High Court OKs an Affirmative Action Challenge

The Supreme Court cleared the way Tuesday for white men to challenge government affirmative action “goals” in court, even when they cannot show that they have been hurt by them.

The court’s action in a California case probably will widen the legal attack on public programs that steer contracts, jobs or other benefits to racial minorities or women.

Before, the court had maintained that plaintiffs must have suffered a true loss, such as losing a contract or a job, if they are to have the “standing” to bring lawsuits challenging government programs as unconstitutional.

But the justices have relaxed that “standing” rule recently in affirmative action cases and in July the U.S. 9th Circuit Court of Appeals in San Francisco relied on the new approach to revive a white architect’s challenge to a state utility directive. The directive has steered $1.1 billion a year in business to companies owned by blacks, Latinos, Asians, Native Americans or women.

White men have a right to challenge a state policy that “effectively encourages, if not compels, [utility companies] to adopt discriminatory programs” that favor minorities and women, wrote Chief Judge J. Clifford Wallace of San Diego for a 2-1 majority.

Lawyers for the state Public Utility Commission appealed. Supported by the state’s giant utilities, the commission’s attorneys said that the ruling puts the entire state program in jeopardy.

They argued that their affirmative action effort should be upheld because it simply “establishes voluntary goals, not quotas, set-asides or preferences.” They also insisted that the architect’s suit should be thrown out because he cannot show that he lost a contract because of the state’s program.

But on Tuesday, the high court rejected the state agency’s appeal in the case (PUC vs. Bras, 95-767), and cleared the way for the architect to seek a federal court order striking down the state policy as unconstitutional.

The case now goes before U.S. District Judge William Orrick in San Francisco for trial.

In recent years, the justices also have limited the range of acceptable affirmative action programs sharply. As the 9th Circuit Court noted, the justices have allowed “nondiscriminatory outreach programs . . . to encourage and assist minority- and women-owned businesses” in bidding for contracts.

But they have frowned on programs that use race or gender as the basis for awarding a contract to a minority-owned firm over a white-owned firm that submitted a lower bid.

Last year, the justices said that official “racial classifications” are generally unconstitutional and can be used only to remedy proven past discrimination.

“This is a great decision,” said Pamela A. Lewis, an attorney from Walnut Creek who represented architect Jack Bras of Pleasanton. “It’s the first case dealing with an indirect program” of affirmative action,

The PUC policy is different from government affirmative action programs that impose rules for awarding contracts. Instead of mandating certain actions, the PUC tells utility companies to adopt policies of their own that steer a required minimum amount of business to firms owned by minorities or women.

Lewis said that white business owners have had a hard time contesting such programs because they could not prove that they were hurt by them.

The decision, she said, means “you no longer have to say, ‘I lost that contract.’ Now you can say, ‘I can’t compete on an even footing.’ ”

A lawyer for the PUC said that the high court’s action “eviscerates the ‘standing’ rule. It presents real challenges if state and local agencies can be so easily sued” over affirmative action policies, said Arocles Aguilar, the PUC attorney. “But we will still be defending our program in federal district court,” she added.

The affirmative action program began with a 1986 law. The Legislature said that utilities with more than $25 million in annual revenue must submit “goals and timetables . . . for increasing women, minority and disabled veteran business enterprise procurement.”

Two years later, the PUC gave teeth to this law by requiring utilities to adopt “minimum goals” for buying goods and services from firms owned by minorities or women. The order said that “not less than 15%” of a utility’s purchases must go to minority-owned businesses and “not less than 5% for women-owned business enterprises.”

This order covers the state’s 15 largest utilities, including Southern California Edison, Pacific Bell and Southern California Gas Co.

Last year, these utilities spent $4 billion on outside purchases, and of that total $1.1 billion went to firms owned by minorities and women, the PUC said.

Bras had done architectural work for Pacific Bell since 1969, but noticed that his business dropped off after 1991. That year, the utility had asked whether he was certified as a “Minority/Women Business Enterprise.”

When he inquired further, he learned that he was no longer eligible to get architectural work, even though a Pacific Bell official assured him that his company “was very competitive and was not eliminated due to any unsatisfactory performance.”

Bras filed suit against Pacific Bell and the PUC, alleging that he suffered discrimination based on race and sex in violation of the Constitution’s guarantee of “equal protection of the laws.”

Pacific Bell agreed to pay damages in a settlement sealed from public view. Not satisfied, Bras continued his suit seeking an order invalidating the 1988 PUC order and the 1986 law.

In upholding Bras’ standing to bring the claim, the 9th Circuit relied on a 1993 opinion written by Justice Clarence Thomas. That 7-2 ruling revived a white contractor’s damage suit against an affirmative action policy in Jacksonville, Fla., that had expired.

“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,” Thomas wrote, “a member of the former group seeking to challenge the barrier need not allege” that he had failed to obtain the benefit. Instead, the challenger must show only he is “able and ready to bid on contracts and that a discriminatory policy prevents [him] from doing so on an equal basis,” Thomas said.

In other action Tuesday, the court:

* Limited the damages that can be won by the families of persons killed over water in international air disasters. In a 9-0 ruling, the court said that a mother whose daughter died when Soviet fighters shot down a Korean Air Lines 747 in 1983 cannot win money for her “loss of society.” The law allows damages only for financial losses, the court said in the case (Zicherman vs. KAL, 94-1361). Damages in international air crashes are already limited by the Warsaw Convention.

* Let stand a ruling that awarded patents for developing AZT, the main drug used in treating AIDS patients, to the Burroughs Wellcome Co. The decision (Barr Labs vs. Burroughs, 94-1527) was a setback for generic drug makers who said that they should be allowed to sell the drug because scientists at the government’s National Institutes of Health helped put the Burrough’s discovery into use. A federal patent court disagreed, ruling that inventors need not show how their discoveries can be used to obtain a patent.

* DEADLOCKED: Court can’t decide closely watched software case. D2