CORAL CONST. INC. v. San Francisco

57 Cal. Rptr. 3d 781, 149 Cal. App. 4th 1218
CourtCalifornia Court of Appeal
DecidedApril 18, 2007
DocketA107803
StatusPublished
Cited by1 cases

This text of 57 Cal. Rptr. 3d 781 (CORAL CONST. INC. v. San Francisco) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CORAL CONST. INC. v. San Francisco, 57 Cal. Rptr. 3d 781, 149 Cal. App. 4th 1218 (Cal. Ct. App. 2007).

Opinion

57 Cal.Rptr.3d 781 (2007)
149 Cal.App.4th 1218

CORAL CONSTRUCTION, INC., Plaintiff and Respondent,
v.
CITY AND COUNTY OF SAN FRANCISCO et al., Defendants and Appellants.
Schram Construction, Inc., Plaintiff and Respondent,
v.
City and County of San Francisco et al., Defendants and Appellants.

No. A107803.

Court of Appeal of California, First District, Division Four.

April 18, 2007.

*783 Dennis J. Herrera, City Attorney, Wayne K. Snodgrass, Sherri Sokeland Kaiser, James M. Emery, Deputy City Attorneys, Moscone, Emblidge & Quadra LLP, G. Scott Emblidge, Rachel J. Sater, San Francisco, Meyers, Nave, Riback, Silver & Wilson, Mara E. Rosales, Joseph M. Quinn, San Francisco, K. Scott Dickey, for Appellants.

Bingham McCutchen LLP, Michael Isaku Begert, Sujal J. Shah, Rianne E. Nolan, Renee M. DuPree, Nancy M. Wang, Elizabeth M. Hall, San Francisco, Lawyers' Committee for Civil Rights, Oren Sellstrom, Woodland, for Amicus Curiae on Behalf of Appellants.

Pacific Legal Foundation, John H. Findley, Sharon L. Browne, Paul J. Beard II, Sacramento, Counsel for Respondents.

*782 REARDON, Acting P.J.

Since 1984, the City and County of San Francisco has operated under various iterations of its Minority/Women/Local Business Utilization Ordinance (Ordinance). The Ordinance, in its several forms, has called for race- and gender-conscious remedies to ameliorate the effects of past discrimination in the awarding of City contracts.

More than 10 years ago the California electorate adopted Proposition 209, the California Civil Rights Initiative, thereby adding article I, section 31 (§ 31) to our Constitution. This amendment prohibits all state and local governments and entities from discriminating against, or granting preferential treatment to, "any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting." (§ 31, subd. (a).) This appeal centers on the prohibition against distribution of race- and gender-based preferences in public contracting.

Subsequent to the adoption of section 31, the City enacted another version of the Ordinance. Two construction companies[1] challenged the Ordinance on grounds that certain provisions patently violated section 31.

On cross-motions for summary judgment, the trial court struck down the Ordinance as violative of section 31 and rejected the City's arguments that (1) section 31 is preempted by the International Convention on the Elimination of All Forms of Racial Discrimination (Race Convention), a human rights treaty ratified by Congress in 1994; (2) section 31 offends the Hunter/Seattle[2] political restructuring arm of equal protection jurisprudence; and (3) pervasive past discrimination in public contracting *784 converts the Ordinance into a remedial measure required by the federal equal protection clause such that the superior mandate of that clause preempts section 31. The City has appealed.

We conclude that the trial court correctly determined that section 31(1) is not preempted by the Race Convention and (2) does not offend the Hunter/Seattle restructuring arm of equal protection jurisprudence. We further hold that the Ordinance is not required to maintain the City's eligibility for federal funds. However, the trial court failed to adjudicate the matter of whether the Ordinance is mandated by the federal Constitution as a narrowly tailored remedial program to remedy ongoing, pervasive discrimination in public contracting. Accordingly, we will remand the matter to the trial court for the limited purpose of adjudicating this issue. In all other respects, the judgment is affirmed.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. History of the Ordinance

1. 1984 and 1989 Ordinances

In Associated Gen. Contractors of Cal. v. Coalition (9th Cir.1991) 950 F.2d 1401 (AGCC ID), involving a challenge to the 1989 Ordinance, the reviewing court summarized the early history of the Ordinance, as follows:

"In April 1984, the San Francisco Board of Supervisors (the `Board') passed the Minority/Women/Local Business Utilization Ordinance ..., which required the City to set aside designated percentages of its contracting dollars to minority-owned business enterprises [MBE's] and women-owned business enterprises [WBE's]. In addition, the 1984 Ordinance required that MBEs, WBEs and locall[y]-owned business enterprises (`LBEs') receive a five percent bidding preference to be taken into account when the City calculated the low bid on city contracts.

"AGCC, an organization of contractors engaged in the building and construction industry, ... challenged the implementation of the 1984 Ordinance in court. In reviewing the ordinance, this circuit upheld the provisions favoring WBEs and LBEs against AGCC's constitutional challenge but invalidated the provisions favoring MBEs. AGCC v. City and County of San Francisco, 813 F.2d 922, 928-44 (9th Cir. 1987), petition dismissed, 493 U.S. 928, [110 S.Ct. 296, 107 L.Ed.2d 276] (1989) (AGCC I). In addition, we ruled that all bidding preferences, insofar as they applied to contracts over $50,000, violated [the] San Francisco City Charter....

"Shortly after our decision in AGCC I, the Supreme Court considered a similar minority set-aside plan in City of Richmond v. J.A. Croson Co., 488 U.S. 469, 109 S.Ct. 706, 102 L.Ed.2d 854 [Croson] [citations] (1989). In that decision, a deeply divided Supreme Court struck down the racial set-aside plan adopted by the city of Richmond, Virginia. At the same time, however, the Court confirmed that municipalities could employ race-conscious remedies to redress discrimination in certain circumstances. [Citations.] Prior to Croson, the City had been investigating continued discrimination in city contracting. In that capacity, it had received, among other information, testimony from 42 witnesses, and written submittals from 127 minority, women, local, and other business representatives. Subsequently, in an attempt to determine whether Croson's criteria for permitting race-conscious ordinances were met with respect to San Francisco, the City held an additional ten public hearings, commissioned two statistical studies, and sought written submissions from the public. Out of this process *785 emerged the 1989 Ordinance...." (AGCC II, supra, 950 F.2d at pp. 1403-1404, fn. omitted.)

The summary continued: "Rather than providing the set-asides mandated by the 1984 Ordinance, the 1989 Ordinance gives bid preferences to prime contractors who are members of groups found disadvantaged by previous bidding practices." (AGCC II, supra, 950 F.2d at p. 1404.) AGCC contested the 1989 Ordinance as well, arguing that it violated the federal equal protection clause and failed to satisfy the Croson standards for race-conscious remedies. The Ninth Circuit concluded that the City was "likely to demonstrate a 'strong basis in evidence' supporting its decision to adopt a race-conscious plan" (id. at p. 1416, fn. omitted) and that the Ordinance was narrowly tailored to redress the consequences of discrimination (id. at pp. 1416-1418).

2. 1998 Ordinance

The 1989 Ordinance expired on October 31, 1998.

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