Is a city's minority or disadvantaged small-business contracting program legal after the Supreme Court's affirmative-action ruling?

Official title

Opinion on the legality of the Small, Disadvantaged, Minority Business Program currently implemented by the City of North Charleston.

Requester

Requested by The Honorable Marvin R. Pendarvis, Member, South Carolina House of Representatives.

Plain-English summary

A state representative asked whether the City of North Charleston's Small, Disadvantaged, Minority Business Program is lawful after the U.S. Supreme Court's 2023 decision ending race-conscious college admissions (Students for Fair Admissions v. Harvard). The program aims to steer city contracts toward small local businesses making under $500,000 a year; it accepts any small business under that threshold, but its stated intent was to increase diversity in procurement.

The Attorney General's office gave a careful, two-part answer. First, it stressed it cannot decide the program's constitutionality in an advisory opinion, because that turns on facts only a court can find. Whether a minority business program survives is a fact-intensive question.

Second, it laid out the governing law and a frank risk assessment: based on the limited information presented, the program is "fraught with risk" and "likely to be challenged on Equal Protection grounds." Any racial classification, even a "benign" one meant to help minorities, gets strict scrutiny under Richmond v. J.A. Croson Co. and Adarand Constructors v. Pena, and the 2023 Students for Fair Admissions decision reaffirmed that race-based government action is permitted only in rare cases. To survive, a race-conscious program needs strong, specific evidence of identified past discrimination and must be narrowly tailored.

The office noted that even a facially race-neutral criterion (the $500,000 threshold) can be treated as race-conscious if it is applied with, or motivated by, a racially discriminatory purpose. The program's "minority" label, and public statements that its intent was to increase diversity, suggested to the office that it is race-conscious in aim. The office pointed to the Fourth Circuit's decision in H.B. Rowe, Inc. v. Tippett as a rare example of such a program being upheld, and only because the state built an extensive evidentiary record, set a sunset date, and required a new disparity study every five years. Its bottom line: only a court can decide, but the program is currently at considerable constitutional risk absent a strong justification.

What this means for you

North Charleston and other local governments: The opinion's view is that a minority or disadvantaged business program that operates on race-consciousness must satisfy strict scrutiny, meaning strong evidence of specific past discrimination and narrow tailoring (a sunset date and periodic disparity studies, as in Tippett). It treats the program as currently at considerable constitutional risk, while emphasizing only a court can rule on it.

Small businesses in the program: The opinion does not invalidate the program or change anyone's eligibility; it describes legal exposure. It notes the $500,000 income threshold is race-neutral on its face, but that a court would examine whether it operates neutrally or bears more heavily on one race.

Officials designing procurement programs: The opinion repeats the office's prior position that nothing prevents helping small businesses grow on a race- and gender-neutral basis; what is required, except in the rarest cases, is that the government's action be colorblind.

Common questions

Did the AG say North Charleston's minority business program is illegal?
No. The opinion is explicit that the office cannot adjudicate facts or decide constitutionality in an advisory opinion; only a court can. It concluded the program is at considerable constitutional risk and likely to be challenged, not that it is unlawful.

Why does a contracting program get strict scrutiny?
Because under Croson and Adarand, all racial classifications by state and local governments, even those meant to benefit minority groups, are reviewed under strict scrutiny. The program survives only if it serves a compelling interest (like remedying specific identified discrimination) and is narrowly tailored.

The program takes any small business under $500,000, so isn't it race-neutral?
The opinion says the threshold is race-neutral on its face, but warns that a facially neutral program can still be treated as race-conscious if it is applied with or motivated by a discriminatory purpose. The "minority" label and stated diversity goal led the office to view the program as likely race-conscious in aim.

Has any similar program ever been upheld?
Yes, rarely. The opinion highlights H.B. Rowe, Inc. v. Tippett, where the Fourth Circuit upheld North Carolina's small-business program because the state produced a strong evidentiary record of discrimination, the program had a sunset date, and it required a disparity study every five years. The office urged North Charleston to study that decision.

Background and statutory framework

The analysis is governed by the Equal Protection Clause of the Fourteenth Amendment. Richmond v. J.A. Croson Co., 488 U.S. 469 (1989), struck down a city set-aside for minority contractors for lack of specific evidence of past discrimination, holding that strict scrutiny applies to racial classifications used for remedial purposes and that generalized assertions of industry-wide discrimination are not enough. Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995), confirmed that all race-based government action, benign or not, is subject to strict scrutiny, and that facially race-neutral measures can still trigger it where they carry a race-based presumption or discriminatory purpose.

The most recent decision, Students For Fair Admissions, Inc. v. President and Fellows of Harvard College, 143 S.Ct. 2141 (2023), reaffirmed strict scrutiny and identified only narrow compelling interests for race-based action, citing Croson with approval. The office applied these to the contracting context and pointed to H.B. Rowe, Inc. v. Tippett, 615 F.3d 233 (4th Cir. 2010), where a similar small-business program was upheld only on an extensive evidentiary record with a sunset provision and recurring disparity studies. It also drew on Grutter v. Bollinger, 539 U.S. 306 (2003), and on the principle that a practice "fair in form" may be "discriminatory in operation" (Griggs v. Duke Power Co., 401 U.S. 424 (1971); Washington v. Davis, 426 U.S. 229 (1976)). Throughout, the office reiterated that it cannot find facts and that the program's constitutionality is for a court.

Citations

Constitutional provision: U.S. Const. amend. XIV (Equal Protection Clause).

Cases: Richmond v. J.A. Croson Co., 488 U.S. 469 (1989); Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995); Students For Fair Admissions, Inc. v. President and Fellows of Harvard College, 143 S.Ct. 2141 (2023); H.B. Rowe, Inc. v. Tippett, 615 F.3d 233 (4th Cir. 2010); Grutter v. Bollinger, 539 U.S. 306 (2003); Griggs v. Duke Power Co., 401 U.S. 424 (1971); Washington v. Davis, 426 U.S. 229 (1976).

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/opinion-on-the-legality-of-the-small-disadvantaged-minority-business-program-currently-implemented-by-the-city-of-north-charleston/
• Original PDF: https://www.scag.gov/media/qw1pemnl/03392327.pdf

Original opinion text

Alan Wilson
ATTORNEY GENERAL

September 1 8, 2023

The Honorable Marvin R. Pendarvis, Member
South Carolina House of Representatives
328-A Blatt Building

Columbia, SC 29201

Dear Representative Pendarvis:
You seek an opinion with respect to “the legality of the Small, Disadvantaged, Minority
Business program currently implemented by the City of North Charleston.”
By way of
background, you state the following:
[i]n light of the recent decision by the U.S. Supreme Court to end race-conscious
college admissions, it has become crucial for us to assess the implications of this
ruling on other race-based programs. One such program is North Charleston's Small,
Disadvantaged, Minority Business Program, which aims to encourage more contracts

between the city and local businesses making under $500,000 annually. The program
accepts any small business below the threshold, regardless of whether it is minorityowned, although its initial intent was to increase diversity in the procurement
process.

The subsequent letter signed by you and 12 other state attorneys general, reminding
employers that race cannot be a factor in hiring employees or contractors, adds
further weight to this matter. We believe that it is essential to clarify whether North

Charleston's business program aligns with the principles outlined in your letter and
remains in compliance with state and federal laws.
In light of the aforementioned considerations, I respectfully request an official

opinion from your office on the following matters:
1.

2.

Whether the Small, Disadvantaged, Minority Business Program as
currently implemented by the city of North Charleston is lawful in
accordance with the recent Supreme Court decision to end race
conscious admissions.
Whether the program's use of the term “minority” in its name raises any
legal concerns or implications, particularly in relation to the principles
outlined in the aforementioned letter.

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The Honorable Marvin R. Pendarvis
Page 2

September 18, 2023

3.

Whether any specific modifications or adjustments are necessary for the
program to comply with state and federal laws while still achieving its
intended goal of encouraging local business contracts with the city.

Law/Analysis

To summarize, we believe that, based upon the limited information presented, the
minority business program is fraught with risk. While only a court may determine the program’s
constitutionality, North Charleston’s disadvantaged business program is likely to be challenged
on Equal Protection grounds. While arguments can be made in support, North Charleston would
face an uphill battle in court in upholding the program.
We begin by noting that this Office is unable in an advisory opinion to determine facts.
As we have stated many times over, “[o]f course, this Office cannot resolve factual questions in
an opinion. . . .”

Op. S.C. Att’v Gen., 2005 WL 774149, (March 10, 2005).

And, in Op. S.C.

Att’v Gen.. 1989 WL 406130 (April 3, 1989), we recognized that “[b]ecause this Office does not
have the authority of a court or other fact-finding body, we are not able, in a legal opinion, to
adjudicate or investigate factual questions.”
Further, we have noted that the constitutionality of a particular minority business
program necessarily involves a fact-intensive analysis. In Op. S.C, Att’v Gen.. 1989 WL 508560

(June 15, 1989), we stated:
[a] recent decision by the United States Supreme Court clearly illustrates the
importance of fact-finding in the context of whether a particular set-aside program is

in conflict with the Court’s guidelines set forth in Croson [Richmond v. J.A. Croson
Co.. 488 U.S. 469 (1989)].

In H.K. Porter Co., Inc, v. Metropolitan Dade County.
103 L.Ed.2d 804 (1989), the Court granted a petition for certiorari, vacated the

judgment and remanded for further consideration by the District Court in light of
Croson. In short, the Court felt it necessary to send the case back to the trial court
because factual determinations were essential to determine whether the set aside in
question violated the Constitution. This case emphasizes the overriding importance
of fact-finding in this area.

Therefore, based upon the foregoing - requiring a determination of facts - we are unable to fully
resolve

your

question

regarding

the

constitutionality

of

North

Charleston’s

Small,

Disadvantaged, Minority Business Program. Only a court may do that. However, we can
provide you with the applicable law in this area, referencing our prior opinions, as well as
pertinent case law. And, we may emphasize - and do herein - that only in rare circumstances is
a minority business program, which aims to increase minority participation, upheld under current
Supreme Court decisions. While the North Charleston program appears to be racially neutral on
its face, a court could, depending upon the facts, deem it racially discriminatory in fact, as
discussed below. If the program is based upon race-consciousness, the City would be required to

present specific, strong evidence to justify it.

Moreover, the program would have to be

The Honorable Marvin R. Pendarvis
Page 3
September 1 8, 2023

“narrowly tailored” to meet a compelling interest. See H.B, Rowe, Inc, v. J.A. Tippett, 615 F.3d

233, 241 (4th Cir. 2010).
We have issued several previous opinions regarding the applicable law related to
minority business programs, all centered upon the J.A. Croson decision, rendered in 1989. One
in particular, Op, S.C. Att’y Gen., 1989 WL 406118 (March 9, 1989), discussed the Croson case
at considerable length. There, it was stated:
Filn City of Richmond v. J.A, Croson Co., 488 U.S. 469, 109 S.Ct. 706 (1989),
decided on January 23, 1989, the United States Supreme Court “confront[ed] once
again the tension between the Fourteenth Amendment’s guarantee of equal treatment

to all citizens, and the use of race-based measures to ameliorate the effects of past
discrimination on the opportunities enjoyed by members of minority groups in our
society.” Id. at
109 S.Ct. at 712. In J.A. Croson Co., the Court struck down an
ordinance requiring city construction contractors to set aside thirty (30%) percent of
the subcontracts for minority business enterprises because insufficient evidence was

offered in support of past racial discrimination in the city's construction industry to
justify the ordinance as a race-based remedy. Id. Relying upon Wygant v. Jackson
Bd. of Educ., 476 U.S. 267 ( 1 986), [ ] the Chief Justice and Justices O'Connor, White,
Kennedy, and Scalia agreed that a strict scrutiny test under the equal protection
clause of the fourteenth amendment must be applied to governmental programs that
impose racial classifications for remedial purposes. J.A. Croson Co., supra at
,

109 S.Ct. at 721 & 735-9 (majority opinion written by Justice O'Connor and
concurring opinion of Justice Scalia). The majority held, in J.A. Croson Co., that
Richmond failed to establish evidence of past discrimination in the local construction
industry sufficient to meet this strict scrutiny test. Id. at
, 109 S.Ct. at 723-4.
Analyzing a recitation that the ordinance had a remedial purpose, the majority
determined that such a recitation is entitled to little or no weight and stated: “Racial
classifications are suspect, and that means that simple legislative assurances of good
intention cannot suffice.” Id. at
, 109 S.Ct. at 724. The majority in J.A. Croson
Co., supra at
, 109 S.Ct. at 724-7, also concluded that neither a generalized,
conclusional assertion that there was racial discrimination in the construction
industry in the area, the state, and the nation, nor a finding by Congress in connection
with the set-aside approved in Fullilove v. Klutznick, 448 U.S. 448 ( 1980), that there
had been nationwide discrimination in the construction industry was deemed
sufficient to establish a need for imposing a race-based remedy in Richmond,
Virginia. The majority determined that Richmond's reliance on the fact that only
0.67 percent of city contracts were awarded to minorities in a city with a fifty (50%)
percent minority population was misplaced. “Without any information on minority
participation in subcontracting, it is quite simply impossible to evaluate overall
minority representation in the city's construction expenditures.” J.A. Croson Co.,
supra at
, 109 S.Ct. at 725. In addition, the majority found that the Richmond
Plan was not narrowly tailored to withstand strict scrutiny, at least in part because
Richmond apparently did not consider the use of race-neutral means to increase
minority business participation in city contracting. Id. at
, 109 S.Ct. at 728-9.

The Honorable Marvin R. Pendarvis
Page 4

September 1 8, 2023

In summary, the majority in Croson stated:
Nothing we say today precludes a state or local entity from taking action to rectify
the effects of identified discrimination within its jurisdiction. If the city of Richmond
had evidence before it that nonminority contractors were systematically excluding
minority businesses from subcontracting opportunities it could take action to end the
discriminatory exclusion. Where there is a significant statistical disparity between
the number of qualified minority contractors willing and able to perform a particular
service and the number of such contractors actually engaged by the locality or the
locality’s prime contractors, an inference of discriminatory exclusion could arise.
[Citations omitted.] Under such circumstances, the city could act to dismantle the
closed business system by taking appropriate measures against those who
discriminate on the basis of race or other illegitimate criteria. [Citation omitted.] In
the extreme case, some form of narrowly tailored racial preference might be
necessary to break down patterns of deliberate exclusion.

Nor is local government powerless to deal with individual instances of racially
motivated refusals to employ minority contractors.
Where such discrimination

occurs, a city would be justified in penalizing the discriminator and providing
appropriate relief to the victim of such discrimination. [Citation omitted.] Moreover,
evidence of a pattern of individual discriminatory acts can, if supported by
appropriate statistical proof, lend support to a local government's determination that
broader remedial relief is justified. [Citation omitted.].

Proper findings in this regard are necessary to define both the scope of the injury and
the extent of the remedy necessary to cure its effects. Such findings also serve to
assure all citizens that the deviation from the norm of equal treatment of all racial and

ethnic groups is a temporary matter, a measure taken in the service of the goal of
equality itself. Absent such findings, there is a danger that a racial classification is
merely the product of unthinking stereotypes or a form of racial politics. . . .

(quoting Croson at 488 U.S. 509-10). Thus, in order to justify a race-conscious remedy, there
must be powerful evidence that it is necessary to address a specific instance or pattern of
discrimination.
Other relevant opinions of this Office rely heavily upon Croson as well. See Op, S.C.
Atfy Gen., 1997 WL 208039 (March 27, 1997) [“The courts subject this form of invidious
reverse discrimination to the strictest scrutiny and the closest review.” (citing Croson and
Adarand Constructors, Inc, v. Pena, 155 S.Ct. 2097 (1995), as well as other authorities); Op. S.C.
Atfy Gen., 1997 WL 323797 (May 29, 1997) (referencing Croson); Op. S.C. Atfy Gen., 1997
WL 255953 (April 7, 1997) (“[n]umerous courts have followed Croson and Adarand striking
down all kinds of affirmative action ‘set aside’ programs” (citing numerous authorities).]. In

The Honorable Marvin R. Pendarvis
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September 1 8, 2023

other words, Croson and Adarand have long been the law with respect to the general ban on
affirmative action in minority business programs.
In Adarand, the Supreme Court held that all racial classifications must be analyzed by the

reviewing court under the standard of strict scrutiny.

Citing Croson, the Court “finally agreed

that the Fourteenth Amendment requires strict scrutiny on all race-based action by state and local
governments.”

515 U.S. at 222.

As the Court made clear, there is no lower standard for so-

called “benign” forms of racial discrimination.

Thus, any racial classification - whether

invidious or benign - is “constitutional only if . . . [there are] narrowly tailored measures that
further compelling governmental interests.” Id, at 227.

It was argued to the Supreme Court in Adarand, that the program in question was “‘based
on disadvantage, not on race,’ and thus should be subject to a lesser standard. The Court rejected

that argument, agreeing that while “the statutes and regulations involved in this case are race
neutral,” the program allowed for a “race-based rebuttable presumption in the certification
determinations. . . .”
race

neutral,

Moreover, the Court acknowledged that certain laws “although facially

result in racially disproportionate impact and are motivated by a racially

discriminatory purpose.” 515 U.S. at 212-13 (citing cases). Thus, all racial classifications must

be subject to strict scrutiny.

Id. at 226.

See also Sherbrooke Turf, Inc, v. Minn. Dep’t, of

Transp., 345 F.3d 964, 969 (8th Cir. 2003) [“Though the DBE program confers benefits on
‘socially and economically disadvantaged individuals,’ a term that is facially race-neutral, the
government concedes that the program is subject to strict judicial scrutiny.”].

Here, it appears

that while the terms of the North Charleston program appear to be race-neutral [income of less
than $500,000 annually], the aim of the program and those who created it is one of race
consciousness.
Likewise, Croson and Adarand have been relied upon in Fourth Circuit decisions.

In

H.B. Rowe, Inc, v. Tippett, supra, for example, the Fourth Circuit recognized that because racial

classifications ‘are simply too pernicious to permit,” courts “subject all racial preferences - even
those intended to benefit minority groups - to strict judicial scrutiny.” According to the Court,

“to justify a race-conscious measure, a state must ‘identify that discrimination, public or private,
with some specificity,’ and must have a ‘strong basis in evidence for its conclusion that remedial
action [is] necessary. . . .’” Id.

In Tippett, the Fourth Circuit upheld the North Carolina Small Business Enterprise
Program which “favors small business for highway construction procurement contracts of

$500,000 or less.” A suit was brought by the low bidder - a white male - who challenged the
award in favor of a slightly higher bid. The state denied the lowest bidder the contract because
of his failure to “demonstrate good faith efforts to attain the pre-designed levels of participation
on the project.”

615 F.3d at 237-39.

The case involved “extensive discovery and a four-day

bench trial at which numerous witnesses testified and over one thousand pages of exhibits were
admitted into evidence. ...” Id. at 240.

The Honorable Marvin R. Pendarvis
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September 18, 2023

According to the Fourth Circuit, this extensive record proved that “the State has met its
burden of producing a ‘strong basis in evidence’ for its conclusion that minority participation
goals were necessary to remedy discrimination against African American and Native American
(but not Asian American or Hispanic American) subcontractors. Particularly compelling is the
State’s evidence that prime contractors grossly underutilized African American and Native
American subcontractors during the study period and that these subcontractors are disadvantaged
by a racially exclusive ‘old boys network.’” 615 F.3d at 251. Thus, the State of North Carolina
had to produce strong evidence to uphold the program.
Further, the Tippett Court held that the program was “narrowly tailored” because it had a
specific expiration date and required a new disparity study every five years.
provision was particularly persuasive in the Court’s mind.

The “sunset”

Such ensured that the Program was

“carefully designed to endure [ ] only until the discriminatory impact has been eliminated.” Id.
Accordingly, in the view of the Fourth Circuit, “... the
statutory scheme is narrowly to achieve the State’s compelling interest in remedying

at 253 (internal quotations omitted).

discrimination in public sector contractors against African American and Native American
subcontractors.” Id. at 254. The Tippett case is particularly significant to your question in our
view.

Further, in Associated Utility Contractors of Md., Inc, v. Mayor and City Council of
Baltimore, 83 F.Supp.2d 613 (D. Md. 2000), an affirmative action plan which mandated across-

the-board subcontractor set asides of 20% and 3% covering minority business enterprises and
women’s business enterprises, was struck down as violative of the Equal Protection Clause.
There, the Court explained in part its ruling as follows:
[A] state entity must ensure that, before it embarks on an affirmative-action program,
it has convincing evidence that remedial action is warranted. That is, it must have
sufficient evidence to justify the conclusion that there has been prior discrimination. .
. . I am compelled [, therefore] to analyze the evidence before the City when it
adopted the 1999 set-aside goals specifying the 20% MBE (minority business
enterprise] participation in city construction subcontracts. For analogous reasons, the
three percent WBE women’s business enterprise] preference must also be justified by
preenactment evidence.

83 F.Supp.2d at 621 . The District Court, referencing Croson and Adarand, explained as follows:
[t]he Fourth Circuit has interpreted Croson to impose a “two step analysis for
evaluating a race-conscious remedy.” [Maryland Troopers Ass’n, v. Evans, 993 F.2d
1072, 1076]. . . . First, the [government] must have a ‘strong basis of evidence for its
conclusion that remedial action [is] necessary. . . .’ ‘Absent searching judicial inquiry

into the justification for such race-based measures, there is simply no way of
determining what classifications are . . . in fact motivated by illegitimate notions of
racial inferiority or simple racial politics.’” (citing Croson).

The Honorable Marvin R. Pendarvis
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September 1 8, 2023

The second step in the Croson analysis is to determine whether the government has
adopted programs that ‘narrowly tailor’ any preferences based on race to meet their
remedial goal.” Id. The Fourth Circuit summarized Supreme Court jurisprudence on
“narrow tailoring” as follows:
The preferences may remain in effect only so long as necessary to remedy
the discrimination of which they are aimed; they may not take on a life of
their own.

The numerical goals must be waivable if qualified minority
applicants are scarce, and such goals must bear a reasonable relation to
minority percentages in the relevant qualified labor pool, not in the
population as a whole. Finally, the preferences may not supplant race-neutral
alternatives for remedying the same discrimination.

Id. at 620 (quoting Md. Troopers, 993 F.2d at 1076-77.
We turn now to the most recent affirmative action decision by the United States Supreme
Court.

That decision, Students For Fair Admissions, Inc, v. President and Fellows of Harvard

College,
education.

143

S.Ct. 2141

(2023), dealt with admissions criteria for institutions of higher
In both cases involved in Students, a nonprofit organization brought an action for

declaratory and injunctive relief, alleging that admissions policies violated the Equal Protection
Clause by virtue of a race-based admissions program. In summary, the Supreme Court’s ruling,
in striking down the affirmative action programs, read as follows:
[e]Iiminating racial discrimination means eliminating all of it.
And the Equal
Protection Clause, we have accordingly held, applies “without regard to any
differences of race, of color, or of nationality” - it is “universal in [its] application.
Yick Wo [v. Hopkins], 118 U.S. at 369, 6 S.Ct. 1064. For ‘[t]he guarantee of equal
protection cannot mean one thing when applied to one individual and something else
when applied to a person of another color.” Regents of Univ, of Cal, v, Bakke. 438
U.S. 265, 289-290, 98 S.Ct. 2733, 57 L.Ed.2d 750 (1978) (opinion of Powell, J.). If
both are not accorded the same protection, then it is not equal.” Id. at 290, 98 S.Ct.
2733.

Any exception to the Constitution’s demand for equal protection must survive a
daunting two-step examination known in our cases as “strict scrutiny.” Adarand
Constructors, Inc, v. Pena, 515 U.S. 200, 227, 115 S.Ct. 2097, 132 L.Ed.2d 158

(1995). Under that standard we ask, first, whether the racial classification is used to
“further compelling governmental interests.”

Grutter v. Bollinger, 539 U.S. 306,
326, 123 S.Ct. 2325, 156 L.Ed.2d 304 (2003). Second, if so, we ask whether the
government’s use of race is “narrowly tailored” - meaning “necessary” - to achieve

that interest.

Fisher v. University of Tex. At Austin, 570 U.S. 297, 311-312, 133
S.Ct. 241 1, 186 L.Ed.2d 474 (2013) (Fisher 1) (internal quotation marks omitted).

Outside the circumstances of these cases, our precedents have identified only two
compelling interests that permit resort to race-based government action. One is
remediating specific, identified instances of past discrimination that violated the

The Honorable Marvin R. Pendarvis
Page 8
September 1 8, 2023

Constitution or a statute. See, e.g. Parents Involved in Community Schools v, Seattle
School Dist. No. 1, 551 U.S. 701, 720, 127 S.Ct. 2738, 168 L.Ed.2d 508 (2007);
Shaw v. Hunt, 517 U.S. 899, 909-910, 116 S.Ct. 1894, 135 L.Ed.2d 207 (1996); post,

at 2186-2187, 2192-2193 (opinion of Thomas, J.). The second is avoiding imminent
and serious risks to human safety in prisons, such as a race riot. See Johnson v.
California, 543 U.S. 499, 512-513, 125 S.Ct. 1 141, 160 L.Ed.2d 949 (2005). . . .
Our acceptance of race-based action has been rare for a reason.

“Distinctions

between citizens solely because of their ancestry are by their very nature odious to a

free people whose institutions are funded upon the doctrine of equality.” Rice v.
Cayetano, 528 U.S. 495, 517, 120 S.Ct. 1044, 145 L.Ed.2d 1007 (2000) (quoting
Hirabayashi v. United States, 320 U.S. 81, 100, 63 S.Ct. 1375, 87 L.Ed. 1774
(1943)). That principle cannot be overridden except in the most extraordinary case.

143 S.Ct. at 2161-2163.

In Students For Fair Admissions, the Supreme Court cited with approval the Croson
decision. Quoting from Croson, the Court emphasized that
[b]y promising to terminate their use of race only when some rough percentage of
various racial groups is admitted, respondents turn that principle on its head. Their
admissions programs “effectively assure [ ] that race will always be relevant . . . and
that the ultimate goal of eliminating race as a criterion “will never be achieved.”
Croson, 488 U.S. at 495, 109 S.Ct. 706 (internal quotation marks omitted).

143 S.Ct. at 2172. Moreover, in his concurring opinion in Students For Fair Admissions, Justice
Thomas referenced Croson, stating that “[e]ven today, nothing prevents the States from
according an admissions preference to identified victims of discrimination. See Croson, 488
U.S. at 526, 109 S.Ct. 706 (opinion of Scalia, J.) (“While most of the beneficiaries might be
black, neither the beneficiaries nor those disadvantaged by the preference would be identified on
the basis of their race.” (emphasis in original)) see also ante at 2175-2176.” 143 S.Ct., at 218687 (Thomas J., concurring).
Thus, the Supreme Court has made it clear for a number of years that there is now a very

narrow window for upholding an affirmative action or race-conscious program.
recognized

that

“[n]othing

prevents

an

admissions

preference

to

The Court has

identified

victims

of

discrimination.” (emphasis added). Absent such a showing that the racial preference is designed
to address “identified instances of past discrimination that violated the Constitution or statute,”
such racial discrimination is unconstitutional.

As Croson emphasized, a “generalized assertion
that there has been past discrimination in an entire industry” is not good enough. Such an
assertion provides little or no “guidance for a legislative body to determine the precise scope of
the injury it seeks to remedy.” 488 U.S. at 498.

An example of the intensive factual showing
required in order to uphold a program is demonstrated by the Fourth Circuit’s decision in
Tippett. In Tippett, the relevant statute defined disadvantaged minority-owned businesses “as

only those racial or ethnicity classifications” subjected to “discrimination in the relevant

The Honorable Marvin R. Pendarvis
Page 9
September 18, 2023

marketplace and that have been adversely affected in their ability to obtain contracts with the
Department.” 615 F.3d at 239. Even so, an extensive factual justification for the program was
required.
Furthermore, as noted above, this Office cannot adjudicate the facts with respect to the
North Charleston “Small, Disadvantaged, Minority Business Program.” However, as your letter

indicates, the program in question tellingly employs the term “minority,” which raises concerns
that the North Charleston program is a race-conscious program.

While we obviously cannot

conclude that such is the case from use of this term only, it does imply that the program is one
primarily of race-consciousness. Moreover, as was reported in a recent article in the Charleston
Post and Courier, while
[t]he program accepts any small business making below the threshold [$500,00
annually] regardless of it is minority owned, . . . the program’s intent was to increase
diversity in the procurement process, said Councilman Ron Brinson, who chairs the
finance committee. . . .

(emphasis added). The attorney for the City of North Charleston is quoted in that same article as
saying that “T suspected at the time of the (Supreme Court) issue that it was not going to be long

until somebody connected the dots from this college admissions realm over to this contracting
realm,’ said Derk Van Raalte, an attorney with the City of North Charleston who brought up the

topic at the July 20 finance committee meeting.”

“North Charleston Mulls over status of

minority small-business program,” Charleston Post and Courier, July 26, 2023.
Mr. Van Raalte is exactly correct. As noted, the same principles set forth in the Students
For Fair Admissions decision are equally applicable to a “minority business” program, governed
by Croson and Adarand. As the Supreme Court emphasized in the Students for Fair Admissions
case, “‘ [distinctions between citizens solely because of their ancestry are by their very nature
odious to a free people whose institutions are founded upon the doctrine of equality. . . .
principle cannot be overridden except in the most extraordinary case.”

That

143 S.Ct. at 2162-63.

Croson and Adarand made precisely the same point decades ago.
Thus, based upon these authorities, North Charleston should have serious constitutional

concerns regarding its “minority business” program. While it is conceivable that a court would
uphold

its

constitutionality,

constitutional risk.

the

North

Charleston

program

currently

is

at

considerable

Particularly important to the validity of the North Charleston program is

whether that program operates on the basis of “race consciousness.” As emphasized above, “all
race-conscious measures receive strict scrutiny under the Equal Protection Clause.” Dean v. City

of Shreveport, 438 F.3d 448, 454 (5th Cir. 2006). Courts have held that even if the measure does
not expressly classify individuals based upon their race, it violates Equal Protection if facially
neutral laws or policies are applied in an intentionally discriminatory manner or if “facially

neutral laws or policies ‘result in racially disproportionate impact and are motivated by a racially
discriminatory purpose.’” Rothe Devel. Inc, v. U.S. Dept, of Defense, 836 F.3d 57, 63 (D.C. Cir.

2016) (citing Adarand, 515 U.S. at 213, Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S.

The Honorable Marvin R. Pendarvis
Page 10

September 1 8, 2023

252 (1976) and Washington v. Davis, 426 U.S. 229 (1976)). At first blush, it appears that the
program is race-conscious even though it has a facially neutral appearance. A court will have to
assess the facts to determine if the North Charleston program is truly race-conscious or was
designed instead to increase racial representation.
Conclusion

As the Supreme Court recently emphasized in Students For Fair Admissions, “‘racial
discrimination is invidious in all contexts.’” Race-conscious affirmative action programs are
inherently suspect and almost universally unconstitutional. The Court will permit race-based
admissions only in the rarest of circumstances, within the confines of narrow restrictions - such
as to remedy to identified victims of discrimination. Moreover, the Supreme Court emphasized
in Croson, that “a generalized assertion . . . that there has been past discrimination in an entire
industry” is insufficient. Such a generalized, conclusory determination “provides no guidance
for a legislative body to determine the precise scope of the injury it seeks to remedy.” Croson,
488 U.S. at 498.

In short, the very same principles apply to “minority small business programs” as apply
to admissions to higher education institutions. The Court in Students For Fair Admissions cited
the Croson case with approval. As we have emphasized in previous opinions, “nothing in the

Constitution prohibits the assistance of small businesses to grow, develop and thrive on a raceand-gender-neutral basis. . . .” But what is required, except in the rarest of cases, is that the
government’s action be colorblind.

As stated, this Office is not a court and thus cannot adjudicate the facts or the legality of
the North Charleson program. However, the use of the term “minority business program” is
concerning, to say the least. Such would suggest outwardly that the program is race-conscious.

Moreover, when the North Charleston program was unveiled, it was described as a program

“aimed at supporting small business run by minorities.” See “North Charleston unveils program
aimed at lifting up minority-run small business.” Charleston Post and Courier, July 25, 2023.
The City’s website states that certification for the program ensures that “[m]andatory quotes will
be solicited from SDMB [Small, Disadvantaged and Mandatory business] vendors on
procurements between $1,500 and $50,000.” What is unclear from this is what degree of
preference, if any, is given these vendors. However, Councilman Brinson has stated publicly
that the program’s intent is to increase diversity in the procurement process. Thus, the program
may be race-conscious in effect or may have been motivated by the benign purpose to increase
minority representation.

We recognize that admission to the program is based upon the fact that the
“disadvantaged small business” is earning no more than $500,000 annually - a race-neutral
criteria on its face. However, the Supreme Court has often emphasized that a practice “fair in
form [may be] discriminatory in operation.” Griggs v. Duke Power Co., 401 U.S. 424, 431
(1971). Moreover, a court would undoubtedly seek to determine whether this threshold is, in

The Honorable Marvin R. Pcndarvis
Page 1 1

September 1 8, 2023

fact, racially neutral or “bears more heavily on one race than another.”
426 U.S. 229, 242 (1976); Adarand. 515 U.S. at 212-13.

Washington v, Davis,

If the program is indeed neutral “and

not one that operates on the basis of race, in accord with the letter and spirit of our Constitution,”

Croson, 486 U.S. at 527-28 (Scalia, J. concurring), it may be upheld.
subject the program to the most exacting of scrutiny.
does not typically prevail in court.
exception.

However a court will

Generally speaking, use of such scrutiny

The Tippett decision in the Fourth Circuit is a notable

There, however, the Fourth Circuit emphasized that North Carolina’s Minority

Business Program which favored contracts below a certain amount (as North Charleson’s
program apparently docs) was “narrowly tailored” in that a specific statutory expiration date for

the program was set and a new disparity study required every 5 years.

North Charleston would

do well to study this decision because it is rare that a court has upheld such a program.
Again, only a court, rather than this Office, may determine the constitutionality of North
Charleston's program under the Croson, Adarand and Tippett cases.

We may only provide the

applicable law. In short, the program would be subject to strict scrutiny by a court and it must be
narrowly tailored.

Based upon our limited information, it would appear that the program was

intended to be a race-conscious program.

The fact that it is so labelled is surely indicative of

such race-consciousness. If so, it will be upheld only in the rarest of circumstances. See Tippett.

We thus urge North Charleston to closely examine these decisions, referenced herein, and
recognize that the Minority Business Program at present is constitutionally at risk.

As Judge

Niemeyer observed in his concurring opinion in the 4th Circuit decision in Tippett, ‘[w]hen we
decide cases involving race-conscious and gender conscious government programs, we must

remain especially vigilant in recalling that such programs are presumptively unconstitutional, in
violation of the Equal Protection Clause.” Tippett, 615 F.3d at 258 (Niemeyer, J., concurring).
His words provide a good guidepost for the City of North Charleston.

Again without a strong

showing of justification, the North Charleston program is constitutionally at risk.
Sincerely,

Robert D. Cook
Solicitor General