UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

OSSAMA NAGY; SHERIF SAAD;

NOOSHIN SOOZANGAR; SHAGUFLA

AZAD,

Plaintiffs-Appellants,

and

DAVID C. GRIGGS; ADEL ALALFEY,

Plaintiffs,

v.

No. 99-1859

THE BALTIMORE LIFE INSURANCE

COMPANY; LIFE OF MARYLAND,

INCORPORATED,

Defendants-Appellees,

v.

THE MARYLAND INSURANCE

COMMISSIONER,

Movant-Appellee.

Appeal from the United States District Court

for the District of Maryland, at Baltimore.

Andre M. Davis, District Judge.

(CA-96-3673-AMD)

Argued: April 7, 2000

Decided: June 5, 2000

Before LUTTIG, Circuit Judge, Roger J. MINER,

Senior Circuit Judge of the United States Court of Appeals

for the Second Circuit, sitting by designation, and

Patrick M. DUFFY, United States District Judge for the

District of South Carolina, sitting by designation.

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Affirmed in part, vacated in part, and remanded in part by unpublished per curiam opinion.

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COUNSEL

ARGUED: Daniel F. Goldstein, BROWN, GOLDSTEIN & LEVY,

Baltimore, Maryland, for Appellants. Stanley Mazaroff, VENABLE,

BAETJER & HOWARD, L.L.P., Baltimore, Maryland, for Appellees.

ON BRIEF: George Hermina, John Hermina, HERMINA LAW

GROUP, Laurel, Maryland, for Appellants.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

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OPINION

PER CURIAM:

Before the court is an appeal from a summary judgment of the

United States District Court for the District of Maryland (Davis, J.)

holding, inter alia, that (1) plaintiffs had not established genuine

issues of material fact concerning claims of race discrimination in

light of the defendants' practice of targeting for insurance sales the

very applicants allegedly discriminated against and (2) plaintiffs'

alienage claim under 42 U.S.C. § 1981 failed because defendants'

denial of life insurance was based on the nation of plaintiffs' origin,

not merely their lack of U.S. citizenship. The appellants also appeal

from certain discovery rulings by the district court.

Because the district court improperly resolved on summary judgment the alienage claims of two of the plaintiffs, despite their production of direct evidence supporting a finding of unlawful alienage

discrimination, we remand. With respect to all other matters on

appeal, we affirm.

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BACKGROUND

Plaintiffs-appellants are Sherif M. Saad ("Saad"), Ossama Nagy

("Nagy"), Nooshin Soozangar ("Soozangar"), and Shagufla Azad

("Azad"). Saad, Nagy, Soozangar, and Azad are non-U.S. citizens of

Middle Eastern origin. The appellants allege that they were victims

of the defendants-appellees' discriminatory insurance practices.

The defendants-appellees are Baltimore Life Insurance Company

("Baltimore Life"), and several of its officers and employees, including President L. John Pearson, Vice President of Underwriting William Vigliotte ("Vigliotte"), Vice President for Career Marketing

Gary Ray, Executive Vice President David S. Sachs, Executive Vice

President Damian A. Salvi, and Senior Underwriter Morrie R. Clark.

Baltimore Life is the only mutual life insurance company domiciled

in Maryland and is owned by its policyholders and managed for their

benefit.

In 1994, Baltimore Life hired Adel Alalfey as a sales agent to

cover a targeted market -- the Middle Eastern community in the Baltimore/Washington metropolitan area. As a result of the efforts of

Baltimore Life and Alalfey, the company was successful in selling

many life insurance policies to persons of Middle Eastern descent.

More specifically, during the period from November 1994 to April

1996, Baltimore Life sold life insurance policies to over 40 persons

whose places of birth or ancestry could be traced to a Middle Eastern

or Arab country. However, Baltimore Life did not issue insurance

policies to some of Alalfey's customers, whom it contends presented

unacceptable mortality risks.

After Alalfey was hired, he met with Vigliotte to discuss plans to

sell life insurance to people from the Middle East. When Alalfey told

Vigliotte about his plan to sell insurance policies to certain employees

of the Kuwaiti embassy, Vigliotte became concerned. Vigliotte stated

that he "was reminded of the Gulf War and the ongoing risk of residing in Kuwait, and . . . had visions of blindfolded Americans in captivity in Iran."

After this conversation, Vigliotte cautioned his staff against providing life insurance policies to customers of Alalfey who were born in

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and remained citizens of unstable countries and consequently were

likely to become poor risks if they returned home. Although Baltimore Life's application does not ask applicants about their citizenship, it does ask for information about applicants'"Country of Birth."

Between December 1994 and April 1995, as a result of Vigliotte's

caution to the underwriting staff, the staff started checking whether

applicants who answered that they were born abroad remained citizens of their "Country of Birth." To obtain this information, inquiries

were made over the telephone by members of the underwriting staff.

Among the many applications screened, the underwriting staff

found only three applicants who continued to be citizens of their

country of birth and whom Vigliotte determined to be unacceptable

underwriting risks. Those three individuals were Saad, Soozanger,

and a third person who is not a party to this case.

On December 22, 1994, Alalfey submitted Saad's application for

life insurance. The application revealed that Saad was born in Egypt

and worked for the Kuwaiti government at its embassy in Washington, D.C. Pat Taylor ("Taylor"), a staff member in the underwriting

department, telephoned Saad and learned that he was a citizen of

Egypt. On December 30, 1994, Saad was notified by letter that his

application for life insurance was rejected. The letter read, in pertinent

part:

 We have completed our review of the life insurance policy for which you recently applied. Unfortunately, we are

unable to offer you coverage. . . . This case is being declined

since it is company policy not to issue coverage on nonUnited States citizens.

(emphasis added).

Soozangar applied for life insurance on December 29, 1994. Her

application showed that she was born in Iran. Accordingly, Taylor

telephoned Soozangar to determine whether she was still an Iranian

citizen. Upon learning that Soozangar remained a citizen of Iran, Baltimore Life rejected her application. On January 11, 1995, she

received a letter identical to that sent to Saad. According to Vigliotte,

Baltimore Life stopped inquiring about the citizenship of applicants

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on April 3, 1995. In April 1996, after Vigliotte had informed Alalfey

that Baltimore Life was no longer evaluating applicants' citizenship,

Alalfey resubmitted Soozangar's application for life insurance. The

application was thereafter approved.

On November 25, 1996, the appellants, and a fifth plaintiff named

David C. Griggs ("Griggs"), who was a former District Manager for

Baltimore Life, filed a class action lawsuit in the United States District Court for District of Maryland, asserting violations of 42 U.S.C.

§ 1981, 42 U.S.C. § 1982, and the Maryland common law, arising

from the alleged refusal of Baltimore Life to issue policies to nonU.S. citizens. The complaint also alleged breach of contract, fraud,

and wrongful discharge on behalf of Griggs and Alalfey. The complaint made a demand for a jury trial and sought an aggregate amount

of approximately $150,000,000.00 in damages.

In December of 1998 and January of 1999, a discovery dispute

arose that related to plaintiffs' service of a motion to compel on Baltimore Life. After the motion was served, but before it was filed, Baltimore Life apparently filed a motion to strike. The plaintiffs then

attempted to file their motion to compel with the court. On January

13, 1999, the district court issued an order denying all pending

motions dealing with discovery and setting certain discovery deadlines. On the same date, the court sent a letter to counsel stating in

relevant part:

 I have concluded that the most sensible way out of the pit

into which this case has fallen is to start fresh. Accordingly,

by separate order, I am DENYING all of your pending

motions and cross motions for protective order, etc. All

prior rulings are wiped from the slate, an amended scheduling order is being issued, and you are all being given the

opportunity to avoid the imposition of very substantial sanctions.

 Hereafter, you will cooperate fully in scheduling the completion of discovery and you will not file another motion to

compel or for protective order or any similar motion.

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 Despite the informal nature of this ruling, it shall constitute an Order of Court, and the Clerk is directed to docket

it accordingly.

Thereafter, the court returned the motion to compel that the plaintiffs

had attempted to file. The plaintiffs then protested the return by filing

a motion for reconsideration. Apparently, the district court never

ruled on this motion for reconsideration.

On May 24, 1999, the district court issued a Memorandum Opinion

and accompanying Order. The opinion dealt with several pending

motions, two of which are relevant on appeal: (1) the defendants'

motion to exclude the testimony of Alalfey and (2) the defendants'

motion for summary judgment.

With regard to the defendants' motion to exclude the testimony of

Alalfey, the court initially noted that plaintiffs' counsel was representing Alalfey in state court litigation arising out of his former employment with Baltimore Life. The court then found that Alalfey's

deposition had been postponed several times and attributed this to

"[t]he inexcusable game-playing and bad faith manifested by Alalfey

and plaintiffs' counsel." The court concluded that the "[e]xclusion of

[Alalfey's] testimony [wa]s a measured and appropriate response

under the circumstances" and granted the defendants' motion.

The majority of the court's opinion addressed the substantive

motion for summary judgment. Because the case giving rise to this

appeal involved claims predicated on direct evidence of discrimination, the court required plaintiffs to "produce direct evidence of a

stated purpose to discriminate on the basis of [ethnicity or citizenship]

and/or circumstantial evidence of a stated purpose to discriminate on

the basis of [ethnicity or citizenship] of sufficient probative force to

reflect a genuine issue of material fact." (internal quotation omitted).

Turning to the allegations of race discrimination, the court flatly

rejected this claim, finding the record replete with evidence that many

persons other than plaintiffs, yet of the same Middle Eastern ancestry,

applied for and received life insurance policies from Baltimore Life

during the time in question. The court also relied on Baltimore Life's

obvious intent to increase the sale of life insurance policies to mem-

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bers of the Middle Eastern community in the Baltimore/Washington

metropolitan area.

Thus, all that remained were the alienage discrimination claims.

The district court found Duane v. GEICO, 37 F.3d 1036 (4th Cir.

1994), controlling and concluded that Section 1981 had been interpreted in our Circuit as outlawing discrimination against aliens. With

regard to Nagy and Azad, the court flatly rejected their contention that

they were ever denied life insurance by Baltimore Life.1 However, the

court found that with regard to Soozangar and Saad,"there [wa]s

direct evidence of discrimination." Discussing the direct evidence of

discrimination, the court noted that Vigliotte admitted that "he instituted a policy of rejecting applications from certain non-United States

citizens" and also noted that a former Baltimore Life employee confirmed the existence of this policy. The court also referred to the

explicit rejection letters that Saad and Soozanger received. Accordingly, the court concluded, "plaintiffs have available a quantum of

evidence supportive of their claims." Nevertheless, the district court

granted summary judgment as to the claims of Soozangar and Saad,

reasoning as follows:

On the whole, although there is admittedly some direct evidence that Baltimore Life rejected the plaintiffs in part

because they were citizens of certain Middle Eastern countries, i.e., they were not citizens of the United States (or

some other country), Baltimore Life nevertheless escapes

liability as a matter of law because a rational juror would be

compelled on this record to conclude that, rather than noncitizenship, plaintiffs' rejection was "solely" based "on the

place or nation of [their] origin," see[Saint Francis College

v. Al-Khazraji, 481 U.S. 604, 613 (1987)] . .., rejection on

the basis of which does not support a cognizable claim

under § 1981.

(emphasis added; emphasis from original omitted). The court also

observed that the plaintiffs had not argued, and thus it did not seek

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1 In a separate portion of the opinion, the court noted that it was undisputed that Baltimore Life had no record that Azad or Nagy ever applied

to Baltimore Life for life insurance.

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to determine, whether a mixed-motive analysis was appropriate in the

context of Section 1981 alienage claims. Accordingly, the court

granted the defendants' summary judgment motion in its entirety.

This appeal followed.

DISCUSSION

The appellants contend that there are genuine issues of material

fact that preclude summary judgment in favor of defendants. The

appellees argue that the district court was correct to grant summary

judgment because the appellants cannot show that Baltimore Life

denied them insurance on the basis of their alienage status. They contend that they actively marketed policies to persons of Middle Eastern

descent and that they considered persons' place of birth and citizenship only as indicia of the likelihood of their traveling to dangerous

foreign countries. The appellants also dispute the district court's rulings with regard to (1) the exclusion of Alalfey's testimony; (2) the

appellants' attempted filing of a motion to compel discovery from

Baltimore Life; and (3) the appellants' motion for reconsideration of

the motion to compel.

Standard of Review

We review a grant of summary judgment de novo . See Halperin v.

Abacus Tech. Corp., 128 F.3d 191, 196 (4th Cir. 1997). Summary

judgment is appropriate if "`there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter

of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (quoting

Fed. R. Civ. P. 56(c)). In determining whether there is a genuine issue

of material fact, the record is viewed in the light most favorable to the

nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

255 (1986). With regard to the discovery rulings and the decision to

strike the testimony of Alalfey, we assess whether the district court

abused its discretion. See United States v. Hassan El, 5 F.3d 726, 731

(4th Cir. 1993); United States v. Curry, 993 F.2d 43, 45 (4th Cir.

1993); Erdmann v. Preferred Research, Inc., 852 F.2d 788, 792 (4th

Cir. 1988).

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The Alienage Claim

42 U.S.C. § 1981, as amended by the Civil Rights Act of 1991,

Pub. L. No. 102-166, § 101, 105 Stat. 1071, 1071-72, states as follows:

(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.

In 1994, we interpreted the meaning of Section 1981 in the alienage context in Duane v. GEICO, 37 F.3d 1036 (4th Cir. 1994). Duane

was a lawfully admitted, permanent resident alien of the United States

and a citizen of Australia. As in our case, the plaintiff had sought

insurance -- home insurance in that case -- and had been denied coverage. GEICO's sales agent had informed Duane that the company

would not issue him a homeowner's policy because he was not a

United States citizen. Thereafter, Duane confirmed that information

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with a GEICO supervisor and filed suit. On appeal from a district

court decision dismissing his claim, we found the 1991 amendments

to Section 1981 inapplicable to the defendant's conduct, since the

conduct occurred before passage of the Civil Rights Act of 1991.

Accordingly, we looked only to what is currently codified as Section

1981(a). See id. at 1038. After detailing the history of Section 1981

and the Supreme Court caselaw surrounding its application, we noted

that the Supreme Court had found Section 1981 applicable to government discrimination against aliens in Takahashi v. Fish & Game

Comm'n, 334 U.S. 410 (1948). We then found that the relevant

Supreme Court caselaw, legislative history, and construction of the

Act indicated that Congress intended the Act to reach private discrimination against aliens. We concluded that Section 1981 prohibited private discrimination on the basis of alienage. See id. at 1042-43.

In the present case, the district court's own discussion of the evidence presented by Soozangar and Saad demonstrated that these two

plaintiffs met their burden of producing direct evidence of discrimination on the basis of alienage. The rejection letters that both received

from Baltimore Life stated that they were being denied insurance

because "it is company policy not to issue coverage on non-United

States citizens." These letters followed telephone calls inquiring into

citizenship status. Additionally, Soozangar and Saad presented Vigliotte's own testimony that "he instituted a policy of rejecting applications from certain non-United States citizens." Nevertheless, the court

discounted the importance of this evidence, drawing a distinction

between discrimination based on the place or nation of origin, which

it found permissible, and discrimination on the basis of noncitizenship. Finding that the discrimination here was really based on

the plaintiffs' place or nation of origin, the court concluded that no

rational juror could find for the plaintiffs.

However, the court inappropriately weighed the evidence and

failed to recognize that once it found direct evidence of alienage discrimination, a "quantum of evidence" as the court put it, that there

was presented a genuine issue of material fact that required resolution

by a jury.2 It is on this basis that we vacate and remand so much of

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2 We recognize that the defendants contend that they only denied life

insurance policies based on applicants' place of citizenship, not applicants' non-citizenship. Yet, these are arguments properly resolved by a

trier of fact, not a district court or appellate court on summary judgment.

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the district court's decision as rendered summary judgment for the

defendants on the alienage claims made by Saad and Soozangar. As

for the alienage claims advanced by Nagy and Azad, we agree with

the district court that they failed to show that they were ever denied

life insurance by Baltimore Life.

The Racial Discrimination Claims

Plaintiffs also dispute the district court's summary judgment

against them on the race discrimination claims. We affirm the district

court's ruling on this issue for substantially the same reasons given

by that court. The plaintiffs failed to make the required showing either

by direct or indirect evidence supporting a claim for discrimination on

the basis of race so as to preclude summary judgment.

The District Court's Discovery and Motion in Limine Rulings

We also affirm the district court on these points, as the appellants'

contentions lack merit. First, contrary to the appellants' assertions, the

record supports the district court's decision to strike Alalfey's testimony on the basis of its finding of bad faith -- the sanction was reasonable in relation to the harm occasioned. Second, the district court's

discovery rulings with regard to the motion to compel and consequent

motion for reconsideration were reasonable. In any event, there is no

evidence that the district court abused its discretion in these rulings.

See Erdmann, 852 F.2d at 792.

CONCLUSION

We vacate so much of the district court's summary judgment as

rejected the alienage claims of Saad and Soozangar and remand for

further proceedings as to those claims in accordance with the foregoing. In all other respects, we affirm the rulings and judgment of the

district court.

AFFIRMED IN PART, VACATED IN PART,

AND REMANDED

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