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GEOD Corp. v. New Jersey Transit Corp.

August 20, 2009


The opinion of the court was delivered by: Wigenton, District Judge



Before this Court are both Defendants'*fn1 and Plaintiffs'*fn2 Motions for Summary Judgment pursuant to Fed. R. Civ. P. 56(c). This Court has jurisdiction pursuant to 28 U.S.C. §§ 1331, 1343, 2201, 2202, and 42 U.S.C. § 1981. Venue is proper pursuant to 28 U.S.C. §§ 1391(b), and 1392. The Motion is decided without oral argument pursuant to Fed. R. Civ. P. 78. For the following reasons, Plaintiffs' Motion is DENIED; Defendants' Motion is GRANTED in part and DENIED in part.


Plaintiff, Geod Corporation ("Geod") is a New Jersey corporation, located at 18-24 Kanouse Road, Newfoundland, New Jersey. (Def. Ex. 1, ¶6). Geod is owned solely by Plaintiffs, Christopher Emilius (Principal), John F. Emilius (President and CEO), Paul J. Emilius, Jr. (Vice-President), and Stanley Palinski (Vice-President) who are all white males. (Id. at ¶¶9-12). Geod specializes in performing surveying, topographic mapping, and photogrammetry. (Deposition of John Emilius at 16-17). Geod does not qualify as a socially and economically disadvantaged business under NJT's Disadvantage Business Enterprise ("DBE") program. (Def. Ex. 1, ¶¶ 9-12).

Defendant NJT is "a body corporate and politic with corporate succession," N.J.S.A. 27:25-4, et seq. and an instrumentality of the State of New Jersey "exercising public and essential governmental function[s]... [which] shall be deemed and held to be an essential governmental function of the State." (Def. Ex. 2, ¶ 15). NJT is allocated within the New Jersey Department of Transportation ("NJDOT"), but it is independent of any supervision or control by the NJDOT. (Def. Ex 2, ¶ 16). NJT is governed by a board of directors (the "Board") which consists of seven members: Defendants Jack Lettiere, Chairman of NJT's Board; Myron P. Shevell, vice-chairman of NJT's Board; Flora Castillo, a Governor appointee; Paul T. Fader, a Governor appointee; John L. McGoldrick, Governor appointee; Patrick W. Parkinson, a Governor appointee; and John E. McCormac, Treasurer of the State of New Jersey. (Def. Ex 1, ¶ 20)

Defendant James E. McGreevey was the Governor of the State of New Jersey; he did not sit on NJT's Board. (Id.) Defendant George D. Warrington was the Executive Director of NJT; he is now deceased. (Id.) Defendant Jan Walden is the Director of Certification and Special Projects, Office of Business Opportunity, for NJT. (Id.)

NJT receives federal funds from the U.S. Department of Transportation ("USDOT"). NJT implemented a DBE program pursuant to the Transportation Equity Act for the 21st Century (TEA-21), Pub. L. 105-178, 112 stat. 107 (1998) and C.F.R. Part 26, §§ 26.1 et. seq. NJT's DBE program requires bidders on NJT construction contracts to submit: (i) the amount of contract dollars to be subcontracted to DBEs; (ii) the DBEs' identity; and (iii) the type of work subcontracted to the DBEs. NJT's DBE program requires prime contractors to consider race, ethnicity, and gender in selecting subcontractors and consultants.

NJT hired the University of Minnesota and Dr. Samuel Myers as its DBE consultant. (Def. Ex. 7). Dr. Myers performed a disparity study entitled "FINAL REPORT: An Availability, Utilization and Decomposition Analysis of New Jersey Transit's Disadvantage Business Enterprise Program" ("Disparity Study") for NJT in 2002, which concluded that actual discrimination occurred in NJT's prequalification and contracting processes generally attributable to passive discrimination. (Def. Ex. 12). The disparity study focused on five categories of "disadvantaged" groups: Blacks, Hispanics, Asians, Women, and "unknown". NJT's DBE goals are determined by utilizing a formula which accounts for each "disadvantaged" group. NJT also considers firms owned by individuals of Iraqi decent to be "socially disadvantaged". (NJT's Admission 12). NJT's DBE goals for the last seven years have been: 2002 - 28.0% DBE goal: 25.0% race conscious, 3% race neutral (NJT 00003628); 2003 -25.0% DBE goal: 22.0% race conscious, 3.0% race neutral (NJT 00003667); 2004 -- 19.0% DBE goal: 10.0% race conscious, 9.0% race neutral (NJT 00005915); 2005 -- 25.0% DBE goal: 20.0% race conscious, 5.0% race neutral (NJT 0000004); 2006 -- 17.38% DBE goal: 11.07% race conscious, 6.31% race neutral (NJT 00014253); 2007 -- 19.9% DBE goal: 11.2% race conscious, 8.7% race neutral (NYT FY07 DBE goals at 1); 2008 -- 21.74% DBE goal: 10.22% race conscious, 11.52% race neutral (NYT FY08 DBE goals). These goals were approved by the Federal Transit Authority ("FTA"). (Pl. Ex. 19). NJT has never applied for a waiver or exemption from DBE regulations. (NJT's Admission 27).

Generally, approximately $200,000 of the overall Business Diversity budget is designated for race neutral programs. These programs include outreach, small business activities, technical assistance programs, and universal advertising. (Def. Ex. 7, 41-47). NJT also sponsors conferences and workshops for small businesses in general. (Id. at 45). Types of workshops include how to do business with NJT, how to estimate, how to audit, how to get through an audit by NJT, and marketing your business. (Id. at 46).

NJT's contract goals are set on each project by a team that considers the availability of subcontracting opportunities, the nature of the geographic market, the available DBEs, and other contract specific characteristics. (Pl. Ex. 10). Once the DBE goal is set, NJT's procurement staff can request modifications before the bidding process begins. (Id.) Once a bid is received, the Business Diversity Office ensures contract compliance with the DBE Form A and eliminates bid shopping. (Pl. Ex. 8). No DBE goal is set for a particular subcontract whenever there are at least three DBEs available. (Dep. of Ellsworth Wiggins, July 6, 2005 at 30). A DBE can use its own workforce to meet the DBE goal on a NJT construction or engineering and design project. (Def. Ex. 6). When NJT sets a DBE goal on a particular project, meeting that goal is a factor in determining which firm is awarded that construction or engineering and design contract. (Def. Ex. 6).

On October 6, 2004, Plaintiffs filed an Amended Complaint against NJT, its Board members, select NJT employees, and the Governor of New Jersey, individually. Plaintiffs complaint seeks: (1) damages of $500,000*fn3 for NJT's alleged violations of: (i) the Fifth and Fourteenth Amendments, (ii) 42 U.S.C. §§ 1983, 1981, et seq., and (iii) the rights guaranteed them by Article 1, ¶¶ 1 and 5 of the Constitution of the State of New Jersey; (2) a declaration that NJT's DBE program is unconstitutional and in violation of Plaintiffs' civil rights pursuant to (i) 42 U.S.C. §§ 1981, 1983 et seq.; and (ii) Article 1, ¶¶ 1 and 5 of the Constitution of the State of New Jersey; (3) to permanently enjoin NJT from enforcing or utilizing the DBE program from violating Plaintiffs' constitutional rights pursuant to: (i) 42 U.S.C. §§ 1983, et seq., (ii) Title VI of the Civil Rights Act 1964, as amended, 42 U.S.C. section 2000d, et seq.; (iii) Article 1, ¶¶ 1 and 5 of the Constitution of the State of New Jersey, and (iv) the Fourteenth and Fifth Amendments; and (4) a violation of the New Jersey Law Against Discrimination, N.J.S.A. 10:2-1, et seq. and 10:5-32, et seq., which Plaintiffs allege to suffer damages, including pain and suffering, and emotional distress.

On January 14, 2005, Defendants filed a motion to dismiss. The Honorable Jose L. Linares, U.S.D.J., granted said motion in part, and denied it in part.

On October 7, 2008, Defendants filed a Motion for Summary Judgment alleging that: (i) the state officials are entitled to qualified immunity; (ii) the individual employees are not federal employees capable of violating the Fifth Amendment; (iii) Defendants are not persons pursuant to 42 U.S.C. § 1983; and (iv) NJT's federally approved DBE program is constitutional.

On January 27, 2009, Plaintiffs filed a Motion for Summary Judgment alleging that NJT's DBE program is unconstitutional.


Summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). A factual dispute is genuine if a reasonable jury could return a verdict for the non-movant, and it is material if, under the substantive law, it would affect the outcome of the suit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).The moving party must show that if the evidentiary material of record were reduced to admissible evidence in court, it would be insufficient to permit the nonmoving party to carry its burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 318 (1986).

Once the moving party meets the initial burden, the burden then shifts to the non-movant who must set forth specific facts showing a genuine issue for trial and may not rest upon the mere allegations or denials of its pleadings. Shields v. Zuccarini, 254 F.3d 476, 481 (3d Cir. 2001). The court may not weigh the evidence and determine the truth of the matter but rather determine whether there is a genuine issue as to a material fact. Anderson, 477 U.S. at 249. In doing so, the court must construe the facts and ...

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