Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-93-07190/USCOURTS-caDC-93-07190-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 15, 1994 Decided July 19, 1994

No. 93-7190

FAIR EMPLOYMENT COUNCIL OF GREATER

WASHINGTON, INC., ET AL.,

APPELLEES

v.

BMC MARKETING CORPORATION, T/A SNELLING & SNELLING

PERSONNEL CONSULTANTS,

APPELLANT

Appeal from the United States District Court

for the District of Columbia

(91cv00989)

John Gibson Mullan argued the cause for appellant. With him on the briefs were John S. Irving and

Michael P. McDonald.

Joseph M. Sellers argued the cause for appellees. With him on the brief were Roderic V.O. Boggs,

AndrewT. Karron and Patricia H. Anderson. Mark A. Kass, Joseph E. Schmitz, Lisa B. Fowler and

Barbara B. Brown entered an appearance.

On the brief for amicus curiae Equal Employment Opportunity Commission was Samuel A.

Marcosson, Attorney, Equal Employment Opportunity Commission.

Before: SILBERMAN, WILLIAMS and GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge WILLIAMS.

WILLIAMS, Circuit Judge: While attending college, plaintiffs Ernest A. Tuckett III and

WilliamDemps,Jr. also worked as "testers" for the Fair Employment CouncilofGreater Washington.

In December 1990, both Tuckett and Demps, who are black, were paired with white testers also

employed by the Council. On successive days, the two pairs of testersequipped with fake

credentials intended to be comparablesought employment referrals from BMC Marketing

Corporation, which runs an employment agency in the District of Columbia. Both times the white

tester received a referral and the black tester did not; indeed, BMC allegedly refused even to accept

an application from one of the two black testers. On the basis of these tests, the Council and the two

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black testerssued BMC in federal district court, alleging that BMC has "a pattern, practice and policy

of employment discrimination on the basis ofrace". The plaintiffs asserted claims under two different

federal statutes42 U.S.C. § 1981 and 42 U.S.C. § 2000eand one local statute. They sought

declaratory and injunctive relief as well as damages of various sorts.

BMC moved to dismiss the complaint for want of standing. The district court denied the

motion but granted BMC leave to take an interlocutory appeal under 28 U.S.C. § 1292(b); we

permitted the appeal. We affirm in part and reverse in part. While the Fair Employment Council can

maintain a portion of its suit, the individual testers cannot.

I. The Individual Testers

A. Federal Claims

Neither of the federalstatutesthat they invoke gives the tester plaintiffs a cause of action for

damages, and they lack standing to seek the other forms of relief requested.

1. Claims for Damages

a. 42 U.S.C. § 1981

Section 1981 gives all citizens of the United States "the same right in every State and

Territory to make and enforce contracts ... as is enjoyed by white citizens", language that the

Supreme Court has interpreted to prohibit not only racially discriminatory government interference

with private contracting but also purely private discrimination in contracts. Runyon v. McCrary, 427

U.S. 160, 168 (1976); Patterson v. McLeanCredit Union, 491 U.S. 164, 171-75 (1989). The testers

assert that BMC violated their rights under this statute in two distinct ways: it deprived them of the

opportunity to enter into contracts with BMC for employment referrals, and it deprived them of the

opportunity to enter into employment contracts on referral by BMC. In the context of this case,

however, neither assertion states a valid claim under § 1981.

As for the first assertion, BMC denies that it enters into contracts with the people who seek

referrals from it. The plaintiffs respond that this argument assumes factual matters that should be

dealt with in further proceedings. But even if BMC sometimes does enter into contracts with

job-seekers, the testers here made conscious and material misrepresentations of fact by deceiving

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BMC about their intentions and by presenting BMC with fictitious credentials. Any resulting

contracts between the tester plaintiffs and BMC would have been voidable at BMC's option, as the

plaintiffs appear to recognize. See, e.g., Rest. (2d) of Contracts § 164(1) (1981). Even on the

plaintiffs' argument, then, BMC did not deny the testers the opportunity to enter into a contract that

they could have enforced.

Certainly the loss ofthe opportunity to enter into a void contracti.e., a contract that neither

party can enforceis not an injury cognizable under § 1981, for a void contract is a legal nullity.

From the perspective of the party who obtains a contract through misrepresentations, however, it is

generally worse for the contract to be voidable than for it to be void; in the absence of any kind of

ratification, a voidable contract simply gives the other party an option. In any event, the rule that

contracts obtained through misrepresentations are merely voidable rather than void seems designed

entirely to protect the target of the misrepresentations. We conclude, therefore, that the loss of the

opportunity to enter into a contract voidable at the other party's will is not cognizable under § 1981.

Cf., e.g., Kawitt v. United States, 842 F.2d 951, 953 (7th Cir. 1988) (job obtained by material

misrepresentation is not a property right on which constitutional suit may be founded).

The plaintiffs'second assertion fails because the testers concededlyhad no interest in securing

a job through BMC. Indeed, they had promised the Council to refuse any offer of employment that

they received in conjunction with their testing activities. See Plaintiffs' Rule 108(h) Statement of

Genuine Factual Issues (Sept. 18, 1992) at 17; Defendant Snelling & Snelling, Inc.'s Motion to

Dismiss and/or for Summary Judgment (June 23, 1992) tab 14 at 17. In depositions, both of the

tester plaintiffs confirmed that theywould have rejected any job offer obtained through a referralfrom

BMC. Plaintiffs' Statement tab 20 at 92 (Tuckett); Snelling's Motion tab 16 at 233-34 (Demps). At

most, then, BMC deprived the tester plaintiffs of the opportunity to refuse to enter into an

employment contract with BMC's clients. This too is not an injury cognizable under § 1981.

Our conclusion that the tester plaintiffs are not entitled to damages under § 1981 arguably

conflicts with decisions of the Third and Eleventh Circuits, but the analysis in those decisions is not

directly on point. In Meyers v. Pennypack Woods Home Ownership Ass'n, 559 F.2d 894 (3d Cir.

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1977), overruled on other grounds by Goodman v. Lukens Steel Co., 777 F.2d 113 (3d Cir. 1985),

aff'd, 482 U.S. 656 (1987), the Third Circuit held that fair-housing testers had standing to sue under

§ 1981 and 42 U.S.C. § 1982, a parallel provision that guarantees all citizens "the same right, in every

State and Territory, as is enjoyed by white citizens thereof" to engage in a variety of transactions

involving property. Meyers, however, addressed exclusivelythe proposition that a plaintiff'sstanding

is not defeated by the fact that he subjected himself to legal injury solely for the purpose of

determining whether his rights would be violated, with the intent to bring suit if they were. Cf., e.g.,

Pierson v. Ray, 386 U.S. 547, 558 (1967); Evers v. Dwyer, 358 U.S. 202 (1958) (per curiam).

Meyers did not address whether the testers had in fact suffered any legal injury within the meaning

of §§ 1981 or 1982. At most, it simply assumed that the testers had a cause of action under those

provisions, and it may not have considered the issue at all. See Meyers, 559 F.2d at 898.

Watts v. Boyd Properties, 758 F.2d 1482 (11thCir. 1985), issimilarly unpersuasive. Though

the Eleventh Circuit did indicate that fair-housing testers have a cause of action under § 1982 (and

hence, presumably, under § 1981), it rested this view chiefly on Meyers.

Our conclusion that the tester plaintiffs lack a cause of action under § 1981 is perfectly

consistent with Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982), which held that black

fair-housing testers had standing to sue over alleged violations of § 804(d) of the Fair Housing Act

of 1968. There, Congress had clearly conferred a cause of action on the testers; § 804(d) made it

unlawful "[t]o represent to any person because of race ... that any dwelling is not available for

inspection, sale, or rental when such dwelling is in fact so available", and § 812 provided that "[t]he

rights granted by section[ ] ... 804 ... may be enforced by civil actions in appropriate United States

district courts". See 42 U.S.C. §§ 3604(d), 3612(a). Under these statutory provisions, it did not

matter that the testers merely posed as potentialrenters or purchasers; regardless of their intentions,

the statute gave them "an enforceable right to truthful information concerning the availability of

housing". Havens, 455 U.S. at 373-74 (emphasis added). The question for the Havens Court, then,

wassimply whether Congress could constitutionally confer such a cause of actioni.e., whether the

denial of truthful information to testers caused them any "injury in fact". The Court's answer to this

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1BMC still argues that people who lack a bona fide interest in employmentsuch as

testerslack any cause of action under § 2000e-2(b). The plaintiffs, supported by the Equal

Employment Opportunity Commission as amicus curiae, dispute this reading of the statute. But

because we agree with BMC's alternative argument that the tester plaintiffs cannot recover

damages under Title VII and have no standing to seek the other relief that they request, we need

not address the issue. 

constitutional question has no bearing on the proper interpretation of § 1981.

b. 42 U.S.C. § 2000e-2(b)

The tester plaintiffs also sought damages under Title VII of the Civil Rights Act of 1964.

Title VII declares that "[i]t shall be an unlawful employment practice for an employment agency to

fail or refuse to refer for employment, or otherwise to discriminate against, any individual because

of his race". 42 U.S.C. § 2000e-2(b). After exhausting certain administrative remedies (as the

plaintiffs have done), "a person claiming to be aggrieved" by any such practice may sue the offending

employment agency in court. Id. § 2000e-5(b), (c), (f)(1). This statutory scheme is much more

analogous than § 1981 to the provisions of the Fair Housing Act that were at issue in Havens.

1 For

our purposes, however, the available remedies are critically different.

Had the tester plaintiffin Havens proved her claims, the district court could have awarded her

damages. See 42 U.S.C. § 3612(b); cf. United States v. Balistrieri, 981 F.2d 916, 932-33 (7th Cir.

1992). At the time of the alleged discrimination against the testers here, however, only equitable

remedies were available under Title VII. 42 U.S.C. § 2000e-5(g); see also United States v. Burke,

112 S. Ct. 1867, 1873-74 (1992) (contrasting "the circumscribed remedies available under Title VII"

with the remedies available under the Fair Housing Act). The Civil Rights Act of 1991 expanded the

remedies available under Title VII, see 42 U.S.C. § 1981a, but the new remedial provisions cannot

be applied to conduct occurring before the enactment of the 1991 statute. Landgraf v. USI Film

Products, 62 U.S.L.W. 4255 (1994).

2. Claims for Prospective Relief

Since the tester plaintiffs have no cause of action for damages under either § 1981 or Title

VII, their federal claims reduce to their request for injunctive or declaratory relief. Yet under City

of Los Angeles v. Lyons, 461 U.S. 95 (1983), they lack standing to seek such prospective relief, for

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they have not made sufficient allegations that they are threatened with any future illegality.

The plaintiffin Lyons alleged that Los Angeles police, without provocation, had subjected him

to a chokehold that had knocked him unconscious and injured hislarynx. In addition to damages, he

sought an injunction barring the police fromapplying such chokeholdsin the future. But the Supreme

Court held that he had no standing to seek injunctive relief. Despite his allegations of past injury, his

standing to seek the injunction "depended on whether he was likely to suffer future injury from the

use of the chokeholds by police officers". Id. at 105 (emphasis added). While conceding the

possibility that "there will be certain instances in which strangleholds will be illegally applied and

injury ... unconstitutionally inflicted upon the victim", the Court thought it "no more than speculation

to assert ... that Lyons himself will again be involved in one of those unfortunate instances". Id. at

108. In short, while Lyons could maintain a suit for damages, he could not maintain his suit for an

injunction because he "has made no showing that he is realistically threatened by a repetition of his

experience". Id. at 109. The same rationale, we have observed, would also have kept him from

bringing a suit for declaratory relief. Haase v. Sessions, 835 F.2d 902, 911 (D.C. Cir. 1987); see

also, e.g., Golden v. Zwickler, 394 U.S. 103, 108-10 (1969); City of Houston v. Department of

Housing & Urban Dev't, No. 92-5491 (D.C. Cir. June 3, 1994), slip op. at 12 n.6.

Here, the tester plaintiffs made several different referencesto future injury in their complaint.

In general, however, these future injuriesspring entirely fromBMC's past conduct. See, e.g., Second

AmendedComplaint ¶ 44 (suggesting that testers will continue to feel embarrassment and humiliation

over their treatment during the tests); id. ¶ 7. To pursue an injunction or a declaratory judgment,

the tester plaintiffs must allege a likelihood of future violations of their rights by BMC, not simply

future effects from past violations. Lyons is directly on point, for the Court there denied standing

despite the plaintiff's allegation that he continued to fear that he would suffer a fatal chokehold in a

future encounter with the police. "The emotional consequences of a prior act", the Court observed,

"simply are not a sufficient basis for an injunction absent a real and immediate threat of future injury

by the defendant." Lyons, 461 U.S. at 107 n.8.

Only once in their complaint do the tester plaintiffs even come close to alleging that they will

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suffer any future illegality at BMC's hands. In their § 1981 count (though not in their Title VII

count), they assert that "[u]nless restrained by this Court, defendants will continue to deny, on the

basis of race, said plaintiffs and third parties who may be unaware of the defendants' discriminatory

conduct[ ] the right to make and enforce contracts for employment." Second Amended Complaint

¶ 50. The reference to third parties, of course, does not help the tester plaintiffs establish standing;

to satisfy the requirements of Article III, they must allege that they themselves are likely to suffer

future injury. See Lyons, 461 U.S. at 108-09. Nonetheless, the quoted passage constitutes the only

conceivable support for the plaintiffs' argument that the complaint contains the requisite claims of

future injuries, which they sort into two distinct types.

First, the plaintiffs assert standing on the basis of "BMC's continuing failure to refer Mr.

Demps or Mr. Tuckett for employment on account of their race". Appellees' Brief at 36. This

allegation, however, does the tester plaintiffs no good; as we explained above, see supra part

I.A.1.a., BMC's refusal to act on the testers' applications does not violate § 1981. And even if we

import the same allegation into the plaintiffs' Title VII count, the facts as alleged by the plaintiffs

would not make out a continuing violation of Title VII either. The tester plaintiffs sought referrals

from BMC solely on the basis of their fictitious credentials and their misrepresentations about their

desire for jobs. Now that BMC is aware of the deception, it surely has no duty to continue to

consider the testers for employment referrals.

The plaintiffs also claim that their complaint, fairly read, raises "the possibility that as people

entering the job market or astesters they will in the future seek job referrals from BMC". Appellees'

Brief at 36. But nowhere does the complaint assert that the tester plaintiffs are likely ever to return

to BMC seeking employment referrals, let alone that they will do so at any point "in the reasonably

near future". Cf. Lyons, 461 U.S. at 108; see also Lujan v. Defenders of Wildlife, 112 S. Ct. 2130,

2138 (1992) (rejecting standing for want ofsufficiently "imminent" future injury). Even now, in fact,

the plaintiffs do not suggest that there is any likelihood that the two testers will re-initiate contact

with BMC; they refer only to the "possibility" of this event. That possibility seems remote indeed.

Their usefulness as testers is minimal because they are now known to BMC, and indeed it does not

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appear from the materials before us that they are still employed as testers at all. Their adversarial

relationship with BMC, moreover, as well as their established record as deceivers, make it highly

implausible that they would ever return as bona fide job seekers. Cf. United Transp. Union v. ICC,

891 F.2d 908, 913 n.8 (D.C. Cir. 1989) (court may discredit incredible allegations).

The district court overlooked these problems on the theory that the plaintiffs themselves

control whether they re-initiate contact with BMC. Mem. Op. at 7. But this fact does not excuse

the plaintiffs from alleging that they plan to do so. To the contrary, the Supreme Court has

categorically rejected the proposition that a plaintiff seeking prospective relief need assert a threat

of imminent future injury "only when the alleged harm depends upon "the affirmative actions of third

parties beyond a plaintiff's control' ". See Defenders of Wildlife, 112 S. Ct. at 2139 n.2.

In any event, the plaintiffssimply do not controlwhether theywillsuffer any future injury, for

they do not controlwhether BMC would discriminate against themin anyfuture encounter. Suppose

we could assume that the tester plaintiffs are likely to return to BMC in the reasonably near future.

Indeed, for the sake of their § 1981 claim (and possibly even their Title VII claim, see supra at 6 n.1),

suppose we could assume that they will do so as bona fide candidates for employment rather than as

testers. They would still appear to be in much the same position as the plaintiff in Lyons: while he

presumably could have initiated another encounter with the Los Angeles police, he could not control

whether he would be subjected to a second illegal chokehold.

In Lyons, the Supreme Court stated that unless the plaintiff could allege that Los Angeles

ordered or authorized its police officers to apply unprovoked chokeholds, he could "establish an

actual controversy in this case" only by "mak[ing] the incredible assertion ... that all police officers

in Los Angeles always choke any citizen with whom they happen to have an encounter". Lyons, 461

U.S. at 105-06. This formulation may be hyperbolic; indeed, Lyons itself said that the plaintiff's

standing to seek an injunction "depended on whether he was likely to suffer future injury from the

use of the chokeholds by police officers". Id. at 105 (emphasis added); see also International Union

of Bricklayers & Allied Craftsmen v. Meese, 761 F.2d 798, 803 (D.C. Cir. 1985) (adopting "fairly

probable" as standard). But see Whitmore v. Arkansas, 495 U.S. 149, 158 (1990) (indicating that

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plaintiff whose standing rests on threat of future injury must show that this injury is "certainly

impending"); Defenders of Wildlife, 112 S. Ct. at 2139 n.2 (same); Animal Legal Defense Fund v.

Espy, No. 92-5105 (D.C. Cir. May 20, 1994), slip op. at 8 (same). Whatever the exact standard for

judging the likelihood offuture injury, however, the tester plaintiffs here have said nothing to indicate

that future violation of their rights is even remotely probable. Indeed, besides its oblique statement

that BMC's treatment of the testers reflects "a pattern, practice and policy of employment

discrimination on the basis of race", the complaint does not even address the likelihood that BMC

may discriminate against the individual plaintiffs in the future.

For all these reasons, the facts as alleged in the complaint do not come close to indicating that

either tester "will again be subjected to the alleged illegality". See Lyons, 461 U.S. at 109. The tester

plaintiffs therefore lack standing to seek prospective relief.

B. The Possibility of Amendment

As a fallback position, the plaintiffs claim that "the appropriate course is to remand to the

District Court to permit plaintiffs an opportunity to amend and supplement their Complaint".

Appellees' Brief at 37 n.26. In Havens, which involved a challenge to a realty company's alleged

practice ofsteering white customers to white areas and black customersto black areas, the Supreme

Court followed this course with respect to two plaintiffs who alleged that the company's actions had

deprived them of the benefits of living in an integrated community. Though the complaint simply

stated that these plaintiffs were "residents of the City of Richmond or Henrico County", the Court

said they would have standing only if they lived in neighborhoods where the company's actions had

"an appreciable effect". See Havens, 455 U.S. at 376-77. Because the complaint was not sufficiently

specific about where they lived, it was "impossible to say" whether its factual allegations, if proved,

would demonstrate the requisite injury. Id. at 378. Citing Rule 12(e) of the Federal Rules of Civil

Procedure, the Court therefore remanded with instructions for the district court to give the plaintiffs

"an opportunity to make more definite the allegations of the complaint". Id.

The Court's later decisions clarify the reasoning behind this disposition. Havens came to the

Court on the defendant's motion to dismiss the case on the pleadings, pursuant to Rule 12(b).

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2The rules become less forgiving as litigation moves along. When a court confronts a Rule 56

motion for summary judgment, "[i]t will not do to "presume' the missing facts". National Wildlife

Federation, 497 U.S. at 889. By the same token, after the district court has held its

summary-judgment hearing, plaintiffs certainly cannot assume that the court will permit them to

supply any requisite averments through supplemental affidavits. See id. at 894-98. 

Though courts addressing such motions usually must "presume[ ] that general allegations embrace

those specific facts that are necessary to support the claim", Lujan v. National Wildlife Fed'n, 497

U.S. 871, 889 (1990), Havens establishes that such a presumption is unwarranted when the

allegations are too general. Even then, however, the contrary presumption may be inappropriate;

faced with such allegations, courts ruling on a Rule 12(b) motion often should not assume that the

claim is invalid without giving the plaintiff an opportunity to make more specific claims.2

The case before us is quite different. We do not confront a complaint whose allegations are

so general that we cannot tell whether, if proved, they would demonstrate injury in fact. To the

contrary, the allegations plainly are notsufficient to support standing, for they simplydo not dealwith

the likelihood of any future injury to the plaintiff testers. What is necessary, then, is not the "more

definite statement" contemplated byRule 12(e), but an amendment adding allegationsthat the present

complaint does not even touch upon. Rule 15(a) makes clear that the plaintiffs have no automatic

right to add those allegations.

On the other hand, district courts do have the discretion to permit such amendments when

considering a motion to dismiss for want of standing. Warth v. Seldin, 422 U.S. 490, 501 (1975);

see also, e.g., Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 113 n.25 (1979); SierraClub

v. Morton, 405 U.S. 727, 736 n.8 (1972); Newark Branch, NAACP v. Town of Harrison, 907 F.2d

1408, 1416-17 (3d Cir. 1990). Here, the district court did not consider whether to exercise this

discretion, because it erroneously believed that no amendment was necessary. Accordingly, while

we vacate the district court's denial of BMC's motion to dismissthe individual testers'suit, we do not

order it to grant that motion; instead, we remand the case for the district court to exercise its sound

discretion over whether to permit amendment. We see no reason why plaintiffs who win in the

district court should automatically be in a worse position than plaintiffs whose allegations ofstanding

have been rightly found defective by the district court.

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Of course, a plaintiff'ssuccessful effort to persuade a trial court to take an erroneous view of

the law may yield different equities from those prevailing in the absence of such an effort. In some

circumstances, it might well be an abuse of discretion for the district court to permit plaintiffs to add

new allegations to a complaint after their adversaries have been forced to spend substantial time and

effort litigating the adequacy of the old allegations. Cf. National Wildlife Federation, 497 U.S. at

897 ("[A] litigant'sfailure to buttressits position because of confidence in the strength ofthat position

is always indulged at the litigant's own risk."). But in any event, the matter of amendment is in the

first instance for the district court.

C. Pendent Claims under District of Columbia Law

The tester plaintiffs have also asserted a cause of action under the District of Columbia's

Human Rights Act. That statute contains a provision similar to § 2000e-2(b), see D.C. Code § 1-

2512(a)(2), and it goesfurther than the original Title VII by authorizing suits for damages as well as

for equitable relief, see id. § 1-2556. But the testers were able to bring their claim under this statute

to federal court only because it was pendent to their federal claims. See 28 U.S.C. § 1367(a). As

a result, even if the plaintiffs have a cause of action for damages under D.C. law, it will be within the

district court's discretion whether or not to dismiss this claim if it dismisses both their federal claims.

See id. § 1367(c)(3); cf. Clifton Terrace Assocs. v. United Technologies Corp., 929 F.2d 714, 723

(D.C. Cir. 1991).

II. The Fair Employment Council

The other plaintiff in this action, the Fair Employment Council of Greater Washington, fares

better under our analysis. The Council does not claim standing on behalf of any members; in fact,

it is not a membership organization. Cf. Hunt v. Washington State Apple Advertising Comm'n, 432

U.S. 333, 343 (1977). It claims instead that BMC's allegedly discriminatory actions have caused it

injury in its own right.

We agree that the Council has alleged "injury in fact" sufficient to satisfy the requirements of

Article III. And, though the Council is suing BMC over alleged violations of statutory rights enjoyed

by third parties, we conclude that Congress did give the Council a cause of action under Title VII.

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We also conclude, however, that the Council has no cause of action under § 1981.

A. Article III Standing

Like the fair-housing organization that was one of the plaintiffs in Havens, the Council has

a broad goal of promoting equal opportunity independent ofmerely seeking more enforcement ofthe

civil rights laws. Second Amended Complaint ¶ 5. Its testing program is but one means toward this

goal; the Council also conducts "community outreach and public education, counseling, and research

projects". Declaration of Charles W. Jackson ¶ 8 (Sept. 18, 1992). The complaint alleges that

BMC's discriminatory actions have interfered with these efforts and programs and have also required

the Council to expend resources to counteract BMC's alleged discrimination. Second Amended

Complaint WW 45, 58, 60.

These allegations closely track the claimsthat the Supreme Court found sufficient in Havens.

See Havens, 455 U.S. at 379. Fairly read, they indicate that BMC's alleged pattern of

discriminationevidenced by the alleged treatment of the testershas made the Council's overall

task more difficult. Discrimination byBMC, for instance, might increase the number of people in need

of counseling; similarly, to the extent that BMC's actions have made it harder for minorities to find

jobs in greater Washington, they may have reduced the effectiveness of any given level of outreach

efforts. If discriminatory actions taken by BMC have "perceptibly impaired" the Council's programs,

"there can be no question that the organization has suffered injury in fact". Id.

In reaching this conclusion, however, we explicitly reject the Council's suggestion that the

mere expense of testing BMC constitutes "injury in fact" fairly traceable to BMC's conduct. The

diversion of resources to testing might well harm the Council's other programs, for money spent on

testing is money that is not spent on other things. But this particular harm is self-inflicted; it results

not from any actions taken by BMC, but rather from the Council's own budgetary choices. Indeed,

it is not really a harm at all; assuming that BMC's actions did not have any other effect on the

Council's programs independent of its efforts to increase legal pressure on possible open housing

violators, the Council and its programs would have been totally unaffected if it had simply refrained

from making the re-allocation. One can hardly say that BMC has injured the Council merely because

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3For the same reason, we reject the district court's theory that the money that the Council

spent on the second test (if not the money that it spent on the first one) gave it "a constitutionally

cognizable injury" because BMC's alleged discrimination against the first set of testers "could

have been a factor" in the Council's decision to run the second test. Mem. Op. at 10-11. BMC's

treatment of the first set of testers did not impair any of the Council's programs in any way, even

though the pattern of discrimination evidenced by such tests may have done so. The Council

simply decided that its limited resources would be better spent on testing BMC again than on

testing a different agency or on pursuing its other programs. 

the Council has decided that its money would be better spent by testing BMC than by counseling or

researching.3

We disagree with the SeventhCircuit that Havens would supportsuch a purelyself-referential

injury. In Village of Bellwood v. Dwivedi, 895 F.2d 1521 (7th Cir. 1990), the court concluded that

even when a fair-housing organization's other activities had not been impaired by the defendant's

discriminatory practices, "the only injury which need be shown ... is deflection of the agency's time

and money from counseling to legal efforts directed against discrimination." Id. at 1526. By this

logic, the time and money that plaintiffs spend in bringing suit against a defendant would itself

constitute a sufficient "injury in fact", a circular position that would effectively abolish the

requirement altogether. Indeed, an organization devoted exclusively to advancing more rigorous

enforcement ofselected laws could secure standing simply by showing that one alleged illegality had

"deflected" it from pursuit of another, contrary to such decisions as Schlesinger v. Reservists

Committee to Stop the War, 418 U.S. 208 (1974). Havens did not so hold. The Court there did not

base standing on the diversion of resources from one program to another, but rather on the alleged

injury that the defendants' actions themselves had inflicted upon the organization's programs. To be

sure, the Court did mention the "drain on the organization's resources". Yet this drain apparently

sprang from the organization's need to "counteract" the defendants' assertedly illegal practices, and

thus was simply another manifestation of the injury that those practices had inflicted upon "the

organization's noneconomic interest in encouraging open housing", an interest that is quite intelligible

apart from the allied efforts at increasing legal pressure on civil-rights violators. See Havens, 455

U.S. at 379 & n.20; cf. Spann v. Colonial Village, 899 F.2d 24, 27-29 (D.C. Cir. 1990) (finding

standing because in order to offset defendant's allegedly discriminatory advertisements, plaintiff

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organization had to spend more on its educational and counseling efforts).

A corollary of our conclusion isthat the Council'sstanding stemsfromBMC's actions against

bona fide employment candidates, not from BMC's actions against the testers. The Council has

adequately alleged that BMC has a pattern or practice of discrimination, and its treatment of the

testers may be some evidence ofsuch a pattern. Any harm to the Council's programs, however, flows

fromBMC'srefusal to refer genuine job-seekersfor employment. As this case proceeds, the Council

will have to provide support for its claim that BMC's alleged discrimination has "perceptibly

impaired" its programs.

B. Cause of Action

Though the Council has adequately alleged an "injury in fact" sufficient to meet the

requirements of Article III, this does not necessarily mean that Congress has conferred a cause of

action upon it. BMC has done nothing to impair the Council's own right to make contracts, nor is

the Council even capable ofseeking an employment referral. Instead, the Council's asserted injuries

flow from BMC's alleged violations of other people's rights under § 1981 and Title VII. This fact

triggers concerns about an aspect of the "prudential" limits on standing: ordinarily, a plaintiff "must

assert his own legal interests, rather than those of third parties". Gladstone, Realtors, 441 U.S. at

100.

To phrase the principle this way, however, is to beg the question. If Congress has given the

Council a cause of action to redress the injuries that it is suffering as a result of BMC's alleged

discrimination against candidates for referrals, then the Council is indeed suing to protect its own

"legal interests". Cf., e.g., Smith v. City of Cleveland Heights, 760 F.2d 720, 724 (6th Cir. 1985).

A more precise statement of the principle, then, is that a statute ordinarily will not be interpreted to

confer causes of action upon people whose only injuries derive from the violation of others' rights

under the statute.

When the "prudential" limits on standing to raise statutory claims are understood in this

wayas a set of presumptionsthat courts use in determining whether the statutesin question confer

a cause of action upon the plaintiff, see, e.g., Warth v. Seldin, 422 U.S. 490, 500-01 (1975);

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Hazardous Waste Treatment Council v. United States Environmental Protection Agency, 861 F.2d

277, 283 (D.C. Cir. 1988)the "prudential" label seems a misnomer. These "prudential" rules are

simply canons ofstatutory interpretation, and Congressisfree to override the normal presumptions.

InHavens, for instance, the Supreme Court noted that Congressintended standing to sue under § 812

of the Fair Housing Act to extend to the full reach permitted by the Constitution, and concluded that

"the courts accordingly lack the authority to create prudential barriers to standing in suits brought

under that section". Havens, 455 U.S. at 372; accord Warth, 422 U.S. at 501. Statutes of this sort

confer a cause of action upon everyone who meets the Article III requirementsthat is, anyone

"genuinely injured by conduct that violates someone's ... rights" under the statute. Gladstone,

Realtors, 441 U.S. at 103 n.9.

Our case law establishes that Title VII is such a statute. Congress specifically permitted any

"person claiming to be aggrieved" by an unlawful employment practice to file suit (after exhausting

certain other potential avenues of relief). See 42 U.S.C. § 2000e-5(f)(1). This language, we have

held, opensthe courtsto "anyone who satisfiesthe constitutionalrequirements". Gray v. Greyhound

Lines, 545 F.2d 169, 176 (D.C. Cir. 1976); see also Trafficante v. Metropolitan Life Ins. Co., 409

U.S. 205, 209 (1972) (citing with approval the Third Circuit's decision to the same effect).

Accordingly, if the Council can back up its allegations of Article III standing with actual proof, it has

a cause of action under Title VII.

Section 1981 is a different matter. A footnote in Gray indicated that there too standing

extended to the full extent permissible under Article III. Gray, 545 F.2d at 176 n.18. This

conclusion, however, rested on an unsustainable assumption that the Supreme Court, in citing a

snippet of Title VII's legislative history to the effect that the remedies available under Title VII were

"co-extensive" with an individual's right to sue under § 1981, meant that Congress had identically

resolved prudentialstanding issues under the two statutes. See Johnson v. Railway Express Agency,

421 U.S. 454, 459 (1975). In fact, as the Supreme Court made clear, the committee's statement that

Title VII and § 1981 were "co-extensive" simply meant that the two statutes co-existed, with the

result that Title VII did not pre-empt whatever rights an individual might enjoy under § 1981. Id.

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Moreover, Gray 's view of § 1981 flatly conflicts with the Supreme Court's holding in Warth

v. Seldin. There, an organization whose members included residents of the town of Penfield, New

York, complained that the town's zoning ordinance excluded people of low and moderate income in

violation of those people's rights under § 1981. This exclusion, in turn, injured the organization's

members by depriving them of the benefits of living in an integrated community. Such an injury

satisfies the constitutional requirements, and the Court accordingly has recognized it as a basis for

standing in suits under the Fair Housing Act (which confers standing to the full extent permitted by

Article III). See Trafficante, 409 U.S. at 208-10. In Warth, however, the Court held that § 1981

was critically different from the Fair Housing Act in this respect. Invoking the "prudential" rule

against allowing litigants "to raise putative rights of third parties", it accordingly barred the

organization's suit. Warth, 422 U.S. at 512-14.

As one would expect, then, other circuitsincluding our ownhave rejected Gray 's view

of § 1981. In Mackey v. Nationwide Insurance Companies, 724 F.2d 419 (4th Cir. 1984), an

insurance agent attempted to challenge his former employer's alleged practice of refusing to

underwrite risks in predominantly black neighborhoods. The agent claimed that this practice had

forced him to forgo the money that he could have earned by selling policiesin these areas. But while

Congress could constitutionallyhave conferred a cause of action upon the agent to redressthis "injury

in fact", the court held that § 1981 did not do so. Distinguishing § 1981 from the Fair Housing Act,

the court decided that standing under § 1981 is restricted to "the direct victims of the alleged

discriminatory practice", at least as long as there is no impediment to suits by those victims. Id. at

422.

We too have now explicitly embraced Mackey rather than Gray. In Clifton Terrace

Associates v. United Technologies Corp., 929 F.2d 714 (D.C. Cir. 1991), the owner of a low-income

housing complex sued the Otis Elevator Company and its corporate parent for refusing to negotiate

a service contract for the elevators in the complex, allegedly because the residents of the complex

were overwhelmingly black. The owner plainly had suffered "injury in fact" as a result of this refusal,

for its elevators were deteriorating; indeed, the city government had taken action against it for

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4This conclusion, although not our embrace of Mackey, seems to be in tension with Gersman

v. Group Health Association, 931 F.2d 1565 (D.C. Cir. 1991), vacated on other grounds, 112 S.

Ct. 960 (1992), reinstated, 975 F.2d 886, 900 (D.C. Cir. 1992). That case also involved a claim

that the defendant had refused to contract with one person ("A") because of a discriminatory

animus against someone else ("B"). But where Clifton Terrace held that A lacked standing to sue

under § 1981 because any such suit would be an attempt to assert B's rights under the statute,

Gersman took the opposite view. Reasoning that § 1981 protects the right to make contracts, we

held that B lacked standing because it was Anot Bwith whom the defendant allegedly was

refusing to contract. See id. at 1567, 1569. Cf., e.g., Alizadeh v. Safeway Stores, Inc., 802 F.2d

111, 114 (5th Cir. 1986) (recognizing cause of action under § 1981 where employer allegedly

fired plaintiff because her husband was not white); Parr v. Woodmen of the World Life Ins. Co.,

791 F.2d 888, 890 (11th Cir. 1986) (similar, where company allegedly refused to hire plaintiff

because of his wife's race); Fiedler v. Marumsco Christian School, 631 F.2d 1144, 1149 (4th Cir.

1980) (recognizing cause of action under § 1981 where white students alleged that private school

had expelled them for associating with blacks); see also Patrick v. Miller, 953 F.2d 1240, 1250

(10th Cir. 1992) (holding that such causes of action under § 1981 are "clearly established"). 

violating its duties as a landlord. Accordingly, we dealt with the owner's Fair Housing Act claims on

the merits. But we accorded a different treatment to the owner's claims under § 1981. Concluding

that "the direct victims of the alleged discrimination are the residents of Clifton Terrace" rather than

the owner, we invoked Mackey to hold that the owner could not sue under § 1981. Id. at 721.4

Accordingly, our law is now in accord with that of the Supreme Court and other circuits in

concluding that § 1981 does not confer a cause of action on persons whose injuries derive only from

the violation of others' rights.

In arguing that the "prudential" barriersto standing nonetheless do not preclude its particular

suit, the Council cites Des Vergnes v. Seekonk Water District, 601 F.2d 9 (1st Cir. 1979). Yet that

case does not get it very far. Des Vergnes held simply that § 1981 confers an implied right of action

"against any other person who, with a racially discriminatory intent, interferes with [the plaintiff's]

right to make contracts with nonwhites"; by the same token, the statute confers an implied right of

action "against any other person who, with a racially discriminatory intent, injures [the plaintiff]

because he made contracts with nonwhites". Id. at 14; see also Winston v. Lear-Siegler, Inc., 558

F.2d 1266, 1270 (6th Cir. 1977); DeMatteis v. Eastman Kodak Co., 511 F.2d 306, 312, modified,

520 F.2d 409 (2d Cir. 1975); cf. Sullivan v. Little Hunting Park, 396 U.S. 229, 237 (1969) (reaching

parallel result under § 1982). Implicit in § 1981, these cases declare, is a cause of action protecting

people from private retaliation for refusing to violate other people's rights under § 1981, or for

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exercising their own § 1981 rights. The present case simply does not implicate this principle.

The normal presumption against reading a statute to authorize "derivative" causes of

actionthat is, causes of action to redressinjuriesthat derive entirely from the violation ofsomeone

else's rights under the statuteis subject to only one exception that is even arguably relevant here.

Courts sometimesinfer that the legislature intended to authorize such causes of action when, in their

absence, no one would be able to assert the statutory rights that the legislature created. Because of

this inference, a litigant might have a cause of action even though hisinjuriesflow from the violation

of other people'sstatutory rights, at least if both ofthe following conditions are met: (1) the litigant's

interests are aligned with the other people'sinterests, and (2) the other people are unable to bring suit

in their own right. See, e.g., Canfield Aviation v. National Transp. Safety Bd., 854 F.2d 745, 748

(5th Cir. 1988); Flittie v. Solem, 827 F.2d 276, 280 (8th Cir. 1987); In re Merrill Lynch Relocation

Management, Inc., 812 F.2d 1116, 1121 (9th Cir. 1987).

But even assuming that the Council's interests are aligned with those of the direct victims of

BMC's alleged discrimination, the obstaclesto suit bythose victims are not serious enough to warrant

the inference that § 1981 confers a cause of action upon the Council. To be sure, the people to whom

BMC denies employment referrals may not necessarily know why their applications were

unsuccessful, and so the possible victims of BMC's alleged discrimination may not always know who

they are. But the Council itself could remedy much of the problem simply by publicizing the results

of its tests and offering litigation assistance to people who suspect (on the basis of this new

information) that BMC has discriminated against them. In the present case, as in Warth v. Seldin,

"there is no indication that [direct victims of discrimination byBMC] are disabled fromasserting their

own right in a proper case." Warth, 422 U.S. at 510. Certainly they do not face anything like the

practical obstacles confronting people excluded from a jury for discriminatory reasons, whose rights

the Court has allowed a criminal defendant to assert. See Powers v. Ohio, 499 U.S. 400, 414-15

(1991) (describing the "daunting" barriers to suit by an excluded juror); cf. Scott v. Greenville

County, 716 F.2d 1409, 1416 (4th Cir. 1983) (hypothesizing preemptive discrimination that could

never be identified with any individual victims).

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5The one notable exception to this rule is inspired by First Amendment overbreadth analysis. 

In Secretary of State of Maryland v. Joseph H. Munson Co., 467 U.S. 947, 956-57 (1984), for

example, the Court allowed a professional fundraiser to assert its clients' First Amendment rights

in challenging statutory limits on the amount that charitable organizations can pay fundraisers. 

But the Court specifically noted that "outside the First Amendment context", the fundraiser's

standing would have been in doubt because it had not shown that "practical obstacles prevent [the

charities] from asserting rights" on their own behalf. Id. Even within the First Amendment realm,

third-party standing is by no means automatic. See, e.g., Renne v. Geary, 501 U.S. 312, 320

(1991). 

The Third Circuit has perceived "seemingly inconsistent strains" in the Supreme Court's

treatment of whether "the "obstacle'factor" is an essentialprerequisite to third-partystanding, Amato

v. Wilentz, 952 F.2d 742, 749 (3d Cir. 1991), and has resorted to a "more flexible balancing

approach" in an effort to make sense of the Court'sjurisprudence. Id. at 749-50 & n.8. But we think

the cases can in fact be reconciled.

Apart from cases involving "the "obstacle' factor", the Court generally has allowed a litigant

to assert the rights of a third party "only when the third party'srights protect that party'srelationship

with the litigant". Haitian Refugee Center v. Gracey, 809 F.2d 794, 809 (D.C. Cir. 1987).5In the

lion's share of these cases, the litigant seeks to challenge direct restrictions on its own activities on

the ground that enforcement of the restrictions against it would dilute or abrogate the rights of third

parties. As the Court has summed up its jurisprudence, "When ... enforcement of a restriction against

the litigant prevents a third party from entering into a relationship with the litigant (typically a

contractual relationship), to which relationship the third party has a legal entitlement (typically a

constitutional entitlement), third-party standing has been held to exist." United States Dep't of Labor

v. Triplett, 494 U.S. 715, 720 (1990); see also Warth, 422 U.S. at 510. For example, the Court has

allowed beer vendors to assert the equal-protection rights of their potential customersin challenging

a prohibition on the sale of beer to young males, Craig v. Boren, 429 U.S. 190, 195 (1976);

distributors of contraceptive devices to assert the privacy rights of contraceptive purchasers in

challenging restrictions on the distributors, Carey v. Population Servs. International, 431 U.S. 678,

682-84 (1977); and booksellers to assert the First Amendment rights of bookbuyers in challenging

the prohibition of certain commercialdisplays, Virginia v. American BooksellersAss'n, 484U.S. 383,

392-93 (1988). Less frequently, the Court has allowed litigants to assert third parties' rights in

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challenging restrictions that do not operate directly on the litigants themselves, but that nonetheless

allegedlydisrupt a specialrelationshipprotected bythe rightsinquestionbetweenthe litigants and

the third parties. See, e.g., Pierce v. Society of Sisters, 268 U.S. 510 (1925) (allowing military

academy and parochial school to assert constitutional rights of students and parents in challenging

state law requiring parentsto send their children to government school); see also Caplin &Drysdale,

Chartered v. United States, 491 U.S. 617, 623-24 n.3 (1989) (allowing lawyers to challenge federal

forfeiture laws that allegedly violate their clients' Sixth Amendment right to counsel); Singleton v.

Wulff, 428 U.S. 106, 113-18 & n.7 (1976) (plurality opinion) (allowing abortion-performing doctors

to complain that restrictions on Medicaid payments for abortion violate the constitutional rights of

women seeking abortions). See generally National Cottonseed Products Ass'n v. Brock, 825 F.2d

482, 489-92 & n.15 (D.C. Cir. 1987).

Whatever the precise limits of these cases, they offer no help to the Council. The Council

certainly faces no direct restriction on its own activities, and the § 1981 rights of people who seek

referrals from BMC are unrelated to any special relationship between those people and the Council.

Under Warth v. Seldin, the Council therefore cannot bring suit to complain about the violation of

those people's § 1981 rights. See Warth, 422 U.S. at 514 n.22.

* * *

To sum up, the Council lacks a cause of action under § 1981. It can proceed with its Title

VII claim, but it has a cause of action only to the extent that the effects of BMC's discrimination have

perceptibly impaired its programs. As for the individual testers, they have not stated a cause of action

under § 1981, nor have they established standing to seek the only form of relief that might be

available to them under Title VII.

We remand the case to the district court for proceedings consistent with this opinion.

So ordered.

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