96 F.3d 1204 (9th Cir. 1996), 94-16947, Federation of African American Contractors v. City of Oakland

Docket Nº:94-16947.
Citation:96 F.3d 1204
Party Name:96 Daily Journal D.A.R. 11,482 FEDERATION OF AFRICAN AMERICAN CONTRACTORS; Rondeau Bay Construction Company; Crowell & Sons Plastering Company; Comack Plumbing Company, et al., Plaintiffs-Appellants, v. CITY OF OAKLAND, Defendant, and Alameda County; Mary King; Don Perata; Gail Steele; Warren Widener; Edward Campbell, Defendants-Appellees.
Case Date:September 19, 1996
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 1204

96 F.3d 1204 (9th Cir. 1996)

96 Daily Journal D.A.R. 11,482

FEDERATION OF AFRICAN AMERICAN CONTRACTORS; Rondeau Bay

Construction Company; Crowell & Sons Plastering

Company; Comack Plumbing Company, et

al., Plaintiffs-Appellants,

v.

CITY OF OAKLAND, Defendant,

and

Alameda County; Mary King; Don Perata; Gail Steele;

Warren Widener; Edward Campbell, Defendants-Appellees.

No. 94-16947.

United States Court of Appeals, Ninth Circuit

September 19, 1996

Argued and Submitted March 12, 1996.

Page 1205

Eric Vickers, Vickers & Associates, St. Louis, MO, for plaintiffs-appellants.

Henry S. Hewitt, Erickson, Beasley, Hewitt & Wilson, Oakland, CA, for defendants-appellees.

Appeal from the United States District Court for the Northern District of California, Eugene F. Lynch, District Judge, Presiding. D.C. No. CV-93-00313-EFL.

Before: CHOY, BEEZER and HAWKINS, Circuit Judges.

Opinion by Judge HAWKINS; Concurrence by Judge BEEZER.

MICHAEL DALY HAWKINS, Circuit Judge:

This appeal presents an issue of first impression: whether the Civil Rights Act of 1991 amended 42 U.S.C. § 1981 to statutorily overrule Jett v. Dallas Indep. Sch. Dist., 491 U.S. 701, 109 S.Ct. 2702, 105 L.Ed.2d 598 (1989), to allow a private right of action against municipalities; and, if so, whether the Act relieves plaintiffs from alleging that their civil rights were violated as a result of an official "policy or custom" as required by Monell v. New York City Dep't of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978).

Plaintiff-appellant Rondeau Bay Construction Company ("Rondeau Bay"), a minority-owned construction firm, appeals the district court's dismissal of its civil rights claims against defendant-appellee Alameda County, which it brought under 42 U.S.C. §§ 1981 and 1983. We have jurisdiction pursuant to 28 U.S.C. § 1291.

We hold that the Civil Rights Act of 1991 creates an implied cause of action against state actors under 42 U.S.C. § 1981, and thus statutorily overrules Jett 's holding that 42 U.S.C. § 1983 provides the exclusive federal remedy against municipalities for violation of the civil rights guaranteed by 42 U.S.C. § 1981. Nevertheless, we uphold the district court's dismissal of Rondeau Bay's claim under 42 U.S.C. § 1981 because we conclude that the Act does not relieve plaintiffs from alleging that their injury was caused by an official "policy or custom," Monell, 436 U.S. at 694, 98 S.Ct. at 2037-38, a requirement Rondeau Bay failed to satisfy below. Additionally, we affirm the district court's dismissal of Rondeau Bay's claim under 42 U.S.C. § 1983 because Rondeau Bay failed to allege that its injury resulted from an official "policy or custom," as required by Monell, 436 U.S. at 694, 98 S.Ct. at 2037-38.

FACTUAL AND PROCEDURAL HISTORY

In 1991, defendant-appellee Alameda County, its Supervisors, and the city of Oakland launched a project to renovate the Touraine Hotel in Oakland and convert it into a shelter for the homeless. The County solicited bids for general construction work on the renovation project. Plaintiff-appellant Rondeau Bay, a minority-owned construction firm, submitted a bid to perform general

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construction work but was not awarded a contract.

In January 1993, Rondeau Bay and four other minority-owned firms that did not receive contracts on the renovation project, along with the Federation of African American Contractors, a local association of minority-owned contractors, sued Alameda County, its Supervisors, and the city of Oakland in federal district court in California. Count I, brought under 42 U.S.C. § 1983, alleged defendants discriminated against plaintiffs by deliberately excluding them from participation in the project on the basis of their race, and also failed to enforce county affirmative action regulations, thereby denying plaintiffs contracts in violation of their Fourteenth Amendment right of due process. Count II, brought under 42 U.S.C. § 1981, alleged defendants' rejection of plaintiffs' bids was part of a "continuing pattern, practice and custom" of racial discrimination that violated plaintiffs' rights under the Thirteenth and Fourteenth Amendments.

Pursuant to Fed.R.Civ.P. 12(b)(6), defendants moved to dismiss the claim that they had failed to enforce county affirmative action regulations, insisting plaintiffs failed to state a claim under either 42 U.S.C. § 1981 or 42 U.S.C. § 1983. 1 Defendants also moved for summary judgment under Fed.R.Civ.P. 56 with respect to plaintiffs' discrimination claims. The district court granted defendants' motion for summary judgment as to Count II, and granted the motion for summary judgment as to Count I with respect to all plaintiffs except Rondeau Bay. 2

Rondeau Bay filed an amended complaint in March 1994, naming itself as the sole plaintiff and Alameda County as the sole defendant in the action. Count I of the amended complaint was brought under 42 U.S.C. § 1981, and alleged that the county violated Rondeau Bay's Fourteenth Amendment rights by (1) violating state and county bidding procedures and contracting with a white-owned firm rather than with minority-owned Rondeau Bay, which claimed to have submitted a lower bid, and (2) deliberately excluding Rondeau Bay, on the basis of race, from obtaining a contract on the renovation project. Count II, brought under 42 U.S.C. § 1983, alleged the county violated state and county bidding procedures, thereby violating Rondeau Bay's Fourteenth Amendment rights by depriving it of a property interest in a contract without due process. 3

Once again, the county moved for dismissal under Fed.R.Civ.P. 12(b)(6). In August 1994, the district court dismissed Count I of Rondeau Bay's amended complaint on the ground that 42 U.S.C. § 1983 "provides the exclusive remedy for § 1981 claims against state governments[,]" invoking Jett v. Dallas Indep. Sch. Dist., 491 U.S. 701, 109 S.Ct. 2702, 105 L.Ed.2d 598 (1989). It also dismissed Count II because Rondeau Bay failed to allege that the deprivation of its property right without due process was "the result of a policy or practice" of the county, as required by Monell v. New York City Dep't of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). Judgment against Rondeau Bay was entered October 3, 1994. Rondeau Bay timely appealed. 4

ANALYSIS

Rondeau Bay contends that the district court's dismissal of Count I was improper

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because it insists that its complaint "point[ed] out that [the county's] denial of the contract was an official action" by its supervisors, and that Count I therefore stated a cause of action under 42 U.S.C. § 1981. It also challenges the district court's dismissal of Count II because it argues that Count II sufficiently alleged a "policy or custom" and therefore stated a cause of action under 42 U.S.C. § 1983.

We review de novo a dismissal for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). Stone v. Travelers Corp., 58 F.3d 434, 436-37 (9th Cir.1995) (citations omitted). Our review is limited to the contents of the complaint. Argabright v. United States, 35 F.3d 472, 474 (9th Cir.1994) (citations omitted). All allegations of material fact must be taken as true and construed in the light most favorable to the non-moving party. National Wildlife Fed'n v. Espy, 45 F.3d 1337, 1340 (9th Cir.1995) (citations omitted).

I. Whether plaintiff-appellant's claim under 42 U.S.C. § 1981 was properly dismissed for failure to state a claim

As described above, the district court dismissed Rondeau Bay's claim under 42 U.S.C. § 1981, relying on the Supreme Court's decision in Jett v. Dallas Indep. Sch. Dist., 491 U.S. 701, 109 S.Ct. 2702, 105 L.Ed.2d 598 (1989), which held, first, that 42 U.S.C. § 1983 provides the exclusive federal remedy against municipalities for the violation of the civil rights guaranteed by 42 U.S.C. § 1981, and, second, that a municipality may not be held liable under a respondeat superior theory for violations of 42 U.S.C. § 1981 but may only be held liable for violations resulting from an official "policy or custom." The county relies chiefly on that authority in asking this Court to affirm the district court's dismissal of Rondeau Bay's claim under 42 U.S.C. § 1981. We point out, however, that Jett may well have been overruled, at least in part, by the amendment to 42 U.S.C. § 1981 contained in the Civil Rights Act of 1991, Pub.L. 102-166, 105 Stat. 1071 (1991). To determine whether Rondeau Bay may sue Alameda County directly under 42 U.S.C. § 1981, we must decide whether the Civil Rights Act of 1991 amended 42 U.S.C. § 1981 to allow a direct federal cause of action against a municipality.

A. The Supreme Court's decision in Jett v. Dallas Indep. Sch. Dist.

The Supreme Court in Jett was faced with deciding whether the previous version of 42 U.S.C. § 1981 provided an independent federal cause of action for damages against local governmental entities; and, if so, whether such an entity may be held liable for violations of 42 U.S.C. § 1981 under a respondeat superior theory.

In Jett, a former high-school athletic director brought an action against a school district and its officials under 42 U.S.C. §§ 1981 and 1983, alleging several violations of his civil rights. Included in his complaint was the allegation that the defendants violated his Fourteenth Amendment right of equal protection and his rights under 42 U.S.C. § 1981 by removing him from his former job on the basis of his race. The trial court held the plaintiff's claim of racial discrimination cognizable under 42 U.S.C. § 1981 as well as 42 U.S.C. § 1983. It allowed him to pursue a respondeat superior theory of liability under 42 U.S.C. § 1981 but not under 42 U.S.C. §...

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