Opinion ID: 2630898
Heading Depth: 3
Heading Rank: 2

Heading: The Federal Funding Exception.

Text: The City next contends the 2003 ordinance is unaffected by section 31 because the ordinance falls within the exception set out in subdivision (e): Nothing in this section shall be interpreted as prohibiting action which must be taken to establish or maintain eligibility for any federal program, where ineligibility would result in a loss of federal funds to the State. (§ 31, subd. (e).) The City, which receives federal funds for a variety of projects, argues it is compelled to enforce the 2003 ordinance by specific federal regulations imposing affirmative action obligations on cities that receive funds. We asked the parties to brief the issue [13] and now hold, as did the lower courts, that the City's argument lacks merit. The City invokes the federal funding exception (§ 31, subd. (e)) not as a basis for its own motion for summary judgment but, rather, as an argument against plaintiffs' motion. Accordingly, the City's burden is to show that a triable issue of fact exists. (Code Civ. Proc., § 437c, subd. (c); see Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849 [107 Cal.Rptr.2d 841, 24 P.3d 493].) The superior court did not mention the federal funding argument in its written ruling granting plaintiffs' motion. The Court of Appeal, however, discussed and rejected the argument, concluding that the relevant federal regulations do not require racial preferences and that the City has not, in any event, made a sufficient factual showing of past discrimination to trigger any obligation under the regulations. Of these two grounds, we find the first dispositive and thus do not reach the second. [14] The City's argument begins with the Civil Rights Act of 1964 (Pub.L. No. 888-352 (July 2, 1964) 78 Stat. 241), title VI, which provides that [n]o person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. (42 U.S.C. § 2000d.) Title VI also authorizes and directs [e]ach Federal department and agency which is empowered to extend Federal financial assistance to any program or activity . . . to effectuate the provisions of section 2000d of this title with respect to such program or activity by issuing rules, regulations, or orders of general applicability which shall be consistent with [the] achievement of the objectives of the statute authorizing the financial assistance in connection with which the action is taken. (42 U.S.C. § 2000d-1.) Exercising this rulemaking authority, the Environmental Protection Agency and the Secretary of Transportation have issued regulations forbidding discrimination in the projects they fund and requiring affirmative action in specified circumstances. (40 C.F.R. § 7.35(a)(7) (2010) [environmental protection]; [15] 49 C.F.R. § 21.5(b)(7) (2009) [transportation]. [16] ) In neither regulation, however, is the term affirmative action defined. (Cf. 40 C.F.R. § 7.25 (2010) [environmental protection; definitions]; 49 C.F.R. § 21.23 (2009) [transportation; definitions].) (11) The City contends these regulations compelled it to adopt the 2003 ordinance to avoid a loss of federal funding. We do not agree. Although the regulations use the broad, undefined term affirmative action, no intention to require racial preferences emerges from their plain language. The Environmental Protection Agency's regulation requires a recipient of federal funds who has previously discriminated to take affirmative action to provide remedies to those who have been injured by the discrimination.  (40 C.F.R. § 7.35(a)(7) (2010), italics added.) In this context, the term affirmative action clearly refers not to race-based remedies but, rather, to actions taken to benefit the specific victims of past discrimination. The regulation thus cannot logically mandate an ordinance like the City's, which confers preferences on bidders based on race without regard to specific instances of past discrimination. (12) The Secretary of Transportation's regulation more broadly requires the recipients of federal funds to take affirmative action to assure that no person is excluded from participation in a federally funded program [e]ven in the absence of prior discriminatory practice or usage . . . . (49 C.F.R. § 21.5(b)(7) (2009).) The regulation also mentions race-based remedies but is on this point expressly permissive, stating that it  does not prohibit the consideration of race . . . to . . . overcome the consequences of past discrimination. ( Ibid., italics added.) The unmistakable import of this language is not that race-based remedies are required, but simply that they are permitted, so far as the Secretary is concerned, if no other law precludes them. That the Secretary has no objection to race-based remedies does not establish the federal compulsion required to exempt the City's 2003 ordinance from section 31. For these reasons, we find no merit in the argument that the federal funding exception (§ 31, subd. (e)) exempts the 2003 ordinance from section 31's general prohibition of racial preferences. No triable issue of fact exists on this point to preclude summary judgment for plaintiffs.