Court of Appeal Rules That Federal Law Trumps Proposition 209

The Lawyers’ Committee for Civil Rights announced last week that a California Court of Appeal ruled April 18 that a San Francisco ordinance requiring outreach to minority- and women-owned businesses in City contracting may be mandated by federal equal protection, notwithstanding Proposition 209, the State’s anti-affirmative action initiative.

The decision reverses a key element of a previous trial court ruling, holding that the trial judge failed to consider whether the City is constitutionally required to implement a race- and gender-conscious affirmative action program in light of substantial evidence of discrimination in City contracting. In its decision, the Court of Appeal stated that the trial court “assumed that [Proposition 209] is the last word. It is not. The federal equal protection clause is the last word.”

Civil rights advocates who filed a brief in support of the City applauded the ruling. “The Court of Appeal has made clear that public entities have a constitutional duty to make sure that taxpayer dollars are not funneled into a discriminatory contracting system,” said Oren Sellstrom, Associate Director of the Lawyers’ Committee for Civil Rights and counsel for the Coalition for Economic Equity, a coalition of minority- and women-owned business groups.

“This decision opens the door for cities and counties across the State to maintain or reinstate minority business programs, if that is necessary to break down ‘old boys’ contracting networks,” Sellstrom added. Bingham McCutchen LLP, a private law firm acting on a pro bono basis, also represented the Coalition in the appeal.

As the Assistant Director of the Lawyers’ Committee at the time, Eva Paterson was instrumental in getting the original ordinance passed in 1984. The Lawyers’ Committee, along with the Asian Law Caucus and MALDEF, represented the Coalition for Economic Equity when the ordinance was challenged by the Associated General Contractors in the late 1980s. Now EJS President, Paterson has worked with Sellstrom, a fellow Texan, for many years in defense of race conscious public policy.

Sellstrom cited the massive volume of evidence that the City of San Francisco has collected over the years, documenting ongoing discrimination against minority-owned (MBE) and women-owned (WBE) businesses in the awarding of City contracts.

For example, as the Court of Appeal noted, recent public hearings drew 134 individuals, who testified to such barriers as City inspectors who impose more onerous requirements on them than on non-minority contractors and subject them to more rigorous background-vetting despite extensive qualifications.

MBE/WBE contractors also testified that City staffers would blame MBE and WBE contractors for project delays, knowing they were not actually responsible for them, and would routinely extend non-minority business contracts rather than putting them out for a new bid, thus limiting opportunities for MBE and WBE firms.

Statistics also show significant under-utilization of MBEs and WBEs, compared to their availability. While upholding other aspects of the trial court’s decision, the Court of Appeal remanded the case to the trial court to determine, based on this evidence, whether the federal equal protection clause mandates race-conscious programs to remedy this discrimination.

The Court of Appeal ruling is the second decision this month to dismiss legal challenges based on Proposition 209 to Bay Area programs designed to remedy discrimination in the public context.

On April 6, the Alameda Superior Court threw out a challenge to the Berkeley Unified Schools District’s (BUSD) school assignment plan, finding that BUSD does not violate state law when it considers race as one of many factors in assigning students to schools.

Together, these decisions indicate that courts recognize that when discrimination and segregation are found to occur, federal equal protection laws not only permit, but mandate remedial programs, and that Proposition 209 cannot stand as an obstacle to that remediation.

The cases are Coral Construction, Inc., v. City and County of San Francisco (San Francisco County Superior Court No. 319549) and Schram Construction, Inc., v. County of San Francisco (San Francisco County Superior Court No. 421249.) The Court of Appeal case number is A107803.

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