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IN THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
Consolidated Nos. 98-3011, 98-3261
Julie M. Williamson
Duncan R. Butts
Eric Fisher
Jonathan Goldberg
Ann C. Kiley
McKENNA & CUNEO, L.L.P.
370 Seventeenth Street, Suite 4800
Denver, Colorado 80202
(303) 634-4000
Attorneys for amicus curiae
Lawyers' Committee
for Civil Rights Under Law
Pages
TABLE OF AUTHORITIES ii
STATEMENT OF INTEREST OF AMICUS CURIAE 1
INTRODUCTION 2
ARGUMENT 5
I. THE PLAIN LANGUAGE OF SECTION 1981 AFFORDS BROAD PROTECTION
AGAINST RACE DISCRIMINATION PRIOR TO, AT THE TIME OF, AND FOLLOWING
ENTRY INTO CONTRACTS 5
II. THE LEGISLATIVE HISTORY DEMONSTRATES THAT SECTION 1981 IS INTENDED
TO PROTECT, BROADLY AND PRACTICALLY, THE OPPORTUNITY TO
PARTICIPATE IN THE MARKETPLACE 7
A. The 1866 Civil Rights Act 7
B. The 1991 Civil Rights Act 10
III. UNDER RUNYON AND ITS PROGENY, THE RIGHT TO "MAKE AND ENFORCE
CONTRACTS" INCLUDES PROTECTION FROM DISCRIMINATORY
CONTRACT-RELATED ACTS BEFORE AND AFTER THE ACTUAL CONTRACT 12
IV. ACCEPTANCE OF THE LOWER COURT'S LIMITATIONS ON THE COVERAGE OF
§ 1981 WOULD LEAD TO RESULTS SO ABSURD THAT CONGRESS CANNOT BE
CONSIDERED TO HAVE INTENDED SUCH LIMITATIONS 18
CONCLUSION 21
CERTIFICATE OF COMPLIANCE 23
CERTIFICATE OF SERVICE 24
TABLE OF AUTHORITIES
Page(s)
Cases
Bellows v. Amoco Oil Co., 118 F.3d 268 (1997) 17
Chandler v. Roudenbush, 425 U.S. 840 (1976) 20
Duparquet Co. v. Evans, 297 U.S. 216 (1936) 8
Fadeyi v. Planned Parenthood Ass'n of Lubbock, Inc.,
160 F.3d 1048 (5th Cir. 1998) 20
General Bldg. Contractor's Ass'n v. Pennsylvania, 458 U.S. 375 (1982) 8
Hall v. Pennsylvania State Police, 570 F.2d 86 (3rd Cir. 1978) 14, 15
Hampton v. Dillard Dep't Stores, Inc., 18 F. Supp. 2d 1256 (D. Kan. 1998) 2, 3, 5
Hampton v. Dillard Dep't Stores, Inc., 985 F. Supp. 1055 (D. Kan. 1997) 2, 3, 4
Jones v. Alfred H. Mayer Co., 392 U.S. 409 (1968) 7, 8, 9, 10, 12
Lewis v. J.C. Penney Co., Inc., 948 F. Supp. 367 (D. Del 1996) 3, 17
Lynch v. Alworth-Stephens Co., 267 U.S. 364 (1925) 20
Morris v. Office Max, 89 F.3d 411 (7th Cir. 1996) 16
Patterson v. McLean Credit Union, 491 U.S. 164 (1989) 6, 10, 11, 14, 18, 19
Phelps v. Wichita Eagle-Beacon, 886 F.2d 1261 (10th Cir. 1989) 13, 14, 17
Runyon v. McCrary, 427 U.S. 160 (1976) 12, 13, 16, 17, 19
Sullivan v. Little Hunting Park, Inc., 396 U.S. 229 (1969) 10
Tillman v. Wheaton-Haven Recreation Ass'n, 410 U.S. 431 (1973) 10, 13
Washington v. Duty Free Shoppers, Ltd., 710 F. Supp. 1288 (N.D. Cal. 1988) 15
Watson v. Fraternal Order of Eagles, 915 F.2d 235 (6th Cir. 1990) 14
White v. Denny's, Inc., 918 F. Supp. 1418 (D. Colo. 1996) 15
Statutes
42 U.S.C. § 1981 (1991) 1, 2, 6
42 U.S.C. § 1982 (1968) 9
42 U.S.C. § 1981(a) (1991) 5
Act of April 9, 1866, ch. 31, 14 Stat. 27 (1866) (Civil Rights Act of 1866) 7, 9
Civil Rights Act of 1991, P.L. 102-66, 105 Stat. 1071 (1991) 6, 10, 16, 17, 18
Other Authorities
Barry Sullivan, Historical Reconstruction, Reconstruction History, and the
Proper Scope of Section 1981, 98 Yale L.J. 541 (1989) 8
137 Cong. Rec. H9526 (daily ed. Nov. 7, 1991.) 12
137 Cong. Rec. H9543 (daily ed. Nov. 7, 1991) 11
137 Cong. Rec. S15472-73 (daily ed. Oct. 30, 1991) 11
137 Cong. Rec. S15483 (daily ed. Oct. 30, 1991) 11
Cong. Globe, 39th Cong., 1st Sess. (1866) 8
H.R. Exec. Doc. No. 11, 39th Cong., 1st Sess. (1866) 9
H.R. Rep. No. 102-40(II), 102nd Cong., 1st Sess. (1991) 11
Ian Ayres, Fair Driving: Gender and Race Discrimination in Retail Car
Negotiations, 104 Harv. L. Rev. 817 (1991) 20
Joe R. Fagin, The Continuing Significance of Race: Antiblack Discrimination in
Public Places, 56 Am. Soc. Rev. 101 (1991) 20
Lena Williams, When Blacks Shop, Bias Often Accompanies the Sale,
N.Y. Times, April 30, 1991 20
Report of C. Schurz, S. Exec. Doc. No. 2, 39th Cong., 1st Sess. (1865) 8
Constitutional Provisions
Thirteenth Amendment § 2 10
STATEMENT OF INTEREST OF AMICUS CURIAE
The Lawyers' Committee for Civil Rights Under Law is a tax-exempt, nonprofit civil rights organization that was founded in 1963 by the leaders of the American bar, at the request of President Kennedy, in order to help defend the civil rights of minorities and the poor. Its Board of Trustees presently includes several past Presidents of the American Bar Association, past Attorneys General of the United States, law school deans and professors, and many of the nation's leading lawyers. It has independent local affiliates in Boston, Chicago, Denver, Los Angeles, Philadelphia, San Antonio, San Francisco, and Washington, D.C. Through the Lawyers' Committee and its affiliates, hundreds of attorneys have represented thousands of clients in civil rights cases across the country challenging racial discrimination in virtually all aspects of American life.
The proper construction of 42 U.S.C. § 1981 lies at the heart of the Lawyers' Committee's mission. Section 1981 embodies the core principles that were intended to guide the rebuilding and healing of the nation after the abolition of slavery and the end of the Civil War. While all statutes are to be construed to effectuate their legislative purposes, this principle of statutory construction is particularly significant for a statute enacted to serve the great national purpose of ending racial discrimination.
The efforts of the Lawyers' Committee helped persuade Congress to enact the Civil Rights Act of 1991. A major purpose of that statute was the restoration of 42 U.S.C. § 1981 as a viable remedy for racial discrimination at all stages, and in all aspects, of contracting. If allowed to stand, the limited and narrow construction of the court below would judicially repeal much of the remedial authority of § 1981 which Congress reestablished in 1991.
INTRODUCTION
The question of the scope of protection from discrimination afforded by 42 U.S.C. § 1981 in this case arises primarily in the November 25, 1997 ruling of the district court on the motion of defendant, Dillard Department Stores, Inc., for summary judgment. Hampton v. Dillard Dep't Stores, Inc., 985 F. Supp. 1055 (D. Kan. 1997). In that decision, the district court sought to apply § 1981 to the claims and facts presented by both plaintiffs, Ms. Hampton and Ms. Cooper. In addition, the district court's August 27, 1998 decision on Defendant's Motion for Judgment As A Matter Of Law, Or Alternatively For A New Trial Or Remittitur, Hampton v. Dillard Dep't Stores, Inc., 18 F. Supp. 2d 1256 (D. Kan 1998), addressed the jury's determination of the extremely limited § 1981 claim that the district court permitted Ms. Hampton to present at trial.
In its decision on summary judgment, the district court considered several theories of § 1981 liability offered by the plaintiffs as shoppers and customers of Dillard. First, the court rejected plaintiffs' claim that being subjected to an intentionally racially discriminatory surveillance, stop and search policy and practice "deprived them of their right to make, perform, modify, and terminate a contract." Hampton, 985 F. Supp. at 1059. Finding that "plaintiffs identify no contract with which [the security guard] interfered," the court held that "[a] claim for interference with the right to make and enforce a contract must allege the actual loss of a contract interest.' Id. (emphasis added) Second, the district court rejected plaintiffs' claim that such discriminatory security practices denied them "a benefit or privilege of a merchant's implied contractual offer to let them shop in its store." Id. Quoting another district court, the court below agreed that "to allow plaintiffs to proceed under such a theory 'would come close to nullifying the contract requirement of section 1981 altogether, thereby transforming the statute into a general cause of action for race discrimination in all contexts." Hampton, 985 F. Supp. at 1060 (quoting Lewis v. J.C. Penney, 948 F. Supp. 367, 371-72 (D. Del. 1996) (emphasis added)). Third, the court declined to enter summary judgment against plaintiffs on their claim that the security guard "interrupted them while they were redeeming their free cologne coupons, and that in doing so, he violated their rights to enjoy the benefits and privileges of their contract with Dillard's." Id. (emphasis added). With respect to this claim, however, the court expressed its doubt whether Ms. Cooper had "an actionable claim under Section 1981" because, "although the coupons were a benefit of purchase, Cooper did not make a purchase." Id. at 1060 (emphasis added). Ultimately, only Ms. Hampton's claim went to the jury, and then only on the very narrow questions whether the coupon she received was a benefit of her prior purchase and whether Dillard interfered with her attempt to redeem the coupon Hampton, 18 F. Supp. 2d at 1264.
In these rulings, the district court imposed several sweeping restrictions on the scope and availability of § 1981 as a protection against intentional race discrimination. First, it clearly imposed as a necessary precondition to a § 1981 claim a requirement that a plaintiff actually have entered into a contract with the defendant. It was on the basis of such a perceived "contract requirement of section 1981," Hampton, 985 F. Supp. at 1060, that the court rejected plaintiffs' claim to the protection of § 1981 as shoppers and customers in the store potential contractors whether before, after, or in the absence of, any actual purchase. In short, the court held that the plaintiffs' right to make a contract, their equal opportunity to enter into a contract, could be violated only if they actually made a contract or, presumably, unsuccessfully attempted to make an actual purchase.
Second, the court sharply restricted § 1981's protections as applicable only with respect to a specific purchase or contract, as distinct even from other purchases from, or contracts with, the same defendant. Thus, even though Ms. Hampton had already made a purchase from formed a contract with Dillard, the court held that she could not assert a § 1981 claim because the subsequent actions of the security guard did not interfere with a separate and distinct purchase or contract; "plaintiffs identify no contract with which [he] interfered. Id. at 1059. Thus, the district court interpreted § 1981 to protect persons from discrimination only at the time a particular transaction is made. Where more than one transaction is made, § 1981 applies only at the point each distinct transaction occurs; not prior to, between, or after the transactions.
It was also on the basis of this contract-specific limitation that the court refused to consider the security guard's actions, without more, as infringing on Ms. Hampton's "enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship" arising from her purchase immediately prior to the security stop and search. Id. at 1059. Thus, even entering into a contract with a defendant, according to the district court, does not create a contractual relationship entitling a person to § 1981's protection against discrimination by the defendant. Any "contractual relationship" within the meaning of the statute is narrowly limited only to the circumstances and moment of a specific purchase or transaction.
Applying this extremely constricted interpretation of § 1981, the district court denied any claim to Ms. Cooper. As to Ms. Hampton, the court bifurcated the trial in order to put first to the jury the very specific questions whether the coupon she received at the time of her purchase was a privilege or benefit of the contractual relationship created by that purchase, and whether the security guard's actions interfered with Ms. Hampton's redemption of the coupon. Hampton, 18 F. Supp. 2d at 1264.
ARGUMENT
I. THE PLAIN LANGUAGE OF SECTION 1981 AFFORDS BROAD PROTECTION AGAINST RACE DISCRIMINATION PRIOR TO, AT THE TIME OF, AND FOLLOWING ENTRY INTO CONTRACTS.
Section 1981 sets forth the bedrock right to contract without racial discrimination:
All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts . . . as is enjoyed by white citizens. . . .
42 U.S.C. § 1981(a)(1991). The plain, common sense meaning of the term "to make" necessarily includes the opportunity to enter into a contract, and conduct that appropriately and customarily leads to contract formation preceding the precise moment of contract execution. Making a contract may involve a number of steps and activities: inspection of goods; comparison of goods and prices; inquiry as to terms and conditions, negotiations. The "same right . . . to make . . . contracts . . . as is enjoyed by white citizens" would be hollow indeed if it did not encompass these and other aspects of contract formation.
In the Civil Rights Act of 1991, Congress reaffirmed the broad sweep of § 1981's protection against discrimination when it clarified the definition and application of "make and enforce" contracts by adding section 1981(b):
For the purposes of this section, the term "make and enforce contracts" includes the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.
42 U.S.C. § 1981. The additional language of the 1991 amendments makes explicit the broad protections against discrimination that § 1981 affords. The amendments were enacted, in part, to correct the Supreme Court's narrow construction of § 1981 in Patterson v. McLean Credit Union, 491 U.S. 164 (1989). The Patterson Court narrowly construed the meaning of the term "to make and enforce contracts" to exclude an employer's postformation imposition of racially discriminatory working conditions. Congress not only eliminated any doubt that discriminatory conduct during a contract was within the reach of § 1981, but by specifying protection of "the enjoyment of all benefits, privileges, terms and conditions of the contractual relationship," indicated an unambiguous intention to protect against discrimination far more broadly than in an isolated act of extending or accepting a particular offer. It cannot plausibly be suggested that, in adding this expansive language to rectify the Patterson Court's cramped reading of § 1981, Congress simultaneously intended that § 1981 would fail to protect persons broadly with respect to the benefits, privileges, terms and conditions under which they are afforded the opportunity to pursue and make contracts.
II. THE LEGISLATIVE HISTORY DEMONSTRATES THAT SECTION 1981 IS INTENDED TO PROTECT, BROADLY and PRACTICALLY, THE OPPORTUNITY TO PARTICIPATE IN THE MARKETPLACE.
A. The 1866 Civil Rights Act.
Section 1981 was originally enacted as the Civil Rights Acts of 1866, in language strikingly similar to its present version:
[C]itizens, of every race and color, without regard to any previous condition of slavery or involuntary servitude . . . shall have the same right, in every State and Territory in the United States, to make and enforce contracts . . . to sue, be parties, and give evidence, to inherit, purchase, lease, sell, hold, and convey real and personal property, and to full and equal benefit of all laws at proceedings for the security of person and property, as is enjoyed by white citizens. . . . and shall be subject to like punishment, pains, and penalties, and to one other, any law, statute, ordinance, regulation, or custom, to the contrary notwithstanding.
Act of April 9, 1866, ch. 31, § 1, 14 Stat. 27 (1866) (emphasis added). When Senator Trumbull introduced the bill that later became the Civil Rights Act of 1866, "He described its objectives in terms that belie any attempt to read it narrowly." Jones v. Alfred H. Mayer Co., 392 U.S. 409, 431 (1968). Senator Trumbull stated:
Mr. President, I regard the bill to which the attention of the Senate is now called as the most important measure that has been under its consideration since the adoption of the constitutional amendment abolishing slavery. That amendment declared that all persons in the United States should be free. This measure is intended to give effect to that declaration and secure to all persons within the United States practical freedom. There is very little importance in the general declaration of abstract truths and principles unless they can be carried into effect, unless the persons who are to be affected by them have some means of availing themselves of their benefits.
Cong. Globe, 39th Cong., 1st Sess. 474 (1866) (emphasis added).
When the same bill was considered in the House, Representative Thayer voiced a similar purpose:
When I voted for the amendment to abolish slavery . . . I did not suppose that I was offering . . . a mere paper guarantee. The bill which now engages the attention of the house has for its object to carry out and guaranty the reality of that great measure. It is to give it practical effect and force. It is to prevent that great measure from remaining a dead letter upon the constitutional page of this country. The events of the last four years . . . have changed [a] large class of people . . . from a condition of slavery to that of freedom. The practical question now to be decided is whether they shall be in fact free men.
Id. at 1151; Jones, 392 U.S. at 433-34. See also General Bldg. Contractor's Ass'n v. Pennsylvania, 458 U.S. 375, 386 (1982) (when interpreting Section 1981, one "must be mindful of the 'events and passions' of the time in which the law was forged"); see also Duparquet Co. v. Evans, 297 U.S. 216, 221 (1936) (Cardozo, J.) (the rights granted in Section 1981 are "freighted with the meaning imparted to them by the mischief to be remedied and by contemporaneous discussion").
When § 1981 was enacted, Congress had before it the report of Major General Carl Schurz which detailed the conditions and intimidation of freed blacks in the Confederate States. Report of C. Schurz, S. Exec. Doc. No. 2, 39th Cong., 1st Sess. (1865); see also Barry Sullivan, Historical Reconstruction, Reconstruction History, and the Proper Scope of Section 1981, 98 Yale L.J. 541, 552 (1989) ("Historical Reconstruction"). Schurz documented numerous acts of private violence and coercion that prevented the freed slaves from exercising their freedom to contract such that they "quietly remained under the restraint imposed upon them." Jones, 392 U.S. at 428-29. Similarly, Gerald Oliver Howard in his report on the operation of the Freedmen's Bureau, chronicled the use of corporal punishment, severe employment conditions, schemes to defraud freed men of their wages, and refusal of whites to fulfill their contracts with freed men. H.R. Exec. Doc. No. 11, 39th Cong., 1st Sess. (1866); Historical Reconstruction at 554. Plantation owners who did not refuse outright to enter into contracts with the freed slaves offered labor contracts with such disadvantageous terms that the freed man's situation was no better, and often worse, than under slavery. Historical Reconstruction at 553.
The Civil Rights Act of 1866 was intended to remedy this pervasive and intentional discrimination that was preventing freed men from exercising their "great fundamental rights" to "go and come at pleasure." See, Jones, 392 U.S. at 437 (concluding, after an exhaustive review of the legislative history of the Civil Rights Act of 1866, that the Court "accord it a sweep as broad as its language"). Congress enacted § 1981 to bar discriminatory practices which were preventing freed men from "making contracts." It is abundantly clear from the record that the 39th Congress intended the prohibition against discrimination in "making contracts" to reach those practices which were inhibiting freed men from even attempting to exercise their right to make contracts -- and not simply outright refusals to enter into a contract based solely on race.
One hundred years after its enactment, the Supreme Court relied on § 1981's legislative history and expansive language to extend the application of 42 U.S.C. 1982 to private contracts for the sale of property in the landmark case of Jones v. Alfred H. Mayer Co., 392 U.S. 409 (1968). Relying on the legislative history of § 1, from which both §§ 1981 and 1982 derive, the Court concluded that Congress intended to prohibit "all racial discrimination, private and public, in the sale . . . of property," Jones, 392 U.S. at 437, and that this prohibition was within Congress' power under § 2 of the Thirteenth Amendment "rationally to determine what are the badges and incidents of slavery, and . . . to translate that determination into effective legislation." Id. at 440. See also, Sullivan v. Little Hunting Park, Inc., 396 U.S. 229, 237 (1969) (refusal to approve assignment of membership share in community swimming pool violated § 1982; a narrow construction "would be inconsistent with the broad and sweeping nature of the protection meant to be afforded by § 1 of the Civil Rights Act of 1886"); Tillman v. Wheaton-Haven Recreation Ass'n, 410 U.S. 431 (1973) (private association could be held liable under § 1981 for racial discrimination in its guest policies).
B. The 1991 Civil Rights Act.
The 1991 amendments responded, in part, "to recent decisions of the Supreme Court by expanding the scope of relevant civil rights statutes in order to provide adequate protection to victims of discrimination," Pub. L. 102-66, 105 stat. 1071 § 3 (1991) (emphasis added). These recent decisions included Patterson v. McLean Credit Union, 491 U.S. 164, 179 (1989), discussed above. When it passed the 1991 amendments to § 1981, Congress explicitly rejected any narrow reading of the statute, as in Patterson, and contemplated that its protections would apply to a wide variety of contractual scenarios.
In the debate leading up to passage of the 1991 Act in the Senate, Senator Danforth introduced the Interpretive Memorandum of the sponsors of the final version of the basic bill, apart from re-numbering and the subsequent addition of further titles dealing with government employment. He remarked on § 4 of the bill, later renumbered as § 101.
Section 4 fills the gap in the broad statutory protection against intentional racial and ethnic discrimination covered by section 1981 . . . that was created by the Supreme Court's decision in Patterson . . . . Section 4 reinstates the prohibition of discrimination during the performance of the contract and restores protection from racial and ethnic discrimination to the millions of individuals employed by firms with fewer than 15 employees. The list set forth in subsection (b) is illustrative only, and should be given broad construction to allow a remedy for any act of intentional discrimination committed in the making or the performance of a contract . . . .
137 Cong. Rec. S15483 (daily ed. Oct. 30, 1991) (emphasis added). Unlike the disputes over retroactivity, there was no dispute as to these statements.(1)
The statements reflect a virtually unanimous consensus in Congress and with the White House.
Congress elsewhere repeated that the list of discriminatory acts provided in new Section 1981(b) was "intended to be illustrative and not exhaustive," H.R. Rep. No. 102-40(II), 102nd Cong., 1st Sess. (1991) at 37, and noted § 1981's applicability in "a broad variety of contexts." H.R. Rep. No. 102-40(I), 102nd Cong., 1st Sess. (1991) at 90.
III. UNDER RUNYON AND ITS PROGENY, THE RIGHT TO "MAKE AND ENFORCE CONTRACTS" INCLUDES PROTECTION FROM DISCRIMINATORY CONTRACT-RELATED ACTS BEFORE AND AFTER THE ACTUAL CONTRACT.
In Runyon v. McCrary, 427 U.S. 160, 172 (1976), the Supreme Court held that § 1981 prohibits private, non-sectarian schools from denying admission to prospective students because of their race. The racial exclusion practiced by the schools was determined by the Court to be a classic violation of § 1981 because the educational services they advertised to the general public were not offered on an equal basis to white and non-white prospective students. Id. at 173.
Runyon involved two private schools which had mailed brochures addressed to "resident." Upon inquiry, however, the parents of black children were informed the schools were not integrated. The Court found a violation § 1981, because the parents sought to enter into contractual relationships with the schools for educational services. However, neither school offered the opportunity to enter into contracts on an equal basis to white and nonwhite students.
Just as in Jones, a Negro's § 1 right to purchase property on equal terms with whites was violated when a private person refused to sell to the perspective purchaser solely because he was a Negro, so also a Negro's § 1 right to "make and enforce contracts" is violated if a private offeror refuses to extend to a Negro, solely because he is a Negro, the same opportunity to enter into contracts as he extends to white offerees.
Runyon, 427 U.S. at 170-71 (emphasis added). The Court opined that under these facts, the conclusion that § 1981 was violated follows inexorably from the language of the statute. Id. at 173.
In this case, Dillard's practice of publicly advertising its goods but subjecting its patrons to surveillance and interception based solely on race, is an intentional refusal to offer its goods on an equal basis to black and white shoppers. Dillard violated § 1981 because it failed to extend to Ms. Hampton and Ms. Cooper, on equal terms and an equal basis, the "same opportunity" to make a contract as it extended to white customers; their "opportunity" was not equal because it subjected them to heightened scrutiny and interception pursuant to explicitly racially discriminatory practices. Such race-based security tactics and the unequal treatment and conditions they create are among the burdens and restraints the exercise of persons' right and opportunity to contract that as to which § 1981 "prohibits racial discrimination." Runyon, 427 U.S. at 168. See Tillman v. Wheaton-Haven Recreation Ass'n., 410 U.S. at 431.
This Court's decision in Phelps v. Wichita Eagle-Beacon, 886 F.2d 1261 (10th Cir. 1989) does not dictate a contrary result. In Phelps, the plaintiff sued a newspaper for publishing two articles about him that he alleged were defamatory. Plaintiff's § 1981 claim rested on a theory that the newspaper conspired to publish false articles about him because he represented African-American clients, and that these unflattering articles would limit plaintiff's future business opportunities by driving away potential new clients. The Court affirmed dismissal of plaintiff's § 1981 claim, finding that defamation and invasion of privacy do not constitute deprivations of any interest protected by § 1981.
Phelps is inapposite here for several reasons. First, Phelps is a defamation case. This Court simply held that defamation and invasion of privacy do not fall within § 1981's sphere of protected interests. The holding dictates only that a plaintiff may not transform a defamation claim into a § 1981 action by contending that his right to contract may be adversely affected. Second, the allegation of lost contracts was extremely speculative and attenuated, and no evidence of any concrete harm from the articles was offered. Finally, Phelps predated the Civil Rights Act of 1991, relying in part on the Supreme Court's narrow interpretation of § 1981 in Patterson. See, Phelps, 886 F.2d at 1267.
While few circuit courts have considered the issue, both the Third and Sixth Circuits have read § 1981 broadly. See Hall v. Pennsylvania State Police, 570 F.2d 86, 92 (3d Cir. 1978) ("Section 1981 obligates commercial enterprises to extend the same treatment to contractual customers 'as is enjoyed by white citizens.'"); Watson v. Fraternal Order of Eagles, 915 F.2d 235, 241 (6th Cir. 1990) ("Under its power to eradicate involuntary servitude throughout the nation, Congress passed this law to ensure that all of the badges and incidents of slavery likewise faded into an ignominious past."). These circuits have interpreted § 1981 to afford protection to plaintiffs against discriminatory acts leading up to the formation of a contract, and demonstrate that a § 1981 claim is viable even when a plaintiff is not explicitly prevented from entering into a contract. For example, in Watson, the Sixth Circuit held that a private club's removal of two black guests to prevent them from purchasing soft drinks denied them the equal right to contract. Watson, 915 F.2d at 243. The court found the fact that plaintiffs were never refused service to be insignificant because § 1981 protects African Americans from behavior aimed at avoiding contracting with them. Id. In Hall, the Third Circuit held that a black bank customer's allegation that he had been photographed, pursuant to a police directive that expressly discriminated on a racial basis, stated a claim under § 1981. The court held that § 1981 is applicable even if the challenged practice does not completely bar transactions:
Section 1981 obligates commercial enterprises to extend the same treatment to contractual customers 'as is enjoyed by white citizens.' Here, plaintiff asserts that upon entering the premises to transact business, his photograph was taken for the police by bank employees pursuant to a racially based surveillance scheme. He received disparate, and because it was based on race, disparaging treatment for which the record offers no justification.
Hall, 570 F.2d at 92.
Washington v. Duty Free Shoppers, Ltd., 710 F. Supp. 1288 (N.D. Cal. 1988), is
analogous to this case. Pursuant to a race-based store security scheme, African American
shoppers were approached while browsing defendant store, and asked to produce proof
that they were traveling abroad, even though the bulk of the store's sales was of
duty-paid, not duty-free merchandise. Id. at 1289. Plaintiffs alleged that defendants'
practice prevented them from patronizing the store without passports or airline tickets
while not applying these restrictions to white shoppers. The court held that plaintiffs
stated a claim under § 1981. Id. at 1290. See also White v. Denny's, Inc., 918 F. Supp.
1418, 1425 (D. Colo. 1996) ("[T]he fact that plaintiffs did not literally attempt to order
food and drinks at Denny's is not enough, in and of itself, to conclude that plaintiffs did
not meet their prima facie burden.")(2)
Only one circuit has narrowly circumscribed § 1981's protection, and that decision rests on an unjustified interpretation of § 1981, contrary to the Civil Rights Act of 1991. This is the decision on which the lower court here relied. In Morris v. Office Max, 89 F.3d 411 (7th Cir. 1996), two African Americans entered a store, and one purchased goods and then joined the other in examining another product. Store management called the police when the two first entered the store, on the alleged basis that blacks had been entering the store before closing and stealing merchandise. As a result, the two were approached by police officers, made to show identification and answer questions, after which the police apologized and left. The Seventh Circuit held that the plaintiffs failed to establish a deprivation of a right protected by § 1981, because they were not denied admittance to the store, service within the store, and were not asked to leave. Morris, 89 F.3d at 414.
Under the Seventh Circuit's reasoning, although plaintiffs could not be refused
entry to the store, once inside, they could be subjected to race-based harassment or other
forms of unequal treatment as long as they were not denied service or asked to leave.
This peculiar and hollow reading of § 1981 cannot be reunited with Runyon's assurance
that African Americans are guaranteed "the same opportunity to enter into contracts
as . . . . white[s]" Runyon, 427 U.S. at 171. Nor can the holding be reunited with the
Civil Rights Act of 1991's explicit application to post-formation conduct, inclusion of
expansive language, and legislative history.(3)
Another case, Lewis v. J.C. Penney Co., Inc., 948 F. Supp. 367 (D. Del 1996), also relied upon by the district court, purported to recognize the 1991 Act's expansion of § 1981 to cover all phases of post-formation contract, but inconsistently and wrongly held that § 1981 does not protect an African American shopper who is performing the essential post-formation task of carrying her purchases out of the store. Under the court's reasoning, § 1981 would not protect the plaintiff from a racially-based decision by a merchant to confiscate her purchases and return them to the shelves. Nothing in the court's reasoning supports its result.
The Fifth Circuit decision, Bellows v. Amoco Oil Co., 118 F.3d 268 (5th Cir. 1997) also does not help the defendant. In that case, an African American co-owner of a company and the company alleged that Amoco had discriminatorily interfered with the company's contracts with Amoco, and with the co-owner's contract with his company. Bellows, 118 F.2d at 272. The court merely held that the co-owner's § 1981 claim was derivative of the company's § 1981 claim, which the jury had rejected. Id. at 277 ("[B]ecause Bellow suffered no violation of his contract rights or rights to contract which differs from the violations claimed by PICI, we conclude that Bellow has no individual cause of action under § 1981 against Amoco."). Nothing in this decision has even a remote connection to the issue before this Court.
IV. ACCEPTANCE OF THE LOWER COURT'S LIMITATIONS ON THE COVERAGE OF § 1981 WOULD LEAD TO RESULTS SO ABSURD THAT CONGRESS CANNOT BE CONSIDERED TO HAVE INTENDED SUCH LIMITATIONS.
It is not possible to reconcile the strongly expressed consensus of Congress and the White House in the Civil Rights Act of 1991 on the need for a strong § 1981 free of limiting constructions with the view of the Seventh Circuit and of some lower courts that § 1981 applies only to a specific attempt to purchase a specific item at a specific time. As described in the Introduction of this Brief, the district court viewed § 1981 as subject to this restriction. In practical effect, such a restriction limits § 1981 to rights that would be recognized as contractual under the law of the State in question. However, the Supreme Court rejected precisely such a limitation in a part of its holding in Patterson that remains good law today:
The Solicitor General argues that the language of § 1981, especially the words "the same right," requires us to look outside § 1981 to the terms of particular contracts and to state law for the obligations and covenants to be protected by the federal statute. Under this view, § 1981 has no actual substantive content, but instead mirrors only the specific protections that are afforded under the law of contracts of each State . . . . We disagree. For one thing, to the extent that it assumes that prohibitions contained in § 1981 incorporate only those protections afforded by the States, this theory is directly inconsistent with Runyon, which we today decline to overrule.
Patterson, 491 U.S. at 182-83 (emphasis added).
The lower court's restrictive view would exclude from § 1981's coverage virtually all of the activity that necessarily precedes the formation of a contract of purchase. It is a matter of common knowledge and experience that many, if not most, consumer purchases at retail establishments are made as a result of browsing and comparing items on display in the establishment. Similarly, many purchases are made on the basis of impulse, involving items that the consumer had no advance intention to purchase. Thus displays are designed to attract the attention of consumers to particular items. In the real world of commercial establishments like the defendant's, the opportunity to make a specific purchase will be frustrated in many, if not most, cases, by harassing behavior by the merchant's security guards unrelated to the act of purchasing a particular item.
The consequences of affirming the lower court's restrictions on § 1981 would be dire. If a merchant is lawfully able to harass African American customers out of the store before making a purchase, or is lawfully able to harass African American customers between the point of sale and their exit from the store, the result will be that no African American customers will feel free to shop with the merchant. The lower court's opinions would allow a bigoted merchant to avoid violating of the truncated § 1981 by humiliating African American shoppers during the shopping process and thereby driving them away as purchasers. As the Fifth Circuit stated in another case involving a different proposed restriction on the scope of § 1981, "Congress could not have meant to exclude at-will workers from the reach of § 1981, as to do so would be to allow use of the ubiquitous at-will doctrine 'as leverage to incite violations of our state and federal laws.'" Fadeyi v. Planned Parenthood Ass'n of Lubbock, Inc., 160 F.3d 1048, 1052 (5th Cir. 1998) (citation and footnote omitted).
Affirmance of the lower court's restrictions would permit a merchant to lawfully require African American customers to enter the store through the "colored entrances" that were often used in the South until the 1960s, or to use racially segregated restrooms, or to use racially segregated cash registers. If the lower court is affirmed, Jewish customers could lawfully be required to wear yellow armbands bearing the Star of David while shopping in a store.
It is simply inconceivable that Congress could have intended such a result. The problem of racial discrimination in consumer contracting is both ongoing and substantial,(4)
and often occurs during the steps leading up to the making of a contract.(5)
It cannot be imagined that Congress would have imposed such a weak protection in 1866, or that it would have virtually unanimously restored § 1981 in the 1991 Civil Rights Act while intending to leave such self-defeating gaps in the statute's coverage. Quoting from Lynch v. Alworth-Stephens Co., 267 U.S. 364, 370 (1925), the Supreme Court in Chandler v. Roudenbush, 425 U.S. 840, 848 (1976) stated that "the plain, obvious and rational meaning of a statute is always to be preferred to any curious, narrow, hidden sense that nothing but the exigency of a hard case and the ingenuity and study of an acute and powerful intellect would discover." So too, here.
CONCLUSION
For the foregoing reasons, the verdict and judgment in favor of Ms. Hampton should be affirmed, and the dismissal of Ms. Cooper's claim should be reversed and remanded for further proceedings.
1. Senator Dole's section-by-section analysis on behalf of the White House and former opponents of the bill made much the same points. 137 Cong. Rec. S 15472-73 (daily ed., Oct. 30, 1991) ta \l "137 Cong. Rec. S 15472-73 (daily ed., Oct. 30, 1991)" \s "137 Cong. Rec. S 15472-73 (daily ed., Oct. 30, 1991)" \c 3 . In the House, Representative Hyde introduced a memorandum that was identical to Senator Dole's memorandum on this point. 137 Cong. Rec. H9543 (daily ed., Nov. 7, 1991). Representative Edwards, one of the Democratic floor managers of the bill, introduced an analysis closely similar to Senator Danforth's 137 Cong. Rec. H9526 (daily ed., Nov. 7, 1991).
2. The court dismissed plaintiffs § 1981 claim, finding no showing of disparate treatment and legitimate nondiscriminatory reasons for refusing service to both black and white patrons.
3. The Seventh Circuit relied on Phelps ta \l "Phelps" \s "Phelps" \c 1 in holding that the plaintiffs' interest in purchasing the product they were examining in the store was too attenuated to represent an interest protected by § 1981. These facts cannot logically be compared to the alleged and unproven future effects of a defamation newspaper article on uncertain contractual opportunities with unknown third parties, as in Phelps.
4. See, Joe R. Fagin, The Continuing Significance of Race: Antiblack Discrimination in Public Places, 56 Am. Soc. Rev. 101 (1991) ta \l "Joe R. Fagin, The Continuing Significance of Race: Antiblack Discrimination in Public Places, 56 Am. Soc. Rev. 101 (1991)" \s "Joe R. Fagin, The Continuing Significance of Race: Antiblack Discrimination in Public Places, 56 Am. Soc. Rev. 101 (1991)" \c 3 ; Lena Williams, When Blacks Shop, Bias Often Accompanies the Sale, N.Y. Times, April 30, 1991, at A1.
5. Ian Ayres, Fair Driving: Gender and Race Discrimination in Retail Car Negotiations, 104 Harv. L. Rev. 817 (1991) ta \l "Ian Ayres, Fair Driving: Gender and Race Discrimination in Retail Car Negotiations, 104 Harv. L. Rev. 817 (1991)" \s "Ian Ayres, Fair Driving: Gender and Race Discrimination in Retail Car Negotiations, 104 Harv. L. Rev. 817 (1991)" \c 3 (negotiating the specific price for a car).
Dated: December 28, 1998
Respectfully submitted,
Julie M. Williamson
Duncan R. Butts
Eric Fisher
Jonathan Goldberg
Ann C. Kiley
McKENNA & CUNEO, L.L.P.
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(303) 634-4000
Attorneys for Amicus CURIAE lawyers committee for civil rights under law
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