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Supreme Court gets 42 USC 1981 case
April 25, 2005 by Ross Runkel at LawMemo

Section 1981 prohibits race discrimination in the formation, termination, and performance of contracts. Can a person who is not a contracting party recover under 1981?

That's what the US Supreme Court will decide in Domino's Pizza v. McDonald, Docket No. 04-593, certiorari granted April 25, 2005.

The allegations were: McDonald, an African American, was the president and main shareholder of JWM, a corporation. JWM entered into contracts with Domino's. Domino's made it difficult or impossible for JWM to perform, propelling JWM into bankruptcy. JWM and Domino's settled. McDonald sued Domino's under Section 1981 claiming financial and emotional loss. He claimed that the downfall of JWM was caused by racial discrimination on the part of Domino's. The allegation have not been proved. The trial court granted summary judgment for the Domino's.

The 9th Circuit reversed, saying that McDonald, even though he personally had no contractual relationship with Domino's, had standing to sue Domino's for alleged injuries that he personally suffered. The 9th Circuit's decision (06/18/2004) was not reported. See 2004 WL 1380296.

The 9th Circuit relied on its earlier case Gomez v. Alexian Bros. Hosp., 698 F.2d 1019 (9th Cir 1983). The Circuits are split on this theory. See Guides Ltd v. Yarmouth Group, 295 F.3d 1065 (10th Cir 2002).

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Editor: Ross Runkel, Professor of Law Emeritus. email Ross@LawMemo.Com, Phone 503-399-8028. Copyright LawMemo, Inc.

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