Mountain West Holding Co. v. State of Montana

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAY 16 2017
MOLLY C. DWYER, CLERK
FOR THE NINTH CIRCUIT U.S. COURT OF APPEALS
MOUNTAIN WEST HOLDING CO., INC., No. 14-36097
Plaintiff-Appellant, D.C. No. 1:13-cv-00049-DLC
v.
MEMORANDUM *
THE STATE OF MONTANA; et al.,
Defendants-Appellees,
and
PATTI MCCUBBINS, MDT's Civil Rights
Bureau Chief and DBE Liaison Officer;
named only in her official capacity,
Defendant.
MOUNTAIN WEST HOLDING CO., INC., No. 15-35003
Plaintiff-Appellee, D.C. No. 1:13-cv-00049-DLC
v.
THE STATE OF MONTANA; et al.,
Defendants-Appellants,
and
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
PATTI MCCUBBINS, MDT's Civil Rights
Bureau Chief and DBE Liaison Officer;
named only in her official capacity,
Defendant.
Appeal from the United States District Court
for the District of Montana
Dana L. Christensen, Chief Judge, Presiding
Argued and Submitted March 10, 2017
Portland, Oregon
Before: LEAVY and FRIEDLAND, Circuit Judges, and BENITEZ,** District
Judge.
Montana and its state Department of Transportation receive federal funds for
transportation projects. As a condition of accepting those dollars, the State must
set up a program to avoid discrimination against “small business concerns owned
and controlled by socially and economically disadvantaged individuals.” See
Moving Ahead for Progress in the 21st Century Act, Pub. L. No. 112–141,
§ 1101(b)(3), 126 Stat. 405, 415 (2012). Federal law and regulations require states
to presume that women and certain racial and ethnic minorities are economically
and socially disadvantaged and authorizes states to set race- and gender-conscious
contract goals in certain circumstances. See W. States Paving Co. v. Wash. State
**
The Honorable Roger T. Benitez, United States District Judge for the
Southern District of California, sitting by designation.
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Dep’t of Transp., 407 F.3d 983, 988-90 (9th Cir. 2005). These preferred
contractors are commonly referred to as disadvantaged business enterprises or
“DBEs.”
Mountain West Holding Company installs signs, guardrails, and concrete
barriers on highways in Montana. It competes to win subcontracts from prime
contractors who have contracted with the State. It is not owned and controlled by
women or minorities. Some of its competitors are. In this case it claims that
Montana’s DBE goal-setting program unconstitutionally required prime
contractors to give preference to these minority or female-owned competitors,
which Mountain West argues was a violation of 42 U.S.C. § 1983 and Title VI of
the Civil Rights Act of 1964, 42 U.S.C. § 2000d, et seq.
The district court granted summary judgment to the State, and Mountain
West appealed. Montana also appealed the district court’s threshold determination
that Mountain West had a private right of action under Title VI, and it appealed the
district court’s denial of the State’s motion to strike an expert report submitted in
support of Mountain West’s motion.
We dismiss Mountain West’s appeal as moot to the extent Mountain West
pursues equitable remedies, affirm the district court’s determination that Mountain
West has a private right to enforce Title VI, affirm the district court’s decision to
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consider the disputed expert report, and reverse the order granting summary
judgment to the State.
I. Mootness
Montana does not currently employ gender- or race-conscious goals, and the
data it relied upon as justification for its previous goals are now several years old.
Mountain West’s claims for injunctive and declaratory relief are therefore moot.
See, e.g., Los Angeles County v. Davis, 440 U.S. 625, 631-34 (1979); Ctr. For
Biological Diversity v. Lohn, 511 F.3d 960, 963-64 (9th Cir. 2007).
Mountain West’s Title VI claim is not moot, however. A plaintiff may seek
damages to remedy violations of Title VI, see 42 U.S.C. § 2000d-7(a)(1)-(2);
Alexander v. Sandoval, 532 U.S. 275, 279 (2001), and Mountain West has sought
damages. Claims for damages do not become moot even if changes to a
challenged program make claims for prospective relief moot. See, e.g., Memphis
Light, Gas & Water Div. v. Craft, 436 U.S. 1, 8-9 (1978).
The appeal is therefore dismissed with respect to Mountain West’s claims
for injunctive and declaratory relief; only the claim for damages under Title VI
remains.1
1
We grant Montana’s motion to amend the caption because the Defendants whose
presence in the caption was contested could only be sued for equitable relief, see
Papasan v. Allain, 478 U.S. 265, 278 (1986), and the equitable relief claims must
be dismissed as moot.
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II. Private Rights of Action under Title VI
Reviewing de novo, we conclude for the reasons in the district court’s order
that Mountain West may state a private claim for damages against Montana under
Title VI. See Sandoval, 532 U.S. at 279-80; Cholla Ready Mix, Inc. v. Civish, 382
F.3d 969, 977-78 (9th Cir. 2004); Thinket Ink Info. Res., Inc. v. Sun Microsystems,
Inc., 368 F.3d 1053, 1060 (9th Cir. 2004).
III. The Expert Report of George R. LaNoue
Montana argues that the district court incorrectly admitted the report of
Mountain West’s expert witness, George R. LaNoue, Ph.D. Evidentiary decisions
such as this one are reviewed for an abuse of discretion, even in the context of
summary judgment. School Dist. No. 1J, Multnomah Cty. v. ACandS, Inc., 5 F.3d
1255, 1261 (9th Cir. 1993). A ruling can be reversed only if it was “manifestly
erroneous and prejudicial.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 (9th
Cir. 2002).
We affirm the district court’s decision to consider the report. Although the
report was authenticated after it was filed, the district court made a reasonable
decision to admit and consider it, and it seems Mountain West suffered no
prejudice as a result.
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IV. Discrimination Under Title VI
The district court granted summary judgment to Montana on Mountain
West’s claims for discrimination under Title VI. We review that decision de novo,
applying the same legal standard as the district court. Animal Legal Def. Fund v.
U.S. Food & Drug Admin., 836 F.3d 987, 988-89 (9th Cir. 2016) (en banc) (per
curiam). Evidence is viewed in the light most favorable to the non-moving party.
Id. Simultaneous cross-motions are considered independently under the same
standard. See, e.g., Tulalip Tribes of Wash. v. Washington, 783 F.3d 1151, 1156
(9th Cir. 2015).
Montana does not dispute that its program took race into account.
Classifications based on race are permissible “only if they are narrowly tailored
measures that further compelling governmental interests.” W. States Paving, 407
F.3d at 990 (quoting Adarand Constructors, Inc. v. Peña, 515 U.S. 200, 227
(1995)).2 Montana bears the burden to justify any racial classifications. Id. In an
as-applied challenge to a state’s DBE contracting program, “(1) the state must
establish the presence of discrimination within its transportation contracting
2
As in Western States Paving, we apply here the same test to claims of
unconstitutional discrimination and discrimination in violation of Title VI. See
407 F.3d at 987; see also Sandoval, 532 U.S. at 281 (noting that Title VI
“proscribes only those racial classifications that would violate the Equal Protection
Clause of the Fifth Amendment” (citation and quotation marks omitted)).
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industry, and (2) the remedial program must be ‘limited to those minority groups
that have actually suffered discrimination.’” Assoc. Gen. Contractors of Am. v.
Cal. Dep’t of Transp., 713 F.3d 1187, 1196 (9th Cir. 2013) (quoting W. States
Paving, 407 F.3d at 997-99). Discrimination may be inferred from “a significant
statistical disparity between the number of qualified minority contractors willing
and able to perform a particular service and the number of such contractors
actually engaged by the locality or the locality’s prime contractors.” City of
Richmond v. J.A. Croson Co., 488 U.S. 469, 509 (1989).
Here, the district court held that Montana had satisfied its burden. In
reaching this conclusion, the district court relied on three types of evidence offered
by Montana. First, it cited a study prepared by the D. Wilson Consulting Group
(“Wilson”), which reported disparities in professional services contract awards in
Montana. Second, the district court noted that participation by DBEs declined
after Montana abandoned race-conscious goals in the years following our decision
in Western States Paving, 407 F.3d 983. Third, the district court cited anecdotes of
a “good ol’ boys” network within the State’s contracting industry. We hold that
summary judgment was improper in light of genuine disputes of material fact as to
the Wilson study’s analysis, and because the second two categories of evidence
were insufficient to prove a history of discrimination.
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A. The Wilson Study
Through his expert report and deposition, LeNoue testified that the Wilson
firm relied on several questionable assumptions and an opaque methodology to
conclude that professional services contracts were awarded on a discriminatory
basis. See Thomas v. Newton Int’l Enters., 42 F.3d 1266, 1270 (9th Cir. 1994)
(explaining that conflicting expert testimony is itself “sufficient to create a genuine
issue of disputed fact sufficient to defeat a summary judgment motion”). A few
examples illustrate the areas in which there are disputes of fact as to whether the
Wilson study sufficiently supported Montana’s actions:
1. Our cases require states to ascertain whether lower-than-expected
DBE participation is attributable to factors other than race or gender. W. States
Paving, 407 F.3d at 1000-01. LeNoue argues that the Wilson study did not explain
whether or how Wilson accounted for a given firm’s size, age, geography, or other
similar factors. The Wilson report’s authors were unable to explain their analysis
in depositions for this case. Indeed, even Montana appears to have questioned the
validity of Wilson’s statistical results.
2. Wilson relied on a telephone survey of a sample of Montana
contractors. LeNoue argued that (a) it is unclear how Wilson selected that sample,
(b) only a small percentage of surveyed contractors responded to questions, and
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(c) it is unclear whether responsive contractors were representative of
nonresponsive contractors.
3. Wilson relied on very small sample sizes but did no tests for statistical
significance, and Wilson admitted that “some of the population samples were very
small and the result may not be significant statistically.”
4. LaNoue argued that Wilson gave equal weight to professional services
contracts and construction contracts, but professional services contracts composed
less than ten percent of total contract volume in the State’s transportation
contracting industry.
5. LaNoue argued that Montana incorrectly compared the proportion of
available subcontractors to the proportion of prime contract dollars awarded. The
district court did not address this criticism or explain why Wilson’s comparison
was appropriate.
B. The Post-2005 Decline in Participation by DBEs
We are likewise unable to affirm the district court’s order in reliance on the
decrease in DBE participation after 2005. In Western States Paving, we held that a
decline in DBE participation after race- and gender- based preferences are halted is
not necessarily evidence of discrimination against DBEs. See 407 F.3d at 999 (“If
[minority groups have not suffered from discrimination], then the DBE program
provides minorities who have not encountered discriminatory barriers with an
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unconstitutional competitive advantage at the expense of both non-minorities and
any minority groups that have actually been targeted for discrimination.”); id. at
1001 (“The disparity between the proportion of DBE performance on contracts that
include affirmative action components and on those without such provisions does
not provide any evidence of discrimination against DBEs.”); see also U.S. Dep’t of
Transp., Western States Paving Co. Case Q&A (Dec. 16, 2014) (“In calculating
availability of DBEs, [a state’s] study should not rely on numbers that may have
been inflated by race-conscious programs that may not have been narrowly
tailored.”).
C. Anecdotal Evidence of Discrimination
Without a statistical basis, the State cannot rely on anecdotal evidence alone.
Coral Const. Co. v. King Cty., 941 F.2d 910, 919 (9th Cir. 1991) (“While
anecdotal evidence may suffice to prove individual claims of discrimination,
rarely, if ever, can such evidence show a systemic pattern of discrimination
necessary for the adoption of an affirmative action plan.”); see also Croson, 488
U.S. at 509 (“[E]vidence of a pattern of individual discriminatory acts can, if
supported by appropriate statistical proof, lend support to a local government’s
determination that broader remedial relief is justified.”).
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* * *
In sum, because we must view the record in the light most favorable to
Mountain West’s case, we conclude that it provides an inadequate basis for
summary judgment in Montana’s favor.
V. Conclusion
We reverse and remand for the district court to conduct whatever further
proceedings it considers most appropriate, including trial or the resumption of
pretrial litigation. See Fed. R. Civ. P. 16(b)(4) (allowing modification of a
scheduling order for good cause); Butler v. San Diego Dist. Attorney’s Office, 370
F.3d 956, 964 (9th Cir. 2004) (noting that a district court had discretion to reopen
discovery on remand given this court’s clarifications on appeal).
DISMISSED in part, REVERSED in part, and REMANDED.
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