FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

FEBRUARY 28, 2002

THOMAS K. KAHN

CLERK

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

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No. 00-11644

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D. C. Docket No. 96-02399 CV-TWT-1

DANIEL WEBSTER,

PEGGY WEBSTER, et al.,

Plaintiffs-Appellants,

Cross-Appellees,

versus

FULTON COUNTY, GEORGIA,

Defendant-Appellee,

Cross-Appellant.

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No. 00-15227

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D. C. Docket No. 96-02399 CV-TWT-1

DANIEL WEBSTER,

PEGGY WEBSTER, et al.,

Plaintiffs-Appellees,
2

versus

FULTON COUNTY, GEORGIA,

Defendant-Appellant.

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Appeals from the United States District Court

for the Northern District of Georgia

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(February 28, 2002)

Before EDMONDSON and WILSON, Circuit Judges, and PAUL*, District Judge.

EDMONDSON, Circuit Judge:

Webster Greenthumb Co.’s (“WGT”) amended complaint alleges that WGT,

since filing a section 1981 lawsuit charging Fulton County with a custom or policy

of disparate-treatment racial discrimination, has “bid upon several contracts, for

which they were the lowest qualified bidder” and that Fulton County “refused to

_______________

* Honorable Maurice M. Paul, U.S. District Judge for the Northern District of Florida,

sitting by designation.
 1

When reviewing a dismissal for failure to state a claim, we take the allegations in the complaint

as true and draw all reasonable inferences in favor of WGT. E.g., Marsh v. Butler County, 268 F.3d

1014, 1023 (11th Cir. 2001) (en banc).

 2Many other issues were raised on appeal. We affirm the district court’s decisions, except for

its decision dismissing WGT’s retaliation claim.

 3In a situation such as the one presented by this case, Section 1981's protections extend to

companies such as WGT. Gersman v. Group Health Ass'n, Inc., 931 F.2d 1565 (D.C. Cir. 1991)

(concluding that corporation discriminated against on the basis of the race of its principal

shareholder has standing to assert section 1981 violation), vacated on other grounds, 502 U.S. 1068

(1992), reinstated 975 F.2d 886 (D.C. Cir. 1992).

3

award these contracts to [WGT] in retaliation for having filed th[is] lawsuit.”1 The

question before us is whether the district court erred when it determined that WGT

-- an independent contractor -- failed to allege a valid section 1981 retaliation

claim. We believe the district court did err, and we vacate the district court’s order

of dismissal.2

Section 1981 provides that “[a]ll persons ... shall have the same right in

every State and Territory to make and enforce contracts ... as is enjoyed by white

citizens.” 42 U.S.C. § 1981(a). Section 1981 protects people, and some entities,3

from racial discrimination during the making of contracts. See Patterson v.

McLean Credit Union, 491 U.S. 164, 176-77, 109 S. Ct. 2363, 2372-73 (1989)

(stating that Section 1981 “prohibits, when based on race, the refusal to enter into a

contract with someone”), superseded by statute on other grounds as stated in

Landgraf v. USI Film Prods., 511 U.S. 244 (1994). Section 1981 is enforceable
 4

WGT brought its section 1981 claims pursuant to Section 1983.

4

against a municipality through 42 U.S.C. § 1983.4 See Butts v. County of Volusia,

222 F.3d 891, 894 (11th Cir. 2000) (concluding that Section 1983 is exclusive

remedy for enforcement of section 1981 rights against state actors).

We have previously concluded that Section 1981 supports a retaliation cause

of action. Andrews v. Lakeshore Rehab. Hosp., 140 F.3d 1405, 1412-13 (11th Cir.

1998). But in this case, the district court -- relying on Board of Comm'rs v.

Umbehr, 518 U.S. 668, 116 S. Ct. 2342 (1996) -- accepted the County’s contention

that Section 1981 could not support a retaliation claim that was based upon WGT’s

factual allegations and, therefore, determined that WGT had failed to state a

section 1981 retaliation claim.

The County’s argument to affirm on appeal seizes on two differences

between the facts presented to the Andrews court and the facts in this case. First,

the plaintiff in Andrews was an employee of a private company, not an

independent contractor for a governmental entity, as is WGT. Second, the plaintiff

in Andrews was terminated from his job. Fulton County contends that WGT, on

the other hand, was not hired (that is, was not awarded the contracts at issue) in the

first place. The County then points to the reasoning of Umbehr to support
 5

The case decided nothing about the right of disappointed bidders to bring retaliation claims,

even those based upon the First Amendment.

5

distinguishing Andrews from this case (and, thus, support concluding that WGT

failed to state a section 1981 retaliation claim) based upon those two differences.

In Umbehr, the Supreme Court recognized a section 1983 retaliation cause

of action against a municipality for independent contractors whose contracts had

been terminated in retaliation for exercising their freedom of speech. The opinion,

however, was explicitly limited to independent contractors with pre-existing

contractual relationships with the government. Umbehr, 518 U.S. at 685, 116 S.

Ct. at 2352. At least one other circuit has interpreted Umbehr to prohibit First

Amendment retaliation claims, brought pursuant to Section 1983, by independent

contractors without pre-existing relationships (that is, “disappointed bidders”). 

McClintock v. Eichelberger, 169 F.3d 812, 817 (3d Cir. 1999). Fulton County

argues that Umbehr’s alleged prohibition on suits by disappointed bidders should

apply to race-based section 1981 retaliation claims brought under Section 1983. 

We disagree. 

Umbehr does not apply to the case at hand.5

 Umbehr drew its distinction

between independent contractors and employees in the context of the First

Amendment, not Section 1981. Disappointed bidders are at the core of Section
 6

In Andrews, the defendant’s retaliatory acts were in response to the plaintiff’s filing of a racebased claim with the EEOC. Andrews, 140 F.3d at 1412. We see no difference, for purposes of this

case, between the filing of a raced-based EEOC claim (as in Andrews) and the filing of a race-based

section 1981 lawsuit (as in this case).

 7See Mitchell v. Baldrige, 759 F.2d 80, 86 n.5 (D.C. Cir. 1985) (“In cases of alleged retaliatory

... failure to hire ..., the plaintiff must also show as part of the prima facie reprisal case that he was

qualified for the position.”).

6

1981's protection: Section 1981 is a protection against an entity (such as Fulton

County) declining to make a contract with a party (such as WGT) on account of

race. Thus, once we say that Section 1981's protection extends to prohibiting

retaliation against a party who has filed a formal complaint charging racial

discrimination (as we did in Andrews),6

 it follows that having no contract (that is,

being a disappointed bidder) is no bar, but actually an element of a traditional

section 1981 retaliation claim alleging failure to contract.

We, therefore, conclude that an independent contractor, such as WGT, states

a claim for violation of Section 1981 when that contractor -- a contractor that is

qualified to do the work upon which it bids7

 -- alleges that a governmental entity

refused to award a contract to the contractor in retaliation for the contractor’s filing

of a lawsuit charging the governmental entity with a custom or policy of disparatetreatment racial discrimination that was applied against the contractor in violation
 8

 We assume, because Fulton County has not argued otherwise, that Section 1983's additional

constraint on section 1981 claims against governmental entities -- that the discrimination complained

of be a custom or policy of the governmental entity, see Monell v. Department of Social Services

of New York, 436 U.S. 658, 694-95, 98 S. Ct. 2018 (1978) -- is met by WGT’s allegation that the

retaliation at issue was in response to a lawsuit charging the County with discriminating against

WGT on the basis of an unconstitutional affirmative action program.

7

of Section 1981.8 Thus, because WGT alleged such a claim, we conclude that

WGT stated a valid section 1981 retaliation claim, as enforced by Section 1983.

AFFIRMED in part, REVERSED in part, and REMANDED for further

proceedings consistent with this opinion.