On the Legal Front: The Grutter, Gratz, & Costa Rulings
Art Gutman
Florida Institute of Technology
On June 23, 2003 the Supreme Court ruled on Grutter v. Bollinger and Gratz v. Bollinger. I discussed these cases in the October 2002, April 2003, and July 2003 issues of
TIP, and I will discuss them just one more time (I think). Grutter and
Gratz will likely dominate the landscape for years to come, and deservedly so. Colleges and universities have relied on Justice Powells ruling in
Regents v. Bakke (1978) to structure their diversity programs, and this is the first Supreme Court test of that ruling. In recent years, some lower courts have ruled that
Bakke is bad law (e.g., Hopwood v. Texas, 1996; Johnson v. Board of Regents, 2001). The
Grutter ruling overturns such opinions.
On June 9, 2003, prior to the above rulings, the Supreme Court ruled on Desert Palace v. Costa.
Although received with less fanfare than Grutter or Gratz,
Costa will also be influential for years to come. Since Price Waterhouse v. Hopkins (1989), and amendments to that ruling in the Civil Rights Act of 1991 (or CRA-91), lower courts have insisted that
direct evidence of an illegal motive is needed to trigger the mixed-motive defense. In
Costa, the Supreme Court unanimously ruled that indirect (or circumstantial)
evidence is also a valid trigger for this defense.
Desert Palace v. Costa (2003)
In Price Waterhouse v. Hopkins (1989), Ann Hopkins was twice passed over for promotion to partner. She presented direct evidence of an illegal motive: that several male partners made sex-based derogatory remarks that her flawed interpersonal skills could be corrected by a soft-hued suit or a new shade of lipstick, that she was macho, and that she overcompensated for being a woman. However, the defense countered with a
legal motive for not promoting her, namely that she was brash and abrasive to staff and clients. The Supreme Court ruling was complex. The bottom line though, was that under rules
predating CRA-91, Ann Hopkins received no relief because the defendant proved the legal motive with a preponderance of evidence.
Hopkins was then addressed in the Civil Rights Restoration Act of 1990, which was vetoed, and in CRA-91, which became law. The aborted 1990 Act promised full equitable relief to plaintiffs if an illegal motive plays
any role in a selection decision. Under these rules, Ann Hopkins was due equitable remedies such as declarative and injunctive relief, legal fees, backpay, and the promotion she was denied. However, CRA-91 bifurcated these remedies so that a plaintiff in Ann Hopkins shoes is due declarative relief, injunctive relief, and legal fees for proving the illegal motive, but the defendant escapes liability for backpay and promotion for proving the legal
motive.1
1 I am often reminded by attorneys themselves that attorney fees are invariably substantial and that they belong to the plaintiff, not the attorneys.
Historically, facing only indirect evidence of an illegal selection decision, defendants have only had to
articulate why the decision was made, forcing plaintiffs to prove that the statement made is a pretext (or cover up) for illegal discrimination. In this so-called McDonnell-Burdine scenario (see
McDonnell Douglas v. Green, 1973), defendants need never offer proof. Thus, if forced into a mixed-motive scenario, defendants face a burden of proof that is
nonexistent in the McDonnell-Burdine scenario. Lost in a maze of opinions in
Hopkins was Justice OConnors lone view that only direct evidence of an illegal motive can force defendants to prove a legal motive. Since
Hopkins, and in spite of CRA-91, lower courts have required proof of a legal motive only in the face of direct evidence of the illegal motiveuntil
Desert Palace v. Costa.
Also of importance, before CRA-91, Title VII cases were tried by district court judges. CRA-91 ushered in jury trials for plaintiffs seeking newly available legal
relief.2 Before CRA-91, judges rendered discreet rulings, and a trial could end in
any of three phases: (a) with plaintiffs failure to make a prima case, (b) with defendants failure to counter the prima facie case, or (c) with plaintiffs success or failure to prove pretext. In jury trials, the evidence flows back and forth more continuously, and the judge instructs the jury on the burdens in these phases after
all of the evidence is heard.
2 Legal relief includes compensatory damages for pain and suffering and punitive damages for employers guilty of willful violations.
Catharina Costa, the only female employee in a warehouse, was terminated after a verbal and physical altercation with a male coworker. The coworker received only a 5-day suspension. Costa lacked direct evidence that her termination was gender-based, but she had indirect evidence; she was treated more harshly than the male coworker with whom she feuded and male coworkers in general. The defense countered that Costa was terminated because she was a repeat offender, whereas the suspended coworker was not. Had the judge used McDonnell-Burdine rules, the jury would have weighed the defenses
articulation (that Costa was fired for cause) against the plaintiffs indirect evidence of pretext (harsher treatment than male coworkers). However, the trial judge gave the
mixed-motive instruction, thereby forcing the defense to prove, rather than to simply verbalize, its legal motive.
Accordingly:
You have heard evidence that the defendants treatment of the plaintiff was motivated by the plaintiffs sex and also by other lawful reasons. If you find that the plaintiffs sex was a motivating factor in the defendants treatment of the plaintiff, the plaintiff is entitled to your verdict, even if you find that the defendants conduct was also motivated by a lawful reason. However, if you find that the defendants treatment of the plaintiff was motivated by both gender and lawful reasons, you must decide whether the plaintiff is entitled to damages. The plaintiff is entitled to damages unless the defendant proves by a preponderance of evidence that the defendant would have treated plaintiff similarly even if the plaintiffs gender had played no role in the employment decision.
The Supreme Court supported the trial judge. Speaking for a unanimous Court, Justice Thomas ruled:
In order to obtain a [mixed motive] instructiona plaintiff need only present sufficient evidence for a reasonable jury to conclude, by a preponderance of the evidence, that race, color, religion, sex, or national origin was a motivating factor for any employment practice. Because direct evidence of discrimination is not required in mixed-motive cases, the Court of Appeals correctly concluded that the District Court did not abuse its discretion in giving a mixed-motive instruction to the jury.
For her part, Justice OConnor joined this ruling because she believed, as did the other eight justices, that in CRA-91, Congress codified a new evidentiary rule for mixed-motive cases arising under Title VII.
The Grutter & Gratz Rulings
In previewing these cases in April 2003, I felt the most important issue was: Is
Bakke good law via 14th Amendment strict scrutiny rules? That means first deciding if diversity is a
compelling government interest and then, presuming it is, deciding further if the admissions plans at issue are
narrowly tailored to that interest. A nay answer on compelling interest ends all diversity programs in higher education. As it turned out, the
Grutter Court ruled that diversity is a compelling government interest and that the law school plan
is narrowly tailored to that interest. However, the Gratz Court ruled that the undergraduate plan is not narrowly tailored.
Briefly, the law school plan combines objective variables (e.g., GPA & LSAT) with soft variables (e.g., recommendation letters, quality of undergraduate school, leadership, work experience, unique talents, and overcoming social or economic disadvantage). The law school claims to seek
a critical mass of underrepresented minority students in order to (a) make each class stronger than the sum of its parts, (b) prevent minority students from feeling isolated or like spokespersons for their race, and (c) prevent minority students from feeling uncomfortable discussing issues freely based on their personal experiences. The law school also claims there is no hard and fast objective rule for admissions and no fixed percentage goal for the critical mass.
The undergraduate admissions (or UGA) plan uses a selection index of 150 points, with 100 points required for admission. Up to 12 points are awarded for standardized scores, up to 98 points for GPA, category of school attended, and strength or weakness of the curriculum, and up to 40 points for
other factors. These other factors include up to 20 points for geographical location, alumni relations, outstanding essay, personal achievement, or leadership and service activity and up to 20 points for
miscellaneous categories, including socioeconomic disadvantage, racial and ethnic minorities, athletic scholarship, and discretionary selection by the provost.
The Grutter Ruling
Justice OConnor was the swing vote in a 5-4 ruling. Speaking for Breyer, Ginsburg, Souter, and Stevens, OConnor ruled, The Law Schools narrowly tailored use of race in admissions decisions to further a compelling interest in obtaining the educational benefits that flow from a diverse student body is not prohibited by the Equal Protection Clause of the 14th Amendment (and other relevant statutes). Quoting routinely from Justice Powells ruling in
Bakke, OConnor explained in detail why the law schools admissions program
is narrowly tailored. Accordingly:
The Law Schools admissions program bears the hallmarks of a narrowly tailored plan. To be narrowly tailored, a race-conscious admissions program cannot insulate each category of applicants with certain desired qualifications from competition with all other applicants. Instead, it may consider race or ethnicity as a plus in a particular applicants file; i.e., it must be flexible enough to consider all pertinent elements of diversity in light of the particular qualifications of each applicant, and to place them on the same footing for consideration, although not necessarily according them the same weight. It follows that universities cannot establish quotas for members of certain racial or ethnic groups or put them on separate admissions tracks. The Law Schools program, like the Harvard plan approved by Justice Powell, satisfies these requirements. Moreover, the program is flexible enough to ensure that each applicant is evaluated as an individual and not in a way that makes race or ethnicity the defining feature in the application.
OConnor made several other intriguing (and ironic) points. Recall from the April 2003 preview that
Bakke was fragmented. That is, Justice Powell was alone in his belief that the Davis Plan used an illegal quota
but the Harvard Plan (and others like it) is narrowly tailored to a compelling government interest. Four justices cared only that the Davis Plan used an illegal quota, and four others argued that the Davis Plan satisfied
moderate scrutiny rules (a substantially related solution to an important interest). This fragmentation motivated some lower courts to evaluate
Bakke in light of Marks v. USA (1977), where Justice Powell himself ruled:
When a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds.
Based on Marks, some lower courts actually struck down Powells ruling in
Bakke. For example, in Johnson v. Bd. of Regents (2001), the 11th Circuit ruled:
Justice Powell clearly identified diversity as a compelling interest that may be asserted by a university in defense of an admissions program that flexibly considers race as one of several factors in making admissions decisions. No other Justice, however, expressly endorsed that view.
The April 2003 preview was through the eyes of amicus briefs written by Solicitor General Theodore Olson for President George Bush. Olson conceded that diversity is a
paramount government objective but asked the Supreme Court to ignore whether
Bakke is good law and, instead, reject the Michigan plans because neither one is narrowly tailored. Or as stated by Olson:
The courts of appeals disagree as to whether any of the opinions in Bakke represents binding precedent under
Marks v. United States. The Court need not undertake the Marks analysis in this case and should instead directly resolve the constitutionality of race-based admissions standards
by focusing on the availability of race-neutral alternatives.
Interestingly, the OConnor majority did not do the Marks analysis, but
not to placate Olson. As stated by OConnor:
We do not find it necessary to decide whether Justice Powells opinion is binding under
Marks. It does not seem useful to pursue the Marks inquiry to the utmost logical possibility when it has so obviously baffled and divided the lower courts that have considered it.
Thus, Marks was killed, not Bakke, ending future lower court opinions on whether Supreme Court rulings are fragmented. Then, in another ironic twist, OConnor used Olsons own words to defend diversity as a compelling interest. Accordingly:
The United States, as amicus curiae, affirms that [e]nsuring that public institutions are open and available to all segments of American Society, including people of all races and ethnicities, represents a paramount government objective[n]owhere is the importance of such openness more acute than in the context of higher education.
OConnor then spoke to two other objections raised by Olson. Speaking to Olsons arguments on
race-neutrality, OConnor stated:
Petitioner and the United States argue that the Law Schools plan is not narrowly tailored because race-neutral means exist to obtain the educational benefits of student body diversity that the Law school seeks. We disagree. Narrow tailoring does not require exhaustion of every conceivable race-neutral alternative. Narrow tailoring does, however, require serious, good faith consideration of workable race-neutral alternatives that will achieve the diversity the university seeks. We agree with the Court of Appeals that the Law School sufficiently considered workable race-neutral alternatives.
And speaking to Olsons argument that the law school plan has no logical ending point, OConnor ruled that, in effect, the law school should achieve its goal of diversity in about
25 years, and it is OK to wait.
There was one concurrence and four dissents. In the lone concurrence, Justice Ginsburg, (for Breyer), claimed that educational opportunity for minorities and nonminorities is not equal and that one may hope, but not firmly forecast, that over the next generations span, progress toward nondiscrimination and genuinely equal opportunity will make it safe to sunset affirmative action. Thus, although concurring with the majority ruling, Ginsburg, believed there should be no time limit.
Among the dissents, no justice other than Thomas directly challenged Powells ruling in
Bakke that diversity is a compelling interest. For example, speaking for Scalia, Kennedy, and Thomas, Justice Rehnquist stated:
I agree with the Court that in the limited circumstance when drawing racial distinctions is permissible, the government must ensure that its means are narrowly tailored to achieve a compelling state interest. Stripped of its critical mass veil, the Law Schools program is revealed as a naked effort to achieve racial balancing.
Thus, Rehnquist echoed Olsons prayer; avoiding the issue of compelling interest and striking down the plan because it is not narrowly tailored. Rehnquist also noted that within the critical mass, preference is accorded to African Americans over Hispanics and Native Americans, an issue agreed to by other justices.
Justice Kennedy (for himself) accepted Bakke as binding but argued that the majority failed to scrutinize the actual plan. He accused the majority of paying too much deference to the universitys right to academic freedom and accused them of confusing deference to a universitys definition of its educational objective with deference to the implementation of this goal. Accordingly:
The separate opinion by Justice Powell in[Bakke]is based on the principle that a university admissions program may take account of race as one, nonpredominant factor in a system designed to consider each applicant as an individual, provided the program can meet the test of strict scrutiny. If strict scrutiny is abandoned or manipulated to distort its real and accepted meaning, the Court lacks authority to approve the use of race even in this modest, limited way. The opinion by Justice Powell, in my view, states the correct rule for resolving this case. The Court, however, does not apply strict scrutiny.
Justice Scalia (for Thomas) did not directly challenge Bakke, but he came close. He sarcastically noted that the good citizenship and educational benefit components of the law school plan will not appear in transcripts or on bar exams, that good citizenship can also motivate diversity in the Michigan Civil Service, and that nonminority individuals who are deprived of a legal education, a civil service job, or any job at all by reason of the skin color will surely understand. He forecasted that the
Grutter-Gratz split double header will generate lawsuits for years to come, including by minority groups shortchanged in the institutions composition of its generic minority critical mass, a reference to disproportions
within the critical mass. He concluded by stating that the Constitution proscribes government discrimination on the basis of race, and state-provided education is no exception.
Finally, Justice Thomas made some points Scalia joined and some that Scalia did not join. Scalia agreed with Thomas that Blacks can achieve in every avenue of American lives without the meddling of university administrators and that rising educational standards have motivated nonminorities, but not minorities, to raise their skill levels. But Scalia did not join Thomass belief that a
Marks analysis was called for to assess the extent to which Justice Powells opinion inBakkeis binding. In short, Thomas was the only dissenter who expressly challenged Powells Bakke ruling.
The Gratz Ruling
The Gratz ruling was what Solicitor General Olson wanted for both Grutter and
Gratz. There was no mention of diversity as a compelling interest; the UGA plan was struck down solely because it was not narrowly tailored. In effect, the vote was 6-2 with one abstention.
Justice Rehnquist delivered the opinion of the Court. Speaking for OConnor, Scalia, Kennedy, and Thomas, Rehnquist stated:
We find that the Universitys [undergraduate] policy, which automatically distributes 20 points, or one-fifth of the points needed to guarantee admission, to every single underrepresented minority applicant solely because of race, is not narrowly tailored to achieve the interest in educational diversity that respondents claim justifies their program.
Rehnquist also noted that an admissions policy relying entirely on points cannot offer applicants the individualized selection process described in Harvards example (i.e., the Harvard Plan cited by Justice Powell in the
Bakke case).
Justice OConnor wrote a separate concurrence to articulate the difference between the UGA and law school plans. Accordingly:
Unlike the law school admissions policythe procedures employed by theOffice of Undergraduate admissions do not provide for a meaningful individualized review of applicants. The Law school considers the various diversity qualifications of each applicant, including race, on a case-by-case basis. By contrast, the Office of Undergraduate Admissions relies on the selection index to assign
every underrepresented minority the same, automatic 20-point bonus without consideration of the particular background, experiences, or qualities of each individual applicant.
Justice Breyer added a sixth vote to strike down the UGA plan, but he refused to join the Court opinion, stating I concur in the judgment of the Court though I do not join its opinion. He joined OConnors concurrence except insofar as it joins that of the Court. He also joined part of Ginsburgs dissent (see below).
Justice Thomas also wrote a separate concurrence to note that the States use of racial discrimination in higher education admissions is categorically prohibited by the Equal Protection Clause. He also took a sarcastic shot at the
Grutter ruling, stating that the UGA plan does not suffer from the additional constitutional defect of allowing racial discrimination among the groups included within its definition of underrepresented minorities (yet another reference to preference for African Americans over Hispanics or Native Americans within the critical mass).
For his part, Justice Stevens (for Souter) dissented, but he never directly addressed the UGA plan. He argued instead that neither plaintiff (Jennifer Gratz nor Patrick Hamacher) had standing to sue because (among other reasons) neither petitioner has a personal stake in this suit for prospective relief. The other arguments in this dissent are complex. In a nutshell, Stevens argued that Gratz had potential standing only because of Hamachers claim, and Hamacher, himself, had no standing because he made a transfer application and the plan at issue was for freshmen admissions.
Justice Souter also wrote a separate dissent, part of which Ginsburg joined, and part of which she did not join. In the part Ginsburg did not join, Souter elaborated on his agreement with the Stevens dissent. In the part Ginsburg did join, Souter argued that the UGA plan is closer to what
Grutter approves than to what Bakke condemns. In explaining this viewpoint, he stated:
Subject to one qualification[in the]selection index system, all of the characteristics that the college thinks relevant to student diversity for every one of the student places to be filled fits Justice Powells description of a constitutionally acceptable program; one that considers all pertinent elements of diversity in light of the particular qualifications of each applicant and places each element on the same footing for consideration, although not necessarily according them the same weight. In the Courts own words, each characteristic of a particular applicant [is] considered in assessing the applicants entire application. An unsuccessful nonminority applicant cannot complain that he was rejected simply because he was not of the right color; an applicant who is rejected because his combined qualificationsdid not outweigh those of the other applicant has been given an opportunity to compete with all other applicants.
Souters one qualification is that membership in an underrepresented minority is given a weight of 20 points on a 150-point scale. But even here, he suggested the assignment of specific points does not set race apart from all other weighted considerations, since nonminority students may receive 20 points in the miscellaneous category for a variety of other reasons. Also, Souter emphasized that according to Justice Powell, it is not necessary that each element of a plan be accorded the same weight.
Finally, Justice Ginsburg (for Souter) wrote separately, making two additional arguments on why the UGA plan is constitutional. In the first argument, joined also by Breyer (see above), Ginsburg argued that policies that
exclude minorities require strict scrutiny, whereas policies that include minorities require less scrutiny. Second, Ginsburg reiterated her belief from
Grutter that there are still compelling remedial interests for which the undergraduate plan is narrowly tailored.
Conclusions
I see two reasons why Costa is important. First, it closes the debate on direct versus indirect evidence started by the Supreme Courts interpretations of
McDonnell Douglas v. Green (1973), in St. Marys v. Hicks (1993), and
Reeves v. Sanderson Plumbing (2000).3 In Green, Justice Powell gave equal weight to direct and indirect evidence in proving pretext. It appeared that direct evidence was accorded the greater weight in
Hicks, a false impression corrected in Reeves. So now, the weight accorded to indirect evidence equals the weight accorded to direct evidence in any disparate treatment claim. This leads to my second point. As in mixed-motive cases before
Costa, lower courts invariably required direct evidence to trigger sexual harassment
claims. Costa implies that indirect evidence of harassment is sufficient here as well. Catharina Costa did claim she was sexually harassed, but the judge did not submit this question to the jury. What if a case like
Costa emerges with stronger indirect evidence of harassment, enough so that the question is submitted to the jury? A jury could conclude (a) sex was a motivating factor, that (b) rose to the level of sexual harassment, but (c) did not motivate the challenged selection decision. As in
Costa, the plaintiff could get declarative and injunctive relief, and legal fees, but the defendant could escape liability for backpay or promotion. However, consistent with the run of sexual harassment cases, the plaintiff could be entitled to compensatory and punitive damages based on sexual harassment
alone.
3 The implication of Reeves for indirect evidence was discussed in detail in this column in the October 2002 issue of
TIP.
If you read (or re-read) what I wrote in the April 2003 column, you will know why I am neither shocked nor overwhelmed that the Supreme Court affirmed
Bakke, supported the law school plan, but frowned on the UGA plan. No need to comment any further there. However, I was surprised and overwhelmed by the deference to Justice Powell. Clearly, the majority of five deferred to Powell, as did Kennedy. It may be added that Rehnquist implied confirmation, Scalia refused to share his feelings, leaving one lone doubting Thomas. I would add only that since the April 2003 column, I was told by more than one attorney that OConnor would support Powell if for no other reason than she considered him to be her mentor.
Heres another thing. Beginning 2 weeks or so before the Grutter and
Gratz rulings, there were reports in the news media that (a) both Grutter and
Gratz were likely losers because of the fragmentation in Bakke, (b) the University of Michigan should have gone with remedial interests,
not diversity, and (c) many colleges and universities have begun dismantling their diversity programs. Indeed, one of these was in a page-one spread in the
Wall Street Journal.4
4 I read the Wall Street Journal articles several times and put it in my save rack. But my son used it as dropping paper for the family dog. So if anyone has it, or subscribes to
Wall Street Journal online, please feed me the exact date so I can cite it correctly as unfinished business in a future column.
Also, I sampled some opinions from university folks, and one of them raised an interesting point. It is plausible for a law school with 3,000 to 5,000 applicants to scrutinize all or most of the applicants. However, it is implausible for an undergraduate program with 30,000 to 70,000 applications to do likewise.
Finally, as SIOP members, our strongest interest is business and industry. So what do
Grutter and Gratz mean for us (i.e., why have you spent four of the last five columns on this beast)? One of the briefs cited by OConnor was submitted by 65 Leading American
Businesses5 on why diversity is required to successfully compete within our own economy, and to successfully compete in a global economy. Therefore, I believe Justice Scalia is correct in his assumption that diversity lawsuits will now proliferate not only in higher education, but in business and industry as well.
5 Another influential brief cited by OConnor (but not cited in my July 2003 column) was by General Becton on why diversity is important for the military.
Case Law Citations
Note: To locate the Grutter, Gratz, & Costa rulings: (a) go to
www.findlaw.com, (b) click on US Laws: Cases & Codes, (c) click on US Supreme CourtOpinions & Website and (d) click on 2003 Cases.
Hopwood v. Texas (CA5 1996) 78F.3d 932.
Johnson v. Board of Regents of Univ. of Georgia (CA11 2001) 263 F.3d 1234.
Marks v. United States (1977) 430 US 188.
McDonnell Douglas Corp. v. Green (1973) 411 US 792.
Price Waterhouse v. Hopkins (1989) 490 US 228.
Reeves v. Sanderson Plumbing (2000) 530 US 133.
Regents of Univ. of California v. Bakke (1978) 438 US 265.
St. Marys Honor Center v. Hicks (1993) 509 US 502.
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