Tuesday, June 11, 2019

Supreme Court to determine causation standard for Section 1981 discrimination cases

The Supreme Court decided on Monday morning that it will determine the scope of Section 1981, the federal statute that prohibits racial discrimination in the making of contracts. Section 1981 governs employment discrimination claims. This will be the third time in a decade the Court will take a look at the causation standard for employment discrimination cases.

The case is Comcast Corp. v. National Association of African American-Owned Media, a case out of the Ninth Circuit, which held that the statute does not require "but for" causation but "motivating factor" causation. This may seem like a meaningless distinction, but if you handle employment discrimination cases, you know exactly what this means. But-for causation means that race was the determining factor in the adverse decision, and that without consideration race, the adverse decision would never have happened. Motivating-factor means that race was one of several motives, even if the racial motive did not by itself make the difference.

The statute provides that “[a]ll persons . . . shall have the same right in every State and Territory to make and enforce contracts . . . as is enjoyed by white citizens . . . .” 42 U.S.C. § 1981(a). It further defines “make and enforce contracts” as including “the making, performance, modification, and dermination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.”

Enacted in the wake of the Civil War, Section 1981 does not articulate a causation standard. Other civil rights statutes do explicitly set forth a standard. Under Title VII's prohibition against racial, gender, national origin and religious discrimination, these characteristics cannot be a "motivating factor" in the adverse decision. We call these "mixed motive" cases. Under Title VII's antiretaliation provision, however, Congress used different language, stating that no one may suffer retaliation "because of" their protected activity under Title VII. In Univ. of Tex. Sw. Med. Ctr. v. Nassar, 570 U.S. 338 (2013), the Supreme Court said "because of" means determining factor, not motivating factor. The same analysis governs age discrimination claims under the Age Discrimination in Employment Act, as per the Court's ruling in Gross v. FBL Fin. Servs., Inc., 557 U.S. 167 (2009), as the ADEA also says no one may suffer discrimination "because of" their age.

 In Comcast, the Ninth Circuit went with the "motivating factor" test in Section 1981 cases, reasoning:

Section 1981 guarantees “the same right” to contract “as is enjoyed by white citizens.” 42 U.S.C. § 1981(a). This is distinctive language, quite different from the language of the ADEA and Title VII’s retaliation provision, both of which use the word “because” and therefore explicitly suggest but-for causation. Charter contends that the most natural understanding of the “same right” language is also but-for causation. We disagree and are persuaded by the reasoning of the Third Circuit in Brown v. J. Kaz, Inc., 581 F.3d 175 (3d Cir. 2009). There, albeit in dicta and without formally resolving the issue, the court reasoned that “[i]f race plays any role in a challenged decision by a defendant, the plain terms of the statutory text suggest the plaintiff has made out a prima facie case that section 1981 was violated because the plaintiff has not enjoyed ‘the same right’ as other similarly situated persons.”

If discriminatory intent plays any role in a defendant’s decision not to contract with a plaintiff, even if it is merely one factor and not the sole cause of the decision, then that plaintiff has not enjoyed the same right as a white citizen. This, we conclude, is the most natural reading of § 1981. Therefore, unlike the ADEA or Title VII’s retaliation provision, § 1981’s text permits an exception to the default but-for causation standard by virtue of “an indication to the contrary in the statute itself.”
 The certiorari petition in Comcast argues that the Ninth Circuit got it wrong and that it should have applied the common-law "but-for" test governing causation in torts cases unless Congress intended that another causation standard applies to that particular statute.

You may ask, if employment discrimination plaintiffs can bring their lawsuits under Title VII, which employs the more plaintiff-friendly "motivating-factor" test, why should it matter what the Supreme Court does under Section 1981? The answer is that (1) Section 1981 does not require any EEOC filing/administrative requirements before the plaintiff can bring a lawsuit, which requirements only prolong the case as the EEOC needs at least six months to investigate the claim, (2) the statute of limitations under Title VII is 180 or 300 days, depending on what state you live in, and Section 1981 claims carry a much longer statute of limitations; (3) unlike Title VII, plaintiffs under Section 1981 may sue employers with fewer than 15 employees; and (4) there are no caps under Section 1981 for pain and suffering, unlike Title VII.

If the Supreme Court adopts the "but-for" test for Section 1981 claims, litigants may face an anomaly: in employment discrimination cases brought under Section 1981 and Title VII, the jury may have to resolve both claims under different standards of proof, with the same evidence. How is the jury going to thread the needle? How are attorneys going to discuss this in summation? What will the jury instructions look like? 

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