Why Courts Must Subject Municipalities to Constitutional Tort Liability Under Section 1983 When Unconstitutional Race & Sex Based Preference Statutes Deprive an Otherwise Lowest Qualified Bidder of a Public Contract

Abstract

This article considers an important public policy question: whether a municipality that knowingly adopts unconstitutional race and sex based preference statutes for the procurement of public contracts (in violation of the Equal Protection Clause) should be subject to 1983 liability for compensatory damages, in the form of lost profits, when it rejects the bid of a contractor who failed to comply with the illegal statute but was, nevertheless, the lowest and otherwise most qualified bidder. This article discusses the rationale for awarding lost profits as damages to a lowest qualified bidder who was denied a bid for not complying with an unconstitutional race and sex based preference program and concludes that the public interest can best be served under these circumstances by awarding the contractor the lost profits he would have earned but for the unconstitutional behavior of the responsible government body.

In Cleveland Construction, the City of Cincinnati established a small business program with provisions that violated the rights of Cleveland Construction under the Equal Protection Clause of the Fourteenth Amendment. Specifically, Cleveland Construction was denied a public contract, although it was the lowest responsible bidder, because the City of Cincinnati violated local rules that strictly limited its discretion in the awarding of public contracts. Cleveland Construction was thus deprived of a constitutionally protected property interest. Additionally, because unconstitutional conduct gave rise to that protected property interest, Cleveland Construction had a valid claim under 42 U.S.C. 1983 against the City of Cincinnati and was therefore entitled to compensatory damages. An award of damages by an action in constitutional tort is in the public interest and provides the best deterrence against future constitutional abuses by state and municipal governments.

We submitted an amicus brief in support of Cleveland Construction, Inc., before the Supreme Court of Ohio, because the record in this case presented the Court with significant findings of fact to support Cleveland Construction's theory that a judicial determination was necessary to redress extreme unconstitutional misconduct by City officials. It is imperative that public entities across the country cease adopting race- and sex-based preference programs in public contracting, employment, and education so that Justice John Marshall Harlan's belief "[o]ur Constitution is color-blind and neither knows nor tolerates classes among citizens" continues to be the prevailing view. Public entities that fail to comply with the law by granting illegal race and sex-based preferences must be held responsible for their misconduct under the theory of constitutional tort liability. By turning a blind eye to the constitutional torts committed by the Cincinnati City Council, the Supreme Court of Ohio abdicated its duty to correct the misconduct of abusive local government officials. We wrote this article because judicial inaction of this nature should not go unnoticed. On January 12, 2009, the United States Supreme Court denied counsel for Cleveland Construction's Petition for a Writ of Certiorari in this case. As such, we hope this article will bring additional attention to these issues.

Keywords: civil rights, equal protection clause, discrimination, public contract, municipal liability, constitutional tort, 42 U.S.C. 1983, race and sex based preferences, lost profits, Croson, Adarand, government contract, Cleveland Construction v. City of Cincinnati, Supreme Court of Ohio