Lead Opinion
Opinion by Chief Judge WALLACE; Dissent by Judge PREGERSON.
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
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,
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,
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,
In both Coral Construction and Associated General Contractors of California v. Coalition for Economic Equity,
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. -,
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 -,
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.
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,
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,
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 -,
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,
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
REVERSED AND REMANDED.
Dissenting Opinion
dissenting:
As a plaintiff who seeks injunctive or declaratory relief, Jack Bras “must show ‘a very significant possibility’ of future harm in order to have standing to bring suit.” Coral Construction Co. v. King County,
The majority relies on Northeastern Fla. Gen. Contractors v. Jacksonville, — U.S. -, -,
Northeastern does not support the majority’s position that Bras has standing in this action against the Commission. First, Bras cannot prove an “injury in fact.” He cannot show a “very significant” possibility of future injury because any possibility of injury is too speculative to warrant judicial scrutiny. Further, because the Code and Order do not “erect[ ] a barrier that makes it more difficult for members of one group to obtain a benefit than it is for members of another group,” id., the provisions do not disadvantage Bras. Second, Bras cannot fulfill another requirement of standing, the necessary causal nexus between his alleged injury and the defendant’s conduct.
I.
Bras’s future injury is too “hypothetical” to warrant judicial review. United Public Workers of America v. Mitchell,
In contrast, the regular bidding process in Northeastern meant that the contractors would bid, and therefore be injured, again in the very near future. In Northeastern, the Supreme Court found that “[i]n its complaint, petitioner alleged that its members regularly bid on construction contracts in Jacksonville, and that they would have bid on contracts set aside pursuant to the city’s ordinance were they so able.” Northeastern, — U.S. at -,
Here no Pacific Bell project is “currently proposed,” and Bras cannot show an injury of “sufficient immediacy.” Id. (quoting Warth,
Moreover, Bras’s future intentions are unclear. As the district court noted, Bras made no statement in his complaint that he intends to bid for future contracts from any public utility. His only statement to that effect came after he settled with Pacific Bell. In his declaration in support of his motion for summary judgment, Bras stated that he “earnestly desire[s]” to reinstate his long term business relationship with Pacific Bell and is “ready” and “able” to provide architectural services if he is given “the opportunity to do so.” [E.R. 57] But Bras does not say that he will apply for another long term contract with Pacific Bell, and he does not specify when he will apply. In the context of an ongoing bidding-process, contractors need only allege that they are “ready” and “able” to bid, because their regular conduct is sufficient evidence of their future intentions. Northeastern, — U.S. at -,
Last, Bras has failed to present any evidence to suggest that Pacific Bell would consider hiring him again after settling his claims. The majority refers to a letter Bras received from Pacific Bell, indicating that it would “maintain [his] information on file,” [E.R. 119], but the opinion fails to note that Pacific Bell sent that letter before the parties reached a settlement. Thus, Bras has not shown an injury of “sufficient immediacy and ripeness to warrant judicial intervention.” Northeastern, — U.S. at -,
II.
Even if Bras could demonstrate that he would be in a position in the future to be injured by the Code and Order, he would not be able to prove “a very significant possibility” of future harm, Coral Construction,
The challenged measures are different in critical ways from Jacksonville’s program in Northeastern. The Supreme Court based its holding in Northeastern expressly on the fact that the Jacksonville ordinance contained a set-aside program. The Court noted that “in the context of a challenge to a set-aside program, the ‘injury-in-fact’ is the inability to compete on an equal footing in the bidding process____” Id. Therefore, the Court concluded, “a party challenging a set-aside program like Jacksonville’s need only demonstrate that it is able and ready to bid on contracts and that a discriminatory policy prevents it from doing so on an equal basis.” Id. (emphasis added). The Code and Order do not foreclose competition on an “equal
The majority’s contention, that the measures at issue are similar to the program in Northeastern because both “authorize” the use of set-asides but do not require them, is specious. First, in Northeastern, the set-aside program was an explicit option which the defendant, the city itself, could employ at any given time. In contrast, the defendant here, the Commission, does not operate any procurement programs whatsoever, discriminatory or otherwise. Second, nothing in the language of the Code or Order alludes to any type of set-aside scheme. The Supreme Court in Northeastern, — U.S. at -,
Attempting to draw a further parallel to Northeastern, the majority states that “[wjhile 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 majority cites no evidence to support this conclusion, nor could it, as none exists in the record. Utilities are not “required” to adopt any particular scheme, only goals. Neither the Code nor the Order specify how those goals should be met nor even dictate that they be met. Utilities are free to adopt completely gender and race-neutral schemes. For example, a program that aided inexperienced contractors with the bidding process might have the effect of achieving the Code and Order goal of increasing women and minority participation in procurement while treating all inexperienced contractors, white and minority, men and women, exactly alike. Moreover, the criteria for successful bidders remain unchanged and are entirely race and gender neutral. If Bras were to participate under such a program, he would suffer no equal protection harm.
If Bras wanted to challenge a particular race or gender-conscious program, one that might “make it more difficult for members of one group to obtain a benefit than it is for members of another group,” id,., he could bring an action against the utility that developed the program. But no utility is a defendant in this action; Bras settled all his claims with Pacific Bell and has not questioned any other utility’s contracting policy. Bras’s suit against the Commission only challenges the Order and the Code, measures that mandate goals alone.
III.
In addition to lacking a constitutionally adequate “injury in fact,” Bras cannot prove a sufficient causal nexus between the contested measures and his injury. In other words, an injury must be “fairly ... trace[able] to the challenged action of the defendant....” Lujan,
The majority attempts to gloss over this issue by stating that “[bjecause 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.” This conclusion is unsupportable. The Code and the Order do nothing more than to require utilities to set goals for hiring women and minority contractors. The provisions do not imply or suggest, and certainly do not compel utilities to use discriminatory programs.
The majority theorizes that because some utilities may have had nondiscriminatory outreach programs in place before the Code and Order were adopted, the “clear message” the Code and Order “may have sent” is that those programs were insufficient. The majority offers no legislative history, case law, affidavits nor any other evidence to support the majority’s conjecture. Just as plausible
Bras is challenging the actions of the Commission. The Commission’s actions are not discriminatory, and there is not a sufficient nexus between the state’s provisions and any future injury that Bras may incur from a utility’s specific program. Just as in Allen v. Wright,
IV.
The likelihood of future injury in the instant ease is far too remote to meet established constitutional standards. Standing is founded “in concern about the proper — and properly limited — role of the courts in a democratic society.” Warth,
