Opinion ID: 3011674
Heading Depth: 2
Heading Rank: 2

Heading: civil rights claims: sections 1981 and 1982

Text: Section 1981, which prohibits racial discrimination in the making and enforcement of contracts and pr operty transactions, provides: All persons within the jurisdiction of the United States shall have the same right in every State and T erritory 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. S 1981(a). Section 1981 is derived from the Civil Rights Act of 1866 and from the reenactment of Section 1 of the 1866 Act in 1870. Mahone v. Waddle , 564 F.2d 1018, 9 1030 (3d Cir. 1977), citing Runyon v. McCrary, 427 U.S. 160, 168-70 & n.8; Civil Rights Act of 1866, ch. 31, section I, 14 Stat. 27, reenacted, Civil Rights Act of 1870, ch. 114 SS 16, 18, 16 Stat. 144, codified at 42 U.S.C. SS 1981, 1982. The legislative history of the 1866 Act makes clear Congress's intent to enact sweeping legislation implementing the thirteenth amendment to abolish all the remaining badges and vestiges of the slavery system. Mahone v. Waddle, 564 F.2d at 1030. As a result, the current statute rests not only on the Fourteenth Amendment but also on the Thirteenth Amendment to the Constitution. Runyon v. McCrary, 427 U.S. at 190 (Stevens, J., concurring). Section 1982, which prohibits racial discrimination in transactions relating to real and personal property, provides: All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property. 42 U.S.C. S 1982. Like S 1981, S 1982 is a Reconstruction statute enacted to effectuate the aims of the Thirteenth and Fourteenth Amendments to the Constitution. Because of the historic interrelationship between the two statutes, courts have consistently construed them together . See Saunders v. General Services Corp., 659 F .Supp. 1042, 1063 (E.D. Va. 1987), citing Tillman v. Wheaton-Haven Recreation Association, 410 U.S. 431 (1973); McCrary v. Runyon, 427 U.S. 160 (1976). Although not identical, the requisite elements of claims under SS 1981 and 1982 are quite similar . In neither case need a plaintiff allege state action on the part of the defendant. See Stirgus v. Benoit, 720 F.Supp. 119 (N.D. Ill. 1989) (S 1982). In order to state a claim under S 1981, a plaintiff must allege facts in support of the following elements: (1) [that plaintiff] is a member of a racial minority; (2) intent to discriminate on the basis of race by the defendant; and (3) discrimination concer ning one or more of the activities enumerated in the statute[,] which includes the right to make and enforce contracts. . . . 10 Yelverton v. Lehman, No. Civ. A. 94-6114, 1996 WL 296551, at  (E.D. Pa. June 3, 1996), aff 'd mem., 175 F.3d 1012 (3d Cir. 1999). In order to bring an action under S 1982, a plaintiff must allege with specificity facts sufficient to show or raise a plausible inference of 1) the defendant's racial animus; (2) intentional discrimination; and 3) that the defendant deprived plaintiff of his rights because of race. Garg v. Albany Indus. Dev. Agency, 899 F . Supp. 961, 968 (N.D.N.Y. 1995), aff 'd, 104 F.3d 351 (Table), 1996 WL 547184 (2d Cir. Sept. 26, 1996). See also Shaare Tefila Congregation v. Cobb, 481 U.S. 615, 616-17, 107 S.Ct. 2019 (1987). Accepting as true the facts alleged in the complaint, we conclude that Black Smokers have not alleged a claim cognizable under either S 1981 or S 1982. Black Smokers do not make the sort of claim that is most readily actionable under the statute: that they have been deprived by defendants of the right to contract for, pur chase, own or use either menthol or non-menthol cigarettes. Black Smokers do not aver that defendants have engaged in a discriminatory refusal to deal with African-Americans with respect to either menthol or non-menthol cigar ettes. Nor do Black Smokers claim that defendants have dealt with customers on differing terms on the basis of race; Black Smokers concede that defendants sell menthol cigar ettes to African-Americans at the same price and on the same terms as such products are of fered to whites. Significantly, Black Smokers do not allege that the mentholated tobacco products sold to African-Americans differ from those sold to whites. Furthermore, at no place in their submissions do Black Smokers argue any disparities with r espect to the marketing or sales of non-menthol tobacco pr oducts on the basis of race. Consequently, it is difficult to understand Black Smokers' allegations to constitute a deprivation of contract or property rights actionable underSS 1981 or 1982. Indeed, Black Smokers' complaint appears instead to present quite the opposite situation. Defendants are alleged to encourage the consumption by African-Americans of certain of their products: mentholated cigar ettes, snuff, and chewing tobacco. The question at the heart of Black Smokers' SS 1981 and 1982 claims, then, is whether such encouragement is 11 unlawful under the civil rights statutes. At the outset, we note that neither party has alerted us to the existence of any authority standing for the proposition that an encouragement to deal is actionable under such statutes. Some authority does exist in support of the notion that targeting consumers for sales of defective pr oducts on the basis of race is actionable under SS 1981 and 1982. For example, in Roper v. Edwards, 815 F .2d 1474 (11th Cir. 1987), a case cited by Black Smokers, the Court of Appeals for the Eleventh Circuit suggests that a cause of action under S1981 exists where a burial vault manufacturer made targeted sales of defective burial vaults to Black consumers. Although the case was brought by white plaintiffs who were inadvertently sold a defective vault, and although the Court of Appeals ultimately rejected plaintiffs' claims on other grounds, Black Smokers corr ectly argue that the Eleventh Circuit did not reject the cause of action. Nevertheless, Roper is readily distinguishable from the case at bar because unlike Roper, which involved deceptive sales to African-Americans of products that dif fered from those sold to whites, this case concerns identical products; defendants sell the same menthol cigarettes to everyone. One might argue that if racially directed marketing of menthol cigarettes resulted in a situation in which virtually all mentholated tobacco products were consumed by African-Americans and substantially all non-mentholated tobacco products by others, that case might come within the sweep of Roper. However, Black Smokers have not alleged such a situation. In order to salvage their S 1981 claims, Black Smokers resort to several alternative theories of recovery. First, they suggest that defendants' advertisements for menthol cigarettes constitute express warranties containing misrepresentations and false statements. This argument seems to constitute a claim of breach of expr ess warranty, intentional fraud or misrepresentation. Although it is true that the Labeling Act does not preempt such an action, Cipollone v. Liggett, 505 U.S. at 526-529, 530-31, Black Smokers fail to make sufficiently detailed allegations with respect to any of these potential causes of action. Black Smokers imply in their submissions, and asserted at oral 12 argument, that defendants fail to disclose the increased health risks of menthol cigarettes and that the AfricanAmerican community suffers damages as a r esult of its higher consumption of mentholated tobacco pr oducts. Although that claim may be factually true, it is not actionable. The Supreme Court has held that the 1969 Act preempts claims based on a failure to war n and on the neutralization of federally mandated warnings to the extent that such claims rely on omissions or inclusions in advertising or promotions. Cipollone v. Liggett, 505 U.S. 504, 530-531. Second, Black Smokers attempt to raise a claim of segregated market exploitation by arguing that defendants' practices fall within the ambit of segregated housing cases such as Clark v. Universal Builders, Inc., 501 F.2d 324 (7th Cir. 1973). This claim also fails on both factual and legal grounds. In the segregated housing cases, unlike the instant case, the defendants sold houses to Black purchasers on substantially differ ent and more onerous terms than to others, effectively cr eating two separate, racially-segregated markets. See, e.g., Clark v. Universal Builders, 501 F.2d at 328. Black Smokers, however, point to no such disparities in the sale of mentholated tobacco products, apart from the generalized allegation that AfricanAmericans are more likely than others to buy mentholated tobacco products as a result of tar geted advertising. Moreover, even if Black Smokers' segr egated market exploitation claims were cognizable on the facts alleged, we must reject them on procedural grounds. It does not appear that Black Smokers advanced such claims in the District Court; arguments asserted for the first time on appeal are deemed to be waived and consequently are not susceptible of review in this Court absent exceptional cir cumstances (e.g., the public interest requir es that the issues be heard or manifest injustice would result from the failure to consider such issues). See, e.g., United States v. Anthony Dell'acquilla Enter. & Subsidiaries, 150 F.3d 329, 335 (3d Cir. 1998) (citations omitted); United Parcel Serv. Inc. v. International Brotherhood of T eamsters, 55 F.3d 138, 140 n.5 (3d Cir. 1995). No such exceptional cir cumstances are apparent here. 13 Third, Black Smokers assert that defendants' targeted marketing practices violate the full and equal benefit clause of S1981, which provides that [a]ll persons within the jurisdiction of the United States shall have the same right in every State and Territory . . . to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens . . .. 42 U.S.C. S 1981(a). Again, we must reject Black Smokers' full and equal benefit claims because they do not appear to have been raised in the District Court and no exceptional circumstances suggest review of such claims notwithstanding Black Smokers' failure to ar gue them previously. United States v. Anthony Dell'acquilla Enter. & Subsidiaries, 150 F.3d at 335 (citations omitted). Moreover, even if we were to consider them, such full and equal benefit claims would fail in light of a substantial line of authority holding that only state actors can be sued under the full and equal benefit clause of S1981. Mahone v. Waddle, 563 F.2d 1018, 1029 (3d Cir. 1977); Sheppard v. Dickstein, Shapiro, Morin & Oshinsky, 59 F.Supp.2d 27, 30 n.1 (D.D.C. 1999) (dictum); Lewis v. J.C. Penney Co., 948 F.Supp. 367, 371 (D.Del. 1996) (citations omitted); Sterling v. Kazmierczak, 983 F.Supp. 1186, 1192 (N.D. Ill. 1997). As we explain in Sections III C and D, infra, the defendants in the instant case cannot be regarded as federal or state actors. Notwithstanding Black Smokers' arguments to the contrary, their complaints essentially constitute discriminatory advertising claims. Black Smokers virtually admit as much when they characterize their claims as allegations of discriminatory targeting in sales of allegedly defective products. Although Black Smokers ar gue that their claims resemble racial profiling and racially-motivated prepayment cases, all such fact patterns are distinguishable from the instant case because they involve either a naked, racially-motivated restriction on dealing or a race-based variation of the terms of the contract at issue. Consequently, Black Smokers' claims remain fundamentally allegations of discriminatory advertising and are not therefore cognizable underSS 1981 or 1982. Even in the context of housing discrimination -- arguably a paradigmatic example of the rights Congress sought to 14 protect under the Civil Rights Acts -- ample authority exists in support of the proposition that discriminatory advertising is not actionable under SS 1981 and 1982. See Jones v. Alfred H. Mayer Co., 392 U.S. 409, 413, 88 S.Ct. 2186 (1968) (noting that S1982 does not pr ohibit advertising or other representations that indicate discriminatory preferences); Span v. Colonial Village, Inc., 899 F.2d 24, 35 (D.C. Cir. 1990) (holding that SS 1981 and 1982 do not prohibit real estate advertisements indicating discriminatory preferences); Saunders v. General Services Corp., 659 F.Supp. 1042 (E.D. Va. 1987) (declining to apply SS 1981 or 1982 to racially discriminatory advertising for rental housing); Ragin v. Steiner, Clateman and Assocs., 714 F.Supp. 709, 713 (S.D.N.Y. 1989) (same in context of cooperative apartment complex).