Court Opinion

ID: 9906026
Source: CourtListenerOpinion
Date Created: 2023-11-30 20:00:49.776601+00
Date Added: 2024-06-11T09:24:05.432723
License: Public Domain

RECOMMENDED FOR PUBLICATION
                                Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                       File Name: 23a0260p.06

                   UNITED STATES COURT OF APPEALS
                                  FOR THE SIXTH CIRCUIT

                                                             ┐
  INNER CITY CONTRACTING, LLC,
                                                             │
                                   Plaintiff-Appellant,      │
                                                             │
         v.                                                   >        No. 22-2131
                                                             │
                                                             │
  CHARTER TOWNSHIP OF NORTHVILLE, MICHIGAN;                  │
  FLEIS & VANDENBRINK ENGINEERING, INC. dba Fleis            │
  & Vandenbrink,                                             │
                           Defendants-Appellees.             │
                                                             ┘

  Appeal from the United States District Court for the Eastern District of Michigan at Detroit.
                      No. 2:22-cv-11349—Sean F. Cox, District Judge.

                                   Argued: October 18, 2023

                            Decided and Filed: November 30, 2023

                    Before: CLAY, KETHLEDGE, and MATHIS, Circuit Judges.

                                      _________________

                                            COUNSEL

ARGUED: Cindy Rhodes Victor, THE VICTOR FIRM, PLLC, Southfield, Michigan, for
Appellant. Kevin J. Campbell, CUMMINGS, MCCLOREY, DAVIS & ACHO, PLC, Livonia,
Michigan, for Appellee Charter Township of Northville. Michelle A. Thomas, DICKIE,
MCCAMEY & CHILCOTE, P.C., Grosse Pointe Farms, Michigan, for Appellee Fleis &
Vandenbrink. ON BRIEF: Cindy Rhodes Victor, KUS RYAN, PLLC, Southfield, Michigan, on
the merits brief, THE VICTOR FIRM, PLLC, Southfield, Michigan, on the reply brief, for
Appellant. Kevin J. Campbell, CUMMINGS, MCCLOREY, DAVIS & ACHO, PLC, Livonia,
Michigan, for Appellee Charter Township of Northville. Michelle A. Thomas, DICKIE,
MCCAMEY & CHILCOTE, P.C., Grosse Pointe Farms, Michigan, for Appellee Fleis &
Vandenbrink.
  No. 22-2131                    Inner City Contracting LLC v.                             Page 2
                                Charter Twp. of Northville, et al.

                                       _________________

                                            OPINION
                                       _________________

       CLAY, Circuit Judge. Plaintiff, a government contractor, brought suit against Defendants,
a township and a consulting company, claiming racial discrimination after the consulting company
allegedly made false and inaccurate statements about Plaintiff, leading Defendant township to
award a government contract to a rival firm. The suit alleged violations of Plaintiff’s rights under
the Constitution, federal statutes, and Michigan law. The district court dismissed the case on the
grounds that Plaintiff failed to state a claim under either 42 U.S.C. § 1981 or 42 U.S.C. § 1983 by
failing to allege the racial composition of its ownership. Further, the district court held that
Plaintiff lacked standing to assert its constitutional claims, and that Defendant consulting company
was not a state actor for purposes of § 1983. For the reasons set forth below, we REVERSE in
part and AFFIRM in part the district court’s order dismissing the case and REMAND the case
for further proceedings in accordance with this opinion.

                                       I. BACKGROUND

                                    A. Factual Background

       Inner City Contracting (“ICC”) is a Detroit-based contracting company. In March 2022,
the Charter Township of Northville, Michigan (“Township”) solicited bids for the demolition of
certain former hospital buildings. ICC submitted the lowest bid, and Asbestos Abatement, Inc.
(“AAI”) submitted the second lowest bid, with a difference between the bids of almost $1 million.
ICC is a minority-owned business, and AAI is a white-owned business. The Township hired
consulting company Fleis & Vandenbrink (“F&V”) to vet the bidders, make a recommendation as
to which company should receive the contract, and manage the demolition project.

       As part of the vetting process, F&V employee Trevor Woollatt conducted interviews with
both companies and provided a checklist with comments about both companies to the Township.
ICC alleges that F&V made several factual errors in its checklist and comments about both ICC
and AAI. For instance, ICC claims that F&V falsely stated that AAI had no contracting violations,
  No. 22-2131                     Inner City Contracting LLC v.                              Page 3
                                 Charter Twp. of Northville, et al.

that ICC did have such violations, that ICC had no relevant experience, that AAI did have relevant
experience, and that AAI was not on a federal contracting exclusion list.

       F&V recommended that AAI should receive the contract, citing AAI’s superior
presentation, more aggressive timeline, and more relevant experience, corroborated by AAI’s
references. Relying on this recommendation, the Township awarded the contract to AAI.

                                      B. Procedural History

       On May 27, 2022, ICC filed a complaint against the Township and F&V in state court,
alleging violations of the U.S. Constitution, federal statutes, and Michigan law and seeking
injunctive and monetary relief. The Township removed the case to federal court on June 17, 2022.
On July 14, 2022, the Township filed a motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6), alleging that ICC did not have standing, that ICC did not sufficiently plead
Monell liability, and that ICC did not sufficiently plead its equal protection and due process claims.
The district court, without ruling on the motion to dismiss, entered an order allowing Plaintiff to
amend its complaint. ICC filed its amended complaint on August 17, 2022. Both Defendants filed
motions to dismiss.

       The district court granted the motions to dismiss on November 22, 2022, finding that ICC
did not allege sufficient facts to state claims of racial discrimination and equal protection
violations, that F&V is not a state actor for purposes of § 1983 liability, and that ICC lacked
standing to allege constitutional violations. The district court declined to exercise supplemental
jurisdiction over the state law claims and remanded them to state court.

                                         II. DISCUSSION

                                      A. Standard of Review

       We review a 12(b)(6) dismissal de novo. Winget v. JP Morgan Chase Bank, N.A., 537 F.3d
565, 572 (6th Cir. 2008). Just as the district court, we “accept[] the plaintiff’s factual allegations
as true and view[] the complaint in the light most favorable to the plaintiff, but [are] not required
to accept legal conclusions or unwarranted factual inferences as true.” Moody v. Mich. Gaming
Control Bd., 847 F.3d 399, 402 (6th Cir. 2017).
  No. 22-2131                          Inner City Contracting LLC v.                                        Page 4
                                      Charter Twp. of Northville, et al.

                                                   B. Analysis

         1. Constitutional Standing

         “Standing is a threshold issue for bringing a claim in federal court and must be present at
the time the complaint is filed.” Moody, 847 F.3d at 402. Parties seeking to invoke the jurisdiction
of federal courts must show that they have suffered an injury, that there is a causal connection
between the injury and the complained-of conduct, and that the injury is redressable by a favorable
decision by the courts. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). These requirements
represent the “irreducible constitutional minimum” that Article III demands. Id. Without standing,
a federal court has no jurisdiction to hear the case. Therefore, we must determine whether ICC
has standing to assert its claims at the outset.

         The Township argued that, as a disappointed bidder, ICC lacked standing to bring its
federal claims.      The district court agreed and held that, under Sixth Circuit precedent, “a
disappointed bidder to a government contract generally lacks standing in federal court to challenge
the bidding procedure or the award of a contract.”1 Op., R. 32, Page ID #1700. The general rule,
first established by the Supreme Court in Perkins v. Lukens Steel Company, prohibits disappointed
bidders from alleging general grievances regarding the awarding of government contracts.
310 U.S. 113, 125–28 (1940). Plaintiffs must “show an injury or threat to a particular right of their
own,” not just to “any general interest which the public may have in” good governance. Id. at 125.
However, ICC’s claim is not merely that of a disappointed bidder alleging issues with the bidding
rules. ICC alleged racial discrimination, a claim seeking to vindicate its own rights rather than
those of the public. Therefore, it has properly alleged a cognizable injury in fact that is not barred
by Lukens and its progeny.

         1
           Aside from the general rule regarding disappointed bidder standing, the district court relied on United of
Omaha Life Ins. Co. v. Solomon to hold that, because a disappointed bidder to a government contract has no “legitimate
claim of entitlement protected by due process,” ICC had no standing here. 960 F.2d 31, 34 (6th Cir. 1992). But this
confuses the standing inquiry with the merits of the due process claim. At this juncture, we are concerned only with
whether the plaintiff has alleged a cognizable injury in fact—not whether there was a sufficient legally protected
interest to support a due process claim.
  No. 22-2131                     Inner City Contracting LLC v.                             Page 5
                                 Charter Twp. of Northville, et al.

       The district court relied on our discussion of disappointed bidder standing in Club Italia
Soccer & Sports Org., Inc. v. Charter Twp. of Shelby, 470 F.3d 286 (6th Cir. 2006), overruled on
other grounds by Engquist v. Oregon Dep’t of Ag., 553 U.S. 591 (2008). But such reliance was
misplaced. In that case, while we repeated the general rule established by Lukens, we noted that
“[t]he Court held that a disappointed bidder for a federal government contract did not have standing
to sue the federal government for violations of bidding rules contained in the Public Contracts
Act.” Club Italia, 470 F.3d at 293 (citing Lukens, 310 U.S. at 125–26) (emphasis added). We
cited the Lukens Court for the proposition that the plaintiffs in Club Italia suffered no invasion of
or threat to their legal rights under the procurement statute. Id. at 293–94. We thus discussed the
application of Lukens only to cases where disappointed bidders—who, as here, were unable to rely
on the Administrative Procedures Act or similar legislation “which evinces a congressional intent”
to give disappointed bidders standing—claimed a general injury as a result of failing to win a
government contract. Id. at 294.

       The context of Lukens matters. The plaintiffs in Lukens weren’t disappointed bidders; they
were seven iron and steel companies seeking to enjoin the federal government from applying the
minimum wage provision of the Public Contracts Act, which would have affected their bottom
line. B.K. Instrument, Inc. v. United States, 715 F.2d 713, 717 (2d Cir. 1983). By the time Lukens
reached the Supreme Court, the D.C. Circuit had enjoined the minimum wage provision from being
enforced, not just against the plaintiff steel companies, but against all other steel and iron
companies. Mila Sohoni, The Lost History of the “Universal” Injunction, 133 Harv. L. Rev. 920,
983 (2020). Thus, the Supreme Court was not confronting a disappointed bidder but an overly
broad injunction. And the issue presented was the ability of government contractors generally to
challenge the enforcement of procurement statutes, rather than the specific award of a specific bid.

       Against this backdrop, the Supreme Court held that the plaintiffs did not have standing
because government action resulting in damage or loss of income is neither “an invasion of
recognized legal rights” nor “in itself a source of legal rights.” Lukens, 310 U.S. at 125. And the
plaintiffs were wrongfully attempting to vindicate a “general interest which the public may have
in the construction of [the procurement statute]” which “was not enacted for the protection of
sellers and confers no enforceable rights upon prospective bidders.” Id. at 125–126. This
  No. 22-2131                     Inner City Contracting LLC v.                               Page 6
                                 Charter Twp. of Northville, et al.

reasoning does not apply to a disappointed bidder alleging claims under established sources of
legal rights (such as § 1981) which are enacted for the protection of and to confer enforceable
rights upon individuals. Lukens itself articulated what is required of plaintiffs: “[r]espondents, to
have standing in court, must show an injury or threat to a particular right of their own, as
distinguished from the public’s interest in the administration of the law.” Id at 125. Thus, neither
Club Italia nor Lukens bars all disappointed bidders from bringing their cases in federal court—
just those who do not allege an injury specific to them, arising from law created for their protection,
and apart from the generic injury of losing a contract award.

       This holding does not depart from our prior case law. We have previously recognized that
disappointed bidders who allege a concrete injury to themselves, not just on behalf of the public,
have standing. Compare Cincinnati Elecs. Corp. v. Kleppe, 509 F.2d 1080, 1086 (6th Cir. 1975)
(holding that an unsuccessful bidder, as a small business, had suffered an injury-in-fact and had
standing under the APA to challenge an agency regulation related to small business contracts) and
Owen of Ga., Inc. v. Shelby Cnty., 648 F.2d 1084, 1090 (6th Cir. 1981) (“[U]nsuccessful bidders
for government contracts have standing to invoke judicial review of adverse procurement
decisions.”), with Hoke Co. v. Tenn. Valley Auth., 854 F.2d 820, 825 (6th Cir. 1988) (denying
standing where disappointed bidder sued under the competitive bidding statute enacted on behalf
of the public and did not allege an injury unto itself).

       Because ICC has alleged “an injury or threat to a particular right of [its] own,” as required
by Lukens, we can proceed to the elements of a standing inquiry: injury in fact, causation, and
redressability. In this case, taking the facts alleged in the complaint as true, ICC suffered a
cognizable injury when it lost a lucrative award and profits as a result of alleged racial
discrimination.    Its injury was therefore twofold: the dignitary harm inherent in racial
discrimination and the financial harm of the lost profit. See, e.g., Smith v. City of Cleveland
Heights, 760 F.2d 720, 723–24 (6th Cir. 1985) (recognizing a stigmatic injury as a result of a
town’s racially discriminatory housing policy); Owen, 648 F.2d at 1089 (holding that an
unsuccessful bidder’s loss of business and profits were a sufficient injury in fact). This injury, per
the complaint, was traceable to Defendants’ conduct. Because only ICC and AAI were finalists
for the bid when the allegedly discriminatory conduct occurred, ICC has alleged enough to
  No. 22-2131                          Inner City Contracting LLC v.                                         Page 7
                                      Charter Twp. of Northville, et al.

establish, particularly at this early stage of the proceedings, that if not for F&V’s allegedly
discriminatory conduct, the Township would have awarded ICC the contract. Finally, these
injuries are redressable by a favorable court decision, which can award monetary relief to
compensate ICC for its injuries and grant the requested injunction prohibiting Defendants from
violating ICC’s constitutional rights. As a result, ICC has Article III standing to bring its claims,
and we can proceed to the merits.2

          2. § 1981 Claims

                   a. Statutory Standing

          Whether a plaintiff can bring its claim under a particular statute used to be a discussion of
“prudential standing,” but is now, rather than jurisdictional, related to the validity of the cause of
action.       Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 127 (2014)
(“[W]hether a plaintiff comes within the zone of interests [requires the Court] to determine, using
traditional tools of statutory interpretation, whether a legislatively conferred cause of action
encompasses a particular plaintiff’s claim.”) (internal quotation marks and citation omitted). F&V
alleges that ICC does not have statutory standing to sue under § 1981 in part because ICC, as a
corporation, lacks a racial identity and therefore “cannot be a direct target of racial discrimination
claims.” F&V’s Br., ECF No. 23, 23. Whether corporations can allege a claim of racial
discrimination under § 1981 is an issue of first impression for this Court. See B & S Trans., Inc.
v. Bridgestone Americas Tire Operations, LLC, 758 F. App’x 503, 505 n.2 (6th Cir. 2019).

          Almost every federal court of appeals has allowed corporations to allege racial
discrimination, and none have established a contrary rule.3 In particular, the D.C. Circuit held:

          2
         Standing in federal court is a matter of federal, not state, law. Hollingsworth v. Perry, 570 U.S. 693, 715
(2013). We therefore need not analyze whether ICC would have standing in state court to bring its claims. Further,
ICC argues that Supreme Court precedent regarding standing under the False Claims Act should apply. However,
because ICC does not, and cannot, allege a claim under the False Claims Act, this argument also fails.
         3
           Des Vergnes v. Seekonk Water Dist., 601 F.2d 9, 14 (1st Cir. 1979); Hudson Valley Freedom Theater, Inc.
v. Heimbach, 671 F.2d 702, 706 (2d Cir. 1982); McClain v. Avis Rent A Car Sys., Inc., 648 F. App’x 218, 222 n.4 (3d
Cir. 2016); Woods v. City of Greensboro, 855 F.3d 639, 645 (4th Cir. 2017); White Glove Staffing, Inc. v. Methodist
Hosps. of Dall., 947 F.3d 301, 305–06 (5th Cir. 2020); Thinket Ink Info. Res., Inc. v. Sun Microsystems, Inc., 368 F.3d
1053, 1060 (9th Cir. 2004); Guides, Ltd. v. Yarmouth Grp. Prop. Mgmt., Inc., 295 F.3d 1065, 1072 (10th Cir. 2002);
Gersman v. Grp. Health Ass’n, Inc., 931 F.2d 1565, 1568 (D.C. Cir. 1991) vacated on other grounds by 502 U.S. 1068
  No. 22-2131                          Inner City Contracting LLC v.                                        Page 8
                                      Charter Twp. of Northville, et al.

“[I]f a corporation can suffer harm from discrimination, it has standing to litigate that harm.”
Gersman v. Grp. Health Ass’n, Inc., 931 F.2d 1565, 1568 (D.C. Cir. 1991). Statutory standing
depends on whether a plaintiff falls within the “zone of interests” of a statute, and a corporation
with a claim under § 1981 can satisfy this “not especially demanding” requirement. Lexmark,
572 U.S. at 130 (citation omitted). The “zone of interests” test asks “whether a legislatively
conferred cause of action encompasses a particular plaintiff’s claim.” Id. at 127.

          Applying this test in this case, § 1981 “protects the equal right of all persons within the
jurisdiction of the United States to make and enforce contracts without respect to race.” Domino’s
Pizza, Inc. v. McDonald, 546 U.S. 470, 474 (2006) (internal quotation marks omitted). Where a
corporation alleges that it was not awarded a contract on the basis of race, it clearly falls within
the zone of interests protected by the statute. See, e.g., Thinket Ink Info. Res., Inc. v. Sun
Microsystems, Inc., 368 F.3d 1053, 1060 (9th Cir. 2004) (“[I]f a corporation either suffers
discrimination harm cognizable under § 1981, or has acquired an imputed racial identity, it is
sufficiently within the statutory zone of interest to have prudential standing to bring an action
under § 1981.”). Therefore, we conclude that a corporation can satisfy statutory standing under
§ 1981.

          F&V argues that dicta in the Supreme Court’s decision in Vill. of Arlington Heights v.
Metro. Hous. Dev. Corp. prohibits corporations from alleging racial discrimination. In that case,
the Supreme Court stated, “[a]s a corporation, [the plaintiff] has no racial identity and cannot be
the direct target of the petitioners’ alleged discrimination.” 429 U.S. 252, 263 (1977). This line
does not control this case for two reasons. First, the Court in Arlington Heights did not address
statutory standing; its opinion concerned an alleged violation of the Fourteenth Amendment.
Second, the Court found that another plaintiff had standing to assert the claims at issue, rendering

(1992). See also, Triad Assocs., Inc. v. Chi. Hous. Auth., 892 F.2d 583, 591 (7th Cir. 1989) (corporation had standing
to assert race discrimination claim under § 1983), abrogated on other grounds by Bd. of Cnty. Comm’rs, v. Umbehr,
518 U.S. 668 (1996); Oti Kaga, Inc. v. S.D. Hous. Dev. Auth., 342 F.3d 871, 880–82 (8th Cir. 2003) (corporation had
standing to assert race discrimination claim under Fair Housing Act).
          The Eleventh Circuit has no established rule on whether corporations have standing to vindicate race
discrimination claims under § 1981. Sheba Ethiopian Rest., Inc. v. DeKalb Cnty., No. 21-13077, 2023 WL 3750710,
at *9 (11th Cir. June 1, 2023) (holding that, for purposes of qualified immunity, there was no clearly established law
in that circuit determining that officials are liable under § 1981 for discriminating against a corporation).
  No. 22-2131                          Inner City Contracting LLC v.                                        Page 9
                                      Charter Twp. of Northville, et al.

the language unpersuasive dicta irrelevant to the Court’s ultimate holding. See Carnell Const.
Corp. v. Danville Redevelopment & Hous. Auth., 745 F.3d 703, 715 (4th Cir. 2014) (“[T]he quoted
language from Arlington Heights was surplusage unrelated to the Court’s determination of the
standing issue presented.”); Hudson Valley Freedom Theater, Inc. v. Heimbach, 671 F.2d 702, 704
(2d Cir. 1982) (“[T]he sentence was of only academic importance and we do not believe that the
Supreme Court would slavishly apply it so as to deny [the plaintiff] its day in court.”). F&V’s
argument that Supreme Court dicta controls must fail, and we are left with persuasive precedent
from sister Circuits that corporations have standing to allege violations of § 1981.4

                  b. Claim Against the Township

         Just because a plaintiff has standing to allege their claim does not mean they have
sufficiently done so. See, e.g., TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2205 (2021)
(discussing the differences between standing and a cause of action). Defendants claimed, and the
district court agreed, that ICC did not allege sufficient facts to plead their § 1981 claims because
ICC did not plead its race or intentional discrimination in the complaint. Further, the Township
argued that ICC improperly brought its claims against the Township under § 1981 rather than
§ 1983. We agree with the latter argument, but not the former.

         The Township challenged ICC’s § 1981 claim on the basis that, against government
entities, § 1981 claims must be made through § 1983. That is correct. We have held that “no
independent cause of action against municipalities is created by § 1981(c).” Arendale v. City of
Memphis, 519 F.3d 587, 599 (6th Cir. 2008) (citing Jett v. Dallas Indep. Sch. Dist, 491 U.S. 701,
733 (1989)). As a result, “the express cause of action for damages created by § 1983 constitutes
the exclusive federal remedy for violation of the rights guaranteed in § 1981 by state governmental
units . . . .” Jett, 491 U.S. at 733. Thus, we evaluate ICC’s § 1981 claims against the Township
under the § 1983 framework. And we analyze the sufficiency of ICC’s § 1981 claims only as to
ICC’s allegations against F&V.

         4
          More recently, when indirectly presented with the issue of whether corporations can bring suit under § 1981,
the Supreme Court merely noted that “the Courts of Appeals to have considered the issue have concluded that
corporations may raise § 1981 claims.” Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470, 473 n.1 (2006).
  No. 22-2131                            Inner City Contracting LLC v.                                         Page 10
                                        Charter Twp. of Northville, et al.

                  c. Claim Against F&V

         The Federal Rules of Civil Procedure require that a complaint be “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). This
statement must do more than state legal conclusions or recite the elements of a cause of action.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 564 (2007). However, the complaint need only
plead “enough facts to state a claim to relief that is plausible on its face.” Id. at 570. And “we
construe the complaint in the light most favorable to the plaintiff, accept all well-pleaded factual
allegations in the complaint as true, and draw all reasonable inferences in favor of the plaintiff.”
Courtright v. City of Battle Creek, 839 F.3d 513, 518 (6th Cir. 2016) (citation omitted). Lastly
and importantly, “the fact that this action was brought under one of the civil rights statutes requires
us to scrutinize such a dismissal with special care.” Lucarell v. McNair, 453 F.2d 836, 838 (6th
Cir. 1972).

         In evaluating ICC’s claims, the district court used the standard from Amini v. Oberlin
College: “[A] plaintiff must plead and prove that (1) he belongs to an identifiable class of persons
who are subject to discrimination based on their race; (2) the defendant intended to discriminate
against him on the basis of race; and (3) the defendant’s discriminatory conduct abridged a right
enumerated in section 1981(a).” 440 F.3d 350, 358 (6th Cir. 2006). The district court incorrectly
cast Amini as a prima facie standard rather than as the test for what plaintiffs must plead and
ultimately prove. And the district court, in holding that ICC failed to allege discriminatory intent,5
misapplied Amini to require a heightened showing of intentional discrimination that this Court’s
precedent does not require.6 ICC did not need to prove discriminatory intent, but rather needed to
allege facts making it plausible that such intent existed.

         5
         The district court incorrectly held that Plaintiff could not prove discriminatory intent without alleging its
own race or explicitly alleging that Defendants knew Plaintiff’s racial identity.
         6
           In fact, this Court has explicitly recognized that requiring plaintiffs to show intentional discrimination as
part of their prima facie case could confuse litigants. Christian v. Wal-Mart Stores, Inc., 252 F.3d 862, 872 (6th Cir.
2001) (including intentional discrimination as a part of a plaintiff’s prima facie case is “inappropriate” and “propagates
the false notion that a plaintiff must provide direct evidence of the defendant’s intent to discriminate . . . .”). Indeed,
although the trained litigator may recognize “intentional discrimination” encompasses both direct and circumstantial
evidence, the undefined term has the potential to befuddle parties and courts alike—as this case clearly illustrates.
  No. 22-2131                         Inner City Contracting LLC v.                                      Page 11
                                     Charter Twp. of Northville, et al.

        Because this issue has confused litigants and courts alike, we take the opportunity to clarify
a plaintiff’s burden when pleading a § 1981 claim. At the motion to dismiss stage, plaintiffs need
only to point to facts that make plausible their allegations. See Keys v. Humana, Inc., 684 F.3d
605, 609 (6th Cir. 2012). In the § 1981 context, this means alleging sufficient facts to show that
(1) the plaintiff belonged to a protected class; (2) the defendant intended to discriminate against
him on the basis of race; and (3) the defendant’s discriminatory conduct abridged a right
enumerated in § 1981(a). Amini, 440 F.3d at 358. The second prong, regarding intentional
discrimination, can be shown through either direct evidence of discrimination or circumstantial
evidence “which would support an inference of discrimination.” Johnson v. Univ. of Cincinnati,
215 F.3d 561, 572 (6th Cir. 2000). Where plaintiffs seek to make their contract discrimination
case using circumstantial evidence, they will have to do so—after they proceed past the
pleadings—using the prima facie standard as described in Keck v. Graham Hotel Sys., Inc. 566
F.3d 634, 639 (6th Cir. 2009) (“(1) they belonged to a protected class; (2) they sought to make a
contract for services ordinarily provided by the defendant; and (3) they were denied the right to
enter into a contract for such services while similarly situated persons outside the protected class
were not, or they were treated in such a hostile manner that a reasonable person would find it
objectively discriminatory.”). The familiar burden-shifting framework from McDonnell Douglas
Corp. v. Green will then apply. 411 U.S. 792 (1973).

        In this case, ICC met its preliminary burden. First, ICC alleged that it belonged to a
protected class when it included in its complaint that “[a]s a minority-owned entity, ICC is a
member of a suspect class.” Am. Compl., R. 19, Page ID # 1119. In addition to ICC’s allegation
that it is a minority-owned entity, ICC claimed that a white-owned company was treated
differently. And ICC sought to vindicate rights under § 1981, a statute which provides that all
citizens have the same rights to make an enforce contracts as white citizens.

        ICC met the intentional discrimination prong by alleging that it submitted a bid for this
government contract, but Defendants treated ICC differently than the similarly situated, white-
owned AAI.7 In particular, ICC alleged that its bid was almost $1,000,000 cheaper than AAI’s

        7
          While the Keck prima facie standard uses language that specifies that plaintiff sought to make a contract
with the defendant, the fact that ICC did not seek to make a contract with F&V does not affect the validity of ICC’s
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                                       Charter Twp. of Northville, et al.

bid. These facts, taken together and liberally construed in favor of ICC, plausibly allege that ICC
was denied the right to contract, while AAI was not, as a result of inaccurate statements allegedly
made on the basis of race.8 Thus, ICC satisfied Amini’s third prong. As the Supreme Court
recently held, “a plaintiff must initially plead and ultimately prove that, but for race, it would not
have suffered the loss of a legally protected right.” Comcast Corp. v. Nat’l Ass’n of Afr. Am.-
Owned Media, 140 S. Ct. 1009, 1019 (2020). ICC met this requirement by alleging that, since
ICC and AAI were the only two bidders being evaluated, but for F&V’s allegedly discriminatory
actions, ICC likely would have been awarded the contract.

         The district court, in holding to the contrary, required ICC to meet standards not required
by our precedent. According to the district court, ICC’s complaint was deficient because it
“fail[ed] to include any factual allegations to identify ‘Plaintiff’s race’ or the races of any of its
member-owners.” Op., R. 32, Page ID #1695. But the district court cites no in-circuit case for the
proposition that failing to allege the specific race of the plaintiff is fatal to a § 1981 claim. We do
not require civil rights plaintiffs to use magic words in their complaints to obtain relief. Rather,
we require plaintiffs to state a claim for relief. See, e.g., Knapp v. City of Columbus, 93 F. App’x
718, 720 (6th Cir. 2004) (“The court’s duty is to look to the facts and grant the necessary relief as
justice requires—not to demand that certain citations or phrases are used.”). The Federal Rules of
Civil Procedure, as well as Supreme Court and Sixth Circuit precedent, seek to protect the goals
of notice pleading. ICC alleged sufficient facts, claiming rights under statutes that protect against
racial discrimination, to give F&V “fair notice of what the plaintiff’s claim is and the grounds
upon which it rests.” Swierkiewicz v. Sorema N. A., 534 U.S. 506, 512 (2002).

         Whether ICC can prove its allegations and survive a motion for summary judgment is a
different story. See, e.g., Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds

§ 1981 claim against F&V. Courts have heard cases involving plaintiffs seeking to vindicate their rights under § 1981
against third parties who interfere with those rights, even if they were not party to the contract. See, e.g., Gen. Bldg.
Contractors Ass’n, Inc. v. Pennsylvania, 458 U.S. 375 (1982); Sutton v. Bloom, 710 F.2d 1188 (6th Cir. 1983).
         8
           In addition, the district court held, “there are no allegations that either of the Defendants knew the races of
Plaintiff’s member-owners,” which the district court claims are required for a showing of intentional discrimination
in the complaint. Op., R. 32, Page ID #1695. In this case, ICC includes sufficient facts—namely that F&V and ICC
met over Zoom—that, taken together and construed in Plaintiff’s favor, establish that F&V would have been aware of
ICC’s race.
  No. 22-2131                      Inner City Contracting LLC v.                                Page 13
                                  Charter Twp. of Northville, et al.

by Harlow v. Fitzgerald, 457 U.S. 800 (1982), (“[I]t may appear on the face of the pleadings that
a recovery is very remote and unlikely but that is not the test.”). But we “cannot dismiss for factual
implausibility. . . .” Courie v. Alcoa Wheel & Forged Prods., 577 F.3d 625, 630 (2009). After
discovery and additional proceedings, ICC may very well prove a set of facts that entitle it to relief:
that F&V, motivated by ICC’s race, lied about ICC on the checklists, leading the Township to
award the contract to AAI. ICC may have included more legal conclusions than might be set forth
in the ideal § 1981 complaint. But complaints need not be perfect. They need to state a claim for
relief sufficient to give the defendants notice of what they are being accused. ICC has done so
here.

        3. § 1983 Claims

        For F&V to be liable under § 1983, ICC must carry its burden of proving that F&V is a
state actor. For the Township to be liable under § 1983, ICC must carry its burden of proving that
the Township is susceptible to Monell liability. ICC must also allege sufficient facts for viable
equal protection and due process claims. It did none of these things.

                a. State Actor

        Typically, liability under § 1983 lies only if the defendant is a government entity. Flagg
Bros. v. Brooks, 436 U.S. 149, 156 (1978) (“[M]ost rights secured by the Constitution are protected
only against infringement by governments.”). To bring a claim against a private actor under
§ 1983, ICC must allege that F&V was a state actor for purposes of § 1983. ICC must therefore
show that F&V’s actions “so approximate state action that they may be fairly attributed to the
state.” Lansing v. City of Memphis, 202 F.3d 821, 828 (6th Cir. 2000). ICC claims that F&V’s
actions are fairly attributable to the state under either the public function test or the nexus test.
Under the public function test, the private actor must exercise powers which are traditionally
reserved exclusively to the state. Wolotsky v. Huhn, 960 F.2d 1331, 1335 (6th Cir. 1992).
Under the nexus test, there must be a sufficiently close nexus between the state and the challenged
action of the regulated entity so that the action of the latter may be fairly treated as that of the state
itself. Id. The burden is on the plaintiff to show that the private actor meets either test. See Nugent
  No. 22-2131                     Inner City Contracting LLC v.                              Page 14
                                 Charter Twp. of Northville, et al.

v. Spectrum Juv. Just. Servs., 72 F.4th 135, 141 (6th Cir. 2023); Jojola v. Chavez, 55 F.3d 488,
494 (10th Cir. 1995). ICC has not met this burden.

        ICC alleges that, because the Township delegated the duty of awarding the government
contract to F&V, and because awarding government contracts is a traditional public function, it
has satisfied the public function test. However, “very few functions fall into that category.”
Manhattan Cmty. Access Corp. v. Halleck, 139 S. Ct. 1921, 1929 (2019) (internal quotation marks
and citation omitted). The few that do, such as holding elections (Terry v. Adams, 345 U.S. 461
(1953)), running a company town (Marsh v. Alabama, 326 U.S. 501 (1946)), and providing
healthcare for incarcerated people (West v. Atkins, 487 U.S. 42 (1988)), bear little similarity to this
case.

        In the instant case, F&V did not award the government contract, as ICC suggests, but rather
reviewed proposals and made a recommendation.              Such actions are not exclusive to the
government and thus are not traditional public functions. See, e.g., Rendell-Baker v. Kohn, 457
U.S. 830, 841 (1982) (“Acts of such private contractors do not become acts of the government by
reason of their significant or even total engagement in performing public contracts.”); Halleck,
139 S. Ct. at 1932 (“Numerous private entities in America obtain [government contracts]. If those
facts sufficed to transform a private entity into a state actor, a large swath of private entities in
America would suddenly be turned into state actors . . . .”). Even if awarding a contract, as
opposed to evaluating contract bids, constituted a traditional and exclusive prerogative of the state,
ICC admits in its complaint that the Township retained final authority over this function.
Therefore, ICC did not allege that F&V operated as a state actor under the traditional public
function test.

        Next, ICC alleges that F&V’s actions satisfy the nexus test because “the Township was
intimately involved in the challenged private conduct.” Appellant Br., ECF No. 19, 30. ICC
argues that “F&V acted as the Township Department Director, working intimately with the
Township.” Id. at 31. And in its complaint, ICC claims that “The Township engaged in inadequate
supervision of F & V and Woollatt” and that “[a]s the Township’s agent, the actions and statements
of F & V and Woollatt can be fairly attributed to the Township.” Am. Compl., R. 19, Page ID
  No. 22-2131                     Inner City Contracting LLC v.                            Page 15
                                 Charter Twp. of Northville, et al.

# 1119.     But ICC makes no showing that the Township “has provided such significant
encouragement of” F&V’s alleged racial discrimination. Am. Mfrs. Mut. Ins. Co. v. Sullivan,
526 U.S. 40, 52 (1999). Therefore, ICC has not met its burden to demonstrate that F&V is a state
actor under the nexus test. Since F&V is not a state actor, it cannot be liable under § 1983, and
ICC’s claims against F&V under § 1983 were properly dismissed.

                 b. Monell Liability

          Local governments are liable under § 1983 not where a local government’s employee or
agent inflicts an injury but where an “execution of a government’s policy or custom inflicts the
injury.” Arendale, 519 F.3d at 599 (quoting Monell v. Dep’t of Soc. Servs., 436 U.S. 658 (1978))
(cleaned up). ICC does not describe an official policy or custom on the part of the Township that
has deprived ICC of its constitutional rights. Rather, ICC alleges that “the Township Board did
no investigation into whether the award to AAI was in the best interest of the Township.” Am.
Compl., R. 19, Page ID # 1118. However, Sixth Circuit and Supreme Court case law demand
more than an allegation of a single instance of a failure to investigate. See, e.g., Rizzo v. Goode,
423 U.S. 362 (1976) (no § 1983 liability where plaintiffs only alleged a failure to act); Daniels v.
Williams, 474 U.S. 327 (1986) (no § 1983 liability where plaintiff claimed injury by negligence);
Memphis Area Local, Am. Postal Workers Union, AFL-CIO v. City of Memphis, 361 F.3d 898 (6th
Cir. 2004) (no Monell liability where plaintiff claimed only negligence). Thus, ICC is unable to
hold the Township responsible for claims under § 1983 because of its failure to sufficiently plead
Monell liability.

                 c. Equal Protection and Due Process Claims

          Even if ICC had properly alleged that F&V was a state actor and that the Township was
liable under Monell, it would still have had to properly allege its equal protection and due process
claims. But ICC failed to do so. “To state a claim under the Equal Protection Clause, a § 1983
plaintiff must allege that a state actor intentionally discriminated against the plaintiff because of
membership in a protected class.” Henry v. Metro. Sewer Dist., 922 F.2d 332, 341 (6th Cir. 1990)
(citation omitted), abrogated on other grounds by Albright v. Oliver, 510 U.S. 266 (1994). ICC
has not sufficiently alleged that a state actor intentionally discriminated against it. ICC’s chosen
  No. 22-2131                     Inner City Contracting LLC v.                             Page 16
                                 Charter Twp. of Northville, et al.

defendants are a private actor who allegedly discriminated, and a state actor who did not commit
any acts of discrimination—crucially, not a state actor who intentionally discriminated. Therefore,
ICC has not alleged an equal protection claim under § 1983.

       ICC’s claim that it was deprived of its procedural and substantive due process rights under
§ 1983 also must fail. A successful § 1983 claim requires showing a deprivation of a protected
life, liberty, or property interest without proper procedure. Women’s Med. Pro. Corp. v. Baird,
438 F.3d 595, 611 (6th Cir. 2006). In order to have a recognized property interest in a government
contract, a disappointed bidder must establish “that it was actually awarded the contract at any
procedural stage or that local rules limited the discretion of state officials as to whom the contract
should be awarded.” United of Omaha Life Ins. Co. v. Solomon, 960 F.2d 31, 34 (6th Cir. 1992).
ICC pleaded neither. To the contrary, the Township’s policies gave it wide latitude to award the
contract to any bidder, even if they were not the lowest bidder. Therefore, ICC’s § 1983 claims
must fail for lack of a cognizable due process claim, lack of a meritorious equal protection claim,
and failure to sufficiently plead either Monell liability or that F&V was a state actor.

                                          CONCLUSION

       Plaintiff had standing to bring its claims, and it sufficiently pleaded a claim under § 1981
against Defendant F&V. But all of Plaintiff’s other federal claims must fail. Therefore, we
REVERSE in part the district court’s order dismissing Plaintiff’s claims for lack of standing and
Plaintiff’s claim against F&V under § 1981 and AFFIRM in part the district court’s dismissal in
all other respects, and REMAND the case for further proceedings in accordance with this opinion.