Hardin v. Cna Ins. Companies

• Decision Date: 04 November 1999
• Docket Number: No. IP 99-0014-C-B/S.,IP 99-0014-C-B/S.
• Citation: 103 F.Supp.2d 1091
• Parties: Adonis HARDIN, Plaintiff, v. CNA INSURANCE COMPANIES, Defendant.
• Court: U.S. District Court — Southern District of Indiana

Page 1091

103 F.Supp.2d 1091

Adonis HARDIN, Plaintiff, v. CNA INSURANCE COMPANIES, Defendant.

No. IP 99-0014-C-B/S.

United States District Court, S.D. Indiana, Indianapolis Division.

November 4, 1999.

John H Haskin, Haskin Lauter Cohen & Larue, Indianapolis, IN, for plaintiff.

Jeffrey S Goldman, Fox and Grove Chartered, Chicago, IL, Robert L McLaughlin, Wooden & McLaughlin, Indianapolis, IN, for defendant.

ENTRY GRANTING DEFENDANT'S MOTION TO DISMISS COUNT I OF THE COMPLAINT

BARKER, Chief Judge.

Plaintiff, Adonis Hardin ("Hardin"), filed a Complaint on January 6, 1999 alleging that she was the victim of unlawful employment practices including race and sex discrimination under Title VII, 42 U.S.C. § 2000e et seq. and 42 U.S.C. § 1981(a); and the Equal Pay Act 29 U.S.C. § 206(d) et seq. perpetrated by the Defendant, Continental Casualty Company ("CNA").¹ Count I of the Complaint asserts a claim for discrimination arising under § 1981. Pursuant to Federal Rule of Civil Procedure 12(b)(6), CNA has moved to dismiss Count I for failure to state a claim upon which relief can be granted. For the reasons discussed below, CNA's motion is GRANTED.

Factual Background

Hardin was hired by CNA's predecessor on or about March 27, 1978. See Compl. ¶ 8. During the course of her employment, Hardin asserts that she was paid less than similarly situated white male employees. See id. ¶ 9. In January 1996, Hardin sought a promotion from her position of Systems Support Analyst II (SSA II) to the position of Systems Support Analyst III (SSA III). See id. ¶ 10. Hardin alleges that she was already performing the duties of a SSA III and was merely seeking compensation commensurate with those duties. See id. Hardin's manager notified her in August or September 1996 that her request for promotion had been denied. See id. ¶ 11.

In November 1996, Hardin informed her manager that she was interested in applying for the positions of customer service manager and operations manager. See id. ¶ 13. After Hardin interviewed for the operations manager position, CNA promoted Guy Mower, a white male. See id. ¶¶ 14-15. On or about January 2, 1997, CNA informed Hardin that she could not interview for the customer service manager position. See id. ¶ 16. Several weeks later, CNA hired two white people for the customer service manager positions who were allegedly less qualified than Hardin. See id. ¶¶ 16, 19. As a result of these events, Hardin timely filed a charge with the Equal Employment Opportunity Commission and filed her complaint in this action on January 6, 1999.

Discussion

A. Standard of Review.

On a motion to dismiss brought pursuant to Rule 12(b)(6), we must determine whether the plaintiff's complaint states a claim upon which relief can be granted. See FED. R. CIV. P. 12(b)(6). We may only grant this motion if it is clear that no relief is appropriate under any set of facts consistent with the allegations of the complaint. See Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)); Jones v. General Elec. Co., 87 F.3d 209, 211 (7th Cir.1996). We do not review the merits of the lawsuit, see Triad Associates. v. Chicago Hous. Auth., 892 F.2d 583, 585 (7th Cir.1989); rather, the motion to dismiss may only be granted if it appears beyond doubt that the plaintiff can prove no set of facts in support of her claim that would entitle her to relief. See Doherty v. City of Chicago, 75 F.3d 318, 322 (7th Cir.1996). Thus, "in order to resist a motion to dismiss, the complaint must at least set out facts sufficient to `outline or adumbrate' the basis of the claim." Panaras v. Liquid Carbonic Indus., Corp., 74 F.3d 786, 792 (7th Cir.1996).

CNA argues that Count I of Hardin's Complaint, which purports to set out a claim under § 1981, must be dismissed because it fails to state a claim upon which relief may be granted based on the expiration of the statute of limitations and the absence of any contractual relationship between Hardin and CNA. Hardin responds that the claim is not barred by the statute of limitations because the appropriate limitations period as provided in 28 U.S.C. § 1658 is four years, or alternatively, even if the statute of limitations is two years under Indiana statute and adopted by federal decisions, the complaint was still timely filed. Hardin also contends that the complaint states a sufficient contractual relationship to support a § 1981 claim.

B. Statute Of Limitations.

1. Application of 28 U.S.C. § 1658 to § 1981 claims.

Before determining whether Hardin's § 1981 claim is barred by the statute of limitations, we first inquire as to the appropriate limitations period applicable to a § 1981 claim. The long-standing and well-settled rule is that the statute of limitations for claims arising under § 1981 is borrowed from the relevant state law. See Goodman v. Lukens Steel Co., 482 U.S. 656, 662, 107 S.Ct. 2617, 96 L.Ed.2d 572 (1987); Runyon v. McCrary, 427 U.S. 160, 179-82, 96 S.Ct. 2586, 49 L.Ed.2d 415 (1976); Vakharia v. Swedish Covenant Hosp., 190 F.3d 799, 807-08 (7th Cir.1999). Since 1987, courts faced with claims arising under § 1981 have borrowed the forum state's personal injury limitations period. See Goodman, 482 U.S. at 661, 107 S.Ct. 2617; Jones v. Merchants Nat'l Bank & Trust Co., 42 F.3d 1054, 1058 (7th Cir. 1994); Smith v. City of Chicago Heights, 951 F.2d 834, 836 n. 1 (7th Cir.1992).² For § 1981 claims arising in Indiana, courts have applied Indiana's two-year statute of limitations applicable to personal injury actions. See, e.g., Jones, 42 F.3d at 1058 (applying Ind.Code. § 34-1-2-2); Vore v. Indiana Bell Tel. Co., 32 F.3d 1161, 1163 (7th Cir.1994) (same); Coopwood v. Lake County Community Dev. Dep't, 932 F.2d 677, 678-79 (7th Cir.1991) (same); Smith v. CB Commercial Real Estate Group, Inc., 947 F.Supp. 1282, 1283 (S.D.Ind.1996) (same).³

Despite these familiar holdings, Hardin asserts that Indiana's two-year statute of limitations should give way to the four-year limitations period found in 28 U.S.C. § 1658. Our research discloses no Seventh Circuit case to adopt this approach; the only other district court in our circuit faced with this issue failed to reach it. See Jones v. R.R. Donnelly & Sons, 1999 WL 639180, at *2 n. 4 (N.D.Ill. Aug.17, 1999); cf. MCI Telecomms. Corp. v. Illinois Bell Tel. Co., No. 97-C-2225, 1998 WL 156674, at *4-*5 (N.D.Ill. Mar.31, 1998) (applying § 1658 to plaintiffs' claims arising under the Telecommunications Act of 1996). Indeed, review of caselaw from other circuit courts has located no decisions addressing the applicability of § 1658 to claims arising under § 1981, and only twelve district courts have dealt with the issue, a majority of which oppose Plaintiff's theory.⁴ After carefully considering the contentions of the parties and the holdings by other courts in similar cases, we adopt the majority view that § 1658 does not apply to claims arising under § 1981, even after the adoption of amendments to that statute in the Civil Rights Act of 1991. The appropriate limitations period for Hardin's claim thus remains at two years as provided by Indiana statute.

On December 1, 1990, Congress enacted 28 U.S.C. § 1658 providing that "[e]xcept as otherwise provided by law, a civil action arising under an Act of Congress enacted after the date of the enactment of this section may not be commenced later than 4 years after the cause of action arises." § 1658 (emphasis added). The language emphasized above could be read to apply to any congressional action, including amendments to previously existing statutes. Our examination of the legislative history of § 1658 indicates, however, such an interpretation is too broad. In enacting this new statute of limitations, Congress was addressing the then existing, and still current, practice by federal courts of borrowing state statutes of limitations for federal causes of action. See H.R.Rep. No. 101-734, at 24 (1990), reprinted in 1990 U.S.C.C.A.N. 6860, 6870. Despite these legislative concerns, § 1658 was not intended to apply to all subsequently enacted statutes; rather § 1658 was to address this problem by creating a four year, "fall-back statute of limitations, applicable to legislation enacted after the effective date of this Act, which creates a cause of action but is silent as to the applicable limitations period." Id. (emphasis added). We conclude, therefore, that the four-year limitation period, applies only to "claims-creating statutes." David Siegel, Practice Commentary to 28 U.S.C.A. § 1658 at 240 (1994). Accordingly, the courts addressing § 1658's applicability to § 1981 must focus on whether the Civil Rights Act of 1991, which effected certain changes to § 1981, was in that respect a "claim-creating" statute.

2. The impact of the Civil Rights Act of 1991 on § 1981.

As amended by the 1991 amendments, § 1981 contains three subsections: subsection (a) incorporates the original § 1981 language; subsection (b), a new provision, defines the term "make and enforce contracts" set out in § 1981(a) to include "the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship;" subsection (c) was added to ensure that the protection of rights found in § 1981(a) extends to private, as well as public contracting. The essential guarantees of § 1981(a) therefore have been clarified but in their essential terms remain unchanged by the 1991 amendments. These protections have existed since § 1981's original enactment in 1866, and provide the basis for plaintiffs' § 1981 claims. The two new subsections added to § 1981 — respectively, paragraphs (b) and (c) — merely define terms to rectify confusions that had arisen under caselaw and provide an enforcement mechanism for § 1981(a)'s protections. Accordingly, we conclude that § 1658 should...