Pacific Legal Foundation Sues City and County of San Francisco for Violating Proposition 209 in Awarding Public Contracts

Business Wire, Sept 12, 2000

News Editors and Legal/Government Writers

SACRAMENTO, Calif.--(BUSINESS WIRE)--Sept. 12, 2000

The Sacramento-based Pacific Legal Foundation, the primary defender of California's Proposition 209, filed a lawsuit today against the City and County of San Francisco for violating the state's constitutional ban on government quotas and race/gender preferences in the award of public contracts. Today's legal action in San Mateo County Superior Court is the second in 12 months PLF has filed against San Francisco under Proposition 209, and is part of a broader effort by the organization to enforce a constitutional provision it says is being largely ignored around the state.

PLF is representing Coral Corporation, an Oregon-based firm that was the low bidder on a public works project by San Francisco International Airport. The airport's "Traffic Guide Signing and Graphics" project was awarded to a firm whose bid was nearly $89,000 higher than Coral's. Koorosh Hariri, manager of the airport's bureau of design and construction, rejected Coral's bid as "nonresponsive" for not listing "minority- and women-owned business enterprises" (MBE/WBE) as subcontractors in its bid. PLF is asking the court to strike down a provision in the city's Administrative Code that requires general contractors either to meet the quota for MBE/WBE subcontractors or to make "good faith" efforts to do so.

"Each time San Francisco uses its race and sex preferences to award a public contract to a firm that is not the lowest responsible bidder, city taxpayers pick up the tab for thousands of dollars," said PLF attorney Stephen R. McCutcheon, Jr. "This kind of blatant discrimination is costing California taxpayers millions of dollars; it's got to stop." (A copy of PLF's complaint, Coral Construction v. City and County of San Francisco, can be downloaded from PLF's web site at www.pacificlegal.org.)

As this lawsuit against San Francisco moves forward, PLF is investigating discriminatory policies in other municipal agencies around the state. Only six days ago, PLF argued before the California Supreme Court in a key test case on behalf of another contractor who filed suit against the City of San Jose in September 1997 (Hi-Voltage Wire Works, Inc. v. City of San Jose). In that case, PLF is asking the state high court to uphold a Court of Appeal ruling from last year that said San Jose's quota and "outreach" program for awarding public contracts violated Proposition 209. That test case is the first to take up the issue of what government conduct constitutes the kind of "preferential treatment" based on race and sex Proposition 209 prohibits. The high court's ruling will have a substantial impact on PLF's action against San Francisco.

Since winning its case against San Jose in the Court of Appeal, PLF has filed lawsuits in San Francisco (Cheresnik v. City and County of San Francisco); Sacramento (United Utilities, Inc. v. Sacramento Municipal Utility District); and Huntington Beach (Crawford v. Huntington Beach Union High School District). A recent survey conducted by PLF indicates numerous instances of Proposition 209 violations are occurring beyond these jurisdictions.

Pacific Legal Foundation is a nonprofit, public interest organization dedicated to litigating nationwide in defense of limited government, private property rights, and individual and economic liberty.