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Craig v. US Bancorp

United States District Court, D. Oregon
Apr 14, 2004
Civil No. 03-1680-AA (D. Or. Apr. 14, 2004)

Summary

In Craig, an African American customer attempted to cash a check, and the bank “completed service but only after effectively requiring a phone call from [the plaintiff's] attorney upon whose account the check was drawn.

Summary of this case from Waller v. Escamilla

Opinion

Civil No. 03-1680-AA.

April 14, 2004

Martin C. Dolan, Dolan Griggs McCulloch LLP, Portland, Oregon, Attorney for plaintiff.

Jeffrey J. Druckman, Janine C. Blatt, Druckman Associates, P.C., Portland, Oregon, Attorneys for defendant.


OPINION AND ORDER


Plaintiff Edward Craig filed this action against US Bancorp, d.b.a. US Bank, seeking relief for violations of his federal constitutional rights pursuant to 42 U.S.C. § 1981. Plaintiff also alleges a state claim of unlawful discrimination in a place of public accommodation in violation of Or. Rev. Stat. § 659A.403. Defendant moves for dismissal of plaintiff's claims, pursuant to Fed.R.Civ.P. 12(b)(6), and asserts that plaintiff has failed to state a claim under either federal or state law upon which relief may be granted.

I. BACKGROUND

On January 8, 2003, Eddie Craig ("Craig"), an African-American male, entered defendant's place of business, the US Bank branch in Beaverton ("US Bank"), and attempted to cash a $50 check drawn on his attorney's US Bank account. Craig provided the bank teller with proper identification but the teller refused to cash the check. After informing Craig that his attorney's account was subject to a "fraud" investigation by the bank, the teller closed her counter and instructed Craig to wait. In the meantime, the teller indicated that she would call plaintiff's attorney's law office to find out what was happening. However, Craig's attorney neither recalls such a phone call nor do phone records reflect that such a call was made from the bank to the law office on the date in question.

Craig waited for at least an hour before the teller returned and again informed him that the bank would not cash the check. Once more, Craig provided the teller with valid identification but was again refused service. Craig then exited the bank and called his attorney, who told him that he would call the bank himself. The bank allegedly never informed Craig's attorney of any such "fraud" investigation and Craig's attorney had never known any other clients to experience similar problems with cashing checks issued by his office. Twenty minutes later, Craig's attorney called him back and told Craig that everything had been straightened out. Craig returned to the bank over an hour and a half after he had first entered the bank. US Bank then accepted the check, stamped it, and gave Craig $50 in cash.

After learning of this incident, Craig's attorney sent two Caucasian clients into the same US Bank branch in Beaverton to cash $50 checks from the same account. Both clients were able to cash the checks without incident, delay, or any mention of a "fraud" investigation.

II. LEGAL STANDARDS

Defendant moves to dismiss the entire complaint for failure to state a claim upon which relief may be granted. Fed.R.Civ.Pro. 12(b)(6). When considering a motion to dismiss, the court must determine whether it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief. See Fed.R.Civ.Pro. 12(b)(6); Morley v. Walker, 175 F.3d 756, 759 (9th Cir. 1999); Johnson v. Knowles, 113 F.3d 1114, 1117 (9th Cir. 1997). The reviewing court must treat all facts alleged in the complaint as true, and all doubts are resolved in favor of the nonmoving party. Lee v. County of Los Angeles, 240 F.3d 754, 764 (9th Cir. 2001); Gilligan v. Jamco Dev. Corp., 108 F.3d 246 (9th Cir. 1997).

II. DISCUSSION

Craig brings two claims for relief: (1) violation under 42 U.S.C. § 1981; and (2) a violation of Or. Rev. Stat. § 659A.403. The court considers each alleged violation separately to determine whether Craig has properly pled a claim for relief.

A. Racial Discrimination in Violation of 42 U.S.C. § 1981

Section 1981 prohibits racial discrimination in the making and enforcing of contracts. As amended by the Civil Rights Act of 1991, the statute reads in pertinent part:

(a) All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts . . . as is enjoyed by white citizens .

. . .

(b) 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. 42 U.S.C. § 1981.

To state a claim under section 1981, Craig must plead facts showing: (1) he is a member of a racial minority; (2) US Bank intentionally discriminated against Craig on the basis of his race; and (3) the discrimination concerned the making or enforcement of a contract, including all phases and incidents of the contractual relationship. Rivers v. Roadway Express, Inc., 511 U.S. 298, 302 (1994); Allen v. US Bancorp, 264 F. Supp.2d 965 (D. Or. 2003).

Craig, an African-American, can readily satisfy the first element of the prima facie case. However, US Bank asserts that Craig's complaint fails to establish the second and third elements. With respect to the third element, US Bank argues that Craig did not have a contractual relationship with the bank and, in the alternative, Craig was not deprived of a contract interest because he ultimately received service. In response, Craig maintains that his attempt to cash a check represents an attempt at contract formation with the bank; that the bank's actions also constituted interference in his contractual relations with his attorney; and the fact that the bank ultimately cashed his check is evidence of the parties' contractual relationship. Thus, the first issue before this court is whether Craig has sufficiently pled facts demonstrating a contractual relationship with US Bank.

When Congress enacted the Civil Rights Act of 1991, it clearly expanded the phrase "make and enforce" contracts to "embrace all phases and incidents of the contractual relationship. . . ." Rivers, 511 U.S. at 298. People of color shall therefore enjoy all the "benefits, privileges, terms, and conditions of the contractual relationship" as other contracting parties. Allen, 264 F. Supp.2d at 950. This court concludes that a broad interpretation of the Civil Rights Act is consistent with both its plain language and its goal of racial equality in the marketplace. See, e.g., Chu v. Gordman's, Inc., No. 8:01CV182, 2002 WL 802353, at *6 (D. Neb. Apr. 12, 2002) (the right to contract under section 1981 should be broadly construed); Charity v. Denny's, Inc., No. CIV.A.98-0054, 1999 WL 544687, at *5 (E.D. La. July 26, 1999) (finding that courts must liberally construe the Civil Rights Act in order to carry out Congress's purpose of eliminating the inconvenience, unfairness, and humiliation of racial discrimination); Haywood v. Sears, Roebuck and Co., No. 7:94-CV-106-BR2, 1996 U.S. Dist. LEXIS 11954, at *5 (E.D.N.C. July 18, 1996) (sections 1981 and 1982 must be construed broadly because they are remedial statutes).

In the instant case, the defendant reduces Craig's complaint to one of "slow service only" and seeks to apply the general "rule" that a mere delay in service represents interference with "prospective contractual relations" rather than actual contract loss. Morris v. Office Max, Inc., 89 F.3d 411 (7th Cir. 1996). This court recognizes that other courts have dismissed section 1981 claims where defendants' behavior perhaps degrades but does not completely deny service. See, e.g., Morris, 89 F.3d at 413 (upholding summary judgment for defendant because plaintiffs "were denied neither admittance nor service, nor were they asked to leave"); Jeffrey v. Home Depot U.S.A., Inc., 90 F. Supp.2d 1066 (S.D. Cal. 2000) (granting summary judgment in favor of defendant even though purchase at check-out counter was delayed by request to search bag); Harrison v. Denny's Restaurant, Inc., 1997 U.S. Dist. LEXIS 5637, 1997 WL 227963 (N.D. Cal. 1997) (granting summary judgment in favor of defendant because plaintiff eventually received his food albeit slower than non-minority customers).

However, an exception to the general "rule" regarding substandard service exists if and when additional conditions are imposed on the terms or benefits of contract formation. See, e.g., Joseph v. New York Yankees P'shp, 2000 WL 1559019, 2000 U.S. Dist Lexis 15417 (S.D.N.Y. 2000) (plaintiff forced to change clothing before gaining entry to restaurant); Bobbitt v. Rage, Inc., 19 F. Supp.2d 512 (W.D.N.C. 1998) (plaintiffs required to pre-pay for their food); Washington v. Duty Free Shoppers, Ltd., 710 F. Supp. 1288 (N.D. Cal. 1988) (African Americans required to show passport to enter store whereas white patrons suffered no such restrictions). Here, Craig alleges the bank first denied service, then it unreasonably delayed service subject to an "investigation" for fraud, and finally it completed service but only after effectively requiring a phone call from Craig's attorney upon whose account the check was drawn. Thus, this court concludes that Craig has pled sufficient facts demonstrating contract formation that was burdened in its initial phase by additional conditions that were not imposed on other clients.

In Allen, the court denied the defendant bank's motion to dismiss after finding that it had imposed additional conditions on an African American customer attempting to conduct business.Allen, 264 F. Supp.2d at 950. "By requiring plaintiff to wait in a separate line because of his race, the defendant explicitly denied plaintiff the benefit of timely service enjoyed by other customers." Id. Although Craig was not an account holder at the bank, as the plaintiff was in Allen, he has nonetheless pled sufficient facts demonstrating a contract expectation that includes the "right to receive service on the same time line as other customers." Id. In light of Congress's purposeful expansion of the Civil Rights Act, the allegations contained within Craig's complaint suggest a form of race-based discrimination that is actionable under section 1981.

With respect to the second element of a prima facie section 1981 case, US Bank argues that Craig has not pled facts that demonstrate discriminatory intent. Craig, an African-American male, alleges in his complaint that US Bank intentionally discriminated against him because of his race. To support his claim, Craig relates facts showing differential treatment, including first a denial and then a long delay in services, as compared to similarly situated Caucasian clients. Craig also alleges that, as a result of US Bank's race-based discrimination, Craig has suffered embarrassment, humiliation, anxiety, and pain and suffering. Whether the allegations of intentional discrimination can be substantiated are for the fact-finder and are beyond the scope of this court's inquiry on a motion to dismiss. Craig's complaint does however sufficiently represent facts that raise a reasonable inference of intent to discriminate against Craig on the basis of his race.

Defendant's motion to dismiss plaintiff's first claim of relief is denied.

B. Public Accommodation Discrimination in Violation of Or. Rev. Stat. § 659A.403

Similarly, section 659A.403 of the Oregon Revised Statutes provides in relevant part:

(1) All persons . . . shall be entitled to the full and equal accommodations, advantages, facilities, and privileges of any place of public accommodation, without any distinction, discrimination or restriction on account of race. . . . Or. Rev. Stat. § 659A.403.

For an interpretation of the statute, both parties cite toKing v. Greyhound Lines, 61 Or. App. 197, 656 P.2d 349 (1982). In King, the plaintiff was subjected to racial slurs as he attempted and eventually managed to obtain a refund on his bus ticket. Id. at 199-200. Despite the fact the plaintiff ultimately received service, the court concluded that the statute had been violated since it "proscribes serving customers of one race in a manner different from those of another race." Id. at 202. The King court recognized that the "chief harm resulting from the practice of discrimination by establishments serving the general public is not the monetary loss of a commercial transaction or the inconvenience of limited access but, rather, the greater evil of unequal treatment, which is the injury to an individual's sense of selfworth and personal integrity." Id. at 202-203.

Thus, the issue here is not whether racial invective was used, as US Bank suggests, but whether Craig was treated differently because of his race and whether that treatment resulted in Craig suffering any harm. In his complaint, Craig alleges he was subjected to discriminatory treatment by first a denial of and then a delay in service. As a result of this treatment, Craig asserts that he has suffered embarrassment, humiliation, anxiety, and pain and suffering. These allegations are sufficient to state a claim under Or. Rev. Stat. § 659A.403.

Defendant's motion to dismiss plaintiff's second claim of relief is denied.

CONCLUSION

Defendant's motion to dismiss (doc. 5) is DENIED. Defendant's request for oral argument is denied as unnecessary.

IT IS SO ORDERED.


Summaries of

Craig v. US Bancorp

United States District Court, D. Oregon
Apr 14, 2004
Civil No. 03-1680-AA (D. Or. Apr. 14, 2004)

In Craig, an African American customer attempted to cash a check, and the bank “completed service but only after effectively requiring a phone call from [the plaintiff's] attorney upon whose account the check was drawn.

Summary of this case from Waller v. Escamilla
Case details for

Craig v. US Bancorp

Case Details

Full title:EDWARD CRAIG, Plaintiff, v. US BANCORP, a Minnesota Corporation, d.b.a…

Court:United States District Court, D. Oregon

Date published: Apr 14, 2004

Citations

Civil No. 03-1680-AA (D. Or. Apr. 14, 2004)

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