Case 47:

Racial Preferences = Discrimination

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Washington State's minority set-aside program for federal highway funds LOST at the Ninth U.S. Circuit Court of Appeals.  Then, recently, the U.S. Supreme Court refused to hear an appeal by the Washingon State diversiphiles.
The week of May 1, 2006 the California Transportation Authority (Caltrans) announced that it has been forced to discontinue its use of race-based set-asides in awarding federally funded transportation contracts!
Recent  news articles on this case appear below.
MAIN: Western States

The Western States Paving case initially affects the nine states under the jurisdiction of the Ninth U.S. Circuit Court of Appeals, including California!
News Synopsis:  On Mon., Feb. 20, 2006 the U.S. Supreme Court refused to hear an appeal by two of the losing defendants in the Western States Paving, Co. reverse discrimination case.

The original defendants in the antecedent, landmark 9th U.S. Circuit Court of Appeals case were the City of Vancouver (Washington), Clark County (Washington), and the Washington State Department of Transportation.

Western States Case Western States Paving Stories Caltrans Caltrans Stories May 5, 2006

Caltrans News Stories May 5, 2006 and newer

Caltrans drops race element in federally funded contracts

Excerpted from the JASON B. JOHNSON story in the San Francisco Chronicle

          "Caltrans announced this week that it will no longer use race as a factor in awarding federally funded contracts, a change that affirmative action critics have praised while minority groups are vowing to fight the move that they say will harm thousands of California businesses.

          "State Transportation Director Will Kempton, in a letter posted on the agency's Web site, said Caltrans must make its policy race-neutral because it could not show sufficient evidence that minority groups have suffered discrimination in the state's contracting industry, a standard required under a recent decision by the Ninth U.S. Circuit Court of Appeals in San Francisco.

          "The Disadvantaged Business Enterprise program, which applies to federally funded contracts administered by Caltrans, identifies disadvantaged, minority and female-owned businesses and encourages their participation in contracts, often as subcontractors partnering with larger firms. Caltrans' decision to change the program does not affect outreach to female-owned businesses.

          "Caltrans [had] a goal of giving 10.5 percent of its federal contracting dollars to disadvantaged businesses. The percentage of Caltrans' federal dollars that went to minority- and female-owned businesses last year was 8.9 percent.

          "Deputy Caltrans Director Olivia Fonseca said the agency is looking for evidence of discrimination in the transportation contracting industry.  At stake is $5.1 billion for 1,400 transportation projects throughout California over the next five years.

          " 'Caltrans funds so many different projects around the state that we saw this as a major problem, and it was contrary to what voters did when they adopted Prop. 209,' which outlawed race-based hiring practices in the state, said Sharon Browne of the Pacific Legal Foundation. The group had threatened to sue Caltrans over its disadvantaged business program.

          "The agency's decision to make its program race-neutral could also affect the few remaining race-based affirmative action programs in California since the passage of Proposition 209 in 1996."

Last Known Link to Original San Francisco Chronicle Article

Caltrans:  Race Will No Longer Be Factor In Contracts

Excerpted from the Associated Press story as published on NBC11.COM

SACRAMENTO -- "A state agency won't use race anymore when awarding contracts.

          "The California Department of Transportation made the decision because it could not show minorities suffered discrimination in contracting, Caltrans said. [Emphasis added.]

          "The department said it took the step early this week after a recent ruling by the 9th U.S. Circuit Court of Appeals set out that standard.

          "Caltrans has had a goal of giving 10.5 percent of its federal contracting dollars to disadvantaged [i.e., minority-owned] businesses. The percentage of Caltrans' federal dollars that went to minority- and female-owned businesses last year was 8.9 percent.

          " 'Caltrans funds so many different projects around the state that we saw this [the Western States decision] as a major problem, and it was contrary to what voters did when they adopted Prop. 209,' which outlawed race-based hiring practices in the state, said Sharon Browne of the Pacific Legal Foundation. The group had threatened to sue Caltrans over its disadvantaged business program."

Last known link to the NBC11.COM Associated Press Story

Western States Paving Stories

Supreme Court refuses to hear appeal in contractor discrimination case

Excerpted from THE ASSOCIATED PRESS story as it appeared in the Seattle Post Intelligencer
Tuesday, February 21, 2006 -- Last updated 8:50 p.m. PT

"WASHINGTON -- The U.S. Supreme Court refused on Tuesday to consider an appeal filed by the city of Vancouver and Clark County in southwest Washington state after an appellate court ruled the government can't favor minority-owned businesses in awarding road-building contracts.

          "Vancouver-based Western States Paving Co. had sued the city, county and state Department of Transportation after losing several contracts to minority-owned firms that had submitted higher bids.

          "Alison Chinn, a lawyer in the Vancouver city attorney's office, said the city and Clark County sought the Supreme Court's review ... Chinn said she had not seen the Supreme Court's denial of her petition.   'Obviously, I'm disappointed,' she said.

          "The [Washington] state Department of Transportation was among the agencies Western States Paving sued, but did not join the city and county in appealing the case to the Supreme Court."
Tuesday, February 21, 2006

          (The Supreme Court case citation is Vancouver v. Western States Paving, 05-591.)

Last Known Link to Original Seattle Post Intelligencer Article

Last Known Printer Friendly Link to Original Article

Road contracts for minority firms may be curtailed

Excerpted from Edwin Garcia story in the San Jose Mercury News
Posted on Wed, Feb. 08, 2006

"SACRAMENTO - Just when California is poised to ramp up road construction, Caltrans may roll back a civil rights program that has steered tens of thousands of federally funded contracts to women- and minority-owned small businesses across the state.

          "State Department of Transportation officials say they prefer to continue administering the Disadvantaged Business Enterprise program -- which pushes large contractors to give a percentage of their contracts to female and minority subcontractors -- but a federal court decision could kill the decades-old quota system.

          "The ruling by the 9th U.S. Circuit Court of Appeals in May forces Caltrans to prove to the U.S. Department of Transportation that discrimination exists among the big contractors that share a $4 billion pot of federal transportation construction funding.

          "And that may be difficult.

          "Caltrans officials recently hosted 12 public forums for small-business owners and other interested parties around California, and only 70 people testified that they had encountered discrimination. Two people spoke in opposition to the program, which has been around for 27 years.

          "... the owners and employees of many small [minority owned] firms may be shut out and, some predict, forced to shut down.  'If they discontinue the Disadvantaged Business Enterprise,' said Tu Nguyen, whose San Jose company works on irrigation projects at freeway interchanges, 'it's going to hurt a lot.'

          "The program works like this: Say California is awarded federal funding for a project, such as the $40.1 million to repair the pavement and bridge at a Branham Lane overcrossing in San Jose. The state tells the main contractor that its bid should include a certain percentage, based on a formula, of business with women- or minority-owned firms -- in this case 11 percent of the project value. As a result, 10 'disadvantaged' businesses are working there on contracts worth $4.4 million.

          "But a court challenge against Washington state has prompted transportation officials in California -- and other states -- to re-evaluate the program.

          "The suit, filed by Western States Paving of Vancouver, alleged that its white owner was turned down for subcontracting work by the city of Vancouver and Clark County because the prime contractor chose minority-owned firms instead. In one instance, the bid by Western States Paving was $100,000 less than a minority bid.

          "In the end, the appeals court ruled that Washington 'has not proffered any evidence of discrimination within its own contracting market' and therefore 'failed to meet its burden of demonstrating that its DBE program is narrowly tailored to further Congress' compelling remedial interest.'

          "There are at least 5,000 firms listed on the Disadvantaged Business Enterprise database.

          "I think a lot of companies will go out of business if this happens, without the legal requirement for large companies to hire smaller, minority-owned companies," said Todd Christner, director of operations for DBE Goodfaith, a Web-based firm that helps connect [minority-owned] contractors with subcontractors. Christner is convinced that contractors will either do the work themselves, or hire white-owned subcontracting firms they've known for years." --
Wed, Feb. 08, 2006

Last known link to the complete San Jose Mercury News Story

Last known printer friendly link

9th Circuit panel rejects minority-contract awards

Excerpted from the Donna Gordon Blankinship Associated Press story in the Seattle Times
Posted on Tue., May 10, 2005

          "Washington state cannot favor minority-owned firms in awarding road-building contracts because it hasn't proved minority contractors have faced discrimination, a three-judge panel of the 9th U.S. Circuit Court of Appeals ruled yesterday.

          "Western States Paving of Vancouver, Wash., sued the state Department of Transportation, Clark County and the city of Vancouver after losing several road-paving contracts to minority-owned firms with higher bids.

          "The company argued that federal law allowing states to give preference to minority firms was unconstitutional, and that the state did not properly follow federal guidelines.

          "The law allows use of race- and sex-based preferences in federally funded transportation contracts, but only if a state has proved there has been bias against minority contractors.

          "The three-judge [9th Circuit Court of Appeals] panel said the Department of Transportation did not provide enough evidence that minorities suffer or have ever suffered discrimination in transportation contracting.  'We have previously expressed similar concerns about the haphazard inclusion of minority groups in affirmative-action programs ostensibly designed to remedy the effects of discrimination,' the opinion said.

          "Gary Lofland, a Yakima attorney representing Western States Paving, said the company was pleased with the decision and believes the court followed existing law, calling for evidence of past discrimination before approving race-based preferences.  'Throughout the proceeding, the state has acknowledged it never had that evidence,' Lofland said.

          "State officials declined to comment yesterday, saying they had not yet read the 9th Circuit opinion." --
Tue., May 10, 2005

Last Known Link 1 to Original Seattle Times Story

Last Known Link 2 to Original Seattle Times Story

Last Known Link 3 to Original Seattle Times Story

END Case 47:
News Articles about the Western States Paving case


Western States Paving PAGE INDEX:
Overview 2.0 2.1 2.2 2.3 2.4 2.5 News
Intro and Summary: Western States Paving Co. Legal Case Feds' DBE Goal Setting Approval Process Memo
and overview of documents
Legal Advice:
Feds' DBE Compliance Guide to the States
Pro Forma Letter:
Feds'  Acknow-
ledgement of Receipt of State DBE Goal Plan
Pro Forma Letter:
Feds' Approval of State DBE Plan
Pro Forma Legal Document:
Feds' Detailed Long Form Approval of State DBE Plan
Feds' Questions and Answers: Impact of the Western States case on DBE Programs News Stories

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*  We use the term reverse discrimination reluctantly and only because it is so widely understood.  In our opinion there really is only one kind of discrimination.