Caltrans minority subcontract plan upheld

By Bob Egelko

Read the original article on SF Gate.
A federal appeals court upheld a Caltrans program Tuesday that requires contractors on federally funded road-building projects to make subcontracts available to companies owned by minorities and women.
The program, in effect since March 2009, requires contractors to make good-faith efforts to award 9.5 percent of their subcontracts to specified minority groups – African Americans, Latinos, Asian Americans and American Indians – and women.
The state Department of Transportation launched the program after a 2007 study found that minority- and female-owned companies were receiving only 2.2 percent of the federal funds. The program does not apply to projects entirely financed by the state, because a 1996 California ballot measure bans preferential treatment for minorities.
Civil rights groups who supported the effort described it as an outreach program that did not involve set-asides or bidding preferences.
Opponents, including the Associated General Contractors of San Diego, who challenged it in court, called it a quota system based on racial discrimination.
In Tuesday’s ruling, the Ninth U.S. Circuit Court of Appeals in San Francisco said the contractors group had not identified any members who have been harmed by the program, and therefore lacked standing to sue.
But even if they could show harm, the court said, the program meets constitutional standards.
While the U.S. Supreme Court has barred race-conscious government programs to combat societal discrimination, a state agency can use such programs to remedy its own discriminatory practices against specific minority groups or women, Judge Jerome Farris said in the 3-0 ruling, which upheld a federal judge’s decision in Caltrans’ favor.
The state’s 2007 study, and testimony from a series of public hearings, provided evidence that “these groups are systematically discriminated against in publicly funded contracts,” Farris said.
The contractors’ lawyer, Ralph Kasarda of the Pacific Legal Foundation, said they would probably appeal.
“The Caltrans program enforces a one-size-fits-all, race-conscious remedy across the state” that “differs from a quota in name only,” Kasarda said.
Oren Sellstrom, a lawyer for the NAACP and the Coalition for Economic Equity, described the program as a “very modest” effort to “make sure (California) is not unfairly excluding any businesses from equal opportunity.”