Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-05-02799/USCOURTS-ca8-05-02799-0/pdf.json

Parties Involved:
Gary Berry
Appellee
City Council
Appellee
Martin Gipson
Appellee
Larry Harris
Appellant
Patrick Henry Hays
Appellee
Charlie Hight
Appellee
Murry Witcher
Appellee
Greg Yielding
Appellee

Document Text:

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 05-2799

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Larry Harris, doing business as

Harris Construction Management

Company,

Appellant,

v.

Mayor Patrick Henry Hays, Mayor

of the City of North Little Rock,

Arkansas; Martin Gipson; Greg

Yielding; Gary Berry; Charlie

Hight; and Murry Witcher,

Individually and in their official

capacities as City Council

Members of the City of North

Little Rock, Arkansas; and the

City Council of the City of North

Little Rock, Arkansas,

Appellees.

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Appeal from the United States

District Court for the Eastern

District of Arkansas.

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Submitted: March 16, 2006

 Filed: July 5, 2006

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Before COLLOTON, JOHN R. GIBSON and GRUENDER, Circuit Judges. 

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The Honorable William R. Wilson, Jr., United States District Judge for the

Eastern District of Arkansas.

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GRUENDER, Circuit Judge.

 Larry Harris appeals the order of the district court1

 granting summary judgment

to the City Council of North Little Rock and the city’s mayor and five city council

members in their official and individual capacities (collectively, “the defendants”) on

Harris’s claims of discrimination and deprivation of a property right under 42 U.S.C.

§§ 1981 and 1983. For the reasons discussed below, we affirm the judgment of the

district court.

I. BACKGROUND

The City of North Little Rock, Arkansas (“City”) implemented the “Year 2000

Sidewalk Program” to bring city sidewalks into compliance with the Americans with

Disabilities Act. The City opened Phase I of the project for bids, expressly stating in

the bid package that the City reserved the right to add or subtract sidewalks from the

contract as funds allowed. Harris, an African-American, submitted the lowest bid of

$558,300 and was awarded the Phase I contract. The City subsequently removed

some sidewalks from the package, and Harris signed the Phase I contract for

$330,000.

Some of the sidewalks removed from the Phase I contract later were included

in the Phase II contract. The lowest bid of $335,444 for the Phase II contract was

submitted by Tom Brooks, a Caucasian. Harris’s bid of $479,459 was only the sixthlowest bid. The City awarded Phase II to Brooks. Again, the City removed sidewalks

from the package, and in 2001 Brooks signed the Phase II contract for $179,000.

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Brooks had never performed work for the City before, but he was wellacquainted with City Engineer Mike Smith and had done work on Smith’s residence.

Brooks also was acquainted with at least two of the City council members. During

performance of the Phase II contract, Brooks offered to keep his price-per-square-foot

constant at the 2001 level if the City agreed to extend his contract for successive

phases without re-bidding. Smith informed the City Council that the price of new bids

likely would rise each year and that, in his opinion, Brooks’s offer was financially

advisable. The City Council passed an ordinance extending the contract with Brooks

without new bids. 

Arkansas law required a municipality to award contracts exceeding $10,000

through competitive bidding, except “in exceptional situations where [competitive

bidding] is deemed not feasible or practical” by the city government. Ark. Code Ann.

§ 14-58-303(b)(2) (2001). The City generally provided for waiver of competitive

bidding only in “emergency” situations involving imminent danger of damage. No

evidence of an emergency was advanced to justify the award of the extended sidewalk

contract to Brooks without competitive bidding.

When the Year 2000 Sidewalk Program finally was opened again to competitive

bidding in 2004, Brooks and seven other contractors submitted bids. Harris did not

bid. The contract was awarded to an African-American contractor who was the lowest

bidder.

Harris brought a claim against the defendants under 42 U.S.C. § 1981for racial

discrimination in the awarding of the Phase II contract and a claim under 42 U.S.C.

§ 1983 for deprivation of a property right under color of state law in violation of due

process. The defendants moved for summary judgment on the ground that the

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The defendants also asserted that they were protected by qualified and

legislative immunity in passing the city ordinance extending Brooks’s contract

without bidding. The district court did not address this defense, and it is not necessary

for this Court to reach its merits on appeal.

3

Harris concedes that there is no direct evidence of discrimination.

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challenged contract decisions were made for financial reasons.2

 The district court

granted the summary judgment motion, holding that Harris failed to create a

reasonable inference that the contract decision was based on racial discrimination and

that Harris had no property right in the extended portion of the Phase II contract.

Harris appeals. 

II. DISCUSSION

“We review a grant of summary judgment de novo, viewing the facts in the

light most favorable to the non-moving party.” Cottrill v. MFA, Inc., 443 F.3d 629,

635 (8th Cir. 2006). 

A. The § 1981 Claim

Section 1981 protects citizens’ rights to make and enforce contracts. The

McDonnell Douglas burden-shifting framework applies to motions for summary

judgment in cases arising under § 1981 where there is no direct evidence of

discrimination.3

 Roxas v. Presentation College, 90 F.3d 310, 315 (8th Cir. 1996).

Under this framework, the claimant first must establish a prima facie case of

discrimination; if a prima facie case is established, the burden of production shifts to

the defendant to show a legitimate, nondiscriminatory reason for the challenged

action; and if the defendant proffers such a reason, the burden of production shifts

back to the claimant to establish that the proffered reason is a mere pretext for

discriminatory animus. Id. at 315-16. “A plaintiff establishes a prima facie case

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Harris claims that the district court erred in its application of the McDonnell

Douglas framework because the district court relied on a nondiscriminatory

justification for the defendants’ actions, “cronyism,” which was not advanced by the

defendants as a legitimate, nondiscriminatory reason for the challenged action.

However, the district court actually held that Harris failed to establish an element of

his prima facie case because the evidence created no inference that the defendants

intended to discriminate against Harris on the basis of race, but rather only an

inference that the defendants intended to favor Brooks due to cronyism.

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under § 1981 by showing (1) membership in a protected class; (2) the intent to

discriminate on the basis of race on the part of the defendant; and (3) discrimination

interfering with a protected activity (i.e., the making and enforcement of contracts).”

Daniels v. Dillard’s, Inc., 373 F.3d 885, 887 (8th Cir. 2004). One way for the

claimant to establish the second element, the defendant’s intent to discriminate, is to

show that he was treated differently from similarly situated nonmembers of the

protected class. Turner v. Gonzales, 421 F.3d 688, 694 (8th Cir. 2005). 

Harris did not establish his prima facie case because he did not present evidence

sufficient to create an inference that the defendants intended to discriminate against

him on the basis of race.4

 Harris argues that he was treated differently from Brooks

in several respects and that Brooks, a Caucasian, was a similarly situated nonmember

of the protected class. However, each of Harris’s allegations of disparate treatment

fails.

First, Harris notes that the value of his Phase I contract was reduced from

$558,300 to $330,000 and that some of the removed work was shifted to the Phase II

contract awarded to Brooks. However, the bid solicitation expressly reserved the right

to add or remove work based on available funding, and in fact Brooks’s Phase II

contract also was reduced from $335,444 to $179,000. Therefore, Harris was not

treated differently from Brooks.

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We agree with the concurring opinion’s statement, post at 10, that “evidence

that the defendants here had a non-racial reason for treating Brooks and Harris

differently should [not] mean that Harris failed to make a prima facie case.” Instead,

we find that Harris failed to make a prima facie case with regard to inspections

because the record evidence cited by Harris does not, in fact, suggest that Harris’s

work was inspected differently from Brooks’s work. Harris himself summarizes the

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Second, Harris cites as evidence of discriminatory intent the City’s decision to

extend additional work under Brooks’s Phase II contract without competitive bidding

after the City refused Harris’s request to extend his Phase I contract without

competitive bidding. Again, Brooks was not similarly situated to Harris because

Brooks offered to keep his price-per-square-foot constant at the 2001 level for three

years if the City agreed to the extension, while Harris did not make a similar pricing

offer in his request for extra work.

Third, Harris notes that at some point during Brooks’s contract, Brooks was

allowed to ignore the contract specification to use Nycon, an expensive concrete

additive. Harris contends that he could have submitted a lower Phase II bid if he had

been told that the Nycon requirement would not be enforced. There is no disparate

treatment in this instance because Brooks and the other four contractors who

submitted lower Phase II bids than Harris had to account for the cost of Nycon when

they bid the contract, just as Harris did. Absent evidence that at the time of bidding

the City informed Brooks, but not the African-American bidders, that the Nycon

requirement would be dropped at some point, this later change does not create an

inference of discrimination against Harris in the awarding of the contract.

Fourth, Harris argues that the City inspected Brooks’s work less rigorously than

it inspected Harris’s work during Phase I. The deposition testimony on which Harris

relies suggests that, at most, City Engineer Smith was very informal when working

with Brooks because of their social relationship. Again, this evidence does not create

an inference of racial discrimination in the awarding of the contract.5

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allegedly disparate treatment with regard to inspections by stating that City Engineer

Smith and Brooks “visited together, enjoyed lunch, or ate pretzels from the jar Mr.

Smith kept on his desk” in addition to reviewing Brooks’s work. Appellant’s Brief

at 17. Notwithstanding Harris’s assertions to the contrary, none of the evidence cited

by Harris suggests that the actual inspection of Brooks’s work was different from the

inspection of Harris’s work.

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Because Harris did not present sufficient evidence to create an inference of an

intent to discriminate on the basis of race on the part of the defendants, Harris cannot

establish a prima facie case for his § 1981 claim. Therefore, the grant of summary

judgment to the defendants on that claim is appropriate.

B. The § 1983 Claim

Harris claims that the extension of Brooks’s Phase II contract in contravention

of Ark. Code Ann. § 14-58-303(b)(2) violated Harris’s due process property right in

the extended portion of the contract. “To have a property interest in a benefit, a

person clearly must have more than an abstract need or desire for it. He must have

more than a unilateral expectation of it. He must, instead, have a legitimate claim of

entitlement to it.” Board of Regents of State Colleges v. Roth, 408 U.S. 564, 577

(1972). Arkansas statutes create a property interest in a competitively bid public

contract for the lowest bidder that complied with the bidding specifications and

procedures. L & H Sanitation, Inc. v. Lake City Sanitation, Inc., 769 F.2d 517, 524

(8th Cir. 1985).

We need not decide whether a similar protected property right arises in a public

contract that should have been, but was not, open to competitive bidding. Assuming

arguendo that such a property right would be recognized, Harris at a minimum would

have to show that he would have been the lowest bidder on the extended portion of the

contract, and thus would have had “a legitimate claim of entitlement to it,” had it been

opened to bidding. Although Harris was the lowest bidder on the Phase I contract in

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2000, he was only the sixth-lowest bidder on the Phase II contract in 2001. This falls

far short of establishing any claim that Harris would have been the lowest bidder for

2002 or 2003. In the absence of evidence that Harris would have had a property

interest in the extended portion of the contract, Harris’s § 1983 claim fails.

III. CONCLUSION

We conclude that the district court did not err in granting summary judgment

to the defendants on Harris’s § 1981 and § 1983 claims. Therefore, we affirm the

judgment of the district court.

JOHN R. GIBSON, Circuit Judge, concurring.

I concur in the result because I am concerned that the Court's opinion could be

read to mean that Harris failed to make a prima facie case even though he showed

different treatment of Brooks and himself. The district court relied on "cronyism," a

reason other than the one asserted by the employer, to justify the alleged preference

for Brooks over Harris:

The evidence produced by Plaintiff raises an inference that in this

particular instance there was favoritism shown to Mr. Brooks, a

Caucasian[,] to the detriment of Plaintiff, an African-American.

. . .

I want to make it clear that in finding for defendants in this case,

I do not discount that in some instances, a clannish preference for friends

and relatives may also be intertwined with racial preferences and

stereotypes that amount to an invidious intent to discriminate on the

basis of race. However, in this case, the Plaintiff has failed to produce

sufficient evidence to create a reasonable inference establishing his

prima facie case. . . . At worst, the evidence simply tends to create an

inference that Mr. Brooks was awarded the extended contract, not

because of financial concerns, but because of "cronyism."

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Dist. Ct. slip op. at 8-9. The defendants had contended that the reason Brooks got the

extended contract was financial advantage to the city; thus, the district court in effect

held that the defendants had used a pretext, but that it was not a pretext for racial

discrimination. Our Court today remarks on this reasoning, supra at 5 n.4, but does

not rely on it, except in excusing the alleged laxity of Smith's inspection of Brooks's

work, supra at 6. I write separately to underscore the problems with the idea that

evidence of "cronyism" rules out "discrimination."

The district court’s conclusion that the evidence created an inference that

cronyism influenced the award of the extended contract is troublesome to me. My

starting point is the meaning of the word "cronyism," and for this I turn to Webster’s

Third International Dictionary. "Crony" is defined as "an intimate companion esp.

of long standing: a familiar friend: an old chum." "Cronyism" is " partiality to cronies

esp. as evidenced in the appointing of political hangers-on to office without due regard

being taken of their qualifications." 

Our Court remarks that the district court held that "Harris failed to establish an

element of his prima facie case because the evidence created no inference that the

defendants intended to discriminate against Harris on the basis of race, but rather only

an inference that the defendants intended to favor Brooks due to cronyism." Supra at

5 n.4. Where a discrimination plaintiff has shown that he has been treated differently

from others who were outside the protected class, I believe that the plaintiff should not

be said to have failed to make a prima facie case because there is an explanation for

the differential treatment. The original test for a prima facie case as stated in

McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973), called for proof 

(i) that [the plaintiff] belongs to a racial minority; (ii) that he applied and

was qualified for a job for which the employer was seeking applicants;

(iii) that, despite his qualifications, he was rejected; and (iv) that, after

his 

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rejection, the position remained open and the employer continued to seek

applicants from persons of complainant's qualifications.

McDonnell Douglas itself recognized that the formulation would not fit the facts of

every case and would have to be adjusted. Id. at 802 n.13. Accordingly, we modified

the test where the plaintiff could not show that his position remained open, but could

show that he was treated differently from persons who were not members of his

protected class; in such a case, we substituted a different fourth element, that the

"plaintiff show that his or her discharge occurred under circumstances that create an

inference of unlawful discrimination." Williams v. Ford Motor Co., 14 F.3d 1305,

1308 (8th Cir. 1994). But even with this less specific formulation, the essence of the

prima facie test was still unequal treatment of minorities versus non-minorities. See

id. The use of the "circumstances that create an inference of unlawful discrimination"

formulation was not meant to force the plaintiff to prove the ultimate issue of

discrimination in order to make a prima facie case. Id. The prima facie case was still

meant to be a first step, not the finish line. See id. (burden of making prima facie case

is "not onerous") (quoting Texas Dep't of Com'ty Affairs v. Burdine, 450 U.S. 248,

253-54 (1981)); Rodgers v. U.S. Bank, N.A., 417 F.3d 845, 852 (8th Cir. 2005).

The question of whether there is a legitimate, nondiscriminatory reason for the

different treatment is to be dealt with at the second step of the McDonnell Douglas

analysis, not the first. See McDonnell Douglas, 411 U.S. at 802. Thus, I cannot agree

that the evidence that the defendants here had a non-racial reason for treating Brooks

and Harris differently should mean that Harris failed to make a prima facie case.

Moreover, I do not believe that characterization of the reason for the unequal

treatment as cronyism should always mean that the plaintiff failed to carry his burden

of proof on the ultimate issue of discrimination. Although there are certainly cases

saying that nepotism, cronyism, and personal favoritism are not equivalent to racial

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Neal v. Roche, 349 F.3d 1246, 1251-52 (10th Cir. 2003); Foster v. Dalton, 71

F.3d 52, 56 (1st Cir. 1995); Howard v. BP Oil Co., 32 F.3d 520, 527 (11th Cir. 1994);

Holder v. City of Raleigh, 867 F.2d 823, 826-27 (4th Cir. 1989). But see Domingo v.

New England Fish Co., 727 F.2d 1429, 1436 (9th Cir. 1984) (nepotism in hiring, plus

use of subjective hiring criteria, plus use of racial labels for certain jobs supported

allegations of intentional discrimination).

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See Backlund v. Hessen, 104 F.3d 1031, 1033-34 (8th Cir. 1997), holding that

a hiring decision by a governmental employer based on nepotism can be arbitrary,

thus violating the equal protection clause of the Fourteenth Amendment.

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discrimination,6 it is nevertheless an oversimplification to conclude that "cronyism"

is always a legitimate, nondiscriminatory reason for a hiring decision--especially by

a governmental employer.7

 This is because "there are similarities between nepotism

and racial discrimination. Both select on a basis unrelated to merit. Both practices

disqualify some applicants, ab initio, based on accidents of birth." Holder v. City of

Raleigh, 867 F.2d 823, 826 (4th Cir. 1989). Indeed, racism can be said to be a

particular kind of cronyism or favoritism. While we must require that a racial

discrimination case has a racial aspect, we must also take care not to condone a

defense that would immunize racial discrimination by giving it a different name. 

It is well established that cronyism can form the basis of a disparate impact

claim where the plaintiff is able to show a pattern of favoritism that closes a protected

class out of jobs or contracts. See Foster v. Dalton, 71 F.3d 52, 57 (1st Cir. 1995).

But this is a disparate treatment case, not a disparate impact case, since Harris does

not contend he has shown a pattern of cronyism affecting others than himself. He

must therefore prove the element of discriminatory intent. However, even in a

disparate treatment case, the same evidence that proves cronyism is often ambiguous

and amenable to interpretation as evidence of racial discrimination. The employer

could prefer X over Y because X is his friend, but he might choose to hire a friend of

his own race in order to avoid hiring a person of a different race. In such cases, a trier

of fact could either accept the employer's non-racial cronyism explanation or find that

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the explanation was a mask for racial preference. For this reason, in Foster, the First

Circuit held that an administrator's decision to hire a white, male fishing buddy instead

of a more qualified African-American woman created an issue of fact as to whether

the reason was racism or "undiluted favoritism, unmixed with racial animus." 71 F.3d

at 57. 

On such a record, it is the trial court's prerogative–indeed, its duty– to

select the inference that it deems appropriate. Because we cannot accept

the appellant's invitation to create a presumption that the use of an old

boy network in hiring constitutes per se racial discrimination, we are

powerless to subvert the district court's election [in a bench trial]

between conflicting inferences. 

Id. ; accord Holder, 867 F.2d at 827 ("Although the presence of family preferences

as a factor in a promotion might be part of the evidence upon which an inference of

invidious motive may be drawn, intention to discriminate remains a question to be

resolved by the ultimate trier of fact."). 

There are similar cases in which judgment as a matter of law was entered for

the employer, but they have significant differences. Although the Tenth Circuit

affirmed summary judgment in a case where the employer had chosen a white

employee over a black one to protect the white woman from being laid off, the

plaintiff had conceded the avoidance of lay-off was determinative, and so had

conceded away racism. Neal v. Roche, 349 F.3d 1246 (10th Cir. 2003). Here, of

course, there is no such concession. In Brandt v. Shop 'N Save Warehouse Foods,

Inc., 108 F.3d 935 (8th Cir. 1997), our court entered judgment as a matter of law for

an employer who passed over a female candidate to hire an unemployed male friend

of a vice president of the company. The employer's proffered reason was that the

female candidate was "unqualified," a reason that this court found was a "fabrication,"

made to hide the truth that the job was especially designed for the vice president's

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"[I]t is not enough that the employee submit evidence of pretext such that the

jury disbelieves the defendant's 'legitimate' reasons." Brandt, 108 F.3d at 938.

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friend. 108 F.3d at 938. Brandt was arguably a "pretext plus" case,8 decided during

the period of uncertainty preceding Reeves v. Sanderson Plumbing Prods., Inc., 530

U.S. 133, 148 (2000), which of course governs our decision. Under Reeves the prima

facie case, combined with the jury's rejection of the employer's asserted reason, can

suffice to allow a jury to find discrimination. Id. at 147-48. Even if Brandt had had

the benefit of Reeves, it would be distinguishable from our case because of a factual

difference that has been considered significant elsewhere– the candidate who got the

job was unemployed, thus giving the employer a compelling non-discriminatory

reason for hiring him. 108 F.3d at 938; see Neal, 349 F.3d at 1252 (summary

judgment where plaintiff conceded "employer had a specific, nondiscriminatory

motivation, to rescue the successful candidate from looming unemployment"). 

Factual nuances specific to the case will usually give the jury a context for

deciding whether favoritism is purely personal or has a racial aspect. The question of

whether the favoritism had a racial aspect must be evaluated on the myriad peculiar

facts of the case, such as the closeness of the relationship between employer and

successful candidate (brother-in-law or cocktail-party acquaintance?), the relative

qualifications of the candidates, the employer's workplace environment, etc. Only in

a rare case will the evidence of cronyism be unambiguously non-discriminatory. I

believe that a case in which the evidence could support either an inference of nonracial cronyism or preference with a racial aspect should be sent to the trier of fact to

choose among competing inferences.

Although the district court relied on the cronyism explanation, the Court today

for the most part is able to justify the summary judgment by different reasoning and

relies on the cronyism explanation only to excuse the alleged laxity of inspections by

Smith of Brooks' work. I have reviewed the record citations on which Harris relies

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to show this laxity, and I am not convinced that these citations show that Smith treated

Brooks differently from Harris so as to establish a prima facie case on this ground.

Accordingly, I concur in the result reached by the Court, though not in all of its

reasoning.

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