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25. In this suit, the most appropriate ruling on the basis of applicable United States Supreme Court precedent would be that the set-asides are
An independent municipal water-supply district was incorporated under the applicable laws of a particular state. The district was created solely to supply water to an entirely new community in a recently developed area of the state. That new community is racially, ethnically, and socioeconomically diverse, and the community has never engaged in any discrimination against members of minority groups. The five-member, elected governing board of the newly created district contains two persons who are members of racial minority groups. At its first meeting, the governing board of the district adopted a rule unqualifiedly setting aside 25% of all positions on the staff of the district and 25% of all contracts to be awarded by the district to members of racial minority groups. The purpose of the rule was «to help redress the historical discrimination against these groups in this country and to help them achieve economic parity with other groups in our society.» Assume that no federal statute applies. A suit by appropriate parties challenges the constitutionality of these set-asides.
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There are three levels of review that are used in judging whether governmental classifications violate the Equal Protection Clause. The highest level of review is strict scrutiny, which is applied to any statute based on a «suspect classification.» Where strict scrutiny is invoked, the classification will be upheld only if it is necessary to promote a compelling governmental interest. The three suspect classifications are race, national origin, and (for some purposes) alienage.
When a classification involves a suspect class, courts will first determine whether the differential treatment of the class is intentional by the government. If the statute or regulation merely has an unintended incidental effect of burdening one group over another, strict scrutiny will not apply. When strict scrutiny is applied, however, it is almost always fatal to the statute or regulation.
Government programs that attempt to assist racial or ethnic minorities (i.e., affirmative action programs), and that do so in an explicit race- or ethnically-conscious way will also trigger strict scrutiny just as if it were a regulation that purposefully disadvantages a minority group.
Even where a state or local government has not historically engaged in past discrimination, it may have a compelling interest in affirmative action. However, the government action must be narrowly tailored to that interest. City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989). Although the Court has found that remedying past discrimination is a compelling interest, there is no such compelling interest in remedying the general effects of societal discrimination.
The Contract Clause under Article I, Section 10 prevents only substantial impairments of contract (i.e., destruction of most or all of a party's rights under a contract). Public contracts (i.e., those in which the state or political subdivision is a party) will not pose a substantial impairment under this Clause if the state has simply reserved the power to revoke, alter, or amend either the contract itself or in a statute or law the terms of which should be considered to be incorporated into the contract.
A is correct. Race is considered a suspect classification under the Equal Protection Clause. A statute or regulation based on a suspect classification will trigger strict scrutiny if the court finds that the differential treatment of the class is intentional. A government program that attempts to assist racial minorities in a race-conscious way will trigger strict scrutiny, and the goal of remedying the general effects of past societal discrimination is not considered a compelling interest.
In this case, the set-asides classify on the basis of race, and therefore, must pass strict scrutiny by serving a compelling governmental interest. There has been no history of discrimination, the community is diverse, and forty percent of the members of the governing board are members of racial minorities. Moreover, the purpose is explicitly «to help redress the historical discrimination against these groups in this country and to help them achieve economic parity with other groups in our society.» This interest in remedying the effects of societal discrimination, without any specific prior discrimination by this agency, is not compelling and thus fails the strict scrutiny test. As such, the set-asides are unconstitutional discrimination against members of the majority race, in violation of equal protection.
B is incorrect. This answer reaches the correct answer with the wrong reasoning. The issue presented here is not the right to contract, but rather, the guarantees of equal protection. Under Article I, Section 10, a «substantial impairment» is when all or most of a party's rights under a contract are destroyed. In this case, the right to contract will not be impaired by limiting the number of contracts available for potential employees or contractors because there has been no destruction of any party's rights under an existing contract.
C is incorrect. As explained above, this classification based on race, even if the purpose is to help redress prior societal discrimination, is not considered a compelling interest under strict scrutiny, which must be satisfied when there are classifications based on race. In this case, without any history of discrimination in the district or evidence that discrimination is currently happening, the policy will not be constitutional under the Equal Protection Clause.
D is incorrect. Even if a government regulation is considered a proprietary venture, it must nevertheless satisfy equal protection guarantees for all of its citizens under the Fourteenth Amendment. Here, because the Equal Protection Clause is violated by the policy, it is unconstitutional, as explained above.