Opinion ID: 673802
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Heading Rank: 1

Heading: The Individual Testers

Text: 3 Neither of the federal statutes that they invoke gives the tester plaintiffs a cause of action for damages, and they lack standing to seek the other forms of relief requested.
4
5 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, 96 S.Ct. 2586, 2593, 49 L.Ed.2d 415 (1976); Patterson v. McLean Credit Union, 491 U.S. 164, 171-75, 109 S.Ct. 2363, 2369-72, 105 L.Ed.2d 132 (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 Sec. 1981. 6 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 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 Sec. 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. 7 Certainly the loss of the opportunity to enter into a void contract--i.e., a contract that neither party can enforce--is not an injury cognizable under Sec. 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 Sec. 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). 8 The plaintiffs' second assertion fails because the testers concededly had 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 they would have rejected any job offer obtained through a referral from 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 Sec. 1981. 9 Our conclusion that the tester plaintiffs are not entitled to damages under Sec. 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.1977), overruled on other grounds by Goodman v. Lukens Steel Co., 777 F.2d 113 (3d Cir.1985), aff'd, 482 U.S. 656, 107 S.Ct. 2617, 96 L.Ed.2d 572 (1987), the Third Circuit held that fair-housing testers had standing to sue under Sec. 1981 and 42 U.S.C. Sec. 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 exclusively the proposition that a plaintiff's standing 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, 87 S.Ct. 1213, 1219-20, 18 L.Ed.2d 288 (1967); Evers v. Dwyer, 358 U.S. 202, 79 S.Ct. 178, 3 L.Ed.2d 222 (1958) (per curiam). Meyers did not address whether the testers had in fact suffered any legal injury within the meaning of Secs. 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. 10 Watts v. Boyd Properties, 758 F.2d 1482 (11th Cir.1985), is similarly unpersuasive. Though the Eleventh Circuit did indicate that fair-housing testers have a cause of action under Sec. 1982 (and hence, presumably, under Sec. 1981), it rested this view chiefly on Meyers. 11 Our conclusion that the tester plaintiffs lack a cause of action under Sec. 1981 is perfectly consistent with Havens Realty Corp. v. Coleman, 455 U.S. 363, 102 S.Ct. 1114, 71 L.Ed.2d 214 (1982), which held that black fair-housing testers had standing to sue over alleged violations of Sec. 804(d) of the Fair Housing Act of 1968. There, Congress had clearly conferred a cause of action on the testers; Sec. 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 Sec. 812 provided that [t]he rights granted by section[ ] ... 804 ... may be enforced by civil actions in appropriate United States district courts. See42 U.S.C. Secs. 3604(d), 3612(a). Under these statutory provisions, it did not matter that the testers merely posed as potential renters or purchasers; regardless of their intentions, the statute gave them an enforceable right to truthfulinformation concerning the availability of housing. Havens, 455 U.S. at 373-74, 102 S.Ct. at 1121 (emphasis added). The question for theHavens Court, then, was simply whether Congress could constitutionally confer such a cause of action--i.e., whether the denial of truthful information to testers caused them any injury in fact. The Court's answer to this constitutional question has no bearing on the proper interpretation of Sec. 1981. 12
13 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. Sec. 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. Sec. 2000e-5(b), (c), (f)(1). This statutory scheme is much more analogous than Sec. 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. 14 Had the tester plaintiff in Havens proved her claims, the district court could have awarded her damages. See 42 U.S.C. Sec. 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. Sec. 2000e-5(g); see also United States v. Burke, --- U.S. ----, ----, 112 S.Ct. 1867, 1873-74, 119 L.Ed.2d 34 (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. Sec. 1981a, but the new remedial provisions cannot be applied to conduct occurring before the enactment of the 1991 statute. Landgraf v. USI Film Products, --- U.S. ----, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994).
15 Since the tester plaintiffs have no cause of action for damages under either Sec. 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, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983), they lack standing to seek such prospective relief, for they have not made sufficient allegations that they are threatened with any future illegality. 16 The plaintiff in Lyons alleged that Los Angeles police, without provocation, had subjected him to a chokehold that had knocked him unconscious and injured his larynx. In addition to damages, he sought an injunction barring the police from applying such chokeholds in 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, 103 S.Ct. at 1667 (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, 103 S.Ct. at 1668. 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, 103 S.Ct. at 1669. 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, 89 S.Ct. 956, 959-61, 22 L.Ed.2d 113 (1969); City of Houston v. Department of Housing & Urban Dev't, 24 F.3d 1421, 1429 n. 6 (D.C.Cir.1994). 17 Here, the tester plaintiffs made several different references to future injury in their complaint. In general, however, these future injuries spring entirely from BMC's past conduct. See, e.g., Second Amended Complaint p 44 (suggesting that testers will continue to feel embarrassment and humiliation over their treatment during the tests); id. p 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, 103 S.Ct. at 1668 n. 8. 18 Only once in their complaint do the tester plaintiffs even come close to alleging that they will suffer any future illegality at BMC's hands. In their Sec. 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 p 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, 103 S.Ct. at 1668-69. 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. 19 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 Sec. 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. 20 The plaintiffs also claim that their complaint, fairly read, raises the possibility that as people entering the job market or as testers 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, 103 S.Ct. at 1668-69; see also Lujan v. Defenders of Wildlife, --- U.S. ----, ----, 112 S.Ct. 2130, 2138, 119 L.Ed.2d 351 (1992) (rejecting standing for want of sufficiently 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 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). 21 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, --- U.S. at ---- n. 2, 112 S.Ct. at 2139 n. 2. 22 In any event, the plaintiffs simply do not control whether they will suffer any future injury, for they do not control whether BMC would discriminate against them in any future 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 Sec. 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. 23 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, 103 S.Ct. at 1667. 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, 103 S.Ct. at 1667 (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, 110 S.Ct. 1717, 1724-25, 109 L.Ed.2d 135 (1990) (indicating that plaintiff whose standing rests on threat of future injury must show that this injury is certainly impending); Defenders of Wildlife, --- U.S. at ---- n. 2, 112 S.Ct. at 2139 n. 2 (same); Animal Legal Defense Fund v. Espy, 23 F.3d 496, 500-01 (D.C.Cir.1994), (same). Whatever the exact standard for judging the likelihood of future 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. 24 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, 103 S.Ct. at 1669. The tester plaintiffs therefore lack standing to seek prospective relief.
25 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 of steering white customers to white areas and black customers to 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, 102 S.Ct. at 1122-24. 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, 102 S.Ct. at 1124. 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. 26 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). 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, 110 S.Ct. 3177, 3189, 111 L.Ed.2d 695 (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 27 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 not sufficient to support standing, for they simply do not deal with the likelihood of any future injury to the plaintiff testers. What is necessary, then, is not the more definite statement contemplated by Rule 12(e), but an amendment adding allegations that the present complaint does not even touch upon. Rule 15(a) makes clear that the plaintiffs have no automatic right to add those allegations. 28 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, 95 S.Ct. 2197, 2206-07, 45 L.Ed.2d 343 (1975); see also, e.g., Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 113 n. 25, 99 S.Ct. 1601, 1614 n. 25, 60 L.Ed.2d 66 (1979); Sierra Club v. Morton, 405 U.S. 727, 736 n. 8, 92 S.Ct. 1361, 1367 n. 8, 31 L.Ed.2d 636 (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 dismiss the 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 of standing have been rightly found defective by the district court. 29 Of course, a plaintiff's successful 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, 110 S.Ct. at 3193 ([A] litigant's failure to buttress its position because of confidence in the strength of that 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. 30
31 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 Sec. 2000e-2(b), see D.C.Code Sec. 1-2512(a)(2), and it goes further than the original Title VII by authorizing suits for damages as well as for equitable relief, see id. Sec. 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. Sec. 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. Sec. 1367(c)(3); cf. Clifton Terrace Assocs. v. United Technologies Corp., 929 F.2d 714, 723 (D.C.Cir.1991).