In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 01-3271

EDITH JONES, EUNICE YOUNG,

VIRGINIA CLARK, et al.,

Plaintiffs-Appellees,

v.

R.R. DONNELLEY & SONS COMPANY,

a Delaware Corporation,

Defendant-Appellant.

____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 96 C 7717—Matthew F. Kennelly, Judge.

____________

ARGUED APRIL 4, 2002—DECIDED SEPTEMBER 16, 2002

____________

Before RIPPLE, KANNE and EVANS, Circuit Judges.

RIPPLE, Circuit Judge. Several classes of plaintiffs brought

suit against their former employer, R.R. Donnelley &

Sons (“Donnelley”), for race discrimination pursuant to

42 U.S.C. § 1981. Before the court is a single certified

question: “[W]hether in a 1996 lawsuit brought under 42

U.S.C. § 1981 alleging race discrimination in termination

of employment, and maintenance of a racially hostile

work environment, the appropriate statute of limitations

is the ‘catch-all’ four-year period enacted by Congress in
2 No. 01-3271

1 The district court certified three classes of employees:

All African-American employees of R.R. Donnelley who

were employed at the Chicago Manufacturing Division and

who were discharged during the shutdown of that division and were not transferred to another Donnelley division;

All African-American employees of R.R. Donnelley who

were employed at the Chicago Manufacturing Division at

any time from November 1991 to the present as non-regular

employees (including temporary, casual, contract, contingent, task force, etc.);

All African-American employees of R.R. Donnelley who

worked at (a) the Dwight division; (b) the Pontiac division;

(c) the Chicago Financial Division; or (d) the Chicago

Manufacturing Division from November 1992 to present

(continued...)

1990 and codified at 28 U.S.C. § 1658, or the personal injury

statute of limitations of the forum state?” R.248 at 2. The

district court determined that § 1658 provided the applicable statute of limitations for the plaintiffs’ claims. Because

we find ourselves in respectful disagreement with the

district court, we reverse its decision and remand the case

for further proceedings consistent with this opinion.

I

BACKGROUND

A.

The plaintiffs are members of three classes of AfricanAmerican former employees of Donnelley’s Chicago

Manufacturing Division, many of whom were terminated

or transferred from their employment on or before July 29,

1994, in connection with the closing of that facility.1

 Their
No. 01-3271 3

1 (...continued)

and were subjected to racial harassment so pervasive as to

create a hostile working environment.

R.230 at 39. The present issue concerns those individuals belonging to all of the classes whose employment was terminated on

or about July 29, 1994.

2 Donnelley’s motion was not confined to the statute of limitations issue, but included other issues that are not before

the court on this appeal.

3 Donnelley also re-presented this issue at least two other times

later in the litigation before the district court ruled on the motion.

claims against Donnelley include discriminatory transfer,

discriminatory termination and racially hostile work environment. They filed their initial pleading in this case

on November 25, 1996.

In its answer, Donnelley raised the statute of limitations as an affirmative defense; Donnelley claimed that

the “alleged 42 U.S.C. § 1981 claims which arose more

than two years prior to the filing of the complaint are

barred by the applicable statute of limitations.” R.2 at 16.

Soon after filing its answer, Donnelley moved for summary judgment on the claims of those plaintiffs whose

employment was terminated on or around July 29, 1996.2

According to Donnelley, this court’s decision in Smith v.

City of Chicago Heights, 951 F.2d 834, 836 n.1 (7th Cir.

1992), established that Illinois’ two-year statute of limitations for personal injury claims was the applicable statute

of limitations for claims of race discrimination arising

in Illinois and brought under 42 U.S.C. § 1981. See R.10

at 2. Because the complaint was not filed until November

1996, more than two years after the plaintiffs’ last employment at Donnelley, their claims were time-barred.3
4 No. 01-3271

In their response, the plaintiffs presented three reasons

why their claims should be considered timely. First, the

plaintiffs argued that the termination of their employment

was part of a larger program of discrimination by Donnelley

and that, consequently, “no statute of limitations should

be imposed in this case.” R.102 at 4. In the alternative,

the plaintiffs submitted that the appropriate statute of

limitations for violations of 42 U.S.C. § 1981 was the fouryear statute of limitations provided in 28 U.S.C. § 1658.

Specifically, the plaintiffs maintained that their claims

arose under amendments to § 1981 enacted through the

Civil Rights Act of 1991. Their claims, therefore, arose

under the 1991 Civil Rights Act, a law enacted after § 1658,

and therefore were subject to § 1658’s four-year statute

of limitations. Finally, the plaintiffs argued that the doctrines of equitable estoppel and equitable tolling should

apply to extend the statute of limitations to allow the

plaintiffs to maintain their claims.

B.

The parties eventually narrowed the issue to be resolved

by the district court: The appropriate statute of limitations to apply to the claims of those plaintiffs whose

employment was terminated in conjunction with the closing of the Chicago facility. The district court began its

analysis by looking at the language of § 1981 prior to the

adoption of the 1991 Civil Rights Act:

All persons within the jurisdiction of the United States

shall have the same right in every State and Territory to

make and enforce contracts, to sue, be parties, give

evidence, and to the full and equal benefit of all laws

and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject
No. 01-3271 5

to like punishment, pains, penalties, taxes, licenses,

and exactions of every kind, and to no other.

42 U.S.C. § 1981 (1990). The court then noted that in

Patterson v. McLean Credit Union, 491 U.S. 164 (1989), the

Supreme Court had interpreted § 1981 to protect just two

rights:

the right to make contracts, which “extend[ed] only to

the formation of a contract, but not to problems that

may arise later from the conditions of continuing

employment,” and the right to enforce contracts, which

“embrace[d] protection of a legal process, and of a right

of access to legal process, that will address and resolve

contract-law claims without regard to race.”

R.244 at 4 (quoting Patterson, 491 U.S. at 176-77). Consequently, after Patterson was handed down, § 1981 had a very

limited scope that did not include claims for discriminatory termination or hostile work environment.

As part of the Civil Rights Act of 1991, the district court

noted, Congress amended § 1981 to define “ ‘make and

enforce contracts’ to include ‘the making, performance,

modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions

of the contractual relationship.’ ” Id. (quoting 42 U.S.C.

§ 1981(b)). Under this language, aggrieved employees

could pursue claims of discrimination based upon events

that occurred during the course of their employment.

After reviewing this evolution of § 1981, the district

court turned to the question of the appropriate statute

of limitations for claims brought under § 1981. The court

acknowledged that courts considering claims under § 1981

historically have applied the personal injury statute

of limitations of the forum state. See id. However, the

court believed that “this well-settled proposition was al-
6 No. 01-3271

4 Until July 30, 2002, § 1658 only consisted of the quoted language. However, on that date, Congress amended § 1658 by

designating the quoted language as subsection (a) and adding

subsection (b) which provides:

Notwithstanding subsection (a), a private right of action

that involves a claim of fraud, deceit, manipulation, or

contrivance in contravention of a regulatory requirement

concerning the securities laws, as defined in section 3(a)(47)

of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)),

may be brought not later than the earlier of—

(1) 2 years after the discovery of the facts constituting

the violation; or

(2) 5 years after such violation.

Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204 § 804(a), 116 Stat.

745, 801 (2002). Nothing in the amendment affects the language

of now subsection (a) or the analysis of that subsection contained

in this opinion.

tered by Congress’ enactment on December 1, 1990 of

28 U.S.C. § 1658, the federal ‘catch-all’ statute of limitations.” Id. Section 1658 provides in relevant part: “Except

as otherwise provided by law, a civil action arising under

an Act of Congress enacted after the date of the enactment of this section may not be commenced later than

4 years after the cause of action accrues.” 28 U.S.C.

§ 1658(a).4

 Noting that § 1658 applies to any “civil action

arising under an Act of Congress enacted” after December

1, 1990, the district court took the view that “An Act of

Congress enacted” was not “susceptible to more than

one reasonable interpretation.” R.244 at 8 (internal quotation marks omitted).

“Enact” means “to make into law by authoritative act,”

Black’s Law Dictionary 546 (7th ed. 1999); thus every

Act of Congress, whether it reflects a never-before
No. 01-3271 7

considered subject or amends a previously existing

statute, is “enacted.” To the extent there could ever

be any doubt about whether the Civil Rights Act of

1991 was “an Act of Congress” or whether it was “enacted,” the language of the law itself should set the

record straight.

Id. (internal citations omitted). The court went on to note

that the preamble to the Civil Rights Act of 1991 both

defines it as “An Act to amend the Civil Rights Act of

1964 . . .” and also begins with “Be it enacted . . . .” Id.

(emphasis in original and internal quotation marks omitted). The court also found it unambiguous that “arising

under” meant “stemming from” or “originating in.” Id.

(internal quotation marks and citations omitted). The

court concluded that the meaning of § 1658 was that

“whenever Congress, after December 1990, passes legislation that creates a new cause of action, the catch-all statute of limitations applies to that cause of action.” Id.

The court then applied its interpretation of § 1658 to

the facts presented. The court stated that § 1981 claims

allowed by Patterson “clearly arise under an Act of Congress that was enacted prior to § 1658’s enactment date,

and the catch-all statute does not apply to such claims.” Id.

at 8-9. However, “[c]laims that Patterson said could not

be brought under the pre-1991 version of § 1981, but

which can be made only by virtue of § 1981(b), just as

clearly arise under the Civil Rights Act of 1991, an Act

of Congress enacted after § 1658.” Id. at 9. Therefore,

the district court concluded that § 1658 applies to that

latter class of claims.

The court acknowledged that its decision was contrary

to the only court of appeals decision to address the issue,

see Zubi v. AT&T Corp., 219 F.3d 220, 225 (3d Cir. 2000),

as well as the majority of the district courts. Quoting
8 No. 01-3271

the Third Circuit, the district court read Zubi as based on

the rationale that Congress, in enacting the 1991 legislation, had chosen “to build upon a statutory text that

has existed since 1870,” and therefore “Zubi’s civil action

arises under an Act of Congress enacted before December 1,

1990, and is governed by New Jersey’s two-year statute

of limitations.” R.244 at 5 (quoting Zubi, 219 F.3d at 225-

26). The district court could not “imagine how this [was]

possible,” because “in Patterson, the United States Supreme Court clearly held that claims such as those asserted by Zubi (discriminatory firing) did not arise under

the pre-1991 version of § 1981.” R.244 at 5.

The district court then summarized its holding:

[T]he Court finds that 28 U.S.C. § 1658 is unambiguous

and, by its terms, applies to all claims arising out of

the Civil Rights Act of 1991, which was enacted

after December 1, 1990, the date on which § 1658

was enacted. Section 1658, by its terms, does not apply

to claims arising under the pre-1991 version of § 1981;

these claims continue to be governed by the most

analogous state law statute of limitations, here, Illinois’

two-year personal injury statute of limitations.

So what does this mean for the parties in this case?

It is clear that claims asserted by Class 1 (the wrongful termination/failure to transfer claims) and Class 3

(the hostile work environment claims) arise under

the 1991 Act, and are therefore governed by § 1658’s

four-year statute of limitations. . . . 

Id. at 10-11 (internal citations omitted).

C.

After the district court issued its memorandum opinion,

Donnelley requested that the court certify the issue of
No. 01-3271 9

the appropriate statute of limitations for immediate review. Determining that the criteria for an immediate appeal pursuant to 28 U.S.C. § 1292(b) had been met, the

district court granted the defendant’s motion to certify the

following question:

[W]hether in a 1996 lawsuit brought under 42 U.S.C.

§ 1981 alleging race discrimination in termination

of employment, and maintenance of a racially hostile

work environment, the appropriate statute of limitations is the “catch-all” four-year period enacted by

Congress in 1990 and codified at 28 U.S.C. § 1658, or

the personal injury statute of limitations of the forum

state.

R.248 at 2. By order of August 21, 2001, this court allowed

Donnelley to pursue its appeal.

II

DISCUSSION

To determine the appropriate statute of limitations, we

must interpret two federal statutes; accordingly, we review the district court’s interpretation de novo. See, e.g.,

Zambrano v. Reinert, 291 F.3d 964, 968 (7th Cir. 2002) (reviewing question of statutory and constitutional interpretations de novo); see also Zubi, 219 F.3d at 221 (reviewing

de novo the question of the appropriate statute of limitations for § 1981 actions after the enactment of § 1658).

Prior to the enactment of § 1658, it was clear that the

proper statute of limitations for § 1981 actions was the

forum state’s statute of limitations for personal injuries.

See Smith v. City of Chicago Heights, 951 F.2d 834, 837 n.1

(7th Cir. 1992) (citing Goodman v. Lukens Steel Co., 482 U.S.

656, 660-64 (1987)). The plaintiffs maintain, however, that

three intervening judicial and legislative events have oc-
10 No. 01-3271

curred that alter the existing rule. First, the Supreme

Court held in Patterson v. McLean Credit Union, 491 U.S.

164, 176-77 (1989), that § 1981 only granted two discrete

rights: the right to make contracts, which “extends only

to the formation of a contract, but not to problems that

may arise later from conditions of continuing employment,”

and the right to enforce contracts, which “embraces protection of a legal process, and of a right of access to legal

process, that will address and resolve contract-law claims

without regard to race.” Id. at 176-77. Second, in 1990,

Congress enacted a uniform catch-all statute of limitations that provided a four-year statute of limitations for

“civil action[s] arising under an Act of Congress” enacted

after the effective date and for which a specific statute

of limitations was not provided. Third, Congress amended

§ 1981 by way of the Civil Rights Act of 1991; specifically,

it redefined “make and enforce contracts” to include

“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(b). Because their actions “aris[e] under” the

1991 Civil Rights Act, § 1658 provides the applicable statute of limitations.

In reply, Donnelley submits that Congress intended § 1658

to apply only to wholly new causes of action and not

those built upon existing statutory schemes. According

to Donnelley, “[n]either the statutory language of § 1658

nor this Court’s jurisprudence on statutory interpretation

sanctions” the plaintiffs’ reading of § 1658. Appellant’s Br.

at 6. We shall consider these arguments below.

As with any statutory interpretation question, determination of the meaning and application of § 1658 to the

§ 1981 claims at issue must begin with the statutory language of both provisions. See Masters v. Hesston Corp., 291

F.3d 985, 989 (7th Cir. 2002) (“The interpretation of a stat-
No. 01-3271 11

ute is a question of law, which we review de novo.”). Prior

to the adoption of the Civil Rights Act of 1991, § 1981 stated:

All persons within the jurisdiction of the United

States shall have the same right in every State and

Territory to make and enforce contracts, to sue, be

parties, give evidence, and to the full and equal benefit

of all laws and proceedings for the security of persons

and property as is enjoyed by white citizens, and

shall be subject to like punishment, pains, penalties,

taxes, licenses, and exactions of every kind, and to

no other.

42 U.S.C. § 1981 (1990). Until the Supreme Court’s decision

in Patterson, courts generally interpreted § 1981 to encompass causes of action for race discrimination that occurred

at any point during the employment relationship. See,

e.g., Hunter v. Allis-Chalmers Corp., Engine Div., 797 F.2d

1417, 1430 (7th Cir. 1986) (upholding jury verdict of discriminatory treatment and termination under § 1981).

However, the Supreme Court in Patterson held that § 1981

should be interpreted more narrowly:

[T]he conduct which petitioner labels as actionable

racial harassment is postformation conduct by the employer relating to the terms and conditions of continuing employment. . . .

This type of conduct, reprehensible though it be

if true, is not actionable under § 1981, which covers only

conduct at the initial formation of the contract and

conduct which impairs the right to enforce contract

obligations through legal process.

Patterson, 491 U.S. at 179.

As part of the Civil Rights Act of 1991, Congress enacted

an amendment to § 1981 that “reversed” the Patterson
12 No. 01-3271

decision. Specifically, Congress added a subsection to

§ 1981 that defined “make and enforce contracts” broadly;

the current version of § 1981 states:

§ 1981. Equal rights under the law

(a) Statement of equal rights

All persons within the jurisdiction of the United

States shall have the same right in every State and

Territory to make and enforce contracts, to sue, be

parties, give evidence, and to the full and equal benefit

of all laws and proceedings for the security of persons

and property as is enjoyed by white citizens, and shall

be subject to like punishment, pains, penalties, taxes,

licenses, and exactions of every kind, and to no other.

(b) “Make and enforce contracts” defined

For 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.

(c) Protection against impairment

The rights protected by this section are protected

against impairment by nongovernmental discrimination

and impairment under color of State law.

42 U.S.C. § 1981 (emphasis added). Consequently, under the

amended § 1981, an employee may bring a cause of

action against his employer for discriminatory conduct

that occurs after the employment relationship is formed.

Section 1981 does not contain its own statute of limitations. Consequently, prior to § 1981’s amendment in

1991, courts applied the most analogous state statute of

limitations to actions brought under that section. See

Goodman v. Lukens Steel Co., 482 U.S. 656, 660 (1987) (“Be-
No. 01-3271 13

cause § 1981 . . . does not contain a statute of limitations, federal courts should select the most appropriate

or analogous state statute of limitations.”). For actions

brought in Illinois, this court has determined that Illinois’ two-year statute for personal injury claims is most

analogous. See, e.g., Vakharia v. Swedish Covenant Hosp., 190

F.3d 799, 807 (7th Cir. 1999), cert. denied, 530 U.S. 1204

(2000) (applying Illinois’ two-year statute of limitations

for personal injury claims to a cause of action brought

pursuant to § 1981).

The plaintiffs maintain that, at least with respect to

§ 1981 actions that were barred by the Patterson decision,

28 U.S.C. § 1658 now provides the applicable statute

of limitations. We look therefore to the language of § 1658

to determine if it applies to any claims brought under

§ 1981. Section 1658 provides in relevant part: “Except as

otherwise provided by law, a civil action arising under an

Act of Congress enacted after the date of the enactment

of this section may not be commenced later than 4 years

after the cause of action accrues.” 28 U.S.C. § 1658(a).

Certainly, the plaintiffs’ claims are “civil action[s].” The

central question therefore is whether their claims “arise

under an Act of Congress enacted after the date of the

enactment of this section.” The district court equated

“arising under” with “ ‘stemming from’ or ‘originating

in.’ ” R.244 at 8 (quoting Black’s Law Dictionary 102 (7th

ed. 1999)). In the district court’s view, claims prohibited by

Patterson, “but which can be made only by virtue of

§ 1981(b), . . . clearly arise under the Civil Rights Act of

1991. . . .” Id. In essence, the district court believed that the

plaintiffs’ claims “aris[e] under” the 1991 Civil Rights Act

because, by virtue of Patterson, those claims could not

have been brought prior to the passage of the 1991 Act.
14 No. 01-3271

5 In Madison v. IBP, Inc., 257 F.3d 780, 798 (8th Cir. 2001),

vacated on other grounds, 122 S. Ct. 2583 (2002), the plaintiffs had

brought Title VII claims as well as § 1981 claims. With respect

to the plaintiffs’ Title VII claims, the Eighth Circuit ruled that

(continued...)

We respectfully disagree, however, that the plain language of § 1658, standing alone, compels the conclusion

that § 1658 must apply to every statute subject to any

amendatory action by Congress. The language of § 1658

addresses only a “civil action” that “aris[es] under” an

act adopted after § 1658’s effective date. The language

simply does address the eventuality when a cause of

action “aris[es] under” two different “Acts,” one enacted

before and one enacted after the effective date of § 1658.

Consequently, we must look not only at the language

of § 1658 and § 1981, but also the structure and history

of those statutes to determine whether § 1658 provides

the applicable statute of limitations for the plaintiffs’

claims. See, e.g., Merrill Lynch, Pierce, Fenner & Smith, Inc.

v. Lauer, 49 F.3d 323, 326-27 (7th Cir. 1995) (stating that

a court may look beyond the text of a statute where

the language is ambiguous, where a literal interpretation

would lead to “absurd results” or where a literal interpretation would “thwart the goals of the statutory scheme”).

At the outset of our inquiry, we remain focused on the

language and structure of § 1658. By its terms, § 1658

applies to civil actions “arising under an Act of Congress

enacted after the date of the enactment of this section . . . .”

28 U.S.C. § 1658 (emphasis added). As noted by one of

our sister circuits, “[t]he phrase ‘an Act of Congress

enacted’ after 1990 is not equivalent to the phrase ‘an Act

of Congress enacted or amended’ after that year.” Madison v. IBP, Inc., 257 F.3d 780, 798 (8th Cir. 2001), vacated

on other grounds, 122 S. Ct. 2583 (2002).5

 “Amendments
No. 01-3271 15

5 (...continued)

[b]ecause Title VII has a 300 day limitations period, the

district court should have instructed the jury that Madison

could only recover damages under Title VII for illegal acts

occurring within the 300 day period prior to the filing of

her administrative charge. Since Madison filed her charge

on January 13, 1995, she was entitled to recover damages

under Title VII only for acts of discrimination or harassment occurring after March 19, 1994. The court therefore

erred in instructing the jury that she could recover punitive

damages under Title VII for illegal acts occurring after

January 13, 1993.

Id. at 797. However, in National Railroad Passenger Corp. v. Morgan,

122 S. Ct. 2061, 2077 (2002), the Supreme Court held that “[a]

charge alleging a hostile work environment claim . . . will not

be time barred so long as all acts which constitute the claim

are part of the same unlawful employment practice and at

least one act falls within the time period.” It was in light of its

decision in Morgan that the Supreme Court vacated the decision of the Eighth Circuit in IBP. See Madison v. IBP, Inc., 122 S. Ct.

2583 (2002). The Supreme Court did not pass judgment on,

or otherwise call into question, the Eighth Circuit’s reasoning

with respect to the § 1981 claim.

vary in their purpose, and the line between an amendment that modifies an existing right and one that creates

a new right is often difficult to draw.” Zubi v. AT&T Corp.,

219 F.3d 220, 224 (3d Cir. 2000). The difficulty in discerning a technical from a substantive amendment, or an

amendment that modifies an existing civil action from

one that creates a wholly new one, has led two of our

sister circuits to reject a reading of § 1658 that would call

for such guess work. According to the Eighth Circuit,

“when Congress amends a preexisting statute, it does not

create a ‘new act,’ and claims arising under the statute

as amended continue to arise under the preexisting stat-
16 No. 01-3271

ute. It is, thus, only when Congress establishes a new

cause of action without reference to preexisting law that

§ 1658 applies.” Id. at 225.

The purpose behind § 1658 confirms the significance of

the distinction drawn by the Eighth Circuit. In enacting

this section, Congress sought to alleviate the uncertainty inherent in the practice of borrowing analogous

state statutes of limitations for federal causes of action

that do not contain their own limitations periods:

At present, the federal courts “borrow” the most analogous state or federal law limitations period for federal claims lacking limitations periods. This practice

creates a number of practical problems. As pointed

out by the Study Committee:

It obligates judges and lawyers to determine the

most analogous state law claim; it imposes uncertainty on litigants; reliance on varying state

laws results in undesirable variance among the

federal courts and disrupts the development of

federal doctrine on the suspension of limitations

periods.

H.R. Rep. No. 101-734, at 24. Notably, Congress also was

concerned with disrupting litigants’ settled expectations

and therefore made § 1658 prospective. This concern is

reflected in the House Report as well:

Section 111 addresses this problem by creating a fouryear fallback statute of limitations, applicable to legislation enacted after the effective date of this Act,

which creates a cause of action but is silent as to the

applicable limitations period.

Witnesses testifying on behalf of the Department

of Justice and the Judicial Conference, urged that this
No. 01-3271 17

section be made retrospective, so as to provide a

fallback statute of limitations for previously enacted

legislation lacking a limitations period. As witness

George Freeman noted at the hearing, however, with

respect to many statutes that have no explicit limitations provision, the relevant limitations period has

long since been resolved by judicial decision, with

the applicable period decided upon by the courts

varying dramatically from statute to statute. Under

these circumstances, retroactively imposing a four

year statute of limitations on legislation that the

courts have previously ruled is subject to a six month

limitations period in one statute, and a ten year

period in another, would threaten to disrupt the

settled expectations of a great many parties. Given

that settling the expectations of prospective parties is

an essential purpose of statutes of limitation, the Committee was reluctant to apply this section retroactively

without further study to ensure that the benefits of

retroactive application would indeed outweigh the

costs.

Id. We believe that Donnelley’s proposed interpretation

of § 1658 is most compatible with this interest in certainty and in honoring settled expectations. Under this

approach, plaintiffs do not have to guess whether their

action arose under the original enactment or its amendment. Section 1658, therefore, applies only when an act

of Congress creates a wholly new cause of action, one

that does not depend on the continued existence of a

statutory cause of action previously enacted and kept in

force by the amendment.

The plaintiffs maintain that their proposed interpretation of § 1658 provides certainty and, at the same time,

does not disrupt litigants’ expectations. According to the

plaintiffs, because the type of claims on which they
18 No. 01-3271

seek relief did not exist post-Patterson and pre-§ 1981(b),

there are no settled expectations to disrupt with respect

to the statute of limitations to apply to such claims. “At

first blush,” the plaintiffs’ interpretation does appear “to

promise a fair degree of certainty in application”; if

the newly enacted statute created a cause of action that

did not exist previously, then § 1658 applies. Zubi, 219

F.3d at 224. “But that promise,” as the Third Circuit has

explained, “upon reflection, seems to us illusory.” Id.

First, as we have pointed out, [this] interpretation

results in different statutes of limitations being applied to plaintiffs suing under the same statute depending on the particular facts of their claims. Thus,

for example, plaintiffs who invoke § 1981 because

they have been victims of discrimination in hiring

will have their claims governed by one statute of

limitations, while plaintiffs who invoke the same statute because they are victims of a discriminatory discharge will have their claims governed by another.

Adoption of such an interpretation would seem to us

to generate exactly the kind of confusion and unfairness that Congress sought to avoid.

Recognition of two classes of plaintiffs under § 1981,

when applied in a state with a statute of limitations

for § 1981 claims larger than four years, is likely to

result in unsuspecting plaintiffs who have relied on

established precedent finding themselves barred from

relief. Conversely, recognizing two classes, when

applied in a state with a statute for § 1981 claims shorter than four years, is likely to result in defendants

finding themselves faced with potential liability on

claims they believed extinguished.

Id.
No. 01-3271 19

We believe that the Third Circuit’s interpretation is

most consonant with the purpose of § 1658 and the

balance struck by Congress between the need for uniformity and the need to preserve settled expectations. Under

this formulation,

[w]hen an Act of Congress passed after December 1,

1990, amends a statute existing before that date, as

opposed to creating a new law without reference to

previously existing statutory language, all claims

accruing after the passage of the amendment arise

under an Act of Congress enacted before December 1,

1990, without regard to whether an identical claim

arising earlier could have been successfully pursued

under the prior statute.

Zubi, 219 F.3d at 222. Thus, it is “only when Congress

establishes a new cause of action without reference to

preexisting law that § 1658 applies.” Id. at 225.

We now turn to the language, structure and history of

§ 1981 to determine whether, given the manifest intent

of Congress in enacting § 1658, it is appropriate to apply

the applicable state statute of limitations or the federal

catch-all provision. We again begin with the language

and the structure of the statute. The most salient feature

of the revised statute is that § 1981(b) simply cannot stand

on its own. An action to recover for discriminatory postformation treatment simply cannot be based solely on

§ 1981(b). Indeed, without § 1981(a), § 1981(b) is meaningless. Consequently, although post-formation discriminatory claims depend on the amendatory language of

§ 1981(b) in the sense that the definitional language of

that subsection makes clear that “make and enforce”

includes post-formation conduct, the cause of action for

post-formation conduct “aris[es] under” § 1981(a); that
20 No. 01-3271

subsection, not subsection (b), provides the actual right

to recovery.

That this structural formation of the revised § 1981 is

no accident is clear when we turn to the history of the

amendment. There is no question that reversing the

Patterson decision was the driving force behind the enactment of § 1981(b). See H.R. Rep. No. 102-40 (I), at 88-92

(1991) (explaining the need to overrule Patterson and that

the act “would overrule Patterson by adding at the conclusion of section 1981 a new subsection (b)”). Notably,

Congress chose to overrule Patterson not by creating

an entirely new statutory provision. Indeed, Congress

did not alter the original language of § 1981 (now § 1981(a)),

which provides the basic right of recovery for an individual whose constitutional rights have been violated; instead, Congress merely supplied a more precise definition to one of the rights already guaranteed by § 1981—

the right “to make and enforce contracts.” Congress

could have overruled Patterson in a number of ways.

Instead of creating a wholly new cause of action, Congress merely defined the term “make and enforce contracts” for the purpose of the old § 1981, now § 1981(a).

Congress’ action therefore evinces a desire to tie the new

cause of action to the existing § 1981.

Moreover, it is highly significant that, when Congress

passed the Civil Rights Act of 1991 with the amendments

to § 1981 contained therein, it believed that the applicable state statute of limitations for personal injury claims

would continue to apply to § 1981 claims:

But under 42 U.S.C. section 1981, which bars intentional race discrimination in employment as well as

other contractual relations, victims have a longer

period of time to commence suits. In the absence of

an express limitations period in section 1981, courts
No. 01-3271 21

6 For the reasons set forth in this opinion, we respectfully

disagree with the decision of the Tenth Circuit in Harris v.

Allstate Insurance Co., 2002 WL 1874825 (10th Cir. Aug. 15, 2002).

In Harris, the Tenth Circuit drew heavily from the analysis of

the district court in the present case and also of the dissenting

judge in Zubi. Specifically, relying on the district court’s reason-

(continued...)

applying the statute have looked to analogous state

statutes of limitations. These statutes typically allow

two or three years, and allow up to six years in some

states.

H.R. Rep. No. 102-40 (I), at 63 (1991). Consequently, although Congress had enacted § 1658 the year before, it

did not view its passage as having altered the practice

of borrowing state statutes of limitations for purposes of

§ 1981.

Finally, we also are persuaded by the considered opinions of two of our sister circuits that adopted the approach set forth here. In Zubi and IBP, the Third and

Eighth Circuits both concluded that § 1658 did not affect

the statute of limitations for § 1981 claims such as those

brought by the plaintiffs. Those courts determined that

it is “only when Congress establishes a new cause of action without reference to preexisting law that § 1658 applies.” Zubi, 219 F.3d at 225; IBP, 257 F.3d at 798 (quoting

same). Because “the Civil Rights Act of 1991 was not the

type of enactment Congress intended to include in the

§ 1658 four year limitations period,” those courts applied the personal injury statute of the forum state. IBP,

257 F.3d at 798. We join those circuits in determining that

§ 1658 does not provide the applicable statute of limitations for claims of discrimination based on actions occurring after the employment relationship is formed.6
22 No. 01-3271

6 (...continued)

ing that the Civil Rights Act of 1991 was an “Act of Congress

enacted” after December 1, 1990, the Tenth Circuit held that

“§ 1658 applies to claims brought under § 1981(b), but not to

claims brought under § 1981(a).” Id. at *6-9. As noted above,

however, we do not believe the plaintiffs’ claims “arise under”

only § 1981(b), and, therefore, courts must look to the text,

structure and purpose of both § 1981 and § 1658 to determine

the correct statute of limitations. When this more complete

context is considered, we believe that the correct statute of

limitations for all § 1981 actions is the closest analogous state

statute of limitations.

Instead, the statute of limitations for those claims, as for

all § 1981 claims, remains the most analogous statute

of limitations, here Illinois’ two-year statute of limitations

for personal injuries.

Conclusion

28 U.S.C. § 1658, as it applies to claims brought pursuant to § 1981, is susceptible to more than one textually

plausible reading. Based on the text, the structure of the

statutes and the legislative history of those sections, we

conclude that § 1658 does not apply to the plaintiffs’

claims brought pursuant to § 1981. Consequently, the

judgment of the district court is reversed, and the case

is remanded for further proceedings not inconsistent

with this opinion. Donnelley may recover its costs on

this appeal.

REVERSED AND REMANDED
No. 01-3271 23

A true Copy:

Teste:

 _____________________________

Clerk of the United States Court of 

Appeals for the Seventh Circuit 

USCA-97-C-006—9-16-02