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Court upholds CA DBE program An appeal challenging the constitutionality of the California Department of Transportation's (Caltrans) Disadvantaged Business Enterprise (DBE) program was dismissed by the 9th U.S. District Court of Appeals in mid-April.

The appeal, brought by the San Diego Chapter of the Associated General Contractors of America (AGC), claimed that the DBE program implemented by Caltrans in 2009 unconstitutionally provided race- and sexbased preferences to businesses owned by African Americans, Native Americans, Asian-Pacific Americans, and women on certain transportation contracts. In its appeal, the AGC sought declaratory and injunctive relief against the DBE regulations.

The court, however, dismissed the appeal on the basis that the AGC had no associational standing to bring suit since it was unable to identify members that have "suffered or will suffer harm as a result of Caltrans' program." Moreover, the court said that even if the AGC could establish standing, its appeal would fail since the DBE program survives "strict scrutiny" and is "narrowly tailored to benefit only those groups that have actually suffered discrimination."

The AGC originally filed a complaint against the DBE program in 2009, but the court ruled in favor of Caltrans in 2011. At the time, the court found that the program was "clearly constitutional" and that it was supported by a strong basis in evidence. Since the establishment of the strict scrutiny and narrow tailoring requirements in a related 2005 case, Caltrans has commissioned two studies to justify the program.

The DBE program was established at the federal level, but it is implemented by states individually as a condition of receiving federal transportation dollars. California receives up to $3 billion in transportation funding from Washington annually.

Caltrans is not the only government entity to find itself in court over its efforts to include minority and women-business participation on its contracts. In 1993, the City of Jacksonville, Florida was taken to the Supreme Court over its DBE program, as was the Washington Sate Department of Transportation in 2005.

Despite its recent victory, Caltrans may again find itself in court over its DBE program. The AGC's attorney has said that they will likely appeal the decision to the Supreme Court.