Petition — National Ass'n of Minority Contractors v. Associated General Contractors

Pe

80-295

Supreme Court. .

FILED

AUG

“ae | 25 1980

; DAK, JR., CLERK

ERK

In the Supreme Court

OF THE

United States

OcToBrER TERM, 1980

NATIONAL ASSOCIATION OF MinorITY CONTRACTORS

and Minority Contractors ASSOCIATION OF

NorTHERN CALiFornNiA, INc.,

Petitioners,

VS.

ASSOCIATED GENERAL CONTRACTORS OF CALIFORNIA, et al.,

Respondents.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

¥OR THE NINTH CIRCUIT

STEPHEN V. BoMsE

COUNSEL OF RECORD

44 Montgomery St., Suite 3000

San Francisco, CA 94104

Telephone: (415) 772-6000

Attorney for Petitioners

Rosert A. RosENFELD

Of Counsel

BOWNE-PERNAU WALSH © 1045 SANSOME ST. © S.F., CA O411i © (415) 961-7882

QUESTIONS PRESENTED

1. In light of decisions such as North Carolina Board of

Education v. Swann, 402 U.S. 43 (1971), may a state enact

a statute which effectively prohibits all race-conscious

remedies for prior discrimination, even where such rem-

edies are premised upon findings of constitutional or statu-

tory violations?

2. Where a state agency finds the existence of prior

discrimination against racial minorities in areas of its

legal responsibility, is that agency under a duty to take

appropriate action, including the adoption of race-con-

scious programs, to remedy the discrimination which it has

identified ?

3. May a governmental entity other than Congress

adopt a minority set-aside program to remedy past dis-

crimination against minority-owned businesses?"

18In the proceedings before the Ninth Circuit, the San Francisco

Unified School District, the San Francisco Board of Education, the

National Association of Minority Contractors and the Minority

Contractors Association of Northern California were the appellants.

The Associated General Contractors of California and individual

contractors and subcontractors engaged in the building and con-

struction industry in San Francisco were appellees.

ii

TABLE OF CONTENTS

Page

Questions presented .................-.- ie . i

Opinions below .... SRLS Pe ed 1

EE jineasitallndsecwenipitcsl 2

Constitutional and statutory provisions .......................-.-.- 2

Statement of the case ................c.ccccececeesesees 2

ones sldatentncomsenbonasliimenncvcsastindesinbinnde 3

The Affirmative Action Policy ............ shlhaitanaadiadeis 4

he acct vedscsnsuesncenitinanainagocinasacsions 6

Reasons for granting the writ ...................... _ ae

I

The petition should be granted to consider whether a

state constitutionally may prohibit all race-conscious

remedies for prior discrimination ............2........:.:--0-+- 12

i

The petition should be granted to consider the existence

of a constitutional duty to engage in affirmative ac-

tion as a remedy for past discrimination and to re-

solve the conflict on that question between the

Sixth and the Ninth Circuits 22000000200... cccsescseseeeseee 16

Ii

The petition should be granted to consider the au-

thority of governmental entities other than Congress

to adopt race-conscious remedies for past discrimina-

I ir caienaidntdlantbtnventtevnsccnonesevbequassusoneesivonrassesnssionbasiaoason 20

iil

TABLE OF AUTHORITIES CITED

Cases

Page

Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975) .... 17

Berkeley Unified School District v. James I. Barnes

Constr. Co., 112 F.Supp. 396 (N.D. Cal. 1953) ............ 17

Borders v. Rippy, 247 F.2d 268 (5th Cir. 1957) ............ 15

Chropowicki v. Lee, 402 U.S. 935 (1971) 2.00. 10, 15

Detroit Police Officers Association v. Young, 608 F.2d

671 (6th Cir. 1979), petition for certiorari pending,

DEO TD ccniseosiniisvigrerncsusapendeaeehacsabanail 11, 12, 16, 17, 19, 21

Fullilove v. Klutznick, ........ i. (1980) 11,17, 20, 21

Green v. Count School Board, 391 U.S. 430 (1968) 10,16

Hall v. City of Taft, 47 Cal.2d 177, 302 P.2d 574 (1956) 17

Louisiana v. United States, 380 U.S. 145 (1965) ........ 10, 16

McDaniel v. Barresi, 402 U.S. 39 (1971) -......00220020022....- 14, 16

Milliken v. Bradley, 418 U.S. 717 (1974)... eee 18

Minnick v. California Dept. of Corrections, No. 79-1213

(cert. granted July 2, 1980) ... EN eT 11, 12, 21

North Carolina Board of Education v. Swann, 402 U.S.

BD CIID cain pictscnsiesesnhishe enlegiiietiataatideniadeiaeaa idee 1, 10, 12, 14

Regents of the Univ. of California v. Bakke, 438 U.S.

bc) | Re CORE: IE NS HORE HO Tm URTE IT 14, 15, 17

Swann v. Charlotte Mecklenburg Board of Education,

Pr Bt Mk Bs ate ei Ee eRe 15

United Steelworkers of America v. Weber, 443 U.S.

193 (1979) coocooo pede mretiname ca Sea en Nae Mach AP 15, 17

iv

TaBLE OF AUTHORITIES CITED

Constitution

Page

United States Constitution, Fourteenth Amendment 2, 6,9

Statutes

California Education Code:

Section 35160 ............ aaiacneteieiimiateadisinatalasinibiciepanah 2, 3,17

a anepiesgmaations 3,17

SS a a 3,17

I aoe caliciataseediasannntoabicblansnsentidl 3,17

NY BA vicpsrertininennttiicsiisninnsibianliaindesnnitcccnbsniiicerssuinsessaidistditctunal 3,17

I I ci aik acai arclidldsabeciicicciintepeiesopaadibuesunioeiicehs Passim

28 U.S.C.:

I MT Sas ai stills accents teeesieicsorioemaeaipnnemannemnenabetines 2

8 RRA SOLS rer lle Cel rae eee eI 6

NN I ai casa ceetccedsiaetiamldincahiabenetcimpiatananatacthes 6

42 U.S.C.:

NR I itd Aida ciaseckdadiinueiccctenanitbetignimmnmieiiensss 2, 6,17

I dst sisiak tails cath nea ccnnshanbonmmndeieniiapiibeieniamitineces 2,6

Section 2000e et seq. ileaahihinllhsiagiicbahchgisdieaiediianiabs len 6

No.

In the Supreme Court

OF THE

United States

Octoser Term, 1980

NATIONAL ASSOCIATION OF Minority CONTRACTORS

and Minoriry Contractors ASSOCIATION OF

NorvTHERN CaLirornw, INC.,

Petitwners,

vs.

AssOcIATED GENERAL CONTRACTORS OF CALIFORNIA, et al.,

Respondents.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Petitioners National Association of Minority Contractors

and Minority Contractors Association of Northern Cali-

fornia, Inc. respectfully pray that a Writ of Certiorari

issue to review the judgment and opinion of the United

States Court of Appeals for the Ninth Circuit entered

in this proceeding on February 11, 1980.

OPINIONS BELOW

The opinion of the Court of Appeals (App. A, infra) is

reported at 616 F.2d 1381. That Court’s order denying

petitioners’ Petition for Rehearing with Suggestion of

2

Rehearing En Bane (App. B, infra) was filed on April

25, 1980, and is not reported. The opinion of the District

Court granting a preliminary injunction was filed on March

17, 1977, (App. F, G, infra) and is unreported. Its opinion

refusing to dissolve the preliminary injunction (App. E,

infra) is reported at 431 F.Supp. 854. The District Court’s

order granting a permanent injunction under the caption

“Orders on Motions, Findings of Fact, Conclusions of Law

and Judgment of Permanent Injunction” was filed on July

20, 1977, (App. C, D, fra) and is not reported.

JURISDICTION

The opinion of the Court of Appeals for the Ninth

Circuit was filed on February 11, 1980. A timely petition

for rehearing with suggestion of rehearing en banc was

denied on April 25, 1980. Thereafter, on July 1, 1980,

Justice William H. Rehnquist signed an order extending

the time for filing this petition for certiorari to and

including August 25, 1980. The jurisdiction of this Court

is invoked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL AND STATUTORY PROVISIONS

The relevant constitutional provisions and statutes are:

U.S. Const. Amend. XIV; 42 U.S.C. §§ 1981 & 1983; Calif.

Educ. Code $§ 35160 & 39640, all of which are reproduced

in Appendix H.

STATEMENT OF THE CASE

This case involves the legality of the Affirmative Action

Policy adopted by the San Francisco Unified School

District (“District”), which mandates that general con-

tractors on school construction projects over $100,000

“employ nonwhite owned businesses for individual contract

dollar amounts which total at least 25% of the general

contract dollar bid.” The policy was implemented to

remedy past discrimination in District construction

3

projects, which its governing Board expressly found, and

to assure that this discrimination was “not perpetuated by

the [District’s] construction program.” (App. E, Exh. A,

p. 6). The District Court enjoined the Board’s policy as

contrary to California’s “low bid” law and the Court of

Appeals affirmed after specifically rejecting the argument

that the “low bid” law, as interpreted, contravened both the

California and United States Constitutions.

The Parties

Petitioners, the National Association of Minority Con-

tractors and Minority Contractors Association of Northern

California, Ine., are two associations of minority con-

tractors doing business in the San Francisco area. Because

the District’s Affirmative Action Policy directly impacted

on the ability of the members of these associations to

obtain jobs in the public construction industry, both asso-

ciations sought to intervene in the District Court action

challenging the legality of that program. Permission to

intervene was granted on November 1, 1976, and both

associations thereafter participated fully in the proceed-

ings in the District Court and the Court of Appeals.

The District, a defendant below, is a duly organized

political subdivision of the State of California consisting

of the public schools in San Francisco. The San Francisco

Board of Education (“Board”), also a defendant below, is

the responsible governing body of the District, and is

endowed by state law with broad authority to initiate

all programs or activities necessary for the successful and

on-going operations of the District, including the construc-

tion and repair of school buildings and facilities. Calif.

Educ. Code §§ 35160, 35270, 39170, 39172 and 39173. The

Affirmative Action Policy invalidated by the courts below

was implemented by the Board under this grant of

authority.

+

Respondents, plaintiffs below, are several unincorporated

associations of general contractors and subcontractors

engaged in the construction industry in San Francisco, as

well as a number of individual contractors and subcon-

tractors who work in the building and construction industry.

None of the plaintiffs is a “nonwhite owned business” as

that term is defined in the Board’s Affirmative Action

Policy.

The Affirmative Action Policy

In March 1977, the Board adopted an Affirmative Action

Policy to overcome the effects of past discrimination in the

awarding of District construction contracts. The policy was

predicated, inter alia, on the following findings made by

the Board:

(1) That hearings conducted by the Department of

Labor in San Francisco in 1970 revealed that “minority

workers have been prevented from fully participating

in the construction trades and that utilization of minority

subcontractors by contractors could significantly expand

the participation of minority craftsmen on projects of

federal construction contractors.” After these hearings,

the San Francisco Plan was implemented by the Depart-

ment of Labor setting minimum goals for participation

of minorities on federal contracts.

(2) That during the period January 1964 through

June 1975, minority contractors and subcontractors par-

ticipated in the performance of only 4.99% of the

$87,241,573 worth of school construction projects let in

San Francisco.

(3) That in the period July 1, 1975 through October

30, 1976—during which time the Board had a policy of

requiring a minimum of 25% minority participation in

School District contracts—minority contractors parti-

5

cipated in 33.4% of the total dollar amount of construc-

tion contracts let.

(4) That there exist in the City and County of San

Francisco competent and qualified minority contractors

and subcontractors able and willing to perform school

construction contracts, and “that the failure of minority

contractors and subcontractors to participate more fully

in the performance of school construction contracts has

resulted primarily from exclusion from participation

therein and discrimination based upon race, religion,

color, sex or national origin contrary to federal, state

and local laws.” (App. E, Exh. A, pp. 3-5).

Seeking to assure that the past discrimination which it

had found was “not perpetuated by the District’s con-

struction program,” the Board formulated an Affirmative

Action Policy which mandated that general contractors on

school construction projects over $100,000 “employ non-

white owned businesses for individual contract dollar

amounts which total at least 25% of the general contract

dollar bid.” A general contractor who submitted a bid not

meeting the 25% dollar participation goal was, under the

Board’s policy, deemed not to be a “responsible” bidder

under California’s “low bid” law. Calif. Educ. Code § 39640.

However, in such circumstances, the low monetary bidder

on a project was entitled to a hearing before the Board,

and the Board was authorized to award a contract not-

withstanding non-compliance if it determined. that the

contractor had “taken every possible measure to comply

{with the policy], or that it is not practicable in the best

interests of the District to require compliance in the spe-

cific case.” For purposes of the Affirmative Action Policy,

“nonwhite” was defined to include those “whose racial

ancestry is one, or a mix, of the following: Black, Asian,

Latin American, American Indian or any native Pacific

6

Island group. A person whosé ancestry is a mixture of

white and nonwhite will be considered ‘nonwhite’ if such

ancestry is one-quarter or more nonwhite.” (App. E, Exh.

A, pp. 5-10).

Prior Proceedings

Prior to the adoption of the Affirmative Action Policy

at issue here, the Board had since July 1, 1975, operated

a related program which also required a contractor who

wished to be considered “a responsible bidder” to grant

at least 25% of the dollar value of subcontract work to

“minority owned” businesses. On October 8, 1976, this

original program was challenged in a suit brought in dis-

trict court by various non-minority general and subcon-

tractors—respondents herein.’ The complaint alleged that

the program contravened the Fourteenth Amendment,

Title VII (42 U.S.C. § 2000e et seq.), and 42 U.S.C. §§ 1981

& 1983, as well as California’s “low bid” law, Educ. Code

§ 39640, which requires that contracts be awarded to the

“lowest responsible bidder”. The suit sought an injunction,

declaratory relief and damages.

On March 17, 1977, the district court issued a preliminary

injunction preventing the District and Board from con-

tinuing to follow the affirmative action policy then in

force. This injunction was based not on any of the grounds

urged by plaintiffs, but on the sole ground that the evi-

dence had failed to establish that the policy was the “will

of the Board established by Board action appropriate to

carry out that will.” (App. F, p. 8) Shortly after issuance

of this injunction, the Board formally adopted the Affirma-

tive Action Policy previously described.

‘Jurisdiction over the federal statutory and constitutional claims

was invoked pursuant to 28 U.S.C. §§ 1343(3) & (4). Since the

federal claims were substantial ones, the court also asserted pendent

jurisdiction over the state law issues.

7

On May 17, 1977, the district court issued an order pre-

liminarily enjoining the Board’s new policy. For the court

the critical question was not whether the Board’s purpose

in enacting the program was a proper one, but instead

whether the Board “ha[d] the legal authority” to do so.

Turning to what it perceived as the only conceivable source

of such authority, the “low bid” law, the court held that the

requisite legislative authorization for the policy was absent.

(App. E).

Intervenors thereafter moved for reconsideration on the

ground that the requisite authority for the policy was to

be found not in the “low bid” law, but in those state statutes

defining the powers of the District. The only relevance of

the “low bid” law was plaintiffs’ contention that it somehow

limited the powers of the Board to enact and implement

the challenged minority participation program. More, inter-

venors argued that if the “low bid” law were construed as a

limit on the Board’s power to eliminate the effects of past

discrimination, the statute was to that extent unconstitu-

tional. (C.T. 1593-95). On July 20, 1977, the court reaffirmed

its prior opinion holding that the “low bid” law did limit

whatever other powers the Board had to undertake affirma-

tive action. (App. C). Intervenors’ constitutional challenge

to the “low bid” law was left unanswered. Summary judg-

ment and a permanent injunction were then entered in

favor of plaintiffs.? (App. D).

*In July 1977, the Board’s application for federal public works

funds was approved, and the Board shortly thereafter formulated

a new minority dollar participation policy. The new policy also con-

tained a 25% minority dollar participation goal, but this goal only

applied to construction projects financed with federal funds. Plain-

tiffs, arguing that this new program violated the injunction, ini-

tiated contempt proceedings against the Board. The District Court

declined to hold the Board in contempt, and revised the permanent

injunction to allow a 10% minority dollar participation goal on fed-

erally funded projects. That ruling is not in issue here.

8

On February 11, 1980, the Ninth Circuit affirmed the deei-

sion of the district court.’ After reiterating and endorsing

the district court’s interpretation of the state “low bid” law

as a bar to the Board’s Affirmative Action Policy, the court

turned at length to the question of whether this interpre-

tation of the “low bid” law rendered it unconstitutional.

The court’s analysis of that question was premised upon

a perceived distinction between “the two major types of

positive governmental action taken on behalf of minori-

ties”: “reshuffle” programs and “stacked deck” programs.

The former, according to the court, do not involve the

granting or withholding of benefits to any individual on the

basis of “that person’s group status,” but simply serve to

ensure “that everyone in every group enjoys the same

rights in the same place.” “Stacked deck” programs, by con-

trast, are those in which the state “specifically favors mem-

bers of minorities in the competition with members of the

majority for benefits that the state can give to some citizens

but not to all.” School desegregation programs are the most

common type of “reshuffle” programs while affirmative

action programs fall into the “stacked deck” category.

(App. A, pp. 17-19)

The court then derived from the school desegregation

eases the principle that while in certain circumstances the

“state has an affirmative constitutional duty to use ‘reshuf-

fle programs to cure the effects of past or present de jure

*In an earlier opinion, the Ninth Circuit addressed only the ques-

tion of “whether or not the Board had the authority to adopt a 25%

minority dollar participation program.” Thereafter, the Board and

Intervenors petitioned for rehearing on the ground, inter alia, that

the Ninth Circuit’s opinion failed to address the constitutional is-

sues raised by appellants. That is, whether the low bid law, when

interpreted as a limit on the Board’s authority to undertake an

affirmative action program, was a constitutional exercise of state

legislative power. On February 11, 1980, the Ninth Circuit withdrew

its earlier opinion and substituted a second opinion. It is that latter

opinion which forms the basis for this petition.

9

segregation, “there is no constitutional duty to engage in

‘stacked deck’ affirmative action.” (App. A, pp. 20-21). In

the court’s view, the reason for the disparate constitutional

stature of the two remedies was that “ ‘stacked deck’ pro-

grams trench on Fourteenth Amendment values in ways

that ‘reshuffle’ programs do not.” (App. A, pp. 21-24). More,

the court observed that, “even if the argued-for constitu-

tional duty exists, it could not come into play until proper

findings were made of discrimination and the need for

affirmative action to-redress it.” And here the Board could

not possibly make such findings since the Legislature,

through the “low bid” law, had already reached, a priori,

the contrary conclusion.* (App. A, pp. 28-29, 39 n.14)

From the premise that the Board was not under a consti-

tutional duty to implement its Affirmative Action Policy, it

was a short step to the conclusion that the state’s “low bid”

law was a constitutionally permissible exercise of legisla-

tive authority. While prior cases had invalidated state stat-

utes which barred ce:tain types of remedial programs, the

Ninth Circuit read those cases to apply “only if the [pub-

lic] bodies had an affirmative constitutional duty which can-

not be effectively fulfilled because of the statute.” (App. A,

p. 86 n.13) Since the Board was under no constitutional

duty regarding its Affirmative Action Policy, the “low bid”

law could, constitutionally, undermine the validity of that

policy.

‘The court did acknowledge that “stacked deck” remedies have

been imposed by courts after making findings of past discrimi-

nation, but found the basis for such remedies to be the “broad

powers of equity” rather than any preexisting constitutional duty.

(App. A, pp. 24-26). Nor did the court accept the argument that

the Board was under a constitutional duty to continue its policy

once it became evident that the District’s affirmative action program

operated in practice to dispel discrimination. (App. A, pp. 32-34).

10.

REASONS FOR GRANTING THE WRIT

Petitioners submit that this case involves issues raised

but not resolved by several recent decisions touching on the

legitimacy of race-conscious remedies for past discrimina-

tion, and that the resolution of such questions here would

be an appropriate exercise of this Court’s jurisdiction. In

particular, this petition should be granted for the following

reasons:

1. Inlight of this Court’s repeated recognition that race-

conscious remedies play an important role in the elimina-

tion of discrimination and its effects, the Ninth Circuit’s

determination that a state is free, by statute, to bar affirma-

tive action programs—without regard to their precise

nature or the existence of prior findings of past discrimi-

nation—seriously threatens the viability of such programs.

Such a result is regrettable as a matter of constitutional

policy. More, it is dubious as a matter of constitutional law

given this Court’s prior decisions in cases such as North

Carolina Board of Education v. Swann, 402 U.S. 43 (1971)

and Chropowicki v. Lee, 402 U.S. 935 (1971).

2. The Affirmative Action Policy adopted by the San

Francisco Unified School District in this case was premised

upon explicit findings of discrimination in that District’s

school construction projects and the resistance of that dis-

crimination to previously implemented non-compulsory

anti-discrimination programs. In view of that record, pe-

titioners suggest that the District was not merely entitled,

but obliged, to take appropriate, race-conscious remedial

action to eliminate the existing pattern of discrimination

which it had identified. Indeed, the existence of such an

obligation would appear to follow from the principles ar-

ticulated in cases like Louisiana v. United States, 380 U.S.

145, 154 (1965) and Green v. County School Board, 391 U.S.

430, 437-38 (1968). Thus, the Ninth Circuit’s unequivocal re-

11:

jection of any constitutional duty to undertake affirmative

action even as a remedy for past discrimination is not only

appropriate for review, standing alone, but is made the

more appropriate by the fact that it also conflicts with the

position taken by the Sixth Circuit in Detroit Police Officers

Assn. v. Young, 608 F.2d 671, 691-92 (6th Cir. 1979). A peti-

tion for certiorari in Young was filed on January 10, 1980,

and remains pending. See No. 79-108¢

3. In Fullilove v. Klutznick, ...... US. ...... (1980), this

Court upheld a minority participation plan adopted by the

United States Congress to remedy the exclusion of mi-

nority-owned businesses from the construction industry.

That program is analogous in all material respects to the

program in issue here save that the latter was adopted not

by the Congress, but by a state agency charged, by law, with

the responsibility for constructing and maintaining school

facilities. The authority of an entity other than the United

States Congress to implement such a program is an im-

portant issue not resolved in Fullilove and expressly raised

by this case.

Petitioners submit that the issues noted above warrant

plenary review of the Ninth Cireuit’s decision. In addition,

the Court’s recent grant of certiorari in Minnick v. Cali-

fornia Dept. of Corrections, No. 79-1213 (cert. granted

July 2, 1980), may effect the appropriate disposition of

this petition. While the basis for certiorari in Minnick is

not entirely clear, that case appears to raise, among other

issues, the propriety of a race-conscious program adopted

by a state entity. It does so, however, against a record

devoid of findings of past discrimination such as supported

the affirmative action program in issue in the instant ease.

To the extent the absence of such findings emerges as criti-

cal to the validity of the program in Minnick, consideration

of this case either in conjunction with, or subsequent to,

12

Minnick may assist in defining the contours of that hold-

ing. At the very least, we submit that it would be appropri-

ate to hold this petition pending the decision in Minnick

and the disposition of the petition for certiorari in Detroit

Police Officers Assn. v. Young, supra.

I

The Petition Should Be Granted To Consider Whether A

State Constitutionally May Prohibit All Race-Conscious

Remedies For Prior Discrimination

Under the decision below, California’s so-called “low bid”

law flatly prohibits the District’s minority participation

program notwithstanding the Board’s findings of actual

discrimination in construction contracts let by the District

and the resistance of such discrimination to less-stringent

methods of redress. While it is perhaps unfair to charac-

verize the “low bid” law as “racially” motivated, there can

be no question that it deprives the Board of the most

effective,’ if not the only,° meaningful remedy for this identi-

fied discrimination. By upholding the constitutionality of

that law, the lower court acted contrary to decisions of this

Court holding that state laws which categorically prohibit

race-conscious remedies for past discrimination are invalid.

In North Carolina Board of Education v. Swann, 402

U.S. 43 (1971), this Court held that a North Carolina

statute which prohibited the busing of students on account

‘See Finding 1, (App. E, Exh. A, pp. 3-4), which indicates that

during the period in which the minority participation program was

in effect minority-participation increased from less than 5% to

33.4%.

°The Board had long attempted, through programs of voluntary

assurance to remedy the severe underutilization of minority-owned

businesses in District projects. The failure of these efforts is chron-

icled in the Board’s findings and elaborated ig the record before

the District Court. See Finding 3, (App. E, Exh. A, p. 2).

13

of race “or for the purpose of creating a balance or ratio

of race .. .” was unconstitutional because it interfered

with the ability of school authorities to remedy existing

patterns of discrimination within the district. Starting

with the premise that “state policy must give way when

it operates to hinder vindication of federal constitutional

guarantees,” the Court spoke in terms applicable to the

instant case:

The legislation before us flatly forbids assignment

of any student on account of race or for the purpose

of creating a racial balance or ratio in the schools.

The prohibition is absolute, and it would inescapably

operate to obstruct the remedies granted by the Dis-

trict Court in the Swann case. But more important

the statute exploits an apparently neutral form to

control school assignment plans by directing that they

be “color blind”; that requirement, against the back-

ground of segregation, would render illusory the prom-

ise of Brown v. Board of Education, 347 U.S. 483

(1954). Just as the race of students must be consid-

ered in determining whether a constitutional viola-

tion has occurred, so also must race be considered

in formulating a remedy. To forbid, at this stage, all

assignments made on the basis of race would deprive

school authorities of the one tool absolutely essential

to fulfillment of their constitutional obligation to

eliminate existing dual school systems.

Similarly, the flat prohibition against assignment

of students for the purpose of creating a racial bal-

ance must inevitably conflict with the duty of school

authorities to disestablish dual school systems. As we

have held in Swann, the Constitution does not compel

any particular degree of racial balance or mixing, but

when past and continuing constitutional violations are

found, some ratios are likely to be useful starting

14

points in shaping a remedy. An absolute prohibition

against use of such a device—even as a starting point

—contravenes the implicit command of Green v.

County School Board, 391 U.S. 430 (1968), that all

reasonable methods be available to formulate an effec-

tive remedy.

402 U.S. at 46-47.

At the very least, Swann compels the conclusion that

a state law which operates to limit the remedies available

to ameliorate the effects of identified past constitutional

or statutory violations is itself unconstitutional. Petitioners

submit that the “low bid” law, like the anti-busing statute

in Swann, constitutes just such an effort by the legislature

to interdict the use of a particular remedy, and thus can-

not be sustained.

The only conceivable sense in which the instant case

and Swann differ is that in Swann the underlying findings

of past discrimination were made by the District Court

whereas here the School District itself identified the past

wrongful conduct which it then sought to remedy. Prior

decisions of this Court, however, clearly establish that

judicial findings of past discrimination are not a required

predicate for the imposition of race-conscious remedies.

See, e.g., McDaniel v. Barresi, 402 U.S. 39 (1971). Indeed,

Justice Powell noted in his separate opinion in Bakke

that preferential remedies had been approved when sup-

ported by judicial, legislative, or administrative findings

of constitutional or statutory violations. 438 U.S. at 300-

302. And the opinion of Justices Brennan, Marshall, White

and Blackman in that case highlighted the self-defeating

nature of any requirement that judicial findings are neces-

sary to support imposition of race-conscious remedies:

15

[T]he requirement of a judicial determination of a

constitutional or statutory violation as a predicate for

race-conscious remedial actions would be self-defeat-

ing. Such a requirement would severely undermine

efforts to achieve voluntary compliance with the re-

quirements of law. And, our society and jurisprudence

have always stressed the value of voluntary efforts

to further the objectives of the law. Judicial inter-

vention is a last resort to achieve cessation of illegal

conduct or the remedying of its effects rather than

a prerequisite to action.

438 U.S. at 364. See also, Swann v. Charlotte Mecklenburg

Board of Education, 402 U.S. 1, 16 (1971) (“Judicial

authority enters only when local authority defaults.”).

The significance of the Ninth Cireuit’s departure from

the principles articulated in Swann (and like cases’) is

surely evident. If it is open to a state, or local, legislature

to prohibit affirmative action even where—as here—there

exists an identified and on-going pattern of racial exclusion,

the ability to undertake affirmative action programs will

be seriously undermined. This is likely to be true not only

of local government programs, such as the District policy

in issue here, but of voluntary private programs as well.

For example, the type of program upheld in Weber® would

seemingly be subject, under the Ninth Cirecuit’s view, to

restriction by state or local legislation forbidding such

“affirmative action”. Petitioners submit that such a sig-

nificant limitation on constitutional prerogatives only

recently recognized should not be accepted without careful

review by this Court.

"See, e.g., Chropowicki v. Lee, 402 U.S. 935 (1971); Borders vo.

Rippy, 247 F.2d 268 (5th Cir. 1957).

*443 U.S. 193 (1979).

16

II

The Petition Should Be Granted To Consider the Existence

of a Constitutional Duty to Engage in Affirmative Action

As A Remedy for Past Discrimination and to Resolve the

Conflict on that Question Between the Sixth and the

Ninth Circuits

Certiorari should also be granted to consider the nature

and extent of a non-judicial entity’s obligation to eliminate

the effects of past discrimination which it has identified.

While this precise issue has never been directly considered

by the Court, the novel distinction drawn in the decision

below between so-called “reshuffle” and “stacked deck”

remedies constitutes a major departure from prior deci-

sions. Moreover, the opinion below is directly contrary on

this point to the recent decision of the Sixth Circuit in De-

troit Police Officers Association v. Young, 608 F.2d 671,

691-92 (6th Cir. 1979), petition for certiorari pending, No.

79-1080.

Prior to the decision below, it seemed well-established in

discrimination cases that, once a constitutional or statutory

violation had been identified, “courts ha[ve] not merely the

power but the duty to render a decree which will so far as

possible eliminate the discriminatory effects of the past

as well as bar like discrimination in the future.” Louisiana

v. United States, 380 U.S. 145, 154 (1965) (emphasis sup-

plied). See also, e.g., Green v. County School Board, 391

U.S. 480, 488 (1968) (School Boards have an “affirmative

duty” to “take whatever steps might be necessary” to elim-

inate racial discrimination) ; McDaniel v. Barresi, 402 U.S.

39, 41 (1971). Nor is this principle limited to school desegre-

gation litigation. Discrimination cases in other areas have

established that the constitutional duty to remedy past

discrimination includes the obligation to employ race-

17

conscious remedies if necessary “to make [the victims]

whole for injuries suffered on account of” past statutory

or constitutional violatious. Regents of the Univ. of Cali-

fornia v. Bakke, 488 U.S. 265, 301 (1978) (opinion of

Justice Powell), quoting Albemarle Paper Co. v. Moody,

422 U.S. 405, 418 (1975). :

In addition, Bakke, Weber and, most recently, Fullilove,

seem to make it clear that the authority to remedy past

discrimination extends not merely to the courts but also to

other legislative and administrative bodies.

From these two lines of cases, it would appear to neces-

sarily follow that once a government agency has identified

discrimination in areas of its legal responsibility,’ that

entity is not merely permitted, but required, to take what-

ever action is appropriate to remedy effectively the unlaw-

ful exclusion. Certainly that was the conclusion reached

by the Sixth Circuit in Detroit Police Officers Association

v. Young, supra, where the court rejected the contention

that an affirmative action plan implemented by the Detroit

Police Department violated 42 U.S.C. § 1981 on the ground

that “the constitution not only permits but requires race-

conscious action to remedy a constitutional violation.” 608

F.2d at 691-92 (emphasis added). Indeed, it would seem

*Lest there be any question on this point, the Board was affirma-

tively charged by state law with undertaking all school district con-

struction projects, including the letting of contracts therefor, and

the determination of the terms and conditions of such contracts. See,

e.g. Calif. Educ. Code §§ 35160, 35270, 39170, 39172 & 39173; Hall

v. City of Taft, 47 Cal.2d 177, 184-85, 302 P.2d 574 [1956]; Berkeley

Unified School District v. James I. Barnes Constr. Co., 112 F.Supp.

396, 399 [N.D. Cal. 1953]. Thus, to the extent that such contracts

resulted in the unlawful exclusion of minorities, the responsibility

therefor—as well as the duty and ability to eradicate the discrimi-

nation—lay with the District and its governing Board.

18

incongruous to suggest that a non-judicial entity (such

as the Board here), having found that minority businesses

were being unlawfully excluded from its school construction

projects, is under no duty to remedy that exclusion by

whatever means may be necessary to do so.*® Since a court

would be required" to impose such a remedy once a viola-

tion were shown, it would seem entirely inconsistent with

the principles of fashioning effective relief and of reducing

the need for litigation in favor of voluntary solutions, to

hold that a non-judicial entity’s obligation to eliminate

discrimination is significantly more restricted than that of

a court.

That is, however, the effect of the distinction between

“reshuffle” and “stacked deck” programs drawn by the

Court of Appeals here. That distinction creates a hitherto

unrecognized difference between types of remedies and con-

signs affirmative action (which is, effectively, what is meant

by the Ninth Circuit’s antagonistic euphemism “stacked

deck”) to some jurisprudential purgatory. Nothing in this

Court’s race discrimination decisions suggests the pro-

°And, as a corollary, that it may therefore be prohibited by state

law from taking such action. See Section I of this Petition, supra.

"The decision below appears not even to accept the proposition

that courts have a constitutional obligation to vindicate the rights of

the victims of discrimination through imposition of race-conscious

remedies when necessary. While the Ninth Circuit acknowledges

that such remedies have sometimes been mandated by the judi-

ciary, it finds their basis not in any underlying constitutional duty,

but in the “equitable” powers of the courts. (App. A, pp. 24-26).

Admittedly, their equitable powers permit the courts flexibility in

shaping remedies, but not until the decision "selow had these pow-

ers been perceived as allowing courts to require of litigants what the

Constitution does not.

19

priety of that distinction.’* To the contrary, it has previ-

ously been considered well-established that the scope of the

constitutionally required remedy is determined in each case

“by the nature and extent of the ... violation,” Milliken v.

Bradley, 418 U.S. 717, 744 (1974).

The net result of the lower court’s holding is to render

illusory the efforts of local agencies such as the Board

here effectively to eliminate racial discrimination. To se-

cure effective relief under the decision below, it would be

necessary for the victims of the discrimination to bring

litigation so that a court might discharge its obligation

to impose an effective, race-conscious remedy for the unlaw-

ful conduct.

Petitioners thus submit that the Ninth Circuit’s departure

from established doctrine in this area in an unfortunate

one not only because of the results in this particular case,

but also because it creates an unwarranted jurisprudence

of “remedies” in race discrimination litigation. In view both

of that fact and the conflict between the decision below and

the Sixth Circuit’s position in Young, supra,” petitioners

submit that the issue is of sufficient importance to justify

review by this Court.

*2Both the “reshuffle” and “stacked deck” labels implicitly assume

that the initial “deck” was a full one which only requires further

shuffling or rearranging. However, with discrimination like that at

issue here, the assumption that one starts with a full deck is simply

not correct. Minority contractors were excluded from the deck and

what is required is neither “reshuffling” nor “stacking” it, but instead

simply returning to the deck those cards (contractors) impermis-

sibly excluded. By referring to this process of making the deck com-

plete as “stacking” it—the court not only misconceives the nature of

the underlying discrimination but also gives an illicit connotation

to the remedy.

“The contrary conclusion regarding the existence of a constitu-

tional duty reached in Young was expressly considered and rejected

by the Ninth Circuit. See App. A, p. 24, n.9.

C 20

III

The Petition Should Be Granted to Consider the Authority

of Governmental Entities Other Than Congress to Adopt

Race-Conscious Remedies For Past Discrimination

In Fullilove v. Klutznick, supra, this Court upheld the

constitutionality of an affirmative action plan implemented

by Congress for the express purpose of remedying past

discrimination which it had identified. Because the program

upheld in Fullilove was adopted by Congress, however, the

Court’s holding necessarily created a further question as to

how the principles articulated in that case would be ap-

plied to preferential programs implemented by other gov-

ernmental entities.“ The instant case expressly presents

that issue and does so in a context which will allow the

Court to resolve it with a maximum of clarity and

precision.

Indeed, it is probably fair to say that, with the exception

of the party responsible for adopting the program, the

Minority Business Enterprise Program considered in Fulli-

love and ‘he Board’s Affirmative Action Policy in issue

here are substantially identical in all other relevant par-

ticulars."° Both programs were predicated upon findings

44Justice Powell, in his concurring opinion in Fullilove, made

these concerns explicit:

“My view that this set-aside is within the discretion of Con-

gress does not imply that other methods are unavailable to

Congress. Nor do I conclude that use of a set-aside always will

be an appropriate remedy or that selection of a set-aside by any

other governmental body would be constitutional. See Bakke,

438 U.S. at 309-310. The degree of specificity required in the

findings of discrimination and the breadth of discretion in the

choice of remedies may vary with the nature of a governmental

body.” .... U.S. .... (1980).

*°The only other arguable distinction is that the Board’s program

contemplated a 25% set-aside vs. the 10% in issue in Fullilove.

However, this distinction does not bear at all upon the authority

of the enacting body to undertake the program.

21

of past discrimination against minority owned businesses

in the construction industry. Both were intended to redress

that discrimination and both chose a specific minority set-

aside as the most appropriate vehicle to accomplish that

end. Thus, the only question left unanswered is whether the

Board shares with Congress the authority to implement

such a program.

This issue is seemingly also presented by Minnick v.

California Dept. of Corrections, supra, and, perhaps less

clearly, by Detroit Police Officers Ass’n v. Young, supra.

However, the record in Minnick evidently contains no ex-

press findings of prior discrimination, thus making it un-

likely that the case will permit the Court to consider fully

the nature or specificity of the findings necessary to sustain

a race-conscious remedial program. Similarly, the compli-

cated factual setting in Young as well as the fact-specific

questions presented in that petition may obscure the gen-

eral question—left open in Fullilove—of who other than

Congress possesses the authority to adopt affirmative action

programs.

Petitioners submit that it may well be appropriate for

this Court to treat this case together with Minnick. At

the very least, we submit that it should be held pending

disposition of that case and the certiorari petition in

Young.

22

CONCLUSION

For the foregoing reasons, this petition should be granted.

Dated: August 18, 1980.

Respectfully submitted,

STEPHEN V. Bose

Attorney for Petitioners

Rosert A. RosENFELD

Heuer, Exrman, Waite & McAuLirre

Of Counsel

(Appendices Follow)

Appendices

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ASSOCIATED GENERAL CONTRAC-

TORS OF CALIFORNIA, et al.,

Plaintiffs-

Appellees,

VS.

SAN FRANCISCO UNIFIED

SCHOOL DISTRICT; SAN

FRANCISCO BOARD OF

EDUCATION, et al.,

Defendants,

and,

NATIONAL ASSOCIATION OF

MINORITY CONTRACTORS and

MINORITY CONTRACTORS

ASSOCIATION OF NORTHERN

CALIFORNIA,

Intervenors-

Appellants.

a oy

eee eee eee ee

No.

No.

No.

No.

77-2507

77-2750

77-3124

77-3764

Appeal from the United States Dis-

trict court for the Northern District of

California.

Before CHOY and HUG, Circuit Judges,

and RICHEY, District Judge.—/

CHOY, Circuit Judge:

Associated General Contractors (AGC)

sued to challenge the “affirmative action

policy" adopted by the San Francisco Board

of Education (Board). Under the policy,

bidders for construction contracts let by

the San Francisco Unified School District

(School District) must be minority general

contractors or must utilize minority sub-

contractors for 25% in dollar volume of the

contract work .-/ AGC asserts that this

policy violates 42 U.S.C. §§ 1981 and 1983 and

a/ The Honorable Mary Anne Richey, United

States District Judge for the District of

Arizona, sitting by designation.

1/ The policy defines as a member of a

minority anyone who is not European or

apparently, of Semitic ancestry. See 431

F. Supp. at 856. There is no special pro-

vision for women.

the Fourteenth Amendment, and California

law as well.

The district court held that such a

set-aside for minority contractors on public

works was illegal, except as to projects

funded with federal money given on condi-

tion that 10% or more of the money would

go to minority contractors. We agree.

I. Statement of the Case

The Board of Education adopted a res-

olution in March 1977 finding a present

need for an affirmative action policy to

overcome the effects of past discrimina-

tion in the awarding of School District

construction subcontracts. The Board then

adopted the policy outlined above. It

applied to general contractors bidding on

all school construction projects worth over

$100,000. Relief from the policy was

available only when the Board was satisfied

~~

that an ineligible contractor had "taken

‘every possible measure to comply" with the

policy, or that it was "not practicable in

the best interests of the District to re-

quire compliance in the specific case."

The policy declared that noncomplying

contractors were not “responsible bidders”

under California Education Code § 15951

(now §39640). That statute requires school

construction contracts to be awarded to the

"lowest responsible bidder."

The district court enjoined the School

District from enforcing the policy, on the

ground that “responsibility” under the

state law referred only to a bidding con-

tractor's financial and physical ability

to do the work. The court forbade the

School District to award contracts to other

than the “lowest responsible bidder" merely

because the lowest bidder was of the wrong

a

parentage and refused to accede to the

School District's views on socially

desirable subcontracting. Associated

General Contractors v. San Francisco

Unified School District, 431 F. Supp. 854

(N.D. Cal. 1977) (refusing to dissolve

preliminary injunction; permanent in-

junction entered later).

At about the same time, the federal

government granted the School District

$8,000,000 in public works funds under

the Public Works Employment Act of 1977,

Pub. L. No. 95-28, 42 U.S.C. §§ 6701-6710,

which requires that the recipient entity

give "satisfactory assurance to the

Secretary [of Commerce] that at least 10

per centum of the amount of each grant

shall be expended for minority business

enterprises," 42 U.S.C. § 6705(f£)(2).

The Board then adopted a second

affirmative action policy, nearly identical

-5-

to the first (including a minority set-

aside of 25% rather than the federally-

required minimum of 10%) except that it

applies only to projects financed with

Public Works Employment Act funds.

AGC applied for a contempt order to

vindicate the earlier injunction. The

district court dismissed the proceeding

without prejudice. However, it issued an

order changing the Board's 25% minority

participation requirement on federally-

aided projects to a 10% requirement.

The court then modified its earlier

injunction so as not to prohibit the new

policy, as altered.

The intervening Minority Contractors

appeal from the entry of the permanent

injunction against the first affirmative

action policy; the School District and

the Board appeal from the reduction from

25% to 10% of the set-aside in projects

funded through the Public Works Employment

Act.

II. Issues

This appeal raises five issues:

(1) whether the district court had

jurisdiction to test under state law the

validity of the Board's policy; (2)

whether the manner in which the court

reduced the set-aside on Public Works

Employment Act projects violated due

process; (3) whether California Education

Code § 39640 prohibits the Board's

affirmative action policy; (4) if state

law does prohibit it, whether the state

law is unconstitutional as applied to do

so; and (5) if the affirmative action

policy is not prohibited by any valid

state law, whether the policy itself

violates the Constitution.

A. Jurisdiction

The district court had jurisdic-

tion to enter its injunction and order.

AGC's attacks on the set-aside policy

based on the Fourteenth Amendment and 42

U.S.C. §§ 1981 and 19832/ are substantial

federal claims -- so substantial that the

Supreme Court has agreed to hear similar

claims this term in Fullilove v. Kreps,

584 F.2d 609 (2d Cir. 1978), cert.

granted sub nom. Fullilove v. Kluztnick,

441 U.S. 960, 99 S. Ct. 2403, 60 L. Ed.

24 1064 (1979). Thus 28 U.S.C. § 1331

provided jurisdiction over the federal

claims. The district court also had

pendent jurisdiction over the state-law

EE TT

2/ The School District is a political

subdivision of the State of California,

not of any city or county. Therefore, it

clearly is a "person" subject to §§ 1981

and 1983.

question whether the Board had authority

under state law to adopt and enforce its

affirmative action policy. See Hagans v.

Lavine, 415 U.S. 528, 536, 94 S. Ct.

1372, 1378, 39 L. Bd. 2d S77 (1974).

And, as it did here, the district court

could properly deal with the state

question first, particularly when

that course avoided a very difficult

constitutional question (the Fullilove

question). See id. 543, 94 S. Ct. at

1382.

B. Due Process

The School District and the Board

are the only parties appealing the

district court's downward revision of the

minority set-aside in the second affirma-

tive action policy (relating to federally-

funded projects). They originally

complained that the manner in which this

un

was done deprived them of their due

process rights to notice and opportunity

to be heard. However, in their reply

brief they explicitly "abandoned and

dismissed that portion of this appeal

which... [a]lleges denial of due

process on hearing In Re Contempt."

Even if we did not hold them to this

waiver, we would find no due process

violation. The effect of what the

district court did was to create an

exception to the injunction, not to

broaden its coverage. The illegality of

a 25% set-aside, to the extent not

required by federal law, was law of the

case; extensive reargument was not

required.

C. Authority Under State Law

The district court held that under

state law the affirmative action program

-~10-

was void because the Board had no authority

to adopt it. A federal court's role in

such a case is to give state laws the

construction it believes the highest

state court would give them. In this

inquiry we give substantial deference to

the opinion of a district court sitting

in the state. Lewis v. Anderson, 615

F.2d 778, 781 (9th Cir. 1979); Smith v.

Sturm, Ruger & Co., 524 F.2d 776, 778

(9th Cir. 1975). We agree with the

district court.

The authority of school boards in

California derives from California

Education Code § 35160, which authorizes

the adoption of any program that is not

in conflict with the purposes for which

school districts are established and "is

not in conflict with or inconsistent

with, or preempted by, any law."

ao Pim

Because the Board's affirmative

action program conflicts with California

Education Code § 39640, we hold that §

35160 does not authorize it. Section

39640, the “low bid law," reads:

The governing board of any school

district shall let any contracts

involving an expenditure of more

than eight thousand dollars ($8,000)

for work to be done or more than

twelve thousand dollars ($12,000)

for materials or supplies to be

furnished, sold, or leased to the

district, to the lowest responsible

bidder who shall give such security

as the board requires, or else

reject all bids. This section

applies to all materials and supplies

whether patented or otherwise.

While no California court has considered

the issue whether a school board may

adopt a program such as the one at issue

here consistent with § 39640, the California

Supreme Court has circumscribed the

meaning of “lowest responsible bidder" in

another context.

=t2=

In Inglewood-Los Angeles County

Civic Center Authority v. Superior Court,

7 Cal. 3d $61, 500 P.2d 601, 103 Cal.

Rptr. 689 (1972), the court held that

California Government Code § 25454, a

statute requiring that counties award

public contracts to the “lowest responsible

bidder," did not embody a concept of

"relative superiority" which would allow

the county to award the contract to the

next-to-lowest bidder because he was

"more qualified" than the lowest bidder.

The court said, “a contract must be

awarded to the lowest bidder unless

it is found that he is not responsible,

i.e., not qualified to do the particular

work under consideration." 7 Cal. 3d at

867, 500 P.2d at 604, 103 Cal. Rptr. at

692 (emphasis added.) Cf. Raymond v.

Fresno City Unified School District,

=33-

123 Cal. App. 2d 626, 267 P.2d 69 (1954)

(board could consider poor workmanship on

previous job in deciding whether plaintiff

was “lowest responsible bidder" under

predecessor of § 39640); West v. Oakland,

30 Cal. App. 556, 159 P. 202 (1916) (city

could consider “quality, fitness, and

capacity to the particular requirements

of the proposed work" under a city

charter provision requiring public

contracts be awarded to "lowest responsible

bidder") .2/

——— a

af Compare Department of General

Services v. Superior Court, 85 Cal. App.

3d 273, 147 Cal. Rptr. 422 (1978), which

involved a special statute exempting

certain work on the state capitol from

the “lowest responsible bidder" require-

ment but subjecting it to "competitive

bidding." The contract-letting body

adopted an affirmative action program

much like the one in the present case.

The court of appeal vacated summary

judgment for the “majority” contractors

and remanded for a determination of

whether or not proper findings had been

made.

= tga

We do not think that the California

Supreme Court would construe the term "lowest

responsible bidder" as used in Education Code

§ 39640 differently from the construction it

gave the same language in Inglewood; the

statutes are virtually identical. Therefore,

we hold that § 39640 must be construed to

prohibit the Board from considering any factor

other than the amount of the bid, the minimum

qualifications bidder as to financial ability

and skills to complete the job successfully,

and the quality of the bidder's past work. 4/

ee a

4/ In Bakke v. Regents of the Univ. of

Calif., 18 Cal. 34°34, 553 P.2d 1152, 132

Cal. Rptr. 680, (1976), aff'd in part and

rev'd in part, 438 U.S. 265, 98 S. Ct.

2733, 57 L. Ed. 2d 750 (1978), the Califor-

nia Supreme Court showed itself un-

friendly to quota-type affirmative action

programs of state educational bodies. That

court recently has narrowly upheld a gov-

ernmental quota-type affirmative action

hiring program, where the minority under-

representation was due to the government

[FOOTNOTE CONTINUED ON FOLLOWING PAGE}

=1S=

D. Constitutionality

Appellants argue that if the low bid

law prohibits the Board's policy, the law is

unconstitutional as applied.

[FOOTNOTE CONTINUED FROM PREVIOUS PAGE]

entity's own past discrimination. Price v.

Civil Serv. Comm'n. _ Cal. 3d 604

P.2d 1365, 161 Cal. Rptr. 475 (1980).

Since the School District itself has not

been guilty of past discrimination, we

think the California Supreme Court would

not be inclined to authorize the Board's

affirmative action program; instead, we

think the court would strictly construe

the low bid law, forbidding the program.

We would not deny that under Califor-

nia law a school board may require a

bidder to agree not to violate antidis-

crimination laws. See 42 Cal. Op. Atty.

Gen. 169, 171 (1963). The Board's

affirmative action policy is not a state

or federal statute, however, but merely

represents the Board's beliefs on a

controversial social question. Refusal

to accede to such beliefs is not a

ground, under California law, for exclusion

from public contracts. See 57 Cal. Op.

Atty. Gen. 574 (1974) (attempt to bar

non-union shops from bidding on state

printing contracts).

-16=

Ve Duty of Affirmative Action

a. United States Constitution

Appellants boldly claim that the

Constitution imposes upon the School District a

legal duty to take affirmative action to remedy

the effects of past discrimination, and that any

state law that prevents such action therefore

violates the Supremacy Clause.

We think it is useful and necessary

to distinguish between the two major types of

positive governmental action taken on behalf of

5 /

minorities.— First, there are “reshuffle”

programs, in which the state neither gives to nor

withholds from anyone any benefits because

of that person's group status, but rather ensures

that everyone in every group enjoys the same

5/ We do not include in either category

those laws which command the state to

take no action that discriminates against

minorities. E.g. 42 U.S.C. §§ 1981-1983.

o{7=

6/

rights in the same place.— The most

common examples are school desegregation

cases and programs.

Second, there are "stacked deck"

programs, in which the state specifically

favors members of minorities in the

competition with members of the majority

for benefits that the state can give to

7/

some citizens but not to all.— This

category includes affirmative action

—_—_— SS

6/ E.g. McDaniel v. Barresi, 402 U.S.

39,.91 S&S. Ct. 1287, 26 Le. BG. 24, 582

(1971) (school desegregation); Zaslawsky

v. Board of Education, 610 F.2d 661 (9th

Cir. 1979) (teacher assignment); cf.

Reynolds v. Sims, 377 U.S. 533, 84 S. Ct.

1362, 12 L. Ed.2a 506 (1964) (legislative

reapportionment required by “one person,

one vote" standard).

7/ We use the term "Stacked deck" to

connote that one contestant has been

given a better than-equal chance to win.

We do not intend by the use of this term

to suggest that all such programs are bad

or illegal. It might well be permissible

[FOOTNOTE CONTINUED ON FOLLOWING PAGE}

-18-

programs of both the quota and "positive-

factor" varieties?/ (but not programs

that merely encourage more minority

persons to apply for state-conferred

benefits).

es ae ee ee ee

[FOOTNOTE CONTINUED FROM PRECEDING PAGE]

for the state to stack the deck when one

player is a novice taking on an expert,

or when one player has only a few chips

because the deck has been stacked in

favor of his opponent for years. On

the other hand, even if one stacks the

deck for reasons that are virtuous,

remedial, or beneficial in the long

run, one cannot analyze the situation

without admitting the reality that the

deck is now stacked.

The term "reshuffle" suggests both

the physical interposition of the various

cards, and the creation of equality of

opportunity for the players by the

elimination of an unfair stack.

8/ See e.g., Regents of the Univ. of

Calif. v. Bakke, 438 U.S. 265, 98 S. Ct.

2733 57 L. Ed. 2d 750 (1978), which struck

down a program that limited whites to 84%

or fewer of the positions in a medical

school class, but approved a program that

made a minority applicant's race one of

several positive factors that could be

considered in the admissions process.

-19-

It is well established that the

state has an affirmative constitutional

duty to use "reshuffle" programs to cure

the effects of past or present de jure

segregation. Brown v. Board of Education,

349 U.S. 294, 75 S. Ct. 753, 99 L. Ed.

1083 (1955) (Brown II); United States v.

Montgomery County Board of Education, 395

U.S. 225, 89 S. Ct. 1670, 23 L. EG. 2d

263 (1969) (faculty assignment); cf.

Dayton Board of Education v. Brinkman,

433 U.S. 406, 413, 97 S. Ct. 2766, 2772,

53 L. Ed. 2d 851 (1977) (no duty to

desegregate schools where cause is past

de facto segregation). Where such a duty

exists, remedies that merely avoid

further overt state discrimination are

inadequate if they fail to effect an

*

immediate reshuffle. Swann v. Charlotte-

Mecklenburg Board of Education, 402 U.S.

-20-

1, 91S. Ct. 1267, 28 L. Ed. 2a 554

(1971); Green v. County School Board,

391 U.S. 430, 88 S. Ct. 1689, 20 L. Ed.

2d 716 (1968).

On the other hand, there is no

constitutional duty to engage in "stacked

9/

deck" affirmative action.— In our

view, the reason for this is that

ee ee

9/ To the extent that the Sixth Circuit

has relied on "reshuffle" cases to find a

constitutional duty of states to take

“stacked deck" affirmative action to

eliminate the effects of past discrimina-

tion, see Detroit Police Officers' Assn. v.

Young, 608 F.2d 671, 691 (6th Cir. 1979).

Petition for cert. filed, U.S. ’

Be Cl. ’ L. Ed. 2d , 48

U.S.L.W. 3558 (U.S. Jan. 10, 1980) (No.

79-1080), we disagree.

Some cases uphold or impose "stacked

deck" affirmative action under federal

statutes such as Title VII of the Civil

Rights Act of 1964 and the Public Works

Employment Act of 1977; these cases

are irrelevant to our discussion of

constitutional duty.

[FOOTNOTE CONTINUED ON FOLLOWING PAGE]

ott

"stacked deck" programs trench on Four-

teenth Amendment values in ways that

"reshuffle" programs do not. For example:

[FOOTNOTE CONTINUED FROM THE PREVIOUS PAGE]

We also think that United Jewish

Organizations v. Carey, 430 U.S. 144, 97

S. Ct. 996, 51 L. Ed. 2d 229 (1977), is

not adverse to our position. There, the

Court upheld election redistricting,

undertaken to satisfy the Voting Rights

Act of 1965, that deliberately split a

Hasidic Jewish community between two

districts so as to assure uniform nonwhite

majorities in both districts. Although

no Justice's opinion commanded a majority

of the Court, it is clear that the

redistricting took race into account, was

intended to help nonwhites, and had the

effect of disadvantaging the "discrete

and insular" Hasidim. However, close

examination proves that this was just

another "reshuffle" case, because no

individual Hasid was placed in a district

that violated the one-person-one-vote

rule, and the petitioners denied that

there was a right to maintain permanently

in a single district the community's

bloc voting power, id. at 154 n.14, 97 S.

Ct. at 1004 n.14. It is well established

that competent agencies may take race

into account in "reshuffle" contexts.

=22e

(1) “Stacked deck" programs offer

the possibility that the official discrim-

ination is or may become invidious.

"Reshuffle" programs are inherently not

invidious.

(2) Ina “stacked deck" operation,

a scarce benefit goes to one individual,

while another individual is totally

deprived of it. "Reshuffle" programs not

only provide something to everyone, they

provide the same thing (e.g., education

in an integrated school) to everyone.

(3) In the short run, a "stacked

deck" program works wholly to the benefit

of certain members of one group, and

correspondingly to the harm of certain

members of another group. "Reshuffle"

programs theoretically provide some

benefits also to the whites, for their

exposure to the minorities is expected to

-23-

7

bring understanding and wisdom. See

Trafficante v. Metropolitan Life Insurance

Co., 409 U.S. 205, 93 S. Ct. 364,

34 L. Ed. 2d 415 (1972). But "stacked

deck" programs do not provide even

collateral benefits to the disadvantaged

whites.

(4) A “stacked deck" program

arguably deprives citizens of rights

(e.g., the right to make contracts, free

from racial discrimination; cf. 42 U.S.C.

§ 1981), whereas a "reshuffle" program

does not (e.g., no “right" to attend a

segregated school).

It is true that courts, after making

judicial findings of past or present

discrimination and a need for affirmative

action, have sometimes imposed "stacked

deck" affirmative action remedies

on public bodies for Fourteenth Amendment

=24~-

violations.12/ But the basis for such

remedies is the broad powers of equity,

not an initial duty of those bodies to

have undertaken affirmative action; it

10/7 E.g. Morrow v. Crisler, 491 F.2d

1053 (Sth Cir.) (en banc) (highway

patrolmen), cert. denied, 419 U.S. 895,

95 8. Ct. 173, 42 Le EG. 24 139 (1974);

Bridgeport Guardians, Inc. v. Bridgeport

Civil Serv. Comm'n, 482 F.2d 1333 (2d

Cir. 1973) (police); Pennsylvania v.

O'Neill, 473 F.2d 1029 (3d Cir. 1973) (en

banc: equally divided court) (police);

Carter v. Gallagher, 452 F.2d 315 (8th

Cir.) (en banc) (firemen), cert. denied,

406 U.S. 950, 92 S. Ct. 2045, 32 L. Ed.

2d 338 (1972).

Note that these cases involve

police, fire, and highway patrol depart-

ments, that cannot perform effectively

unless the public accords them cooperation

and goodwill. Cooperation is unlikely

if the public views them as symbols of

discrimination. Thus, there is an

interest in the immediate and visible

integration of those departments.

However, there is no special func-

tional value in a physical show of

integration in this case, which involves

the ownership of subcontracting firms in

school construction projects.

o28e

is not true that the substance of a

post-verdict remedy necessarily was

"constitutionally or legally required"

before verdict. United States v.

Montgomery County Board of Education, 395

U.S. 225, 236, 89 S. Ct. 1670, 1676, 23

L. Ed. 2d 263 (1969).

No authority impels us to find a

constitutional duty to take “stacked

deck" affirmative action. If the Supreme

Court believed that such a duty existed,

it surely would have said so in Regents

of the University of California v. Bakke,

438 U.S. 265, 98 S. Ct. 2733, 57 L. Ed.

2d 750 (1978). On the contrary, even the

Bakke dissenters admitted that a school

"is generally free, as far as the Consti-

tution is concerned, to abjure granting

any racial preferences in its admissions

program." Id. at 379, 98 S. Ct. at

=26-

2794 (Brennan J. dissenting). Similarly,

we think it significant that in all cases

in recent years where the permissibility

of "stacked deck" programs was sharply

attacked, no court has ventured to still

all the controversy by proclaiming that

not only is such affirmative action

permitted, it is actually required by the

Constitution.

There is no doubt that the enactors

of the Fourteenth Amendment did not

intend it to require “stacked deck"

affirmative action programs. Moreover,

it is difficult to understand how the

literal guarantee that "No State shall

» « « deny to any person within its

judisdiction the equal protection of the

laws" could require a state to disadvantage

one citizen and aid another in their

competition for a scarce benefit. And

o2F=

even acknowledging that courts have used

the general language of the Fourteenth

Amendment to import into it contemporary

theories of desirable social policy, we

decline to import into the Amendment a

"stacked deck" affirmative-action require-

ment. The pluses and minuses of "stacked

deck" programs are far too uncertain and

controversial for us to remove the

question from the legislative sphere

without grossly overstepping the appro-

priate limits of the judiciary in the

American system.

Therefore, because no precedent

suggests that the Fourteenth Amendment

creates a duty to engage in "stacked

deck" affirmative action, and no valid

reason appears for discovering within the

Amendment such a duty, we hold that no

such constitutional duty exists.

-28-

Moreover, even if the argued-for

constitutional duty exists, it could not

come into play until proper findings were

made of discrimination and the need for

affirmative action to redress it. Such |

findings were not and could not be made

in this case, as we show infra.

b. California Constitution

Nor is "stacked deck" affirmative

action required by the California Consti-

tution. It is true that Crawford v.

Board of Education, 17 Cal. 3d 280, 551

P.2d 28, 130 Cal. Rptr. 724 (1976), held

that school boards have an affirmative

duty under the state constitution to

take "reshuffle" affirmative action to

alleviate racial segregation in the

public schools, regardless of whether its

root cause was de facto or de jure

segregation or anything else. However,

=29u:

Crawford (1) confined itself to the

alleviation of disproportionate minority-

student enrollment in public school; (2)

refused to set numerical quotas even in

the “reshuffle" desegregation context;

and (3) did not authorize "stacked deck"

affirmative action in any context.

Therefore, there is no reason to think

that the California Constitution compels

school boards to engage in “stacked deck"

affirmative action geared to numerical

quotas, especially in areas other than

school enrollment.

Appellants assert that the affirma-

tive action program is necessary to

ensure equal educational opportunities

for minority students in vocational

work/study programs. While the lack of

opportunities in such programs is an

educational concern, the availability of

=30<

post-graduation employment is not.

Schools teach; what happens to the

graduates is the province of other

agencies. "The elimination of racial

discrimination in public schools is a

large task and one that should not be

retarded by efforts to achieve broader

purposes lying beyond the jurisdiction of

school authorities." Swann v. Charlotte-

Mecklenburg Board of Education, 402

U.S. 1, 22, 91S. Ct. 1267, 1279, 28 L.

Ed. 2d 554 (1971).

Besides, if the Board truly were

concerned with education, rather than

employment, its affirmative action policy

would merely compel contractors to offer

work experience to all vocational educa-

tion students, regardless of race.

Instead, the policy says nothing about

the education or hiring of any minority

aat~n

workers, student or non-student; its

concern is that employers be minority.

Even if the Board's policy might have the

effect of enhancing education opportunities

for minority students, we find that the

previous inequality was not so great, and

the ameliorative effect would not be so

pronounced, that the policy is con-

stitutionally compelled.

Co Irretractability

Appellants argue further that

once a program is proven in practice to

dispel discrimination, it is unconstitu-

tional to withdraw from it. By this

logic, even if the Board was not initially

compelled by the Constitution to adopt

its affirmative action policy, it is now

compelled to continue it.

Apparently, the Supreme Court's

position is that it is a constitutional

eo

violation for a school board to rescind

previous action if and only if the board

was under a constitutional duty to take

the action initially. Dayton Board

of Education v. Brinkman, 433 U.S. 406,

414, 97 S. Ct. 2766, 2772, 53 L. Ed. 2d

851 (1977). Because we hold that the

Board here had no constitutional duty to

adopt its affirmative action policy, the

Constitution does not forbid the Board to

return to its former race-neutral policy.

In support of their argument,

appellants cite only Ethridge v. Rhodes,

268 F. Supp. 83 (S.D. Ohio 1967). There

the state proposed to withdraw a require-

ment that contractors sign assurances

that they would not discriminate against

black workers. Given the state's knowl-

edge that this would result in only

whites being hired, the court properly

o33-

found unconstitutional state action. But

in this case no state agency is signalling

private parties that they may disregard

statutory antidiscrimination laws, so

V/

Ethridge is inapposite.—+

eee ee

11/ Similarly, state constitutional

provisions that have the effect of

repealing fair housing statutes are

prohibited by the United States Constitu-

tion because they are tantamount to state

encouragement of private discrimination.

Reitman v. Mulkey, 387 U.S. 369, 87 S.

Ct. 1627, 18 L. Ed. 2d 830 (1967); Hunter

v. Erickson, 393 U.S. 385, 89 S. Ct. 55/7,

21 L. Ed. 2d 616 (1969) (municipal equi-

valents). But here, the state retains

many laws forbidding private discrimination

against minority subcontractors and

generals, so to withdraw the affirmative

action policy would not be to encourage

discrimination. Also, in Reitman and

Hunter the Supreme Court was concerned

that anti-discrimination statutes were

being supplanted by pro-discrimination

constitutional provisions, which expressed

the basic policy of the state and could

not be repealed as easily as statutes

could. This factor is not present

here.

= Rin

Therefore, even though when the

Board's affirmative action policy was in

effect the percentage of subcontract

dollars won by minority firms rose to

33%, we hold that the Board has no

constitutional obligation to maintain the

policy.12/

Zs Power to Prohibit Affirmative

Action

Appellants argue that, even if

the affirmative action policy is not consti-

tutionally compelled, the state law pro-

hibiting it is nonetheless unconstitutional.

12/ The same result obtains under the

California Constitution. In Santa

Barbara School Dist. v. Superior Court,

13 Cal. 34 315, 530 P.2d 605, 118 Cal.

Rptr. 637 (1975), the California Supreme

Court upheld the repeal by initiative of

specific "racial balance" quotas for

public schools, on the ground that the

Constitution required only nonsegregation,

rather than any numerical quota.

Thus the quotas could be repealed even if

they had resulted in achieving the racial

ratios that they dictated.

-35~<

a. Legislative Incompetence

Per Se

Appellants first argue that

voluntary, local affirmative action

programs such as the one ie aes extremely

useful tools for eliminating the effects

of past discrimination and for raising

minorities to a position of economic and

sociological equality, and that therefore

it is per se unconstitutional for a state

to ban them.

Whether courts might think that

voluntary affirmative action should be a

favored policy is of no moment. There is

no constitutional duty for the state or

the Board to take affirmative action

here..3/ This holding would be

13/ The cases seem to indicate that

state statutes forbidding public bodies

to do something are unconstitutional per

[FOOTNOTE CONTINUED ON FOLLOWING PAGE]

-~36-

vitiated if on constitutional grounds we

denied the state the power to decide that

certain policies outweigh the policy of

affirmative action, and to enforce that

decision against the agencies it has

created. We decline to do so.

Appellants’ position boils down to

an assertion that if a state legislature

and a state agency disagree about the

[FOOTNOTE CONTINUED FROM PRECEDING PAGE]

se only if the bodies had an affirmative

constitutional duty which cannot be

effectively fulfilled because of the

statute. Thus, state statutes prohibiting

busing are unconstitutional only because

they remove from school boards the sole

or most effective way to fulfill their

duty to desegregate the schools via

"reshuffle" affirmative action. See

North Carolina State Bd. of Educ. v.

Swann, 402 U.S. 43, 45-46, 91 S. Ct.

1284, 1285-1286, 28 L. Ed. 2d 586 (1971);

San Francisco Unified School Dist. v.

Johnson, 3 Cal. 3d 937, 955, 479 P.2d

669, 680, 92 Cal. Rptr. 309, 320, cert.

denied, 401 U.S. 1012, 91 S. Ct. 1266, 28

L. Ed. 2a 549 (1971).

=37J=

wisdom of affirmative action, the agency

should prevail (if it is the entity in

favor of affirmative action). This

we cannot accept. The competent entity

in such a situation is always the legis-

lature, whose members are charged with

responsibility and accountable to the

people for such decisions. The Supreme

Court has insisted that "explicit

[legislative or Presidential] action,

especially in areas of doubtful constitu-

tionality, requires careful and purposeful

consideration by those responsible for

enacting and implementing our laws.

Without explicit action by lawmakers,

decisions of great constitutional import

and effect would be relegated by default

to administrators who, under our system

of government, are not endowed with

authority to decide them." Greene v.

-36@~

McElroy, 360 U.S. 474, 507, 79 S. Ct.

1400, 1419, 3 L. Ed. 2d 1377 (1959).

"Stacked deck" affirmative action,

the constitutionality and wisdom as

social policy of which are sharply

debatable, is precisely the kind of

policy decision in which legislatures

have the greatest advantage in competence

over local agencies such as school

boards. Therefore, we hold that it is

constitutionally acceptable for a legis-

lative determination to foreclose, as

it does in this case, the Board from

voluntarily adopting an affirmative

4/

, 1

action policy.

14/ Moreover, the contrary legislative

determination fatally undermines the

propriety of the Board's findings in

Support of its affirmative action policy.

However, the Supreme Court has held that

the quota-type affirmative action

[FOOTNOTE CONTINUED ON FOLLOWING PAGE}

-39-

b. Discriminatory Impact

Intent

Even if the low bid law is not

unconstitutional per se because it

removes the Board's authority under state

law to take “stacked deck" affirmative

action, it still must be tested under

Washington v. Davis, 426 U.S. 229, 96S.

Ct. 2040, 48 L. Ed. 2d 597 (1976).

[FOOTNOTE CONTINUED FROM PREVIOUS PAGE]

is unconstitutional where not supported

by "appropriate findings . . . made by

judicial, legislative, or administrative

bodies with competence to act." Regents

of the Univ. of Calif. v. Bakke, 438 U.S.

265, 325, 9S. Ct. 2733, 2766, 57 L. Ed.

2d 750 (Brennan, J. dissenting); accord,

id. at 307, 98 S. Ct. at 2757 (opinion of

Powell, J.). See also id. at 421, 98S.

Ct. at 2815 (Stevens, J., concurring

in the judgment) (interpreting the

federal legislative determination, Title

VI, to prohibit the University's voluntary

affirmative action program). The Board's

own (disqualified) findings are the only

ones supporting its policy. Therefore,

the low bid law effectively destroys

the Board's constitutional as well as

and

statutory authority to adopt an affirmative

action policy.

-40-

Under Washington, "a law, neutral on

its face and serving ends otherwise

within the power of government to pursue,

is [not] invalid under the Equal Protection

Clause simply because it may affect a

greater proportion of one race than of

another." Id. at 242, 96S. Ct. at 2049.

Even in cases involving so-called discrim-

inatory impact, “the invidious quality of

a law claimed to be racially discrimin-

atory must ultimately be traced to a

racially discriminatory purpose."

Id. at 240, 96 S. Ct. at 2048.

The requirement of California

Education Code § 39640 that school

construction contracts go to the “lowest

responsible bidder" obviously is on its

ate

face race-neutral .>/ Although the

low bid law may have a disproportionate

impact on minorities, this is not a case

where the disparity of a law's impact

"may fo. all practical purposes demonstrate

unconstitutionality because .. . the

discrimination is very difficult to

explain on nonracial grounds," thus

permitting an inference of discriminatory

purpose. See 426 U.S. at 242, 96 S. Ct.

at 2049. Nor, aS we understand it, has

the Board itself ever applied (or failed

to apply) the low bid law with an invidious

intent.

15/7 We need not decide whether a statute

explicitly singling out and prohibiting

affirmative action programs would be

facially neutral or would fall under the

doctrine of Hunter v. Erickson, 393 U.S.

365, 68 8. Ct. 357, 2) be BG. 24 616

(1969).

#4 2<

Obviously, when the low bid law was

passed in 1917, its purpose was not to

disadvantage racial minorities. It was

designed to protect the public fisec by

preventing public officials from awarding

contracts uneconomically on the basis of

special friendships. Cf. Miller v.

McKinnon, 20 Cal. 2d 83, 88, 124 P.2d 34,

37-38 (1942) (purpose of competitive

bidding on public contracts is to protect

taxpayers from corruption and prevent

waste of public funds.) Such friend-

ships might be based on mutual fondness,

bribery, political co-partisanship,

racial/ethnic affinity, or any combination

of these. It is highly unlikely that

minority contractors of that day were in

such positions of special friendship;

instead, such arrangements harmed the

racial outsiders. If anything, the

~43=

purpose of the low bid law was to help

such outsider contractors.

Therefore, the low bid law passes

the Washington v. Davis test, and must be

upheld.

E. Constitutionality of the Policy

Even if the Board's policy was

permissible under state law, or if the

state law that prohibited the policy was

unconstitutional, we would still have to

test the policy itself against the

standard of the United States Constitution

before we could reverse the district

court. Because of our disposition of the

other issues, we need not reach this one,

especially in light of the grant of

certiorari to Fullilove v. Kreps, 584

F.2d 600 (2d Cir. 1978), cert. granted

sub nom, Fullilove v. Klutznick, 441 U.S.

9600 99 S. Ct. 2403, 60 L. Ed. 2d 1064 (1979).

-44-

III. Conclusion

The Board lacked authority to adopt

its affirmative action policy because the

policy was inconsistent with the Califcrnia

low bid law. This application of the low

bid law is constitutional.

Our opinion of July 16, 1979, slip

op. at 2487, is withdrawn.

AFFIRMED.

-45-

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ASSOCIATED GENERAL CONTRAC-

TORS OF CALIFORNIA, et al.,

Plaintiffs-

Appellees,

vs.

SAN FRANCISCO UNIFIED

SCHOOL DISTRICT; SAN

FRANCISCO BOARD OF

EDUCATION, et al.,

Defendants,

and,

NATIONAL ASSOCIATION OF

MINORITY CONTRACTORS and

MINORITY CONTRACTORS

ASSOCIATION OF NORTHERN

CALIFORNIA,

Intervenors-

Appellants.

me eee ee ee ee ee

No.

No.

47-2507

77-2750

ASSOCIATED GENERAL CONTRAC-

TORS OF CALIFORNIA, et al.,

Plaintiffs-

Appellees,

vs. No. 77-3124

SAN FRANCISCO UNIFIED

SCHOOL DISTRICT; SAN

FRANCISCO BOARD OF

EDUCATION, et al.,

Defendants-

Appellants,

and No. 77-3764

NATIONAL ASSOCIATION OF

MINORITY CONTRACTORS, and

MINORITY CONTRACTORS

ASSOCIATION OF NORTHERN

CALIFORNIA,

ORDER

Intervenors.

meee eee ee eee eee ee ee

Before: CHOY and HUG, Circuit Judges,

and RICHEY,* District Judge.

The panel as constituted in the above

case has voted to deny the petition for

*/ The Honorable Mary Anne Richey,

United States District Judge for the

District of Arizona, sitting by desig- &

nation.

ete

rehearing and a majority of the panel has

voted to reject the suggestion for rehear-

ing en banc.

The full court has been advised of

the suggestion for rehearing en banc and

no judge of the court has voted to grant

rehearing en banc. F. R. App. P. 35(b).

The petition for rehearing is denied

and the suggestion for rehearing en banc

is rejected.

APPENDIX C

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ASSOCIATED GENERAL CONTRACTORS

OF CALIFORNIA; LATHING AND

PLASTERING CONTRACTORS ASSO-

CIATION, SAN FRANCISCO AND

SAN MATEO; PAINTING AND

DECORATING CONTRACTORS ASSOCIA-

TION OF SAN FRANCISCO, INC.; W.G.

THOMPSON; ARNTZ BROTHERS, INC.;

ARNTZ CONTRACTING COMPANY;

CAHILL CONSTRUCTION CO.;

CHRISTENSEN & FOSTER; DeNARDE

CONSTRUCTION; ENGSTRUM & NOURSE;

MARTINELLI CONSTRUCTION; PACIFIC

COMPANY; WILLIAMS & BURROWS and

FREDERICK MEISWINKEL, INC.,

Plaintiffs,

vs.

SAN FRANCISCO UNIFIED SCHOOL

DISTRICT; SAN FRANCISCO BOARD

OF EDUCATION; LEE S. DOLSON;

SAMUEL MARTINEZ; MRS. JAMES W.

ABRAHAMSON; Z.L. GOOSBY;

EUGENE HOPP; JOHN A. KIDDER;

and THOMAS A. REED,

Defendants.

et el cet et

No.

C-76-2244

SAW

NATIONAL ASSOCIATION OF MINORITY )

CONTRACTORS, and MINORITY )

CONTRACTORS ASSOCIATION OF )

NORTHERN CALIFORNIA, INC., )

)

)

)

Intervenors.

ORDERS ON MOTIONS, FINDINGS OF FACT,

CONCLUSIONS OF LAW AND JUDGMENT OF

PERMANENT INJUNCTION

Plaintiffs are unincorporated asso-

ciations of general contractors and sub-

contractors engaged in the building and

construction industry in San Francisco and

contractors and subcontractors so engaged.

Defendant San Francisco Unified School Dis-

trict (hereafter "District") is a duly or-

ganized public body consisting of the public

schools in San Francisco. Defendant San

Francisco Board of Education (hereafter

"Board") is the responsible governing body

of the District. Intervenors are National

Association of Minority Contractors and

Minority Contractors’ Association of North-

ern California, Inc.

On May 17, 1977, this Court granted a

preliminary injunction prohibiting the

Board from carrying out an Affirmative Ac-

tion Policy which, briefly stated, would

have required general contractors bidding

for school construction contracts to employ

nonwhite owned businesses for at least

twenty-five percent of the general contract

dollar bid. The details of the Policy are

set out in the Court's Memorandum and Order

of May 17, 1977.

The question then addressed was whether

the Board has the "legal authority to pro-

claim and carry out the Affirmative Action

Policy." Defendants and intervenors con-

tended that legislative authority to lay

down the Policy was granted by California

Education Code § 15591, now recodified as

a%

California Education Code § 39640, which

reads:

The governing board of any

school district shall let any con-

tracts involving an expenditure

of more than five thousand dollars

($5,000) for work to be done or

more than eight thousand dollars

($8,000) for materials or supplies

to be furnished, sold, or leased

to the district, to the lowest

responsible bidder who shall give

such security as the board re-

quires, or else reject all bids.

This section applies to all ma-

terials and supplies whether

patented or otherwise. (Emphasis

added.)

They argued that a bidder who would not

comply with the Board's Affirmative Action

Policy could not be deemed "responsible"

within the terms of section 39640. Plain-

tiffs, of course, disagreed. After ana-

lyzing all authorities cited by the par-

ties, the Court concluded that section

39640 does not empower the Board to enact

and carry out its Affirmative Action Policy.

oho

Defendants and intervenors now urge

reconsideration and move for summary judg-

ment. Defendants move alternatively for a

stay of enforcement of the preliminary in-

junction pending appeal. Plaintiffs coun-

termove for partial summary judgment and

entry of a permanent injunction in light

of the Order of May 17.

All but one of the authorities cited

and arguments made by defendants and inter-

venors have already been considered by the

Court and rejected. However, they now as-

sert that a statute, not previously cited

to the Court, grants the legislative au-

thorization which the Court had found

lacking. That statute, California Educa-

tion Code § 35160, states:

On and after January 1, 1976,

the governing board of any school ,

district may initiate and carry on

any program, activity, or may

otherwise act in any manner which

=5=

is not in conflict with or incon-

sistent with, or preempted by, any

law and which is not in conflict

with the purposes for which school

districts are established.

Defendants and intervenors now contend

that the question properly before the Court

is not that addressed in the Memorandum and

Order of May 17, i.e., whether section 39.40

authorizes the Board to adopt an Affirmative

Action Policy, but whether section 39640

limits the general power granted the Board

by section 35160. Having carefully consid-

ered their current arguments, the Court

concludes that the preliminary injunction

entered on May 17, 1977, should not be dis-

solved and that plaintiffs are entitled to

1/

summary judgment .—

1. All parties stipulated in open

court on July 7, 1977, that none had nor

could produce further evidence relevant to

any issue concerning the grant or denial

of a judgment of permanent injunction.

=6=

While section 35160 does give the

Board power to enact and carry out programs

not in conflict with any law, the Court

finds that the Affirmative Action Policy

is in conflict with the low bid law, sec-

tion 39640.

Section 39640 requires that the Board

award construction contracts to the "lowest

responsible bidder." Its plain purpose is

to conserve public funds. The Board may

not demand compliance with requirements in

conflict with the provisions of section

39640. See City of Inglewood v. Superior

Court, 7 Cal. 3d 861, 867, 103 Cal. Rptr.

689, 692-93, 500 P.2d 601, 604-05 (1972).

On May 17, 1977, the Court held that

the Board's Affirmative Action Policy

transcends the requirements of.section

39640. Because the Policy transcends those

requirements, it conflicts with that section

x

and, therefore, is not authorized by

section 35160. Section 35160 is not a

license to violate the requirements of

section 39640.

The choice between spending public

funds to try to remedy past racial discrim-

ination or to conserve those funds by

awarding construction contracts to the

lowest qualified bidder is not one open

to the Board. Section 39640 is a legis-

lative determination requiring the Board

to choose in favor of conserving public

funds.

All of the foregoing as well as the

Memorandum and Order entered on May 17,

1977, constitute the Findings of Fact and

Conclusions of Law of this Court in grant-

ing a permanent injunction against carrying

out defendants' Affirmative Action Policy.

IT IS THEREFORE HEREBY ORDERED that:

1. Defendants' and intervenors' mo-

tion for reconsideration of the Order of

May 17, 1977, is denied;

2. Defendants’ and intervenors' mo-

tion for summary judgment is denied;

36 Defendants' motion for a stay of

enforcement of the preliminary injunction

pending appeal is denied;

4. Plaintiffs’ motion for partial

summary judgment and entry of a permanent

injunction is granted;

or Defendants San Francisco Unified

School District and San Francisco Board of

Education, each of them, their officers,

agents, successors, deputies, servants and

employees, and all persons acting by,

through or under them or either of them or

by or through their order, or in active

concert or participation with them, are

-9-

hereby permanently restrained and enjoined

from requiring, directly or indirectly,

that any bidder, in order to be awarded a

construction contract as the general con-

tractor, must employ nonwhite owned busi-

nesses for at least twenty-five percent of

the general contract dollar bid and from

otherwise delineating requirements for bid-

ding which are in conflict with the provi-

sions of section 39640 of the California

Education Code.

6. This injunction does not preclude

defendants from requiring, as a condition

of bidding, that bidders agree to comply

with all applicable state and federal anti-

discrimination laws.

Dated: July 20, 1977

/s/ Stanley A. Weigel

Judge

= {Q—

ot

APPENDIX D

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

-_ ——s ————— — ao

ASSOCIATED GENERAL CONTRACTORS

OF CALIFORNIA; LATHING AND

PLASTERING CONTRACTORS ASSO-

CIATION, SAN FRANCISCO AND

SAN MATEO; PAINTING AND

DECORATING CONTRACTORS ASSOCIA-

TION OF SAN FRANCISCO, INC.; W.G.

THOMPSON; ARNTZ BROTHERS, INC.;

ARNTZ CONTRACTING COMPANY;

CAHILL CONSTRUCTION CO, ;

CHRISTENSEN & FOSTER; DeNARDE

CONSTRUCTION; ENGSTRUM & NOURSE;

MARTINELLI CONSTRUCTION; PACIFIC

COMPANY; WILLIAMS & BURROWS and

and FREDERICK MEI*SWINKEL, INC.,

Plaintiffs,

vs.

SAN FRANCISCO UNIFIED SCHOOL

DISTRICT; SAN FRANCISCO BOARD

OF EDUCATION; LEE S. DOLSON;

SAMUEL MARTINEZ; MRS. JAMES W.

ABRAHAMSON; Z. L. GOOSBY;

EUGENE HOPP; JOHN A. KIDDER;

and THOMAS A. REED,

Defendants.

eee eee ese eae ee eee

No.

C-76-2244

SAW

NATIONAL ASSOCIATION OF MINORITY )

CONTRACTORS, and MINORITY )

CONTRACTORS ASSOCIATION OF )

NORTHERN CALIFORNIA, INC., )

)

)

)

Intervenors.

JUDGMENT OF PERMANENT INJUNCTION

In accordance with the Orders on

Motions, Findings of Fact, Conclusions of

Law and Judgment of Permanent Injunction

of July 20, 1977, it is hereby

ORDERED, ADJUDGED and DECREED as

follows:

t Defendants San Francisco Unified

School District and San Francisco Board of

Education, each of them, their officers,

agents, successors, deputies, servants and

employees, and all persons acting by,

through or under them or either of them or

by or through their order, or in active

concert or participation with them, are

hereby permanently restrained and enjoined

_

from requiring, directly or indirectly, that

any bidder, in order to be awarded a con-

struction contract as the general contrac-

tor, must employ nonwhite owned businesses

for at least twenty-five percent of the

general contract dollar bid and from other-

wise delineating requirements for bidding

which are in conflict with the provisions

of section 39640 of the California Educa-

tion Code.

as This injunction does not pre-

clude defendants from requiring, as a con-

dition of bidding, that bidders agree to

comply with all applicable state and fed-

eral antidiscrimination laws.

Dated: July 20, 1977

/s/ Stanley A. Weigel

Judge

APPENDIX E

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

-—— -_——_ _

ASSOCIATED GENERAL CONTRACTORS

OF CALIFORNIA; LATHING AND

PLASTERING CONTRACTORS ASSO-

CIATION, SAN FRANCISCO AND

SAN MATEO; PAINTING AND

DECORATING CONTRACTORS ASSOCIA-

TION OF SAN FRANCISCO, INC.; W.G.

THOMPSON; ARNTZ BROTHERS, INC.;

ARNTZ CONTRACTING COMPANY;

CAHILL CONSTRUCTION CO.;

CHRISTENSEN & FOSTER; DeNARDE

CONSTRUCTION; ENGSTRUM & NOURSE;

MARTINELLI CONSTRUCTION; PACIFIC

COMPANY; WILLIAMS & BURROWS and

FREDERICK MEISWINKEL, INC.,

Plaintiffs,

VS.

SAN FRANCISCO UNIFIED SCHOOL

DISTRICT; SAN FRANCISCO BOARD

OF EDUCATION; LEE S. DOLSON;

SAMUEL MARTINEZ; MRS. JAMES W.

ABRAHAMSON; Z.L. GOOSBY;

EUGENE HOPP; JOHN A. KIDDER;

and THOMAS A. REED,

Defendants.

eee ee -——- - e—

meee eee

No.

C-76-2244

SAW

NATIONAL ASSOCIATION OF MINORITY

CONTRACTORS, and MINORITY

CONTRACTORS ASSOCIATION OF

NORTHERN CALIFORNIA, INC.,

Intervenors.

eee eee eee ee

MEMORANDUM AND ORDER

The plaintiffs fall into two classes:

(1) unincorporated associations of general

contractors and subcontractors engaged in the

building and construction industry in San Fran-

cisco and (2) contractors and subcontractors so

engaged. None of the plaintiffs is a "nonwhite"

owned business. Defendant San Francisco Unified

School District (hereafter "District") is a

duly organized public body consisting of the

public schools in San Francisco. Defendant San

Francisco Board of Education (hereafter "Board")

is the responsible governing body of the District.

Intervenors are two associations of minority

contractors, respectively, National Association of

a Qe

Minority Contractors and Minority Contractors'

Association of Northern California, Inc.

On March 17, 1977, this Court issued a

preliminary injunction preventing the District

and the Board from carrying out what was called

an Affirmative Action Policy. That so-called

policy required that a bidder, in order to

be awarded a construction contract as a general

contractor, utilize minority owned businesses for

no less than twenty-five percent of the base bid

amount, or that the bidder be a minority owned

business. The injunction was granted on the

sole ground that the evidence had failed to

establish that the so-called policy was "the will

of the Board established by Board action appropri-

ate to carry out that will."

On March 22, 1977, the Board, voting unani-

mously, took appropriate action to declare and

enforce a new and considerably different Affirma-

tive Action Policy. Based upon the adoption of

~~

the new Policy, the District and Board now move

for dissolution of the preliminary injunction.

Plaintiffs, of course, oppose.

At the hearing on the motion, all parties

stipulated to this effect: In deciding the

matter, the Court should pass upon the new

Affirmative Action Policy to the same extent

as if plaintiffs were moving to enjoin its

V/

enforcement .— Accordingly, the Court now

considers the new Policy and, in determining

whether or not the preliminary injunction

1/ This stipulation was made by the parties

and approved by this Court in the interest of

expeditious administration of justice. Absent

the stipulation, defendants would have been

entitled to dissolution of the injunction on the

ground that the present policy is, unquestionably,

that laid down by the Board. Then, the plaintiffs

would have had to have filed a new motion for a

preliminary injunction against enforcement of the

new policy, and the defendants would have had to

have filed their opposition to the new motion,

The stipulation enables the Court to decide,

without duplicative paperwork by the parties or

undue delay, the question as to whether or not a

preliminary injunction should be issued against

carrying out the new Policy.

a

should be dissolved, reaches its decision on the

same basis as if the issues were generated by

plaintiffs’ motion for a preliminary injunction

against carrying out the new Policy.

The Board action establishing it may be

2/

summarized as follows:=—

The Board found, inter alia, that in

1966 the San Francisco Supervisors adopted

an ordinance “requiring affirmative action

non-discrimination practices in the award of

all city contracts" and that, in 1968, the

Board adopted the provisions of that ordin-

ance "prohibiting discrimination in the

waned of contracts for and on behalf of the

San Francisco Unified School District." The

ere

2/ The entire Policy, contained in five type-

written pages, is appended as Exhibit A. Exhibit

A is an exact duplicate, without editing or

correction, of the Policy as certified to the

Court by the defendant Board and not challenged

by plaintiffs as to authenticity. The Court's

summary in text is greatly abbreviated.

oSe

Board made further findings showing that in

1975 it adopted and implemented a policy

read abies a 25% "minority participation

in the dollar amount of all contracts"

awarded by or on behalf of the Board and

that, aS a consequence, the percentage of

dollar amount awards to minority contractors

rose to 33.4% compared with 4.99% during a

prior period of over ten years. The Board

also found that competent and qualified

minority contractors and subcontractors are

ready, willing and able to perform school

construction contracts.

The Board's findings conclude with a

Statement to the effect that an effective

Affirmative Action Policy requires the Board

to act in a manner which will insure the

awarding of contracts "to the lowest responsi-

ble bidder whose bid is consistent with the

affirmative action policy" of the District.

aie

Based upon the foregoing and other

findings, the Board's Affirmative Action

Policy proceeds to declare its purposes and

goals to be these: (A) to assure that

competitive nonwhite business participation

corresponds with the present availability of

nonwhite firms seeking an opportunity to

compete for San Francisco School District

construction jobs on the same terms as white

business firms; (B) to overcome the historic

unwillingness of white business firms to

participate in joint business ventures with

nonwhite business firms; (C) to assure that

the effects of past discrimination against

nonwhite firms are not perpetuated by the

District's construction program; and (D) to

guarantee that the largest possible pool of

qualified contracting firms will be available

for competitive bidding on District construc-

tion projects.

The Board resolution then lays down

the following requirements:

General contractors bidding upon

school construction projects over

$100,000.00 will be required to employ

nonwhite owned businesses for individual

contract dollar amounts which total at

least 25% of the general contract

dollar bid. A general contractor

who submits a bid that does not meet

the 25% requirement will not be consid-

ered a responsible bidder and will not

be awarded the bid unless he establishes

at a hearing that he has taken every

possible measure to comply with the 25%

requirement.

If the low monetary bidder is found

not to have met the 25% nonwhite owned

business participation requirement, he

shall be informed and notified of the

=-8-

Opportunity for a hear .g to rebut any

finding of non-compliance and to

present evidence on his own behalf.

The Board may award a contract

notwithstanding non-compliance "where

the Board determines either that the

contractor has taken every possible

measure to comply, or that it is not

practicable in the best interests of

the District to require compliance in

the specific case."

The Board resolution defines a number

of terms including "nonwhite". "({A] nonwhite

person is a person whose racial ancestry 1s

one, or a imix, Of the following: Black,

Asian, Latin America, American Indian, or

any native Pacific Island group. A person

whose ancestry is a mixture of white and

nonwhite will be considered 'nonwhite,' if

such ancestry is one-quarter or more nonwhite.’

-—Yo

The good faith and good intentions of the

Board are not open to question. There is no

evidence to suggest that it had any purpose, in

laying down the Affirmative Action Policy, other

than the laudable one of curbing and correcting

racial discrimination which the Board found to

have been practiced with respect to nonwhite

owned subcontracting businesses. The Board's

purpose is manifestly based upon the premise --

requisite to the freedoms protected by our

Constitution -- that there be an end to racial

discrimination denying equality of economic

opportunity.

Plainly, then, the crucial legal question

here presented is not one of purpose. It is one

of power.

Does the Board have legal authority to

proclaim and carry out the Affirmative Action

Policy?

«16

As the law now stands, there is little doubt

that the State of California itself could require

compliance with an Affirmative Action Policy of

the kind here before the Court. The State could

also authorize school boards to declare and

effectuate such policies. Many decisions confirm

the power of state legislatures (and of other

governmental bodies authorized to establish

public policy) to mandate preferences for racial

minorities, when the mandate is based upon proper

findings of past discrimination against those

minorities. For example, the State of Massachu-

setts can require a contractor for publicly

funded construction work at Boston State College

to

", . » Maintain on his project,

which is located in an area in which there

are high concentrations of minority group

persons, a not less than twenty percent

ratio of minority employee man hours to

«tt<

total employee man hours in each job cate-

gory. . . -" Associated General Contractors

of Massachusetts, Inc. v. Altshuler, 490

Poa Be, .th: (ISG Cir. .1973)¢, cert. denied,

416 U.S. 957 (1974).

The underlying rationale of this and other

like decisions is well stated in the First

Circuit's Opinion written by Chief Judge Coffin.

Agreeing with Justice Harlan's famous observation

that the United States Constitution is colorblind,

Judge Coftin remarked:

It is by now well understood, however, that

Our society cannot be completely colorblind

in the short term if we are to have a

colorblind society in the long term. Atter

centuries of viewing through colored lenses,

eyes do not quickly adjust when the lenses

are removed. Discrimination has a way of

perpetuating itself, albeit unintentionally,

because the resulting inequalities make new

-12

Opportunities less accessible. Preferential

treatment is one partial prescription to

reniedy our society's most intransigent and

deeply rooted inequalities. 49U F.2d at

16.27,

a a ee ee

3/ Other cases in accord with Altshuler include:

Franks v. Bowman Transp. Co., 424 U.S 747 (1976),

permitting seniority relief for minorities;

Southern Iil. Builders Ass'n v. Ogilvie, 471 F.2d

680 (7th Cir. 1972), upholding the Ogilvie Plan

for the recruitment, placement and training of

minorities in the highway construction industry

of southern Illinois; Contractors Ass'n of E. Pa. v.

Secretary of Labor, 442 F.2d 159, 175 (3d Cir.),

cert. denied, 404 U.S. 854 (1971), upholding the

Philadelphia Plan which required bidders on

construction projects to have an affirmative

action policy so as to advance the Plan's goals

for minority hiring; Porcelli v. Titus, 431 F.2d

1254 (3d Cir. 1970), cert. denied, 4Uz U.S. 944

(1971), holding that the promotion by the Newark

Board of Education of black teacners over white

teachers, in disregard of a promotional list, was

constitutional; Germann v. Kipp, No. 76 CV 30-w-4

(W.D. Mo., April 7, 1977) (excerpted in 45

U.S.L.W. 2486), upholding the promotion of minori-

ties ahead of whites in the Kansas City, Mo., Fire

Department; Joyce v. McCrane, 32U F. Supp. 1284

(D.N.J. 1970), upholding the Newark Plan which

{FOOTNOTE CONTINUED ON FOLLOWING PAGE]

-13-

To say that the legislature of the St&te of

California (or the people by initiative) could

lawfully require conformity to the Affirmative

Action Policy or could empower subordinate

bodies, such as boards of education, to do so, is

not to say that the San Francisco Board of

Education has that power. As will be seen, the

Board's powers are limited, under the state

constitution and statutory enactments, to those

closely related to public education and school

administration. They do not enable the Board to

require building contractors and subcontractors

to conforin to a social policy declared by the

{FOOTNOTE CONTINUED FROM PREVIOUS PAGE}

set goals for the utilization of minority journey-

men on construction projects; Weiner v. Cuyahoga

Community College Dist., 19 Ohio St. 2d 35, 249Y

N.E.2d 9U7 (1969), cert. denied, 396 U.S. 1UU4

(1970), holding that Cuyahoga Community College

District properly rejected che lowest financial

bid for a construction project where the bidder

failed to assure the District that he would

comply with antidiscrimination laws.

-14<

Board, however enlightened and desirable that

policy may be.

The powers of the Board derive entirely from

the state constitution and a state statute, the

California Education Code. They are limited to

those matters having a reasonably direct relation-

ship to the operation of schools -- matters such

as administration, staffing, curricula, text

books, school building construction and mainten-

ance, rules for admission, disciplinary procedures,

etc. See, e.g., Cal. Constit. Art. 9, § 14;

Calif. Educ. Code §§ 1051, 15351.

Nevertheless, the Board claims that the

state legislature has given it authority to lay

down and enforce the Affirmative Action Policy.

It is to be found, the Board contends, in the

provisions of California Education Code § 15951

reading as follows:

The governing board of any school

district shall let any contracts involving

=1§-

an expenditure of more than five thousand

dollars ($5,000) for work to be done or more

than eight thousand dollars ($8,000) for

materials or supplies to be furnished, sold,

or leased to the district, to the lowest

responsible bidder who shall give such

security as the board requires, or else

reject all bids. This section applies to

all materials and supplies whether patented

or otherwise. (Emphasis added.)

In particular, the Board relies upon the word

"responsible".

Plaintiffs urge that the quoted section

does not sanction the Affirmative Action Policy.

The Court agrees.

The manifest purpose of section 15951 --

clear from its plain language -- is to protect

the public against corrupt or wasteful expenditure

of school funds. Defendants‘ reliance upon the

word “responsible” as authorizing the Board's

~16~—

Affirmative Action Policy calls for transforming

section 15951 from one narrowly focusing upon

honesty and economy into an enactment of public

policy by which the California legislature

undertook to redress, or permit school boards to

redress, past racial discrimination by contractors

dealing with school boards. No such broad

intendment can reasonably be read into the

section.

Defendants, arguing to the contrary, rely

upon an opinion of the California Attorney

General issued in 1963 and upon a 1969 decision of

the Supreme Court of Ohio rendered by a divided

court.

Upon careful analysis, it will be seen that

the Attorney General's opinion (42 Ops. Att'y

Gen. 169 (1963)) does not support defendants'

contention. The question presented to the

Attorney General was whether the Berkeley Unified

School District and its Board of Education

=1J=

could include, in school construction contracts,

clauses prohibiting builders from engaging in

racial and religious discrimination in their

employment practices. The Attorney General found

that such clauses were “consistent with and in

aid of existing statutes". The opinion then

proceeded to state that "conformity to the laws

prohibiting employment discrimination on public

works would appear to be a criterion well within

the requirements of being a ‘responsible bidder'

especially in view of the fact that such laws

represent an urgent policy of this state."

The Ohio case, upon which defendants place

great reliance, is Weiner v. Cuyahoga Community

College Dist., supra, note 3. It is not clear

from either the majority nor the minority opinion

as to precisely what was required by the school

board policy in that case. But there again, as

is true of the California Attorney General's

opinion, the question involved related to the

-18-

power of the district (a college district in that

case) to require a bidder to conform to law. The

majority opinion stated:

We conclude that the capacity to assure a

performance which complies with antidis-

crimination laws is reasonably a part of the

Standard of a best or responsible bidder on

a contract involving the expenditure of

public funds. 249 N.E.2d at 910 (emphasis

added).

It is one thing to say that a bidder is not

responsible if he is unwilling to comply with the

law. It is quite another to say that the Board

can declare a social policy and then categorize a

bidder as not responsible within the terms of

section 15951 for failing or refusing to comply

when that policy transcends the authorized power

of the Board. See Broidrick v. Lindsay, 39

N.Y.2d 641, 350 N.E.2d 595 (1976).

=19=

The most recent, authoritative interpretation

of the term "lowest responsible bidder" is to be

found in a decision of the California Supreme

Court, City of Inglewood v. Superior Court, 7

Cal. 3d 861, 103 Cal. Rptr. 689, 500 P.2d 601

(1972). After pointing out that trustworthiness,

quality, fitness and capacity are included in the

term “responsible bidder", the California Supreme

Court goes on to say: "Thus, a contract must be

awarded to the lowest bidder unless it is found

that he is not responsible, i.e., not qualified

to do the particular work under consideration."

7 Cal. 3d at 867. There is not the slightest hint

in Inglewood nor any other California case that

the term "lowest responsible bidder" is sufficiently

_ broad to justify the construction that a bidder

is not responsible if he does not comply with a

=Bbeo

social policy adopted by the Board without

constitutional or statutory authorization .4/

To repeat, the Affirmative Action Policy of

the San Francisco Board of Education serves

desirable purposes, but it goes beyond requiring

compliance with duly enacted laws. In other

words, it is a Board policy which lacks legisla-

tive authorization and therefore may not be

legally imposed. Defendants must turn to the

California legislature or to the California

electorate (through the initiative process) for

3/

authorization of that policy.=

4/ The term "lowest responsible bidder” has

been unchanged since the original enactment of

what has become section 15951. 1919 Cal. Stats.

c.552, p. 741. No amendment has affected the

meaning of the quoted phrase as used from the

beginning.

5/ In reaching its decision, the Court has not

disregarded the difficult problem faced by the

Board when it adopted the Affirmative Action

Policy. It had found that nonwhite subcontractors

[FOOTNOTE CONTINUED ON FOLLOWING PAGE]

w3t~

a

_

A Ninth Circuit decision, William Inglis &

Sons Baking Co. v. ITT Continental Baking Co.,

Inc., 526 F.2d bo, 8& (1975), binding upon this

Court, lays down the standards yoverning the

issuance of preliminary injunctions. It rules

that a plaintiff is entitled to a preliminary

injunction upon showing (1) probable success on

the merits and (2) the possibility of irreparable

injury. In this case, plaintiffs’ probable

{FOOTNOTE CONTINUED FROM PREVIUUS PAGE}

had been discriminated against by general contrac-

tors for some ten years. It had futher found

that a remedy thereafter invoked for a year had

helped correct the invidious discrimination. On

these facts, failure to remedy past discrimination

could open the Board to charges that it was

tolerating, if not itself participating in,

unlawful discrimination. See Ethridge v. Rhodes,

268 F. Supp. 83, 88 (S.L. Ohio 1967). But the

logic underlying any such charge is more inviting

than compelling. It begs the quesiton of limita-

tion on the Board's power. If the Board lacxs

the power to require others to correct past

racial discrimination, it cannot yain that power

Simply because it has seen others engage in such

discrimination nor because the Board was able to

correct it by exceeding the Board's authority.

-22-

Success on the merits is augured because of the

Board's lack of authority to lay down the Affirma-

tive Action Policy. And, as to the possibility

of irreparable injury, the Board's Affirmative

Action Policy must mean in some cases, at least,

that white owned subcontractors will be rejected

or by-passed in favor or nonwhite owned subcon-

tractors solely because the former are white. It

necessarily follows that white owned subcontrac-

tors are faced with "the possibility of irrepar-

able injury".

Nothing in this opinion is to be construed

as in anywise precluding defendants from requiring,

as a condition of bidding, that the bidder must

agree to comply with all applicable state and

federal antidiscrimination laws, including the

Constitution of the United States and that of the

State of California.

a23e

For all of the foregoing reasons, defendants'

motion to dissolve the preliminary injunction is

hereby denied.

Dated: May 17, 1977.

_ /s/ Stanley A. Weigel

Judge

= Pha

FINDINGS AND AFFIRMATIVE ACTION POLICY RELATING

TO PARTICIPATION OF MINORITY CONTRACTORS IN

SCHOOL CONSTRUCTION PROGRAM AND INTERIM REGULA-

TLONS - 1977 (P 3665.1)

This board Of Education of the San Francisco

Unified School vistrict finds:

1. That on July 24, 1964, the Board of

Supervisors of the City and County of San Fran-

cisco adopted Ordinance No. 209-64 based upon

findings duly made, among other things, that:

The population of this city and county is

composed of people of various racial,

religious and ethnic groups. In this city

and county, the practice of discrimination

on the grounds of race, religion, color,

ancestry, or place of birth and the exploita-

tion of prejudice related thereto adversely

affects members of minority groups.

Such discriminatory practices are inimical to

the public welfare and good order in that

they: (1) impede social and economic progress

for the entire citizenry by preventing

members of minority groups from achieving

full development of their individual poten-

tialities and from contributing fully to the

cultural and business life of the community;

(2) constantly frustrate, degrade and

embitter members of minority groups, thereby

diminishing their initiative and interest in

the community; and (3) tend to create

intergroup hostilities and antisocial

behavior.

EXHIBIT "A"

73-22 Spl (Page 1

3/22/77 Adopted)

Subject: Findings and Affirmative Action Policy

Relating to Participation of Minority

Contractors in School Construction

Program and Interim Regulations - 1977

(P 3665.1)

The products of discrimination accumulate

continuously; with the result that the

social, economic and educational gaps

between those suffering discrimination and

the majority of the community constantly

widen. As a result, mere prohibition of

future and present discrimination, while

essential, will not reduce the inequalities

and disadvantages which a history of discri-

mination has produced. Accordingly,

affirmative remedial action must be initiated,

encouraged and coordinated.

Se That on October 10, 1966, the Board of

Supervisors of the City and County of San Francisco

adopted Ordinance No. 261-66, adding Chapter 12B

to the San Francisco Administrative Code and

requiring affirmative action nondiscrimination

practices in the award of all city contracts; and

that on January 16, 1968 by Resolution No.

81-16A1, this Board adopted the provisions of

said Chapter 12B prohibiting discrimination in

the award of contracts for and on behalf of the

San Francisco Unified School District.

iP That on January 20, 1970, this Board

adopted Resolution No. 01-20A1 authorizing

formation of a committee to formulate procedures

for an affirmative action program in the awarding

of school construction contracts and to secure

increased participation of minority contractors

in the bidding and awarding of such contracts,

and did, on May 19, 1970, by Resolution No.

73-22 Spl (Page 2

3/22/77 Adopted)

Subject: Findings and Affirmative Action Policy

kKelating to Participation of Minority

Contractors in School Construction

Program and Interim Regulations - 1977

(P 3665.1)

05-19A1 adopt an aftirmative action policy

governing the award of school construction

contracts and assigning the Superintendent of

Schools the responsibility tor carrying out

said policy.

4. That on December 15, 16 and 17, 1970,

the Otfice of Contract Compliance, Equal Employ-

ment Opportunity, United States Department of

Labor, held hearings in the City and County of

San Francisco for the purpose of determining what

action should be taken to ensure equal employment

Opportunity in the construction industry 1n San

Francisco, California, and, further, to determine

the availability and utilization of minority

contractors on Federally-involved contracts. It

was thereupon found that minority workers have

been prevented from fully participating in the

construction trades and that utilization of

minority Subcontractors by contractors could

Significantly expand the participation of minority

craftsmen on projects of federal construction

contractors. The San Francisco Plan (41 C.F.R.

60-6), was adopted by the United States Department

of Labor setting minimum goals for participation

of minorities in federal contracts.

This Board further finds:

ts That during the period commencing

January 1964 to and including June 30, 1975,

contracts for school construction projects were

let and awarded for and on behalf of the School

73-22 Spl (Page 3

3/22/77 Adopted)

Subject: Findings and Affirmative Action Policy

Relating to Participation of Minority

Contractors in School Construction

Program and Interim Regulations - 1977

(P 3665.1)

District in the total dollar amount of $87,241,573;

that minority contractors and subcontractors

participated in the performance of said contracts

in the total dollar amount of $2,532,205, repre-

senting 4.99 per cent minority contractor parti-

cipation in the total dollar amount of said

contracts; that on or about July 1, 1975, the

School District administratively, and pursuant

to authority conferred upon the Superintendent

aforesaid, adopted and implemented a policy of

requiring a minimum of 25 per cent minority

participation in the dollar amount of all contracts

let or awarded by or on behalf of the School

District; that commencing July 1, 1975, to and

including October 30, 1976, school construction

contracts containing said affirmative action

requirement were let and awarded in the total

dollar amount of $20,620,788, of which minority

contractors participated in the sum of $6,892,264,

representing 33.4 per cent of the total dollar

amount of said contracts.

Re That there are now, and have been, in

the City and County of San Francisco and immediate

environs, during all of the the times herein

mentioned, competent and qualified minority

contractors and subcontractors who are now, and

have been, ready, willing and able to perform

school construction contracts and to participate

more fully in the performance thereof; and that

the failure of minority contractors and subcontrac-

tors to participate more fully in the performance

of school construction contracts has resulted

73-22 Spl (Page 4

3/22/77 Adopted)

Subject: Findings and Atfirmative Action Policy

Relating to Participation of Minority

Contractors in School Construction

Program and Interim Regulations - 1977

(P 3605.1)

primarily from exclusion from participation

therein and discrimination based upon race,

religion, color, sex or national origin contrary

to tederal, state and local laws.

36 That the implementation and administra-

tion of an affirmative action policy in the award

of school construction contracts which will

ensure minimum minority participation in the

performance of school construction contracts

requires that this Board adopt a policy which

Shall ensure contracts shall be awarded to the

lowest responsible bidder whose bid is consistent

with the affirmative action policy of the San

Francisco Unified School District herein set

forth.

AFFIRMATIVE ACTION POLICY

BUSINESS PARTICIPATION POLICY

OF NONWHITE OWNED BUSINESSES

I. POLICY AND PURPOSE

The policy of the Board in enacting this

Atfirmative Action Proyram, and in setting forth

goals therein, is as follows:

A. To assure that competitive nonwhite

business participation corresponds with the

present availability of nonwhite firms that

are seeking a fair and nondiscriminatory

73-22 Spl (Page 5

3/22//]7 Adopted)

opportunity to compete for San Francisco

School District construction jobs on the

same terms as white business firms;

B. To overcome the historic unwillingness

of white business firms to participate in

joint business ventures with nonwhite business

firms, which joint participation is an integral

part of the construction industry;

Cc. To assure the presently evidenced

effects of past discrimination against

nonwhite firms within the construction

industry is not perpetuated by the construc~

tion program of the San Francisco Unified

School District;

D. To guarantee the largest possible pool

of qualified contracting firms will be

available for the competitive bidding upon,

and accomplishment of, San Francisco Unified

School District Construction Projects.

II. AFFIRMATIVE ACTION GOALS

A. In order to comply with the requirement

for being a "responsible bidder" under

Education Code 15951, general contractors

bidding upon school construction projects

over $100,000 will be required, under this

Program, to employ nonwhite owned businesses

for individual contract dollar amounts which

total at least 25% of the general contract

dollar bid.

A general contractor who submits a bid under

this program that does not meet this minimum

25% dollar participation goal will be

considered not responsible under Education

73-22 Spl (Page 6

3/22/77 Adopted)

Code § 15951, and will not be awarded the

bid unless the bidder establishes at a

hearing that he has taken every possible

measure to comply with the 25% dollar

participation goal of this program.

B. 1. Determination of Responsible Bidder.

In the event that the dollar participation

goal of paragraph A is not met, the District

may consider the bidder as not responsible

and not award the contract to him unless the

bidder establishes at a public hearing

before the Board of Education that he has

taken every possible measure to comply with

the program.

2. Opportunity for Hearing. If the

low monetary bidder is found not to have met

the 25% nonwhite owned business participation

requirement, he shall be informed of such

non-compliance and notified of the opportunit

to request, within five days after receipt

of such notification, a hearing before the

Board of Education to rebut any finding of

non-compliance and to present evidence on

his own behalf.

3. Discretion of Board. The Board of

Education may award a contract notwithstandin

non-compliance with its affirmative action

goal where the Board determines either that

the contractor has taken every possible

measure to comply, or that it is not practic-

able in the best interests of the District

to require compliance in the specific

case.

C. In furtherance of this defined policy,

"ownership" is defined as follows:

73-22 Spl (Page 7

3/22/77 Adopted)

1. The ownership of a thing is the

right of one or more persons to possess and

use the thing owned to the exclusion of

others. The elements of control in the use

of a business and the liability for one's

actions in the use of a business are essen-

tial to the definition of ownership pursuant

to this Program which seeks to eliminate

discriminatory practices in the construction

industry.

2. Excluding sole proprietorships and

corporately owned businesses, nonwhite

ownership of a business will be calculated

aS a percentage in direct proportion to the

ownership interest the nonwhite person has

in the business. This ownership interest

will be determined according to the general

legal definitions of such ownership.

III. Interim Regulations 1977 covering specific

types of business formations are hereby

passed effective to and including June 30,

1977, pending further study and recommenda-

tion by the Superintendent.

INTERIM REGULATIONS 1977

A. RECOGNIZED BUSINESS OWNERSHIP

1. Partnerships: Partners are owners

of the business and “all partners have equal

rights in the management and conduct of the

partnership's business." (Corp. Code

§ 15018(e)). :

73-22 Spl (Page 8

3/22/77 Adopted)

2. Joint Ventures: The resemblance

between a partnership and a joint venture is

so close that the rights as between adventure

are governed practically by the same ruies

that govern partners. However, each joint

venture agreement will be examined to assure

that the intent and purpose of this Program

is not subverted by the joint venture

agreement.

3. Limited Partnership: The purpose

of this Program is to impose a legally

enforceable obligation upon the person

exercising ownership control of a business,

and since limited partners do not take part

in control of the business, and are not

bound by the obligations of the partnership

(Corp. Code § 15501), limited partners are

not considered "owners" of the business for

purposes of this Program.

4. Corporation: A corporation is a

legal person or entity recognized as having

an existence separate from that of its

shareholders. The corporation, itself, is

the "business owner," and for purposes of

this Program, a corporate business will be

considered to be a nonwhite business if 51%

or more shares of its voting stock are held

by nonwhite persons.

B. "NONWHITE" Defined

In general, the term "nonwhite" shall be

defined in order to carry out the overall

purpose of this program which is to guarantee

equal business opportunity for those persons

historically stigmatized and discriminated

against, because of ancestry, by the social

73-22 Spl (Page 9

3/22/77 Adopted)

policies and racial views of the white

majority in this country as a whole.

For purposes of this Program, a nonwhite

person is a person whose racial ancestry is

one, or a mix, of the following: Black,

Asian, Latin American, American Indian, or

any native Pacific island group. A person

whose ancestry is a mixture of white and

nonwhite will be considered "nonwhite,"

if such ancestry is one-quarter or more

nonwhite.

73-22 Spl (Page 10

3/22/77 Adopted)

APPENDIX F

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

eee -—_ —

ASSOCIATED GENERAL CONTRACTORS

OF CALIFORNIA; LATHING AND

PLASTERING CONTRACTORS ASSO-

CIATION, SAN FRANCISCO AND

SAN MATEO; PAINTING AND

DECORATING CONTRACTORS ASSOCIA-

TION OF SAN FRANCISCO, INC.; W.G.

THOMPSON; ARNTZ BROTHERS, INC.;

ARNTZ CONTRACTING COMPANY;

CAHILL CONSTRUCTION CO,.;

CHRISTENSEN & FOSTER; DeNARDE

CONSTRUCTION; ENGSTRUM & NOURSE;

MARTINELLI CONSTRUCTION; PACIFIC

COMPANY; WILLIAMS & BURROWS and

FREDERICK MEISWINKEL, INC.,

Plaintiffs,

vs.

SAN FRANCISCO UNIFIED SCHOOL

DISTRICT; SAN FRANCISCO BOARD

OF EDUCATION; LEE S. DOLSON;

SAMUEL MARTINEZ; MRS. JAMES W.

ABRAHAMSON; 2.L. GOOSBY;

EUGENE HOPP; JOHN A. KIDDER;

and THOMAS A. REED,

Defendants.

tl ll ll ll dl dd de a a a a ee ee ee ee

No.

C-76-2244

SAW

NATIONAL ASSOCIATION OF MINORITY

CONTRACTORS, and MINORITY

CONTRACTORS ASSOCIATION OF

NORTHERN CALIFORNIA, INC.,

Intervenors.

ee eee ee ee ee

— = — ——

FINDINGS OF FACT, CONCLUSIONS OF LAW,

AND ORDER GRANTING MOTION FOR

PRELIMINARY INJUNCTION

The named plaintiffs fall into two classes:

(1) unincorporated associations of general

contractors and subcontractors engaged in the

building and construction industry in San

Francisco and (2) contractors and subcontractors

so engaged. None of the plaintiffs is a "“mino-

rity-owned" contractor or subcontractor within

the meaning of the quoted term as hereinafter

elaborated.

The defendant San Francisco Unified School

District (hereafter "District") is a duly orga-

nized public body consisting of the public schools

in San Francisco. The defendant San Francisco

ago

Board of Education (hereafter "Board") is the

responsible governing board of the District. The

individually named defendants are members of the

Board, defendant Dolson being named as President

and defendant Martinez as Vice President.

The Complaint charges that defendants

require conformity with the following policy

as a condition of awarding construction contracts.

Affirmative Action Policy in Award of

Contracts: The District shall award con-

struction contracts to the lowest respon-

sible Bidder as required by Education Code

Section 15951. In order to meet the cri-

terion of being a responsible bidder, the

general contractor must utilize minority-

owned businesses for no less than 25% of the

Base Bid amount, or the general contractor

himself must be a minority-owned business.

(Emphasis not added.)

As used in the above quoted policy statement:

Minority refers to the following racial

or ethnic groups: American Indian, Black,

Chinese, Filipino, Japanese, Spanish Ameri-

can and other non-white racial and ethnic

groups.1/

1/ Answers filed by defendants January 25,

1977, in response to written questions propounded

by the Court, Exhibit 4.16b, at GC-19 n.3.

én

The term "non-white racial and ethnic groups"

includes, in addition to the groups specified

above, all Hawaiians, Aleuts, Eskimos and Asians

other than those listed above.2/

Defendants rely on the following section of

the California Education Code as justifying their

Affirmative Action Policy.

§ 15951. Letting of contracts to lowest

bidder

The governing board of any school

district shall let any contracts involving

an expenditure of more than * * * five

thousand dollars (* * * $5,000) for work to

be done or more than eight thousand dollars

($8,000) for materials or supplies to be

furnished, sold, or leased to the district,

to the lowest responsible bidder who shall

give such security as the board requires, or

else reject all bids. This section applies

to all materials and supplies whether

patented or otherwise.

2/ Id., Exhibit 4.5, at vii. At the

hearing on the motion for Preliminary Injunction,

February 1, 1977, counsel for the defendants

affirmed and represented to the Court, without

qualification, that the definition of minority

set out in the text (including the definition of

"non-white racial and ethnic groups") was that

used in connection with the stated Affirmative

Action Policy.

The position of the defendants is that the

Code section empowers them to lay down the 25%

requirement as a criterion of the teri "respons-

ible bidder".

The plaintiffs contend that the action of

the defendants violates, as to plaintiffs, the

provisions of two federal statutes, namely, 42

U.S.C. § 1981 which reads

§ 1981. Equal rights under the law

All persons within the jurisdiction

of the United States shall have the same

right in every State and Territory to make

and enforce contracts, to sue, be parties,

give evidence, and to the full and equal

benefit of all laws and proceedings for the

security of persons and property as is

enjoyed by white citizens, and shall be

subject to like punishment, pains, penalties,

taxes, licenses, and exactions of every

kind, and to no other.

and 42 U.S.C. § 1983 which reads

§ 1983. Civil action for deprivation of

rights

Every person who, under color of

any statute, ordinance, regulation, custom,

or usage, Of any State or Territory, sub-

jects, or causes to be subjected, any

=5-

citizen of the United States or other person

within the jurisdiction thereof to the

deprivation of any rights, privileges, or

immunities secured by the Constitution and

laws, shall be liable to the party injured

in an action at law, suit in equity, or

other proper proceeding for redress.

The essence of plaintiffs’ argument is that

the defendants' actions constitute an impermis-

sible discrimination against contractors and

subcontractors who are not minority-owned.

The Court has concluded that it need not

reach the question as to whether the defendants

may lawfully adopt and enforce the Affirmative

Action Policy. The reason is that there is not

sufficient evidence to show that the claimed

policy is actually that of the Board.

Nowhere is there to be found a single,

clear-cut resolution or other positive action by

the Board adopting the policy. Nor has the Board

made any finding of past discrimination against

minorities. Counsel for defendants have frankly

admitted that the asserted policy is to be

-6-

derived only from two sources, namely, (1)

scattered, unrelated records and (2) ratification

by the Board of a number of contracts recommended

to the Board by the staff which had included the

Affirmative Action Policy in the calls for bids.

While the Board did award or ratify contracts

which required compliance with the Affirmative

Action Policy, it is far from clear that this was

a delineation of Board policy applicable to all

contracts. The Board alone, not the staff, has

the power to enact policy. And a policy as

controversial as that before the Court is not to

be assumed or presumed .2/

If the quoted Affirmative Action Policy is,

indeed, the official policy of the Board, it

would be a very simple matter for the Board

plainly to spell it out and adopt it by proper

————

3/ California Government Code § 54950

requires that public board "actions be taken

openly and that their deliberations be conducted

openly."

ay

procedure in conformity with the relevant require-

ments for Board action.

The question of the power of the Board to

declare and enforce such an Affirmative Action

Policy cannot be adjudicated on the facts before

this Court. To repeat, the evidence fails to

establish that the policy is the will of the

Board established by Board action appropriate to

carry out that will.

It should be emphasized that the Court .

does not hereby decide whether or not the Board

has the lawful power to declare and effectuate

the quoted or any other affirmative action

policy. The Court's present holding is limited

to the decision that the evidence now before it

is inadequate to establish that the Board has

undertaken to declare and effectuate the chal-

lenged policy.

In the light of all the foregoing, which

constitutes the Court's Findings of Fact and

nin

Conclusions of Law on the motion for Preliminary

Injunction, the Court decides that there is not

sufficient evidence to establish that the Affir-

mative Action Policy actually has been adopted

and promulgated by the Board and that, for that

reason alone, efforts now to impose it upon

plaintiffs are not supportable.

Dated: March 17, 1977.

/s/ Stanley A. Weigel

Judge

APPENDIX G

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ee

ASSOCIATED GENERAL CONTRACTORS

OF CALIFORNIA; LATHING AND

PLASTERING CONTRACTORS ASSO-

CIATION, SAN FRANCISCO AND

SAN MATEO; PAINTING AND

DECORATING CONTRACTORS ASSOCIA-

TION OF SAN FRANCISCO, INC.; W.G.

THOMPSON; ARNTZ BROTHERS, INC.;

ARNTZ CONTRACTING COMPANY;

CAHILL CONSTRUCTION CO. ;

CHRISTENSEN & FOSTER; DeNARDE

CONSTRUCTION; ENGSTRUM & NOURSE;

MARTINELLI CONSTRUCTION; PACIFIC

COMPANY; WILLIAMS & BURROWS and

FREDERICK MEISWINKEL, INC.,

Plaintiffs,

vs.

SAN FRANCISCO UNIFIED SCHOOL

DISTRICT; SAN FRANCISCO BOARD

OF EDUCATION; LEE S. DOLSON;

SAMUEL MARTINEZ; MRS. JAMES W.

ABRAHAMSON; Z.L. GOOSBY;

EUGENE HOPP; JOHN A. KIDDER;

and THOMAS A. REED,

Defendants.

ee eee eee ee oe

No.

C-76-2244

SAW

NATIONAL ASSOCIATION OF MINORITY

CONTRACTORS, and MINORITY

CONTRACTORS ASSOCIATION OF

NORTHERN CALIFORNIA, INC.,

Intervenors.

eee eee eee ee

PRELIMINARY INJUNCTION

This cause came on to be heard on Plaintiffs'

Motion for a Preliminary Injunction, and the

Court having considered the Complaint, the

Affidavits submitted in support of said motion

and having heard counsel for Plaintiffs and for

Defendants San Francisco Unified School District

and San Francisco Board of Education and it

appearing to the Court after due deliberation

that, for reasons stated in the Court's Findings

of Fact, Conclusions of Law and Order Granting

Motion for Preliminary Injunction, this day

filed, Plaintiffs are entitled to this prelimi-

nary injunction.

Now, therefore,

IT IS ORDERED that Defendants San Francisco

Unified School District and San Francisco Board

of Education, each of them, their officers,

agents, successors, deputies, servants and employ-

ees, and all persons acting by, through or under

them or either of them or by or through their

order, or those in active concert or participa-

tion with them who receive notice of this Order,

be, and they are hereby, restrained and enjoined,

until the further order of this Court, from

requiring that a bidder, in order to be awarded a

construction contract as the general contractor,

must utilize minority-owned businesses for no

less than twenty-five percent of the Base Bid

amount, or that the bidder must be a minority-

owned business.

This preliminary injunction is on condition

that a cash or corporate surety bond be filed by

Plaintiffs herein in the sum of 100,000.00

w% a

dollars conditioned for payment of such costs and

damages as may be incurred or suffered by any

party who was found to have been wrongfully

‘restrained or enjoined, said bond to be approved

by this Court.

Dated: March 17, 1977.

/s/ Stanley A. Weigel

Judge

APPENDIX H

United States Constitution, Amendment

Fourteen § 1.

. « « No State shall make or enforce

any law which shall abridge the pri-

vileges or immunities of citizens of

the United States; nor shall any State

deprive any person of life, liberty, or

property, without due process of law; nor

deny to any person within its jurisdiction

the equal protection of the laws. ...

42 U.S.C. § 1981.

All persons within the jursidiction

of the United States shall have the same

right in every State and Territory to

make and enforce contracts, to sue, be

parties, give evidence, and to the full

and equal benefit of all laws and proceedings

for the security of persons and property as is

enjoyed b white citizens, and shall be

subject to like punishment, pains, penalties,

taxes, licenses, and exactions of every

kind, and to no other.

42 U.S.C. § 1983.

Every person who, under color of any

statute, ordinance, regulation, custom, or

usage, of any State or Territory or the

District of Columbia, subjects, or causes

to be subjected, any citizen of the United

States or other person within the jurisdic-

tion thereof to the deprivation of any

rights, -privileges, or immunities secured

by the Constitution and laws, shall be

liable to the party injured in an action

at law, suit in equity, or other proper

proceeding for redress. ...

California Education Code § 35160.

On and after January 1, 1976, the

governing board of any school district

may initiate and carry on any program,

activity, or may otherwise act in any

manner which is not in conflict with or

inconsistent with, or preempted by, any

law and which is not in conflict with the

purposes for which school districts are

established.

California Education Code § 39640.

The governing board of any school

district shall let any contracts involving

an expenditure of more than eight thousand

dollars ($8,000) for work to be done or

more than twelve thousand dollars ($12,000)

for materials or supplies to be furnished,

sold, or leased to the district, to the

lowest responsible bidder who shall give

such security as the board requires, or

else reject all bids...

~