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Southwest Washington Chapter, National Electrical Contractors Ass'n v. Pierce County
Citations: 667 P.2d 1092; 100 Wash. 2d 109Docket: 48975-1
Court: Washington Supreme Court; July 28, 1983; Washington; State Supreme Court
In the case of Southwest Washington Chapter, National Electrical Contractors Association v. Pierce County, the Supreme Court of Washington upheld an affirmative action plan aimed at increasing participation of minority and women's business enterprises in public works contracting. The appellants contended that the plan infringed upon statutory competitive bidding requirements and constitutional rights. The court found no violations of either constitutional or statutory provisions, affirming the lower court's decision. The Pierce County Council enacted ordinance 81-121 on January 5, 1982, which established the affirmative action plan in response to the identified underrepresentation of minorities and women in the workforce. Key components of the plan required contractors to actively seek minority subcontractors and set a participation goal of at least 12 percent of the total contract amount for minority businesses, though no specific goal was established for women. This goal was derived from consultations with various stakeholders and a review of existing regulations. When soliciting bids for a new Detention and Correction Center on January 8, 1982, the county mandated bidders to certify their intended subcontracting amounts for minority and women-owned businesses and to make every effort to meet specific subcontracting goals. The goals were set at approximately 11 percent for minority businesses and 1 percent for women-owned businesses. The selection of the successful bidder was contingent on meeting these goals or demonstrating good faith efforts if the goals were not met. The county outlined criteria for evaluating good faith, comparing the participation rates of bidders to determine responsiveness. The court's ruling affirmed the legitimacy of these measures in promoting diversity in public contracting. "Minority" encompasses individuals and groups identified as economically and socially disadvantaged under the Small Business Act, including blacks, Hispanics, Asian Americans, and native North Americans. To qualify as a Minority Business Enterprise (MBE) or Women Business Enterprise (WBE), a business must have at least 51 percent ownership and full management control by minorities or women. The County's bidding process on February 16, 1982, revealed only one compliant bidder, which was over budget. Due to perceived misunderstandings regarding affirmative action requirements among other bidders, all bids were rejected. The County then amended the specifications to address issues and clarified the affirmative action requirements, allowing the low bidder to amend proposals for subcontracting with MBEs and WBEs if all bids within budget were non-compliant. New bids were solicited, opening on March 23, 1982, where all bidders met the affirmative action goals except the low bidder. Following the contract award to this low bidder, Commercial Electric, Inc., a subcontractor, alongside local contractor associations, initiated legal action originally seeking damages and injunctions but later focused solely on declaratory relief for future projects. The complaint alleges that the affirmative action standards are typical across other projects, an assertion the County does not dispute. This situation constitutes a justiciable controversy under the Uniform Declaratory Judgments Act. The trial court ruled against the appellants, who subsequently petitioned for direct review, arguing that the County's affirmative action plan infringes upon the state competitive bidding statute, the Fourteenth Amendment's equal protection clause, and state constitutional provisions regarding privileges and immunities and equal rights. Under RCW 36.32.250, public works contracts must be awarded to the lowest responsible bidder, with the option to reject any bid for good cause. Appellants maintain that failing to meet affirmative action goals does not justify the rejection of a bid nor classify a bidder as "not responsible," asserting that these terms should pertain solely to factors affecting work quality or completion. The definitions of "responsible" and "good cause" remain ambiguous. The term "reasonable under the law" is defined in Butler v. Federal Way Sch. Dist. as a standard for assessing legal compliance. Preferences for state residents are generally prohibited, as seen in Reiner v. Clarke County, but the state's interest in addressing past discrimination is deemed more significant. In Laborers Local 374 v. Felton Construction Co., the state's interest in residents' employment did not warrant a requirement for public works contractors to hire 95% state residents. Conversely, in Schmidt v. Oakland Unified School District, the state was justified in using racial classifications to mitigate past discrimination. Interpretations of similar statutory language vary across states. McQuillin suggests that agencies may reject low bids if it serves the public interest, including adherence to affirmative action goals. Other courts have limited terms like "responsible" and "good cause" to factors related to quality alone. However, this document supports a broader interpretation, emphasizing that "responsible" includes the contractor's social responsibility and that "good cause" encompasses compelling reasons beyond quality concerns. This approach aligns with the competitive bidding statute's dual purposes: protecting the public from fraud and favoritism and ensuring a fair bidding process. Rejecting bids for failing to meet affirmative action criteria does not risk fraud or favoritism and supports the public interest by addressing past discrimination. The argument that "responsible" and "good cause" should be narrowly construed to only include quality factors is dismissed, as the ejusdem generis rule does not apply in this context according to the document's interpretation. The ejusdem generis rule applies when general and specific words are associated within the same sentence, following a specific pattern. It loses relevance when the terms are not clearly connected. The appellants argue that the County's affirmative action plan breaches the equal protection clause of the Fourteenth Amendment. The Supreme Court's decision in Fullilove v. Klutznick is critical, as it upheld a federal requirement for minority subcontracting in public works projects, despite a split opinion among the Justices. Chief Justice Burger's controlling opinion emphasizes a two-step analysis: first, determining if the law's objective falls within congressional authority, and second, assessing the constitutional validity of the chosen means. The law aimed to address the consequences of past discrimination and was deemed valid under the commerce clause, supported by a rational basis that current practices could lead to ongoing discrimination. Chief Justice Burger justified the regulation of state and local governmental grantees through Congress' enforcement power under the Fourteenth Amendment, noting that state practices could be regulated if Congress reasonably judges them to perpetuate past discrimination. He emphasized that any congressional program using racial or ethnic criteria must be narrowly tailored to address the effects of past discrimination but rejected the notion that actions must be completely "color-blind." Burger found the law in Fullilove sufficiently narrow, highlighting the minimal burden on nonminority firms and the administrative provisions allowing for case-by-case waivers and exemptions, ensuring that the law remained aligned with its remedial objectives. Justice Powell concurred with the plurality opinion, applying a three-part test: there must be authority to act on identified discrimination, findings of past discrimination must exist, and remedies must be narrowly drawn to fulfill governmental purposes. He supported the congressional authority based on the commerce clause and the enforcement powers of the Thirteenth, Fourteenth, and Fifteenth Amendments, while not distinguishing between regulating private and governmental entities. Powell emphasized that findings should satisfy fair-minded individuals and acknowledged that the specificity of findings could vary based on the governmental body's nature. Ultimately, he deemed the findings in Fullilove sufficient and aligned his means prong with Burger’s test. Justice Powell identified five factors for evaluating affirmative action plans: (1) effectiveness of alternative remedies, (2) anticipated duration of the remedy, (3) correlation between the percentage of minority workers and the set-aside percentage, (4) availability of waivers if goals are unmet, and (5) impact on innocent third parties. He concluded the plan in Fullilove was sufficiently narrow. Three essential requirements emerged for affirmative action plans under the equal protection clause: 1. The governmental body must possess authority to address racial discrimination issues, with Justice Powell suggesting this authority lies primarily with Congress. However, Chief Justice Burger's opinion indicates that state governments also hold this authority under their police power, paralleling Congress's scope under the commerce clause. 2. Affirmative action plans must be based on minimal findings demonstrating that past discrimination effects are being perpetuated, providing a "rational basis" for the plan. 3. Plans must be "narrowly tailored," meaning they should only address the specific issues justifying their existence and be adaptable for individual cases. While not mandatory, the factors proposed by Justice Powell can aid in evaluating the plans, particularly emphasizing the importance of including waivers for specific situations. The Pierce County affirmative action plan meets the necessary legal requirements to address past discrimination. Pierce County possesses the authority to tackle this issue, having enacted a home rule charter that grants it broad powers akin to those of the state legislature, except where explicitly limited. Evidence of past discrimination is present, despite the lack of preserved records from County Council meetings; documentation exists showing engagement with stakeholders and acknowledgment of minority and female underrepresentation in the workforce within the ordinance's preamble. The Council's reliance on broader national and state findings is permissible, aligning with established legal precedents. The plan demonstrates a "rational basis" for addressing ongoing discrimination effects, and while lacking a fixed expiration date, it includes provisions for annual review and revision. Other factors favoring the plan include the absence of more effective alternative remedies and a minimal burden on nonminority male-dominated firms, which can still compete for 88% of subcontracting opportunities. The 11% Minority Business Enterprise (MBE) participation goal reflects the minority population in Pierce County and aligns with similar cases where set-aside goals were deemed acceptable in relation to population demographics. The excerpt highlights the importance of a flexible waiver scheme in affirmative action plans, as emphasized by Chief Justice Burger in Fullilove. Key components of this scheme include procedures to identify non-bona fide Minority Business Enterprises (MBEs) and opportunities for grantees to demonstrate their inability to meet MBE participation goals despite good faith efforts. Lower court-approved plans have similarly included provisions for waivers under specific conditions, ensuring flexibility. The Pierce County plan is deemed sufficiently flexible, incorporating a "semi-individualized" consideration of project-specific circumstances through an objective definition of good faith. This definition, which relies on market conditions as reflected in contractor bids, mitigates arbitrariness in waiver decisions. The plan's adherence to Fullilove's requirements supports its constitutionality under the equal protection clause, extending this validation to Women Business Enterprises (WBEs) as well. Under federal law, sex-based classifications face intermediate scrutiny, which the plan satisfies due to its compliance with Fullilove. The appellants argue that the Pierce County affirmative action plan violates the state constitution, asserting it breaches the state equal protection clause and the state Equal Rights Amendment (ERA). However, the interpretation of the state equal protection clause aligns closely with federal standards, and while stricter limitations could theoretically be applied, no compelling reason to impose them exists. The ERA is distinct from the federal equal protection clause and lacks a direct federal counterpart. The Equal Rights Amendment (ERA) categorically prohibits sex-based discrimination, disallowing even narrow exceptions typically allowed under strict scrutiny. It emphasizes equality without sacrificing it for state interests, allowing for limited separate equality under specific circumstances. While the ERA mandates equal rights, it does not prevent affirmative government actions aimed at achieving actual equality for women, viewing such measures as necessary to rectify past discrimination. Affirmative action programs that focus solely on addressing the impacts of historical discrimination do not violate the ERA. The text clarifies that the requirements for sex-based affirmative action are less stringent than those for racial programs; they must aim to eliminate past discrimination effects and have a rational basis for doing so. Courts may evaluate the intent behind such programs by examining legislative history, the representation of the favored sex in the workforce, evidence of past discrimination, and how the law relates to outdated gender stereotypes. The mere declaration of a benign purpose does not automatically exempt a law from scrutiny. Legislative intent behind sex-based classifications is scrutinized more rigorously, as those not aimed at correcting past inequities are largely forbidden. The Pierce County plan in this context is determined to have the sole purpose of addressing the consequences of past discrimination. The law's intent aligns with the surrounding circumstances and lacks any conflicting legislative history. The 1 percent goal for women's representation is below their workforce and population percentages and cannot be seen as detrimental to men. Historical underrepresentation of women in the construction industry is well-documented. The law does not rely on outdated sexual stereotypes; instead, it counters the notion that women are incapable of physically demanding work. The affirmative action plan in question does not violate federal or state law, leading to the affirmation of the trial court's judgment. One concurring judge expresses concern over the majority's reliance on past discrimination to justify current affirmative action programs, arguing that this rationale is problematic due to the difficulties in proving past discrimination. The majority's vague references do not substantiate their claims. The judge suggests focusing solely on whether the program addresses current underrepresentation, which Pierce County's plan does, thus supporting the majority's conclusion. The excerpt also notes that the statute involved did not include a "good cause" requirement and that local legislative bodies should not be held to the same detailed record-keeping standards as Congress. Although affirmative action programs must meet federal constitutional requirements, no additional state constitutional limitations apply. The court has shifted from a strict scrutiny standard for sex-based classifications to a review governed by the Equal Rights Amendment (ERA).