MTA Policy on Women, Minority Contracts Struck Down : Affirmative action: Judge cites U.S. Supreme Court ruling, says agency failed to demonstrate pattern of bias.

Dealing another setback to government affirmative action programs, a Los Angeles judge has struck down a Metropolitan Transportation Authority policy of setting aside millions of dollars in contracts for minority- and women-owned firms.

In declaring the policy unconstitutional, Superior Court Judge Dzintra I. Janavs cited the U.S. Supreme Court’s ruling in June that government may not use “racial classifications” to award funds except to remedy proven past discrimination.

An MTA spokeswoman called the ruling “very significant,” and added, “We’re very disappointed.” She described the decade-long affirmative action program as “socially beneficial.” Attorneys for the MTA had not decided whether to appeal the decision.

The ruling came in a lawsuit filed by a San Diego engineer who was denied a piece of the $5.8-billion subway project because of the MTA policy. The transit agency had a goal of awarding 29% of contracts to “disadvantaged” businesses.

San Diego contractor Michael Cornelius said he felt vindicated and added that the ruling “speaks for the premise that America is a melting pot of people, not just groups of individuals who can get preferential treatment.”

His lawyers, with the conservative Pacific Legal Foundation in Sacramento, hailed the ruling as a “victory for equality under the law.”

“MTA’s policy was discriminatory and a waste of the taxpayers’ dollars,” said foundation attorney Robert J. Corry.

The judge found that the MTA failed to justify the 29% figure--three times the federal goal. He also found that the MTA failed to demonstrate, under the “strict scrutiny” standard required by the recent Supreme Court ruling, that its affirmative action program was a response to a statistically proven pattern of past discrimination.

The judge also found that there was no basis for an MTA policy allowing a disadvantaged business to bid up to 10% higher than the lowest qualified bidder and still win the contract.

Further, he wrote that the program favors contractors “based on their membership in a particular group and places the burden on others to rebut the presumption.” If the ruling is upheld, it is likely to have a broad impact in restructuring or dismantling the program altogether, according to Michael Gagan, editor of MTA Report.

Even though Gagan represented a firm that disputed the program, he supports it on the whole. “It was a huge boost for emerging minority- and women-owned firms, and I personally am very disappointed that the decision came down the way it did, because I do think the program serves a very positive public policy purpose,” Gagan said.

“But I have to say, this ruling was the MTA’s own fault” because the agency did not meet judicial requirements for adequately demonstrating a pattern of discrimination to justify the program, he said.

Times staff writer Eric Lichtblau contributed to this story.