User:Rsradford/Hi-Voltage Wire Works v. City of San Jose

Hi-Voltage Wire Works, Inc. v. City of San Jose, ___ P.3d ___, 24 Cal. 4th 537 (Cal. 2000), was a high profile case in which the California Supreme Court first interpreted and applied Proposition 209, the controversial 1996 initiative that added Article 1, section 31 to the California Constitution. Proposition 209 prohibits state or local governments in California from discriminating against or granting preferences to any individual or group based on race, sex, ethnicity, national origin, or color in the areas of public education, public employment, or public contracting. In Hi-Voltage Wire Works, the court applied Prop. 209 to invalidate a public contracting program that required general contractors submitting bids on city jobs either to meet certain quantitative goals in the use of subcontractors owned by minorities and women; or else to engage in specified “outreach” efforts aimed exclusively at minority and women subcontractors.

=Parties= Plaintiff Hi-Voltage Wire Works, Inc., is a California Corporation doing business as “Power Providers,” a general contracting firm with headquarters in Rancho Cordova, California. Allen L. Jones, a resident of San Jose, was also a plaintiff in this case. As a taxpayer, Mr. Jones challenged San Jose’s contracting program as an unlawful expenditure of public funds. The defendants were the City of San Jose and Susan Hammer, Mayor of San Jose.

=Background=

State of the law
Following the United States Supreme Court decisions of City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989), and Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 227 (1995), it was universally recognized that any government program that made racial classifications would be upheld against the charge that it violated the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution if (and only if) the program met the demands of strict scrutiny. The “strict scrutiny” test requires the government to establish that the racial classifications it is using are in pursuit of a compelling state interest and that they are a narrowly tailored means to achieve that compelling state interest. This was so whether the program originated with a state or was mandated by the Federal government, and likewise applies regardless of whether the racial classification is intended to discriminate against or give a helpful preference to a particular group based upon race. Then,  In in November, 1996, the California electorate adopted Proposition 209, which added Article I, section 31, to the California Constitution. Section 31(a) states: “The 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.” Immediately after Proposition 209 passed, a lawsuit was filed in Federal Court that made the claim that Proposition 209, on its face, itself violated the Equal Protection Clause of the Fourteenth Amendment by making it more difficult for racial minorities, and only racial minorities, to obtain preferences through the legislative process. Although the District Court blocked enforcement of Proposition 209, the Ninth Circuit Court of Appeals reversed, upholding upheld the constitutionality of Proposition 209 on all points, finding that Proposition 209 did not violate the Equal Protection Clause,  Fourteenth Amendment, nor did it violate Titles VI, VII, or IX, of the United States Code. See, Coalition for Economic Equity v. Wilson, 122 F.3d 692 (1997). [did you want to mention that PLF represented the drafters of Prop 209 at the district court?]

Facts of the case
Hi-Voltage Wire Works challenged the City of San Jose’s program designed to encourage minority business enterprises (MBE’s) and women business enterprises (WBE’s) to participate in public works projects. For each contract, the City set a participation goal based on the ability and availability of MBE’s and WBE’s that could do the work to be contracted. To qualify as a responsible bidder, a contract had to meet the City’s participation goal of utilizing MBE or WBE subcontractors or demonstrate reasonable efforts to obtain WBE and MBE participation. This was is referred to as the participation option. If a contractor does not meet the City’s participation goal, it has to demonstrate and document its efforts to obtain MBE and WBE participation. This was is referred to as the outreach option. Reasonable efforts to obtain WBE/MBE participation include providing written notice to at least four MBE/WBE’s soliciting them for the project, follow-up contact to determine their interest in bidding, and providing written justification for rejecting an MBE/WBE’s low bid. A bid that fails both the participation option and the outreach option will be rejected as “nonresponsive” and the contractor is deemed not a “responsible” bidder. In 1997, after passage of Proposition 209, Hi-Voltage submitted a bid to the City. Because it intended to utilize its own workforce, Hi-Voltage did not comply with either the participation or outreach options and its bid was rejected. Hi-Voltage filed a lawsuit claiming that the City’s program constituted a facial violation of Proposition 209.

Prior history
Before Proposition 209 was passed, opponents of the initiative filed a lawsuit asking the Court to compel the Attorney General to revise Proposition 209’s ballot title and label in Lungen v. Superior Court, 48 Cal.App.4th 435 (1996). In Lungen, plaintiffs argumed that the ballot summary prepared by the Attorney General should “reflect the chief purpose of the measure is to prohibit affirmative action programs by public entities that are inconsistent with the prohibition in the measure.” The Court of Appeal found that the Attorney General’s title and summary were sufficient, and that it would be misleading to say that Proposition 209 repeals affirmative action programs when the term “affirmative action” does not have a commonly understood definition. The Court recognized that Proposition 209 only prohibited discrimination and preferences based on race or sex, while affirmative action is often understood to include such activities as outreach programs.

Procedural posture
The trial court granted summary judgment in favor of Hi-Voltage. San Jose appealed and, but the Court of Appeal affirmed the trial court’s ruling. The California Supreme Court’s decision affirmed the Court of Appeal.

=Legal analysis=

Issue
The Hi-Voltage case address the looked at the question of whether a program that did not actually consider race or sex in the awarding of a public contract might still violate Section 31. The City’s program sought to increase minority participation in the contracting process by a) requiring general contractors to meet or exceed the City’s goal for hiring MBEs or WBEs subcontractors, or b) engage in and document specific efforts to solicit minority or women owned businesses, follow-up with their solicitation, and provide written justification for rejecting a minority or women owned business’s low bid. Contractors were required to engage in these additional “outreach” efforts only with respect to minority and women owned businesses.

Arguments/theories
Plaintiffs argued that non-minority owned businesses were being discriminated against by the City requiring that a certain number of minority owned businesses be hired as subcontractors on contracts that the City lets out to bid (the participation option), and that minority-owned businesses were being given a special advantage or preference by the City requiring [I thought the program applied to all general contractors]  non-minority owned general contractors to satisfy the City’s outreach requirement to notify, solicit bids from and negotiate with minority-owned subcontractors (the outreach option), while imposing no requirement that non-minority owned businesses be similarly notified or solicited. Defendants relied heavily upon the Court of Appeals’ earlier decision in Lungen v. Superior Court, for the notion that Proposition 209 does not, in all circumstances, prohibit outreach programs; specifically, this outreach program. The City argued that the requirements that it imposed on contractors were not impermissible “goals” and that its provisions are neither discriminatory nor preferential. The City argued that the program was designed merely to ensure that MBEs/WBEs no minorities were being excluded from the bidding process. =Holding= In striking down the City of San Jose’s race-conscious outreach program, the Hi-Voltage court made several significant findings with respect to Section 31 [previously you used Proposition 209]. The first is that in Proposition 209, the voters of California “intended to adopt the original construction of the Civil Rights Act and prohibit the kind of treatment accorded by this program.” The Court referred to legislative materials that surrounded debate on and passage of the Civil Rights Act of 1964, concluding that the Civil Rights Act was intended by Congress to reflect the notion that the Constitution should be “colorblind” in its application. The Court also looked to the dictionary definitions of “discriminate” and “preference” to determine the voters’ intent. [it would be helpful to include the definitions] Finding no reason to deviate from these straightforward definitions, the Court found that the City’s program to be unconstitutional because the outreach option afforded preferential treatment to MBE/WBE subcontractors on the basis of race or sex, and the participation option discriminates on the same bases against non-MBE/WBE subcontractors as well as general contractors who fail to fulfill either of the options when submitting their bids.

=Subsequent history= 4.1 Judgment/disposition The trial court granted the plaintiffs’ motion for summary judgment, finding that both components of the program constituted race-based and sex-based classifications and violated Section 31. The Court of Appeal affirmed the trial court’s decision. The California Supreme Court affirmed the Court of Appeal’s decision, finding that the City of San Jose’s “outreach” program violated Section 31.

=Legacy and other notes= Hi-Voltage remains the seminal most significant decision from the California Supreme Court on the scope, intent, and effect of Proposition 209. The following year, relying on Hi-Voltage’s definitions of “preference” and “discriminate,” the California Court of Appeal invalidated five separate statutory programs that used race for ______.