Vance v. Southern Bell Telephone & Telegraph Co.

983 F.2d 1573, 1993 U.S. App. LEXIS 2009, 60 Empl. Prac. Dec. (CCH) 42,049, 61 Fair Empl. Prac. Cas. (BNA) 925

• Court: Court of Appeals for the Eleventh Circuit
• Decided: February 5, 1993
• Docket: No. 90-3559
• Status: Published

Opinions

EDMONDSON, Circuit Judge:

Mary Ann Yance won a jury verdict on her claim that Southern Bell Telephone and Telegraph Company (“Southern Bell”) violated her rights under 42 U.S.C. § 1981. Southern Bell appeals the denial of its motions for summary judgment, directed verdict and judgment notwithstanding the verdict on Vance’s section 1981 claim. We reverse.

I. Background

A. The First Trial: Vance I

This case is detailed in Vance v. Southern Bell Tel. and Tel. Co., 863 F.2d 1503 (11th Cir.1989) (“Vance I”). To review, Mary Ann Vance in 1986 brought an action under 42 U.S.C. § 1981¹ against her former employer, Southern Bell. Vance said that various acts of racial harassment had injured her and driven her from her job.² A jury returned a verdict for Vance on her racial harassment claim and awarded multimillion dollar damages, but the district court granted Southern Bell’s motion for JNOV or a new trial. Vance v. Southern Bell Tel. and Tel. Co., 672 F.Supp. 1408 (M.D.Fla.1987). On appeal, we reversed the JNOV, but allowed a new trial. 863 F.2d at 1506. The Vance I panel decided that the evidence was sufficient to hold Southern Bell liable for racial harassment, but that the size of the jury’s award was “outside the realm of reasonableness” given the evidence. Id. at 1516. This appeal arises from the retrial of the action.

B. The Second Trial

After we decided Vance I, the Supreme Court decided Patterson v. McLean Credit Union, 491 U.S. 164, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989).³ In Patterson the Court held that racial harassment claims “[are] 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.” 491 U.S. at 179, 109 S.Ct. at 2874. Relying on Patterson, Southern Bell moved for summary judgment. The district court acknowledged the “inescapable conclusion that the holding in Patterson would preclude maintenance of this suit if it were filed today,” but refused to apply the Patterson holding retroactively based on the equitable considerations outlined by the Supreme Court in Chevron Oil v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971).⁴

This case then went to a jury trial in April 1990. The jury awarded Vance about a million dollars in compensatory and punitive damages on her section 1981 claim. The district court entered judgment for Vance and denied Southern Bell’s renewed motions for directed verdict, JNOV or a new trial. In June 1990, Southern Bell appealed the section 1981 rulings.

In November 1991, while this appeal was pending, Congress enacted the Civil Rights Act of 1991, which, among other things, enlarges the range of behavior subject to section 1981 to include the “performance, modification, and termination” of contracts.⁵ Under Patterson, plaintiffs alleging most kinds of post-hiring discrimination were limited to the set of equitable remedies provided under Title VII.⁶ But under the Civil Rights Act of 1991, such plaintiffs may sue under section 1981 for damages.

II. Issues Presented

We must decide two related issues: First, whether the district court erred by refusing to apply Patterson retroactively; and second, whether the Civil Rights Act of 1991 overrules Patterson retroactively. We hold that the Supreme Court’s decision in Patterson v. McLean Credit Union, which interpreted 42 U.S.C. § 1981 as it existed during all times material to this action, applies retroactively and barred Vance’s section 1981 claim. We further hold that the Civil Rights Act of 1991, which extended the scope of section 1981 to performance and termination of contracts, applies prospectively and, therefore, has no bearing on Vance’s bar under Patterson.⁷

III. The 42 U.S.C. § 1981 Claim

A. The Nature of Vance’s 42 U.S.C. § 1981 Claim

Vance claims that Southern Bell discriminated against her during her employment at Southern Bell’s Western Way service facility between August 1984 and October 1985. Supra note 2. Vance further says that by these “cumulative actions,” Southern Bell effectively “terminated” her employment. R.Vol. 6-208, ¶ 46. We understand Vance’s claim to state three separate theories of liability: racial harassment, discriminatory denial of a transfer, and constructive discharge.

Vance’s allegations describe the kinds of “postformation ... incidents relating to the conditions of employment” that were unac-tionable under section 1981. Patterson, 491 U.S. at 179, 109 S.Ct. at 2374. Vance’s allegations about her initial months of work at the Western Way facility describe the same kind of behavior — post-hiring racial harassment — that the Court held to be outside the scope of section 1981 in Patterson. Id. 491 U.S. at 177, 109 S.Ct. at 2373. In a similar way, Vance’s claim that Southern Bell wrongfully refused to transfer her to a different assignment within the company is unactionable under section 1981 because such “lateral transfers [do] not rise ‘to the level of an opportunity for a new and distinct relation between the employee and the employer.’ ” Jones v. Firestone Tire and Rubber Co., 977 F.2d 527 (11th Cir.1992) (Tjoflat, C.J.), quoting Patterson, 491 U.S. at 185, 109 S.Ct. at 2377. And it is settled in this circuit that, under the Patterson rule, section 1981 provides no relief on claims of discriminatory discharge. E.g., Pearson v. Macon-Bibb Co. Hosp. Auth., 952 F.2d 1274, 1277-78 (11th Cir.1992); Weaver v. Casa Gallardo, 922 F.2d 1515, 1519-20 (11th Cir.1991). Thus we conclude that Vance’s section 1981 claim is among the kinds of post-hiring claims that Patterson bars.⁸

B. Retroactive Application of Patterson v. McLean Credit Union

The district court declined to apply Patterson retroactively based on the pragmatic and equitable considerations set out in Chevron Oil v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971). We think the Supreme Court’s recent decision in James B. Beam Distilling Co. v. Georgia, — U.S.-, 111 S.Ct. 2439, 115 L.Ed.2d 481 (1991), forecloses Chevron Oil analysis in this case and commands retroactive application of Patterson.

In Beam, the Supreme Court held that if the court applies a rule to the parties in the case in which the rule is announced, the rule must be applied retroactively to cases pending at the time the rule issues. “[T]he question is whether it is error to refuse to apply a rule of federal law retroactively after the case announcing the rule has already done so. We hold that it is, principles of equity and stare decisis here prevailing over any claim based on a Chevron Oil analysis.” Beam, — U.S. at-, 111 S.Ct. at 2446. Under Beam, the dispositive question is whether the Patterson court applied its interpretation of section 1981’s “make and enforce” language to the parties in the Patterson case. See Lufkin v. McCallum, 956 F.2d 1104, 1106-07 (11th Cir.1992) (applying Beam).

The Court in Patterson did apply its interpretation of section 1981 to the litigants there. See Patterson, 491 U.S. at 177-80, 189, 109 S.Ct. at 2373-74, 2379 (affirming court of appeals’ dismissal of racial harassment claim as unactionable under section 1981). So, even assuming for the sake of argument that Patterson did announce a new rule (as opposed to declaring what section 1981 always meant), that rule would apply to all cases then pending, such as this one.

Based on the principles announced in Beam, we conclude that the district court erred in refusing to apply Patterson v. McLean Credit Union to dismiss the section 1981 claim in this case.

C. Prospectivity of the Civil Rights Act of 1991

The remaining question is whether the Civil Rights Act of 1991 applies retroactively to overrule Patterson to save Vance’s section 1981 claim. One effect of the 1991 Act, in cases where it applies, is to make the rule in Patterson obsolete by statutorily adding certain categories of post-hiring discrimination to the list of practices liable to suit under section 1981. In Baynes v. AT & T Technologies, Inc., 976 F.2d 1370 (11th Cir.1992), we decided that section 101 has no retroactive application in cases in which entry of judgment predates the effective date of the Act.⁹ Because judgment in this case was entered in May 1990, before the effective date of the Act,¹⁰ the Act does not apply retroactively to Vance’s action.¹¹

IV. Conclusion

The district court’s order denying Southern Bell’s motion for summary judgment on Count I, the 42 U.S.C. § 1981 claim, is REVERSED.

1 . 42 U.S.C. § 1981 contains section 1 of the Civil Rights Act of 1866. It provides:

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.A. § 1981(a) (West 1981 & Supp.1992).

2 . Vance claims Southern Bell violated section 1981 by: (1) hanging a rope "noose" over her work station shortly after she started work in August 1984; (2) suspending her in September 1984 for an offense for which white employees were not suspended; (3) "subjecting [Vance] ... to a physical altercation with a white [female] co-worker" in October 1984 and disciplining only Vance for the incident; (4) sabotaging her work on a pay phone; (5) refusing to treat her equally in disciplinary proceedings unless she dismissed charges of racial discrimination then pending before a local government agency; (6) refusing to purge stale disciplinary actions from her file; (7) "confining her to the supervision of the white woman who attacked her in October ... causing her to suffer a nervous breakdown on the job"; (8) “intentionally transporting [Vance] to the wrong hospital during her nervous breakdown in an effort to cause her further trauma"; (9) refusing Vance’s doctor’s January 1985 request to transfer Vance to a different department; (10) continuing to refuse to transfer Vance, despite her doctor's requests, until October 1985; and (11) constructively discharging her on October 14, 1985 when she was physically and medically unable to continue working under her tormentors without a transfer to a department which did not harass or intimidate her.” Id.

3 .In October 1987, some six months after the jury rendered its verdict in Vance I, the Supreme Court granted certiorari in Patterson. Id., cert. granted, 484 U.S. 814, 108 S.Ct. 65, 98 L.Ed.2d 29 (1987). Fifteen months later, with Patterson still undecided in the Supreme Court, this court decided Vance I. Vance I, 863 F.2d 1503 (11th Cir.1989).

4 . R.Vol. 10-302.

5 . See 42 U.S.C.A. § 1981(b) (West 1981 & Supp. 1992), codifying section 101 of the Civil Rights Act of 1991. Section 101 of the Civil Rights Act of 1991, enacted on November 21, 1991, amended 42 U.S.C. § 1981. The 1991 Act redefines the phrase "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," and protects these contractual rights "against impairment by nongovernmental discrimination and impairment under color of state law.” See 42 U.S.C.A. § 1981(b), (c) (West 1981 & Supp.1992).

6 . See 42 U.S.C. §§ 2000e et seq. Mary Ann Vance made no claim under Title VII.

7 . We must also decide Vance’s appeal of the dismissal of a state law claim for intentional infliction of emotional distress. We see no error. In Florida, “[t]he issue of whether or not the activities of the defendant rise to the level of being extreme and outrageous so as to permit a claim for intentional infliction of emotional distress is a legal question in the first instance for the court to decide as a matter of law.” Baker v. Florida Nat'l Bank, 559 So.2d 284, 287 (Fla.Dist.Ct.App.1990). As we read Florida's decisions, the acts Vance alleged do not rise to the level of extremity or outrageousness required to sustain Vance’s claim for intentional infliction of emotional distress. See, e.g., Lay v. Roux Laboratories, Inc., 379 So.2d 451, 452 (Fla. 1st DCA1980) (although “extremely reprehensible,” racially hostile misconduct did not rise to the degree of "outrageousness or atrociousness” required to sustain a claim). See also Mundy v. Southern Bell Tel. & Tel. Co., 676 F.2d 503, 505-506 (11th Cir.1982) (surveying Florida cases rejecting claims in employment context); Studstill v. Borg Warner Leasing, 806 F.2d 1005, 1007 (11th Cir.1986) (This court is bound by decisions of Florida’s intermediate courts of appeals absent "some persuasive indication that the state’s highest court would decide the issue otherwise.”). Therefore, we affirm the district court’s order directing a verdict for Southern Bell on the state law claim.

8 . This court decided Vance I when Patterson v. McLean Credit Union was pending before the Supreme Court. In Vance I, we saw a distinction between the constructive discharge theory of Vance’s case and the "pure” harassment claims of the plaintiff in Patterson. Vance I, 863 F.2d at 1509 n. 3. But there has been an intervening change in the law that alters what some may have seen as the law of this case. See Westbrook v. Zant, 743 F.2d 764, 768-69 (11th Cir.1984) ("law of the case” doctrine subject to intervening change in controlling law). After the Supreme Court’s opinion in Patterson, no basis exists in section 1981 cases to sustain the distinction between claims of "pure" harassment and claims which allege that acts of harassment caused the discharge of the employee. Given the sweep of the words of the Patterson opinion, all such claims would involve "postformation” contractual activity outside the protection of section 1981. See Patterson, 491 U.S. at 179, 109 S.Ct. at 2374 (Section 1981 "covers only conduct at the initial formation of the contract and conduct which impairs the right to enforce contract obligations through legal process.”).

9 . Almost every circuit that has addressed the retroactivity of the Civil Rights Act of 1991 has concluded that the 1991 Act does not apply retroactively. See Baynes v. AT & T, supra; Gersman v. Group Health Ass'n, Inc., 975 F.2d 886 (D.C.Cir.1992); Johnson v. Uncle Ben’s Inc., 965 F.2d 1363 (5th Cir.1992), petition for cert. filed, 61 U.S.L.W. 3356 (U.S. Sept. 29, 1992) (No. 92-737); Mozee v. American Commercial Marine Svc. Co., 963 F.2d 929 (7th Cir.), cert. denied, — U.S. —-, 113 S.Ct. 207, 121 L.Ed.2d 148 (1992); Hicks v. Brown Group, Inc., 982 F.2d 295 (8th Cir.1992) (en banc); Vogel v. City of Cincinnati, 959 F.2d 594 (6th Cir.), cert. denied, — U.S. -, 113 S.Ct. 86, 121 I..Ed.2d 49 (1992). But see Davis v. City and County of San Francisco, 976 F.2d 1536 (9th Cir.1992).

In Davis, a panel of the Ninth Circuit inferred from sections 109(c) and 402(b) of the Act that Congress did intend the Act to apply retroactively except in specific kinds of cases. Section 109 makes Title VII applicable to U.S. citizens employed in foreign countries, overruling EEOC v. Arabian Amer. Oil Co., — U.S.-, 111 S.Ct. 1227, 113 L.Ed.2d 274 (1991); section 109(c) expressly makes section 109 purely prospective. Pub.L. No. 102-166, § 109(c) (1991). Section 402(b) makes the Act inapplicable to the Wards Cove litigation. See Pub.L. No. 102-166, 105 Stat. 1071, § 402(b) (1991); Wards Cove Packing Co. v. Antonio, 490 U.S. 642, 109 S.Ct. 2115, 104 L.Ed.2d 733 (1989); 137 Cong.Rec. S15950-968 (daily ed. Nov. 5, 1991) (Senate discussion preceding vote on section 402(b)). Considering these two provisions, the Ninth Circuit decided that to conclude the whole Act applies only prospectively would violate the general canon of construction that statutes be interpreted "so as not to render one part inoperative” and so that "no provision ... be construed to be entirely redundant." Davis, 976 F.2d at 1551 (citations omitted).

Recalling that there are exceptions to almost all general propositions, we cannot accept the Davis reasoning. The negative inference (that Congress intended general retroactivity) that the Davis court drew from sections 109(c) and 402(b) is an unhelpful legal fiction given the reality of a sharp conflict between legislators on the retroactivity of the Act generally. See Davis, 976 F.2d at 1554 (collecting citations to legislators’ divergent views). We think it makes little sense to know that Congress never acted on retroactivity and then to infer from a couple of provisions — here, distinctive provisions that made prospectiveness especially plain for certain situations — that Congress generally “envisioned” or "intended” retroactive application as a general matter. Cf. Davis, 976 F.2d at 1552-56.

Congress probably only intended for sections 109(c) and 402(b) to minimize, in specific instances, the risk posed by uncertain outcomes in the courts on the general retroactivity issue. See Gersman, supra, 975 F.2d at 890 (sections may be viewed as an "insurance policy”); Johnson, supra, 965 F.2d at 1373 (sections may evince no general conclusion about general retroactive application). And when a court holds that the Act generally applies prospectively, the court does not render sections 109(c) and 402(b) "entirely redundant” nor inoperative. Those sections operate to ensure that, although some court might hold the Act retroactive as a general matter, no court may hold that the Act applies in Wards Cove or in a section 109 case where the conduct predates enactment. With that understanding of sections 109(c) and 402(b), and given the abundant evidence that Congress never agreed on the retroactivity of the Act in general, but instead left that issue to the courts, e.g., compare 137 Cong.Rec. S15483-485 (daily ed. Oct. 30, 1991) (interpretive memorandum of Sen. Danforth) with 137 Cong.Rec. S15485 (daily ed. Oct. 30, 1991) (statement of Sen. Kennedy), we decline to infer general "intent” on retroactivity from sections 109(c) and 402(b).

10 . Section 402 of the Civil Rights Act of 1991 provides that the Act took effect on its date of enactment, November 21, 1991, unless otherwise provided.

11 . We recognize that Vance's section 1981 claims went to trial despite Patterson, while Baynes’s section 1981 claims, in contrast, fell to Patterson in a summary judgment. Baynes, 976 F.2d at 1372. But in view of all the Bradley factors, this distinction leads us to no different conclusion in this case about the retroactivity of the Civil Rights Act of 1991. See Baynes, 976 F.2d at 1373-75, applying Bradley v. School Board of Richmond, 416 U.S. 696, 711, 94 S.Ct. 2006, 2016, 40 L.Ed.2d 476 (1974). In addition, the principle that "litigants in similar situations should be treated the same,” Beam, — U.S. at -, 111 S.Ct. at 2444, dissuades us from a different view of the Act in this case.