Legal Foundation Sues Sacramento Municipal Utility District for Violating Anti-Preference
Sacramento, California; June
20, 2000: A public contracting program that gives special preferences to
minority- and women-owned businesses seeking contracts with the Sacramento Municipal
Utility District is unconstitutional and violates Proposition 209, according to a lawsuit filed today by the Sacramento-based Pacific Legal
Foundation. Enacted by California voters in November, 1996, Proposition 209
prohibits state and local government agencies from discriminating against or granting
preferential treatment to anyone based on race and gender in public contracting.
Challenged in PLF's lawsuit is SMUD's "Equal
Business Opportunity Program," which gives preference to minority-owned prime
contractors by calculating their bids as being 5% lower than what they actually are. In
addition, PLF charges that prime contractors are forced to discriminate in favor of
minority subcontractors by SMUD's race-based quotas and recruitment requirements.
PLF sued on behalf of United Utilities, Inc., and C & C
Construction, Inc., two firms that have been subjected to unequal treatment under
SMUD's policies. "SMUD's public contracting program hurts everyone
involved--the utility customers, prime contractors, and minority-owned firms," said
PLF attorney Stephen McCutcheon. "Ratepayers get burned when the lowest
qualified bidders are rejected and those higher costs are passed on to them. Prime
contractors are discriminated against by SMUD, and then are forced to discriminate against
others when seeking subcontractors. Minority-owned subcontractors are encouraged by SMUD
to bid on jobs for which they may not have the skills or funds to complete, thus
compromising public safety and increasing costs."
As this lawsuit against SMUD moves forward, Pacific
Legal Foundation is investigating discriminatory policies in other municipal utility
agencies in California. Moreover, PLF is preparing to argue before the California Supreme
Court in a key test-case on behalf of another contractor who filed suit against the city
of San Jose in September 1997 (Hi-Voltage Wire Works, Inc. v. City of San Jose). In
that case, the state high court is reviewing PLF's successful challenge to a city's
failure to comply with Proposition 209 since the measure was upheld by the U.S. Ninth
Circuit Court of Appeals in April, 1997. PLF also is challenging discriminatory
public contracting and employment programs in San Francisco--Taber v. City and County
of San Francisco and Cheresnik v. City and County of San Francisco. PLF is supporting in
court measures similar to Proposition 209 in Texas and in Florida.
Pacific Legal Foundation is a public interest, nonprofit organization dedicated to
litigating nationwide in defense of private property rights, individual and economic
freedoms, and limited government. PLF has opposed race and gender preferences, quotas, and
set-asides in government employment, education, and contracting for more than 27 years.
PLF maintains a web-site at http://www.pacificlegal.org
Related: Pacific Legal Sues San Francisco Over Racial Set Asides (Updated 07/15/00)
The racial lobby in California
continues to ignore Prop. 209, and continues to enforce racial quotas in dozens of
agencies. Pacific Legal also has sued the City of San Francisco for ignoring the law
against racial quotas. Tom Taber, a salesman for Ford Graphics, was denied the right
to bid on a city contract for reprographic services because he is white. However, as
of July 13, the activist, pro-quota Superior Court ruled that it didn't see anything wrong
with anti-white discrimination.
END Sacramento Utility Sued for Racial