Opinion
Civil Action No. 3:97-CV-0638-H.
November 8, 2001.
MEMORANDUM OPINION AND ORDER
Before the Court is Conoco's Renewed Motion for Judgment or, in the Alternative, Motion for New Trial, filed August 8, 2001, and Plaintiffs' Response in Opposition, filed August 22, 2001.
I. BACKGROUND
On March 26, 1995, Denise Arguello and her father Alberto Govea, both of whom are Hispanic, stopped at a Conoco gas station in Fort Worth to purchase gas and other items. The clerk on duty was Cindy Smith. Plaintiffs claim Smith was immediately rude when Arguello approached the counter. Govea was behind Arguello in line. Arguello believed Smith had singled her out by requesting identification. Smith threatened not accept Arguello's drivers' license since it was from Oklahoma, but she eventually relented. During Arguello's purchase, Govea became frustrated with how he perceived Smith was treating his daughter. He left the beer he had intended to purchase with Arguello and departed the store. Arguello did not attempt to purchase Govea's beer. After Smith completed Arguello's sale, the tension between Arguello and Smith escalated into a confrontation. Arguello alleges Smith referred to her as a "f***ing Iranian Mexican bitch." Arguello also alleges that after she left the store, Smith began screaming racist remarks over the store's intercom. At the same time, Smith laughed at Arguello and her family and displayed several crude gestures. Govea and other family members then telephoned Conoco from a payphone outside the store to lodge a complaint. During the telephone conversation, the Conoco official indicated he wanted to know the name of the clerk in question. When Mr. Govea attempted to reenter the store to determine Smith's name (it was then unknown to him), Smith locked him out. Apparently, Smith was again laughing and displaying crude gestures. Govea alleges that Smith admitted she was discriminating against them as they spoke through the locked door.
The Court notes that Smith's version of these events is almost entirely different. See Transcript ("Tr."), Vol. 1b, p. 2-73.
Arguello and Govea brought this racial discrimination case against Conoco under 42 U.S.C. § 1981. Plaintiffs allege that they suffered discriminatory and abusive treatment that deprived them of the right to contract as protected by § 1981. Following a trial on the merits, a jury returned a verdict in favor of plaintiffs. Arguello was awarded $550,000 in damages ($50,000 compensatory and $500,000 punitive). The jury awarded Govea $275,000 ($25,000 compensatory and $250,000 punitive). The defendants timely filed a motion for judgment under FED. R. CIV. P. 50(b), or, alternatively, a motion for new trial under FED. R. CIV. P. 59. As the Court resolves this motion on Rule 50 grounds, it will not reach the motion for new trial under Rule 59.
II. STANDARD OF REVIEW
Parties agree that liability in this case is premised on 42 U.S.C. § 1981, and that the relevant statutory language from § 1981 controls:
(a) 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. . . .
(b) For the purpose 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.
To establish a § 1981 claim, a plaintiff must show: (1) he or she is a member of a racial minority; (2) the defendant had an intent to discriminate on the basis of race; and (3) the discrimination concerned an activity enumerated in the statute. See Bellows v. Amoco Oil, 118 F.3d 268, 274 (5th Cir.), cert. denied, 522 U.S. 1068 (1998); Green v. State Bar of Texas, 27 F.3d 1083, 1086 (5th Cir. 1994). As in Bellows, the relevant statutory right in this case is the making and enforcing of a contract. See Bellows, 118 F.3d at 274.
The standard to be applied to a motion for judgment as a matter of law, or judgment notwithstanding the verdict ("judgment n.o.v."), is the same as that applied to a motion for a directed verdict. See Long v. Shultz Cattle Co., 881 F.2d 129, 132 (5th Cir. 1989). To grant such a motion, the Court must construe the entire record of the case in the light most favorable to the nonmovant and find that the evidence is so overwhelmingly in favor of the moving party that no reasonable juror could have arrived at the challenged verdict. See FED. R. CIV. P. 50(a); Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 149-51 (2000). A defendant is entitled to judgment when the plaintiff fails to produce sufficient admissible evidence to support an essential element of the cause of action. See Boeing Co. v. Shipman, 411 F.2d 365, 375 (5th Cir. 1969) (en banc), overruled on other grounds by Gautreaux v. Scurlock Marine, Inc., 107 F.3d 331, 336-37 (5th Cir. 1997) (en banc).
With these legal standards in mind, the Court now turns to Conoco's motion for judgment as a matter of law.
III. ARGUELLO'S CLAIM
Conoco argues that Arguello's claim fails as a matter of law because she failed to produce any evidence that Smith's discriminatory conduct resulted in the loss of a contractual interest. See Conoco Brief, at 3-4. Conoco correctly argues that Arguello was required to demonstrate the actual loss of a contractual interest. See Morris v. Office Max, Inc., 89 F.3d 411, 414-15 (7th Cir. 1996). A claim based on the possible loss of future contractual opportunities does not state a claim under § 1981. See id. Arguello had to demonstrate that she was actually prevented from making a purchase by Conoco's discriminatory actions in order to state a claim under § 1981. See id.; Rogers v. Elliot, 135 F. Supp.2d 1312, 1315 (N.D. Ga. 2001) (noting that virtually all federal courts that have analyzed § 1981 have held a plaintiff must show she was actually prevented from making a purchase in order to state a claim).
Before reaching Arguello's claim, a brief discussion of the previously cited Morris and Rogers cases is helpful to the Court's analysis. In Morris, an Office Max manager called the police to investigate two African-American shoppers who had entered the store shortly before closing. The plaintiffs were the only African-American customers in the store at that time. The plaintiffs made a purchase, but stayed in the store examining other merchandise. After the police arrived, they asked the plaintiffs some questions and requested identification. The police then apologized and left. The plaintiffs brought suit under § 1981 claiming that the Office Max employee called the police only because plaintiffs were African-American, and as such, interfered with their right to make and enforce contracts. The plaintiffs specifically referenced a stamp machine that they were considering purchasing when approached by the police. See Morris, 89 F.3d at 411-12. The Seventh Circuit affirmed the trial court's summary judgment based on the fact that the plaintiffs made no showing that Office Max interfered with their right to make further purchases or enter into retail contracts. See id. at 412-14. The court noted that the plaintiffs were not denied admittance or service, nor were they asked to leave the store. See id. at 414. The court held that a claim for interference with the right to make and enforce contracts must allege the actual loss of a contractual interest, not merely the possible loss of contractual opportunities in the future. See id. at 414-15.
In a ruling similar to Morris, the Rogers court recently granted summary judgment on a § 1981 claim. In that case, the plaintiffs (Ms. Rogers and her two sons) were shopping at Wal-Mart. At the checkout, Rogers informed her sons they could choose some treats from a candy display. The children chose their items, and the checker scanned them. As one of the children walked away from the checkout, another checker named Ms. Elliot, who was not involved in Rogers' transaction, yelled at the child to get back to the checkout and pay for the candy. Rogers informed Elliot that she had already paid for the candy. See Rogers, 135 F. Supp.2d at 1313. As Rogers walked to the exit with her children, Elliot allegedly said, "Hey Bitch, have a nice day." Id. As Rogers was looking for a manager to report Elliot's conduct, Elliot allegedly assaulted Rogers by pulling her hair, punching and scratching her. While assaulting her, Elliot referred to Rogers as a "stealing nigger" and a "bitch." Id. In granting summary judgment in favor of Elliot and Wal-Mart on Rogers § 1981 claim, the Court noted that Rogers was not denied the right to make and enforce a contract. See id. at 1315. She had already completed her purchase by the time of the altercation, and was not prevented from making another purchase. See id. The court found Rogers was not prevented from doing anything, except perhaps exiting the store. See id. As such, Rogers was not denied any rights protected by § 1981. See id. at 1314-15.
Turning to Arguello's claim, she, like Rogers, was able to complete her purchase. See Tr. Vol. lb, p. 82-85; 125-29. Arguello stated that she intended to purchase beer and gas. She also testified that her father, who had accompanied her inside, also wanted to purchase some beer. See id. at 76-79. Viewing the evidence in the light most favorable to Arguello, Smith provided Arguello with woefully substandard service. Smith also harassed, insulted, and disparaged Arguello due to her ethnic background. Smith did not, however, prevent Arguello from completing the sales transaction and purchasing the goods she desired. She was denied no rights protected by § 1981. See Morris, 89 F.3d at 414-15; Rogers, 135 F. Supp.2d at 1315. Accordingly, Arguello's transaction cannot be the basis for recovery under § 1981. See Bellows, 118 F.3d at 274.
Apart from Arguello's own purchase, plaintiffs point out that Govea left his beer with Arguello and she intended to purchase it for him. See Tr. Vol. 1b, p. 86; Tr. Vol. 2, p. 93-94. Arguello testified that she did not purchase Govea's beer because she did not want to begin another transaction with Smith; Arguello testified she ". . . couldn't take it all over again." Tr. Vol. lb, 86-87. Plaintiffs essentially argue that Smith's racially abusive behavior prevented Arguello from purchasing the beer left by Govea. The Court notes that the confrontation between Arguello and Smith had escalated substantially by the time Arguello's original transaction was complete. While Arguello testified she wanted to purchase the beer, she made no attempt to purchase it. See id. Arguello testified she left the store because she wanted to get away from Smith. See id. As Arguello was not actually prevented by Smith from purchasing Govea's beer, her failure to purchase the beer did not deprive her of a contractual right under § 1981. See Morris, 89 F.3d at 414-15; Rogers, 135 F. Supp.2d at 1315.
In opposition to Conoco's motion, Arguello cites to several § 1981 cases in the restaurant context (collectively "the restaurant cases"). See, e.g., McCaleb v. Pizza Hut of America, Inc., 28 F. Supp.2d 1043 (N.D. Ill. 1998). McCaleb is illustrative of the restaurant cases cited by Arguello. In that case, African-American plaintiffs had gone to dinner at a local Pizza Hut. They arrived just before closing, but Pizza Hut had a policy of allowing customers to stay and finish their meals. As the McCaleb family entered the restaurant, one of the employees stated "I'm not serving those niggers." Id. at 1046. After plaintiffs were seated, Pizza Hut provided no plates or silverware; the plaintiffs had to go to the counter and request both. After inquiring about drinks, plaintiffs were informed the drink machine had been turned off; plaintiffs were refused drinks. After ordering their pizzas for dine-in service, the pizzas were prepared in take-away boxes. The pizzas were not delivered to the table, instead a member of the family had to retrieve them for the table. After the plaintiffs began eating their pizza, several Pizza Hut employees played very loud music, repeatedly turned the lights on and off, and committed other actions aimed at disrupting the McCalebs' meal. Unable to complete their meal, the family left. As the family left, Pizza Hut employees yelled racially derogatory remarks. One employee even took up a threatening position with a stick. See id. at 1046-47. The court denied summary judgment. The court pointed out that utensils and a proper dining atmosphere must be considered elements of a restaurant contract. See id. at 1048. The court also pointed out that Pizza Hut's employees succeeded in their effort to prevent the plaintiffs from finishing their pizzas. See id. Thus, plaintiffs were denied the opportunity to complete their meal contract. Considering these facts with the fact that plaintiffs were refused the opportunity to purchase drinks, the court found the plaintiffs had stated a claim under § 1981. See id. at 1048.
Arguello argues that McCaleb's reasoning supports recovery for her confrontation with Smith. Specifically, as it appears to the Court, Arguello argues that she was denied a proper shopping atmosphere by Smith's repeated outbursts. Even though the Court may agree that Arguello was denied a proper shopping atmosphere, that, alone, does not state a claim under § 1981; Arguello must still satisfy the required elements of such a claim. See Bellows, 118 F.3d at 274; Morris, 89 F.3d at 414-15. In McCaleb, the plaintiffs were denied specific elements of the restaurant contract; Pizza Hut also refused to sell drinks to the McCalebs. In fact, the McCaleb court distinguished Morris on precisely these grounds. See McCaleb, 28 F. Supp.2d at 1048. The denial of specific contractual rights was the root of the McCaleb court's reasoning. See id. at 1048. Unlike Pizza Hut, Conoco never refused to sell Arguello anything. While Smith may have been rude and abusive, Arguello completed her contract for the goods she attempted to purchase. She was not denied an opportunity to enter into a contractual relationship, nor was she denied the right to complete a contractual relationship. That is the fundamental distinction between these two cases; it is also why Arguello's claim must fail as a matter of law. Conoco's motion for judgment as a matter of law as to Arguello's § 1981 claim must be GRANTED. See Bellows, 118 F.3d at 274.
The Court is equally unpersuaded by Arguello's claim that Hill v. Shell Oil Co., 78 F. Supp.2d 764 (N.D. Ill. 1999) justifies her recovery in this case. In that case, even though plaintiffs were served, the courts found the defendants had violated § 1981 through the use of a racially discriminatory policy that required African-American patrons to pre-pay for their gas while not requiring white customers to pre-pay. The court noted that in Morris, the plaintiffs were allowed to carry out their contract to purchase goods at Office Max on the same terms and conditions as white customers. A racially discriminatory pre-pay policy, however, adversely affects the basic terms and conditions of the contractual relationship, i.e. the timing and method of payment. See id. at 777. The court held such conduct directly implicated plaintiffs' right to contract and their right to enjoy the benefits, terms, and conditions of the contractual relationship as protected by § 1981. It also noted that courts across the country have found racially discriminatory pre-pay policies actionable under § 1981. See id.
The present case does not implicate the basic terms and conditions of the contractual relationship. The Hill court noted that the discriminatory pre-pay requirement subjected plaintiffs to different terms of purchase than white customers. See id. The plaintiffs can make no such claim in this case. Arguello does not argue that she was required to pay for her purchase at a different time or in a different manner than non-minority customers. Instead, Arguello's claim is based on the racially discriminatory statements made by Smith during and after her purchase. Smith's discriminatory behavior, unlike that in Hill, did not alter the basic terms of the retail sales contract between Arguello and Conoco.
IV. GOVEA'S CLAIM
Just as Arguello's claim fails, so must Govea's. There is no evidence in the record that Govea attempted to make a purchase. Govea left the store before reaching the checkout counter. See Tr. Vol. 2, p. 93-95. The record indicates that Govea had left the store, or was in the process of leaving, when Smith began her racially discriminatory outbursts. See Tr. Vol. 1b, p. 83-84, 125-29. When Govea left the store, he had not attempted to purchase anything, nor had he been prevented from purchasing anything. He had only waited in line. See id. As such, nothing that occurred before Govea left the store gives rise to a claim under § 1981. See Bellows, 118 F.3d at 274; Morris, 89 F.3d at 414-15. While mentioned only briefly in plaintiff's brief, the record also indicates that Smith locked Govea out of the store following the family's call to Conoco on the outside payphone. The record clearly indicates that Govea attempted to reenter the store only to learn Smith's name, not to make a purchase. See Tr. Vol. 1b, p. 89; Tr. Vol. 2, p. 97. As Govea did not attempt to purchase anything from Smith, nothing that occurred after Govea left the store gives rise to a claim under § 1981. See Bellows, 118 F.3d at 274; Morris, 89 F.3d at 414-15 (noting the plaintiff must allege the loss of an actual contractual interest, not just the possible loss of future contractual opportunities). Accordingly, Conoco's motion for judgment as a matter of law as to Govea's claim is GRANTED.
V. CONCLUSION
Conoco's motion of judgment as a matter of law is GRANTED as to both Arguello and Govea's claims. Judgment will be entered accordingly.
THE CLERK IS DIRECTED TO IMMEDIATELY FAX THIS MEMORANDUM OPINION AND ORDER TO COUNSEL.
SO ORDERED.