The Californians for Equal Rights Foundation, an anti-discrimination nonprofit, plus two California taxpayers are challenging a pair of Alameda County programs that put non-minority-owned companies at a disadvantage when competing for government contracts. Pacific Legal Foundation, the nonprofit representing the Californians pro bono, filed a lawsuit in state court on Monday alleging that the programs are unconstitutional.
The programs require that at least 15 percent of the money the county pays for certain contracts, known as “set-asides,” be put into the hands of “minority business enterprises” — determined solely by skin color. Wencong Fa, the PLF attorney for the case, told The Federalist that normally a company known as a “prime contractor” would receive a contract for a project from the county and then subcontract other companies to complete certain parts of the project, but now a portion of that subcontracting is race-based.
Fa said that even though the set-aside is only 15 percent, it effectively excludes some non-minority businesses from competing for county contracts. If a prime contractor decides to meet the race requirement by subcontracting trucking to a minority company, for example, all non-minority trucking companies are automatically excluded from the entire county contract.
The program also harms minority businesses, Fa added. In the lawsuit, he referenced minority companies being used as “‘pass through’ subcontractors that allow the prime contractor [to] meet the minority business ‘participation goals,’ but perform none of the work.” He also referenced a minority subcontractor who “receives calls from companies that know that he cannot do the work — just so that they can say that they made the effort.”
The lawsuit argues these discriminatory programs violate the Equal Protection Clause of the 14th Amendment as well as the California Constitution, which specifically forbids racial discrimination in public contracting.
Fa said Pacific Legal Foundation has won victories in similar anti-discrimination cases, including challenges to race-based farm loan forgiveness, racially discriminatory Covid relief for small businesses, and racial discrimination in admissions at a Virginia high school.
“The construction business and public contracting, it’s often a very difficult business,” Fa said. “Companies face a lot of barriers to opportunity, and we believe strongly that government-sanctioned racial discrimination should not be one of those barriers.”
Fa said the lead plaintiff, the Californians for Equal Rights Foundation, is “a grassroots advocacy group that takes a strong stand against racial discrimination” and was at the forefront of the successful fight to keep California’s anti-discrimination constitutional provision in place when voters had to decide in 2020 whether to repeal it. The other two plaintiffs, he said, are Alameda County taxpayers Chunhua Liao, who has fought racial preferences in education, and Debbie Ferrari, who has worked for almost 40 years in the trucking industry.
“The government is spending public funds paid by the taxpayers,” Fa said, “so they can’t do so for illegal or unconstitutional purposes.” He continued, “Alameda County is spending taxpayer money on race-based public contracting programs, which is unconstitutional under both the federal Constitution and the [California state] Constitution.”