9th Circuit panel rejects minority-contract awards

Washington state cannot favor minority-owned firms in awarding road-building contracts because it hasn't proved minority contractors have faced discrimination, a three-judge panel of the 9th U.S. Circuit Court of Appeals ruled yesterday.

Western States Paving of Vancouver, Wash., sued the state Department of Transportation, Clark County and the city of Vancouver after losing several road-paving contracts to minority-owned firms with higher bids.

The company argued that federal law allowing states to give preference to minority firms was unconstitutional, and that the state did not properly follow federal guidelines.

A U.S. District Court judge ruled against Western States Paving, but the three-judge appellate panel disagreed in part. The federal guidelines — part of the Transportation Equity Act for the 21st Century — were affirmed, but the panel disputed the way the state enforces them.

The appellate panel sent the case back to U.S. District Court for a ruling on damages for Western States Paving.

The law allows use of race- and sex-based preferences in federally funded transportation contracts, but only if a state has proved there has been bias against minority contractors.

The three-judge panel said the Department of Transportation did not provide enough evidence that minorities suffer or have ever suffered discrimination in transportation contracting.

"We have previously expressed similar concerns about the haphazard inclusion of minority groups in affirmative-action programs ostensibly designed to remedy the effects of discrimination," the opinion said.

Gary Lofland, a Yakima attorney representing Western States Paving, said the company was pleased with the decision and believes the court followed existing law, calling for evidence of past discrimination before approving race-based preferences.

"Throughout the proceeding, the state has acknowledged it never had that evidence," Lofland said.

He said the lower-court discussion of damages would include the contracts cited in the lawsuit, plus any previous or subsequent instances in which Western States lost a bid.

State officials declined to comment yesterday, saying they had not yet read the 9th Circuit opinion.