Ofori-Tenkorang v. American Intern. Group, Inc.

• Decision Date: 15 August 2006
• Docket Number: Docket No. 05-5272-cv.
• Citation: 460 F.3d 296
• Parties: John OFORI-TENKORANG, Plaintiff-Appellant, v. AMERICAN INTERNATIONAL GROUP, INC., AIG Financial Products Corp., AIG International, Inc. and AIG Trading Corp., Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

460 F.3d 296

John OFORI-TENKORANG, Plaintiff-Appellant, v. AMERICAN INTERNATIONAL GROUP, INC., AIG Financial Products Corp., AIG International, Inc. and AIG Trading Corp., Defendants-Appellees.

Docket No. 05-5272-cv.

United States Court of Appeals, Second Circuit.

Argued: May 9, 2006.

Decided: August 15, 2006.

Anne C. Vladeck (Rebecca J. Osborne, on the brief), Vladeck, Waldman, Elias & Engelhard, P.C., New York, NY, for Plaintif-Appellant.

P. Kevin Connelly, Connelly Sheehan Harris, Chicago, IL (Kristine Aubin, Connelly Sheehan Harris, Chicago, IL and Marc E. Bernstein, New York, NY, on the brief), for Defendants-Appellees.

Before WINTER, CABRANES and RAGGI, Circuit Judges.

JOSÉ A. CABRANES, Circuit Judge.

The issue presented is whether the Civil Rights Act of 1871, as amended, 42 U.S.C. § 1981 ("Section 1981"),¹ may be applied to prohibit an employer's allegedly discriminatory conduct arising from the overseas assignment of plaintiff, a non-citizen. We review here the dismissal by the United States District Court for the Southern District of New York (Denise Cote, Judge) of claims against American International Group, Inc., AIG International, Inc., AIG Financial Products Corp., and AIG Trading Group, Inc. (collectively "AIG" or "defendants") of unlawful discrimination on the basis of race brought under Section 1981. Presumably because other discrimination statutes reaching the employment relationship, such as Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. ("Title VII"), limit pertinent aspects of their coverage to U.S. citizens,² plaintiff's federal law claims rest entirely on Section 1981, which protects "persons." But unlike those other civil rights statutes, which have been amended deliberately to reach conduct occurring outside the United States,³ Section 1981 protects only "persons within the jurisdiction of the United States," 42 U.S.C. § 1981(a).

Based on the text and legislative history of Section 1981, we conclude, as a matter of first impression in this Circuit, that Congress has not extended the coverage of Section 1981 beyond the territorial jurisdiction of the United States. Accordingly, we affirm the holding of the District Court dismissing plaintiff's Section 1981 claims to the extent that those claims arise from alleged discriminatory conduct that occurred while plaintiff was living and working in South Africa. We conclude, however, that the District Court erred in dismissing plaintiff's claims insofar as he alleges discriminatory conduct that occurred while he was in the United States. We therefore vacate the judgment of the District Court insofar as it dismissed those claims, and we remand the cause for further proceedings consistent with this opinion.

I. BACKGROUND

We set forth the facts as alleged by plaintiff, mindful that on a motion to dismiss we accept all factual allegations as true and draw all reasonable inferences in plaintiff's favor. See Twombly v. Bell Atl. Corp., 425 F.3d 99, 106 (2d Cir.2005).

Plaintiff-appellant John Ofori-Tenkorang ("Ofori") is a black man who has been employed by AIG and who maintains his permanent residence in Connecticut. Ofori, a non-citizen, began working in AIG's Connecticut offices in September 1996 as a Research Analyst. "By September 2003, Ofori held the position of Structurer and Marketer in AIG's Financial Services Division." Compl. ¶ 8. At that time, senior AIG executives based in Connecticut and London decided to reassign Ofori to work on a temporary basis in one of the company's offices in South Africa. According to a "Confirmation of Assignment Letter" signed by Ofori on September, 2, 2003, South Africa was designated as Ofori's "host country," while the United States remained his "home country." AIG promised, among other things, to (a) pay Ofori's salary in U.S. dollars, which were to be directly deposited into Ofori's bank account in Connecticut, (b) cover his housing and transportation costs in South Africa, (c) prepare all necessary paperwork pertaining to his South African employment, and (d) reimburse him for certain travel expenses to and from the United States. Id. ¶¶ 10-12.

Ofori alleges that before and after his arrival in South Africa he was singled out for discriminatory treatment on account of his race. Specifically, Ofori asserts that before he left the United States, AIG personnel decided to send him to South Africa and made arrangements with respect to his work environment in South Africa. Ofori's workplace in South Africa was allegedly situated in an office with a white colleague of questionable ethics, apart from the office where a majority of his white, soon-to-be colleagues worked. See id. ¶¶ 16-17. Upon his arrival, Ofori allegedly was subjected to greater scrutiny than his white colleagues when attempting to obtain reimbursement for business-related expenses, see id. ¶ 18, blamed for poor business performance that was unrelated to his work, see id. ¶ 20, threatened with termination after only a single poor performance review, see id. ¶ 23, given a smaller bonus than similarly-situated colleagues, see id. ¶ 24, wrongfully accused of stealing funds from the South African businessman with whom he shared an office, see id. ¶¶ 25-26, improperly suspended from work, see id. ¶¶ 27-31, and required to provide more documentation than his white colleagues to justify his request for medical leave, see id. ¶¶ 36, 39.

In March 2005, Ofori brought an action in the United States District Court for the Southern District of New York against AIG and its subsidiaries, alleging that he was (1) subjected to discrimination and retaliated against on the basis of his race, in violation of 42 U.S.C. § 1981 and New York State Human Rights Law, N.Y. Exec. Law § 290 et seq. ("NYHRL"), and (2) subsequently defamed by AIG. Defendants-appellees moved to dismiss Ofori's claims under Federal Rule of Civil Procedure 12(b)(6), arguing that despite Ofori's many contacts with the United States, neither Section 1981 nor the NYHRL applies to discriminatory conduct that took place outside the territory of the United States.

In an Opinion and Order dated September 20, 2005, the District Court concluded that "nothing in the text, structure, or history of Section 1981 indicates that Congress intended it to apply to events outside the territorial jurisdiction of the United States, and it is therefore presumed that Congress did not intend Section 1981 to apply extraterritorially." See Ofori-Tenkorang v. Am. Int'l Group, Inc., No. 05 Civ. 2921, 2005 WL 2280211, at *6 (S.D.N.Y. Sept. 20, 2005). In reaching this conclusion, the District Court adhered to the Supreme Court's teaching in EEOC v. Arabian American Oil Company (Aramco), 499 U.S. 244, 111 S.Ct. 1227, 113 L.Ed.2d 274 (1991), that courts must "look to see whether language in the relevant Act gives any indication of a congressional purpose to extend its coverage beyond places over which the United States has sovereignty or has some measure of legislative control," and must adopt the presumption that "legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States." Ofori-Tenkorang, 2005 WL 2280211, at *5 (quoting Aramco, 449 U.S. at 248, 111 S.Ct. 1227).

The District Court specifically rejected Ofori's contention that his Section 1981 claims should survive, notwithstanding that most of the allegedly discriminatory acts occurred in South Africa, because the "center of gravity" of his employment relationship with AIG was supposedly in the United States. Noting that in similar contexts "[w]here statutes do not apply extraterritorially, courts have rejected the application of a `balancing of contacts' test to permit U.S. jurisdiction over foreign actions with substantial U.S. contacts," the District Court concluded that "the fact that the alleged discrimination occurred outside the territorial jurisdiction of the United States is fatal to [Ofori's] claim[s]" under Section 1981. Id. at *6-7.

Following its decision to dismiss Ofori's Section 1981 claims with prejudice, the District Court declined to exercise supplemental jurisdiction over Ofori's remaining state law claims. See 28 U.S.C. § 1367(c)(3) (permitting a district court to decline to exercise supplemental jurisdiction where "the district court has dismissed all claims over which it has original jurisdiction"). Those claims were dismissed without prejudice to their revival in state court.

II. DISCUSSION

We review de novo a district court's decision to grant a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), "accepting as true all facts alleged in the complaint and drawing all inferences in favor of the plaintiff." Twombly, 425 F.3d at 106. "[A] complaint should not be dismissed for failure to state a claim 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).

A. Section 1981 and Employment Discrimination

Section 1981 sets forth a remedy for employment discrimination that is independent of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. See Johnson v. Ry. Express Agency, 421 U.S. 454, 459-60, 95 S.Ct. 1716, 44 L.Ed.2d 295 (1975). Specifically, Section 1981 provides that "[a]ll 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." 42 U.S.C. § 1981(a) (reproduced ante note 1). In Patterson v. McLean Credit Union, 491 U.S. 164, 174-78, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989), the Supreme Court read the then-applicable version of Section 1981 to "prohibit[ ] racial discrimination in the making and enforcement of private contracts," id. at 171, 109 S.Ct. 2363 (internal quotation marks omitted), but not to apply to "conduct which occurs...