Court Opinion

ID: 9488272
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:40:58.433193+00
Date Added: 2024-06-11T17:52:48.080342
License: Public Domain

Opinion by Chief Judge WALLACE; Dissent by Judge PREGERSON.
WALLACE, Chief Judge:
Bras appeals from the district court’s summary judgment in favor of the California Public Utilities Commission (Commission), dismissing his equal protection claims for lack of standing. We have jurisdiction over this timely appeal pursuant to 28 U.S.C. § 1291. We reverse and remand.
I
From 1969 to 1991, Bras provided architectural services to Pacific Bell. Approximately 30 percent of Bras’s gross receipts after 1983 came from work generated by Pacific Bell. On February 1, 1991, Bras was asked to complete a “prequalification criteria” form. The form was to be used by Pacific Bell to select a group of architectural firms to submit proposals and, if selected, to enter into “improved business partnerships.” Question 10 on the form asked: “[A]re you currently certified through the Cordoba Corporation Clearing House process for Minority/Women Business Enterprise status?” Bras completed the form, answering question 10 in the negative, and returned the form to Pacific Bell on February 4, 1991.
In June 1991, Bras was informed by Pacific Bell that a business decision was made to work closely with a small number of suppliers in the San Francisco Bay Area and to develop working relationships with those firms over a period of time. Bras was told that Pacific Bell chose these suppliers based on the information contained in the “prequalification criteria” form that Bras completed. Bras was also informed that 13 architectural firms had completed the forms, that Bras ranked sixth amongst all of those firms, that Pacific Bell initiated negotiations with the top three ranked firms, and that Bras would have ranked third instead of sixth had question 10 not been considered. In fact, however, Pacific Bell gave ten points for answering question 10 with a “yes” and zero points for answering question 10 with a “no.” The firm that finished third in the ranking was a minority-owned business.
In response to Bras’s inquiries concerning the selection process and the reason why he was eliminated from consideration for an “improved business partnership,” a representative of Pacific Bell wrote to Bras, stating: “I would like to assure you that your firm was very competitive and was not eliminated due to any unsatisfactory performance____ Again, I appreciate your interest and the many contributions to our business. We plan to maintain your information on file and will be happy to consider Bras & Associates when our contract for architectural services is reevaluated in the future.”
On January 10, 1992, Bras filed this action pursuant to 42 U.S.C. §§ 1981, 1983, and 1985 against Pacific Bell and the Commission. Bras alleged that Pacific Bell discriminated against him on the basis of race and sex in violation of the Equal Protection Clause of the United States Constitution. Bras also charged that sections 8281-8286 of the California Public Utilities Code (Code) and the Commission’s General Order 156 (Order) are unconstitutional and should be declared void, and sought a permanent injunction forbidding the Commission from implementing these provisions.
For many years, the Commission has overseen programs to increase the participation of minority-owned and women-owned businesses in public utility contracting. Before 1986, the Commission simply required public utilities to maintain public outreach programs which encouraged and assisted minority-owned and women-owned businesses to compete for contracts with public utilities. In 1986, however, the California Legislature passed the Women and Minority Business Enterprise Law, which is codified at sections 8281-8286 of the Code.
Section 8283(a) requires “each electrical, gas, and telephone corporation with gross annual revenues exceeding twenty-five million dollars ... to submit annually, a detailed *872and verifiable plan for increasing women, minority, and disabled veteran business enterprise procurement in all categories.” Cal. Pub.Utü.Code § 8283(a) (West 1993). A “minority business enterprise” is one where at least 51% of the enterprise is owned by a minority group or groups. Id. § 8282(b). Utilities are required by the Code to “presume that minority includes Black Americans, Hispanic Americans, Native Americans, and Asian Pacific Americans.” Id. The Code also requires that annual plans be submitted by utilities that include “short- and long-term goals and timetables, but not quotas, and ... methods for encouraging both prime contractors and grantees to engage women, minority, and disabled veteran business enterprises in subcontracts.” Id. § 8283(b). The Commission is directed to “establish guidelines” to help utilities establish programs pursuant to the Minority Business Enterprises section of the Code. Id. § 8283(e).
Pursuant to Code § 8283(c), the Commission implemented the Order, which requires utilities to set “substantial and verifiable short-term (one year), mid-term (three years), and long-term (five years) goals for the utilization of’ minority businesses. Id. § 8. It specifically directs that “[e]ach utility shall establish initial minimum long-term goals for each major category of products and services the utility purchases from outside vendors of not less than 15% for minority owned business enterprises and not less than 5% for women owned business enterprises.” Id. § 8.2. A “goal” is defined as a “target which when achieved, indicates progress in a preferred direction. A goal is neither a requirement nor a quota.” Id. § 1.3.13. Although a utility cannot automatically be sanctioned solely for failing to meet goals, the Commission may, after conducting an investigation, sanction a utility for failing to make acceptable progress in the hiring of minority businesses. Id. § 8.12. The Commission concedes that it could sanction a utility by reducing its rate of return.
Bras settled all of his claims against Pacific Bell. On November 25, 1992, the settlement agreement was placed under seal by the district court. Bras’s only remaining claims are for declaratory and injunctive relief against the Commission. The district court dismissed these claims for lack of standing.
II
We review the district court’s summary judgment de novo. First Pacific Bank v. Gilleran, 40 F.3d 1023, 1024 (9th Cir.1994). Our role is to determine whether, viewing the evidence in the light most favorable to the nonmoving party, there is a genuine issue of material fact for trial and whether the district court correctly applied the law. Id. We may affirm on any ground supported by the record even if it differs from that of the district court. Id.
There are three requirements for Article III standing: (1) injury in fact, which means an invasion of a legally protected interest that is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical; (2) a causal relationship between the injury and the challenged conduct, which means that the injury fairly can be traced to the challenged action of the defendant, and has not resulted from the independent action of some third party not before the court; and (3) a likelihood that the injury will be redressed by a favorable decision, which means that the prospect of obtaining relief from the injury as a result of a favorable ruling is not too speculative. Lujan v. Defenders of Wildlife, 504 U.S. 555, 559, 112 S.Ct. 2130, 2136, 119 L.Ed.2d 351 (1992) (Lujan). The party invoking federal jurisdiction bears the burden of establishing each of these elements. Id. “Each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation.” Id. In order to defeat a summary judgment motion, the non-moving party may not simply rely on his pleadings but must present some evidence on every material issue for which he will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). Thus, Bras will defeat summary judgment if he has present*873ed some evidence establishing each of the three requirements for Article III standing.
Ill
The Commission contends that Bras failed to meet the “injury in fact” requirement because he has not demonstrated the loss of any future business. The Commission argues that there is no evidence that Bras intends in the future to bid on work for Pacific Bell or any other public utility subject to the Code or Order, and that Bras has, in any event, been excluded from consideration by Pacific Bell as a result of the settlement.
Because Bras seeks declaratory and injunctive relief only, it is insufficient for him to demonstrate that he was injured in the past; he must instead show a very significant possibility of future harm in order to have standing. Coral Construction v. King County, 941 F.2d 910, 929 (9th Cir.1991) (Coral Construction), cert. denied, 502 U.S. 1033, 112 S.Ct. 875, 116 L.Ed.2d 780 (1992).
In both Coral Construction and Associated General Contractors of California v. Coalition for Economic Equity, 950 F.2d 1401 (9th Cir.1991) (Associated General), cert. denied, 503 U.S. 985, 112 S.Ct. 1670, 118 L.Ed.2d 390 (1992), we concluded that contractors had standing to challenge programs that gave preferences to minority- and women-owned businesses for public contract awards. The programs essentially gave minority- and women-owned businesses a 5% bidding preference. In other words, the lowest bid would be accepted unless a minority- or women-owned business was within 5% of the bid price. See Coral Construction, 941 F.2d at 914; Associated General, 950 F.2d at 1404. In both cases, we concluded that the plaintiffs did not have to prove that they would lose any bids or identifiable contracts in order to sustain actual injury. We explained in Coral Construction that “[a]s a result of the objectively unequal bidding process under the preference method of awarding contracts, an injury results not only when Coral Construction actually loses a bid, but every time the company simply places a bid.” 941 F.2d at 930. Similarly, in Associated General we stated: “the mere fact that [Associated General] members cannot play on an even field against [Minority Business Enterprises] subjects them to a legally cognizable injury.” 950 F.2d at 1407. Under Coral Construction and Associated General, plaintiffs alleging equal protection violations need not demonstrate that rigid quotas make it impossible for them to compete for any given benefit. Rather, they need only show that they are forced to compete on an unequal basis.
The Supreme Court recently adopted our analysis of the injury in fact requirement as it applies in equal protection cases in Northeastern Florida Contractors v. City of Jacksonville, - U.S. -, 113 S.Ct. 2297, 124 L.Ed.2d 586 (1993) (Northeastern Florida). The Supreme Court stated:
When the government erects a barrier that makes it more difficult for members of one group to obtain a benefit than it is for members of another group, a member of the former group seeking to challenge the barrier need not allege that he would have obtained the benefit but for the barrier in order to establish standing. The ‘injury in fact’ in an equal protection case of this variety is the denial of equal treatment resulting from the imposition of the barrier, not the ultimate inability to obtain the benefit.
Id. at -, 113 S.Ct. at 2303. Under Northeastern Florida, Bras need only demonstrate that he is “able and ready to bid on contracts and that a discriminatory policy prevents [him] from doing so on an equal basis.” Id.
We conclude that Bras has met this burden. Bras’s complaint and summary judgment declaration do not assert that he presently intends to submit bids to Pacific Bell. However, Bras cannot presently “bid” on future projects for Pacific Bell because Pacific Bell has entered into long-term business relationships with three architects that are now used for all of its architectural service needs. Bras can, however, fill out a new qualification form when the three-year term of Pacific Bell’s present business relationships expires. That Bras can only compete for long-term contracts every several years rather than on a project-by-project basis does not change the analysis.
*874Bras states in his summary judgment declaration, which was subsequent to his settlement with Pacific Bell, that: “I earnestly desire to reinstate my long term business relationship with Pacific Bell ... in the future and stand ready, willing and able to provide such services should I be given an opportunity to do so.” (Emphasis added.) Bras also submitted a letter from Pacific Bell indicating that Pacific Bell was pleased with his past work, would keep his information on file, and would consider him when it reevaluates its needs. This evidence is sufficient to establish, for purposes of summary judgment, that Bras will suffer future injury if the program is not enjoined.
In deciding whether Bras has standing, we must consider the allegations of fact contained in Bras’s declaration and other affidavits in support of his assertion of standing. See Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 2206, 45 L.Ed.2d 343 (1974), (Warth). We are required to view the evidence in the light most favorable to Bras because we are reviewing a summary judgment entered against him on the basis of lack of standing. Fors v. Lehman, 741 F.2d 1130, 1132 (9th Cir.1984); see also Warth, 422 U.S. at 501, 95 S.Ct. at 2206 (when addressing motion to dismiss for lack of standing, both district court and court of appeals must ac cept as true all material allegations of the complaint and must construe the complaint in favor of the party claiming standing). Thus, we must presume that Bras’s declaration is truthful and that he is willing, ready, and able to do work for Pacific Bell in the future should he be given the opportunity. Nothing in the record indicates that this is not so. Viewing the evidence in the light most favorable to Bras, we must also accept as true the evidence in the record that Pacific Bell was satisfied with Bras’s past performance and that it promised to keep his information on file and to consider him when Pacific Bell reevaluates its needs. This evidence shows that there will be future competitions to provide architectural services to Pacific Bell and that Bras will be eligible to participate. There is no evidence in the record indicating that the settlement with Pacific Bell prevents Bras from competing for future contracts. Moreover, Bras would have been one of the three firms considered for work by Pacific Bell had Pacific Bell not been forced to implement a Minority Business Enterprise program under the Code and Order. Given all of this evidence, we cannot assume that Bras would suffer no future injury by the ongoing implementation of the program. To the contrary, viewed in the light most favorable to Bras, the evidence indicates that there is a significant likelihood that he will suffer future injury if the program is not enjoined.
IV
The Commission further contends that Bras lacks standing because the Code and Order do not themselves contain any race or gender specific discriminatory devices such as preferences or set-asides pursuant to which Bras could be denied equal treatment. Although the Commission couches this argument in terms of the “injury in fact” requirement, this argument implicates not only the “injury in fact” requirement but also the interrelated requirements that there be a causal relationship between the injury and the challenged conduct and that the injury will be redressed by a favorable decision. Lujan, 504 U.S. at 559, 112 S.Ct. at 2136.
The Code and Order are not immunized from scrutiny because they purport to establish “goals” rather than “quotas.” We look to the economic realities of the program rather than the label attached to it. During the pendency of the Northeastern Florida litigation, a new ordinance was adopted that “established ‘participation goals’ ranging from 5 to 16% ... [and] provides not one but five alternative methods for achieving the ‘participation goals.’ ” Northeastern Florida, — U.S. at -, 113 S.Ct. at 2300. Nevertheless, the Court explained that the replacement of the old statute with the new one did not make the case moot, because “[t]he gravamen of petitioner’s complaint is that its members are disadvantaged in their efforts to obtain city contracts. The new ordinance may disadvantage them to a lesser degree than the old one, but insofar as it accords preferential treatment to black- and female-owned contractors ... it disadvantages them in the same fundamental way.” Id. at -, *875113 S.Ct. at 2301. The ordinance at issue in Northeastern Florida did not require the use of set-asides, it merely authorized them. The Code and Order at issue here do nothing less. As Northeastern Florida shows, the relevant question is not whether a statute “requires” the use of such measures, but whether it authorizes or encourages them.
Other circuits, both prior to and since Northeastern Florida, have also concluded that the label attached to the program does not change the standing analysis. In Concrete Works of Colorado v. Denver, 36 F.3d 1513 (10th Cir.1994), cert. denied, — U.S. -, 115 S.Ct. 1315, 131 L.Ed.2d 196 (1995), the Tenth Circuit concluded that a nonminority prime contractor had standing to challenge a Denver ordinance that established “goals” for minority participation in city projects. The ordinance in Concrete Works directed the Office of Contract Compliance “to establish goals, on a project-by-project basis, for the participation level of [Minority and Women Business Enterprises] in city projects.” Id. at 1516. Project goals were not required for every project, and project goals were often set at levels below the annual goals level. A prime contractor owned by a white male brought an action seeking both damages and injunctive relief. The Tenth Circuit correctly explained that “so long as the nonminority contractor can show that it was ‘able and ready to bid’ on a contract subject to the ordinance, the requisite ‘injury in fact’ under Article III arises from an inability to ‘compete [with minority contractors] on an equal footing’ due to that ordinance’s discriminatory policy.” Id. at 1518, citing Northeastern Florida, — U.S. at -, 113 S.Ct. at 2303. Concrete Works further supports the conclusion that a program that establishes “goals” rather than rigid “quotas” can still cause “injury in fact.” See also Adarand Constructors v. Pena, 63 U.S.L.W. 4523 (U.S. June 12, 1995) (nonminority subcontractor has standing to challenge the validity of a federal program pursuant to which prime contractors for highway projects were given an additional 1% of the bid price if the contractor met relevant “goals” for the hiring of minority subcontractors); Harrison & Burrowes Bridge Constructors v. Cuomo, 981 F.2d 50 (2d Cir.1992) (nonminority prime contractor had standing to challenge a state program requiring prime contractors to submit a “utilization plan” outlining the participation of minority- and women-owned businesses and requiring such contractors to make “good faith efforts” to comply with project “goals” established by the contracting agency).
We are also unmoved by the Commission’s argument that the Code and Order do not require public utilities to adopt discriminatory programs. While the Code and Order do not expressly state that public utilities must adopt any particular programs such as bidding preferences or set-asides, they clearly have the practical effect of requiring them to do so.
The Order requires utilities to establish “substantial and verifiable” short-term, medium-term, and long-term goals, and to set a minimum initial long-term “goal” of purchasing at least 15% of each major category of products and services from minority-owned businesses and 5% from women-owned businesses. The Commission also monitors each utility’s “progress” and can sanction a utility for failing to make acceptable progress by reducing its rate of return. Considering that the utilities already had nondiscriminatory outreach programs in place to encourage and assist minority- and women-owned businesses to compete for contracts before the adoption of the Code and Order, the clear message sent to the utilities by their adoption may have been that racially neutral outreach programs were insufficient. Because the Code and Order effectively encourage, if not compel, Pacific Bell to adopt discriminatory programs, there is a sufficient nexus between Bras’s injury and the Commission’s actions in enforcing the Code and implementing the Order.
V
We express no opinion as to whether the Code or Order discriminates against Bras on the basis of race or gender. All we hold is that he has standing to raise the claims. Bras, like any person alleging .discrimination, must satisfy no less or more than what Article III requires. We conclude that Bras has *876satisfied his burden of showing injury in fact and that he has standing to seek declaratory and injunctive relief against the Commission.
REVERSED AND REMANDED.