Kimon Manolius, Hanson Bridgett San Francisco, California
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1 Thorny Issues in Transit Funding Litigation under Title VI, the Equal Protection Clause, and State Disparate Impact Statutes or How a case like Darensburg v. Metropolitan Transportation Commission can ruin your summer vacation Kimon Manolius, Hanson Bridgett San Francisco, California kmanolius@hansonbridgett.com
2 Case Background Filed in April, 2005 Filed in federal court N. Dist. of California Class Action Trial Commenced on October 1, 2008 Trial Completed in four weeks. Decision (90 pages) issued on March 27, Appeal filed by Plaintiffs Assigned to Magistrate Judge Elizabeth Laporte Class consisting of minority riders of AC Transit AC Transit is the Bay Area s 3 rd Largest Transit Operator with among the highest percentage minority ridership.
3 Parties Plaintiffs Three Individuals Labor Union Environmental Interest Group AC Transit Not A Party Represented by class action firm, labor union firm, public interest firm, and large commercial firm (pro bono). Defendant Metropolitan Transportation Commission (MPO, not transit provider) Represented by Hanson Bridgett
4 Legal and Initial Factual Theories Equal Protection (federal) (intentional) Title VI (federal) (intentional) Cal. Government Code sec (state counterpart to Title VI) (disparate impact) Allegations: MTC provided greater subsidy per passenger for rail riders MTC refused to fund most costeffective roots that would benefit minority riders MTC refused to fund student bus pass program MTC refused to provide funds as requested by community MTC dedicated money to transit expansion that could have been used for operations or rehabilitation. MTC favored rail over bus.
5 Relief Sought Injunctive Relief Only * More operating money for AC Transit. * Minor shift at the end of trial. Attorneys Fees and Costs
6 Background on MTC s Region The Bay Area Transit funding landscape. 26 Operators, differently situated. The seven largest operators are SF Muni, BART, AC Transit, Santa Clara s VTA, SamTrans, Caltrain and Golden Gate Transit. Racially diverse ridership. Local streets and roads, bridges, and highways.
7 Policies, Practices, and Realities Rehab, rehab, rehab, and rehab deficits. Shortage of operating funds across the board. 26 operators and the need for regional consensus. Zero Sum Game Lobbying and speaking with one voice.
8 Procedural Considerations MTC moved to dismiss under Fed. Rule Civ. Proc. Rule 12(b)(6) and prevailed. Plaintiffs amended. MTC moved again, and provides judicially noticeable documents to show that it funds transit in a non-discriminatory manner. Court denied second motion. Discovery like you ve never seen. Expert reports and depositions. Motions for Summary Judgment by both sides.
9 Procedural Considerations cont d MTC prevailed on its motion with regard to intentional discrimination claims. MTC s motion with regard to standing was denied. All motions regarding disparate impact were denied. Trial.
10 Federal Intentional Discrimination Claims Equal Protection/ Title VI Discovery MTC produces 500,000 paper documents. MTC produces 100 GB of e-docs. MTC produces 5 years of s from all key personnel. Searches regarding key terms. Searches regarding racially discriminatory terms. Document conversions on all hits.
11 Cal. Gov t Code sec (disparate impact state claim) Discovery Rule 30(b)(6) depositions on 14 topics. Other fact witness depositions.
12 Expert Discovery Plaintiffs * Transportation funding expert with a minor in statistics for disparate impact. Government process expert for intentional discrimination case. Defendants Statistician for disparate impact case. Transportation policy expert for policy corroboration. In-house expertise.
13 Expert Discovery cont d Each of Plaintiffs experts produce opening and rebuttal reports of over 100 pages. Both sides statisticians produce scores of charts. Lengthy but limited depositions.
14 Intentional Discrimination Keys Plaintiffs must show a significant discriminatory impact, and discriminatory intent with regard to a specific policy. Significant impact? Minority ridership % of different systems v. funding? v. projected shortfalls? v. expansion dollars allocated?
15 What is significant? Bay Area Transit riders 61% minority AC Transit 78% minority ridership. BART at 53% minority ridership. Caltrain at 51% minority ridership. (note: Caltrain is a joint powers authority comprised of VTA (70% - bus and rail), SamTrans (70% bus) and the City and County of San Francisco (58% bus and rail.) Bus v. rail High minority operator (>70%) v. Low (<60%) Are these appropriate comparisons?
16 Discriminatory Intent Direct evidence of discriminatory intent? If not, then use Arlington Heights factors to show at least an indicia of discriminatory intent: historical patterns, departures from procedural and substantive norms, etc. Plaintiffs must identify a specific decision that they challenge. These indicia must be decision specific. They must be contemporaneous with the specific decision at issue.
17 Arlington Heights factors Historical Background - original studies from 1960s and 1970s - original passage by Legislature of statute to fund BART s operations. - separate programs for expansion, rehab, and assisting lower income riders. - program delays for innovative, first-of-its kind program.
18 Arlington Heights factors cont d Procedural Norms Changes between draft and final documents. Changes in staff recommendations. Failure to adopt EJ principles, where no requirement to do so. Hiding data? No, that would be a missing exhibit. Substantive Norms Preservation of existing system trumps all other planning norms in 23 U.S.C. sec. 134(h)(1)(A)-(H) Equity analyses associated with RTPs. Failure to fund bus expansion without explanation.
19 Seizing the stage and taking over the agenda Best defense? Change focus from what you did not do, to what you did do. What you don t do v. what you do do. Infusions of operating money, assistance in swapping funds, policies to maximize operating money, protecting bus, other programs designed to assist law income or minority riders.
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25 Disparate Impact Keys Choice of metrics. What do you measure and for whom? What do the metrics show in light of the complexity of the transit funding landscape? The role of the statisticians. Plaintiffs brought numerous theories based on projected operating and capital deficits over 25 years, transit expansion dollars, total vehicle revenue hours and miles. Cuts in service became a key issue.
26 On appeal, new focus on expansion MTC s Resolution $13.5 billion over 25 years. 95% to be spent on new rail, and 5% on new bus. 85% to be spent on low minority projects v. 9% on high minority projects. Bus riders 66% minority, while rail riders are 52% minority in Bay Area. If you accept the bus/ rail dichotomy, do these feel like bad facts?
27 What is wrong with this picture? Ignores that expansion is limited and 80% of all funds go to rehab and operations. Assumes that these expansion funds are fungible and may be moved among projects. Is aggregate project cost meaningful? Assumes existing system riders are beneficiaries. Assumes no interconnectivity in system.
28 Deconstruct Projects Most importantly, it ignores what agencies sponsor and commit to funding the projects: Rail / Low minority Transbay Terminal at $1.2 billion sponsored by Joint Powers Authority comprised of 4 bus operators with minority ridership percentages of 78%, 58%, 38%, and 70%. Rail / Low minority BART to San Jose at $4.8 billion by Santa Clara s VTA, a bus/ rail operator with a 70% minority ridership percentage. Rail / Low minority Caltrain electrification sponsored by JPA comprised of 70% bus operator, 70% bus and rail operator, and 58% bus and rail operator. Result: $10.6 out of $13.6 billion are bus/ high minority sponsored projects.
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30 Disparate Impact cont d If prima facie case, burden shifts to MTC to justify its actions. Rational basis v. substantial justification v. business necessity. * Burden shifts back to Plaintiffs to show a better alternative.
31 Justification Standards Plaintiffs want to import necessity standards from Title VII, due to the dearth of planning/ policy cases under Title VI and state disparate impact statutes. Problematic in the planning/ policy context. Use legislative history and regulatory framework
32 Fighting the necessity defense. Legislative history and regulatory framework. Employment law standards applicable to hiring, promotional, screening cases not appropriate. Single screening or selection device as opposed to broad stroke policy decisions.
33 Legitimate non-discriminatory reason Very few transportation policy cases, but two district court cases support this lower standard. Borrow from other policy contexts like housing, bond issuance, etc., which support lower standard. Dicta in New York Urban League v. New York, 71 F.3d 1031 (2d Cir. 1995)( substantial justification).
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35 Lessons Learned Discrimination case in the MPO or transit operator context is simply ugly. Equity studies, Title VI reports, certification actions and awards unfortunately do not end the inquiry. Top to bottom review and everything is on the table. The importance of procedurally sound decision-making and documentation. Expense and staying with it. Document and e-document management. In-house expertise must be cultivated. The role of General Counsel.
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37 Lessons Learned Discrimination case in the MPO or transit operator context is simply ugly. Equity studies, Title VI reports, certification actions and awards unfortunately do not end the inquiry. Top to bottom review and everything is on the table. The importance of procedurally sound decision-making and documentation. Expense and staying with it. Document and e-document management. In-house expertise must be cultivated. The role of General Counsel.
38 Lessons Learned in Darensburg v. Metropolitan Transportation Commission Kimon Manolius, Hanson Bridgett San Francisco, California
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