Home > Construction Law, Real Estate Law > Ninth Circuit Decision Approves of Caltrans DBE Program

Ninth Circuit Decision Approves of Caltrans DBE Program

The Ninth Circuit Court of Appeals just ruled in the case of Associated General Contractors, San Diego Chapter v. Caltrans (AGC v. Caltrans), No. 11-16228, in which it affirmed Caltrans (California Department of Transportation) outreach program to promote fairness and equity in its federal contracting. AGC had brought suit in 2009 challenging Caltrans’ Disadvantaged Business Enterprise (DBE) program, which seeks to ensure that minority and women-owned businesses are on equal footing to compete for federally-funded contracts.  Summary judgment was granted in favor of Cal-Trans in the U.S. District Court in 2011, and AGC appealed.

Caltrans’ Disadvantaged Business Enterprise program establishes a framework for ensuring fair participation in federally funded public works projects in California. In 2007, an extensive disparity study commissioned by Caltrans documented discrimination against small businesses owned by women and minorities in federally funded contracts, which led to the creation of its new DBE program which was challenged in this action.

The Ninth Circuit Court of Appeals found that AGC did not identify any of its members who had or would suffer harm from the DBE program, such that AGC lacked standing.  Nevertheless, even if AGC had standing the appeal would have failed as the Appellate Court noted that the DBE program survived strict scrutiny as there was strong evidence of discrimination in the transportation contracting community, and the program was narrowly tailored to combat that discrimination.

– All Rights Reserved © 2013 by Michael L. Mau, Esq. and The Mau Law Firm

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