UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

MARYLAND MINORITY CONTRACTORS
ASSOCIATION, INCORPORATED; PRINCE
GEORGE'S COUNTY CONTRACTORS AND
BUSINESS ASSOCIATION,
INCORPORATED; COALITION FOR BLACK
ECONOMIC DEVELOPMENT,
INCORPORATED; HEZEKIAH DANIELS,
d/b/a Hezekiah's Construction and
Welding Company; RICHARD J.
COLON, d/b/a Mace Electric
Company, Incorporated; ROOSEVELT
LABOO, d/b/a DSI Construction
Company; RALEIGH NANTON, d/b/a
New World Steel Erectors; CARLTON
                                    No. 96-1203
CRAIG, d/b/a Craig's Trucking
Company; JAMES JUSTICE, d/b/a
Justice Trucking Company; PLES
JONES, d/b/a P and J Contractors,
Incorporated,
Plaintiffs-Appellees,

v.

HAL KASSOFF; CHARLES OLSEN;
JAMES KELLY; STEVE ZENTZ,
Individually and Personally,
Defendants-Appellants,

and
FEDERICO F. PENA, SECRETARY,
DEPARTMENT OF TRANSPORTATION;
EDWARD MORRIS, Director of Civil
Rights; MARYLAND DEPARTMENT OF
TRANSPORTATION (MDOT);
MARYLAND STATE HIGHWAY
ADMINISTRATION (MSHA);
A. PORTER BARROWS, Individually
and Personally; DAVE GENDELL,
Individually and Personally;
O. JAMES LIGHTHIZER, Individually
and Personally,
Defendants.

Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Alexander Williams, Jr., District Judge.
(CA-93-2761-AW)

Submitted: June 17, 1997

Decided: June 15, 1998

Before WILKINS, NIEMEYER, and MOTZ, Circuit Judges.

_________________________________________________________________

Vacated and remanded by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

J. Joseph Curran, Jr., Attorney General of Maryland, Evelyn O. Can-
non, Assistant Attorney General, Omar V. Melehy, Assistant Attorney
General, STATE HIGHWAY ADMINISTRATION, Baltimore,

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Maryland, for Appellants. John H. Rhines, STANCIL & RHINES,
Baltimore, Maryland, for Appellees.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Maryland Minority Contractors Association and others brought this
action alleging discrimination against African Americans and His-
panic Americans in the administration of a federal program that pro-
vides funds for the construction of highways and mass transit
facilities. The program is designed to support "the fullest possible par-
ticipation of firms owned and controlled by minorities and women . . .
in Department of Transportation programs." 49 C.F.R. § 23.1(a)
(1997). The Plaintiffs primarily alleged that federal and Maryland
state agencies and employees involved with the award and oversight
of federal highway construction contracts in Maryland intentionally
discriminated against businesses controlled by African Americans and
Hispanic Americans in favor of those controlled by white women.

The district court dismissed all claims save those under 42 U.S.C.
§§ 1981, 1983 (1994) against all Defendants except four individual
state Defendants, Hal Kassoff, Charles Olsen, James Kelly, and Steve
Zentz. Those state Defendants moved to dismiss, claiming, among
other things, that they were entitled to qualified immunity.

In its final order, the district court did not mention qualified immu-
nity. The district court's silence on the qualified immunity issue "sub-
jected [the state Defendants] to further pretrial procedures, and so
effectively denied [them] qualified immunity." Jenkins v. Medford,
119 F.3d 1156, 1159 (4th Cir. 1997). We therefore have jurisdiction
to consider this appeal, in which the state Defendants challenge the
denial of qualified immunity. See id. Because we conclude that the

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state Defendants were entitled to qualified immunity, we vacate the
decision of the district court.

I

This action concerns the federally authorized set-aside program
implemented by the State of Maryland. The program originated after
Congress enacted the Surface Transportation Assistance Act of 1982
(Surface Transportation Act), Pub. L. No. 97-424, 96 Stat. 2097
(1983). Section 105(f) of the Surface Transportation Act provides that
ten percent of the amounts authorized to be appropriated thereunder
are to "be expended with small business concerns owned and con-
trolled by socially and economically disadvantaged individuals." 96
Stat. at 2100. Black Americans, Hispanic Americans, Native Ameri-
cans, Asian Pacific Americans, and certain other individuals are pre-
sumed to be socially and economically disadvantaged. See 15 U.S.C.
§ 637(d)(3)(C) (1994).

Congress subsequently enacted the Surface Transportation and
Uniform Relocation Assistance Act of 1987 (Surface Relocation Act),
Pub. L. No. 100-17, 101 Stat. 132. That statute was designed to
achieve certain minority business participation goals primarily
through the use of set-asides for qualified subcontractors. See S. Rep.
No. 4, 100th Cong., 1st Sess. 11-12 (1987), reprinted in 1987
U.S.C.C.A.N. 66, 76. Section 106(c) of the Surface Relocation Act
established a ten percent minority business goal, see 101 Stat. at 145,
similar to that in the Surface Transportation Act, and added women
to the list of those presumed to be socially and economically disad-
vantaged. See id.

States, such as Maryland, that receive federal funds under the Sur-
face Transportation Act and Surface Relocation Act must comply
with federal regulations concerning minority business participation in
highway and mass transit construction contracts. A state recipient
must establish annual overall minority business enterprise (MBE) par-
ticipation goals on projects receiving federal funds, see 49 C.F.R.
§ 23.64 (1997), and must ensure that at least ten percent of money
expended on federally assisted projects goes to such enterprises,
absent a waiver by the Secretary of Transportation. See 49 C.F.R.

                    4
§ 23.61(a) (1997). The record reveals that Maryland always has met
or exceeded the ten percent goal.

II

In this appeal, the state Defendants challenge the district court's
denial of qualified immunity. "Government officials performing dis-
cretionary functions are entitled to qualified immunity from liability
for civil damages to the extent that `their conduct does not violate
clearly established statutory or constitutional rights of which a reason-
able person would have known.'" Rish v. Johnson, 131 F.3d 1092,
1095 (4th Cir. 1997) (quoting Harlow v. Fitzgerald, 457 U.S. 800,
818 (1982)). To determine whether an official is entitled to qualified
immunity, we first "identify the specific constitutional right allegedly
violated, then . . . inquire whether at the time of the alleged violation
it was clearly established, [and finally we] inquire whether a reason-
able person in the official's position would have known that his con-
duct would violate that right." Collinson v. Gott, 895 F.2d 994, 998
(4th Cir. 1990) (Phillips, J., concurring).

The specific rights allegedly violated--those to be free from pur-
poseful racial discrimination in the making and enforcing of contracts
(42 U.S.C. § 1981) and from intentional violation, under color of state
law, of the right to equal protection under the law (42 U.S.C. § 1983)
--are clearly established. See General Bldg. Contractors Ass'n v.
Pennsylvania, 458 U.S. 375, 391 (1982) (§ 1981); Personnel Admin-
istrator v. Feeney, 442 U.S. 256, 281 (1979) (§ 1983). It also is well
established that the racially discriminatory impact of an official pol-
icy, standing alone, rarely renders that policy unconstitutional. Rather,
"the decisionmaker . . . must have selected or reaffirmed a particular
course of action at least in part `because of,' not merely `in spite of,'
its adverse effects upon an identifiable group." Feeney, 442 U.S. at
279.

Here, there is no evidence that the statutes or regulations were
drafted so as to have an adverse impact on African Americans or His-
panic Americans. Nor is there any evidence that the state Defendants
acted with discriminatory intent when administering the federal pro-
gram in Maryland.

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The Plaintiffs chiefly complain that the individual state Defendants
awarded a significantly higher number of contracts to businesses
owned by white women than to businesses owned by African Ameri-
cans and Hispanic Americans. Even if this is true, no reasonable per-
son in the state Defendants' position would have known that such
action violated any constitutional right. The MBE program has no
specific quota or goal for participation by each type of disadvantaged
business. See 49 C.F.R. § 23.62 (1997); Gauvin v. Trombatore, 682
F. Supp. 1067, 1072 (N.D. Cal. 1988). There is no requirement that
recipients of federal funds insure that each MBE group receives an
equal share of contracts. And there is no showing that the state Defen-
dants purposefully discriminated against any group in awarding con-
tracts that counted towards the ten percent goal.

The Plaintiffs also contend that other practices violated their con-
tractual and equal protection rights. Contrary to their assertions, how-
ever, there is no requirement that the state include a minimum ten
percent MBE participation clause in each individual construction con-
tract valued at more than $100,000. State officials are permitted under
the regulations to waive or reduce the ten percent goal in accordance
with certain procedures, and the Plaintiffs made no showing that any
such reductions were intentionally targeted at African Americans or
Hispanic Americans.

Further, there is not, as the Plaintiffs claim, a requirement that state
transportation officials annually revise and submit to federal officials
an MBE program. The pertinent regulation provides that once a state
program receives federal approval, applicants "are not required to
resubmit the program or to produce a new program for future applica-
tions, as long as all requirements for approval continue to be met and
implementation of the program is achieving compliance." 29 C.F.R.
§ 23.41 (1997).

Finally, the Plaintiffs assert that the state Defendants improperly
allowed MBE credit for large supply items and allowed prime con-
tractors to falsify documents to demonstrate compliance with their
MBE goals. These allegations, even if proven, do not state a claim for
intentional discrimination. Improper crediting is not specifically tar-
geted at African Americans or Hispanic Americans, and the Plaintiffs

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do not allege any reason why these groups would be affected by the
alleged policies any more than any other MBE group.

III

We conclude that reasonable persons in the state Defendants' posi-
tion would not have known that their actions violated any clearly
established constitutional rights of the Plaintiffs. Accordingly, the
state Defendants are entitled to qualified immunity. We vacate the
decision of the district court and remand with instructions to dismiss
the remaining counts against the state Defendants.

We dispense with oral argument because the facts and legal conten-
tions are adequately presented in the materials before the court and
argument would not aid the decisional process.

VACATED AND REMANDED

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