Sen. Kennedy)).
The congressional debates on TEA-21 must be considered along with the historical knowledge that Congress had available to it when it considered other race- and gender-neutral approaches to similar programs. For example, Congress considered and utilized race- and gender-neutral measures for at least twenty-five years prior to enacting the 1978 amendments to the Small Business Act, including the portions of Section 8(d), 15 U.S.C. 637(d), that were incorporated in the Intermodal Surface Transportation Efficiency Act of 1991 ("ISTEA"), Pub. L. No. 102-240, 105 Stat. 1914 (and its predecessors) and now in TEA-21. In 1970, to help small businesses obtain surety bonds, the Small Business Administration was authorized by the Housing and Urban Development Act, 15 U.S.C. §§ 694(a),(b), to establish the Surety Bond Guarantee Program. By 1975, however, the General Accounting Office reported that the "[Small Business Act's] success in helping disadvantaged firms to become self-sufficient and competitive has been minimal." Library of Congress, Congressional Research Service, Minority Enterprise and Public Policy 53 (1977). The reform of the Small Business Act in 1978 was based on the ineffectiveness of race- and gender-neutral measures in helping minority-owned firms overcome the discriminatory barriers in federal procurement. Thus, Congress enacted Sections 8(a) and 8(d) of the Small Business Act, 15 U.S.C. §§ 637(a),(d), 644(g) (establishing procurement contracting goals for, among others, businesses owned and controlled by socially and economically disadvantaged individuals), only after determining that race-neutral alternatives had been unsuccessful in opening up opportunities for small disadvantaged businesses.
In considering TEA-21, Congress was very much aware that the new DBE regulations would give priority to race- and gender-neutral means to achieve the DBE program's objectives. See n.7, supra. In response to Congressional concerns, the federal DBE regulations implementing TEA-21 explicitly provide for the use of race- and gender-neutral means whenever possible. Adarand VII, 228 F.3d at 1179. Accordingly, under the regulations, recipients must obtain maximum feasible DBE participation through race- and gender-neutral means. 49 C.F.R. § 26.51. If a recipient expects to be able to meet its entire overall goal through race- and gender-neutral means, it may implement its program without any use of contract goals whatsoever. Id. § 26.51(f)(1).
The Tenth Circuit explicitly held that the race-neutral provisions contained in the new DOT regulations rendered the DBE program narrowly tailored, concluding that these regulations "emphasize the continuing need to employ non-race-conscious methods even as the need for race-conscious remedies is recognized." Adarand VII, 228 F.3d at 1179. These conclusions are equally applicable here.
b. Limited Duration.
In Adarand III, one of the issues Justice O'Connor identified for the lower court to consider on remand was whether the challenged racial classification is appropriately limited such that it "will not last longer than the discriminatory effects it is designed to eliminate." 515 U.S. at 238 (citing Fullilove, 448 U.S. at 513 (Powell, J., concurring)). The challenged provisions of TEA-21 are of limited duration, since they will expire automatically in 2004 unless Congress determines that they should be reauthorized. (9) Before deciding to reauthorize the DBE program, Congress will have the opportunity to examine the state of transportation contracting and determine whether the federal DBE program remains necessary to remedy the effects of discrimination.
In addition to Congress' periodic review of the entire DBE program, there are limits within the DBE program itself imposed upon individuals and firms participating in the DBE program. For instance, the current program imposes a personal net worth cap of $750,000 and maintains an overall business size cap. When an individual's personal wealth grows beyond the $750,000 limit, he or she will no longer be eligible to participate in the DBE program. 49 C.F.R. § 26.67. Similarly, when a firm's receipts grow beyond the small business size standards, it no longer may participate in the program. Id. at § 26.65. Such a "periodic reevaluation of disadvantaged status remedies [a DBE program] narrowly tailored because in that way, the program will not last longer than the situation it seeks to correct." Adarand VII, 228 F.3d at 1180, n.23. In addition, to ensure that race- and gender-conscious remedies are not used any longer than absolutely necessary, 49 C.F.R. § 26.51 requires recipients to reduce or eliminate the use of contract goals and rely on race- and gender-neutral measures to the extent that they are effective. Thus, for instance, when a DBE goal can be entirely achieved through race- or gender-neutral means, reliance on race or gender will be eliminated.
Citing the extensive 1998 congressional debates regarding TEA-21, and the limited duration of the legislation and its predecessor statutes, the Tenth Circuit held that the "race conscious programs at issue are 'appropriately limited' to last no longer than 'the discriminatory effects [they are] designed to eliminate.'" Adarand VII, 228 F.3d at 1178 (quoting Adarand III, 515 U.S. at 237). This Court must reach the same conclusion.
c. The Flexibility of Relief Including Waiver Provisions
The regulations set forth in 49 C.F.R. Part 26 incorporate several provisions that ensure the flexibility of the DBE program. See Adarand VII, 228 F.3d 1147, 1180-81. First, the regulations permit a recipient of DOT funds to apply for waivers releasing the recipient from many of the specific requirements of the regulations if it believes that equal opportunity for DBEs can be achieved through other approaches. See 49 C.F.R. § 26.15. For example, the new regulations permit a recipient to seek waivers if the recipient believes that it can operate its DBE program differently from the manner recommended in the regulations. Waiver requests could pertain to such subjects including, but not limited to, the use of a race- and gender-conscious measure other than a contract goal, different ways of counting DBE participation in certain industries, and the use of separate overall or contract goals to address demonstrated discrimination against specific categories of socially and economically disadvantaged individuals. Participation by Disadvantaged Business Enterprises in Department of Transportation Programs, 64 Fed. Reg. at 5102-03 (1999). A recipient acting in good faith can also receive an exemption from any provision in the event that exceptional circumstances make compliance impractical. 49 C.F.R. § 26.15.
Second, the assistance provided to DBEs is not based on an immutable status or characteristic acquired at birth, but on a more extensive, probing inquiry into the business seeking DBE certification. The certification provisions of the new DBE program, and particularly the social and economic disadvantage provisions of 49 C.F.R. § 26.67, ensure that only firms owned and controlled by individuals who are in fact socially and economically disadvantaged can participate in the program. The new regulatory program imposes for the first time an economic standard for the owners of firms seeking DBE status. Under the current program, recipients are required to obtain a signed and notarized statement of personal net worth from all persons who claim to own and control a firm applying for DBE certification and whose ownership and control are relied upon for DBE certification. The personal net worth standard for rebutting the presumption of economic disadvantage has been established at $750,000. Id. §§ 26.65, 26.67(b). Those who exceed this standard are excluded from the program. In addition, the current program reaffirms that any person (as well as the recipient and DOT) may challenge a DBE's entitlement to the presumption of social and economic disadvantage. Id. § 26.87. The current program also reaffirms that people who are not presumed to be socially and economically disadvantaged (e.g., non-minorities) can secure DBE certification. To do so, they must demonstrate to the recipient that they are disadvantaged as individuals. Recipients are required to make case-by-case decisions concerning such applications. As a result, the current DBE program is now more precisely focused on remedying the effects of disadvantage, thereby reducing reliance on membership in certain designated minority groups.
Third, the new DBE regulations emphasize that the DBE program is not a quota or set-aside program, and may not be permitted to operate as one. Explicit language appears in the new regulations stating that recipients are prohibited from using quotas on DOT-assisted contracts. Id. § 26.43. The DOT DBE program does not require any recipient or contractor to have 10 percent (or any other specific percentage) DBE goals or participation. Unlike the former regulations, the new regulations do not require a recipient to take any special administrative steps if its annual overall goal is less than 10 percent. Recipients are required under 49 C.F.R. § 26.45 to set goals consistent with their own local circumstances. There is no direct link between the national 10 percent aspirational goal and the way a recipient operates its program. Moreover, the new regulations explicitly state that a recipient operating in good faith cannot be penalized or found in non-compliance for failure to meet the annual goal it has established. Id. § 26.47.
Finally, the new DBE program also makes it clear that in setting annual overall goals, recipients should aspire to achieve only the amount of DBE participation that would be obtained in a local nondiscriminatory market. See Adarand VII, 228 F.3d at 1193. The program outlines what bidders must do to be responsive and responsible on DOT-assisted contracts having contract goals. Inability to attain a contract goal after exercising good faith efforts is a legitimate means of contract compliance. 49 C.F.R. § 26.53. Recipients are prohibited from denying a contract to a bidder simply because it did not obtain enough DBE participation to meet the goal. Furthermore, recipients are required to consider seriously bidders' documentation of good faith efforts. Id.; see also Participation by Disadvantaged Business Enterprises in Department of Transportation Programs, 64 Fed. Reg. at 5114. To ensure that a contractor's documentation of its good faith efforts is taken seriously, the regulation requires recipients to offer administrative reconsideration to bidders whose good faith efforts are initially rejected for failure to meet a DBE goal. Id.
d. Relationship of Numerical Goals to the Relevant Labor Market.
An analysis of over- or under-inclusiveness generally focuses on "the relationship of the numerical goals to the relevant labor market." See Peightal v. Metropolitan Dade County, 26 F.3d 1545, 1558 (11th Cir. 1994); Ensley Branch, N.A.A.C.P. v. Seibels, 31 F.3d 1548, 1576 (11th Cir. 1994) (court asked whether goals were "reasonably related to the pool of qualified minorities"). The DOT DBE regulations require each recipient to set annual overall goals that reflect market conditions that might have existed had discrimination not impaired the contracting opportunities of minorities and women. 49 C.F.R. § 26.45. The direct effect of this goal-setting process is to narrow the program's focus to DBEs that actually are ready, willing, and able to compete in that recipient's market and to exclude firms outside that market. The Tenth Circuit found that the process by which recipients set goals is rigorous and concluded that the DBE regulations as to goal-setting avoid the danger of arbitrariness identified in Croson, 488 U.S. at 507. Adarand VII, 228 F.3d at 1182. That conclusion is equally applicable here.
Nor will the federal DBE program implemented by NDOR result in the random or unjustified inclusion of minority groups. While on a national basis Congress has determined the need to include all of the designated groups within its list of individuals who are presumptively disadvantaged, as a practical matter, local inclusion of specific groups in the determination of overall goals by NDOR and other recipients of DOT funds is driven entirely by the specific groups' presence in the relevant local market. Thus if a particular group is not represented in a local market's available contracting community, then it will not be included in the accounting of available firms the recipient uses to set its overall goal. 49 C.F.R. § 26.45(b). Moreover, if an individual firm owner is not socially disadvantaged, the presumption of social disadvantage may be rebutted, regardless of that owner's race or gender. Accordingly, the DBE program challenged here is a far cry from the application of an "unyielding racial quota" rejected in Croson, 488 U.S. at 470. Furthermore, as previously discussed, it is entirely appropriate for Congress to enact legislation with a national focus, even if similar legislation would be overbroad if enacted by a single state or municipality.
e. The Minimal Impact on Third Parties.
The current DOT DBE program is designed to impact only minimally the legitimate interests of third parties (for example, non-DBE prime contractors and non-DBE subcontractors) because the current program is aimed at replicating a market in which there are no effects of discrimination. As the Tenth Circuit held, the design of the overall goal provisions ensures that the use of race- and gender-conscious remedies that have the potential to affect the interests of third parties is limited to the extent necessary to counter the effects of discrimination. Adarand VII, 228 F.3d at 1182. A reduction in the use of race- and gender-conscious remedies obviously lessens the potential impact on non-DBEs. Each recipient sets and attains goals based on demonstrable evidence of the relative availability of ready, willing and able DBEs in the areas from which it obtains contractors, but only to the extent that the program is needed to counter the effects of discrimination in the recipient's market. 49 C.F.R. § 26.45. Therefore, goals will not bestow any undue benefits on DBEs, but rather place them on a level playing field with non-DBE firms.
5. Congress Acted Within Its Legislative Authority in Adopting TEA-21.
Plaintiff's contention that Congress unconstitutionally exceeded its legislative authority in adopting TEA-21 is erroneous. See Plaintiff's Second Amended Complaint ¶¶ 66-67. Section 5 of the Fourteenth Amendment grants Congress the unique power to "enforce by appropriate legislation" the equal protection guarantees of the Fourteenth Amendment. That provision, among others, gives Congress the authority to enact remedial measures such as TEA-21. As Chief Justice Burger stated in Fullilove:
It is fundamental that in no organ of government, state or federal, does there repose a more comprehensive remedial power than in the Congress, expressly charged by the Constitution with competence and authority to enforce equal protection guarantees.
448 U.S. at 483. Specifically, Congress can act to remedy discrimination by the federal government. Wygant v. Jackson Bd. of Educ., 476 U.S. 267, 293 (1986) (O'Connor, J., concurring). Congress also has the authority, and indeed the responsibility, under Section 5 of the Fourteenth Amendment to remedy discrimination by states and municipalities. Croson, 488 U.S. at 490. Further, Congress has the power under Section 2 of the Thirteenth Amendment to pass appropriate legislation to prohibit and remedy private discrimination, Fullilove, 448 U.S. at 500 (Powell, J., concurring), and also can act in a remedial fashion to ensure that the United States does not become a passive participant in the discrimination of private parties. Croson, 488 U.S. at 492 ("It is beyond dispute that any public entity, state or federal, has a compelling interest in assuring that public dollars, drawn from the tax contributions of all citizens, do not serve to finance the evil of private prejudice."). Because the DBE provisions of TEA-21 fall within the foregoing remedial powers, the Federal Defendants are entitled to summary judgment on this claim.
B. NDOR'S DBE PROGRAM COMPORTS WITH FEDERAL STANDARDS AND IS FACIALLY CONSTITUTIONAL.
Plaintiff has not alleged, and there is no factual basis upon which to conclude, that NDOR has implemented its DBE program inconsistently with the federal program. As previously indicated, NDOR submitted its Disadvantaged Business Program Plan to DOT for review and approval in August 1999. The review of NDOR's Program Plan consisted of an initial review by the FHWA Nebraska Division Office; a more formal review by a DOT team tasked to review state DBE programs; and a Departmental legal review. See Evidence Index, Ex. C at 4-5. After reviewing NDOR's plan in its entirety for compliance and consistency with the new DBE regulations, DOT granted final approval of NDOR's plan on March 20, 2000. Id. at 1. The NDOR Program Plan set an overall goal for fiscal year 2000 of 11% participation of all DBEs but stated its intent to meet approximately 21% of that goal (i.e., a total of 2.33% overall) through race- and gender-neutral methods. Evidence Index, Ex.C, at 45 and Ex. D at 13-15. The provisions of that program are discussed in Parts II and IV.B. See also Evidence Index, Ex. C and Ex. D.
As detailed above in Part III, supra, 49 C.F.R. § 26.45 requires NDOR to set overall annual goals for DBE participation in federally-funded highway contracting based on local market conditions. The first step of the goal selection process requires creating a baseline figure for the relative availability of ready, willing and able DBEs in each recipient's market. 49 C.F.R. § 26.45(c). The second step of the process permits adjusting the base figure to ensure that the annual overall goal "reflects the DBE participation that the recipient would expect absent the effects of discrimination." 49 C.F.R. § 26.45(d).
In accordance with 49 C.F.R. § 26.45(c)(2), NDOR used the bidders list method as the basis for determining whether local conditions warranted race- and gender-conscious goals. Evidence Index, Ex. C at 43. NDOR did not automatically set an annual overall goal based on its goals established under previous versions of the DBE program. Id. at 43-45. Rather, it compiled data from prime contract bidders on previous year's federal aid contracts; analyzed statistical reports of past years' DBE participation; assessed the availability of ready, willing, and able DBEs that would compete for contracts and subcontracts; reviewed budget data; sought and considered public input; and projected the amount of race- and gender-neutral DBE participation that NDOR anticipated in the upcoming year. See Evidence Index, Ex. C at 43-45 and Ex. D at 13. After considering this data, NDOR determined that an overall annual goal of 11% was appropriate.
NDOR has proposed an overall goal of 9.95% for fiscal year 2001, with a race- and gender-conscious goal of 4.82% and a race- and gender-neutral goal of 5.13%. See Evidence Index, Ex. E. As required by 49 C.F.R. Part 26, that goal has been submitted to DOT for review, which is pending.
Because the NDOR program, including the goal-setting methodology, is authorized by and consistent with the overall scheme and purpose of TEA-21 and 49 C.F.R. Part 26, both of which are constitutional, the NDOR program likewise must pass constitutional muster.
C. THE DBE PROGRAM IS CONSTITUTIONAL AS APPLIED.
While Plaintiff alleges that it cannot compete on an equal footing with DBE-certified firms because of the race and gender of its owner and claims to have lost a single contract due to race- or gender-based preferences under the new federal DBE program, Plaintiff's burden caused by the new DBE program, if any, is minimal. It certainly does not preclude a finding that the DBE program is narrowly tailored. Adarand VII, 228 F.3d at 1183 ("the possibility that innocent parties will share the burden of a remedial program is itself insufficient to warrant the conclusion that the program is not narrowly tailored"). See also Fullilove, 448 U.S. at 484 ("When effectuating a limited and properly tailored remedy to cure the effects of prior discrimination . . . 'a sharing of the burden' by innocent parties is not impermissible."); Rothe Development Corp. v. U.S. Dept. of Defense, 49 F. Supp. 2d 937, 951 (W.D. Tex. 1999), appeal argued, No. 00-1171 (Fed. Cir. Nov. 8, 2000) ("[Plaintiff] has not provided evidence showing that, in this case, the number of contracts awarded with or without the preference exceeded any constitutional limit that might be placed on Congress."). Indeed, the Rothe court concluded that if it were to accept the position that "the mere loss of a contract constitutes a violation of the Equal Protection Clause - no race based remedial program would survive strict scrutiny [and] such a result contravenes the clear language of [Adarand III]." 49 F. Supp. 2d at 953.
The current DBE program only minimally affects the legitimate interests of Plaintiff and other third parties because they are aimed at replicating a market in which there are no effects of discrimination. Moreover, as is the situation here, any injury sustained by Plaintiff, if it were to sustain any injury at all, is minimal.
As set forth above, Congress has a compelling interest in adopting the DBE provisions of TEA-21. Those provisions and DOT's new implementing regulations codified at 49 C.F.R. Part 26 are narrowly tailored to address that compelling interest. Clearly, the federal DBE program at issue in this case satisfies the Supreme Court's strict scrutiny test. Furthermore, the DBE program adopted by NDOR and approved by DOT is consistent with 49 C.F.R. Part 26 and therefore is constitutional. For the foregoing reasons, the Federal Defendants respectfully request that this Court grant their motion for summary judgment.
December 7, 2000
Acting General Counsel
PAUL M. GEIER
Assistant General Counsel
EDWARD V. A. KUSSY
Acting Chief Counsel
Federal Highway Administration
U.S. Department of Transportation
400 Seventh Street, S.W.
Washington, D.C. 20590
BILL LANN LEE
Assistant Attorney General
Civil Rights Division
RICHARD S. UGELOW
JANIE ALLISON SITTON
D.C. Bar No. 453655
Member, New York Bar (no number issued)
U.S. Department of Justice
Civil Rights Division
Employment Litigation Section
P.O. Box 65968
Washington, D.C. 20035-5968
(202) 514-1005 (telefacsimile)
THOMAS J. MONAGHAN, JR.
United States Attorney
District of Nebraska
1620 Dodge Street
Omaha, Nebraska 68102
1. The original Adarand case was filed in 1990. Adarand Constructors, Inc. v. Skinner, 790 F. Supp. 240 (D. Colo. 1992) ("Adarand I"). At issue in that litigation was the DBE program established by the Surface Transportation Assistance Act of 1982, Pub. L. No. 97-424 § 105(f), 96 Stat. 2097 (1983) ("STAA"), the Surface Transportation and Uniform Relocation Assistance Act of 1987, Pub. L. No. 100-17 § 106(c), 101 Stat. 132 ("STURAA"), and 49 C.F.R. Part 23 (1989). The district court held that the program at issue was constitutional under an intermediate scrutiny standard. Adarand I, 790 F. Supp. at 242-45. The Tenth Circuit Court of Appeals affirmed that decision. Adarand Constructors, Inc. v. Peña, 16 F.3d 1537 (10th Cir. 1994) ("Adarand II"). The Supreme Court reversed, however, holding that the correct standard for evaluating such programs is strict scrutiny. Adarand Constructors, Inc. v. Peña, 515 U.S. 200 (1995) ("Adarand III"). The case was remanded to the district court, which found that the federal DBE program did not pass constitutional muster under the strict scrutiny standard. Adarand Constructors, Inc. v. Peña, 965 F. Supp. 1556 (D. Colo. 1997) ("Adarand IV"). On appeal, the Tenth Circuit found the case to be moot because Adarand had received certification as a DBE and was entitled to receive the benefits of the federal program. Adarand Constructors, Inc. v. Slater, 169 F.3d 1292 (10th Cir. 1999) ("Adarand V"). The Supreme Court later determined that the case was not moot and remanded the matter to the Tenth Circuit. Adarand Constructors, Inc. v. Slater, 528 U.S. 216 (2000) ("Adarand VI"). Meanwhile, following Adarand III, the DOT took steps to address criticisms of its extant program while Congress enacted new legislation reauthorizing the DBE program. The result was the promulgation of an entirely new and revised regulatory program. 49 C.F.R. Part 26 (2000). It is the DBE program implemented by 49 C.F.R. Part 26 that was evaluated by the Tenth Circuit in Adarand VII, supra. There, as explained in this brief, the Tenth Circuit considered every aspect of the federal DBE program and found it to pass constitutional muster.
2. Section 1101(b)(1) of TEA-21 provides, in part, as follows: "Except to the extent the Secretary determines otherwise, not less than 10 percent of the amounts authorized to be appropriated under [the Act] shall be expended with small business concerns owned and controlled by socially and economically disadvantaged individuals." Section 1101(b) also states that women and members of minority groups identified in 8(d) of the Small Business Act are presumed to be socially and economically disadvantaged for purposes of the DBE program. See Index of Evidentiary Materials Submitted by Federal Defendants in Support of Their Motion for Summary Judgment ("Evidence Index"), Ex. A, for the full text of Section 1101(b).
3. See, e.g., § 1003(b) of the Intermodal Surface Transportation Efficiency Act of 1991 ("ISTEA"), Pub. L. No. 102-240, 105 Stat. 1914; § 106(c) of the STURAA, Pub. L. No. 100-17, 101 Stat. 132.
4. While Adarand III, 515 U.S. at 235, makes clear that the race-conscious portions of the challenged DBE programs are subject to strict scrutiny, the Supreme Court has held that, in defending gender-based classifications, the government defendant must show "at least that the [challenged] classification serves important governmental objectives and that the discriminatory means employed are substantially related to the achievement of those objectives." United States v. Virginia, 518 U.S. 515, 524 (1996) (citations and internal quotation marks omitted). Because the race- and gender-conscious provisions of TEA 21, its implementing regulations, and NDOR's DBE program meet the more rigorous standard of strict scrutiny, it is unnecessary for this Court to analyze separately the gender-conscious portions of the program under the standard for intermediate scrutiny set forth in United States v. Virginia, supra. It is clear, however, that the gender-conscious provisions of the challenged DBE program easily satisfy that standard.
5. The regulatory program in existence at the time of the Congressional debates and referenced in the text of Adarand III was codified at 49 C.F.R. Part 23 (1994).
6. The basic distinction between a "facial" and an "as applied" constitutional challenge is that an as applied challenge represents a plaintiff's protest against how a statute was applied in the particular context in which the plaintiff acted or proposed to act, while a facial challenge represents a plaintiff's contention that a statute is incapable of constitutional application in any context. See, e.g., Sanjour v. Environmental Protection Agency, 56 F.3d 85, 92 n.10 (D.C. Cir. 1995) (en banc) (noting that the distinction between facial and as applied challenges is that the former requests "that the court go beyond the facts before it" to consider whether the law is unconstitutional while the latter asks that the "court declare the challenged statute or regulation unconstitutional on the facts of the particular case").
7. As the Tenth Circuit has recognized, the proper focus for this Court's analysis is TEA-21 itself, together with the regulations set forth at 49 C.F.R. Part 26. Adarand VII , 228 F.3d at 1157-61. As previously noted, Congress was aware during its debates that DOT was developing regulations to more narrowly tailor the DBE program. See, e.g., Report of the Committee on Transportation and Infrastructure, H.R. Rep. No. 105-467, pt. 1, at 174 (1998) ("the Committee understands that the Department of Transportation is reviewing the DBE program in light of recent court rulings and has proposed new regulations to ensure the program withstands constitutional muster"); id. at 504-05 ("In addition, DOT has initiated rulemaking to address concerns raised by the [Adarand IV] Court. DOT's rulemaking is designed to ensure that the DBE program remains narrowly tailored by fine tuning the annual goal setting process, expanding local flexibility, and emphasizing race neutral measures and good faith effort waivers of contract goals"); Conference Report for H.R. 2400, Transportation Equity Act for the 21st Century, H.R. Conf. Rep. No. 105-550, at 409 (1998) ("The Department of Transportation is reviewing the DBE program in light of recent court rulings and has proposed new regulations to ensure that the program withstands constitutional muster.").
8. While the current DOT DBE program fulfills each of the narrow tailoring factors set forth in Paradise and Adarand III, narrow tailoring does not require that government action satisfy all such factors in order to pass constitutional muster. See Paradise, 480 U.S. at 171 (indicating that courts should weigh the narrow-tailoring factors).
9. TEA-21 also provides for an interim review of the impact of the DBE program. Section 1101(b)(6) specifies that within three years of the statute's enactment, "the Comptroller General of the United States shall conduct a review of, and publish and report to Congress findings and conclusions on, the impact throughout the United States of administering the" DBE provisions. Section 1101(b). See Evidence Index, Ex. A.