Columbus & Ohio Set Aside Programs in Legal Turmoil
Kegler Brown Construction Newsletter May 1, 1999
As reported previously, the City of Columbus and State of Ohio construction "set-aside" programs have been declared unconstitutional. However, supporters of such programs received a boost recently in view of an Ohio Supreme Court decision and an opinion by the Sixth Circuit Court of Appeals.
In the Richey Produce case, the Ohio Supreme Court unanimously ruled that the Ohio set-aside program for goods and services (as opposed to construction) was constitutional. In view of that decision, the goods and services set-aside program is being restored in Ohio.
The decision of Judge Graham of the U.S. District Court, finding the Ohio construction set-aside program unconstitutional, remains on appeal to the Sixth Circuit in Cincinnati and it is uncertain at this time whether the State will receive a stay of that decision to re-implement the set-aside program during the pendency of the appeal.
Meanwhile, the Sixth Circuit reversed Judge Graham on a narrow issue with respect to the City of Columbus set-aside plan. The Court of Appeals ruled that while the plan may have been unconstitutional, Judge Graham exceeded his powers in prospectively throwing out the plan before it was utilized.
Most agree that a traditional MBE "set-aside" program will ultimately be hard to sustain legally, particularly if there is no convincing study showing institutional discrimination against minorities by the public authority instituting the set-aside program. Nevertheless, these recent decisions should keep alive the short term debate and uncertainty concerning these programs.