Case 0:06-cv-02860-JMR-FLN Document 78 Filed 12/13/2007 Page 1 of 17
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
06-CV-2860(JMR/FLN)
Michael Thomas, Brian )
Conover, and Frederick Newell
vs. ORDER
City of Saint Paul
This matter is before the Court on defendant’s motion for
summary judgment pursuant to Rule 56 of the Federal Rules of Civil
Procedure (“Fed. R. Civ. P.”). Plaintiffs, African-American
business owners, claim defendant, City of Saint Paul, discriminated
against them in awarding publicly-funded contracts. All parties
agree plaintiffs are African-American, and defendant is a duly
organized Minnesota city. For the reasons set forth herein,
defendant’s motion for summary judgment is granted.
I. Background
1A. The Parties
Defendant, City of St. Paul (“the City”), has adopted a Vendor
Outreach Program (“VOP”) designed to assist minority and other
small business owners in competing for City contracts. Plaintiffs,
at all relevant times, were VOP-certified minority business owners.
Each contends the City engaged in racially discriminatory illegal
conduct when awarding contracts for publicly-funded projects.
1. Michael Thomas
Plaintiff Michael Thomas owns Cornerstone Community Realty &
1
Because this is a motion for summary judgment, the facts aretaken in the light most favorable to plaintiffs
Mortgage Services. According to the complaint, his business is one
of the City’s few – if not the only – African-American owned,
certified minority real estate disposition service. He contends
the City consistently denied him opportunities to work on publiclyfunded
2
Thomas’s allegations concerning the Housing 5000 projects areproblematic. Housing 5000 is a project of the Saint Paul Housing
and Redevelopment Authority (“HRA”), not defendant. As an
independent government agency, it is neither an arm nor an alterego
of the City of St. Paul. Thus, it is the HRA which rejected
the team’s bid.
2
Case 0:06-cv-02860-JMR-FLN Document 78 Filed 12/13/2007 Page 3 of 17
separate contracts, each set at $10,000. The City’s terms also
required VOP contractors to obtain insurance, accept payment on a
reimbursement basis (up to 90 days), and accept payment of the
contract over a period of 12 months. Thomas declined the work,
because “the terms of this contract simply did not make good
business sense” for him.
2. Brian Conover
3
In 2004, Conover submitted bids on at least 22 differentprojects, including: (a) St. Paul Site F Demo Phase 1 & 2, A-23783-
3; (b) St. Paul Highway 5, A-23847-3; (c) Upper Landing Park, A-
23978-31; (d) Roselawns, A-24016-3 e; (e) Phalen Park Pathway, A-
24103-3; (f) Riverview Busyway, A-24102-3; (g) St. Paul Library
Outreach; (h) Paul Wellstone Center; (I) St. Paul River Bluff
Village, A-241733; (j) St. Paul McDonough Phase II, 04096; (k)
University and Dale Red, A-24262-3; (l) Elmcrest Park Utility and
Street, 04-20; (m) McCarron’s Campus Road, A-23965-3; (n) South St.
Paul Street Reconstruction, 2004-001D; (o) Phalen Blvd Phase II, A-
23955-3; (p) St. Paul Kellogg Blvd, A-23974-3; (q) West St. Paul
Street Reconstruction, 041; ® St. Paul major sewer repairs, A-
24016-3; (s) St. Paul Water Service, A-23961-1; (t) North St. Paul
Charles St. & Centennial Drive, 6211-82; (u) Ruth Residential
Paving, A-24089-3; and (v) North St. Paul, 04-01.
3
separate contracts, each set at $10,000. The City’s terms also
required VOP contractors to obtain insurance, accept payment on a
reimbursement basis (up to 90 days), and accept payment of the
contract over a period of 12 months. Thomas declined the work,
because “the terms of this contract simply did not make good
business sense” for him.
2. Brian Conover
Plaintiff Brian Conover owns Abel Trucking. Conover claims he
submitted subcontracting bids to provide trucking services on 22
projects to various independent developers.
3 None of the bids wereaccepted.
According to Conover, the independent developers awarded each
subcontract to Caucasians, whose bids were no more competitive than
his. Notwithstanding this contention, and after years of
discovery, he offers no admissible evidence to support his claim.
He has not identified the subcontractors whose bids were accepted
Plaintiff Brian Conover owns Abel Trucking. Conover claims he
submitted subcontracting bids to provide trucking services on 22
projects to various independent developers.
3 None of the bids wereaccepted.
According to Conover, the independent developers awarded each
subcontract to Caucasians, whose bids were no more competitive than
his. Notwithstanding this contention, and after years of
discovery, he offers no admissible evidence to support his claim.
He has not identified the subcontractors whose bids were accepted,
projects because of his race. As evidence of his claim, he
cites (1) the City’s failure to invite him to bid on projects
related to the “Housing 5000 initiative”;
2 (2) the City’s failureto award him contracts for the same; and (3) the fact that
independent developers have not contracted with his company.
The City contends Thomas was provided opportunities to bid for
City work, pointing to an occasion when he was part of a team of
qualified builders and developers who entered a competitive bid for
the “Phalen Village Project.” Ultimately, Thomas’s bid was
rejected, and the contract was awarded to a Caucasian-owned
business.
On another occasion, Thomas bid on, and the City was set to
award him, a contract to market certain housing units for $40,000.
The City, however, in an attempt to broaden the contract
awards to more VOP-covered businesses, divided
3
In 2004, Conover submitted bids on at least 22 differentprojects, including: (a) St. Paul Site F Demo Phase 1 & 2, A-23783-
3; (b) St. Paul Highway 5, A-23847-3; (c) Upper Landing Park, A-
23978-31; (d) Roselawns, A-24016-3 e; (e) Phalen Park Pathway, A-
24103-3; (f) Riverview Busyway, A-24102-3; (g) St. Paul Library
Outreach; (h) Paul Wellstone Center; (I) St. Paul River Bluff
Village, A-241733; (j) St. Paul McDonough Phase II, 04096; (k)
University and Dale Red, A-24262-3; (l) Elmcrest Park Utility and
Street, 04-20; (m) McCarron’s Campus Road, A-23965-3; (n) South St.
Paul Street Reconstruction, 2004-001D; (o) Phalen Blvd Phase II, A-
23955-3; (p) St. Paul Kellogg Blvd, A-23974-3; (q) West St. Paul
Street Reconstruction, 041; ® St. Paul major sewer repairs, A-
24016-3; (s) St. Paul Water Service, A-23961-1; (t) North St. Paul
Charles St. & Centennial Drive, 6211-82; (u) Ruth Residential
Paving, A-24089-3; and (v) North St. Paul, 04-01.
3
Case 0:06-cv-02860-JMR-FLN Document 78 Filed 12/13/2007 Page 4 of 17
nor has he offered any comparison showing the accepted bid and the
bid he submitted.
Conover also complains that, on other occasions, he received
bidding invitations only a day before the bid was due. He
maintains this practice created a barrier to competitive bidding,
because it did not allow him adequate time to prepare a fairly
competitive bid for the project. Once again, however, he fails to
identify even one particular project to which he had only a single
day to bid, and does not identify any person, of any race or
background, similarly situated, who was afforded a longer period of
time in which to submit a bid.
As proof of discrimination, he simply offers the independent
developers’ refusal to use his company; their failure to offer him
any justification for their decision; and the City’s failure to
enforce the VOP.
3. Frederick Newell
Plaintiff Frederick Newell owns Newell Abatement Services,
Inc.; Lead Investigative Services, Inc.; and Nails Construction
Company. He claims he submitted numerous bids on the City’s open
competition projects, all of which were rejected.
Thereafter, he repeatedly contacted various Housing and
Redevelopment Authority (“HRA”) officials and Department of
Planning and Economic Development (“PED”) officials to complain
that he did not get these jobs. Providing no specifics, he states
4
Case 0:06-cv-02860-JMR-FLN Document 78 Filed 12/13/2007 Page 5 of 17
the PED “provided a variety of excuses” about why he did not
receive the work. As evidence of discrimination, Newell cites the
HRA’s and the PED’s failure to provide adequate explanations for
his rejected bids, and their failure to liberally construe the
mandates of the VOP in order to further the objective of providing
economic opportunities to VOP-protected entities.
B. The VOP
1. Sec. 84.01. Declaration of Policy and Purpose
In the mid-1990s, two studies - but no judicial decision -
found indications that the City of St. Paul, Minnesota,
discriminated against women and minorities in its contracting
programs. The City attempted to remedy this discrimination and
prevent it in the future by creating the VOP. The program was
designed to assist contractors providing goods and services to the
City with access to its publicly-funded projects.
The City adopted a policy to “promote increased participation
by qualified, minority-owned, women-owned, and economically
disadvantaged small businesses in public contracting that is
comparable to their availability in the Saint Paul marketplace.”
(City of St. Paul, Minn., Administrative Code ch. 84.)
Under the VOP, the City sets annual benchmarks or levels of
participation for the targeted groups. At the same time, the VOP
expressly prohibits quotas. VOP benchmark levels are established,
and participation of eligible businesses is reviewed every three
Case 0:06-cv-02860-JMR-FLN Document 78 Filed 12/13/2007 Page 6 of 17
years in an effort to ensure (1) that the program seeks no more
than to remedy the effects of past discrimination and prevent
future discrimination, and becomes neither a quota program, nor cap
participation of qualified businesses. The VOP’s provisions apply
to all contracts entered into or awarded, including prime and
vendor contracts. Importantly, however, the VOP program applies
only to the City of St. Paul; it does not refer to, or bind, any
other governmental agency.
2. Sec. 84.08. Prime Contract Requirements
The VOP imposes various “good faith” requirements on prime
contractors who bid for City projects. In particular, § 84.08
requires, among other things, that when a prime contractor rejects
a bid from a VOP-certified business, the contractor must give the
City its complete basis for the rejection, and evidence that the
rejection was justified.
3. Sec. 84.09. Vendor Contract Requirements
The VOP further imposes obligations on the City with respect
to vendor contracts. The City’s contract manager must seek, where
possible and lawful, to award a portion of vendor contracts to VOPcertified
businesses. The contract manager must solicit these bids
by phone, advertisement in a local paper, or other means prior to
opening bid. Where applicable, the contract manager may assist
interested VOP participants in obtaining bonds, lines of credit, or
insurance required to perform under the contract. The
