Addisu v. Meyer

Decision Date04 January 2000
Docket NumberAL-SAEED,No. 98-35854,98-35854
Citation198 F.3d 1130
Parties(9th Cir. 2000) TAYE ADDISU; MOKHTAR; GHASSAN ABU HEMDEH, Plaintiffs-Appellants, v. FRED MEYER, INC., a Delaware Corporation, Defendant-Appellee
CourtU.S. Court of Appeals — Ninth Circuit

COUNSEL: Leonard R. Berman, Beaverton, Oregon, for the plaintiffs-appellants.

Marjorie A. Spiers and Janet M. Schroer, Hossfam, Hart & Wagner, Portland, Oregon for the defendant-appellee.

Appeal from the United States District Court for the District of Oregon; Ann L. Aiken, District Judge, Presiding. D.C. No. 97-1096-ALA

Before: Ruggero J. Aldisert,* Andrew J. Kleinfeld and William A. Fletcher, Circuit Judges.

OPINION

ALDISERT, Circuit Judge:

This appeal by would-be purchasers of the familiar blue jeans name brand Levi's, at Fred Meyer, Inc., a prominent nation-wide retailer, presents the question of whether a person can sue under 42 U.S.C. S 1981 for the refusal of a retailer to enter into a sales contract, which was solicited through fraudulent misrepresentation by the potential customer and would be voidable at that retailer's discretion.

Appellants Taye Addisu, Mokhtar Al-Saeed and Ghassan Abu Hemdeh brought a complaint against Fred Meyer alleging that it refused to sell them Levi's jeans because of their race or color. They contend that they were allowed to purchase any other item in the store, but were precluded from purchasing the jeans. Addisu is an American citizen of Ethiopian descent, Al-Saeed is a legal resident alien from Yemen and Hemdeh is an American citizen of Jordanian descent.

Fred Meyer admits that it refused to sell to the Appellants, but argues that the basis for its refusal was not their race or color but a race-neutral policy of the jeans' manufacturer, Levi Strauss and Co. ("LS&CO."), that limits sales of its products only to ultimate consumers and prohibits retailers like Fred Meyer from selling Levi's to re-sellers or dealers. Fred Meyer argues, and Appellants agree, that they are not ultimate consumers purchasing for personal use.

Appellants concede that they are dealers or agents of dealers who intend to resell the jeans, precisely the category of buyer prohibited under the Levi's policy implemented by Fred Meyer. Appellants' attempts to purchase come within what the stated Levi Strauss policy describes as participating in "Retail Accumulation [which] occurs when individuals or groups who are not the ultimate consumers purchase significant quantities of LS&CO. products from LS&CO.'s approved retail customers."1 Fred Meyer is an approved Levi Strauss retail customer. Appellants were well aware of the Levi's policy at the times of all their attempted purchases.

Appellants sued Fred Meyer for discrimination pursuant to 42 U.S.C. S 1981,2 averring that the conduct of the store "was wanton and intentional, was intended to deprive the plaintiff of his federally protected civil and legal rights, based on his race and/or color." Fourth Amended ComplaintP 7, E.R. Supp. Tab 36, at 3. They also allege a conspiracy to discriminate based on race pursuant to 42 U.S.C. S 1985(3).3 Appellants sought an injunction as well as compensatory and punitive damages. The district court granted Appellee's motion for summary judgment on all of Appellants' claims. The court employed the disparate treatment test according to standards used to analyze disparate treatment claims under Title VII of the Civil Rights Act of 1964. 42 U.S.C.S 2000e; Williams v. Edward Apfels Coffee Co., 792 F.2d 1482, 1484 (9th Cir. 1986). It determined that although Appellants established a prima facie case, the store came forward with a nondiscriminatory explanation and that Appellants did not prove that this reason was pretextual. The court also determined that Appellants failed in their S 1985(3) claims because they did not prove discriminatory intent. The court reasoned:

An indispensable element of a claim under 42 U.S.C. S 1985(3) is "some racial, or perhaps otherwise class-based, invidiously discriminatory animus behind the conspirator's action, Griffin v. Brecken ridge, 403 U.S. 88, 102 (1971). . . ." There was no such evidence in this case. Fred Meyer has proffered evidence showing that its refusal to sell Levi's to the plaintiffs was motivated by a reasonable belief that plaintiffs were agents for dealers attempting to pur chase the Levi's for resale.

Dist. Ct. Op. at 11, E.R. Tab 56, at 11.

On appeal Appellants argue that there is a genuine issue of material fact to preclude summary judgment under SS 1981 and 1985(3). Summary judgment should be granted if "there is no genuine issue as to any material fact and[ ] the moving party is entitled to judgment as a matter of law. " Rule 56(c), Federal Rules of Civil Procedure. If the moving party shows that there are no genuine issues of material fact, the nonmoving party must go beyond the pleadings and designate facts showing an issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986). A scintilla of evidence or evidence that is merely colorable or not significantly probative does not present a genuine issue of material fact. United Steel Workers of America v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir. 1989). The underlying substantive law governing the claims determines whether or not it is material. Price v. Taco Bell Corporation, 934 F. Supp. 1193, 1196 (D. Or. 1996). Reasonable doubts as to the existence of material factual issue are resolved against the moving parties and inferences are drawn in the light most favorable to the non-moving party. Id. There must be enough doubt for a "reasonable trier of fact" to find for plaintiffs in order to defeat the summary judgment motion. Wallis v. J.R. Simplot Co., 26 F.3d 885, 889 (9th Cir. 1994).

The district court had jurisdiction pursuant to 28 U.S.C. S 1331. We have jurisdiction pursuant to 28 U.S.C. S 1291. The appeals were timely filed under Rule 4, Federal Rules of Appellate Procedure.

I.

Fred Meyer is required to conform to Levi Strauss policy as a condition of selling Levi's Jeans. As a retailer of Levi's, it limits the number of Levi Strauss products it sells to individual consumers (generally two pairs to a customer) and refuses to sell to persons who are acquiring, or are suspected to be acquiring, Levi's for resale. Such persons are referred to variously as retail accumulators, dealers and diverters. Fred Meyer's company policy allows employees to refuse to sell Levi's to an individual if the employee knows or reasonably believes that the individual is a dealer or the agent of a dealer. As a retailer, it enforces this practice because Levi Strauss requests it to notify customers that it has been advised by Levi Strauss that "[t]his policy is a condition of doing business with LS&Co., and we risk losing LS&Co. as a vendor if we do not comply with their policy." See note 1.

Fred Meyer has certain criteria which form the basis for suspecting that a purchaser is a dealer or the agent of a dealer rather than an ultimate consumer.4 Sales personnel are alerted to the following circumstances: the purchasers are in groups; they seek to purchase Levi's only, and no other merchandise; they show little or no concern about size; they have previously been observed buying multiple pairs of Levi's; they purchase only by cash or gift certificate. E.R. Supp. Tab 43B. The Levi Strauss policy provides that "[w]hile we do require retailers to enforce the six-unit limit policy, they may decide for their own business reasons and their customer's benefit to set a lower limit." See note 1. Thus, Fred Meyer's lower limit of two pairs per customer is within the Levi's policy.

On October 1, 1996, Appellant Addisu went to four Fred Meyer stores at the request of a dealer to purchase Levi's on the dealer's behalf. In each store, he purchased two pairs of Levi's without hindrance. No reference was made to his race or national origin. That same day, he and his dealer, Abbas Al-Sheikly, went to a fifth store, the Glisan Fred Meyer, also to purchase Levi's on Al-Sheikly's behalf. E.R. Tab VI.B, at 83-87; E.R. Supp. Tab 43D, at 1. An employee, Shelley Phelps, suspected Addisu was acting as or on behalf of a dealer and requested assistance from another employee, Faith Kreis. Ms. Kreis refused to sell the Levi's to Addisu and told him she suspected that he was a dealer. She told him he could buy anything else he wanted at the store, except for the jeans. E.R. Tab VI.B, at 84. In his deposition, Addisu testified that he had shopped at Fred Meyer on other occasions and had not been treated in a discriminatory manner. E.R. Supp. Tab 43D, at 1.

On October 31, 1996, Addisu returned to the Glisan Fred Meyer store at the direction of his attorney and accompanied by a private investigator. E.R. Supp. Tab 43, at 4; Tab 52, at 2. He requested a pair of Levi's, and a Fred Meyer employee, Shirley Johnson, gave them to him. Mr. Addisu then told Ms. Johnson that he had previously been refused the right to purchase Levi's and asked her questions about the store's policy and whether it related to his nationality. The investigator has testified that Mr. Addisu's conversation with Ms. Johnson was for the purpose of developing his lawsuit. E.R. Tab VI.B, at 74.

Mr. Addisu then asked to speak with Shelley Phelps, the employee who had refused to sell to him on October 1, 1996. Ms. Phelps, still believing Mr. Addisu to be an agent for a dealer, took back the Levi's Mr. Addisu had been given and refused to sell them to him. E.R. Tab VI.B, at 93-94.

Appellant Mokhtar Al-Saeed was also an agent for a dealer. For several months he bought Levi's and turned them over to the dealer for resale. Ms. Al-Saeed testified that he was paid $2.00 a pair by the dealer, and that he averaged $500 a month in earnings for this practice. Tammy Al-Saeed Depo. at 26. Mr. Al-Saeed was sometimes joined by his wife and by her brother and...

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