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Feriozzi Co. v. City of Atlantic City

Decided: April 2, 1993.

FERIOZZI COMPANY, INC., A CORPORATION OF THE STATE OF NEW JERSEY, AND CONCETTA FERIOZZI, PLAINTIFFS,
v.
THE CITY OF ATLANTIC CITY, A MUNICIPAL CORPORATION AND BODY POLITIC OF THE STATE OF NEW JERSEY, AND CJM ASSOCIATES, INC., A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANTS



Winkelstein, J.s.c.

Winkelstein

[266 NJSuper Page 126] In this case the court is asked to decide the facial constitutionality of defendant City of Atlantic City's (the City) affirmative action plan (The Plan). It appears to be a case of first impression in this jurisdiction subsequent to the United States Supreme Court's landmark decision in Richmond v. Croson Co., 488 U.S. 469, 109 S. Ct. 706, 102 L. Ed. 2d 854 (1989) which changed the legal landscape in evaluating the constitutionality of affirmative action ordinances.

This decision is a comprehensive explanation of the court's oral decision from the bench on April 2, 1993.

I. Background

The City established the Plan by Ordinance No. 14 of 1979, Executive Orders No. 2 of 1984, No. 1 of 1985, and No. 2 of 1992. The Plan required that bidders for public contracts achieve a minimum twenty five per cent (25%) minority participation through minority subcontractors and/or suppliers. Minority subcontractors owned or controlled by white-women could constitute no more than twenty per cent of the total minority participation. Plaintiffs, an unsuccessful bidder and property owner in the City, argue that the Plan is violative of the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution, and discriminates against nonminorities under the New Jersey Constitution and 42 U.S.C.A. § 1983.

After the complaint was filed, the City, on March 17, 1993, adopted Ordinance 24 of 1993, (Ordinance 24), which amended the Plan. On March 31, 1993 the Mayor of the City signed Executive Order 2 of 1993, (the Executive Order) which rescinds Executive Order No. 2 of 1984, No. 1 of 1985 and No. 2 of 1992, and established standards of "good faith efforts" which are required to be made by all bidders and contractors.

As a result of the recent amendments to the Plan, the City argues that it is no longer violative of the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution as it does not create suspect classes based upon racial or ethnic criteria which would require a strict scrutiny test pursuant to Croson, supra. The plaintiff disagrees, arguing that section 7-15 of Ordinance 24, which requires a good faith effort to "utilize a minimum of ten percent minority contractors and/or suppliers" establishes a suspect class based on racial or ethnic criteria and thus the Plan remains constitutionally defective.

II. The Facts

The facts are undisputed. The City is a municipal corporation of the State of New Jersey which operates under the Mayor-Council form of local government pursuant to the Faulkner Act, N.J.S.A. 40:69A-1 et seq. Plaintiff, The Feriozzi Company, Inc., (Feriozzi) is a corporation of the State of New Jersey engaged in the business of construction contracting which includes general contracting, concrete work and excavation. Plaintiff Concetta Feriozzi is an individual who owns real property in the City, and is a principal of Feriozzi.

On March 31, 1992, Feriozzi submitted a bid to the City for a project which involved the realignment of Albany Avenue and Captain O'Donnell Parkway in the City. In accordance with standard City procedure, the bid was sent to its affirmative action office for review. The affirmative action officer denied the application for consideration as a Women Business Enterprise (WBE) which would have qualified under the Plan as a minority business. Feriozzi's bid was therefore rejected and the contract awarded to another bidder.*fn1

III. The Plan

The pertinent provisions of the City's Plan (as codified as Chapter 7 of the Atlantic City Code) were as follows:

ORDINANCE No. 14 of 1979

AN ORDINANCE to regulate persons, firms, associations, companies, partnerships and corporations, wishing to develop or engage in the assistance in the development of projects within the City of Atlantic City.

WHEREAS, it is in the public interest to regulate and approve economic development projects in the City of Atlantic City; and

WHEREAS, such developers do not necessarily have sanctioned affirmative action plans or committments [sic]; and

WHEREAS, it is in the public interest to ensure minority entrepreneurs and equal opportunity for economic development;

NOW, THEREFORE, The Board of Commissioners of the City of Atlantic City do ordain:

SECTION 1. That all firms, corporations, partnerships, or any combination thereof wishing to do business with or in the City of Atlantic City shall present to the Atlantic City Planning Board upon application for development opportunity an equal employment opportunity affidavit and must agree to make a bona fide effort to utilize minority contractors and suppliers paying prevailing wages.

SECTION 4. That all firms, . . . wishing to do business with or in the City of Atlantic City, utilizing government funding, . . . shall make a good faith effort to utilize a minimum of ten percent (10%) minority contractors and/or suppliers.

Atlantic City, N.J., Ordinance 14 (March 1, 1979).

EXECUTIVE ORDER NO. 2 OF 1984

WHEREAS, the provisions of Ordinance No. 14 of 1979 have been inadequately enforced, with the result that millions of dollars in development and business activity have transpired in the City of Atlantic City with little involvement by minority owned businesses, and it is now necessary to redress the failure of the City of Atlantic City to live up to its obligations in the past; and

WHEREAS, in order to improve the City's efforts herein, it is necessary:

(a) to mandate that the percentages required by Ordinance No. 14 of 1979 be increased for a period of ten (10) years; and

ARTICLE I. DEFINITIONS

(a) Minority Business Enterprise -- A minority business enterprise is an independent business concern which is at least 51% owned and controlled by minority group members; . . .

(b) Minority Group Members -- Minority group members are citizens who are Black, Hispanic, Asian or American Indian, as further defined by the Executive Committee.

. . . .

ARTICLE III. MINIMUM MINORITY ...


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