UPDATE APRIL 16, 2013: A three-judge panel of the Ninth Circuit Court of Appeals today upheld the Caltrans program ensuring that minority and women-owned businesses are on equal footing to compete for federally-funded contracts. Read the press release from the Lawyers’ Committee here.
Download the opinion here | SF Chronicle | Sacramento Bee
FEBRUARY 11, 2013 — The Ninth Circuit Court of Appeals heard oral arguments today in San Francisco in the case of Associated General Contractors, San Diego Chapter v. Caltrans (AGC v. Caltrans).
AGC brought suit in 2009 seeking to invalidate the California Department of Transportation’s Disadvantaged Business Enterprise (DBE) program, which seeks to ensure that minority and women-owned businesses are on equal footing to compete for federally-funded contracts. AGC filed the appeal after summary judgment was granted in U.S. District Court in 2011.
The Lawyers’ Committee for Civil Rights of the San Francisco Bay Area, together with Bingham McCutchen LLP, ACLU-NC and the Equal Justice Society (EJS), represent the Coalition for Economic Equity and the San Diego Chapter of the NAACP in the case, two groups that intervened to ensure that the perspectives of DBEs themselves would be represented in the litigation.
“Caltrans’ DBE program is clearly within constitutional bounds, and is in fact much more cautious than it could be given the extent of discrimination in the transportation contracting industry,” said Oren Sellstrom, Legal Director at the Lawyers’ Committee, “As we argued in the district court, without a remedy, small businesses owned by women and minorities would continue to be locked out from fair competition for federally funded contracts. Caltrans’ equal opportunity program gives these businesses a fair shot at competing, which strengthens the economy as a whole.”
Caltrans’ Disadvantaged Business Enterprise program establishes a framework for ensuring fair participation in federally funded public works projects in California. In 2006, Caltrans suspended the program’s race- and gender-conscious elements after a federal appeals court ruled that states had to document the existence of discrimination in the awarding of contracts. As a result, women- and minority owned business participation on Caltrans’ federally funded projects plummeted — from nearly 11 percent in 2005 to just over 2 percent in 2008.
In 2007, an extensive disparity study commissioned by Caltrans documented discrimination against small businesses owned by women and minorities in federally funded contracts. Caltrans then sought approval from the U.S. Department of Transportation (DOT) to reinstate the suspended elements as a necessary remedy to such discrimination. DOT granted its approval in August 2008, noting that Caltrans has a duty under federal law to ensure that taxpayer dollars are not funneled into an exclusionary contracting system.
In June 2009, Caltrans’ procedures were challenged in the aforementioned lawsuit by the Associated General Contractors of San Diego. In 2011, Caltrans’ Disadvantaged Business Enterprise program was upheld by the U.S. District Court.
Source: Lawyers’ Committee for Civil Rights of the San Francisco Bay Area