This case resolves a minor question that's been lingering ever since Congress amended the Civil Rights Act of 1964. In 1991, Congress overruled various Supreme Court rulings that were deemed hostile to civil rights plaintiffs. Since that time, some legal scholars and even the Ninth Circuit believed that you could sue government entitles under Section 1981, the Civil War-era statute that prohibits racial discrimination in the making and enforcement of contracts.
The case is Duplan v. City of New York, decided on April 30. Duplan claims he suffered racial discrimination as a city employee. When you are suing the government for civil rights violations, you normally start with Section 1983, also a Civil War-era civil rights law that more broadly provides a remedy for constitutional violations. But Section 1983, at least in New York, carries a three-year statute of limitations. Section 1981 gives you four years. Plaintiff in this case sued under Section 1981, probably to take advantage of the longer statute of limitations.
In 1989, the Supreme Court said in Jett v. Dallas Independent School District that Section 1981 claims cannot be brought against governmental defendants. The exclusive remedy for claims that might be brought under Section 1981 in these cases is Section 1983. Two years later, Congress amended the Civil Rights Act to overturn a series of Supreme Court rulings. The Civil Rights Act of 1991, for example, modified the burdens of proof in disparate impact cases, bolstered Section 1981 remedies in the employment context and altered the burdens of proof in cases where the plaintiff has direct evidence. But, the Second Circuit says, the 1991 act did not appear to address the Jett ruling. At least the extensive legislative history does not do so.
Still, the Ninth Circuit held in 1996 that the 1991 act did overturn the Jett holding. In that case, the Ninth Circuit said the 1991 law "afforded identical protection against impairment by nongovernmental discrimination and impairment under color of State law." But that ruling is an outlier. The other federal circuits have rejected that analysis and held that Jett remains good law. The Second Circuit (Lynch, Lohier and Reiss [D.J.]) joins the crowd and holds that "Section 1981 does not provide a separate private right of action against state actors."