Court Opinion

ID: 2995969
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:23:55.730514+00
Date Added: 2024-06-11T12:04:08.452890
License: Public Domain

In the
 United States Court of Appeals
                  For the Seventh Circuit
                          ____________

No. 01-3271
EDITH JONES, EUNICE YOUNG,
VIRGINIA CLARK, et al.,
                                                  Plaintiffs-Appellees,
                                  v.

R.R. DONNELLEY & SONS COMPANY,
a Delaware Corporation,
                                                Defendant-Appellant.
                          ____________
             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
             No. 96 C 7717—Matthew F. Kennelly, Judge.
                          ____________
     ARGUED APRIL 4, 2002—DECIDED SEPTEMBER 16, 2002
                          ____________

  Before RIPPLE, KANNE and EVANS, Circuit Judges.
  RIPPLE, Circuit Judge. Several classes of plaintiffs brought
suit against their former employer, R.R. Donnelley &
Sons (“Donnelley”), for race discrimination pursuant to
42 U.S.C. § 1981. Before the court is a single certified
question: “[W]hether in a 1996 lawsuit brought under 42
U.S.C. § 1981 alleging race discrimination in termination
of employment, and maintenance of a racially hostile
work environment, the appropriate statute of limitations
is the ‘catch-all’ four-year period enacted by Congress in
2                                                      No. 01-3271

1990 and codified at 28 U.S.C. § 1658, or the personal injury
statute of limitations of the forum state?” R.248 at 2. The
district court determined that § 1658 provided the applica-
ble statute of limitations for the plaintiffs’ claims. Because
we find ourselves in respectful disagreement with the
district court, we reverse its decision and remand the case
for further proceedings consistent with this opinion.

                                  I
                         BACKGROUND
                                 A.
  The plaintiffs are members of three classes of African-
American former employees of Donnelley’s Chicago
Manufacturing Division, many of whom were terminated
or transferred from their employment on or before July 29,
                                                      1
1994, in connection with the closing of that facility. Their

1
    The district court certified three classes of employees:
      All African-American employees of R.R. Donnelley who
      were employed at the Chicago Manufacturing Division and
      who were discharged during the shutdown of that divi-
      sion and were not transferred to another Donnelley division;
      All African-American employees of R.R. Donnelley who
      were employed at the Chicago Manufacturing Division at
      any time from November 1991 to the present as non-regular
      employees (including temporary, casual, contract, contin-
      gent, task force, etc.);
      All African-American employees of R.R. Donnelley who
      worked at (a) the Dwight division; (b) the Pontiac division;
      (c) the Chicago Financial Division; or (d) the Chicago
      Manufacturing Division from November 1992 to present
                                                    (continued...)
No. 01-3271                                                         3

claims against Donnelley include discriminatory transfer,
discriminatory termination and racially hostile work en-
vironment. They filed their initial pleading in this case
on November 25, 1996.
  In its answer, Donnelley raised the statute of limita-
tions as an affirmative defense; Donnelley claimed that
the “alleged 42 U.S.C. § 1981 claims which arose more
than two years prior to the filing of the complaint are
barred by the applicable statute of limitations.” R.2 at 16.
Soon after filing its answer, Donnelley moved for sum-
mary judgment on the claims of those plaintiffs whose
                                                            2
employment was terminated on or around July 29, 1996.
According to Donnelley, this court’s decision in Smith v.
City of Chicago Heights, 951 F.2d 834, 836 n.1 (7th Cir.
1992), established that Illinois’ two-year statute of limita-
tions for personal injury claims was the applicable statute
of limitations for claims of race discrimination arising
in Illinois and brought under 42 U.S.C. § 1981. See R.10
at 2. Because the complaint was not filed until November
1996, more than two years after the plaintiffs’ last employ-
                                                    3
ment at Donnelley, their claims were time-barred.

1
    (...continued)
       and were subjected to racial harassment so pervasive as to
       create a hostile working environment.
R.230 at 39. The present issue concerns those individuals belong-
ing to all of the classes whose employment was terminated on
or about July 29, 1994.
2
   Donnelley’s motion was not confined to the statute of lim-
itations issue, but included other issues that are not before
the court on this appeal.
3
  Donnelley also re-presented this issue at least two other times
later in the litigation before the district court ruled on the motion.
4                                                No. 01-3271

   In their response, the plaintiffs presented three reasons
why their claims should be considered timely. First, the
plaintiffs argued that the termination of their employment
was part of a larger program of discrimination by Donnelley
and that, consequently, “no statute of limitations should
be imposed in this case.” R.102 at 4. In the alternative,
the plaintiffs submitted that the appropriate statute of
limitations for violations of 42 U.S.C. § 1981 was the four-
year statute of limitations provided in 28 U.S.C. § 1658.
Specifically, the plaintiffs maintained that their claims
arose under amendments to § 1981 enacted through the
Civil Rights Act of 1991. Their claims, therefore, arose
under the 1991 Civil Rights Act, a law enacted after § 1658,
and therefore were subject to § 1658’s four-year statute
of limitations. Finally, the plaintiffs argued that the doc-
trines of equitable estoppel and equitable tolling should
apply to extend the statute of limitations to allow the
plaintiffs to maintain their claims.

                             B.
  The parties eventually narrowed the issue to be resolved
by the district court: The appropriate statute of limita-
tions to apply to the claims of those plaintiffs whose
employment was terminated in conjunction with the clos-
ing of the Chicago facility. The district court began its
analysis by looking at the language of § 1981 prior to the
adoption of the 1991 Civil Rights Act:
    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 prop-
    erty as is enjoyed by white citizens, and shall be subject
No. 01-3271                                                5

    to like punishment, pains, penalties, taxes, licenses,
    and exactions of every kind, and to no other.
42 U.S.C. § 1981 (1990). The court then noted that in
Patterson v. McLean Credit Union, 491 U.S. 164 (1989), the
Supreme Court had interpreted § 1981 to protect just two
rights:
    the right to make contracts, which “extend[ed] only to
    the formation of a contract, but not to problems that
    may arise later from the conditions of continuing
    employment,” and the right to enforce contracts, which
    “embrace[d] protection of a legal process, and of a right
    of access to legal process, that will address and resolve
    contract-law claims without regard to race.”
R.244 at 4 (quoting Patterson, 491 U.S. at 176-77). Conse-
quently, after Patterson was handed down, § 1981 had a very
limited scope that did not include claims for discrimina-
tory termination or hostile work environment.
  As part of the Civil Rights Act of 1991, the district court
noted, Congress amended § 1981 to define “ ‘make and
enforce contracts’ to include ‘the making, performance,
modification, and termination of contracts, and the en-
joyment of all benefits, privileges, terms, and conditions
of the contractual relationship.’ ” Id. (quoting 42 U.S.C.
§ 1981(b)). Under this language, aggrieved employees
could pursue claims of discrimination based upon events
that occurred during the course of their employment.
  After reviewing this evolution of § 1981, the district
court turned to the question of the appropriate statute
of limitations for claims brought under § 1981. The court
acknowledged that courts considering claims under § 1981
historically have applied the personal injury statute
of limitations of the forum state. See id. However, the
court believed that “this well-settled proposition was al-
6                                                    No. 01-3271

tered by Congress’ enactment on December 1, 1990 of
28 U.S.C. § 1658, the federal ‘catch-all’ statute of limita-
tions.” Id. Section 1658 provides in relevant part: “Except
as otherwise provided by law, a civil action arising under
an Act of Congress enacted after the date of the enact-
ment of this section may not be commenced later than
4 years after the cause of action accrues.” 28 U.S.C.
           4
§ 1658(a). Noting that § 1658 applies to any “civil action
arising under an Act of Congress enacted” after December
1, 1990, the district court took the view that “An Act of
Congress enacted” was not “susceptible to more than
one reasonable interpretation.” R.244 at 8 (internal quota-
tion marks omitted).
    “Enact” means “to make into law by authoritative act,”
    Black’s Law Dictionary 546 (7th ed. 1999); thus every
    Act of Congress, whether it reflects a never-before

4
  Until July 30, 2002, § 1658 only consisted of the quoted lan-
guage. However, on that date, Congress amended § 1658 by
designating the quoted language as subsection (a) and adding
subsection (b) which provides:
    Notwithstanding subsection (a), a private right of action
    that involves a claim of fraud, deceit, manipulation, or
    contrivance in contravention of a regulatory requirement
    concerning the securities laws, as defined in section 3(a)(47)
    of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)),
    may be brought not later than the earlier of—
        (1) 2 years after the discovery of the facts constituting
        the violation; or
        (2) 5 years after such violation.
Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204 § 804(a), 116 Stat.
745, 801 (2002). Nothing in the amendment affects the language
of now subsection (a) or the analysis of that subsection contained
in this opinion.
No. 01-3271                                                7

    considered subject or amends a previously existing
    statute, is “enacted.” To the extent there could ever
    be any doubt about whether the Civil Rights Act of
    1991 was “an Act of Congress” or whether it was “en-
    acted,” the language of the law itself should set the
    record straight.
Id. (internal citations omitted). The court went on to note
that the preamble to the Civil Rights Act of 1991 both
defines it as “An Act to amend the Civil Rights Act of
1964 . . .” and also begins with “Be it enacted . . . .” Id.
(emphasis in original and internal quotation marks omit-
ted). The court also found it unambiguous that “arising
under” meant “stemming from” or “originating in.” Id.
(internal quotation marks and citations omitted). The
court concluded that the meaning of § 1658 was that
“whenever Congress, after December 1990, passes legisla-
tion that creates a new cause of action, the catch-all stat-
ute of limitations applies to that cause of action.” Id.
  The court then applied its interpretation of § 1658 to
the facts presented. The court stated that § 1981 claims
allowed by Patterson “clearly arise under an Act of Con-
gress that was enacted prior to § 1658’s enactment date,
and the catch-all statute does not apply to such claims.” Id.
at 8-9. However, “[c]laims that Patterson said could not
be brought under the pre-1991 version of § 1981, but
which can be made only by virtue of § 1981(b), just as
clearly arise under the Civil Rights Act of 1991, an Act
of Congress enacted after § 1658.” Id. at 9. Therefore,
the district court concluded that § 1658 applies to that
latter class of claims.
  The court acknowledged that its decision was contrary
to the only court of appeals decision to address the issue,
see Zubi v. AT&T Corp., 219 F.3d 220, 225 (3d Cir. 2000),
as well as the majority of the district courts. Quoting
8                                                  No. 01-3271

the Third Circuit, the district court read Zubi as based on
the rationale that Congress, in enacting the 1991 legisla-
tion, had chosen “to build upon a statutory text that
has existed since 1870,” and therefore “Zubi’s civil action
arises under an Act of Congress enacted before December 1,
1990, and is governed by New Jersey’s two-year statute
of limitations.” R.244 at 5 (quoting Zubi, 219 F.3d at 225-
26). The district court could not “imagine how this [was]
possible,” because “in Patterson, the United States Su-
preme Court clearly held that claims such as those as-
serted by Zubi (discriminatory firing) did not arise under
the pre-1991 version of § 1981.” R.244 at 5.
    The district court then summarized its holding:
     [T]he Court finds that 28 U.S.C. § 1658 is unambiguous
     and, by its terms, applies to all claims arising out of
     the Civil Rights Act of 1991, which was enacted
     after December 1, 1990, the date on which § 1658
     was enacted. Section 1658, by its terms, does not apply
     to claims arising under the pre-1991 version of § 1981;
     these claims continue to be governed by the most
     analogous state law statute of limitations, here, Illinois’
     two-year personal injury statute of limitations.
        So what does this mean for the parties in this case?
     It is clear that claims asserted by Class 1 (the wrong-
     ful termination/failure to transfer claims) and Class 3
     (the hostile work environment claims) arise under
     the 1991 Act, and are therefore governed by § 1658’s
     four-year statute of limitations. . . .
Id. at 10-11 (internal citations omitted).

                               C.
 After the district court issued its memorandum opinion,
Donnelley requested that the court certify the issue of
No. 01-3271                                                9

the appropriate statute of limitations for immediate re-
view. Determining that the criteria for an immediate ap-
peal pursuant to 28 U.S.C. § 1292(b) had been met, the
district court granted the defendant’s motion to certify the
following question:
    [W]hether in a 1996 lawsuit brought under 42 U.S.C.
    § 1981 alleging race discrimination in termination
    of employment, and maintenance of a racially hostile
    work environment, the appropriate statute of limita-
    tions is the “catch-all” four-year period enacted by
    Congress in 1990 and codified at 28 U.S.C. § 1658, or
    the personal injury statute of limitations of the forum
    state.
R.248 at 2. By order of August 21, 2001, this court allowed
Donnelley to pursue its appeal.

                             II
                      DISCUSSION
  To determine the appropriate statute of limitations, we
must interpret two federal statutes; accordingly, we re-
view the district court’s interpretation de novo. See, e.g.,
Zambrano v. Reinert, 291 F.3d 964, 968 (7th Cir. 2002) (re-
viewing question of statutory and constitutional interpreta-
tions de novo); see also Zubi, 219 F.3d at 221 (reviewing
de novo the question of the appropriate statute of limita-
tions for § 1981 actions after the enactment of § 1658).
  Prior to the enactment of § 1658, it was clear that the
proper statute of limitations for § 1981 actions was the
forum state’s statute of limitations for personal injuries.
See Smith v. City of Chicago Heights, 951 F.2d 834, 837 n.1
(7th Cir. 1992) (citing Goodman v. Lukens Steel Co., 482 U.S.
656, 660-64 (1987)). The plaintiffs maintain, however, that
three intervening judicial and legislative events have oc-
10                                              No. 01-3271

curred that alter the existing rule. First, the Supreme
Court held in Patterson v. McLean Credit Union, 491 U.S.
164, 176-77 (1989), that § 1981 only granted two discrete
rights: the right to make contracts, which “extends only
to the formation of a contract, but not to problems that
may arise later from conditions of continuing employment,”
and the right to enforce contracts, which “embraces pro-
tection of a legal process, and of a right of access to legal
process, that will address and resolve contract-law claims
without regard to race.” Id. at 176-77. Second, in 1990,
Congress enacted a uniform catch-all statute of limita-
tions that provided a four-year statute of limitations for
“civil action[s] arising under an Act of Congress” enacted
after the effective date and for which a specific statute
of limitations was not provided. Third, Congress amended
§ 1981 by way of the Civil Rights Act of 1991; specifically,
it redefined “make and enforce contracts” to include
“the making, performance, modification, and termination
of contracts, and the enjoyment of all benefits, privileges,
terms, and conditions of the contractual relationship.” 42
U.S.C. § 1981(b). Because their actions “aris[e] under” the
1991 Civil Rights Act, § 1658 provides the applicable stat-
ute of limitations.
  In reply, Donnelley submits that Congress intended § 1658
to apply only to wholly new causes of action and not
those built upon existing statutory schemes. According
to Donnelley, “[n]either the statutory language of § 1658
nor this Court’s jurisprudence on statutory interpretation
sanctions” the plaintiffs’ reading of § 1658. Appellant’s Br.
at 6. We shall consider these arguments below.
  As with any statutory interpretation question, deter-
mination of the meaning and application of § 1658 to the
§ 1981 claims at issue must begin with the statutory lan-
guage of both provisions. See Masters v. Hesston Corp., 291
F.3d 985, 989 (7th Cir. 2002) (“The interpretation of a stat-
No. 01-3271                                                 11

ute is a question of law, which we review de novo.”). Prior
to the adoption of the Civil Rights Act of 1991, § 1981 stated:
    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.
42 U.S.C. § 1981 (1990). Until the Supreme Court’s decision
in Patterson, courts generally interpreted § 1981 to encom-
pass causes of action for race discrimination that occurred
at any point during the employment relationship. See,
e.g., Hunter v. Allis-Chalmers Corp., Engine Div., 797 F.2d
1417, 1430 (7th Cir. 1986) (upholding jury verdict of dis-
criminatory treatment and termination under § 1981).
However, the Supreme Court in Patterson held that § 1981
should be interpreted more narrowly:
    [T]he conduct which petitioner labels as actionable
    racial harassment is postformation conduct by the em-
    ployer relating to the terms and conditions of continu-
    ing employment. . . .
       This type of conduct, reprehensible though it be
    if true, is not actionable under § 1981, which covers only
    conduct at the initial formation of the contract and
    conduct which impairs the right to enforce contract
    obligations through legal process.
Patterson, 491 U.S. at 179.
  As part of the Civil Rights Act of 1991, Congress enacted
an amendment to § 1981 that “reversed” the Patterson
12                                                   No. 01-3271

decision. Specifically, Congress added a subsection to
§ 1981 that defined “make and enforce contracts” broadly;
the current version of § 1981 states:
     § 1981. Equal rights under the law
     (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.
42 U.S.C. § 1981 (emphasis added). Consequently, under the
amended § 1981, an employee may bring a cause of
action against his employer for discriminatory conduct
that occurs after the employment relationship is formed.
  Section 1981 does not contain its own statute of lim-
itations. Consequently, prior to § 1981’s amendment in
1991, courts applied the most analogous state statute of
limitations to actions brought under that section. See
Goodman v. Lukens Steel Co., 482 U.S. 656, 660 (1987) (“Be-
No. 01-3271                                                   13

cause § 1981 . . . does not contain a statute of limita-
tions, federal courts should select the most appropriate
or analogous state statute of limitations.”). For actions
brought in Illinois, this court has determined that Illi-
nois’ two-year statute for personal injury claims is most
analogous. See, e.g., Vakharia v. Swedish Covenant Hosp., 190
F.3d 799, 807 (7th Cir. 1999), cert. denied, 530 U.S. 1204
(2000) (applying Illinois’ two-year statute of limitations
for personal injury claims to a cause of action brought
pursuant to § 1981).
  The plaintiffs maintain that, at least with respect to
§ 1981 actions that were barred by the Patterson decision,
28 U.S.C. § 1658 now provides the applicable statute
of limitations. We look therefore to the language of § 1658
to determine if it applies to any claims brought under
§ 1981. Section 1658 provides in relevant part: “Except as
otherwise provided by law, a civil action arising under an
Act of Congress enacted after the date of the enactment
of this section may not be commenced later than 4 years
after the cause of action accrues.” 28 U.S.C. § 1658(a).
  Certainly, the plaintiffs’ claims are “civil action[s].” The
central question therefore is whether their claims “arise
under an Act of Congress enacted after the date of the
enactment of this section.” The district court equated
“arising under” with “ ‘stemming from’ or ‘originating
in.’ ” R.244 at 8 (quoting Black’s Law Dictionary 102 (7th
ed. 1999)). In the district court’s view, claims prohibited by
Patterson, “but which can be made only by virtue of
§ 1981(b), . . . clearly arise under the Civil Rights Act of
1991. . . .” Id. In essence, the district court believed that the
plaintiffs’ claims “aris[e] under” the 1991 Civil Rights Act
because, by virtue of Patterson, those claims could not
have been brought prior to the passage of the 1991 Act.
14                                                    No. 01-3271

  We respectfully disagree, however, that the plain lan-
guage of § 1658, standing alone, compels the conclusion
that § 1658 must apply to every statute subject to any
amendatory action by Congress. The language of § 1658
addresses only a “civil action” that “aris[es] under” an
act adopted after § 1658’s effective date. The language
simply does address the eventuality when a cause of
action “aris[es] under” two different “Acts,” one enacted
before and one enacted after the effective date of § 1658.
Consequently, we must look not only at the language
of § 1658 and § 1981, but also the structure and history
of those statutes to determine whether § 1658 provides
the applicable statute of limitations for the plaintiffs’
claims. See, e.g., Merrill Lynch, Pierce, Fenner & Smith, Inc.
v. Lauer, 49 F.3d 323, 326-27 (7th Cir. 1995) (stating that
a court may look beyond the text of a statute where
the language is ambiguous, where a literal interpretation
would lead to “absurd results” or where a literal interpreta-
tion would “thwart the goals of the statutory scheme”).
  At the outset of our inquiry, we remain focused on the
language and structure of § 1658. By its terms, § 1658
applies to civil actions “arising under an Act of Congress
enacted after the date of the enactment of this section . . . .”
28 U.S.C. § 1658 (emphasis added). As noted by one of
our sister circuits, “[t]he phrase ‘an Act of Congress
enacted’ after 1990 is not equivalent to the phrase ‘an Act
of Congress enacted or amended’ after that year.” Mad-
ison v. IBP, Inc., 257 F.3d 780, 798 (8th Cir. 2001), vacated
                                            5
on other grounds, 122 S. Ct. 2583 (2002). “Amendments

5
  In Madison v. IBP, Inc., 257 F.3d 780, 798 (8th Cir. 2001),
vacated on other grounds, 122 S. Ct. 2583 (2002), the plaintiffs had
brought Title VII claims as well as § 1981 claims. With respect
to the plaintiffs’ Title VII claims, the Eighth Circuit ruled that
                                                      (continued...)
No. 01-3271                                                         15

vary in their purpose, and the line between an amend-
ment that modifies an existing right and one that creates
a new right is often difficult to draw.” Zubi v. AT&T Corp.,
219 F.3d 220, 224 (3d Cir. 2000). The difficulty in discern-
ing a technical from a substantive amendment, or an
amendment that modifies an existing civil action from
one that creates a wholly new one, has led two of our
sister circuits to reject a reading of § 1658 that would call
for such guess work. According to the Eighth Circuit,
“when Congress amends a preexisting statute, it does not
create a ‘new act,’ and claims arising under the statute
as amended continue to arise under the preexisting stat-

5
    (...continued)
       [b]ecause Title VII has a 300 day limitations period, the
       district court should have instructed the jury that Madison
       could only recover damages under Title VII for illegal acts
       occurring within the 300 day period prior to the filing of
       her administrative charge. Since Madison filed her charge
       on January 13, 1995, she was entitled to recover damages
       under Title VII only for acts of discrimination or harass-
       ment occurring after March 19, 1994. The court therefore
       erred in instructing the jury that she could recover punitive
       damages under Title VII for illegal acts occurring after
       January 13, 1993.
Id. at 797. However, in National Railroad Passenger Corp. v. Morgan,
122 S. Ct. 2061, 2077 (2002), the Supreme Court held that “[a]
charge alleging a hostile work environment claim . . . will not
be time barred so long as all acts which constitute the claim
are part of the same unlawful employment practice and at
least one act falls within the time period.” It was in light of its
decision in Morgan that the Supreme Court vacated the deci-
sion of the Eighth Circuit in IBP. See Madison v. IBP, Inc., 122 S. Ct.
2583 (2002). The Supreme Court did not pass judgment on,
or otherwise call into question, the Eighth Circuit’s reasoning
with respect to the § 1981 claim.
16                                                No. 01-3271

ute. It is, thus, only when Congress establishes a new
cause of action without reference to preexisting law that
§ 1658 applies.” Id. at 225.
  The purpose behind § 1658 confirms the significance of
the distinction drawn by the Eighth Circuit. In enacting
this section, Congress sought to alleviate the uncer-
tainty inherent in the practice of borrowing analogous
state statutes of limitations for federal causes of action
that do not contain their own limitations periods:
     At present, the federal courts “borrow” the most analo-
     gous state or federal law limitations period for fed-
     eral claims lacking limitations periods. This practice
     creates a number of practical problems. As pointed
     out by the Study Committee:
         It obligates judges and lawyers to determine the
         most analogous state law claim; it imposes un-
         certainty on litigants; reliance on varying state
         laws results in undesirable variance among the
         federal courts and disrupts the development of
         federal doctrine on the suspension of limitations
         periods.
H.R. Rep. No. 101-734, at 24. Notably, Congress also was
concerned with disrupting litigants’ settled expectations
and therefore made § 1658 prospective. This concern is
reflected in the House Report as well:
     Section 111 addresses this problem by creating a four-
     year fallback statute of limitations, applicable to legis-
     lation enacted after the effective date of this Act,
     which creates a cause of action but is silent as to the
     applicable limitations period.
       Witnesses testifying on behalf of the Department
     of Justice and the Judicial Conference, urged that this
No. 01-3271                                             17

   section be made retrospective, so as to provide a
   fallback statute of limitations for previously enacted
   legislation lacking a limitations period. As witness
   George Freeman noted at the hearing, however, with
   respect to many statutes that have no explicit limita-
   tions provision, the relevant limitations period has
   long since been resolved by judicial decision, with
   the applicable period decided upon by the courts
   varying dramatically from statute to statute. Under
   these circumstances, retroactively imposing a four
   year statute of limitations on legislation that the
   courts have previously ruled is subject to a six month
   limitations period in one statute, and a ten year
   period in another, would threaten to disrupt the
   settled expectations of a great many parties. Given
   that settling the expectations of prospective parties is
   an essential purpose of statutes of limitation, the Com-
   mittee was reluctant to apply this section retroactively
   without further study to ensure that the benefits of
   retroactive application would indeed outweigh the
   costs.
Id. We believe that Donnelley’s proposed interpretation
of § 1658 is most compatible with this interest in cer-
tainty and in honoring settled expectations. Under this
approach, plaintiffs do not have to guess whether their
action arose under the original enactment or its amend-
ment. Section 1658, therefore, applies only when an act
of Congress creates a wholly new cause of action, one
that does not depend on the continued existence of a
statutory cause of action previously enacted and kept in
force by the amendment.
  The plaintiffs maintain that their proposed interpreta-
tion of § 1658 provides certainty and, at the same time,
does not disrupt litigants’ expectations. According to the
plaintiffs, because the type of claims on which they
18                                                 No. 01-3271

seek relief did not exist post-Patterson and pre-§ 1981(b),
there are no settled expectations to disrupt with respect
to the statute of limitations to apply to such claims. “At
first blush,” the plaintiffs’ interpretation does appear “to
promise a fair degree of certainty in application”; if
the newly enacted statute created a cause of action that
did not exist previously, then § 1658 applies. Zubi, 219
F.3d at 224. “But that promise,” as the Third Circuit has
explained, “upon reflection, seems to us illusory.” Id.
      First, as we have pointed out, [this] interpretation
      results in different statutes of limitations being ap-
      plied to plaintiffs suing under the same statute de-
      pending on the particular facts of their claims. Thus,
      for example, plaintiffs who invoke § 1981 because
      they have been victims of discrimination in hiring
      will have their claims governed by one statute of
      limitations, while plaintiffs who invoke the same stat-
      ute because they are victims of a discriminatory dis-
      charge will have their claims governed by another.
      Adoption of such an interpretation would seem to us
      to generate exactly the kind of confusion and unfair-
      ness that Congress sought to avoid.
        Recognition of two classes of plaintiffs under § 1981,
      when applied in a state with a statute of limitations
      for § 1981 claims larger than four years, is likely to
      result in unsuspecting plaintiffs who have relied on
      established precedent finding themselves barred from
      relief. Conversely, recognizing two classes, when
      applied in a state with a statute for § 1981 claims short-
      er than four years, is likely to result in defendants
      finding themselves faced with potential liability on
      claims they believed extinguished.
Id.
No. 01-3271                                              19

  We believe that the Third Circuit’s interpretation is
most consonant with the purpose of § 1658 and the
balance struck by Congress between the need for uniform-
ity and the need to preserve settled expectations. Under
this formulation,
    [w]hen an Act of Congress passed after December 1,
    1990, amends a statute existing before that date, as
    opposed to creating a new law without reference to
    previously existing statutory language, all claims
    accruing after the passage of the amendment arise
    under an Act of Congress enacted before December 1,
    1990, without regard to whether an identical claim
    arising earlier could have been successfully pursued
    under the prior statute.
Zubi, 219 F.3d at 222. Thus, it is “only when Congress
establishes a new cause of action without reference to
preexisting law that § 1658 applies.” Id. at 225.
  We now turn to the language, structure and history of
§ 1981 to determine whether, given the manifest intent
of Congress in enacting § 1658, it is appropriate to apply
the applicable state statute of limitations or the federal
catch-all provision. We again begin with the language
and the structure of the statute. The most salient feature
of the revised statute is that § 1981(b) simply cannot stand
on its own. An action to recover for discriminatory post-
formation treatment simply cannot be based solely on
§ 1981(b). Indeed, without § 1981(a), § 1981(b) is mean-
ingless. Consequently, although post-formation discrim-
inatory claims depend on the amendatory language of
§ 1981(b) in the sense that the definitional language of
that subsection makes clear that “make and enforce”
includes post-formation conduct, the cause of action for
post-formation conduct “aris[es] under” § 1981(a); that
20                                               No. 01-3271

subsection, not subsection (b), provides the actual right
to recovery.
  That this structural formation of the revised § 1981 is
no accident is clear when we turn to the history of the
amendment. There is no question that reversing the
Patterson decision was the driving force behind the enact-
ment of § 1981(b). See H.R. Rep. No. 102-40 (I), at 88-92
(1991) (explaining the need to overrule Patterson and that
the act “would overrule Patterson by adding at the con-
clusion of section 1981 a new subsection (b)”). Notably,
Congress chose to overrule Patterson not by creating
an entirely new statutory provision. Indeed, Congress
did not alter the original language of § 1981 (now § 1981(a)),
which provides the basic right of recovery for an individ-
ual whose constitutional rights have been violated; in-
stead, Congress merely supplied a more precise defini-
tion to one of the rights already guaranteed by § 1981—
the right “to make and enforce contracts.” Congress
could have overruled Patterson in a number of ways.
Instead of creating a wholly new cause of action, Con-
gress merely defined the term “make and enforce con-
tracts” for the purpose of the old § 1981, now § 1981(a).
Congress’ action therefore evinces a desire to tie the new
cause of action to the existing § 1981.
  Moreover, it is highly significant that, when Congress
passed the Civil Rights Act of 1991 with the amendments
to § 1981 contained therein, it believed that the applic-
able state statute of limitations for personal injury claims
would continue to apply to § 1981 claims:
     But under 42 U.S.C. section 1981, which bars inten-
     tional race discrimination in employment as well as
     other contractual relations, victims have a longer
     period of time to commence suits. In the absence of
     an express limitations period in section 1981, courts
No. 01-3271                                                      21

    applying the statute have looked to analogous state
    statutes of limitations. These statutes typically allow
    two or three years, and allow up to six years in some
    states.
H.R. Rep. No. 102-40 (I), at 63 (1991). Consequently, al-
though Congress had enacted § 1658 the year before, it
did not view its passage as having altered the practice
of borrowing state statutes of limitations for purposes of
§ 1981.
   Finally, we also are persuaded by the considered opin-
ions of two of our sister circuits that adopted the ap-
proach set forth here. In Zubi and IBP, the Third and
Eighth Circuits both concluded that § 1658 did not affect
the statute of limitations for § 1981 claims such as those
brought by the plaintiffs. Those courts determined that
it is “only when Congress establishes a new cause of ac-
tion without reference to preexisting law that § 1658 ap-
plies.” Zubi, 219 F.3d at 225; IBP, 257 F.3d at 798 (quoting
same). Because “the Civil Rights Act of 1991 was not the
type of enactment Congress intended to include in the
§ 1658 four year limitations period,” those courts ap-
plied the personal injury statute of the forum state. IBP,
257 F.3d at 798. We join those circuits in determining that
§ 1658 does not provide the applicable statute of limita-
tions for claims of discrimination based on actions oc-
                                                           6
curring after the employment relationship is formed.

6
  For the reasons set forth in this opinion, we respectfully
disagree with the decision of the Tenth Circuit in Harris v.
Allstate Insurance Co., 2002 WL 1874825 (10th Cir. Aug. 15, 2002).
In Harris, the Tenth Circuit drew heavily from the analysis of
the district court in the present case and also of the dissenting
judge in Zubi. Specifically, relying on the district court’s reason-
                                                      (continued...)
22                                                 No. 01-3271

Instead, the statute of limitations for those claims, as for
all § 1981 claims, remains the most analogous statute
of limitations, here Illinois’ two-year statute of limitations
for personal injuries.

                         Conclusion
  28 U.S.C. § 1658, as it applies to claims brought pursu-
ant to § 1981, is susceptible to more than one textually
plausible reading. Based on the text, the structure of the
statutes and the legislative history of those sections, we
conclude that § 1658 does not apply to the plaintiffs’
claims brought pursuant to § 1981. Consequently, the
judgment of the district court is reversed, and the case
is remanded for further proceedings not inconsistent
with this opinion. Donnelley may recover its costs on
this appeal.
                                   REVERSED AND REMANDED

6
  (...continued)
ing that the Civil Rights Act of 1991 was an “Act of Congress
enacted” after December 1, 1990, the Tenth Circuit held that
“§ 1658 applies to claims brought under § 1981(b), but not to
claims brought under § 1981(a).” Id. at *6-9. As noted above,
however, we do not believe the plaintiffs’ claims “arise under”
only § 1981(b), and, therefore, courts must look to the text,
structure and purpose of both § 1981 and § 1658 to determine
the correct statute of limitations. When this more complete
context is considered, we believe that the correct statute of
limitations for all § 1981 actions is the closest analogous state
statute of limitations.
No. 01-3271                                           23

A true Copy:
       Teste:

                      _____________________________
                      Clerk of the United States Court of
                        Appeals for the Seventh Circuit

                USCA-97-C-006—9-16-02