Behind the defiant rhetoric lies a political and legal quagmire–the changing view, in U.S. courts and public opinion, of affirmative action in general and set-aside programs in particular. Since 1989 the U.S. Supreme Court has held that city governments may use set-asides only as a last resort and only where there is ongoing discrimination against minorities and women; otherwise, the court said, such preferences may not be based on race or gender. Atlanta revamped its program to meet those criteria but, like some other localities, may not have gone far enough. In June, a federal judge threw out a nearly identical program in surrounding Fulton County, Ga. The Southeastern Legal Foundation’s plan to sue the city “isn’t about race,” said foundation president Matthew Glavin. “It’s about a government that’s breaking the law.”

Glavin argues that other cities–New York, Los Angeles and Detroit, for example–have rewritten their set-aside programs to be “race-neutral” while still giving locally owned firms preference in the competitive-bidding process. He also thinks that a victory in Atlanta would have symbolic value. “I think there will be an enormous ripple effect because of Atlanta’s significance as the cradle of the civil-rights movement,” he says.

None of that persuades Campbell and his supporters. They say the city’s set-asides are crucial to the growth of minority- and female-owned firms because white-male-owned companies are so dominant in the private sector. Carol Hojeij, who operates three coffee shops at Atlanta’s Hartsfield Airport, says she couldn’t have done it without the city’s set-aside program. “Affirmative action is working,” she says. “When you talk about the big players, why would they invite a smaller party to take a piece of the pie if they could have it all?” Campbell, noting that Atlanta is about to launch a $10 billion capital-improvement program, says the threatened lawsuit is “about naked greed and unmitigated racism.” Given the hard-line attitudes on both sides, few insiders think a settlement is possible–and that means the coming courtroom battle could be a turning point in the history of grass-roots affirmative action.