Hi-Voltage Wire Works, Inc. v. City of San Jose

12 P.3d 1068, 101 Cal. Rptr. 2d 653, 24 Cal. 4th 537, 24 Cal. 537, 2000 Cal. Daily Op. Serv. 9442, 2000 Daily Journal DAR 12705, 2000 Cal. LEXIS 8928, 79 Empl. Prac. Dec. (CCH) 40,347
CourtCalifornia Supreme Court
DecidedNovember 30, 2000
DocketS080318
StatusPublished
Cited by80 cases

This text of 12 P.3d 1068 (Hi-Voltage Wire Works, Inc. v. City of San Jose) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hi-Voltage Wire Works, Inc. v. City of San Jose, 12 P.3d 1068, 101 Cal. Rptr. 2d 653, 24 Cal. 4th 537, 24 Cal. 537, 2000 Cal. Daily Op. Serv. 9442, 2000 Daily Journal DAR 12705, 2000 Cal. LEXIS 8928, 79 Empl. Prac. Dec. (CCH) 40,347 (Cal. 2000).

Opinions

Opinion

BROWN, J.—

“In the history of this Court and this country, few questions have been more divisive than those arising from governmental action taken on the basis of race.” (Fullilove v. Klutznick (1980) 448 U.S. 448, 516 [100 S.Ct. 2758, 2794, 65 L.Ed.2d 902] (conc. opn. of Powell, J.); see also DeFunis v. Odegaard (1974) 416 U.S. 312, 350 [94 S.Ct. 1704, 1722, 40 L.Ed.2d 164] (dis. opn. of Brennan, J.).) In November 1996, the California voters added yet another chapter to the long and tortuous history of this question when they approved Proposition 209, which amended our Constitution to prohibit the state and its political subdivisions 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.” (Cal. Const., art. I, § 31.) Subsequent to the approval of Proposition 209, the City of San Jose adopted a program that requires contractors bidding on city projects to utilize a specified percentage of minority and women subcontractors or to document efforts to include minority and women subcontractors in their bids.

The question before the court is whether this program contravenes article I, section 31 of the California Constitution. Although the precise issue is a [542]*542narrow one, the electorate did not approve Proposition 209 in a vacuum. Quite the contrary. Thus, while it may be possible to resolve the matter, as do the Chief Justice and Justice Kennard, simply by relying on differences between Proposition 209 and title VII of the Civil Rights Act of 1964 or on the plain meaning of the initiative’s language, we can discern and thereby effectuate the voters’ intention only by interpreting this language in its historical context. Viewing the provisions of article I, section 31 from this perspective, it is clear the voters intended to adopt the original construction of the Civil Rights Act and prohibit the kind of preferential treatment accorded by this program.

Factual and Procedural Background

The salient facts, which are not in dispute, are drawn from the opinion of the Court of Appeal. In 1983, the City of San Jose (City) established a program to encourage public works projects participation by minority business enterprises (MBE’s) and women business enterprises (WBE’s).1 For each contract, the City set a “participation goal” based on the “availability and ability of the MBE and WBE to do the work to be contracted.” To qualify as a “responsible bidder,” a contractor had to meet or exceed this goal or demonstrate “reasonable efforts” to obtain MBE/WBE participation. “Reasonable efforts” entailed documenting written notice to at least four MBE’s/WBE’s soliciting them for the project, follow-up contact to determine their interest in bidding, and written reasons justifying rejection of an MBE’s or WBE’s low bid.

In 1989, the United States Supreme Court held in Richmond v. J. A. Croson Co. (1989) 488 U.S. 469, 498-507 [109 S.Ct. 706, 724-729, 102 L.Ed.2d 854] (Croson), that a state government could not implement a program designed to remedy past discrimination absent a factual predicate substantiating an inference of prior discriminatory exclusion. Following Croson, in 1990 the City suspended its MBE/WBE program and commissioned a study to identify any statistically significant disparity in the number and dollar value of contracts and subcontracts awarded to MBE’s and WBE’s. The resulting report established such a disparity as to the amount of contract dollars awarded MBE subcontractors. In response, the City adopted the “MBE/WBE Construction Program” to encourage nondiscriminatory subcontracting. Like its predecessor, the new program included participation goals and required documentation of good faith efforts to meet them.

After the passage of Proposition 209, the City’s Office of Affirmative Action/Contract Compliance became the Office of Equality Assurance. The [543]*543City also adopted the Nondiscrimmation/Nonpreferential Treatment Program Applicable to Construction Contracts in Excess of $50,000 (Program) at issue here. The Program reaffirms the findings of the 1990 disparity study and attempts to clarify the City’s policy of nondiscrimination and nonpreference in the subcontracting of its construction projects to “ensure that the historical discrimination does not continue.”2

As with the 1983 version, the Program requires contractors bidding on City projects to fulfill either an outreach or a participation component. The “Documentation of Outreach” option entails maintaining records of written notice, or “solicitation letters,” to four certified MBE’s/WBE’s for each trade area identified for the project. Copies of the notice or letters must accompany the bid. The contractor must document at least three attempts to contact the MBE/WBE firms to determine their interest in participating in the project. If any MBE’s/WBE’s express interest, the contractor must negotiate in good faith. It may not unjustifiably reject any bids prepared by MBE’s/WBE’s and must specify the reasons for doing so.3 With respect to the “Documentation of Participation” option, the City determines for each project the number of MBE/WBE subcontractors that would be expected in the absence of discrimination. If a contractor lists a sufficient number of MBE’s/WBE’s in the bid to meet this “evidentiary presumption” of nondiscrimination, it will satisfy the participation alternative, and the City will not require any documentation of outreach.

A bid failing to document either MBE/WBE outreach or participation is rejected as “nonresponsive,” and the contractor is deemed not a “responsible” bidder. The Program’s requirements apply to all contractors, including MBE’s, WBE’s, and those not planning to subcontract any portion of the project.

In 1997, the City solicited bids on a project for which plaintiff Hi-Voltage Wire Works, Inc. (Hi-Voltage), a general contracting firm, was the low bidder. Because it intended to utilize entirely its own work force, it failed to comply with either the MBE/WBE outreach or participation requirement. The City therefore rejected its bid. Joined by plaintiff Allen Jones, a City taxpayer, Hi-Voltage initiated this litigation challenging the Program as a [544]*544violation of article I, section 31 of the California Constitution (section 31) because it required contractors to accord “unlawful preferences” to minority and women subcontractors by giving them “special assistance and information” not provided non-MBE/WBE subcontractors. Plaintiffs sought declaratory relief and an injunction preventing continuation of the Program. The trial court granted plaintiffs’ motion for summary judgment, finding that both components of the Program constituted race- and sex-based classifications that violated section 31.

The Court of Appeal affirmed. Considering the language of section 31 in light of the ballot materials accompanying Proposition 209, the court concluded “that the term ‘preferential treatment’ . . . , viewed in its ordinary, natural sense, refers to any kind of treatment favoring one group or individual over another. The prohibition is not limited to set-asides, quotas, and ‘plus factors,’ but extends to all preferences granted to the target groups. [Fn.

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12 P.3d 1068, 101 Cal. Rptr. 2d 653, 24 Cal. 4th 537, 24 Cal. 537, 2000 Cal. Daily Op. Serv. 9442, 2000 Daily Journal DAR 12705, 2000 Cal. LEXIS 8928, 79 Empl. Prac. Dec. (CCH) 40,347, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hi-voltage-wire-works-inc-v-city-of-san-jose-cal-2000.