Brown v. American Honda Motor Co., Inc.

• Citation: 939 F.2d 946
• Decision Date: 23 August 1991
• Docket Number: No. 90-8487,90-8487
• Parties: 57 Empl. Prac. Dec. P 40,947 Johnny Mac BROWN, Plaintiff-Appellant, v. AMERICAN HONDA MOTOR COMPANY, INC., Jerry Felty, Defendants-Appellees, Philip R. Hughes, Ashley D. Hughes, Hughes Auto Sales, Inc., Intervenors-Defendants.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

Page 946

939 F.2d 946

57 Empl. Prac. Dec. P 40,947

Johnny Mac BROWN, Plaintiff-Appellant, v. AMERICAN HONDA MOTOR COMPANY, INC., Jerry Felty, Defendants-Appellees, Philip R. Hughes, Ashley D. Hughes, Hughes Auto Sales, Inc.,

Intervenors-Defendants.

No. 90-8487.

United States Court of Appeals, Eleventh Circuit.

Aug. 23, 1991.

Thomas Broughton Branch, III, Branch, Pike & Ganz, Frank O. Brown, Jr., Atlanta, Ga., for plaintiff-appellant.

Dorothy Y. Kirkley, Paul, Hastings, Janofsky & Walker, Atlanta, Ga., J. Donald McCarthy, Lyon & Lyon, Los Angeles, Cal., Kevin C. Gallagher, Paul, Hastings, Janofsky & Walker, Atlanta, Ga., for defendants-appellees.

J. Edward Allen, Fortson, Bentley and Griffin, P.A., Athens, Ga., Ronald T. Coleman, Jr., Paul, Hastings, Janofsky & Walker, Atlanta, Ga., for intervenors-defendants.

Appeal from the United States District Court for the Northern District of Georgia.

Before KRAVITCH and COX, Circuit Judges, and RONEY, Senior Circuit Judge.

RONEY, Senior Circuit Judge:

Plaintiff Johnny Mac Brown brought suit under 42 U.S.C. Sec. 1981 alleging that American Honda Motor Company (Honda) rejected his bid to obtain a Honda dealership in Warner Robbins, Georgia, for racially discriminatory reasons. To succeed, plaintiff would have to show that Honda intentionally discriminated against him on the basis of race. See General Bldg. Contractors Ass'n v. Pennsylvania, 458 U.S. 375, 389-91, 102 S.Ct. 3141, 3149-50, 73 L.Ed.2d 835 (1982). We affirm the summary judgment for defendants American Honda Motor Company, Inc. and Jerry Felty on the ground that the district court correctly concluded that the business reasons advanced by defendants for awarding the dealership to Hughes Auto Sales, Inc. were not a pretext for intentional discrimination against Brown because he was black.

Although the plaintiff asserts that this case is important to the developing law of discrimination claims asserted under section 1981, we believe the case involves nothing more than the application of established law, about which the parties do not disagree, to the individual facts of this case. Although the facts of this case present a very close question, it presents a situation which has been addressed by a host of other courts. See, e.g., Williams v. City of Sioux Falls, 846 F.2d 509 (8th Cir.1988) (black contractor alleged city violated Sec. 1981 by denying his bid on basis of race); Taylor v. City of St. Louis, 702 F.2d 695 (8th Cir.1983) (black businesswoman maintained contract was denied on account of race); T & S Service Assoc. v. Crenson, 666 F.2d 722 (1st Cir.1981) (minority owned business did not receive contract and sued under Sec. 1981); Howard Security Services, Inc. v. Johns Hopkins Hospital, 516 F.Supp. 508 (D.Md.1981) (same); Scott v. Clark, 436 F.Supp. 569 (D.Mo.1977) (black refuse collector sued under Sec. 1981 alleging racial motive for failure to grant contract).

The triggering facts can be briefly stated. In early September of 1984, the plaintiff learned that Honda planned to open a new dealership in Warner Robbins, Georgia. At that time, plaintiff owned and operated a General Motors dealership in Warner Robbins and was anxious to expand his operations. Initially, he and two other white individuals submitted applications to Honda. The other two applicants also had existing dealerships in the Warner Robbins area. Honda then contacted one of its own dealers, Phil Hughes, who ran a Honda dealership 120 miles away in Athens, Georgia. Allegedly, Honda encouraged Hughes, who is white, to submit an application and actively assisted in his efforts to obtain the contract. Hughes eventually received approval from Honda to open the dealership.

The plaintiff brought suit seeking both equitable relief and damages. District Judge Horace T. Ward bifurcated the proceedings and denied plaintiff's request for a preliminary injunction after a full evidentiary hearing. After further discovery, the defendant filed a motion for summary judgment which was granted.

The district court found these undisputed facts: four applications were submitted to American Honda by persons seeking to become the American Honda franchisee for Warner Robbins, Georgia. They were submitted by (1) plaintiff Johnny Mac Brown, (2) Philip and Ashley Hughes, (3) Dan G. Walton, and (4) Billy B. Butler. Johnny Mac Brown is black; Philip and Ashley Hughes, Dan G. Walter and Billy B. Butler are white. All of the applications met American Honda's minimum requirements. Of the four applicants, however, only the Hugheses had prior experience in the sales and service of Honda automobiles. In addition, only the Hugheses' application showed that they would sell exclusively Honda automobiles in the Warner Robbins market. Philip and Ashley Hughes were chosen by American Honda to receive the American Honda franchise in Warner Robbins.

Legal Standard

The plaintiff correctly notes that the basis for a federal race discrimination claim by a non-employee against a private company is under 42 U.S.C. Sec. 1981. Patterson v. McLean Credit Union, 491 U.S. 164, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989). Section 1981 provides that all citizens shall have the same right to "make and enforce contracts." The aim of the statute is to remove the impediment of discrimination from a minority citizen's ability to participate fully and equally in the marketplace. Patterson, at 176, 109 S.Ct. at 2372, 105 L.Ed.2d at 150. This right extends not only to interactions between citizens and government, but to wholly private business dealings as well. St. Francis College v. Al-Khazraji, 481 U.S. 604, 609, 107 S.Ct. 2022-2026, 95 L.Ed.2d 582 (1987).

Section 1981 requires proof of intentional discrimination. General Building Contractors Association v. Pennsylvania, 458 U.S. 375, 391, 102 S.Ct. 3141, 3150, 73 L.Ed.2d 835 (1982); Washington v. Davis, 426 U.S. 229, 246-48, 96 S.Ct. 2040, 2050-52, 48 L.Ed.2d 597 (1976); Baldwin v. Birmingham Board of Education, 648 F.2d 950, 954 (5th Cir. Unit B 1981); Crawford v. Western Electric Co., 614 F.2d 1300, 1309 (5th Cir.1980). The Supreme Court has held that the test for intentional discrimination in suits under Sec. 1981 is the same as the formulation used in Title VII discriminatory treatment causes. Patterson, 491 U.S. at 185-87, 109 S.Ct. at 2377-78, 105 L.Ed.2d at 156-57. Under the familiar McDonnell Douglas/Burdine framework, the court employs a three part test designed to determine the motivation of the defendant in taking the challenged action. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973); Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981).

The initial burden rests with the plaintiff to demonstrate by a preponderance of the evidence a prima facie case of discrimination. Id. at 252-53, 101 S.Ct. at 1093-94. This burden is not onerous, id. at 253, 101 S.Ct. at 1094, and can be met by simply demonstrating that the plaintiff is a member of a minority group, that he submitted an application or bid which met the requirements for an available contract, that the application or bid was ultimately rejected, and that the contract was eventually given to an individual who is not a member of a protected class. Patterson, 491 U.S. at 187, 109 S.Ct. at 2378, 105 L.Ed.2d at 157; Zaklama v. Mount Sinai Medical Center, 842 F.2d 291, 293 (11th Cir.1988). Thereafter the defendant must come forward with evidence demonstrating legitimate, nondiscriminatory reasons for its conduct. Burdine, 450 U.S. at 254, 101 S.Ct. at 1094. It is important to note that the burden on the defendant is one of production not persuasion. Id. at 254-55, 101 S.Ct. at 1094-95; Eastland v. Tennessee Valley Authority, 704 F.2d 613, 618-19 (11th Cir.1983). Once the defendant satisfies this obligation, it is incumbent on the plaintiff to produce evidence suggesting that those reasons are merely a pretext, the real reason for the action having been based on race. Burdine, 450 U.S. at 256, 101 S.Ct. at 1095.

District Court's Application of the Legal Standard

Following McDonnell Douglas and its progeny, the district court would have denied summary judgment for defendant insofar as it challenged plaintiff's prima facie case. The plaintiff is a member of a minority group, his proposal met the specifications required, and the franchise agreement was awarded to white applicants. The defendant does not argue that the court was incorrect in this determination.

The district court held, however, that to withstand a defendant's motion for summary judgment, a plaintiff had to do more than establish a prima facie case and deny the credibility of defendant's witnesses. Schuler v. Chronicle Broadcasting Co., 793 F.2d 1010, 1011 (9th Cir.1986). Throughout the proceeding the burden of persuasion and the burden of proving intentional discrimination remains with the plaintiff. Accordingly, despite the general presumption against using summary judgment to resolve the largely factual questions concerning discriminatory intent, Beard v. Annis, 730 F.2d 741, 743 (11th Cir.1984), it is possible for the defendant to present such strong evidence of a nondiscriminatory rationale that summary judgment is warranted. Grigsby v. Reynolds Metals Co., 821 F.2d 590, 596 (11th Cir.1987). If the defendant's proffer of credible, nondiscriminatory reasons for its actions is sufficiently probative, then the plaintiff must come forward with specific evidence demonstrating that the reasons given by defendant were a pretext for discrimination. It does not appear from this record that the plaintiff has done that in this case.

The district court held that the two reasons articulated by defendants for not selecting either plaintiff's application or either of the other two applications were legitimate and nondiscriminatory. The case turns on whether these were the real reasons, or simply pretexts given for a decision that was...