Disregarding intent: using statistical evidence to provide greater protection of the laws.
The year is 2015. The Governor of California has recently announced the startling statistic that fifty percent of the state government construction contracts awarded this year went to minority-owned businesses. This percentage is extremely high given that minority-owned businesses averaged roughly fifteen percent of such contracts in 1995--the year preceding the abolition of minority preferences in California.
The owner of a construction firm suspects that the reason for this increase--twenty years later--is that preferences are being granted to minority contractors within the state, in violation of Section 31 of the California Constitution (Section 31). (1) The one available statistic--depicting the substantial disparity between the number of state contracts awarded to minority-owned businesses in 1995 and the amount awarded in 2015--might suggest that there is a problem.
The difficulty in determining whether there is preferential treatment arises when there is a lack of available information concerning the number of minority contractors present in the state, the number of minority contractors who submitted bids to the state, and the number of minority contractors who submitted the lowest bids on state jobs. Most state government agencies have stopped gathering these numbers altogether.
In reality, recent cases suggest that California is progressing towards a fundamental change in the nature of its anti-discrimination law, which will increase the efficacy of reliance upon statistical evidence in future litigation. (2) The change is that California courts may soon permit consideration of disparate-impact evidence in proving violations of anti-preference and anti-discrimination provisions (3) of Section 31, which was added in 1996 and which was based on the voter's approval of Proposition 209. (4)
While this may seem like a substantial departure from existing anti-discrimination law, California has been heading in this direction for the past two years. In Hi-Voltage Wire Works, Inc. v. City of San Jose, decided in 2000, the California Supreme Court abruptly changed the way that California courts can apply anti-discrimination law by adopting a standard that made it virtually impossible to justify a race-conscious outreach program. (5) This decision laid a foundation for the next step--making preferences and discrimination actionable despite the inability to prove intent. Thus, in the few short years since the passage of Proposition 209, California has accomplished something that the United States Supreme Court has been moving towards for two decades--the California Supreme Court has obliterated the distinction between invidious and benign discriminations.
While the California Supreme Court was unwilling to address whether the prohibitions of Section 31 are limited to intentional conduct, as in Hi-Voltage, (6) its rationale indicated that the next logical step would, in fact, be to resolve this issue. If, indeed, the voters who approved Proposition 209 wanted greater protection against discrimination and preferences, then it is appropriate for the courts to provide greater protection against harm by making redress available whenever harm is proven, regardless of the intent of the actor. Thus, in order to provide greater protection against the harm of discrimination means to interpret Section 31 to prohibit discriminatory acts, even when intent is lacking. (7) The California courts have already addressed the issue of de facto preferences in favor of minority groups, (8) but there is no evidence of reciprocal concern to eliminate the unintentional preferences that favor the majority.
If unintentional discrimination constitutes a violation of Section 31, then a disparate impact analysis--borrowing contextually from Title VII of the federal Civil Rights Act of 1964 (9) and relying heavily on statistics--would be sufficient to establish the existence of improper preferences or discrimination. By using a disparate-impact analysis, the harmful effect of discriminatory acts will be revealed. Title VII litigation would be an appropriate model for public contracting litigation because it involves numerous individual decisions that could result in a finding of discrimination absent probative evidence of discriminatory intent. The importance of statistics in disparate impact cases is readily accepted. As a result, these statistics could easily become the requisite evidence for proving discrimination claims.
Regardless of the court's decision on the issue of intent, statistics are also important because the courts rely heavily--and almost exclusively--on such evidence to establish violations of anti-discrimination laws. (10) As explained in Part IV of this article, statistics are the most powerful circumstantial evidence of intent to discriminate, even where intent is an essential element of the claim. Thus, in either case, statistical evidence will continue to be crucial for proving discrimination, as well as for establishing preference claims.
Notwithstanding its recognition of the voter mandate for greater protection, the California Supreme Court's denial of review of Barlow v. Davis (11) has operated to undermine the citizens' ability to identify and redress instances of improper discrimination and preferences. There is a critical split in California's Court of Appeal opinions on the issue of whether keeping statistical records on minority participation in public contracting is permissible or even constitutional, under the California Constitution, as amended by Section 31. In its 1999 Barlow decision, the First District of the California Court of Appeal, in effect, determined that since the California Constitution no longer permitted preferential treatment for minority contractors in public contracting, there would be no justification for continuing to collect statistics on the state government's utilization of minority contractors in state public contracting jobs. (12) In 2001, the Third District of the California Court of Appeal departed from this reasoning in Connerly v. State Personnel Board. (13) In that case, the court determined that the government has a compelling need for statistical records--sufficient to justify the requirement that statistical records be gathered and maintained. (14) The conflict between these two decisions leaves an impressive gap in California's equal protection doctrine.
Although the California Supreme Court has refused to decide whether gathering statistical data on minority participation in public contracting is permissible, it is important to address the role that such statistical data plays in a discrimination case. Part II of this article describes and analyzes the California Supreme Court's interpretation of the scope of Section 31 in its Hi-Voltage decision and presents the argument that proof of intent may not be required to establish a violation of Section 31. Part III of this article goes on to describe the background of the conflicting California Court of Appeal decisions--Barlow and Connerly--on the issue of statistical recordkeeping for public contracting jobs. Part IV explains how statistics actually help litigants prove intent in public contracting discrimination cases, and identifies some of the flaws and inadequacies in many statistical reports. Finally, Part V concludes the article.
II. THE EFFECTS OF APPLYING HI-VOLTAGE'S ANTI-PREFERENCE STANDARD
A. Anti-Discrimination Law, Federal Anti-Discrimination, and Preference Law in a Nutshell
Before Hi-Voltage can be adequately understood, one must understand the context in which it was decided. The federal government has long supported affirmative action in federal procurement programs, (15) and these affirmative action programs have been continually expanded and reauthorized. (16) The United States Supreme Court has given deference to race-conscious federal programs--provided that the motivation for their implementation was benign. For example, affirmative action programs and minority participation goals, implemented to help under-represented minorities in a particular area, have gained Supreme Court approval. (17) City of Richmond v. J.A. Croson Co. then eliminated the division between benign and invidious racial classifications and determined that the amount of deference afforded to state and local programs would be dependent upon the history of discrimination in a particular state. (18) Then, in Adarand Constructors, Inc. v. Pena, the Court determined that even federal programs enacted for a benign purpose would be subject to strict scrutiny, based on the principles of "skepticism," "consistency," and "congruence." (19) While a substantial debate remains about the role that the motivation for governmental acts should play in determining whether a preference is permissible or unconstitutional, in Adarand Constructors Inc., the United States Supreme Court settled the issue for the foreseeable future. (20)
A strict scrutiny analysis is now required whenever a race-based classification is enacted by any governmental agency or entity, regardless of whether the classification results in a benefit or a burden to a class of people based on race or ethnicity. (21) The strict scrutiny test has a two-prong analysis. The first prong requires the court to determine whether there is a compelling governmental interest sufficient to justify the race-based classification. (22) Thus far, the remedying of past racial discrimination has been the only reason compelling enough to satisfy this stringent prong. (23) The evidence produced to support this justification, however, often fails to establish sufficient proof of past discrimination. (24)
The second prong of the strict scrutiny test requires a determination that the means used be narrowly tailored to accomplish the compelling governmental interest. (25) Even when the courts have found adequate proof of a compelling interest to satisfy the first prong, the courts often determine that the means--the law, ordinance, or program--is not sufficiently narrowly tailored to avoid disadvantaging innocent people or to avoid benefiting those who were not harmed by the articulated past discrimination. (26) Despite the Supreme Court's assertion that strict scrutiny was not "strict in theory, but fatal in fact," (27) race-based classifications almost always fail the test and are struck down as a result. (28)
B. Hi-Voltage Wire Works, Inc. v. City of San Jose
Recently, the California Supreme Court determined that even meeting the strict scrutiny test is not a sufficient justification for a race-conscious remedy in the state of California. (29) Therefore, even when sufficient evidence of past discrimination by a governmental agency or office exists, race-conscious remedies are not permitted. (30)
In November of 2000, in Hi-Voltage, the California Supreme Court interpreted Section 31 to provide greater protection against race-conscious remedies, preferences, and reverse discrimination, than that which the federal courts currently provide. (31) Thus, California shifted from the strict-in-theory-but-fatal-in-fact approach that the federal courts follow to the simple pronouncement that race-based classifications are in fact fatal.
In Hi-Voltage, a taxpayer and a general contractor brought suit against the City of San Jose and challenged the constitutionality of a municipal program (Program). (32) The Program required contractors bidding on city projects to either employ a certain percentage of subcontractors categorized as Minority Business Enterprises (MBEs) and Women Business Enterprises (WBEs) or to document certain outreach efforts. (33) These efforts included solicitation of bids, involvement in follow-up meetings to ascertain subcontractors' interest in bidding, and avoidance of any unjustifiable rejection of bids from MBE and WBE subcontractors. (34) The Program was a post-Section 31 modification of a pre-Section 31 city program. (35) The City's rationale for the modification was to comply with Section 31 in an effort to "'ensure that the historical discrimination does not continue'" in the public contracting industry. (36)
The plaintiff, Hi-Voltage, did not intend to employ any subcontracts, and therefore, did not make any outreach efforts or list MBE and WBE participation levels. (37) Hi-Voltage had the lowest bid, but the City rejected the bid as "nonresponsive" for its failure to comply with the statutory requirements. (38) The Court of Appeal considered the issue of whether the Program compelled prime contractors to give preferential treatment to MBEs and WBEs or discriminated against non-MBEs and non-WBEs. (39) Recognizing that the end was to prevent discrimination, the court reasoned that the means employed were unacceptable because the personal attention and consideration given to MBEs and WBEs granted a "distinct preference." (40) The City appealed and contended that its Program was not discriminatory or preferential, but simply used to "screen" for discrimination. (41)
The California Supreme Court affirmed the Court of Appeal's holding. (42) The California Supreme Court gave a detailed historical analysis (43) demonstrating the shift from colorblind equal opportunity--the original mandate of affirmative action--to color-conscious racial remedies. (44) The court next attempted to ascertain the California voters' intent by analyzing the language and the voter information pamphlets that accompanied the ballot measure known as Proposition 209 (45) that the voters of the state of California passed in 1996. (46) Proposition 209 stated, in part, that "[t]he state shall not discriminate against, or grant 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," and has been incorporated into the California Constitution. (47) Even prior to the voters' passage of Proposition 209, race-based discrimination by the state violated California law. (48)
The second clause of Proposition 209 was of crucial importance because it was more inclusive than past California legislation. (49) This clause added the prohibition of race-based preferences--programs and policies that provide a benefit to a particular racial group--commonly known as affirmative action programs. Previously, such affirmative action programs fit under the definition of benign discrimination, before the United States Supreme Court dissolved that distinction in City of Richmond v. J.A. Croson Co. (50)
The Hi-Voltage court--using dictionary definitions--stated that to discriminate denotes "'mak[ing] distinctions in treatment; show[ing] partiality (in favor of) or prejudice (against)"' and preferential signifies "'giving 'preference,' which is [defined as] 'a giving of priority or advantage to one person ... over others."' (51) Thus, the Court concluded that the "[p]rogram is unconstitutional because the outreach option affords preferential treatment to MBE/WBE subcontractors on the basis of race or sex." (52) This particular statement adversely affected the pro-affirmative action forces that frequently asserted the argument that targeted outreach--outreach focused on underrepresented racial and ethnic groups--did not constitute a preference. (53) The Court recognized that some outreach--outreach focused on underrepresented racial and ethnic groups--may be acceptable, as long as it is directed to everyone in general and to no one in particular. (54)
C. Hi-Voltage's Thread: Unraveling the Differing Interpretations of Preferences and Discriminations
Hi-Voltage is the beginning of the wave of future litigation on anti-discrimination and anti-preference measures in California. The California Supreme Court stated that the Equal Protection Clause does not "preclude a state from providing its citizens greater protection" against both discrimination and preferential treatment than what the Fourteenth Amendment already guarantees. (55) Since the California voters wanted greater protection against discrimination and against preferences, they did not want to unconsciously or unintentionally perpetuate the effects of past discrimination or past preferences. (56) Hi-Voltage made explicit the recognition that preferences constitute discrimination in favor of one, at the expense of another. (57) As a result, Hi-Voltage actually struck down de jure preferences in favor of minority groups, without disturbing de facto preferences in favor of the majority. The court engaged in creative reasoning to strike down a de facto minority preference; however, it did not employ the same analysis to strike down a de facto majority preference. (58)
As an explanatory example, consider the outreach and participation requirements presented in Hi-Voltage. (59) The court found the outreach requirements to be in violation of Section 31 because they create a situation whereby a contractor "can only prove it does not discriminate against minorities and women by discriminating or granting preferences in their favor." (60) Furthermore, "[s]atisfying the outreach option grants preferential treatment because prime contractors must notify, solicit bids from, and negotiate with MBE's and WBE's [sic], but may exclude non-MBE's/WBE's [sic]." (61) Additionally, the court stated that the participation option also discriminates against non-MBE and non-WBE subcontractors and general contractors who neglect to complete either of the options when presenting their bids. (62) Consequently, the City's actions will be deemed discriminatory--on the basis of race and sex--against any contractor's bid that fails to carry out either option, even if the contractor's bid is the lowest responsive submission. (63)
The court, however, omits any explanation of the connection it assumes between rejecting a bid as non-responsive, and discriminating on the basis of race. This link is neither obvious nor sound. The court's implicit reasoning seems to be that if a contractor can be responsive simply by being a member of a minority group, then rejecting someone as non-responsive who is not a member of a minority group constitutes discrimination based on race--examining the bidder's membership in a predominant racial or ethnic group is an inquiry into the essence of the person's racial identity. (64) When the trigger for the preference is the race of the beneficiary, the preference violates Section 31 of the California Constitution.
In contrast, if this logic is the basis for the court's rationale, then the discrimination is based on conduct, not race. Those who perform the required acts--outreach or participation--are responsive, while those who do not are non-responsive. Minority firms do not satisfy the participation goal simply by virtue of their minority status; rather, it is their conduct--performance of a certain percentage of the work themselves--that satisfies the participation requirement. Further, conduct is an appropriate basis for treating firms differently. Since it is not a race-based classification, strict scrutiny does not apply. Rational basis review is sufficient for discrimination based on business and economic motives that do not involve race or ethnicity. (65) Such classifications--those based on conduct--would be permissive under Section 31's prohibition on race-based classification. (66) The Hi-Voltage court nonetheless found that there was a violation of Section 31.
What the court's preference analysis failed to acknowledge is that outreach to minority firms is an extra step--and hence a preference--only if the contractor was not already performing outreach to minority firms. For those contractors who routinely do such outreach, this requirement does not create a burden and does not provide any extra benefit to the minority contractors to whom the contractor reaches out. Only where the contractor did not plan on reaching out to minority firms in the normal course of business, does a burden arise. In such a case, however, the possibility and probability increases that the contractor is intending to discriminate. Furthermore, even without the intent to discriminate, it is possible that the contractor would perpetuate the effects of past discrimination, either discrimination in which the contractor had specifically engaged or industry-wide discrimination without such outreach requirements. Either of these outcomes operates to grant a preference to majority contractors, and both appear to be acceptable to the court.
A preference is nothing more than discrimination in favor of a particular person or group. The lack of outreach confers a preference on those who are already participants in the process. If that preference is connected to race, then it will constitute a violation of Section 31. The California Supreme Court recognized this very point in its pre-Section 31 opinion in Domar Electric, Inc. v. City of Los Angeles (hereinafter Domar I), in which an unsuccessful bidder for a city agency contract sought a writ of mandate to challenge an outreach program. (67) The California Supreme Court found that the phrase "'lowest and best regular responsible bidder'" did not bar the city from requiring bidders to comply with an outreach program where the program did not involve preferences, set-asides, or quotas. (68) Further, failure to meet the anticipated participation level did not disqualify bidders from consideration, and "[t]hus, a bidder gains no advantage from meeting the anticipated participation level." (69)
The Domar I court recognized the preference enjoyed by non-MBEs and non-WBEs in the absence of government-sponsored outreach programs. (70) The court examined the purposes of competitive bidding, which are to "'guard against favoritism, improvidence, extravagance, fraud and corruption; to prevent the waste of public funds; and to obtain the best economic result for the public.'" (71) The court also noted that, in the absence of mandated outreach, prime contractors might tend to seek out subcontractors with whom they are already familiar. (72) Thus, the court suggested that the price of using familiar subcontractors might be higher, and that price difference will be passed along to the government in the bidding documents. (73)
Applying the reasoning of the court in Domar I, it appears that seeking out familiar contractors can operate as a preference in violation of Section 31 when those familiar contractors are non-minority or non-female. If this is the case, then MBEs and WBEs will never be considered unless or until there is an outreach program in place. If, however, through affirmative action and set-aside programs, majority contractors become familiar with the minority contractors with whom they were compelled to work, perhaps the majority contractors will eventually seek out these minority firms when that compulsion is removed.
In Domar Electric Inc. v. City of Los Angeles (hereinafter Domar II), a California Court of Appeal held that outreach to all contractors was sufficient to meet the concerns of the Domar I court by providing a fair opportunity for all firms to bid for public contracts. (74) In Domar II, the plaintiffs low bid was rejected for failing to document outreach requirements. (75) Under the program, failure to achieve the participation goal did not automatically disqualify the bidder, as long as the bidder could show a good faith effort to meet the goal. (76) The method of demonstrating good faith was a documentation checklist that was provided to all contractors. (77) The Court of Appeal found that the outreach program violated neither section 2000 of California's Public Contract Code nor the Fourteenth Amendment of the United States Constitution. (78) The program included OBEs and required outreach to all firms that submitted bids, and therefore, was not discriminatory. (79) The outreach program did not require prime contractors to focus their outreach efforts on or to give special preference to subcontractors within any specific category. (80) Instead, the outreach program applied to MBEs, WBEs and OBEs, which had the effect of broadening the pool of bidders and increasing competition. (81)
Thus, this argument is not completely reflexive. While, overall, outreach programs might not constitute a preference under Domar II, due to the history of discrimination in California and the public contracting industry, failing to require any outreach may still amount to a preference. It seems that the courts take different views depending upon whether the past action is characterized as a preference or as discrimination. The difference depends upon whether race is an explicit or implicit component of the preference.
While this differential treatment of preference and discrimination appears internally inconsistent, the outcome is consistent with other decisions by California courts. A recent California Court of Appeal case applied Section 31 to a school district policy that regulated student transfers based on race or ethnicity, in an effort to maintain the existing balance between white and non-white students in each high school. (82) After analyzing California Supreme Court precedent, (83) as well as Proposition 209 ballot pamphlet materials, the Court of Appeal determined that the transfer policy was guided solely by the students' race. (84) The court reasoned that since the ballot information stated that voluntary school desegregation plans could be affected, the California voters must have intended for Proposition 209 to apply to such race-based plans. (85) In a discussion concerning equal protection issues, the court explained that "[t]he distinction between what is required by the federal equal protection clause, and what may be permitted by it, is critical in this context." (86) In the absence of de jure segregation, the Ninth Circuit recognized that there is no constitutionally required obligation to order desegregation. (87) Thus, the California Court of Appeal determined that segregation arising from de facto circumstances--as opposed to de jure segregation--is not intentional, and therefore, does not require a compelling interest sufficient to justify a race-based classification under federal or California law. (88) In effect, there is no remedy for past de facto discrimination within California under either the United States Constitution or the California Constitution. In contrast, the courts are willing to strike down de facto preferences which favor minority groups.
In Bras v. California Public Utilities Commission, the majority opinion analyzed whether an architectural firm had standing to bring a claim for racial discrimination, and the court held that the firm met the injury in fact and causal relationship requirements of standing. (89) Although the Public Utilities Commission (PUC) did not require the adoption of discriminatory programs "such as bidding preferences or set-asides," the court determined that the regulations had this practical effect. (90) The PUC program set goals and timetables for increasing minority participation but had neither quotas or set-asides, nor automatic direct penalties for failing to meet the goals. (91) Still, the court reasoned that since the nondiscriminatory outreach programs had been in place prior to the adoption of the challenged regulation, an unambiguous message was sent to utilities informing them that "racially neutral outreach programs were insufficient." (92) Thus, alleging that the practical effect of governmental regulation was that entities would feel compelled to engage in preferential outreach was sufficient to state a claim for discrimination. (93) Even de facto preferences will be curtailed when phrased as preferences in favor of minorities.
This incongruence in courts' concern over de facto preferences and de facto discrimination is troubling. De facto preferences give rise to a cognizable injury, whereas de facto discrimination does not have a remedy in the courts. (94) Since preferences are the converse of discrimination, de facto discrimination against one person is actually a de facto preference in favor of someone else. De facto preferences in favor of minorities give rise to a cognizable injury claim for the majority, whereas de facto preferences in favor of majority are not sufficient to constitute a cognizable injury claim for minorities.
D. Should Implicit Preferences Be Actionable, or Is Intent Required Under California's Section 31?
The next question that arises is whether Section 31 forbids preferences that arise absent discriminatory intent. For purposes of this article, such preferences will be referred to as implicit preferences. Section 31 does not expressly require intent but merely provides that "[t]he state shall not discriminate against, or grant preferential treatment to ..." the individuals and groups specified. (95) In this way, Section 31 is comparable to other anti-discrimination legislation, such as Title VII's disparate impact claims, in which intent is also not required. (96) The Equal Protection Clause of the Fourteenth Amendment to the United States Constitution states that "[n]o State shall ... deny to any person within its jurisdiction the equal protection of the laws." (97) Despite the lack of an express intent requirement in the Fourteenth Amendment, it has nevertheless been inferred. (98) The California Court of Appeal did not address this issue in Hi-Voltage, thus, the question remains open.
The Court of Appeal decision in Hi-Voltage reasoned that the preferential treatment of a targeted group violates the prohibition against discrimination in Section 31, regardless of the benignity of the motive. (99) The court used the prohibition on preferential treatment to invalidate a minority outreach program aimed, ironically, at achieving equality. (100) In the court's view, to hold otherwise would mean that discrimination turns on the government's intent in creating or implementing the program, however, "[n]either the text of Proposition 209 nor its accompanying ballot materials suggest that a violation occurs only when the government intentionally discriminates or grants preferences." (101) The court emphasized that the actual conduct of parties, rather than their motives, was the determinative factor on the issue of compliance with Section 31. (102) By invalidating a program that lacked discriminatory intent, the court suggested that intent is not required to prove a violation of Section 31. (103)
Since the California Supreme Court did not address the issue of intent when it vacated and affirmed the Court of Appeal decision, there is no binding authority dictating whether Section 31 prohibits only intentional discrimination and preferences. In the absence of any other precedent, the logical conclusion arising from the California Supreme Court's reasoning is that Section 31 can be interpreted to prohibit unintentional discrimination and preferences. In contrast, the California Supreme Court explicitly stated that a compelling interest will not justify a race-based classification scheme because of the greater level of protection against preferences and discrimination provided under California law than under the Federal Constitution. (104) Providing greater protection means better enforcement and more effective redress for violations. Given that the purpose of Section 31 was to heighten the level of protection for California citizens against both discrimination and racial preferences, it would be appropriate for the court to interpret the law in a way that would permit even unintentional preferences and discrimination to be actionable.
If intent is required to prove a violation of Section 31, then violations will be difficult to establish. Where the state does not intend to discriminate or grant preferences on the basis of race, but in fact does, there would be no actionable violation of Section 31. For instance, if the state were to contract with more majority firms on the basis of race without intending to do so, then the state would avoid liability. This outcome, however, results in no greater protection against discrimination or preferences than that which existed before the enactment of Section 31. Thus, this reasoning is counterintuitive.
It used to be the case that while the courts might not have found the government or the prime contractors liable for discriminatory conduct, a harm was nonetheless recognized. Prospective relief--like affirmative action--in the form of set-asides and consent decrees was available. Since affirmative action is now unconstitutional in California, there is no prospective relief. The level of the victim's harm has not decreased or changed, yet the relief has changed dramatically. An individual that was once considered worthy of prospective relief is now left with no available compensation for the harm suffered. The one way of remedying the situation that is permissible under the current law in California--which would not only comply with but would also help to fulfill the voters' greater protection mandate--would be through deeming disparate impact sufficient to prove a violation of Section 31.
There is precedent for such a determination. For instance, the regulations promulgated to enforce Title VI allow for consideration of disparate impact evidence under section 602, although section 601 still requires intentional discrimination to be proved. (105) In Alexander v. Sandoval, the United States Supreme Court analyzed the intent requirement for claims under Title VI, which prohibits discrimination in programs and activities that received federal funds. (106) The court determined that while a private right of action existed to enforce the prohibition of intentional discrimination under Title VI, there was no private right of action to enforce the disparate impact regulations promulgated under Title VI. (107) The court assumed for the purposes of this case that the regulations were valid, while still recognizing that the court has not explicitly decided that issue. (108) Thus, there is additional precedent in anti-discrimination law to support redress for unintentional conduct in government programs.
If the California Supreme Court determines that intent is not required to prove a violation of Section 31, then it is reasonable to use a disparate impact analysis to prove claims of unintentional discrimination or unintentional preferences in violation of Section 31. Arguably this goes too far, yet the courts have already allowed the use of statistics to prove disparate treatment claims under Title VII, due in part to the difficulty of proving intent in each individual case. (109) Still, statistics need to show significantly disparate results before anecdotal and other circumstantial evidence may be used to attribute the disparate results to a racial causation. (110) The use of statistics to prove claims under both the disparate treatment and disparate impact theories under Title VII leads to the conclusion that the same standard should apply to California in the public contracting field.
Even in the post-Proposition 209 regime, federal district courts in California have continued to recognize and demonstrate the need for statistical evidence. Recently, in L. Tarango Trucking v. County of Contra Costa, the United States District Court for the Northern District of California determined that in light of the county's failure to maintain adequate statistics, there was not enough data available from which the court could find intentional discrimination. (111) Thus the plaintiffs were left without a remedy. In Tarango, MBEs and WBEs brought a class action suit against the county of Contra Costa, alleging intentional discrimination in awarding county contracts in violation of the Fourteenth Amendment's Equal Protection Clause. (112) In a bench trial, the district court found that the plaintiffs had not proven that the county intentionally discriminated against them in violation of the Fourteenth Amendment. (113) The court reasoned that even if the county's policies and practices had a disparate impact on minorities and women, the county did not intentionally discriminate against these businesses merely by permitting such practices to continue. (114) According to the court, the fact that a large percentage of contracts were entered into without competitive bidding was not enough to establish intent. (115) Further, the county's failure to collect data on its utilization of minority contractors also was not enough to establish intentional discrimination. (116) The court determined that many factors must be considered in evaluating whether invidious discrimination was a motivating factor; including the "'[h]istorical background of the decision,'" the "'specific sequence of events,'" "'[d]epartures from the normal procedur[es],'" "'[s]ubstantive departures,'" and the "'legislative or administrative history.'" (117)
The plaintiffs contended that the disparate impact, subjective decision-making and failure to follow through on an affirmative action plan resulted in intentional discrimination. (118) The plaintiffs argued that there were not enough statistics kept by the government concerning the amount of contracts awarded to MBEs and WBEs; further, plaintiffs contended that the statistics that were kept were incomplete or inadequate. (119) The court held that the plaintiffs had not proven a disparate impact, admitting that "[i]t is true that the meager information that is available suggests that the County awards a low absolute number of contracts to women-owned and minority-owned contractors. There is no accurate data, however, on the number of women-owned and minority-owned contractors who are qualified to do business with the County." (120) Without accurate data, the court could not conclude that the County's contracting practices had a disparate impact on WBEs and MBEs. (121)
The Tarango court examined the plaintiffs' argument that the county was intentionally discriminating under a ratification theory. (122) The court applied a strict ratification rule, stating that intent can arise on a ratification theory only when the defendant intended the discrimination to occur and when the defendant was deliberately indifferent to "known existing discrimination by someone over whom the defendant has authority and control." (123) Moreover, the course of the conduct must be "at least in part because of, not merely in spite of, its adverse effects upon an identifiable group." (124) Under Tarango's application of the ratification theory, plaintiff need not show that defendant was the one that performed the discriminatory act. (125) The defendant, however, must have been so indifferent to the discrimination as to have intended the discrimination to occur. (126)
Considering the issue of awarding contracts without competitive bidding, the Tarango court determined that although the evidence presented was flawed and somewhat inaccurate, it did show that the county made it difficult for any new business to receive contracts, not simply for MBEs. (127) The court found no evidence to indicate that the county permitted this situation to continue in order to adversely impact minorities and women. (128) Rather, the court determined that the county made an effort to ensure that its policies did not negatively impact MBEs or WBEs by amending its policies for compliance each time the law changed. (129) Thus, the court concluded that the plaintiffs did not demonstrate that the county's failure to more aggressively enforce their own affirmative action programs was caused by the intent to discriminate against minority contractors. (130)
In the absence of current data, there is no way to decipher whether the policy has a disparate impact. This is critical in the justification of continuing the practice of maintaining statistics. The Tarango court stated that, at a minimum, adequate statistics would be needed for a plaintiff to prove a claim under the disparate impact theory but that disparate impact was not sufficient to establish a violation of the Fourteenth Amendment because of the absence of the vital element of intent. (131) Based on the authorities in Part IV, (132) the statistical evidence, combined with anecdotal and historical evidence, raises an inference of intentional conduct sufficient to defeat a motion for summary judgment on the issue of the defendant's intent, and therefore, may be sufficient to support a conclusion that the county's discrimination was intentional. (133) At the very least, if the statistics were gathered and maintained, there is a possibility that they could demonstrate a disparate impact. (134) Since the California Supreme Court, in Hi-Voltage, left open the possibility of whether disparate impact would be sufficient to prove a violation of Section 31 in California, (135) the Tarango plaintiffs may have been successful in a later lawsuit, providing that statistical records had been maintained.
E. Using Statistics to Establish Grants of Unconstitutional Preferences
Contra Costa County's inaction in Tarango could also be analyzed in another way; that the county was preferential to those upon whom no disparate impact was shown by purposefully maintaining the status quo and intentionally failing to enforce the affirmative action plan.
In the public contracting field, it can scarcely be argued that the government intends for discrimination to occur. This is true even though some actual discrimination occurs when contractors choose subcontractors, despite the mandates of anti-discrimination law. Rather, it could be argued that by intentionally preferring established companies as contractors, the government ratifies the contractors' discriminatory purpose and conduct in the selection of their subcontractors. It might not be difficult to demonstrate that the government maintains the low bid preference system because of--not merely in spite of--its positive impacts on the identifiable majority contractors. The demonstration would not only require a showing that the government officials--like prime contractors--prefer hiring contractors with whom they are familiar but also that preference negatively impacts minority contractors.
The difficulty of entry for new businesses suggests that states, counties and local governments continue to do business with the entities with which they have always done business. Since there are few MBEs and WBEs in this group, the government is perpetuating the effects of past discrimination and maintaining existing preferences in favor of non-minority companies. (136) Similarly, statistics about past preferences can show the continued operation of preferences. Even though the Tarango court found that such an impact was not sufficient to prove an intent to discriminate, (137) it is, nonetheless, a disparate impact that adversely affects underrepresented minorities. To the extent that the California courts will enforce the voters' "greater protection mandate," evidence of a disparate impact of preferences for majority contractors may state a cause of action for a violation of California's Section 31.
If the showing of a disparate impact is sufficient to prove a violation of Section 31, then statistics must be kept concerning the availability, participation rates, and the variance over time and in different locales for different jobs and circumstances. This information is vital because it is necessary to provide greater protection to Californians, to assist the government in defending itself against unfounded charges of discrimination or grants of preferences, and to demonstrate effective proof to those minority or majority firms who actually are the victims of present or future discrimination or preferences. The availability of these statistics will permit litigants to marshal the evidence needed to support their claims for redress and to back up their pleas for compensation.
III. GREATER PROTECTION REQUIRES STRICT COMPLIANCE MONITORING & STATISTIC GATHERING: RESOLUTION OF THE BARLOW & CONNERLY CONFLICT
A. Barlow Court Strikes Statistic Gathering Requirement
Given that statistics play such a vital role in discrimination litigation, it is significant to explore why the conflict in the California Court of Appeal decisions leads to incomplete statistical records. In Barlow v. Davis, the plaintiff challenged the validity of an executive order in which the governor directed state agencies to cease any enforcement of the MBE and WBE participation goals codified in Article 1.5 of the California Public Contract Code (138) and to cease collecting statistics tracking compliance with those goals. (139) Article 1.5 was originally enacted in 1988 (140) "[t]o 'ensure that a fair proportion of the total number of contracts ... are awarded to minority, women, and disabled veteran business enterprises.'" (141) This statutory scheme set up a program that chose the lowest responsible bidder for state contracts but determined a bidder to be responsible only if that bidder met--or made good-faith efforts to meet--the participation goals established for MBEs and WBEs. (142) At issue in Barlow was section 10115.5, which required that by January 1st of each year, each department awarding public contracts "shall report to the Governor and the Legislature on the level of [contract] participation by minority, women, and disabled veteran business enterprises." (143)
The Barlow court held that section 10115.5 was "neither functionally nor volitionally severable" from the invalid provisions at issue, which set up affirmative action participation goals. (144) Therefore, the reporting requirements could not stand alone. (145) The court reasoned that when race and gender participation and affirmative action provisions of the program were declared unconstitutional as a result of Section 31, the maintenance of these statistics no longer made sense. (146)
The Barlow court relied upon the Ninth Circuit's decision in Monterey Mechanical Co. v. Wilson. (147) In Monterey Mechanical Co., the court ruled that these goals and participation requirements violated the Equal Protection Clause because the program treated contractors differently based on their race and gender and provided benefits to MBEs and WBEs without satisfying either components of the strict scrutiny test. (148) The Monterey Mechanical case did not specifically consider or address the reporting provisions of section 10115.5, and thus, did not declare it to be unconstitutional. (149)
The Barlow plaintiffs argued that since there was a severability clause included in the enactment, the recordkeeping should continue. (150) The court's severability test requires that a provision be grammatically, functionally, and volitionally separable in order to survive after other parts of an enactment are ruled invalid. (151) The court found that the grammatical component was met but that the functional and volitional components were not satisfied. (152) Reasoning that the portion of the statute remaining after the Monterey Mechanical Co. decision was not complete and would not have been separately adopted by the legislature, the court determined that the reporting requirement could not stand. (153)
The Barlow court was more narrowly focused than the issue required in finding that statistical recordkeeping was illogical when separated from the unconstitutional provisions of the section. (154) The court suggested that while the legislature could have intended to require some more general reporting on ethnic and gender participation levels, it had not demonstrated such intent. (155) Thus, the court found this portion of the statute to be unenforceable. (156)
This reasoning of the Barlow court rested on the fallacy that the statistics had no purpose--that nothing could be done with them. (157) After Section 31, it is clear that minority preferences can no longer be granted, but there are several other uses for statistics that are not so clearly curtailed. For instance, statistics can be used to monitor minority participation, as well as majority participation in the market place. Additionally, statistics can be used to show that preferences are still being given and that discrimination is still being practiced in the contracting field. Finally, on the basis of the statistics, actual cases of discrimination and preferences can be proven. (158)
It is not likely that the Barlow court recognized how significantly its decision reduced the available proof to discrimination cases in the state of California, but the California Supreme Court denied review nonetheless and allowed Barlow to stand as an authority. (159)
B. Connerly v. State Personnel Board
In Connerly v. State Personnel Board, the governor and a taxpayer brought a suit to challenge the constitutionality of several affirmative action programs, including a program for state contracting. (160) In stark contrast to the Barlow decision, the Connerly court held that the data collection and reporting requirements--mandated by legislation--were severable from invalid portions of the act, and thus, would be upheld. (161) The court reasoned that discrimination is not simply a thing of the past. "Accurate and up-to-date information is the sine qua non of intelligent, appropriate legislative and administrative action. Assuming that strict scrutiny is required, a monitoring program designed to collect and report accurate and up-to-date information is justified by the compelling governmental need for such information." (162)
Taking a broader reading of the logical uses of statistical evidence, the Connerly court determined that the severability clause would permit the recordkeeping aspects of the program to survive, despite their ruling that the underlying affirmative action program itself was unconstitutional. (163)
This split in the two Court of Appeal decisions must be resolved. As it now stands, there is inconsistent guidance on whether it is permissible--or even constitutional--to continue to maintain statistical records of the race and ethnicity of contractors for public contracting jobs in the state of California. According to the reasoning of the Connerly court, statistics are necessary to effectuate compliance with the voter mandate of Section 31--to provide greater protection against discrimination, and against preferences, in California. (164) This position is more legally sound.
C. Keeping Statistics: Not a Preference, but Constituting Good Public Policy to Promote Intelligent and Informed Decision-Making
The compilation of statistics is not, in itself, a preference favoring any particular group. The recording of statistics is an objective act that serves only to document what has already occurred. The process is analogous to the law school admissions process whereby the school admits students based on certain criteria and then categorizes the student body in order to establish its profile. The categorization itself, however, is not a preference. Instead, statistics help school administrators decide where to focus their recruiting efforts and other resources in the future. Since these categorizations can be made after a student is selected for admission, the categorization is not taken into account during the selection process. This type of analysis supports the conclusion that categorization of this nature is not a preference.
Additionally, maintaining statistics is not a preference because there is no act of choice. No one is being treated differently as a result of the statistics because the statistics are gathered after the bidding is completed and after the winner has been chosen, or after the selection--if there is no open bidding. Furthermore, it is not likely that a court would find the keeping of statistics to constitute a preference based on the possibility of a future preference that at the time the statistics are needed to support a discrimination claim, the mere fact that those statistics were kept operates as a preference to those who claim discrimination.
To the extent that one may still assert that gathering statistics constitutes a preference, the Connerly court has determined that statistics are necessary, and that the government has a compelling need for statistical information. (165) The government has a compelling interest in collecting accurate statistical information for the purpose of assisting in the creation of appropriate, effective legislation. (166) Thus, even if the keeping of statistics were to constitute a preference, the Connerly court reasoned that such a preference would meet the strict scrutiny test. (167) Whether the California Supreme Court would agree or disagree remains to be seen.
D. Fulfilling the Greater Protection Mandate
Regardless of how the California Supreme Court ultimately decides the issue, statistical records must be maintained. In Hi-Voltage Wire Works, Inc. v. City of San Jose, the California Supreme Court justified its decision--that race-based preferences are no longer permissible--on the grounds that the California electorate intended to provide greater protection against race-based discrimination and preferences than was provided under existing laws. (168) In order to provide greater protection, California must apply more rigorous standards to deter the occurrence of improper discrimination and preferences, to enforce the anti-discrimination laws by identifying instances of such discrimination and preferences, and to allow for more effective redress of these identified wrongs. All of these interests would be served by the use of statistics.
The Barlow court ended its analysis here, failing to recognize that statistics can also be used to monitor the abolition of preferences and the affirmation of the non-discrimination mandate of the voters under Proposition 209. (169) Questions remain--are preferences still being granted? Is discrimination still occurring? The government must monitor itself because there is no other way to defend against a claim of discrimination or preference. (170) In addition, actual discrimination and actual preferences can be identified by examining the numbers, or at the very least, the numbers can provide support for further investigation. For these reasons, the government must maintain statistics on the race and gender of those who receive state contracting funds.
As a matter of public policy, keeping records of statistics is a good practice. Some would contend that any recordkeeping burdens small businesses because it is time and resource consuming, and thus, new recordkeeping legislation would harm the already overburdened small business owner. Unlike these small business owners, the burdens on contractors would be minimal because the reporting obligation only applies to those awarded the work. Reporting statistics is not as burdensome as the outreach and documentation requirements that had been due at the time of bid submission and needed to be completed for every bid, not merely for the successful ones. (171) Moreover, since only the successful bidders would bear this cost, they could build the compliance costs into the bid amount. (172) The benefits would be substantial for all of the legal reasons articulated here and for the additional need of the state to demonstrate its commitment to monitoring its own enforcement of, and compliance with, the voter's mandate.
IV. STATISTICS ARE NECESSARY TO PROVE CONTRACTOR DISCRIMINATION CLAIMS
In discrimination cases, the courts commonly focus on direct evidence--when available--and three types of circumstantial evidence: (1) historical evidence of past and present policies and practices; (2) statistical evidence of how groups of people are treated; and (3) anecdotal evidence (173) of how different individuals have been and are treated under these policies and practices. (174) The historical evidence is useful but often too general or too far removed from the present situation to be sufficient in isolation. (175) Anecdotal evidence is often criticized as too specific, and thus, not sufficiently probative of discrimination against people on the basis of their race. (176) Statistics are criticized as being both too general and too specific but nevertheless are commonly accepted--when adequate--as proof of racial discrimination. (177)
Most scholars and judges accept the proposition that statistical evidence is probative of discrimination; as a result there is not much focus placed on why statistics are necessary. (178) It is well settled that statistical evidence is required, and thus widely used to establish a disparate impact claim under Title VII. (179) Much of the literature on the use of statistical evidence focuses on the methodologies, the appropriate measures, variables, time periods, and the geographic scope of the statistical information gathered. (180) Many court cases that analyze statistical evidence provide strong criticisms of the methods employed as being incomplete or inaccurate. (181) Still, these cases recognize the importance of probative statistical evidence.
A. The Courts' Use of Statistics as Evidence of Intentional Discrimination
Even if intent is required to prove a violation, the government needs statistics to monitor its own compliance with the nonpreference and the non-discrimination mandates of Section 31. Statistical data is the most probative type of circumstantial evidence considered by many courts, and thus the most relevant type of evidence for the parties to a lawsuit. Statistics have also been used in jury selection discrimination cases and in some federal strict scrutiny cases.
For instance, in Hernandez v. Texas, statistical evidence showed that in twenty-five years no Latinos had served on a jury in a jurisdiction that was comprised of 14% Latino citizens. (182) This statistic was conclusive evidence of intentional discrimination in violation of the Fourteenth Amendment. (183)
Courts also use statistics to establish intent in disparate-treatment claims. (184) The Ninth Circuit endorsed the use of statistical evidence in Gay v. Waiters' and Dairy Lunchmen's Union, Local No. 30. (185) The court acknowledged the importance of statistics as circumstantial evidence if this is "sufficient to permit the court to infer ... that the employment decision was more likely than not the product of intentional discrimination." (186) Therefore, government agencies routinely commission disparity studies to justify their affirmative action and set-aside programs. (187)
One early example of the courts' use of statistics demonstrates the longevity of the proposition that statistics can constitute sufficient evidence to fulfill the courts' articulated requirements for finding purposeful discrimination. As far back as 1974, in Legal Aid Society v. Brennan, the District Court for the Northern District of California granted a mandamus action to compel federal officials to release information on the ethnic composition of contractors subject to an equal employment opportunity Executive Order. (188) The information required of contractors in performing underutilization assessments was quite specific about what statistical information needed to be collected. (189) The District Court granted partial summary judgment for the plaintiffs to restrain the federal officials from approving any affirmative action plan that did not adequately address each of these utilization factors. (190)
Similarly, in Cone Corp. v. Hillsborough, the Eleventh Circuit found that a genuine issue of material fact existed to preclude summary judgment concerning whether the county's MBE law violated the Equal Protection Clause. (191) The County commenced studies to examine the problems encountered by MBEs and found that MBEs were significantly underrepresented in county contract participation. (192) As a result of this study, the county created a program that provided a goal for MBE participation levels whenever there were at least three eligible MBEs in a given area to be subcontracted. (193)
The court divided the money to be received by MBEs according to statistical percentages and indicated the amount of county money that had previously gone to MBEs. (194) The court found these statistics sufficient to support its finding that the ordinance "resulted from prolonged studies of the local construction industry that indicated a continuing practice of discrimination." (195)
In Ensley Branch, NAACP v. Seibels--involving the modification of a consent decree that was negotiated in response to racial discrimination lawsuits in local government employment--the court analyzed the Title VII and equal protection authorities. (196) On the equal protection claim, the court stated that "when a consent decree providing race-conscious relief is challenged as unconstitutional, the district court must make a factual determination that the public employer has 'a strong basis in evidence for its conclusion that' racial discrimination necessitates affirmative action." (197) The Eleventh Circuit went on to note that public employees could justify affirmative action programs where they could show that "'gross statistical disparities'" existed between the number of minorities hired by public employers and the number of minorities willing and able to do the work. (198) The success of this justification requires a constitutional basis for the affirmative action and a prima facie showing that past intentional discrimination demands such a race-based remedy.
Still, other cases have used a burden shifting approach to uphold a program where the challenger has insufficient evidence to rebut the government's evidentiary showing. In Adarand Constructors, Inc. v. Slater, a white contractor challenged the constitutionality of the Department of Transportation's federal highway program for disadvantaged business enterprises (DBEs). (199) In examining the adequacy of the government's factual finding to justify the affirmative action program, the court reiterated the necessity of the "'strong basis in evidence"' standard and stated that "[b]oth statistical and anecdotal evidence are appropriate in the strict scrutiny calculus, although anecdotal evidence by itself is not." (200) The court identified two distinct types of discriminatory barriers, both of which involve private discrimination by prime contractors against sub-contractors. (201) The court acknowledged that the government had presented powerful evidence that the contracting field was a closed network and that minority participation was often prevented by practices such as bid shopping. (202) The court noted that the government's evidence strongly supported the conclusion that informal, racially exclusionary business networks dominated the subcontracting construction industry and worked to shut out competition from minority firms absent affirmative action programs. (203) Based on this statistical evidence, the court determined that the problems faced by minority businesses were not simply the same problems faced by all new businesses and that--therefore--some discrimination was in fact evident. (204) In addition, the court justified the passive participant argument, by noting that "[t]he Constitution does not obligate Congress to stand idly by and continue to pour money into an industry so shaped by the effects of discrimination that the profits to be derived from congressional appropriations accrue exclusively to the beneficiaries, however personally innocent, of the effects of racial prejudice." (205) Since the government set forth evidence of its compelling-interest--to eradicate racial discrimination in federally-funded programs--the court determined that a prima facie case had been established. (206)
The court concluded that the government had met the "strong basis in evidence" (207) standard that supported the compelling interest prong of the strict scrutiny test because disparity studies showed that the level of minority participation would have been higher in the absence of discriminatory barriers; such evidence was relevant to the issue of whether the disparity "is sufficiently significant to give rise to an inference of discriminatory exclusion." (208) The court reiterated that the ultimate burden of proof lies with the party challenging the program and held that the plaintiffs failed to meet their burden of introducing credible, particularized evidence to rebut the government's showing. (209)
B. California's Interest in Maintaining Statistics: Perpetuating the Denial of Federal Rights to California Litigants
Federal law holds that race-conscious remedies are only appropriate where such discriminating mechanisms satisfy a two-pronged review. First, there must be a compelling state interest involved, and second, the remedy must be accomplished via a narrowly tailored mechanism. (210) While diversity in education still holds some weight as a legitimate purpose, in several jurisdictions the predominate standard used for remedying past discrimination is a "compelling state interest." Historical statistics are arguably the only way to legitimize the compelling state interest. (211) In addition, as explained in Part A, supra, the most effective way to prove the intentional discrimination necessary to invoke a race-conscious remedy is with statistical evidence. (212)
It is important to briefly address why a race-conscious remedy might be necessary in the future. Some scholars believe that race-neutral remedies will never work to achieve true equal opportunities because there is no adequate proxy for considering race and because the effects of past discrimination have a continuing impact on the survivors of that discrimination, as well as on their heirs. (213) Thus, in a competitive economic model, the business or person who once suffered from discrimination is at a competitive disadvantage based on economies of scale, the learning curve, and other costs of doing business. (214) That disadvantage is one that can never fully be overcome because as one moves up, so does the rest of the pool. (215) An individual subject to discrimination will always "lag behind" in experience, reputation, and skills. (216)
As a result of this continuing inequality, it may be recommended to implement race-conscious policies in certain instances to assist in leveling the playing field--even where there is no current discrimination--simply because of the effects of past discrimination. The United States Supreme Court has determined that past discrimination can constitute a compelling interest sufficient to justify a narrowly tailored race-conscious remedy. (217) In California, however, the only statutory justifications compelling enough to warrant a race-conscious remedy are the maintenance of federal funding and the avoidance of conflicts with federal law--not remedying past discrimination. (218)
Returning to a variation on the contract employment hypothetical from the introductory section of this article, suppose that in the year 2015, MBEs constitute 20% of the contractors and receive 2% of the state contracting dollars. (219) This disparity between the percentage of contractors and percentage of state contracting dollars suggests that inappropriate practices may be occurring. A disparity that dramatic is surely sufficient to establish at least a prima facie case of discrimination. Since intent is required under the federal standard, in order to justify a race-conscious remedy, the minority contractors would need to present evidence of intent before a successful federal claim could be commenced. How does one prove intent in the federal courts? When direct evidence is lacking, as it is in most litigated cases, proof is established with statistics, supplemented by anecdotal and other circumstantial evidence. (220)
If there are no statistics from the year 2000 to the year 2015 on minority and majority contractors in the state of California, it is unlikely that the federal courts would find this particular statistic from the year 2015 to be sufficiently probative. The court would want an analysis over time to ensure that the year 2015 statistic was not an aberration or something that would correct itself in the following year without court intervention. Since the courts are especially careful in ordering race-conscious remedies, the compelling interest prong and the intentional discrimination element must be proven with substantial evidence. (221) The lack of statistical evidence would mean that any such lawsuit would likely be terminated by an early motion to dismiss.
If the same situation occurs but the lawsuit is for discrimination in federal contracting jobs--instead of state jobs--those MBEs would have the statistical records available to support their claim because the federal government requires that these statistics be reported and maintained. (222) The victims of federal government discrimination therefore would have a much greater likelihood of successfully defeating a motion to dismiss than would the victims of discrimination by the state of California. Thus, California victims would be unable to adequately prove their case, even when the same case would otherwise be actionable under federal law.
If statistical evidence is lacking, then there is no benchmark and no comparison to be made, and therefore intent could not be established. In effect, what this means is that contracting discrimination claims in California will be set back years. If, and when, the state resumes statistical recordkeeping, the gap in the available information would continue to indicate that no case could be proven--possibly for several years--until some sort of statistical database is redeveloped.
Furthermore, the litigants may wish to file their discrimination claim in federal court for an additional reason--the federal courts may be able provide greater relief--in terms of race-conscious remedial measures--than the California courts currently provide under the framework set forth in Hi-Voltage. If the litigant is successful, and the state provides improper preferences that amount to discrimination, then a race-conscious remedy--such as targeted outreach--may be ordered by the federal courts as a remedy for Fourteenth Amendment violations. It seems that race-conscious remedies can no longer be ordered by California courts (223) based on the Hi-Voltage court's reasoning that states may afford more equal protection to its citizens than that afforded by the federal government. (224) The Hi-Voltage court distinguished Section 31 of its own constitution from the Equal Protection Clause requirements of the federal constitution and opined that Section 31 disallows race-based programs regardless of the existence of a compelling state interest. (225) The court is clear--at least at this point--that such remedies are no longer constitutional in California. Thus, the federal courts will be the only avenue for obtaining race-conscious relief in California.
C. When More Detailed Statistical Records are Necessary: Availability Data and Utilization Rates
Underutilization statistics are another statistical measure that can help to prove or disprove discrimination claims. In the Ninth Circuit's 1979 case Legal Aid Society of Alameda County v. Brennan, the plaintiffs alleged that the federal officials "failed to discharge their duty to ensure the maintenance by food processing contractors of adequate affirmative action programs." (226) In Legal Aid Society, federal regulations required that affirmative action programs must address the underutilization of minorities by ensuring that particular job groups contain a percentage of minorities at least equal to the number of minorities available in that job group in a particular job market. (227) As proof of the officials' deficient enforcement of compliance with the program, the plaintiffs introduced contemporaneous compliance reports that included statistics that showed a 70% underutilization of blacks by Alameda County food processing contractors and "systematic underutilization of blacks both overall and in every or virtually every job category by more than a third of such contractors." (228)
The court did not consider the compliance report's statistics to be useful solely for the purpose of making and proving discrimination claims, but rather, the court suggested that prior to the commencement of any lawsuit, the statistics may help those contractors who want to remove any existing unintentional barriers for minority entry into the market may do so in advance. (229) Those contractors would then be able to carefully consider their own procedures and how discrimination may be unintentionally operating to keep the minority utilization rates lower. (230) One determinative factor for the court was that the program's goals were based on the "contractor's own determination of the percentage of minority and female workers qualified for the particular job group who are reasonably available for employment by that contractor." (231) Thus, the number reflects what the contractor thinks the representation figures would be if all selection processes were completely non-discriminatory. (232) The court further indicates that:
Given this premise, it is entirely reasonable to assume that a contractor who finds a lower percentage of women or minority members in a particular job category in his work force may well be able to correct the deficiency simply by removing obstacles to fair and equal employment, without reliance upon racial preference or discrimination. (233)
The court then identified several possible solutions that could result from an analysis of statistical evidence, including where the evidence does not demonstrate existing or past discrimination. For instance, the court suggested that: (1) minorities and women may not be aware of job openings, so contractors could establish contacts with local organizations, institutions, or individuals in a position that enables them to refer candidates; (2) the contractor could take advantage of media events and could encourage "word-of-mouth" recruiting; (3) the contractors could delegate authority to a "minority liaison" to recruit potential applicants who may be discouraged by the contractors' own negative image in the community; or (4) the contractor could attempt to persuade the labor unions or subcontractors to abandon discriminatory practices. (234) The court stated that in most cases, these suggestions may likely correct the flaws in the contractor's hiring system, without resorting to preferences or discrimination. (235) If, however, these programs themselves lead to preferences and reverse discrimination, both judicial and administrative remedies remain available. (236)
In 1987, the Ninth Circuit again addressed the sufficiency of statistical records of underutilization as proof to support a claim of discrimination in Associated General Contractors of California, Inc. v. City and County of San Francisco in which an MBE and WBE set-aside ordinance was challenged. (237) Although the district court upheld the ordinance, the Ninth Circuit found that certain provisions were in violation of the Equal Protection Clause. (238) Additionally, the court found flaws with the statistics used to support the City's program. (239) For instance, the City relied on the statistics that indicated that MBEs--representing over 33%--and WBEs--representing 25%--of all San Francisco-based firms combined were awarded less than 3% of all prime contracts. (240) The Ninth Circuit determined that this statistical disparity was not compelling evidence because of what the statistics did not include, specifically the failure to consider the percentage of subcontracting dollars that the MBEs and WBEs may have been receiving. (241) Further, the court found that the figures--33% and 25%--were over-inclusive because they included businesses that sold goods and provided services that would not be subjected to city contracting. (242)
Thus, the court stated that additional statistics were necessary. The court reasoned that the percentage of subcontracting dollars received by these firms must be known before the large disparity--between the percentage of minority firms and the percentage of prime contract dollars--would be sufficient to prove a claim of intentional discrimination by the government officials. (243)
Concrete Works of Colorado, Inc. v. City & County of Denver involved another equal protection challenge to a city's minority contractor preference program. (244) The court discussed the permissible evidence and burden of proof, and relying on Croson (245) stated that race-conscious programs are permissible when they seek to "eradicate discrimination" by a city itself and prevent the city from performing as a "'passive participant"' in impermissible discrimination. (246) Based on the Croson opinion, the court was required to evaluate the factual support for the program. (247)
Although this case was before the court on the appeal of a motion for summary judgment, the court addressed the issue of the sufficiency of the evidence. The court noted that empirical evidence may be used to demonstrate a statistical disparity between the number of qualified minority contractors and the number of those contractors that were hired by the locality. (248) The court further found that the defendant offered convincing pieces of evidence that--when assessed abstractly--could provide the basis for inferring gender- and race-based discrimination on certain public works projects. (249) The participation rates of MBEs and WBEs combined, however, were relatively strong in comparison to the total number of similar firms within the local industry. (250)
The court was unable to conclude whether the defendant "indirectly contributed to private discrimination by awarding public contracts to firms that in turn discriminated against MBE and/or WBE subcontractors," or determine whether the private discrimination was practiced by firms who were not recipients of public contracts. (251) The court suggested that the government's contribution to minority underutilization in the private construction market was an issue worth investigating at trial. (252) Ultimately, the court recognized that the conflicting statistical records made granting summary judgment improper at that stage and urged the parties to develop a better "factual record" supporting their conflicting analysis of the empirical data. (253)
In another case, a contractors' association challenged an ordinance in the city of Philadelphia that created set-asides for black subcontractors on city public works contracts. (254) Philadelphia's goal for MBE participation was 15%, and the disparity index (255) for black contractors was 22.5. (256) In general terms, the Philadelphia City Council initially found "that a pattern of discrimination against minority contractors existed" that deprived those contractors of obtaining their fair portion of construction contract revenues. (257) Specific exclusionary trends were identified, such as "discrimination by prime contractors in the awarding of subcontracts," as well as the city's own discrimination in the awarding of the prime contracts. (258)
In examining the city's discrimination, the Third Circuit found that the statistics should have taken into account the qualifications and willingness of the subcontractors to perform the work. (259) The court found the statistician's approach of using the African American firms listed in the Philadellphia's Office of Minority Opportunity Directory as a reasonable estimate of the number of available firms. (260) The court noted, however, that these statistics could be evidence of discrimination as well. (261) In recognizing that discrimination in city contracting may discourage minorities from applying, the court noted that the low numbers may actually "corroborate the existence of discrimination rather than belie it." (262) Therefore, the court pinpointed that one problem emanating from the use of statistics as evidence for or against either party is that its use requires one to presume the conclusion that is being proved. (263)
Even though the court accepted much of the evidence, it determined that these statistics--though indicative of disparity in minority contractor utilization--were not sufficiently detailed to provide effective proof. (264) Thus, the court held that no firm basis existed for finding race-based discrimination by contractors or the local trade association. (265) Further, even if such past discrimination was shown, the court determined that the program was not narrowly tailored to address past discrimination by the city. (266)
In Engineering Contractors Ass'n of South Florida Inc. v. Metropolitan Dade County, the court found that post-enactment statistics and anecdotal evidence were insufficient to justify a race-based affirmative action program that awarded the county construction contracts where there was a neutral explanation for the proven statistical disparity--even if the explanation amounted to a flaw in the statistics. (267) The program had set-aside provisions, subcontractor goals, project goals, and allowed for bid preferences. (268) The court did state that "[a]lthough post-enactment evidence is admissible to determine whether an affirmative action program is constitutional, such evidence carries with it the hazard that the program at issue may itself be masking discrimination that might otherwise be occurring in the relevant market." (269)
The Eleventh Circuit analyzed the disparity indices and determined that the district court's conclusion--that a disparity index of 80% or greater was not probative of discrimination--was not clearly erroneous. (270) The County's study applied a standard deviation analysis to the statistics gathered that resulted in a figure that "describe[d] the probability that the measured disparity is the result of mere chance." (271) The County's study ultimately determined that there was "significant underutilization" of black business enterprises and less drastic results when women and Hispanic business enterprises were concerned. (272) The court did not address whether this showing was sufficient but instead went on to describe three mechanisms that would allow plaintiffs to rebut the inference, including "'(1) showing that the statistics are flawed; (2) demonstrating that the disparities shown by the statistics are not significant or actionable; or (3) presenting contrasting statistical data."' (273) The court, however, did not need to explore the analysis since it was already determined that the plaintiffs had successfully established a neutral explanation for the disparities. (274)
The lack of sufficient statistics--regarding which firms were available, willing and able, or qualified to perform the work required--is fatal to preference and discrimination cases. Without detailed statistical information, the courts will not be able to effectively enforce anti-discrimination laws even where intent must be shown.
D. Other Statistical Infirmities: Firm Size, Geographic Scope, and General Inadequacy
Another common criticism of statistics is their failure to consider the size of the various minority and non-minority firms. In Engineering Contractors Ass'n of South Florida, discussed above, the neutral explanation for the disparities was that firm size, rather than the race or ethnicity of its owner accounted for smaller contracts. (275) The county anticipated this neutral explanation and performed its own regression analysis to determine whether there was a statistically meaningful relationship between the dollar value of the contract awarded and the firm size. (276) The County's analysis showed that when controlling for firm size, the standard deviation figure which resulted from the study's analysis was statistically insignificant in every instance except one, which was not enough to justify an entire racial preference program. (277)
In Associated General Contractors of Ohio, Inc. v. Drabik, general contractors brought an action claiming that the Minority Business Enterprise Act violated the Equal Protection Clause of the United States Constitution. (278) Reciting the "strong basis in evidence" standard, the court criticized the statistics that were provided as the grounds to justify the program as insufficient. (279) Mainly, the court noted that the statistics merely indicated a disparity, without differentiating between the number of minority construction firms and the number of firms actually ready, willing, and able to perform available state construction contracts. (280)
In Michigan Road Builders Ass'n, Inc. v. Milliken, the court found that the state of Michigan failed to establish the existence of a compelling interest--the eradication of the effects of its own past discrimination--which would validate its affirmative action programs. (281)
In that case, Michigan failed to maintain records of the number of MBEs that placed bids on state contracts versus the number of MBEs awarded such contracts. (282) At best, the court found that the statistics provided tended to show that MBEs were at a disadvantage because of their size, not as a result of invidious discrimination by the state. (283)
Accordingly, the court held that Michigan failed to set forth the existence of a compelling state interest that would justify its establishment of racial classifications. (284) Without the existence of such an interest, the court held that race-based classifications that favored MBEs were constitutionally invalid. (285)
In Coral Construction Co. v. King County, the Ninth Circuit provided critical analysis of the statistics provided, while recognizing the probative value of post-enactment evidence to justify the existence of the program. (286)
The extensive record from the trial court level contained affidavits from fifty-seven minority or women contractors, each of whom described instances of discrimination in the local construction industry. (287) The court noted that there was almost no statistical data presented to support the county's program but that the anecdotal and statistical evidence was "potent" when considered together. (288) Nevertheless, the court found that this program could not withstand a strict scrutiny review without a proper statistical foundation to establish a compelling governmental interest. (289) Since post-enactment evidence was acceptable to this court, (290) the state simply needed to improve its method of gathering appropriate and useful statistics to support its plan--even if it did so after the enactment of the legislation.
The geographic scope of the MBE program was also crucial to the court's determination of its probative nature. (291) Thus, allowing MBEs with no prior county contact to receive the benefits from the challenged MBE program made the program overbroad. Therefore, where a state or local government adopts a race-based program to combat past discrimination, the program must be limited geographically in order to meet the requirement that such a program be narrowly tailored to meet the legitimate government interest.
In O'Donnell Construction Co. v. District of Columbia, a white-owned construction company sought a preliminary injunction to prevent the enforcement of a set-aside program that benefited minority contractors. (292) The program had a 35% participation goal, used "sheltered markets" for some contract bidding, and required the prime contractor who subcontracts to award "'50 percent of the subcontracting effort ... to MBEs."' (293) The circuit court found a likelihood of the plaintiff prevailing on the merits, because society-wide discrimination was an insufficient justification for racial preferences, and therefore, the plaintiff would suffer irreparable harm in the absence of an injunction. (294)
The circuit court criticized the lack of specificity and the imprecise tailoring of the statistics relied upon by the district court. For instance, the district court found that minority contractors had the capability of performing 34% of the available contracts, but only 3.4% of the contracts were awarded to MBEs. (295) Upon closer examination, however, the circuit court determined that the 3.4% reflected the number of MBEs awarded contracts for one city agency, not for the entire city. (296) Thus, the disparity was not as large as it had initially seemed.
In addition, the court reasoned that there was insufficient support for the conclusion that discrimination caused the disparity. In denying the claim, the court reasoned that even if discrimination caused the disparity, the claim was too general to provide an adequate justification for a race-based program. (297)
Over the past decade, other circuit courts have used statistical evidence with increasing frequency in order to determine whether minority contractor programs satisfied the strict scrutiny test required in equal protection analysis. Several cases decline to consider post-enactment evidence when there is insufficient pre-enactment evidence to justify a race-conscious measure. (298) Recently, in Rothe Development Corp. v. United States Department of Defense, the Federal Circuit Court discussed the evolution of strict scrutiny as applied to federal race-based policies and analyzed the use of post-enactment evidence to justify the race-based federal program. (299) The court noted that the government had failed to set forth sufficient evidence that its program was needed to remedy past discrimination. (300) The court reiterated the threshold requirement that the legislature must demonstrate--with a sufficient evidentiary basis--a justification for its race-based program at its inception (301) The outcome of the case, therefore, was due to insufficient statistical evidence, not the use of post-enactment justifications for race-based policies. (302)
The Rothe decision is also important because it applies the ruling in Shaw v. Hunt (303) to the contracting field, stating:
Shaw makes clear that the quantum of evidence that is ultimately necessary to uphold racial classifications must have actually been before the legislature at the time of enactment. In light of Shaw, we conclude that if the prereauthorization evidence is insufficient to maintain the program when the program is challenged as reauthorized, the program must be invalidated, regardless of the extent of post-reauthorization evidence. (304)
This means that at least in the Federal Circuit, statistics gathered after the fact cannot be used to support and defend a race-conscious program, regardless of what the statistics demonstrate. (305) Therefore, the court reasons that it is the legislative intent that must also be subject to strict scrutiny, not merely the legislative action.
Case law reveals that statistics are very often vulnerable to strong and noticeable criticism. A very common criticism is based on the omission of some important factor, whether it is a variable that was not measured or a correlation that was not analyzed. (306) Despite the known vulnerabilities of statistical evidence, the various circuits continue to rely heavily on them as evidence of specific discrimination warranting remedial measures in public contracting discrimination cases. (307) As a result, uncertainty exists--even in simplest of cases--at either end of the statistical spectrum. Courts use historical, anecdotal, and other circumstantial evidence to bolster, explain, or refute the statistical evidence, but statistics are the foundation for the required proof. Even in cases in which the historical background is significant, the courts deem the examination of statistics over time to at minimum be significant as the historical evidence. Moreover, in evaluating legislative intent, some courts have determined that it is important to examine both the pre- and post-enactment evidence available to the legislature when the challenged legislation was enacted. (308) Thus, Congress spends numerous hours conducting hearings and taking written and oral testimony about discrimination before enacting and re-authorizing affirmative action legislation. (309)
In considering claims of improper preference or discrimination in public contracting, in the future, a California court is likely to consider the rates of MBE participation before, during, and after affirmative action, and the probabilities that such changes would occur in the absence of discrimination or in the absence of preferences. In addition, the state--as a potential future defendant--will likely want to have statistical evidence that demonstrates that there is no discrimination or that no improper preferences are being granted.
Even assuming that the government no longer intends to discriminate, it must be realistic in understanding that unintended consequences often result from conscious and unconscious public policies. Maintaining statistics on minority contractor participation would simply be a way for the government to self-regulate, and to avoid unintended discriminatory effects that have a disproportionate and statistically significant adverse impact based on the race of the victim. Otherwise, the courts will be unable to fairly evaluate the issue of discrimination because, without statistics, courts generally find that the remaining circumstantial evidence is neither certain enough nor reliable enough to constitute effective proof. (310)
V. POTENTIAL SOLUTIONS BY THE CALIFORNIA COURTS, STATE LEGISLATURE AND OTHER GOVERNMENT AGENCIES
A. Mode of Analysis for the California Supreme Court
One possible solution for equitable contracting is for the California Supreme Court to grant review of the next case that arises dealing with the issue, in order to affirm the ruling and expand on the reasoning of Connerly on the issue of the importance of maintaining statistical records. Such a ruling could implicitly, or explicitly, overrule Barlow. Another option would be to grant review of a case whose facts would allow the California Supreme Court to explore and define the elements necessary for proving a Section 31 violation. Based on the court's determination as to whether intent is or is not required, the court might explicitly consider adopting a disparate impact test as a method of proving a Section 31 violation. A decision of this kind would be consistent with the court's own interpretation of Section 31 thus far and would provide California citizens with greater protection against preferences and discrimination, which they so clearly requested when passing Proposition 209. (311)
With Title VII cases in the federal courts, a large number of employers and employees created a host of subjective factors relative to each individual decision, such that the use of statistical records became an alternative means of proving intent. (312) The same reasoning applies in the public contracting context. Since the number of prime contractors and subcontractors is so vast and the qualifications of prime contractors and subcontractors so varied, the availability of statistical evidence would provide for more effective litigation of violations of Section 31.
B. Statutory Solutions
Another potential solution involves legislative action. The California State Legislature should enact a state statute that requires the keeping of detailed statistical data concerning the race, ethnicity, and gender of the owners of businesses that were awarded public contracts in California. Legislation similar to California's Public Contract Code section 10115.5 (313) has recently been enacted, but it may only result in an increase in flawed statistical information that is insufficient to support discrimination and preference claims. For example, California's Senate Bill 1045 identified the lack of useful data on minority contractor participation, stating that "[t]he Governor's Task Force on Diversity and Outreach, in its August 1, 2000, report, concluded that data on minority business participation is not currently available, and that lack of useful data on minority business participation in state contracting is an overarching issue to be addressed." (314) Recognizing the need for such information, the bill proposed the addition of the following language to the California Government Code:
[E]ach state department or agency awarding a contract or procuring goods or services shall, and each local agency receiving state funds may, collect information and report to the Governor and the Legislature on the level of participation by minority, women, and disabled veteran-owned business enterprises in contract and procurement activities as identified in this section. (315)
Senate Bill 1045 also enacted legislation that authorizes focused and general outreach programs aimed at increasing participation by small business and "increasing diversity in the state's contracting and procurement activities." (316) The permissible outreach activities include giving bid invitations to small businesses, advertising in media whose primary audience consists of minorities, and outreach to professional minority organizations. (317)
The enacted legislation serves the main purpose of developing a data base containing the number of minority business enterprises awarded state contracting and subcontracting jobs. This legislation, however, is insufficient for two reasons. First, as the courts have repeatedly explained, the statistics must not only contain the level of MBE participation but also corresponding information on the particular MBEs availability and qualifications. (318) Second, there will be confusion and overlap in the statistical reports since local agencies receiving state funds are not required to, but simply may, submit such reports. (319) Since it is likely that some local agencies will be diligent about submitting reports, while others will not, gaps will inevitably develop in the statistical data. Litigants will be able to exploit these gaps in an attempt to demonstrate that the actual level of state funds received by MBEs are unknown. Thus, any statistics gathered will be subject to the same criticism found in Associated General Contractors, Inc. v. City of San Francisco, in which the court determined that the particular statistical analysis was flawed because it failed to consider the amount of public money being earned by minority subcontractors, as opposed to minority contractors. (320)
A slightly different version of the reporting requirement was proposed, and later enacted, in California's Assembly Bill 1084 that requires business enterprises to report the participation levels of the race, ethnicity, and gender of their owner. (321) While the bill did not provide for any additional detailed statistical reporting, it contained provisions that would prohibit the awarding departments and the contractors themselves from using the information compiled for discriminatory or preferential purposes. (322) These restrictions on data usage may have helped garner support for the legislation by providing additional protection against impermissible uses of race and ethnicity in public contracting. These restrictions, however, would also seem to prevent courts from ordering race-conscious remedies when a violation of Section 31 is proven by using the statistics gathered under this legislation. This result would further lessen the rights of California litigants in federal courts, as discussed in Part IV.B, supra.
Outside of California, there is another example of reporting legislation that gives a slightly more detailed list of the types of statistics that are to be maintained. New York's Assembly Bill 11690--introduced in 2001--requires state agencies to submit compliance reports on their minority business enterprise goals and plans. (323) These reports may--but are not required to--include information pertaining to the number and dollar amounts of all state contracts, of those contracts awarded to minority enterprises, of those contracts with a utilization plan for certified minority businesses, and of those contracts that granted waivers from their minority utilization goals. (324) The information comparing minority and majority participation will be useful but will likely still fall short of what the courts require in order to prove a discrimination claim.
The legislation in these jurisdictions still does not provide for gathering the detailed statistical information that will be necessary to prove violations of Section 31. Based on the authorities analyzed in Part IV, supra, a statute must require the reporting of certain data, the compilation of which would significantly increase the amount of relevant statistical information available to support and refute claims of improper preferences or discrimination.
This data should be gathered for a particular focused time period, perhaps bi-annually. It should include statistics reflecting the total number and dollar amounts of contracts awarded by the state and its entities or agencies. Included should be a brief description of all eligible contractors in the region, including their qualifications, worth, availability, and experience, as well as a comprehensive list of bids made by such firms in the past. Such breakdowns should be done in order to categorize the race and ethnicity of the owners. In addition, the state should further include an examination of contracts awarded to minority firms and the dollar amounts of these contracts. Finally, for each individual job, the state should compile a report of the actual bidding process, such as the number of firms who picked up bid packages, the number of those who actually bid, the number of those found to be non-responsive, and specific statistical data on the firm actually awarded the bid. Census data may be a starting point for retrieving much of this information. Other beneficial sources may include the Contractors' State Licensing Board and the disparity studies commissioned by various governmental entities within the state. Each awarding agency would be responsible for collecting the particular information for each job.
A further consideration is that California's legislation must omit any targeted outreach component to avoid conflict with the courts' rulings in Domar I, Domar II, and Hi-Voltage. (325) Upon its passage, California's Assembly Bill 1045 provided for targeted outreach. There is a high probability that this legislation will be constitutionally challenged following its enactment for violating Section 31 by granting an impermissible preference based on the California Supreme Court's determination that "the outreach option grants preferential treatment because prime contractors must notify, solicit bids from, and negotiate with MBE's [sic] and WBE's [sic] but may exclude non-MBEs/WBEs." (326)
While California's Senate Bill 1045 includes outreach to non-minority groups (327)--and thus might fall into the analysis of the Domar decisions--it is likely that the California Supreme Court may now find that the specific provisions concerning targeted outreach violate Section 31.
There may, however, be ways to maintain an outreach requirement without violating Section 31, for instance, by mirroring proposed legislation in the state of Washington, which sought to reconcile an outreach requirement with its own version of Section 31. (328) Washington House Bill 1153 states that "[p]ublic bodies shall make an effort to solicit proposals from a certified minority or certified woman-owned contractor to the extent permitted by the Washington state civil rights act." (329) Without an interpretation from Washington courts, however, it is difficult to determine what sort of outreach would be permissible. In California, it is likely that the mere mention of the phrase minority-owned contractor within the text of the statute would lead the court to conclude that the outreach violates the state constitution due to its reference to race and ethnicity.
Another way to approach a statute would be to redefine the concept of merit in the context of public contracting in an effort to recognize the importance of another factor in addition to lowest price or most experience. For example, the state of Texas enacted legislation that replaced the term "lowest responsible bidder" with the term "the bidder who provides goods or services at the best value for the municipality." (330) In order to determine the best value, the municipality is allowed to consider, among other factors, "the impact on the ability of the municipality to comply with laws and rules relating to contracting with historically underutilized businesses." (331) By incorporating this type of redefining of statutory provisions in California it can provide mechanisms for increasing minority participation without violating competitive bidding laws or without violating Section 31 since a preference for historically underutilized businesses would not be race-based.
The state of Washington has also implemented a more expansive notion of the criteria for awarding public contracts. Washington's House Bill 1155 states that:
The legislature finds that the traditional process of awarding public works contracts in lump sum to the lowest responsible bidder is a fair and objective method of selecting a contractor. However, under certain circumstances, alternative public works contracting procedures may best serve the public interest if such procedures are implemented in an open and fair process based on objective and equitable criteria. (332)
There are various benefits to using these alternative methods of contractor selection. The bill explains that a prime contractor--after being chosen through an alternative method--would be required to solicit potential subcontractors through a competitive bidding process that includes public bid openings and required prior consultation with a local agency to identify project goals that would "equitably spread" minority and women business opportunities to the maximum extent practicable. (333) Availing the subcontracting process to public competitive bidding would help to alleviate minority subcontractors' concern about bid-shopping and overt discrimination, as well as the majority subcontractors' concerns that preferences are still being granted to their minority competitors. Alternatively, the increased costs of preparing formal and public bids for subcontracts may become an enormous burden on minority contractors, especially if they are unsuccessful bidders. (334)
Any legislation in California that would require contractors to submit ethnic information regarding their subcontractors should not mandate disclosure of any submission of racial or ethnic information until after the job is awarded. To satisfy the concerns expressed in the Domar I dissent, regarding time-consuming recordkeeping, (335) the statute should require that the information be submitted only after the bid is accepted and, perhaps, even only after the work has been completed. This timing adjustment would not create extra work for those who are not selected as the winning bidder, and it has the additional advantage of protecting the government procurement officers from the charge that they violated Section 31 by using the racial and ethnic information to help them make their choices of which bids to accept. The inclusion of provisions similar to those in California's Assembly Bill 1084--which would explicitly prohibit the use of the compiled race, ethnicity, and gender data for the purpose of selecting a contractors (336) would also help to lessen the likelihood of a successful Section 31 challenge.
Another crucial component of the proposed legislation would be to ensure that the statistics were actually reviewed and not merely gathered. One approach would be to assign to the state's Attorney General's Office the task of reviewing and monitoring these statistics, and to delegate the responsibility of overseeing the timely and accurate publication--through an annual report--of the breakdowns of participation levels and availability data by race and ethnicity. While more detailed information should be gathered and should be made available, it may be too burdensome to require the publication of the data on every statistical variable on a yearly basis.
Annual reports would reveal any significant statistical disparity indicative of a prima facie case of discrimination in violation of Section 31, such as increases or decreases in a group's participation level or patterns of non-inclusion in particular areas or jobs.
C. Administrative Options
Another potential solution for equitable contracting involves government compliance offices. Because the courts often criticize statistical data as being an incomplete or inaccurate measure, (337) it would be important to draft specific regulations concerning the types of statistical evidence that should be gathered regarding each public contracting job. In addition to race, ethnicity, and gender, the agency promulgating the regulations governing these statistics should consider some of the other variables that statistics in the past have failed to demonstrate. For instance, a strong statistical record should include years of experience, track record or successful completion of jobs, a score rating the contractor's bonding ability, information on the number and quality of responses to bid requests, documentation on attempts or refusals to negotiate, and the discouraging of bidders.
The administrative agencies could also conduct periodic interviews to gather the anecdotal information relevant to discrimination and preference claims. Anecdotal evidence is powerful, and it is often used in litigation as well as in legislative and administrative hearings to bring the "cold numbers ... to life" (338) and to rally the legislators in the direction of social change. Congressional hearing records abound with anecdotal information about the prevalence of discrimination in the public contracting field. (339) Minority contractors report being overcharged for materials, (340) being discriminated against by lenders, (341) and as having the substantial burden of obtaining bonding for government jobs, (342) in addition to simply not being chosen for particular jobs, (343) without any certainty as to who had the lowest bid on a particular subcontract. (344)
Numerous courts use anecdotal evidence as a supplement to statistical information. For instance, in Concrete Works of Colorado, Inc. v. City and County of Denver, the court examined anecdotal evidence and determined such evidence to be an appropriate supplement to the strict scrutiny analysis. (345)
Additionally, in Cone Corp. v. Hillsborough County, there was anecdotal evidence that the MBEs made numerous complaints to the county about prime contractor discrimination. (346) For instance, prime contractors: (1) would be unavailable or would refuse to talk to MBEs when approached by them; (2) would not accept the MBEs estimates or would not submit those estimates with their own bids; (3) would offer the MBE bid to non-MBEs until they found someone to underbid it; and (4) who were non-MBEs would receive discounts and special purchase contracts from suppliers that were not available to MBEs. (347) The court recognized the importance of this compelling combination of statistical and anecdotal evidence and stated that "It]he testimony regarding these complaints, combined with the gross statistical disparities uncovered by the County studies, provides more than enough evidence on the question of prior discrimination and need for racial classification to justify the denial of a motion for summary judgment." (348) Again, the court was using the combination of statistical evidence and anecdotal evidence to find a triable issue of fact on whether the program violated the Equal Protection Clause. (349)
In Associated General Contractors of California, Inc. v. Coalition for Economic Equity, an organization of construction contractors challenged a city ordinance which provided bid preferences to MBEs. (350) The circuit court upheld the district court's denial of a preliminary injunction for finding no likelihood of plaintiff prevailing on the merits. (351) In doing so, the court emphasized the importance of anecdotal information, combined with statistics, as evidence that discrimination had occurred in the past. (352)
The opinion discussed anecdotal evidence in situations where--despite being the low bidder--MBEs were denied the contract where MBEs were told by the city that they were not qualified (however, third parties had determined that those MBEs were qualified for the particular project) and where MBEs were harassed by city personnel to discourage them from bidding on the city contracts. (353) The court stated that the old boy network has continued and evidence both anecdotal and statistical--in nature remains powerful. (354)
In North Shore Concrete and Assoc., Inc., v. City of New York, the court examined a city program that provided MBE and WBE participation goals for construction contracts in response to the plaintiffs challenge that the program violated the Equal Protection Clause. (355) The court cited Coral Construction Co. as an example to endorse the proposition that while anecdotal evidence alone is not sufficient, it is useful to support statistics that are indicative of discrimination. (356) The Department of Business Services (DBS) conducted hearings over the course of five days during which time an excess of one-hundred witnesses testified, and an additional two hundred MBE and WBE owners of construction firms and supply companies were interviewed. (357) The plaintiff criticized the hearing testimony on three basic grounds--that the interviewing research firm failed to corroborate any of the anecdotes, that the white male-owned firms were not even interviewed, and that the testimony was not sworn to and the witnesses were not subject to cross examination. (358) The court did find that the application of the program to Native Americans and Alaskan Natives was unconstitutional because there was no statistical or anecdotal evidence indicating that Native Americans or Alaskan natives had been the subject of past discrimination. (359) Therefore, the court found that New York City had failed to present evidence of a compelling governmental interest sufficient to survive judicial scrutiny, in regards to how the program applies to Native Americans and Alaskan Natives. (360) Thus, the absence of both anecdotal and statistical evidence as to a particular racial group was fatal to the defense.
As the authorities indicate, gathering anecdotal evidence will not dramatically increase the available proof in discrimination cases because anecdotal evidence is subject to a variety of criticisms--such as being too particular or unverifiable--and is therefore insufficient on its own to support a discrimination claim. (361) Anecdotes are useful for encapsulating a story, but discrimination often happens over time, in the course of several encounters, and is not always capable of being reduced to one instance or interaction. (362) The most effective, convincing, or persuasive stories of discrimination rely upon more information, but when an anecdote gets too detailed, it is no longer an anecdote. In most cases, hard numbers are needed to accept a discrimination claim. Thus, statistical evidence will continue to constitute the vast majority of proof in discrimination cases, often with the assistance of anecdotal evidence.
In conjunction with gathering anecdotal information--based on an analogy to minority certification programs--the appropriate administrative agencies could institute a state-wide historically underutilized business enterprise certification program. The contractors could answer questions about educational access, financial resources, community and professional network access and participation, and receive a score. Those with higher scores could receive a bid preference or an alternate advantage. These scores would not be race-based, but rather, based on disadvantage or underutilization so that the program could overcome California's constitutional scrutiny under Section 31.
A mentorship program would be another way to increase the competitiveness of the bidding process, and help historically underutilized businesses. (363) One might argue that there is no incentive for the older, more experienced contracting firms to help their competitors to be more competitive. Some majority contractors, however, may be willing to participate in the mentoring program, given that the current system is arguably better for them than the former system of set-asides and participation goals. In addition, the legislature and voters might support the sponsorship of such a program when reminded that it is in the interest of the voters to make the most effective use of their tax dollars by avoiding paying too much for public works. Increasing the number of capable and experienced competitors will raise the quality of the work and lower the price along the way. If minority status is not the primary factor considered in determining disadvantage, then such a program would likely pass a constitutional challenge in California.
In the efforts to comply with Section 31 and to provide and maintain equal opportunity for all contractors in California, each actor has a role. State government and administrative agencies can begin to gather more detailed, statistical data and compile the anecdotal information necessary to supplement that data. The California State Legislature can continue to and has passed legislation that has the effect of superceding Public Contract Code Section 10115.5--thereby requiring the gathering and reporting of statistics sufficient to establish accurate participation rates and availability rates, correlated by race and ethnicity, in addition to firm size and years of experience. Maintaining statistics on contractor participation levels on race and ethnicity would also be a means of self-regulation. This would ensure that the government's procurement policies and the operation of those policies do not somehow produce an effect that has a disproportionate and statistically significant impact--positively or negatively--based on the race of the contractor. Furthermore, statistics can also be used to prove that preferences are still being granted or can be used to show that discrimination or preferences are no longer being employed. By maintaining appropriate and complete statistical records, California can thus defend itself from unsupported charges of discrimination and preferences.
The California Supreme Court has two roles. First, it can address the issue of whether gathering and reporting statistics by race and ethnicity is in conformity with the constitution. The act of recordkeeping does not itself constitute a preference because that act does not confer any benefit on a particular group. Rather, the benefit is a societal one, as the Connerly case recognized when it determined that statistics are crucial for intelligent and informed decision-making. (364) In addition, in litigation, accurate and complete statistics are necessary for effective proof, and the courts are critical when the statistical record is poorly developed, incomplete, or omits important variables and correlations. (365)
The California Supreme Court can take on its second role by seizing the opportunity to determine whether unintentional discrimination and preferences also violate Section 31. The HiVoltage case did not foreclose, and in fact supported, an interpretation that omitting an intent requirement that would help fulfill the voter mandate by providing greater protection against all discrimination and preferences without the artificial limitation of merely addressing those harms that were intentionally caused. (366) It is likely that providing greater protection against preferences and discrimination necessitates applying a lower standard of proof. In addition, subjecting unintentional, as well as, intentional preferences and discriminations to liability would provide the greater protection that the voters sought when passing proposition 209. Moreover, this lower standard of proof would likely result in a more consistent application of the prohibitions against all preferences and discriminations in a manner that does not vary with the race of the benefited or burdened group.
Regardless of the court's decision on the intent issue, however, statistical evidence will continue to form the cornerstone of preference and discrimination claims in California, as well as in the rest of the nation. When intent is required, the courts frequently use evidence of statistical disparities to provide the necessary proof for disparate treatment claims. Statistics, combined with historical and anecdotal evidence, frequently are used in cases alleging equal protection violations under the Fourteenth Amendment. The cases discussed in Part IV, supra, demonstrate that, as a practical matter, the courts rely heavily upon these statistics. Thus, if intent is required to establish a violation of Section 31, many claims of improper discrimination or preferences will be unsuccessful because of the dearth of statistical evidence and the inadequacy of many statistical studies. Therefore, in order to prove intent in future discrimination claims in California, more detailed statistical data must be gathered and maintained.
Moreover, since intent is a requirement of many discrimination claims under federal law, California must gather and record these statistics to avoid decimating the protections and remedies available to those who may prevail in federal anti-discrimination lawsuits. Failing to gather and record adequate statistics would effectively be denying federal rights to California litigants by curtailing the available proof for their federal discrimination claims regarding public contracting jobs.
If, on the other hand, the California Supreme Court determines that intent is not required to prove a violation of Section 31, then the importance of maintaining accurate statistical records increases substantially because disparate impact evidence would then be an appropriate measure of improper preferences and discrimination. There is no debate that statistics are relevant to a disparate impact claim, and this view is supported by their use in Title VII disparate impact cases. Since statistics are also used to prove discrimination, if the California Supreme Court determines that disparate impact is sufficient to prove a violation of Section 31, the state has an interest in maintaining the statistics.
Mere equal protection of the laws is no longer sufficient. In California, citizens are now entitled to greater protection of the laws than they are federally protected, and statistics are the necessary foundation for this mandate. Therefore, it is crucial that the California executive, legislative and judicial branches perform their roles to guide the state towards fulfilling the promise of greater protection.
(1) CAL. CONST. art. I, [section] 31 (prohibiting discrimination against, or the grant of, preferential treatment to minority groups in the operation of the public sector, including employment, education, and contracting).
(2) See infra notes 138-65 and accompanying text (recognizing the important role statistics have in the determination of discrimination claims with special emphasis on the decisions in Connerly v. State Pers. Bd., 112 Cal. Rptr. 2d 5 (Cal. Ct. App. 2001), and Barlow v. Davis, 85 Cal. Rptr. 2d 752 (Cal. Ct. App. 1999)).
(3) For purposes of this article, the terms preference(s) and discrimination will be used to reflect acts of discrimination--those that benefit and those that burden--particular groups or individuals, based on race or ethnicity.
(4) See CAL. CONST. art. I, [section] 31; see also AMERICAN CIVIL RIGHTS INSTITUTE, CALIFORNIA'S PROPOSITION 209 (indicating that the state of California may not consider "race, sex, color, ethnicity, or national origin" when awarding state contracts, admission to state educational institutions, or for hiring public employees), available at http://www.acri.org/209/209text.html (last visited Feb. 18, 2003).
(5) 12 P.3d 1068, 1082 (Cal. 2000).
(6) See id. at 1085 (declining to define the boundaries of Section 31 because the court's holding was limited to the specific form of discrimination at issue in that case).
(7) When intent is lacking, this article will use the terms unintentional discrimination or unintentional preference(s).
(8) See infra Part II and accompanying notes (discussing cases wherein courts examine discriminatory regulations and de facto preferences in favor of minorities).
(9) Civil Rights Act of 1964, 42 U.S.C. [section] 2000e-16(a) (2000). Title VII prohibits employment discrimination based on "race, color, religion, sex or national origin." Id.
(10) See infra notes 174-210 and accompanying text (identifying statistics as the main evidence offered as proof of discrimination).
(11) No. S080733, 1999 Cal. LEXIS 6272 (Cal. Sept. 15, 1999).
(12) See Barlow v. Davis, 85 Cal. Rptr. 2d 752, 758 (Cal. Ct. App. 1999).
(13) 112 Cal. Rptr. 2d 5 (Cal. Ct. App. 2001).
(14) See id. at 30-31 (holding that the collection of statistics regarding minorities in governmental programs is not in violation of equal protection principles).
(15) Exec. Order No. 11,246, 3 C.F.R. 567 (1966). The concern over the utilization of minority firms in government contracting became a focus of government attention in the 1960s. Through Executive Order 11,246, the federal government implemented the affirmative action requirement for those private employers that it had the most control over--those who contracted for federal business. Then, Congress enacted Title VI of the 1964 Civil Rights Act which extended the reach to programs that received federal funds and enacted Title VII, which encompassed private employers and their hiring plans--including voluntary affirmative action plans. See 42 U.S.C. [subsection] 2000d, 2000e-15 (2000). Furthermore, the Office of Federal Contract Compliance Programs (OFCCP) issued guidelines on the utilization of minority firms. The OFCCP determined that minority firms needed an advantage since they could not compete at the price level of the majority firms due to their relatively recent entry into the market, and past and present discrimination. See U.S. DEP'T OF LABOR, OFFICE OF FED. CONTRACT COMPLIANCE PROGRAMS, EXECUTIVE ORDER 11,246, at http://www.dol.gov/ esa/regs/compliance/ofccp/fs11246.htm (last visited Feb. 18, 2003).
(16) See, e.g., SBA's Minority Business Development Program: Hearing Before the House of Representatives Comm. on Small Bus., 102d Cong. 2-3 (1992) (statement of Hon. John J. LaFalce, Chairman, Comm. on Small Business) (emphatically recognizing the need for implementation of the Minority Business Development Reform Act of 1988 and explaining that much more effort is required in order to achieve the Act's goal of assisting minority businesses to the extent that they are able to compete for government contracts). In March of 1969, President Nixon signed Executive Order 11,458, which created the Office of Minority Business Enterprise (OMBE). See Exec. Order No. 11,458, 34 Fed. Reg. 4937 (Mar. 7, 1969). Executive Order 11,625 was signed in October, 1971 to further enhance the scope of Executive Order 11,458. See Exec. Order No. 11,625, 36 Fed. Reg. 19,967 (Oct. 14, 1971). This Order established the Advisory Council for Minority Enterprise--now referred to as the Minority Enterprise Development Advisory Council (MEDAC)--which empowered the Secretary of Commerce to coordinate and review all federal activities in an effort to assist in minority business development. See Exec. Order 11,625, 36 Fed. Reg. 19,967 (Oct. 14, 1971). In 1980, the OMBE became known as the Minority Business Development Agency (MBDA). See Location of Freedom of Information Act Reference Facilities; Delegation of Initial Denial Authority, 45 Fed. Reg. 79,016 (Nov. 28, 1980) (to be codified at 15 C.F.R. pt. 4). In July 1983, Executive Order 12,432 was signed to further strengthen the Secretary of Commerce's oversight of the coordination and review aspects of Executive Order 11,625. See Exec. Order No. 12,432, 3 C.F.R. [section] 198 (1984) (advocating the development of minority business development plans by each federal agency).
(17) See, e.g., Fullilove v. Klutznick, 448 U.S. 448, 490 (1980) (affording latitude to Congressional programs in which race-based classifications are motivated for remedial purposes). After Fullilove, states, counties, and even cities began instituting their own plans for increasing minority utilization, using set-asides, bid preferences, participation goals, quotas, and even shielded bids--bids that limit competition to minority firms. See Charles Cooper, A Slow Return to Constitutional Colorblindness, LEGAL TIMES (Wash, D.C.), May 1, 1989, at 27 (reporting that Fullilove resulted in the governmental establishment of minority set-aside programs for public contracts with construction companies). For a fuller treatment of the history of set-asides and minority preferences see, Andrew C. Jayne, Constitutional Law: Affirmative Action in the Public Sector: The Admissibility of Post-enactment Evidence of Discrimination to Provide a Compelling Governmental Interest, 55 OKLA. L. REV. 121, 125 (2002) (expounding the purpose and intent of affirmative action programs); Shawn Pompian, Expectations of Discrimination as a Justification for Affirmative Action, 8 VA. J. SOC. POL'Y & L. 517, 520-38 (2000) (articulating the debate over affirmative action); Docia Rudley & Donna Hubbard, What a Difference a Decade Makes: Judicial Response to State and Local Minority Business Set-Asides Ten Years After City of Richmond v. J.A. Croson, 25 S. ILL. U. L.J. 39, 44 (2000) (analyzing judicial response to set-aside programs after the Croson decision); Peter H. Schuck, Affirmative Action: Past, Present, and Future, 20 YALE L. & POL'Y REV. 1, 5-9 (2002) (defining and explaining the operation of affirmative action programs).
(18) 488 U.S. 469, 493, 509 (1989) (characterizing a race-based program where a pattern of invidiously discriminatory acts are present as legitimate).
(19) 515 U.S. 200, 223-24 (1995) (adhering to the use of strict scrutiny for both classifications that are blatantly motivated by notions of racial inferiority, as well as for classifications that appear to be benign).
(20) See Harvey Gee, From the Pre-Bakke Cases to the Post-Adarand Decisions: The Evolution of Supreme Court Decisions on Race and Remedies, 16 GEO. IMMIGR. L.J. 173, 17576 (2001) reviewing GIRARDEAU A. SPANN, THE LAW OF AFFIRMATIVE ACTION: TWENTY-FIVE YEARS OF SUPREME COURT DECISIONS ON RACE & REMEDIES (2000) (explaining Spann's assertion that there is merit to arguments both for and against affirmative action programs).
(21) See Adarand Constructors Inc., 515 U.S. at 226-27.
(22) See id. at 235 (finding that the strict scrutiny standard was implicitly present in Fullilove v. Klutznick, 448 U.S. 448, 491 (1980)).
(23) See Jayne, supra note 17, at 22; see also Shaw v. Hunt, 517 U.S. 899, 909-10 (1996) (holding that satisfaction of the compelling state interest is conditioned upon a finding of identifiable discrimination and a strong evidentiary basis that remedial action was necessary before the state implemented an affirmative action program), overruled by, Hunt v. Cromartie, 425 U.S. 541 (1999); City of Richmond v. J.A. Croson Co., 488 U.S. 469, 501 (1989) (indicating that with sufficient evidence supporting it, a proper defense to impermissible discrimination includes the remedying of past inequality); Wygant v. Jackson Bd. of Educ., 476 U.S. 267, 274 (1986) (allowing limited use of racial classifications when a governmental body properly supports the assertion that such classifications were designed to combat past discrimination by that governmental body).
(24) See, e.g., J.A. Croson, Inc., 488 U.S. at 498-99 (acknowledging the fact that historical discrimination impacts present opportunity yet concluding that this fact alone cannot support race-based programs).
(25) See Adarand Constructors, Inc., 515 U.S. at 227.
(26) See, e.g., Wygant, 476 U.S. at 280-84 (finding that race-based layoffs burdened individuals more than race-based hiring and concluding that by creating such a burden, the scheme was not sufficiently narrowly tailored).
(27) See Fullilove v. Klutznick, 448 U.S. 448, 519 (1980) (Marshall, J., concurring).
(28) See Jed Rubenfeld, Affirmative Action, 107 YALE L.J. 427, 433-34 (1997) (noting that the strict scrutiny test has been applied to invalidate preferences in voting districts and government contracts). But see United States v. Paradise, 480 U.S. 149, 166-67 (1987) (finding that a program which sought to remedy past discrimination against blacks was sufficiently narrowly tailored).
(29) Hi-Voltage Wire Works, Inc. v. City of San Jose, 12 P.3d 1068, 1087 (Cal. 2000).
(30) See id.
(31) See id.
(32) Id. at 1071.
(33) Id. at 1070-71.
(35) See id. (indicating that the purpose of the modification was to more effectively combat discrimination by requiring contractors to attempt to hire MBEs and WBEs).
(36) See id. at 1071 (referencing section 4.08.070, subdivision B of the San Jose Municipal Code, which indicates that a contractor may not discriminate or grant preferential treatment on the basis of race or gender). A recent version of the San Jose Municipal Code is available at http://www.amlegal.com/nxt/gateway.dll/California/ San%20Jose/title00039.htm/chapter000 4 (last visited Feb. 18, 2003).
(37) Hi-Voltage, 12 P.3d at 1071.
(38) Id. Hi-Voltage then sought injunctive and declaratory relief to prevent enforcement of the Program. Id. at 1071-72. The trial court enjoined the City from implementing the Program and the Court of Appeal affirmed. Id. at 1072.
(39) Hi-Voltage Wire Works, Inc. v. City of San Jose, 84 Cal. Rptr. 2d 885, 889 (Cal. Ct. App. 1999), aff'd, 12 P.3d 1068 (Cal. 2000).
(40) Id. at 895.
(41) Hi-Voltage, 12 P.3d at 1072 (articulating the City's argument that the Program was not quota-based).
(42) Id. at 1089.
(43) Id. at 1073-79 (citing Johnson v. Transp. Agency, 480 U.S. 616 (1987); Local 28, Sheet Metal Workers' Int'l Ass'n v. EEOC, 478 U.S. 421 (1986); Int'l Bhd. of Teamsters v. United States, 431 U.S. 324 (1977); Griggs v. Duke Power Co., 401 U.S. 424 (1971); Brown v. Bd. of Educ., 347 U.S. 483 (1954); Plessy v. Ferguson, 163 U.S. 537 (1896); and Scott v. Sanford, 60 U.S. (19 How.) 393 (1856), as evidence of the shift in employment laws).
(44) Id. at 1078.
(45) See id. at 1082-83 (determining that California voters sought to eliminate classifications based on race and gender). The court included the Proposition as an appendix to the decision. See id. at 1107-10.
(46) See CAL. CONST. art. I, [section] 31 (indicating that this provision was added by Initiative Measure after citizen approval on November 5, 1996); see also Dave Lesher, Battle Over Prop. 209 Moves to the Courts, L.A. TIMES, Nov. 7, 1996, at A1 (reporting that 54.3% of the citizens voting supported Proposition 209), available at 1996 WL 12753869.
(47) CAL. CONST. art. I, [section] 31.
(48) See CAL. GOV'T CODE [subsection] 12940-12948 (West 1992 & Supp. 2002) (making the refusal to hire a potential employee unlawful when that decision was based, inter alia, on race).
(49) CAL. CONST. art. I, [section] 31(a).
(50) 488 U.S. 469, 498-507 (1989) (requiring a factual predicate on which to base a presumption of past discrimination in order to support a state's affirmative action program).
(51) Hi-Voltage, 12 P.3d at 1082 (quoting WEBSTER'S NEW WORLD DICTIONARY 392, 1062 (3d coll. ed. 1988)).
(53) See id. at 1086 (arguing in support of its plan, the City contended that it merely increased the number of applicants through its outreach efforts).
(54) Id. at 1085.
(55) Id. at 1087.
(56) See id. at 1083 (concluding that the California electorate, in passing Proposition 209, evidenced its desire that race would not be a factor in employment decisions).
(57) See id. at 1082, 1085 (stating that satisfaction of the participation and outreach options of the Program would discriminate against non-MBEs and WBEs, while providing preferential treatment to MBEs and WBEs).
(58) See id. at 1084-85 (recognizing that-in this situation-the city as an employer is impermissibly treating majority contractors less favorably than non-majority contractors based on race and gender).
(59) Id. at 1070-71. In order for a contractor to be in compliance with this program, the contractor had to meet certain MBE and WBE employment goals set by the city. The goals were individually assessed for each job and were based on the availability and ability of area MBEs and/or WBEs. In order for a contractor's bid to be accepted by the City, that contractor had to show either compliance with this goal or reasonable efforts to meet this goal. If the contractor could do either, then the contractor was considered responsive, and their bid could be accepted. Id. at 1070.
(60) Id. at 1085.
(62) Id. at 1082.
(63) Id. at 1085.
(64) When dealing with participation requirements, the minority contractor receives a preference to the extent that she can choose to do 100% of the work herself and still satisfy the participation option. This preference discriminates against the majority contractor who only has that ability as to 70%, 80%, or 90% of the work, depending upon the minority participation percentage.
(65) See Assoc. Pa. Contractors v. Jannetta, 738 F. Supp. 891, 893 (M.D. Pa. 1990) (stating that the policies involved were simply screening devices rather than "classification based on whether prime contractors [met] certain quotas for awards to minority and women contractor[s]" and were therefore, subject to the rational basis test as opposed to strict scrutiny).
(66) The response to this critique is likely to be illustrated by the following. The minority firms are not required to perform anything in addition to their normal activities--which consist of working on government contracts. The majority firms, however, are obligated to execute an extra step--outreach to minority firms. This outreach grants a preference to its potential recipient. Since the preference is based on the race or gender of the outreach recipient, it is unconstitutional. The next question becomes, who--in this situation--is the discriminator, and therefore, the one responsible for granting the preference? One can construct a plausible case on the issue of participation, indicating that the actor is the state entity by virtue of its own rules. When one explores the outreach option, however, the actor is the prime contractor, and it is he or she who is granting the preference by providing outreach to minorities. That particular outreach should not be prohibited by Section 31 because no state entity is granting a preference or discriminating based on race or gender. Instead, the state entity is discriminating against those who do not comply with the rules, and the rules dictate that one either participates or performs outreach. Thus, this is another solid basis for concluding that the outreach option is not in violation of Section 31.
(67) 885 P.2d 934, 937, 940-41 (Cal. 1994) [hereinafter Domar I] (pointing out that without mandated outreach programs, contractors might only rely on familiar subcontractors and thereby perpetuate discrimination).
(68) Id. at 935.
(69) Id. at 936-37.
(70) See id. at 941 (suggesting that majority contractors will likely turn to familiar subcontractors when taking bids rather than turning to MBEs and WBEs).
(71) Id. at 940 (citing Graydon v. Pasadena Redevelopment Agency, 164 Cal. Rptr. 56, 59 (Cal. Ct. App. 1980).
(72) Id. at 941.
(73) Id. at 940-41.
(74) 48 Cal. Rptr. 2d 822, 833 (Cal. Ct. App. 1995) [hereinafter Domar II]. The California Supreme Court remanded Domar I for further consideration of the remaining issues by the Court of Appeal, which was reported in Domar II. Thus, the Domar II decision left open the option of blanket outreach to everyone, which is consistent with the mandate of Proposition 209. The court cases addressing this alternative, however, were decided before Proposition 209's actual effective date.
(75) See id. at 824 (noting that the plaintiff challenged the rejection by claiming the outreach program violated the Equal Protection Clause of the United States Constitution).
(76) See id. at 830 (setting forth the ten criteria to be considered in determining whether a good-faith effort was made to comply with goals and requirements).
(77) See id. at 827 & n.9, 828.
(78) Id. at 830-33 (explaining that California's Public Contract Code section 2000 "permits a local agency to impose a condition in bid specifications that the bidder meet the agency's goals and requirements for MBE and WBE subcontractor participation").
(79) See id. at 833 (emphasizing that by including OBEs, the outreach program equalizes the bidding process).
(82) Crawford v. Huntington Beach Union High Sch. Dist., 121 Cal Rptr. 2d 96, 97 (Cal. App. Ct. 2002) (holding that the racial and ethnic balancing component of the transfer policy violated California's constitution).
(83) See id. at 99-100 (considering the emphasis that the Hi-Voltage court put on the plain meaning of the word discriminate). Going further, it considered the reasoning behind the Connerly decision, which held that race-based classifications are presumptively invalid. See id. Based in part on both precedents, the Crawford court found the transfer policy to be invalidly discriminatory under the constitution. See id. at 104.
(84) Id. at 102.
(85) See id. at 102-103 (noting that the ballot information relied upon by voters specifically stated that it could effectively abolish school desegregation programs).
(86) Id. at 103.
(87) See id.
(88) See id. at 103 (distinguishing between segregation that occurs as a result of intentional acts and segregation that occurs as a result of societal circumstances).
(89) 59 F.3d 869, 872-75 (9th Cir. 1995) (emphasizing that laws may still be examined though they purport to establish goals rather than quotas).
(90) Id. at 875.
(91) Id. at 872 (explaining that after an investigation, a utility may be sanctioned--by reducing its rate of return--for failing to meet goals).
(92) Id. at 875.
(94) Title VII provides a remedy for past de facto discrimination in the employment context, only, through the disparate impact test. See 42 U.S.C. [section] 2000e-(k) (2000).
(95) CAL. CONST. art. I, [section] 31(a).
(96) See 42 U.S.C. [section] 2000e-2(k) (outlining the circumstances under which a disparate impact claim can be established); Mason v. United Air Lines, Inc., 274 F.3d 314, 318 (5th Cir. 2001) (recognizing that claims under Title VII do not require proof of discriminatory intent); Colbert v. H-K Corp., 4 Fair Empl. Prac. Cas. (BNA) 529, 530 (1971) (stating that where educational requirements are it issue, intent is no longer a necessary element to claims brought under Title VII).
(97) U.S. CONST. amend. XIV, [section] 1.
(98) See, e.g., Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 265 (1977) (holding that "[p]roof of racially discriminatory intent or purpose is required to show a violation of the Equal Protection Clause"); Washington v. Davis, 426 U.S. 229, 239-43 (1976) (recognizing that some proof of intent is necessary in order to prevail on an equal protection claim).
(99) Hi-Voltage Wire Works, Inc. v. City of San Jose, 84 Cal. Rptr. 2d 885, 894 (Cal. App. Ct. 1994) (reasoning that the purpose behind a race-based program is immaterial; that once a program is race-based, it is in violation of Section 31), aff'd 12 P.3d 1068 (Cal. 2000).
(100) Id. at 898. For this appellate court, the integral question was simply whether the program treated subcontractors differently based on any criteria other than merit. See id. at 894.
(101) See id. at 895 (ruling that the constitutional provision at issue does not make the state's intent regarding a race-based action relevant).
(102) Id. at 897.
(103) Id. at 895-96, 898; see also La. Assoc. Gen. Contractors, Inc. v. Louisiana, 95-2105, at 1195 (La. 3/8/96) (indicating that Louisiana voters adopted an amendment to the State Constitution that provides, in part, that "[n]o law shall arbitrarily, capriciously, or unreasonably discriminate against a person because of birth, age, sex, culture, physical condition, or political ideas or affiliations" (quoting LA. CONST. art. I, [section] 3)). The court interpreted the Louisiana Constitution as providing a greater degree of equal protection rights to its citizens than is provided by the Federal Constitution. Id. at 1196. The same Louisiana court has, however, read a requirement of discriminatory intent into the state constitution. See R.J. D'Hemecourt Petroleum v. McNamara, 444 So.2d 600, 603 (La. 1983) (holding that "[p]arties attacking a statute must bear the burden of proving clear and intentional discrimination" (citing La. & Ark. Railway Co. v. Goslin, 300 So.2d 483 (La. 1974))).
(104) See Hi-Voltage Wire Works, Inc. v. City of San Jose, 12 P.3d 1068, 1087 (Cal. 2000) (indicating that while the federal concept of equal protection encompasses the narrowly tailored and compelling state interest tests, the California State Constitution does not provide for any such exception).
(105) See 28 C.F.R. [section] 42.104(b)(ii) (2002) (prohibiting the disparate treatment of individuals); see also 42 U.S.C. [subsection] 2000d, 2000d-1 (2000) (outlawing the disparate treatment of individuals by employers that receive federal aid, while authorizing agencies to promulgate regulations to further this prohibition). This is also referred to as section 601 of Title VI. See also Alexander v. Sandoval, 532 U.S. 275, 280-82 (2001) (assuming that regulations valid under section 601 may nonetheless be impermissible under section 602 of Title VI).
(106) 532 U.S. at 278, 280-82.
(107) Id. at 284-86, 293. Section 601 prohibits intentional discrimination, while section 602 proscribes activities having a racially disparate impact, notwithstanding their validity under section 601. See id. at 280-81 (relying on 42 U.S.C. [subsection] 2000d, 2000d-1).
(108) Id. at 281-82. "It is clear now that the disparate-impact regulations do not simply apply [section] 601--since they indeed forbid conduct that [section] 601 permits--and therefore clear that the private right of action to enforce [section] 601 does not include a private right to enforce these regulations." Id. at 285 (citing Cent. Bank of Denver v. First Interstate Bank of Denver, 511 U.S. 164, 173 (1994)).
(109) See, e.g., Int'l Bhd. of Teamsters v. United States, 431 U.S. 324, 336-38 (1977) (relying partially on statistics that illustrated disparity between the races, the court found that the government had met its burden to prove racial discrimination by a preponderance of the evidence).
(110) See id. at 338-40 (bolstering its case of discrimination, the government included testimony of individuals recounting specific examples of discrimination).
(111) 181 F. Supp. 2d 1017, 1032 (N.D. Cal. 2001) (indicating that the statistics refer to the amount of contracts the county awards minority- and women-owned business enterprises).
(112) Id. at 1021.
(113) See id. at 1021, 1038 (explaining that the evidence presented at trial did not demonstrate an invidiously discriminatory purpose).
(114) Id. at 1033.
(116) Id. at 1036-37.
(117) Id. at 1023 (citing Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 266-68 (1977)).
(118) Id. at 1032.
(119) See id. at 1031-32 (noting that the county did not require that reports be submitted).
(120) Id. at 1031.
(121) Id. at 1032.
(122) Id. Under the ratification theory, one can be held liable for the discriminatory acts of those over which one has control. See id.
(123) Id. (citing Gant v. Wallingford Bd. of Educ., 195 F.3d 134 (2d Cir. 1999)).
(124) Id. (citing Pers. Adm'r of Mass. v. Feeney, 442 U.S. 256, 279 (1979)).
(127) Id. at 1033.
(129) See id. at 1034-35 (summarizing the county's different programs, such as affirmative action and set-asides for MBEs and WBEs, from the late 1980s through 2000).
(130) See id. at 1037. The court did not address whether this failure amounted to a preference for majority contractors.
(131) See id. at 1032 (indicating that allowing deliberate discrimination to continue would demonstrate the intent needed to establish a violation of the Equal Protection Clause).
(132) See infra Part IV (detailing the significance of the use of statistics in proving contractor discrimination claims).
(133) See infra notes 175-210 and accompanying text (supporting the proposition that statistics are an invaluable part of judicial determinations of disparity as well as intent).
(134) See Tarango, 181 F. Supp. 2d at 1032 (finding that without further data, there could be no conclusion as to the presence of disparate impact).
(135) Hi-Voltage Wire Works, Inc. v. City of San Jose, 12 P.3d 1068, 1085 (Cal. 2000) (acknowledging that some forms of outreach may not be prohibited by Section 31).
(136) See Tarango, 181 F. Supp. 2d at 1031 (concluding that institutional inertia rather than institutional bias was the cause of statistical irregularities, and thus, no intentional discrimination by the county was shown).
(137) Id. at 1037.
(138) CAL. PUB. CONT. CODE [section] 10115(a)(1)(West Supp. 2003) [hereinafter Article 1.5].
(139) Barlow v. Davis, 85 Cal. Rptr. 2d 752, 755-56 (Cal. Ct. App. 1999).
(140) Minority and Women Business Participation Goals for State Contracts, ch. 61, 1988 Cal. Stats., [section] 3 (codified at CAL. PUB. CONT. CODE art. 1.5 (West Supp. 2003)); see Barlow, 85 Cal. Rptr. 2d at 754.
(141) Barlow, 85 Cal. Rptr. 2d at 754 (citing California's Public Contract Code section 10115(a)(1)).
(142) See id. (requiring a bidder to identify, through documentary evidence, each certified MBE and WBE subcontractor that will be used in order to satisfy the good faith effort standard).
(143) CAL. PUB. CONT. CODE [section] 10115.5(a).
(144) Barlow, 85 Cal. Rptr. 2d at 759.
(146) See id. at 758 (abrogating that numerical participation goals for MBE and WBE reports no longer serve its statutory function; therefore the act must be held invalid).
(147) Id. at 755 (discussing Monterey Mechanical Co. v. Wilson, 125 F.3d 702 (9th Cir. 1997)).
(148) Id. at 758 (citing Monterey Mech. Co., 125 F.3d at 714-15).
(150) Id. at 756.
(152) Id. at 756, 759.
(153) See id. at 758-59 (reasoning that monitoring the execution and administration of programs designed to increase minority participation no longer made sense when this goal was no longer constitutional).
(154) See id. (explaining that the only motivation for the compelled compilation of data was to reveal whether parties conformed to statutory mandates and that without the severed provisions, the reporting provisions had no independent purpose).
(157) See id. at 758 (considering statistics in one possible role--as a check on the progress towards achieving minority participation goals).
(158) See Connerly v. State Pers. Bd., 112 Cal. Rptr. 2d 5, 43 (Cal. App. Ct. 2001) (recognizing the benefits of statistical recordkeeping irrespective of its association with the substantive elements of any particular statutory scheme).
(159) Barlow v. Davis, No. S080733, 1999 LEXIS 6272, at *1 (Cal. Sept. 15, 1999).
(160) 112 Cal. Rptr. 2d 5, 15-16.
(161) Id. at 43-44.
(162) Id. at 31.
(163) Id. at 43-44.
(164) See id. (recognizing that keeping statistics may aid in ending further discrimination).
(165) Id. at 30-31.
(166) Id. at 31.
(168) 12 P.3d 1068, 1083 (Cal. 2000) (reasoning that the voters' intention in passing Proposition 209 was to restore the force of the Civil Rights Act of 1964 and to specifically prohibit "'the State from classifying individuals by race or gender'").
(169) See Barlow v. Davis, 85 Cal. Rptr. 2d 752, 758-59 (Cal. Ct. App. 1999) (reasoning that the compilation of statistics served no purpose outside of monitoring the application of the newly invalid statutory provisions); see also infra Part III. A. (discussing Barlow and showing the importance of statistical recordkeeping, distinct from monitoring the effectiveness of any particular statutory provisions).
(170) By refusing to maintain additional statistics, the government is preventing the gathering of evidence that could be used to prove or disprove current discrimination in equal protection litigation.
(171) See Domar I, 885 P.2d at 945-46 (Arabian, J., dissenting) (opining that the extensive outreach program requirements failed to enhance competition among bidders, and instead, discouraged prime bidders from submitting proposals for city contracts, and thus, would invariably increase city costs).
(172) See id. at 949-50 (Arabian, J., dissenting) (recognizing that documenting good-faith efforts involves considerable time, effort, and expense, which results in a monetary loss for the unsuccessful bidder).
(173) See generally Douglas A. Hedin, On Losing, 26 AM. J. TRIAL ADVOC. 107, 109, n.9 (2002) (defining anecdotal evidence as the "personal experiences of the witnesses appearing before the court," and indicating that such can be used to supplement statistical evidence).
(174) See infra Part IV. A (discussing various courts' treatment of historical, statistical, and anecdotal evidence in discrimination cases).
(175) See Ensley Branch, NAACP v. Seibels, 31 F.3d 1548, 1565 (11th Cir. 1994) (recognizing that a general claim of overall societal discrimination is not enough to meet the plaintiffs burden to present a prima facie case); see also infra notes 197-99 and accompanying text (analyzing a case in which the court used Title VII and the Equal Protection Clause as historical evidence to support present violations).
(176) See Adarand Constructors, Inc. v. Slater, 228 F.3d 1147, 1166 (10th Cir. 2000) (considering anecdotal evidence in its reasoning, though the court nonetheless declared it to be insufficient when offered alone); see infra notes 182-209 and accompanying text (discussing evidence that should be considered when a court is determining the constitutionality of a program).
(177) See infra notes 182-209 and accompanying text (examining the various court rulings that rely most heavily on statistical evidence to prove or disprove discriminatory intent).
(178) See Int'l Bhd. of Teamsters v. United States, 431 U.S. 324, 339-40 (1977) (reinforcing the importance of statistical analysis in discrimination claims). For a detailed analysis of the courts continued reliance and recognition of the necessity of statistical evidence see supra notes 107-26, 134-35 and accompanying text.
(179) See L. Tarango Trucking v. County of Contra Costa, 181 F. Supp. 2d 1017, 1032 (N.D. Cal. 2001) (recognizing that the lack of adequate statistics is deadly to a disparate impact claim); see also supra notes 105-08 and accompanying text (reviewing a court opinion that relied on statistical evidence to prove disparate treatment in Title VII cases).
(180) See, e.g., infra notes 275-310 and accompanying text (recognizing that courts often criticize statistical evidence for failing to take firm size into account).
(181) See, e.g., Int'l Bhd. of Teamsters, 431 U.S. at 339-40 (permitting statistical evidence as proof of discrimination even where the breadth of those statistics were called into question); L. Tarango Trucking, 181 F. Supp. 2d at 1032 (commenting on the age of the available data and finding that ten year old statistics were no longer sufficiently accurate to support a disparate impact claim); see also infra notes 227-250 and accompanying text (analyzing courts' practices of criticizing the lack of available statistical evidence to support a claim and the relevancy of such statistics as proof of discrimination).
(182) 347 U.S. 475, 480-82 (1954).
(183) See id. at 482 (holding that the statistics presented "bespeak discrimination").
(184) See, e.g., Kraszewski v. State Farm Ins. Co., 38 Fair Empl. Prac. Cas. (BNA) 197, 211-13 (N.D. Cal. 1985) (finding the evidence that showed that defendants hired a disproportionately low number of women compared to the number of female applicants and exlaining that this was sufficient to establish disparate treatment).
(185) 694 F.2d 531 (9th Cir. 1982).
(186) Id. at 550; see also Van v. Plant & Field Serv. Corp., 672 F. Supp. 1306, 1316 (C.D. Cal. 1987) (noting that a presentation of statistical evidence regarding defendant's hiring practices is sufficient to establish a prima facie case for intentional discrimination).
(187) See Ian Ayres and Fredrick E. Vars, When Does Private Discriminatin Justify Public Affirmative Action?, 98 COLUM. L. REV. 1577, 1595 (1998) (recognizing that municipalities have incentives to produce data on disparities in order to support their minority preference policies).
(188) 381 F. Supp. 125, 127 (N.D. Cal. 1974) (requiring the State Labor Department to release information used to review contractors' affirmative action programs).
(189) Id. at 134 & n.14. The relevant factors that must be considered include the minority population of the labor area surrounding the facility, the size of the minority unemployment force in the surrounding area, the percentage of the minority work force as compared with the total work force in the labor area, the skill level of the minorities in the labor area, and the availability of the individuals possessing such skill. See 41 C.F.R. [section] 60-2.11(a) (2000) (revised by Government Contractors, Affirmative Action Requirements, 165 Fed. Reg. 68,022 (Nov. 13, 2000) (to be codified at 41 C.F.R. pts. 60-1, 60-2)).
(190) Legal Aid Soc'y, 381 F. Supp. at 140.
(191) 908 F.2d 908, 915-16 (11th Cir. 1990) (reversing a grant of summary judgment and finding disparities between the total number of minorities involved and the amount of work awarded to them to be sufficient to support a prima facie case).
(192) Id. at 910.
(194) Id. at 915 n.7. In the 1979-1980 fiscal year, blacks received 0.3%, Hispanics received 2.24%, and females received 0.0%, while in the 1980-81 fiscal year, blacks received .03%, Hispanics received 1.94%, and females received .24%. Id. The County did document the statistical disparity--between the percentage of MBE contractors in the area and the percentage of county contracts awarded in other time periods--which ranged from 4% to 10%. Id. at 916. Unfortunately, this data was compiled before an MBE directory was available, and as a result, there was no way to compare these utilization statistics with MBEs availability. See id. at 915.
(195) Id. at 915.
(196) 31 F.3d 1548, 1552-53 (11th Cir. 1994).
(197) Id. at 1565 (citing Howard v. McLucas, 871 F.2d 1000, 1007 (11th Cir. 1989)).
(198) See id. at 1565 (citing City of Richmond v. J.A. Croson Co., 488 U.S. 469, 501 (1989)).
(199) 228 F.3d 1147, 1155-56 (10th Cir. 2000).
(200) Id. at 1166.
(201) Id. at 1167-68. The court determined that the first type of discriminatory barrier is the very "formation of qualified minority subcontracting enterprises" that from the outset precludes competition for public construction contracts by minority enterprises. Id. at 1168. The second discriminatory barrier is "fair competition between minority and non-minority subcontracting enterprises." Id. This private discrimination precludes existing minority firms from effectively competing for the public construction contracts. Id. After referencing numerous congressional hearings, the court stated that the "[t]he evidence demonstrates that prime contractors in the construction industry often refuse to employ minority subcontractors due to 'old boy' networks--based on a familial history of participation in the subcontracting market--from which minority firms have traditionally been excluded." Id. Since subcontractor unions and access to capital create additional barriers, the court took "judicial notice of the obvious causal connection between access to capital and ability to implement public works construction projects." Id. at 1168-70.
(202) Id. at 1170-71 (explaining that bid shopping is the practice of obtaining a low bid from one subcontractor and then disclosing the amount of that bid to a more preferred subcontractor in hopes that the second will be able to under bid the first).
(203) Id. at 1171 (noting the difficulty MBEs face in breaking into the well-established circle of non-minority contractors that perpetuates discrimination).
(204) See id. at 1170-72 (enumerating the barriers to competition that minority enterprises face).
(205) Id. at 1176.
(207) Id. at 1174 (citing City of Richmond v. J.A. Croson Co., 488 U.S. 469, 500 (1989)).
(209) Id. at 1175 (rejecting the defendant's use of a reverse discrimination argument under the Equal Protection Clause).
(210) See Wygant v. Jackson Bd. of Educ., 476 U.S. 267, 274, 283-84 (1986) (determining that, despite even an otherwise legitimate public purpose, the plan lacked the narrow tailoring demanded under the Equal Protection Clause).
(211) See id. at 277 (emphasizing the requirement that a public employer obtain "sufficient evidence" to support a finding of prior discrimination before instituting an affirmative action plan).
(212) See Adarand Constructors, Inc., 228 F.3d at 1166 (indicating that anecdotal evidence alone is not sufficient to support a claim, however, when combined with statistical evidence it may then be adequate).
(213) See, e.g., Martin J. Katz, The Economics of Discrimination: The Three Fallacies of Croson, 100 YALE L.J. 1033, 1041-43 (1991) (analogizing the effects of racial discrimination with late entry into the market).
(214) See id. at 1041 (identifying "costs of entry" as the lack of experience, the expenses associated with insurance, credits, bonds, and intangible attributes such as name recognition).
(215) See id. at 1046-47 (outlining the inefficiencies associated with race-neutral remedies and noting, in particular, that minority entrants will be helped only after majority entrants who have benefited from discrimination are also helped).
(216) See id. at 1052 (delineating the link between racial discrimination and productivity that allows the majority to retain a superior, unearned market position).
(217) See, e.g., Wygant v. Jackson Bd. of Educ., 476 U.S. 267, 280 (1986) (recognizing the need to account for race when remedying past discrimination); Fullilove v. Kluznick, 448 U.S. 448, 480 (1980) (referring to the need for "careful judicial evaluation" of any program employing racial criteria in remedying past discrimination); Franks v. Bowman Transp. Co., 424 U.S. 747, 777 (1976) (suggesting a tolerance for a burden on innocent parties where a narrowly tailored remedy is employed to cure past discrimination).
(218) See CAL. CONST. [section] 31(e), (h) (proscribing discrimination or preferences except when necessary to maintain federal funding, conceding supremacy of any conflicting constitutional provision, and failing to include past discrimination as an exception to the mandate).
(219) This decrease in the contracting dollar is not so far fetched. Challengers of such programs have made the same or similar arguments. For example, in Michigan, statistical data showing the decline in minority or disadvantaged business participation levels indicates a sharp decrease in participation after such programs have ended or been repealed. See 144 CONG. REC. S1404 (daily ed. Mar. 5, 1998) (statement of Sen. Baucus). Additionally, in San Jose, California minority participation in the city's prime contracts fell 80% when the city suspended the MBE program in 1989. See 144 CONG. REC. S1409 (daily ed. Mar. 5, 1998) (statement of Sen. Kerry). Finally, in Philadelphia, public works subcontracts awarded to MBEs and WBEs fell ninety-seven percent in the first month after the program there was suspended. See Proposed Reforms to Affirmative Action in Federal Procurement, 61 Fed. Reg. 26,062 (proposed May 23, 1996).
(220) See, e.g., Adarand Constructors, Inc. v. Slater, 228 F.3d 1147, 1166 (10th Cir. 2000) (allowing the government to justify the compelling interest behind theft affirmative action legislation with statistical and anecdotal evidence).
(221) See id. (requiring a "strong basis in evidence" to prove that the affirmative action legislation was necessary).
(222) See, e.g., id. at 1189 (noting that it appears that the Federal Highway Administration has adopted participation goals since statutory authority requires the submission of annual reports to the Administration and Congress on the state of small business participation in contracting).
(223) In contrast, Section 31 cannot prevent the state government from doing what it is required under federal law where a violation of equal protection is found. If the governmental entity is found to be discriminating against minorities, that situation must be corrected by altering the practices, laws, procedures, or other mechanisms that operate to discriminate and by making the practices race-neutral--if possible and appropriate--or race-based, if necessary, to meet the compelling governmental interest in eradicating its own perpetuation of illegal discrimination.
(224) See Hi-Voltage Wire Works, Inc. v. City of San Jose, 12 P.3d 1068, 1087 (Cal. 2000) (explaining that although the Equal Protection Clause allows for race-conscious remedies when they are justified by a compelling state interest and narrowly tailored to meet the state's needs, an analysis of Section 31 does not indicate that such a compelling state interest exception is present or was even intended by the California voters).
(225) Id. at 1087.
(226) 608 F.2d 1319, 1325 (9th Cir. 1979) (noting that the federal contractor failed to comply with the condition precedent to doing business with the federal government, which was to develop and maintain adequate affirmative action programs).
(227) Id. at 1338-39 & n.37 (citing 41 C.F.R. [section] 60-2.11 (2000) (revised by Government Contractors, Affirmative Action Requirements, 165 Fed. Reg. 68,022 (Nov. 13, 2000) (codified at 41 C.F.R. pts. 60-1, 60-2))).
(228) Id. at 1334.
(229) Id. at 1343.
(236) See id. at 1348-44 (declining to speak to the legality of such a result, but rather, deferring to available "administrative and judicial remedies" to determine their lawfulness).
(237) 813 F.2d 922, 923 (9th Cir. 1987).
(238) See id. at 944 (holding that the ordinance's preferences violated the Equal Protection Clause insofar as the preferences would result in an actual injury to the "'lowest reliable and responsible bidder"').
(239) See id. at 932-33 (noting that the exclusion of subcontracts in a statistical analysis claiming underutilization of minorities is inaccurate, and therefore, renders the statistics meaningless to support a claim of discrimination).
(241) Id. at 933.
(242) See id. (emphasizing that precise data is necessary to prove an impairment of constitutional rights).
(243) See id. at 933-34; see also Contractors Ass'n of E. Pa., Inc. v. City of Philadelphia, 6 F.3d 993, 1005 (3d Cir. 1996) (holding that the statistical evidence presented indicated that minority contractor participation compared with availability was sufficiently probative of discrimination); Arrow Office Supply, Co. v. City of Detroit, 826 F. Supp. 1072, 1079-80 (E.D. Mich. 1993) (criticizing the city's reliance on incomprehensive and inadequate statistics used to enact minority programs). The particular statistical study conducted in Arrow Office Supply, Co. was criticized as insufficient because of the small sample used in the study and on the grounds that there were no statistics available to show that local minority businesses were being underutilized in city projects. See id.
(244) 36 F.3d 1513, 1513 (10th Cir. 1994).
(245) City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989).
(246) Concrete Works of Colo., Inc., 36 F.3d at 1519.
(247) See id. at 1520 (analyzing the geographic scope of the data and recognizing that the data from the greater metropolitan area of six counties would be relevant because contracts are often awarded to firms in adjacent areas).
(248) Id. at 1522.
(249) See id. at 1523 (stating that the evidence presented consisted of federal agency reports, public works reports, expert affidavits detailing the MBE disparity index, and data reflecting MBE and WBE participation in projects).
(250) See id. at 1523-24 (noting that the an estimated 11% of construction firms in Denver were minority-owned).
(251) See id. at 1529 (indicating that the issue becomes whether or not private discrimination that is not federally-funded can provide the necessary evidentiary basis for a municipality to create affirmative action programs).
(252) Id. at 1529-30.
(253) Id. at 1531.
(254) Contractors Ass'n of E. Pa., Inc. v. City of Philadelphia, 91 F.3d 586, 590-91 (3d Cir. 1996).
(255) For a definition of a disparity index see Concrete Works of Colo., Inc.,36 F.3d at 1523 n.10, which indicates that: "[t]he disparity index is calculated by dividing the percentage of MBE and WBE participation in city contracts by the percentage of MBEs and WBEs in the relevant population of local construction firms."
(256) Contractors Ass'n of E. Pa., Inc., 91 F.3d at 595.
(257) Id. at 599.
(259) See id. at 603 (deeming able market participants as "'willing"' in the absence of contrary evidence).
(260) See id. (recognizing the impracticability of reviewing every contract awarded each year in comparison to every MBE).
(261) Id. at 604.
(264) See id. at 606 (holding that a program focused on remedying discrimination in the subcontracting market must be "narrowly tailored" to effectively address discrimination in the market).
(265) See id.
(266) Id. at 606, 610 (commenting on the failure of the city to show that there was a adequate evidence supporting the existence of past discrimination that would justify such race-based programs).
(267) 122 F.3d 895, 926, 929 (11th Cir. 1997).
(268) Id. at 901.
(269) Id. at 912.
(270) Id. at 914.
(272) See id. at 916 (noting that some of the unfavorable disparities towards Hispanic business enterprises and WBEs became statistically insignificant over the three-year period).
(273) Id. (quoting Coral Constr. Co. v. King County, 941 F.2d 910, 921 (9th Cir. 1991)).
(275) Id. at 918.
(276) See id. at 917 (explaining that the two proxies used for firm size in the analyses were the total value of all the contracts that were bid on and the largest single contract awarded).
(277) See id. at 917-19 (summarizing the results of the regression analyses performed for black business enterprises, Hispanic business enterprises, and WBEs).
(278) 214 F.3d 730, 733 (6th Cir. 2000).
(279) Id. at 735-36.
(280) Id. at 736. The court's criticism of the statistics included an observation that the statistics used by the plaintiff did not take into account the size of the minority firms, and therefore, the ability of the firms to actually accept and execute available contracts. Thus, the statistics did not provide the court with sufficient evidence of "'pervasive, systematic, and obstinate discriminatory conduct.'" Id. at 736-37 (quoting Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 237 (1995)). The Sixth Circuit stated that "[a]ny time two non-minority firms merge, or a minority firm splits in two, the total proportion of minority contracting firms in the state increases; but it would be ludicrous to imagine that such alteration affects the overall degree of discrimination." Id.
(281) 834 F.2d 583, 590, 594 (6th Cir. 1987). This was due to the fact that the state of Michigan failed to present sufficient probative evidence. See id. at 594.
(283) See id. at 592, 594 (addressing the issue that many small businesses in the industry inherently cannot compete with the few large businesses in the industry since the large businesses have higher volume, lower costs, more advertising, and have the ability to be more efficient).
(284) Id. at 594.
(286) F.2d 910, 920-21 (9th Cir. 1991) (describing post-enactment evidence as evidence that was not available to the municipality at the time of enactment and thereafter presented to the court in order to justify a race-conscious policy). This case followed a construction company's challenge to the validity of an MBE and WBE set-aside program under the Fourteenth Amendment. The trial court found in favor of the county, and the circuit court, however, held that the program was unconstitutionally broad because it permitted participation by minority enterprises with no prior connection to the county. Id. at 925. This determination is in contrast to other circuits, where pre-enactment evidence must be sufficient in order to justify the program. See also infra Part IV (explaining that statistical evidence is generally probative of discrimination).
(287) See Coral Constr. Co., 941 F.2d at 917 (quoting from one of the affidavits presented to the court and indicating that the president of a subcontracting company overheard a general contractor state that since "'there is no minority requirement on this project.... we are going to use someone else'").
(288) See id. at 919 (explaining that while anecdotal evidence alone may effectively prove an individual claim of discrimination, such evidence will most likely be insufficient to prove systemic discrimination requiring an affirmative action program).
(290) See id. at 921 (explaining that although a state must have evidence of past discrimination in order to create a race-conscious program, such a program will not be struck down for a lack of such evidence if the "state has good faith reason to believe that systemic discrimination has occurred").
(291) See id. at 925, 927 (indicating that only Congress has the power to remedy societal discrimination, but a state may create programs to mend its own private discrimination that has occurred in the past).
(292) 963 F.2d 420, 421 (D.C. Cir. 1992).
(293) See id. at 422 (detailing the program and its use of a sheltered market approach to achieve the goal of MBE participation (quoting D.C. CODE ANN. [section] 1-1147(c) (1981) (repealed 2000))). In order to achieve the program goal of 35% MBE participation, agencies are empowered to designate certain contracts for sheltered markets. Bids on sheltered markets contracts may only be submitted by qualified MBEs. Id. (citing D.C. CODE ANN. [section] 1-1147(b) (1981) (repealed 2000)).
(294) Id. at 427-29.
(295) Id. at 426.
(297) Id. at 426-27.
(298) See, e.g., Shaw v. Hunt, 517 U.S. 899, 909-10 (1996) (asserting that before any remedial can be taken, there must be a "strong basis in evidence" indicating that such action is necessary), overruled by Hunt v. Cromartie, 526 U.S. 521 (1999); W. Tenn. Chapter of Accoc. Builders & Contractors, Inc. v. City of Memphis, 138 F. Supp. 2d 1015, 1023 (W.D. Tenn. 2000) (indicating that post-enactment evidence can merely supplement pre-enactment evidence, not replace it).
(299) 262 F.3d 1306, 1317-20, 1325-28 (Fed. Cir. 2001).
(300) Id. at 1323.
(301) Id. at 1317 (citing Wygant v. Jackson Bd. of Educ., 476 U.S. 267, 277 (1986)).
(302) See id. at 1323-24 (concluding that the lack of statistical evidence was the basis for the court's decision). The court emphasized the importance of using statistics in order to justify race-based legislation. Id. at 1323. This is no aberration: "nearly every court of appeals upholding the constitutionality of a race-based classification has relied in whole or in part on statistical evidence." Id. at 1323-24. The court in this case found that the statistics were inadequate to justify the program for several reasons. The statistics were void of the quantity of basic information such as the number of minority individuals who sought to own small business. Id. at 1324. The statistics failed to consider how many of the minority-owned and small businesses were "qualified, willing, and able to compete for ... contracts." Id. Further, the statistics were inadequate since they were over twelve-years old at the time the program was initiated. Id.
(303) 517 U.S. 899 (1996), overruled by Hunt v. Cromartie, 526 U.S. 521 (1999).
(304) Rothe Dev. Corp., 262 F.3d at 1327-28.
(305) Subsequent cases have provided a different interpretation of Shaw. For example, in West Tennessee Chapter of Associated Builders and Contractors, Inc., v. City of Memphis, the court analyzing relevant Supreme Court decisions--including Shaw and Croson--concluded that race-based remedial legislation would only survive strict scrutiny analysis if the government entity used pre-enactment evidence as its justification. See 138 F. Supp. 2d 1015, 1020-23 (W.D. Tenn. 2000). The court, in further analyzing Shaw, concluded that:
Under this alternative interpretation of Shaw, post-enactment evidence is appropriate if it is used only to assess the first condition of the compelling interest test, whether the City's MWBE program meets evidentiary requirements suggested by Croson.... However, after an assurance that the governmental entity passed legislation for remedial purposes, Shaw can be read to allow post-enactment evidence to supplement the statistical foundation showing the City's passive or active discriminatory practices.
Id. at 1022-23.
(306) See infra notes 275-309 and accompanying text (discussing the various inadequacies in statistical studies including firm size and geographic scope).
(307) See, e.g., Concrete Works of Colo., Inc. v. City & County of Denver, 36 F.3d 1513, 1523 29 (10th Cir. 1994) (concluding--based upon general and specific statistical evidence of discrimination--that a genuine dispute of material fact existed that must be resolved at trial); O'Donnell Constr. Co. v. District of Columbia, 963 F.2d 420, 427 (D.C. Cir. 1992) (recognizing anecdotal evidence as only a supplement to statistical evidence).
(308) See, e.g., Concrete Works of Colo., Inc., 36 F.3d at 1521 (accepting evidence of discrimination in existence after the implementation of the ordinance in assessing its constitutionality); Coral Constr. Co. v. King County, 941 F.2d 910, 920 (9th Cir. 1991) (explaining that an absence of adequate evidence to support a remedial program is not presumptively invalid if subsequent evidence demonstrates the need for the program).
(309) See generally COMM. ON GOV'T OPERATIONS, PROBLEMS FACING MINORITY AND WOMEN OWNED SMALL BUSINESSES, INCLUDING SBA SECTION 8(A) FIRMS, IN PROCURING U.S. GOVERNMENT CONTRACTS: AN INTERIM REPORT, H.R. REP. NO. 103-870 (1994) (discussing the problems and obstacles that minority-owned enterprise businesses are confronted with when attempting to obtain government contracts); Procurement Assistance to Small Business: Field Hearing Before the Subcomm. on Gov't Programs and Oversight of the House Comm. on Small Businesses, 106th Cong. 7 (1999) (statement of Hedy Ratner, Co-President, Women's Business Dev. Center) (urging Congress to avoid "streamlining' women- and minority-owned businesses out of competition for federal contracts).
(310) See, e.g., Gay v. Waiters' & Daffy Lunchmen's Union, Local No. 30, 694 F.2d 531, 550, 555 (9th Cir. 1982) (rejecting the claim of intentional discrimination based on statistical and circumstantial evidence); Allard v. Ind. Bell Tel. Co., 1 F. Supp. 2d 898, 909 (S.D. Ind. 1998) (indicating that non-persuasive circumstantial evidence of discrimination presented by plaintiffs was excluded).
(311) Although the full discussion of this rational is beyond the scope of this particular article, there is a strong argument to be made for the proposition that California courts need to adopt a recklessness standard for proving discrimination in the public contracting arena, in order to satisfy the voters' concern for greater protection against preferences and against discrimination. A recklessness standard would be preferable because it is rare for one to admit to intentional discrimination. Thus, circumstantial evidence is the only way to prove intent. Proving intent has become similar to the whole strict scrutiny test--intent in theory; in fact, fatal, which is a variation on "strict in theory, but fatal in fact" from Fullilove v. Klutznick. 448 U.S. 448, 519 (1980) (Marshall, J., concurring). As a result of the prevalence and history of unconscious racism in our society, in many instances there is no intent in the strict legal sense of the word. As additional support, apt analogies to other areas of law exist, and serve as illustrations of the usefulness of the recklessness standard. For instance, under criminal law, reckless disregard can be tantamount to intentional conduct and is sometimes punished at the same level. See, e.g., M. Amanda Racines, Note, Constitutional Law--To Chase or Not to Chase: What "Shocks the Conscience" in High-Speed Police Pursuits?--County of Sacramento v. Lewis, 73 TEMP. L. REV. 413, 445 (2000) (explaining that when conduct is regarded as reckless, the defendant can be liable for punitive damages at common law). Similarly, in the tort context, reckless behavior can provide an alternative basis for liability so that the tortfeasor is not wholly absolved but merely punished with a lower monetary adverse judgment than he would find if the conduct was intentional. See, e.g., W. PAGE PROSSER, ET AL., PROSSER & KEETON ON THE LAW OF TORTS [section] 8, at 37 (5th ed. 1984).
(312) See, e.g., Ronald Turner, Thirty Years of Title VII's Regulatory Regime: Rights, Theories, and Realities, 46 ALA. L. REV. 375, 430-32 (1995) (explaining that "any discussion of discrimination within the meaning of Title VII must consider the use of statistical proof' to demonstrate adverse treatment and patterns of intentional discrimination).
(313) CAL. PUB. CONT. CODE [section] 10115.5 (West Supp. 2003) (requiring awarding departments to report to the governor and legislature the level of participation of minority, women, and disabled veteran businesses in contracts and if established goals are not met, the reasons for failing to meet the requirements must also be included).
(314) S.B. 1045, 2001-2002 Reg. Sess. (Cal. 2002) (adding CAL. GOV'T CODE [section] 11139.7(a) (West Supp. 2003)).
(315) Id. (adding CAL. GOV'T CODE [section] 11139.8 (West Supp. 2003). This language is very similar to the existing Public Contract Code section 10115.5, which was challenged in Barlow and Connerly. CAL. PUB. CONT. CODE [section] 10115.5(a) (West Supp. 2003). The bill merely replaced the phrase "in contracts as identified in this article," found within California's Public Contract Code, with "in contract and procurement activities as identified in this section." S.B. 1045, 2001-2002 Reg. Sess. (Cal. 2002) (adding CAL. GOV'T CODE [section] 11139.8 (West Supp. 2003)).
(316) S.B 1045, 2001-2002 Reg. Sess. (Cal. 2002) (adding CAL. GOV'T CODE [section] 11139.7(b) (West Supp. 2003)).
(317) See id. (enumerating valid outreach activities through its addition of section 11139.7(c) to California's Government Code).
(318) See supra notes 111-35 and accompanying text (discussing the importance of complete and accurate data).
(319) See S.B. 1045, 2001-2002 Reg. Sess. (Cal. 2002) (adding CAL. GOV'T CODE [section] 11139.8 (West Supp. 2003)) (emphasis added).
(320) 813 F.2d 922, 924, 933 (9th Cir. 1987); see also supra Part IV.C. and accompanying notes (addressing the issue of statistical records by finding that the statistics were inaccurate and that additional statistics were necessary to demonstrate that there was a disparity between minority firms and prime contract dollars to show that government officials had actually been involved in discrimination).
(321) A.B. 1084, 2001-2002 Reg. Sess. (Cal. 2001) (adding CAL. PUB. CONT. CODE [section] 10116 (West Supp. 2003).
(322) See id. at [section] 13 (providing additions to sections 10116(b) and 10116(c) of the Public Contract Code and indicating that the awarding department and the contractors are prohibited from using the compiled data to discriminate or provide a preference in awarding contracts).
(323) A.B. 11690, 2001 Leg., 225th Sess. (N.Y. 2001) (adding N.Y. EXEC. LAW [subsection] 315-A and 315-B (West 2001)).
(324) Id. (adding N.Y. EXEC. LAW [section] 315-B (West 2001)).
(325) See supra notes 29-54, 67-81 and accompanying text (discussing Hi-Voltage, Domar I, and Domar II, respectively).
(326) Hi-Voltage Wire Works, Inc. v. City of San Jose, 12 P.3d 1068, 1085 (Cal. 2000).
(327) S.B. 1045, 2001-2002, Reg. Sess. (Cal. 2001) (adding CAL. GOV'T CODE [section] 1139.6(3) that sets forth that "all governmental agencies shall engage in general recruitment and outreach programs to all individuals including persons who are economically disadvantaged").
(328) H.R. 1153, 57th Leg., 1st Reg. Sess. (Wash. 2001).
(329) See id. (adding WASH. REV. CODE ANN. [section] 39.10 (West Supp. 2003)). Washington has statutory provision similar to California's Section 31 that prohibits discrimination and preferential treatment in public contracting on the basis of race and ethnicity. WASH. REV. CODE ANN. [section] 49.60.400 (1999). By recognizing limits within the statute there is an internal acknowledgment to the courts that discrimination and preferential treatment is not acceptable.
(330) H.R. 1892, 77th Leg. Sess. 33 (Tex. 2001) (amending TEX. LOC. GOV'T CODE ANN. [section] 252.043(a)(6) (Vernon 1999)).
(331) See id. (amending TEX. LOC. GOV'T CODE ANN. [section] 252.043(a)(6) (Vernon 1999)). The other factors that have been made available for consideration are: (1) the purchase price; (2) the reputation of the bidder and of the bidder's goods or services; (3) the quality of the bidder's goods or services; (4) the extent to which the goods or services meet the municipality's needs; (5) the bidder's past relationship with the municipality; ... (7) the total long-term cost to the municipality to acquire the bidder's goods or services; and (8) any other relevant factor that a private business entity would consider in selecting a bidder. Id. (amending TEX. LOC. GOV'T CODE ANN. [section] 252.043(a)(1-5, 7-8) (Vernon 1999)).
(332) See H.R. 1155, 57th Leg., 1st Reg. Sess. (Wash. 2001) (amending WASH. REV. CODE ANN. [section] 39.10.010 (West 2001) (stating further that the purpose of the amendment was to empower state agencies to use "supplemental alternative" contracting methods in certain circumstances)).
(333) Id. at [section] 4 (amending WASH. REV. CODE ANN. [section] 39.10.060(6)).
(334) See Domar Elec., Inc. v. City of Los Angeles, 885 P.2d 934, 949 (Cal. 1994) (Arabian, J., dissenting) (recognizing the "critical economic realities" of such reporting requirements and their financial toll).
(335) See id. at 945 (Arabian, J. dissenting) (1994) (criticizing the majority's "extensive good faith effort" and opining that documenting requirements would only inflate contractual costs, and thus, result in fiscal harm to the city).
(336) A.B. 1084, 2001-2002 Reg. Sess. [section] 11(b-c) (Cal. 2001) (adding Cal. Pub. Cont. Code [section] 10116 (a-c) (West Supp. 2003).
(337) See Barlow v. Davis, 85 Cal. Rptr. 2d 752, 758 (Cal. Ct. App. 1999) (remarking that additional data would not be reflective of compliance with the law).
(338) See, e.g., Int'l Bhd. of Teamsters v. United States, 431 U.S. 324, 337-39 (1977) (indicating that the testimony, revealing over forty different instances of discrimination, accentuated the statistical disparity between minorities and non-minorities employed as line drivers).
(339) See, e.g., City of Richmond v. J.A. Croson: Impact and Response: Hearing Before the Subcomm. on Urban and Minority-Owned Bus. Dev. of the Senate Comm. on Small Bus., 101st Cong. 34-35 (1990) (statement of Hon. Andrew F. Brimmer, President, Brimmer & Co., Inc.) (identifying discrimination in "subcontracting, in bid shopping, bid manipulation, price discrimination by suppliers, discrimination in financing, and discrimination in employment opportunities"); see also infra notes 357-62 and accompanying text (discussing that without anecdotal evidence to supplement statistical evidence, it is difficult to survive the strict scrutiny test).
(340) See, e.g., Barriers to Full Minority Particpation in Federally Funded Highway Construction Projects: Before the House Subcomm. on Gov't Operations, 100th Cong. 189 (1988) (testimony of Dexter Marshall). Mr. Marshall testified that:
Even when I go to buy my materials, ! am overcharged and if I am not being overcharged I am discriminated against in regard to buying materials or even being selected for state work in regards to those jobs. There is not much to do except go in the hole on a job or not compete. I don't think that is the purpose of the program. In regard to other contactors, I am sure they are facing the same problems and I think we need to get something that is more solid or more flexible that would make it better for us all.
Id. at 189.
(341) See, e.g., Availability of Credit to Minority-Owned Small Business: Hearing Before the Subcomm. on Fin. Insts., Regulation and Deposit Ins. of the House Comm. on Banking, Fin., and Urban Affairs, 103d Cong. 21-22 (1994) (statement of Harrison Boyd, HB Assocs.) (explaining that white lenders automatically believe minority-owned business loans are an extremely risky investment); see also, e.g., The Disadvantaged Business Enterprise Program of the Federal-Aid Highway Act: Hearing Before the Subcomm. on Transp. of the Senate Comm. on Envtl. and Pub. Works, 99th Cong. 56 (1985) (statement of James K. Laducer, Director, North Dakota Minority Business Enterprise Programs, United Tribes Educational Technical Center) (suggesting that local banks "usually refuse to lend moneys to minority businesses from ... Indian communities ... [because] ... [b]ankers tend to view lending capital to such businesses as potentially harmful to 'their own' small business community and their own local economic base").
(342) See, e.g., Discrimination in Surety Bonding: Hearing Before the Subcomm. on Minority Enter., Fin. and Urban Dev. of the House Comm. on Small Bus., 103d Cong. 6-10 (1993) (statement of John B. Cruz, III, President, John B. Cruz Construction, Co.) (identifying problems for minorities that include higher rates, inappropriate collateral, and unnecessary escrow accounts).
(343) See, e.g., How State and Local Governments Will Meet the Croson Standard (Minority Set-Asides): Hearing Before the Subcomm. on Civil and Constit. Rights of the House Comm. on the Judiciary, 101st Cong. 58 (1989) (statement of John Payton, Wilmer, Cutler & Pickering) (remarking that one of the most difficult obstacles to overcome is actually proving discrimination).
(344) See, e.g., Meaning and Significance for Minority Businesses of the Supreme Court Decision in the City of Richmond v. J.A. Croson: Hearing Before the Subcomm. on Legislation and Nat'l Sec. of the House Comm. on Gov't Operations, 101st Cong. 126 (1990) (statement of Manuel Rodriguez, Owner and President of R & D Development, Inc. and on behalf of the Hispanic American Construction Industry Assoc.) (commenting on the lack of proof available in many discrimination cases--often the quotes are verbal, not written or taped recorded, and then the question arises concerning who is to be believed when a supplier quotes the minority contractor a higher price than he gives the white contractor who is bidding for the same job).
(345) 36 F.3d 1513, 1520-21 (10th Cir. 1994).
(346) 908 F.2d 908, 916 (11th Cir. 1990).
(349) See id. at 914-15 (explaining how statistics were combined with other evidence to determine whether or not the strict scrutiny test was met).
(350) Assoc. Gen. Contractors of Cal., Inc. v. Coalition for Econ. Equity, 950 F.2d 1401, 1403- 04 (9th Cir. 1991).
(351) Id. at 1418.
(352) See id. at 1415-16 (pronouncing "that such statistical disparities are 'an invaluable tool' in demonstrating the discrimination necessary to establish a compelling interest" (quoting Coral Constr. Co. v. King County, 940 F.2d 910 (9thCir. 1991))).
(353) Id. at 1415.
(354) Id.; see also O'Donnell Constr. Co. v. District of Columbia, 963 F.2d 420, 427 (D.C.Cir. 1992) (stating that "[a]necdotal evidence is most useful as a supplement to strong statistical evidence").
(355) No. 94 Civ. 4017, 1998 WL 273027, at *1 (E.D.N.Y. Apr. 12, 1998).
(356) See id. at *4 (citing Coral Const. Co., 941 F.2d at 919).
(358) Id. at *5.
(359) Id. at *12-13 (discussing the plaintiffs disparagement with the programs definition of minority, which they contended was overinclusive).
(360) Id. at *12-13, 19 (explaining that since the defendants had exhibited issues of material facts the court was unable to decide whether or not the entire program would be able to survive strict scrutiny analysis).
(361) See, e.g., Associated Gen. Contractors of Conn. v. City of New Haven, 791 F. Supp. 941, 947 (D. Conn. 1992) (stating that the anecdotal evidence was not sufficient to justify the setaside program).
(362) See Joe R. Feagin, Kevin E. Early & Karyn D. McKinney, The Many Costs of Discrimination: The Case of Middle-Class African Americans, 34 IND. L. REV. 1313, 1327 (2001) (reflecting, through examples, that discriminatory treatment takes place over time and is not made up of a single isolated event).
(363) See Lynn Bonner, DOT Contracts Protested, NEWS & OBSERVER (Raleigh, N.C.), Feb. 8, 2002, at A3 (describing a plan in the North Carolina Department of Transportation that would pair smaller, minority-owned businesses with larger contractors), available at 2002 WL 11704526.
(364) See Connerly v. State Pers. Bd., 112 Cal. Rptr. 2d 5, 31, 38 (Cal. Ct. App. 2001).
(365) See id. at 23-24 (stating that "accurate and up-to-date information is the sine quo non of intelligent, appropriate legislative and administrative action").
(366) Hi-Voltage Wire Works, Inc. v. City of San Jose, 12 P.3d 1068, 1085 (Cal. 2001) (holding that although the current program used by the city was unconstitutional, under Section 31, the court was willing to acknowledge that other similar programs may not be unlawful).
Christine Chambers Goodman, Associate Professor of Law, Pepperdine University School of Law; J.D., Stanford Law School, 1991; A.B., Harvard University, 1987, cum laude. I wish to thank Alison Anderson for her mentoring and inspiration; Michael Wald for his encouragement, advice, and review of early outlines of this work; Jerry Lopez for his mentoring and guidance; The Dean's Summer Research Grant Fund at Pepperdine University, which helped me to complete this work; my research assistants, Marcus Brown and Alicia Brown, for their diligent work on this project; and the many current and former colleagues who provided sounding boards for my ideas along the way. I also wish to thank my husband, Marc Goodman, and my son, Alexander Ross Goodman, for their support throughout this process.
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|Title Annotation:||public contracting discrimination cases, California|
|Author:||Goodman, Christine Chambers|
|Publication:||Albany Law Review|
|Date:||Mar 22, 2003|
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