Baker v. Elmwood Distributing, Inc.

• Decision Date: 13 August 1991
• Docket Number: No. 90-2466,90-2466
• Citation: 940 F.2d 1013
• Parties: 56 Fair Empl.Prac.Cas. 1017, 57 Empl. Prac. Dec. P 40,916 Larry BAKER, Robert C. Campbell, George Ditola, John Kennedy and John Zochowski, Plaintiffs-Appellants, v. ELMWOOD DISTRIBUTING, INC., City and Suburban Distributors-Illinois, Inc., Franklin D. Raines, and Vierk Distributing Co., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1013

940 F.2d 1013

56 Fair Empl.Prac.Cas. 1017,

57 Empl. Prac. Dec. P 40,916

Larry BAKER, Robert C. Campbell, George Ditola, John Kennedy and John Zochowski, Plaintiffs-Appellants, v. ELMWOOD DISTRIBUTING, INC., City and Suburban

Distributors-Illinois, Inc., Franklin D. Raines,

and Vierk Distributing Co., Defendants-Appellees.

No. 90-2466.

United States Court of Appeals, Seventh Circuit.

Argued April 17, 1991.

Decided Aug. 13, 1991.

David Letvin (argued), Letvin & Stein, Chicago, Ill., for plaintiffs-appellants.

Judson H. Miner, Jeffrey Cummings (argued), Davis, Miner, Barnhill & Galland, Louis R. Hegeman, Gould & Ratner, William G. Hutul, James R. Sneider, Sneider & Troy, Chicago, Ill., William A. Vlasek, William W. Winterhoff, Winterhoff & Associates, Lansing, Ill., for defendants-appellees.

Before BAUER, Chief Judge, and WOOD, Jr., and POSNER, Circuit Judges.

BAUER, Chief Judge.

This reverse discrimination suit under 42 U.S.C. Sec. 1981 has been kicking around the federal courts for over eight and a half years. In what we hope is the end of the line, we herein affirm the district court's entry of summary judgment against the Plaintiffs-Appellants. The district court held that their claims are foreclosed by Patterson v. McLean Credit Union, 491 U.S. 164, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989), and we agree.

I

The events that gave rise to this lawsuit occurred back in 1981. For most of that year, Plaintiffs-Appellants, all white men, delivered beer for Metropolitan Distributors South, Inc. Then, in early September of 1981, Metropolitan sold part of its franchise to Elmwood Distributing, Inc., whose president and sole shareholder was Franklin D. Raines, a black man. Raines chose Robert Harley, also a black man, as the new general manager of Elmwood. Harley had been a sales manager for Metropolitan.

Plaintiffs-Appellants (henceforth "the Drivers") learned on September 4, 1981, which was a Friday, that Elmwood had purchased that portion of Metropolitan's franchise that covered their territories. Immediately, the Drivers contacted Harley to determine whether they would have jobs the following week. According to their depositions, the Drivers were assured by Harley that, although they should formally reapply, they would be retained by Elmwood. See, e.g., Deposition of John Zochowski at 15 ("[Harley] said, 'As far as I am concerned you are hired. You got the job. I am honoring the [union] contract. Fill out an application anyway.' "); Deposition of Robert Campbell at 36 ("[Harley] told me that my job was--would be there when I came back Tuesday [September 8th], and he was keeping all the help in that area, and he told us our job[§ were] secure."). The Drivers did in fact apply for employment with Elmwood, and Harley received their applications.

Based on Harley's representations, the Drivers (all but Larry Baker) showed up for work as usual on Tuesday, September 8--Monday the 7th was the Labor Day holiday. Baker did not show because, after he was told by Harley on the 4th that he had a job with Elmwood, he went on vacation. With the exception of some slight route changes, the other Drivers delivered beer for Elmwood on September 8th and 9th just as they had for Metropolitan. As they expected, the Drivers (again, all but Baker) were paid by Elmwood for the hours they worked on the 8th and 9th, as well as for the Labor Day holiday.

Then, at the end of the day on September 9th, the bottom dropped out. Harley called all of Elmwood's drivers and helpers together that evening for a meeting. According to the Drivers' allegations, Harley told the assembled employees that Elmwood was getting pressure from black organizations that it had "too much white help," and that therefore some of the white employees had to be terminated. Harley then read off a list of the employees who would keep their jobs. The Drivers were not on that list. (Baker was not at the meeting because he was still out on vacation. Waiting for him when he returned home was a telegram from Harley that stated, "Your employment services will no longer be needed." The telegram did not state that the termination was due to Baker's race.)

In January 1983, the Drivers filed suit against Elmwood in federal district court, complaining that Elmwood had fired them because of their race in violation of 42 U.S.C. Sec. 1981. The following month, Elmwood sold substantially all of its assets (and unloaded its liabilities) to City and Suburban Distributors--Illinois, Inc. ("C & S"). In November 1985, the Drivers filed an amended complaint adding C & S as a defendant under the successorship doctrine. See Musikiwamba v. ESSI, Inc., 760 F.2d 740 (7th Cir.1985). ¹ In August 1986, the Drivers filed a second amended complaint adding Raines as a defendant, charging that Harley's actions on September 9th "were taken and made under the supervision, control and direction of Defendant Raines, and the discharge of the [Drivers] was made with Raines' approval for the reason of their race." p 7. In April 1988, C & S sold substantially all of its assets to Vierk Distributing Co. The district court thereafter allowed the Drivers to file a "Supplemental Complaint" adding Vierk as a defendant, again under the successorship doctrine.

Thus, between January 1983 and April 1988, the Drivers filed a total of four complaints against Elmwood and a growing list of additional defendants. In all four complaints, the Drivers alleged that they were hired by Elmwood on September 4, 1981, that they were employed by Elmwood until September 9, 1981, and that they were then fired by Elmwood solely because of their race. The defendants, for their part, denied these allegations, and raised as well various procedural and affirmative defenses. Specifically, in his deposition testimony, Raines testified that none of the Drivers ever was hired by Elmwood. He agreed that all but Baker "worked a number of days for Elmwood," but he stated that that occurred merely "at the insistence of the Teamsters Union." Raines Deposition at 61. ² As for why the Drivers "were not invited to be employees of Elmwood," Raines testified that it had nothing to do with race. Id. at 93-95. In his deposition, Harley also stated that the Drivers never were hired by Elmwood. As for those few days in September when the Drivers worked for Elmwood, Harley explained that Raines and the Teamsters decided to "let it go status quo" until a new collective bargaining agreement ("CBA") could be negotiated. Harley Deposition at 40. In February 1989, the district court determined that all of this created a jury question as to whether the Drivers actually were discharged for racially discriminatory reasons, and therefore denied Raines' summary judgment motion.

Then came Patterson v. McLean Credit Union, 491 U.S. 164, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989). In that case, the Supreme Court held that Sec. 1981's prohibition on discrimination "covers only conduct at the initial formation of the contract and conduct which impairs the right to enforce contract obligations through legal process." Id. at 179, 109 S.Ct. at 2374. The Court thus rendered Sec. 1981 inapplicable to racial harassment and all other "conduct which occurs after the formation of a contract and which does not interfere with the right to enforce established contract obligations." Id. at 171, 109 S.Ct. at 2369. The Court did not explicitly foreclose claims of discriminatory discharge under Sec. 1981, but every Circuit (including this one) that since has addressed such claims has held that they are no longer viable after Patterson. See Taggart v. Jefferson County Child Support Enforcement Unit 935 F.2d 947, 948 (8th Cir.1991) (en banc ) (collecting cases from seven other circuits that have held that Patterson precludes discriminatory discharge claims, which list includes McKnight v. General Motors Corp., 908 F.2d 104 (7th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 1306, 113 L.Ed.2d 241 (1991)). In addition, we have held that Patterson applies retroactively to cases that were not yet final when it was decided. See Bailey v. Northern Indiana Public Service Co., 910 F.2d 406, 407 (1990).

With this freight train coming at them, the Drivers quickly changed tracks. In August 1989, they sought and obtained leave to file a third amended complaint, in which they abandoned their discriminatory discharge claims. The Drivers now alleged that, although they may have believed they were hired (and then fired) by Elmwood, that's not what really happened. Elmwood actually refused to hire them, Drivers alleged, and did so because of their race. What the Drivers were trying to do, of course, was recast their claims so that the alleged discrimination occurred pre-contract formation and thus came within the post-Patterson scope of Sec. 1981.

It didn't work. In an order dated May 11, 1990, the district court granted C & S's motion for summary judgment based on Patterson. The court acknowledged and discussed the Drivers' new position, but concluded nonetheless that "[t]here is no genuine dispute in this case that [Drivers] were hired by Elmwood." Baker v. Elmwood Distributing, Inc., No. 83 C 215, slip op. at 4 (N.D.Ill. May 11, 1990). Given that fact, the only claim the Drivers could be making is that they were fired because of their race, a claim foreclosed by Patterson. Thus, the court entered judgment in favor of the defendants and dismissed the Drivers' action "in its entirety." In that same judgment, the court also certified, "There being no just reason for delay, this is a final and appealable order." Two weeks later, the Drivers filed a post-judgment motion under Fed.R.Civ.P. 59, which was denied. The Drivers brought a timely appeal.

II

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party...