ASSOC. GEN. CONTRACTORS v. CITY & CTY. OF SAN FRAN.

• Court: United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
• Citation: 619 F. Supp. 334
• Docket Number: No. C 84-6899 TEH.,C 84-6899 TEH.
• Parties: ASSOCIATED GENERAL CONTRACTORS OF CALIFORNIA, INC., a nonprofit California corporation; Balliet Brothers, a California corporation; William P. Young, Inc., a California corporation; Under-Ground Construction, a California corporation; Webcor Builders, a California corporation; and Guy F. Atkinson, a Nevada corporation, Plaintiffs, v. CITY AND COUNTY OF SAN FRANCISCO, Defendant. San Francisco Black Chamber of Commerce, et al., Defendant-Intervenors.
• Decision Date: 07 August 1985

619 F. Supp. 334

ASSOCIATED GENERAL CONTRACTORS OF CALIFORNIA, INC., a nonprofit California corporation; Balliet Brothers, a California corporation; William P. Young, Inc., a California corporation; Under-Ground Construction, a California corporation; Webcor Builders, a California corporation; and Guy F. Atkinson, a Nevada corporation, Plaintiffs, v. CITY AND COUNTY OF SAN FRANCISCO, Defendant.

San Francisco Black Chamber of Commerce, et al., Defendant-Intervenors.

No. C 84-6899 TEH.

United States District Court, N.D. California.

August 7, 1985.

Ronald A. Zumbrun, John H. Findley, Pacific Legal Foundation, Sacramento, Cal., Eva Jefferson Paterson, San Francisco Lawyers' Committee for Urban Affairs, Robert L. Harris, Charles Houston Bar Ass'n, Edwin M. Lee, William R. Tamayo, Asian Law Caucus, Judith Kurtz, Shauna Marshall, Equal Rights Advocates, San Francisco, Cal., William C. McNeill, III, Pearl, McNeill, Gillespie & Standish, Oakland, Cal., for defendants-intervenors.

James W. Polk, Associated Gen. Contractors of California, West Sacramento, Cal., for plaintiffs.

George Agnost, City Atty., Philip S. Ward, Chief Trial Deputy, Burk E. Delventhal, Mara E. Rosales, Deputy City Attys., San Francisco, Cal., for city defendant.

OPINION AND ORDER

THELTON E. HENDERSON, District Judge.

This case comes before the court on the cross-motions of plaintiffs, defendant, and defendant-intervenors, for summary judgment pursuant to Rule 56(c) of the Federal Rules of Civil Procedure. The parties having fully briefed the issues, the matter was submitted without oral argument on June 3, 1985. After careful consideration of the parties' papers, and the entire record herein, the Court determines that there is no genuine dispute over a material issue of fact, and that defendant and defendant-intervenors are entitled to judgment as a matter of law. Deukmejian v. United States Postal Service, 734 F.2d 460, 462 (9th Cir.1984). Accordingly, and for the reasons set forth below, defendant and defendant-intervenor's motions for summary judgment are HEREBY GRANTED and plaintiffs' motion for summary judgment is HEREBY DENIED.

The instant action concerns a facial attack upon the validity of the Minority/Women/Local Business Utilization Ordinance, Chapter 12D of the San Francisco Administrative Code (hereafter "Ordinance"), enacted by the Board of Supervisors (hereafter "Board") of the City and County of San Francisco (hereafter "City") on April 2, 1984. The Ordinance represents the culmination of a long effort by the Board and members of the community to increase the participation of minority and women business enterprises (hereafter "MBE's" and "WBE's") in municipal contracting, by seeking to remedy the effects of past discrimination against such businesses in this area.¹

To this end, the Ordinance provides, inter alia, that City departments set aside 10% and 2% of their total eligible contract dollars for minority and women business enterprises, respectively. This 12% set aside is subsumed in an overall goal of awarding 30% and 10% of contract dollars to minority and women business enterprises, respectively. The Ordinance also affords minority and women enterprises a 5% bidding preference to aid achievement of the above set asides and goals. The 5% bidding preference is also extended to local business enterprises. These and other provisions of the Ordinance are explained more fully, infra, and in this Court's Findings of Fact and Conclusions of Law re: Preliminary Injunction, filed January 8, 1985 (hereafter "Findings and Conclusions").

Plaintiffs seek injunctive and declaratory relief invalidating the Ordinance on the grounds that its provisions violate 1) Section 7.200 of the San Francisco Charter (hereafter "Charter"), 2) 42 U.S.C. §§ 1981, 1983, 2000d, and 3) the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution. In addressing these cross-motions, the court turns first to the pendent claim, since its resolution could moot or modify the need for constitutional adjudication. Hagans v. Lavine, 415 U.S. 528, 545-47, 94 S.Ct. 1372, 1383-84, 39 L.Ed.2d 577 (1974).

I.

San Francisco Charter § 7.200 provides, in relevant part, that public works contracts in excess of $15,000 be let by City departments to the "lowest, reliable and responsible bidder". While an ordinance is invalid if it conflicts with a city's charter, Acton v. Henderson, 150 Cal.App.2d 1, 13, 309 P.2d 481, 487 (1957), we reject plaintiffs' contention that the Ordinance (to the extent it concerns public works contracts exceeding $15,000.) conflicts with § 7.200 because the phrase "lowest, reliable and responsible bidder" can only refer to price and quality of work, and therefore necessarily prohibits adoption of any affirmative action program regarding city contracts covered by that section.

We believe our discussion of this issue in our Findings and Conclusions fully explains our reasoning on this issue. There we stated that "in determining whether ... the Ordinance conflicts with the Charter ..., the following well settled rules apply. A city, such as San Francisco, which operates under a `home-rule' charter, has full sovereign powers to regulate municipal affairs. The charter is not a grant of power, but only acts as a limitation. Thus, it should be liberally construed, and only when it expressly prohibits the ordinance, does it render the ordinance invalid. City of Glendale v. Trondsen, 48 Cal.2d 93, 308 P.2d 1 (1957); City of Grass Valley v. Walkinshaw, 34 Cal.2d 595, 212 P.2d 894 (1949); Acton, supra, 150 Cal.App.2d at 13-15, 309 P.2d at 487-88. Thus, in construing the charter, no restrictions may be implied. Miller v. City of Sacramento, 66 Cal.App.3d 863, 867, 136 Cal.Rptr. 315, 318 (1977)."

"Given the above, a `construction in favor of the exercise of the power and against the existence of any limitation or restriction thereon which is not expressly stated ... is clearly indicated.' Acton, supra, 150 Cal.App.2d at 13, 309 P.2d at 487. In sum, ordinances enacted pursuant to competent authority enjoy a strong presumption of validity and `Courts are bound to uphold them unless they manifestly transcend the powers of the enacting body.' Glass v. City of Fresno, 17 Cal.App.2d 555, 560, 62 P.2d 765, 768 (1936); Brown v. City of Berkeley, 57 Cal.App.3d 223, 231, 129 Cal.Rptr. 1, 4-5 (1976)."

"In addition, it is well established that, in determining whether a conflict exists between a state statute and the state constitution, the legislature's construction of the constitutional provision at issue is `"of very persuasive significance"', and should not be rejected unless `"unreasonable or arbitrary."' Methodist Hospital of Sacramento v. Saylor, 5 Cal.3d 685, 691-95, 488 P.2d 161, 164-67, 97 Cal.Rptr. 1, 4-7 (1971). Given that the Charter is the City's `constitution', Brown, supra, 57 Cal.App.3d at 230-31, 129 Cal.Rptr. at 4, and is governed by the same principles, Adams v. Wolff, 84 Cal.App.2d 435, 441, 190 P.2d 665, 670 (1948), the above rule of construction appears instructive in this case as well. Cf. Franklin v. Peterson, 87 C.A.Cal. App.2d 727, 730, 197 P.2d 788, 790 (1948)."

"In light of the above, this Court concludes that section 7.200 of the Charter does not prohibit adoption of the Ordinance. The term `responsible' is broad and does not expressly or necessarily require an interpretation narrowly limiting its scope to `work quality.' Rather, the concept of responsibility is sufficiently flexible to embody other legitimate municipal concerns such as the remedying of past discrimination. Moreover, this Court finds no indication that the drafters of the 1932 Charter intended to preclude the City, by way of § 7.200, from redressing the effects of past or continuing discrimination."

"This view is in accord with the City's construction of section 7.200 (see Findings of Fact # 25)², as well as with several court decisions interpreting similar or identical bidding provisions. For example, in Weiner v. Cuyahoga Community College Dist., 19 Ohio St.2d 35, 39, 249 N.E.2d 907, 910 (1969), cert. denied, 396 U.S. 1004 90 S.Ct. 554, 24 L.Ed.2d 495 (1970), the Ohio Supreme Court stated `the capacity to assure a performance which complies with antidiscrimination laws is reasonably a part of the standard of a best or responsible bidder on a contract involving the expenditure of public funds.' Similarly, in Southwest Washington, Nat'l Electrical Contractor Ass'n v. Pierce County, 100 Wash.2d 109, 115, 667 P.2d 1092, 1096 (1983), the Washington Supreme Court found `in the word "responsible" a legislative intent that "the social responsibility of the contractor should also be a concern."' (emphasis in original) (citing S.N. Nielsen Co. v. Public Bldg. Comm'n, 81 Ill.2d 290 at 299 43 Ill.Dec. 40, 410 N.E.2d 40 (1980)."

"As the Washington court noted, the more liberal construction, adopted here, is clearly consistent with the two purposes generally underlying competitive bidding statutes: 1) to protect the general public from cronyism or collusion in the awarding of contracts and, 2) to provide a fair forum for potential bidders. `Permitting rejection of bids due to failure to meet published affirmative action requirements presents no danger of fraud, collusion, or favoritism and in fact advances the broader public interest by alleviating the effects of past discrimination. Affirmative action requirements further the second purpose of competitive bidding in its broader sense, by providing a fairer forum for subcontractors disadvantaged by the effects of past discrimination.' Southwest Washington, supra, 100 Wash.2d at 116, 667 P.2d at 1096."

"In sum, section 7.200 does not, expressly or by necessary implication, prohibit the City from considering affirmative action requirements in determining whether a bid is `responsible.' Accordingly, the Ordinance does not conflict with, and therefore, does not violate, the City's Charter.

"Plaint...