Bras v. California Public Utilities Com'n

• Decision Date: 05 July 1995
• Docket Number: No. 93-15764,93-15764
• Citation: 59 F.3d 869
• Parties: , 95 Cal. Daily Op. Serv. 5132, 95 Daily Journal D.A.R. 8845 J. Jack BRAS, individually and doing business as J. Jack Bras & Associates, Plaintiff-Appellant, v. CALIFORNIA PUBLIC UTILITIES COMMISSION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 869

59 F.3d 869

64 USLW 2057, 95 Cal. Daily Op. Serv. 5132,

95 Daily Journal D.A.R. 8845

J. Jack BRAS, individually and doing business as J. Jack Bras & Associates, Plaintiff-Appellant, v. CALIFORNIA PUBLIC UTILITIES COMMISSION, Defendant-Appellee.

No. 93-15764.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 13, 1994.

Decided July 5, 1995.

Pamela A. Lewis, Schneider & Wallerstein, San Jose, CA, for plaintiff-appellant.

Timothy E. Treacy, Public Utilities Com'n of the State of Cal., San Francisco, for defendant-appellee.

Appeal from the United States District Court for the Northern District of California.

Before: WALLACE, Chief Judge, PREGERSON and BEEZER, Circuit Judges.

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. Sec. 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 "pre-qualification 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. Secs. 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 and verifiable plan for increasing women, minority, and disabled veteran business enterprise procurement in all categories." Cal.Pub.Util.Code Sec. 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. Sec. 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. Sec. 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. Sec. 8283(c).

Pursuant to Code Sec. 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. Sec. 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. Sec. 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. Sec. 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. Sec. 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 nonmoving 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 presented some evidence establishing each of the three requirements for Article III standing.

III

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, ...