Professor Suggs argues that set-asides for minority business enterprises are the only practical remedy for business discrimination and therefore need more flexible treatment by the judiciary. In City of Richmond v. J.A. Croson Co., the Supreme Court set up strict standards for upholding set-asides, assuming that the problem of discrimination could be addressed adequately by laws prohibiting racial discrimination in business transactions. The author challenges this assumption. He considers the record of cases asserting claims of business discrimination and concludes that these cases fail, regardless of merit, because they face insurmountable practical problems of proof. After exploring whether a legislative remedy could be enacted, he finds that the legal and practical obstacles are too great. Therefore, he argues that set-asides should be re-examined as a preventative measure for business discrimination and that the standards imposed by the Court in Croson should be relaxed because they cannot be met even when discrimination is pervasive.
Professor Suggs then compares the complaints of minority firms claiming discrimination in domestic markets to those of American firms claiming exclusion from Japanese markets. American firms urge that the only way to surmount Japanese trade barriers is to extract firm guarantees from Japan that assure American firms a specified share (in substance a set-aside) of Japanese markets. Because these demands would allocate contracts by race, they create the same dangers of racial stereotyping and the politics of racial hostility that the Court feared in Croson. To be justified, they should be required to meet the same strict standards as minority set-asides under Croson. Otherwise, minorities are held to a higher standard than majority firms in an equivalent situation.
Robert E. Suggs,
Racial Discrimination in Business Transactions,
42 Hastings L.J. 1257
Available at: https://repository.uchastings.edu/hastings_law_journal/vol42/iss5/1