Buchanan v. Consolidated Stores Corp.

• Decision Date: 04 January 2001
• Docket Number: No. CIV.A. 99-3736.,CIV.A. 99-3736.
• Citation: 125 F.Supp.2d 730
• Parties: Avis E. BUCHANAN, et al. v. CONSOLIDATED STORES CORP.
• Court: U.S. District Court — District of Maryland

125 F.Supp.2d 730

Avis E. BUCHANAN, et al. v. CONSOLIDATED STORES CORP.

No. CIV.A. 99-3736.

United States District Court, D. Maryland.

January 4, 2001.

COPYRIGHT MATERIAL OMITTED

Edward J. Reed, Baach, Robinson & Lewis, Washington, DC, for Avis E. Buchanan, Carolyn Kornegay-Belton.

John P. Relman, Relman & Associates, Washington, DC, Christine Robitscher Ladd, Relman & Associates, Washington, DC, Edward J. Reed, Baach, Robinson & Lewis, Washington, DC, Elizabeth S. Westfall, Relman & Associates, Washington, DC, for Equal Rights Center.

R. Michael Smith, Dechert, Price & Rhoads, Washington, DC, for Consolidated Stores Corp.

John P. Relman, Relman & Associates, Washington, DC, Christine Robitscher Ladd, Relman & Associates, Washington, DC, Edward J. Reed, Baach, Robinson & Lewis, Washington, DC, for Albert R. Conley, Ardelia Crawford, Yvette D. Tate.

MEMORANDUM OPINION

CHASANOW, District Judge.

Pending before the court and ready for resolution is the motion to dismiss of Defendant Consolidated Stores Corp. ("Consolidated" or "KB Toys"). No hearing is deemed necessary, and the court now rules pursuant to Local Rule 105.6. For the reasons that follow, the court shall grant the motion in part and deny it in part.

I. Background

Plaintiffs are five individuals, Avis E. Buchanan, Albert R. Conley, Ardelia Crawford, Carolyn Kornegay-Belton and Yvette D. Tate, and a non-profit organization, the Equal Rights Center ("ERC")¹. Defendant Consolidated Stores Corp. is a Delaware corporation that controls or owns several hundred KB Toys stores across the country. Plaintiffs allege that KB Toys discriminated against the five individual plaintiffs when several stores owned by Defendant and located in predominately African-American neighborhoods in Maryland refused to accept Plaintiffs' checks to pay for merchandise. The individual Plaintiffs recount similar stories.

On separate occasions, Crawford, Kornegay-Belton and Tate attempted to purchase by check gifts at the KB Toys at Iverson Mall in Temple Hills, but were told that the store did not accept checks. In July 1999, Crawford asked to see the manager about the no-check policy as she previously had paid for items by check at KB Toys in Waldorf, Maryland and Falls Church, Virginia. In response to her inquiry concerning the no-check policy, the manager, an African-American, told her "you know how we are; we write bad checks." Upset, Crawford left without buying the items.

In December 1997, Kornegay-Belton was similarly told by the cashier that the store did not accept checks. She bought the items she wanted anyway. In December 1999 while working with ERC, Kornegay-Belton learned that ERC was investigating KB Toys no-check policy and told her supervisor that she had earlier been a victim of the policy.

In November 1998, Tate also was told by a cashier at the Temple Hills store that she could not pay for her merchandise by check. Tate, who nevertheless completed her purchase, claims that she previously had paid by check at KB Toys in Bowie, Maryland and Arlington, Virginia. Moreover, a day after Tate's incident at the Temple Hills store, she purchased items by check at the KB Toys at Pentagon City in Virginia.

Dr. Conley attempted to purchase a video game for his sons in July 1999 at KB Toys in Prince George's Plaza and was told by a cashier that the store did not accept checks. Concerned about the matter, he asked to see the manager, who explained to him that because the store had been receiving bad checks, his superiors decided that checks would no longer be accepted there. The manager also told him that stores in Landover and Silver Spring did not accept checks either. Dr. Conley purchased the video game by credit card.

In November 1999, Buchanan attempted to make a purchase by check at the KB Toys in Forest Village Park Mall in Forestville, Maryland and was told by the cashier that that particular store did not accept checks. Buchanan used her credit card to buy the items she wanted. Suspecting that she had been the victim of unlawful discrimination, Buchanan called ERC the next day and asked the center to investigate KB Toys no-checks policy.

Following Buchanan's call, ERC conducted tests by telephone and in person and claims it uncovered "a pattern and practice of discrimination against African Americans ...." Paper no. 5, ¶ 47. ERC asked members of its staff to shop at various KB Toys. According to ERC, the tests uncovered that KB Toys located in areas with a predominately African American population did not accept checks from any of its customers while stores located in predominantly white areas would accept checks.² Plaintiffs claim that Defendant "knows the racial composition of the geographic areas in which its stores are located and has determined the race of the customers most likely to frequent each of its stores ... and intentionally instituted a `no-checks' policy in those stores ... where the customers are most likely to be African-Americans." Id. at 13. Plaintiffs also assert that Defendant "instituted its no-check policy" with the "intent to discriminate against African-Americans." Id. The individual plaintiffs claim that as a result of the no-check policy they have suffered economic loss, humiliation, embarrassment, and mental and emotional distress. ERC claims that it has suffered injury, among other things, by "expending significant resources," in terms of both money and staff time to investigate the discrimination claims and because the no-check policy has frustrated its mission of ridding the Washington-Baltimore metropolitan area of discrimination based on race. Paper no. 10 at 12-13.

Plaintiffs filed this action alleging discrimination under 42 U.S.C. § 1981. Plaintiffs also seek class action status, pursuant to Fed.R.Civ.P. 23(a), (b)(2), (b)(3). Defendant's motion asserts that the individual Plaintiffs fail to state a claim upon which relief can be granted, Fed.R.Civ.P. 12(b)(6), and that, because ERC lacks standing, this court lacks subject matter jurisdiction over its claim, Fed.R.Civ.P. 12(b)(1).

II. Analysis

A. Individual Plaintiffs' § 1981 claim

A Rule 12(b)(6) challenge requires a court to accept all well-pled allegations of the complaint as true and to construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff. Ibarra v. United States, 120 F.3d 472, 473 (4th Cir.1997). Such a motion ought not be granted unless "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). The court, however, need not accept unsupported legal allegations, Revene v. Charles County Comm'rs, 882 F.2d 870, 873 (4th Cir.1989), or conclusory factual allegations devoid of any reference to actual events. United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir.1979). Nevertheless, neither vagueness nor lack of detail is a sufficient ground on which to grant a motion to dismiss. Hill v. Shell Oil Co., 78 F.Supp.2d 764, 775 (N.D.Ill.1999) (quoting Strauss v. City of Chicago, 760 F.2d 765, 767 (7th Cir.1985)).

Section 1981, in pertinent part, states:

All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, ... as is enjoyed by white citizens ....

(b) ... the term "make and enforce contracts" includes the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.

Most § 1981 actions involve employment discrimination claims, and courts analyze such cases employing the same statutory scheme used in cases brought under Title VII. Hawkins v. Pepsico, Inc., 203 F.3d 274, 278 (4th Cir.2000); Gairola v. Commonwealth of Virginia Dept. of Gen. Serv., 753 F.2d 1281, 1285-86 (4th Cir.1985) (citations omitted). Discrimination claims involving retail transactions have been far more rare. Morris v. Office Max, Inc., 89 F.3d 411, 413 (7th Cir.1996). However, when faced with such claims, courts generally employ a three-prong test to analyze them. To state a cause of action in a § 1981 action like the one presently before the court, a plaintiff must show: (1) he or she is a member of a racial minority; (2) the defendant intended to discriminate on the basis of race; and (3) the discrimination concerned one or more of the activities protected by the statute. Hill, 78 F.Supp.2d at 776; Bobbitt v. Rage Inc., 19 F.Supp.2d 512, 517 (W.D.N.C.1998) (citing cases using this standard from the Second, Fifth, Seventh and Eleventh circuits).

All individual plaintiffs are African American and thus satisfy prong one of the prima facie case. Defendant's primary argument concerns prong two. Defendant argues that Plaintiffs cannot show intentional discrimination, and at most allege facts sufficient to show only disproportionate impact. Paper no. 7 at 11. The court disagrees. Plaintiffs allege that Defendant knew the racial composition of its stores, determined the race of customers most likely to patronize particular stores, and based on the race of the predominant clientele at those stores, African American, instituted the no-check policy. Paper no. 5, ¶¶ 50-51. Under the standard applicable to a motion to dismiss, Plaintiffs have alleged sufficient facts to support a claim of intentional discrimination. See Hill, 78 F.Supp.2d at 775 ("[M]ere vagueness or lack of detail does not constitute sufficient grounds for a motion dismiss.") (citation omitted). Proof, of course, must follow if Plaintiffs are to succeed ultimately.³

With respect to the third prong, Defendant argues that because all patrons had the opportunity to make their purchases, there was no interference with the right to contract. Paper no. 7 at 13 ("[A]ll of the individual Plaintiffs had the opportunity to complete their purchases...