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42 USC 1981 suit by non-contracting party
December 04, 2005 by Ross Runkel at LawMemo
Does a person who was not a contracting party have standing to sue under 42 USC 1981? The US Supreme Court will hear arguments on that question on December 6 in Domino's Pizza v. McDonald (No. 04-0593).
Federal Circuit Courts have provided conflicting answers.
Here's what happened in the 9th Circuit:
- Domino's Pizza had entered into several contracts with JWM Investments, a corporation.
- McDonald, an African-American, was an officer and the sole shareholder the JWM corporation.
- McDonald personally was not a party to the contracts.
- McDonald sued Domino's claiming that Domino's terminated its contracts with JWM because of race.
- The suit was brought under 42 USC Section 1981 which provides that "All persons within the jurisdiction of the United States shall have the same right ... to make and enforce contracts ... as is enjoyed by white citizens."
- The trial court dismissed the suit, saying McDonald did not have standing because he was not a party to the contracts.
- The 9th Circuit reversed, saying "the same discriminatory conduct can result in both corporate and individual injuries."
- The US Supreme Court granted certiorari to review the 9th Circuit decision.
Decision below (unpublished): McDonald v. Domino's Pizza (9th Cir 06/18/2004)
Briefs: http://www.lawmemo.com/docs/us/dominos/
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