Duane v. Geico, 92-1616

• Citation: 37 F.3d 1036
• Decision Date: 12 October 1994
• Docket Number: No. 92-1616,92-1616
• Parties: Vincent P. DUANE, Plaintiff-Appellee, v. GEICO; Geico General Insurance Company, Defendants-Appellants. American Civil Liberties Union; Mexican-American Legal Defense and Education Fund; Public Citizen, Amici Curiae.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

Page 1036

37 F.3d 1036

63 USLW 2248

Vincent P. DUANE, Plaintiff-Appellee, v. GEICO; Geico General Insurance Company, Defendants-Appellants.

American Civil Liberties Union; Mexican-American Legal

Defense and Education Fund; Public Citizen, Amici Curiae.

No. 92-1616.

United States Court of Appeals, Fourth Circuit.

Argued Oct. 27, 1992.

Decided Oct. 12, 1994.

ARGUED: Thomas J.S. Waxter, Jr., Semmes, Bowen & Semmes, Baltimore, MD, Harley Thomas Howell, Howell, Gately, Whitney & Carter, Towson, MD, for appellants. Jerome Vincent Bolkcom, Washington, DC, for appellee. ON BRIEF: J. Douglass Ruff, Washington, DC, for appellants. Vincent P. Duane, Washington, DC, for appellee. Lucas Guttentag, American Civ. Liberties Union Foundation Immigrants' Right Project, New York City; David C. Vladeck, Cornish F. Hitchcock, Public Citizen, Washington, DC; H. Jefferson Powell, Duke Law School, Durham, NC; Eileen B. Hershenov, Rebecca W. French, Charles L. Kerr, Morrison & Foerster, New York City; Kevin Baker, Valerie Small Navarro, Mexican American Legal Defense and Educational Fund, Los Angeles, CA, for amici curiae.

Before ERVIN, Chief Judge, and RUSSELL and WILKINS, Circuit Judges.

Affirmed by published opinion. Judge DONALD RUSSELL wrote the opinion, in which Chief Judge ERVIN and Judge WILKINS joined.

OPINION

DONALD RUSSELL, Circuit Judge:

Defendant Government Employees Insurance Company (GEICO) appeals the district court's denial of its motion to dismiss plaintiff Vincent Duane's discrimination claim under 42 U.S.C. Sec. 1981, 784 F.Supp. 1209. We find no error in the district court's denial and affirm.

I

Vincent Duane is a lawfully admitted, permanent resident alien of the United States and a citizen of Australia. On June 3, 1991, Duane contacted GEICO about obtaining insurance for his newly purchased home. In response to a question from the GEICO sales agent, Duane disclosed his citizenship status. The sales agent informed Duane that GEICO would not write homeowner's insurance for him because he was not a United States citizen. Duane then spoke with one of GEICO's supervisory personnel, who confirmed that GEICO had a policy of refusing to enter into contracts for homeowner's insurance with persons who were not United States citizens.

Duane filed this action against GEICO in the District of Maryland in September, 1991, claiming that GEICO's action in denying him insurance because he was not a United States citizen violated section 1981. GEICO moved to dismiss on the ground, among others, that Duane failed to state a claim upon which relief could be granted because section 1981 did not prohibit private alienage discrimination. The district court denied GEICO's motion, finding that section 1981 did prohibit private alienage discrimination, but certified its order for immediate appeal under 28 U.S.C. Sec. 1292(b).

II

Section 1981 was amended in November, 1991, by section 101 of the 1991 Civil Rights Act, Pub.L. No. 102-166, Sec. 101, 105 Stat. 1071 (1991). ¹ We must first address whether section 101 should be applied here, where GEICO's conduct occurred prior to November, 1991. The Supreme Court recently addressed in Rivers v. Roadway Express, Inc., --- U.S. ----, 114 S.Ct. 1510, 128 L.Ed.2d 274 (1994), whether section 101 of the 1991 Civil Rights Act "applies to a case that arose before it was enacted," id. at ----, 114 S.Ct. at 1513, and held that "Sec. 101 does not apply to preenactment conduct," id. at ---- - ----, 114 S.Ct. at 1519-20. We therefore conclude that section 101 cannot apply here; accordingly, we will examine section 1981 prior to its amendment by section 101. ²

III

We turn to the crux of this case: whether section 1981, prior to its amendment by the 1991 Civil Rights Act, prohibited GEICO's discrimination against Duane.

Section 1981 has its origins in the Civil Rights Act of 1866 (the 1866 Act) and the Voting Rights Act of 1870 (the 1870 Act). Runyon v. McCrary, 427 U.S. 160, 168-70 n. 8, 96 S.Ct. 2586, 2593-94 n. 8, 49 L.Ed.2d 415 (1976). Section 1 of the 1866 Act stated in relevant part:

That ... citizens of the United States ... of every race and color ... shall have the same right, in every State and Territory in the United States, to make and enforce contracts, to sue, be parties, and give evidence, to inherit, purchase, lease, sell, hold, and convey real and personal property, and to full and equal benefit of all laws and proceedings for the security of persons and property, as is enjoyed by white citizens....

Civil Rights Act of 1866, ch. 31, Sec. 1, 14 Stat. 27 (1866).

Section 18 of the 1870 Act reenacted the 1866 Act. Voting Rights Act of 1870, ch. 114, Sec. 18, 16 Stat. 140 (1870). Section 16 of the 1870 Act expanded many of section 1's discrimination protections to non-citizens by adding the following:

That all persons within the jurisdiction of the United States shall have the same right in every State and Territory in the United States 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 person and property as is enjoyed by white citizens....

Voting Rights Act of 1870, ch. 114, Sec. 16, 16 Stat. 140 (1870). See General Bldg. Contractors Ass'n, Inc. v. Pennsylvania, 458 U.S. 375, 385-86, 102 S.Ct. 3141, 3147, 73 L.Ed.2d 835 (1982).

In 1874, section 1 of the 1866 Act and section 16 of the 1870 Act were codified without substantive change. McCrary, 427 U.S. at 168-70 n. 8, 96 S.Ct. at 2593-94 n. 8. A portion of section 1 of the 1866 Act, that which gave all citizens the same rights to make and enforce contracts, to sue, be parties, and 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, was combined with all of section 16 of the 1870 Act, which provided these same rights to all persons within the jurisdiction of the United States, to form what is now 42 U.S.C. Sec. 1981. Id. Section 1981, prior to its amendment by section 101 of the 1991 Civil Rights Act, thus provided in relevant part:

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....

42 U.S.C. Sec. 1981.

The remainder of section 1 of the 1866 Act, which granted all citizens the same rights to inherit, purchase, lease, sell, hold, and convey real and personal property, as is enjoyed by white citizens, was codified to create what is now 42 U.S.C. Sec. 1982. Jones v. Alfred H. Mayer Co., 392 U.S. 409, 422 & n. 28, 88 S.Ct. 2186, 2194 & n. 28, 20 L.Ed.2d 1189 (1968). Section 1982 states:

All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property.

42 U.S.C. Sec. 1982.

The Supreme Court in Jones addressed whether section 1982 prohibited private discrimination against a black citizen in the sale of real property. The Court held that "Sec. 1982 bars all racial discrimination, private as well as public, in the sale or rental of property." Jones, 392 U.S. at 413, 88 S.Ct. at 2189 (emphasis in original). Section 1982, the Court noted, had its origins in section 1 of the 1866 Act, id. at 422, 88 S.Ct. at 2194, and section 1 "guaranteed all citizens the same right ... to inherit, purchase, lease, sell, hold, and convey real and personal property ... as is enjoyed by white citizens," id. at 423, 88 S.Ct. at 2194 (quotation omitted). The Court then reasoned:

To the Congress that passed the Civil Rights Act of 1866, it was clear that the right to do these things might be infringed not only by State or local law but also by custom ... or prejudice. Thus, when Congress provided in Sec. 1 of the Civil Rights Act that the right to purchase and lease property was to be enjoyed equally throughout the United States by Negro and white citizens, it plainly meant to secure that right against interference from any source whatever, whether governmental or private.

Id. at 423-24, 88 S.Ct. at 2194-95 (quotations omitted).

Moreover, the Court continued, if section 1 did not apply to private discrimination, "much of Sec. 2 [of the 1866 Act] would have made no sense at all." Id. at 424, 88 S.Ct. at 2195. The Court explained:

[Section 2], which provided fines and prison terms for certain individuals who deprived others of rights "secured or protected" by Sec. 1, was carefully drafted to exempt private violations of Sec. 1 from the criminal sanctions it imposed. There would, of course, have been no private violations to exempt if the only "right" granted by Sec. 1 had been a right to be free of discrimination by public officials.

Id. at 424-26, 88 S.Ct. at 2195-96. "Hence," the Court concluded, "the structure of the 1866 Act, as well as its language, points to the conclusion urged by [petitioners]--that Sec. 1 was meant to prohibit all racially motivated deprivations of the rights enumerated in the statute...." Id. at 426, 88 S.Ct. at 2196 (emphasis in original).

Eight years later, the Court in McCrary addressed the related question of whether section 1981 prohibited private discrimination against black citizens in the making of contracts. The Court found that section 1981 did apply to such private discrimination. McCrary, 427 U.S. at 170-71, 96 S.Ct. at 2594-95. It stated: "In Jones the Court held that the portion of Sec. 1 of the Civil Rights Act of 1866 presently codified as 42 U.S.C. Sec. 1982 prohibits private racial discrimination in the sale or rental of real or personal property." Id. at 170, 96 S.Ct. at 2594. The holding in Jones, the Court reasoned, "necessarily implied that the portion of Sec. 1 of the 1866 Act presently codified as 42...