Featured Case

Caltran's Quotas are Unconstitutional

Associated General Contractors of America, San Diego Chapter, v. California Department of Transportation

Contact: Sharon L. Browne, Ralph W. Kasarda, or Joshua P. Thompson

Status:  NAACP and Coalition for Economic Equity were granted intervention status. Defendant Will Kempton resigned as Director of Caltrans and a stipulation dismissing him from the lawsuit and dropping our Prop 209 cause of action has been filed. 

Summary:
The California Department of Transportation (Caltrans) has launched a new program that uses race- and sex-based quotas in awarding contracts on federally funded highway projects. This quota program violates both the U.S. Constitution (Fourteenth Amendment) and the California Constitution (Article I, Section 31; i.e., Proposition 209, the voter-approved provision that bars race- and sex-based preferences or discrimination in public contracting, employment, and education). On June 11, 2009, Pacific Legal Foundation attorneys filed a federal lawsuit challenging the Caltrans quota program, representing Associated General Contractors of America, San Diego Chapter.

At issue is Caltrans’ 2009 Disadvantaged Business Enterprise (DBE) Program, which Caltrans announced to transportation-related agencies in a memo on March 4, 2009. On projects that receive federal funds, Caltrans’ DBE program sets a quota of having 6.75 percent of contracts go to women or members of targeted, preferred groups—African American, Asian-Pacific American, and Native American (but not Latinos or any other group)—through the explicit use of race or sex in awarding contracts.

This new Caltrans program represents a backward step—a return to quotas—by the agency. In 2006, after PLF sent a demand letter arguing that the scheme violated state and federal law, Caltrans abandoned a previous policy of using quotas in contracting. However, soon after going “race neutral” in response to PLF’s letter, the agency began seeking a route to bring quotas back—by trying to exploit the exception to Proposition 209 for cases where federal funds would be lost if race-conscious policies were not implemented. Caltrans petitioned the federal government for permission to reinstate race-based and sex-based goals in the awarding of public works contracts funded by federal dollars. Caltrans cited a “disparity study” that it commissioned, reporting that Caltrans dollars going to minority contractors didn’t match the available minority firms.

For two years, Caltrans was unsuccessful in getting federal permission to reinstate race-based quotas. But the federal government now has complied. In letters on February 25, 2009, and April 2, 2009, the U.S. Department of Transportation (Federal Highway Administration) approved “race conscious means” in “implementation of [Caltrans’] FY 2009 Disadvantage[d] Business Enterprise (DBE) Program.”

However, this federal “permission slip” does not in fact provide Caltrans a valid excuse to evade Proposition 209 or the Equal Protection Clause of the Fourteenth Amendment. For instance, the Ninth Circuit has ruled—in Western States Paving v. Washington State DOT (2006)—that race-based preferences in government contracting are allowed under the Equal Protection Clause only if there is evidence of past or present intentional discrimination that is being remedied. Caltrans’ vague and defective “disparity study” provides no such evidence of discrimination by Caltrans.

For this same reason—the lack of any credible evidence of discrimination by Caltrans—the agency’s quotas are invalid under the California Constitution (Proposition 209), because they are not “narrowly tailored” to respond to specific, identified discrimination. Moreover, Caltrans cannot demonstrate that it will lose federal money if it does not implement quotas. Indeed, Nancy Singer, a spokeswoman for the Federal Highway Administration, told the Associated Press in May that the race- and sex-based goal it approved for Caltrans is “an aspirational goal. It’s not a drop-dead goal that you’re losing your federal funds if you don’t meet that goal.”