Thinket Ink Info. v. Sun Microsystems, Inc.

• Decision Date: 17 May 2004
• Docket Number: No. 02-16754.,02-16754.
• Citation: 368 F.3d 1053
• Parties: THINKET INK INFORMATION RESOURCES, INC., Plaintiff-Appellant, v. SUN MICROSYSTEMS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

368 F.3d 1053

THINKET INK INFORMATION RESOURCES, INC., Plaintiff-Appellant, v. SUN MICROSYSTEMS, INC., Defendant-Appellee.

No. 02-16754.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 2, 2003.

Filed May 17, 2004.

COPYRIGHT MATERIAL OMITTED

Raymond P. Bolanos, Redwood City, CA, for the appellant.

David Fallek; Alfred Pfeiffer, Jr., Neha Nissen, Bingham McCutchen LLP, San Francisco, CA, for the appellee.

Appeal from the United States District Court for the Northern District of California; Susan Yvonne Illston, District Judge, Presiding. D.C. No. CV-97-00300-SI.

Before: TASHIMA, THOMAS, and SILVERMAN, Circuit Judges.

THOMAS, Circuit Judge:

In this appeal, we consider the question, inter alia, of whether a corporation has standing to commence an action under 42 U.S.C. § 1981. We hold that if a corporation either suffers discrimination harm cognizable under § 1981, or has acquired an imputed racial identity, it is sufficiently within the statutory zone of interest to have prudential standing to bring an action under § 1981. We affirm the judgment of the district court in part, vacate in part, and remand.

I

Thinket Ink Information Resources, Inc. ("Thinket") is a minority-owned technology services contractor certified by the United States Small Business Administration ("SBA") as a firm owned and operated by socially and economically disadvantaged individuals, eligible to receive federal contracts under the SBA's "Section 8(a)" business development program. 15 U.S.C. § 637(a) (2000); 13 C.F.R. § 124. Each of Thinket's shareholders is an African-American, including plaintiff Ralph Jackson, who is the corporation's majority shareholder.

In June 1992, Thinket began providing Sun Microsystems, Inc. ("Sun") with systems support services at Sun's facility in Fremont, California, contracting through individual purchase orders. In an attempt to substantially increase its business with Sun, Thinket commenced a concerted effort in 1993 to become a supplier to Sun under a Master Service Agreement ("MSA"), which is a contract Sun offers to its preferred vendors. Sun characterizes its MSA arrangement as a form of a requirements contract, under which one party agrees to supply and the other party agrees to purchase all the specific goods or services that the other party may require during a certain period at an agreed price. According to Thinket's complaint, its application for an MSA was denied three times without explanation, despite Sun's alleged acknowledgment that Thinket's work was very good.

In December 1994, Thinket was successful in obtaining an MSA with Sun. The MSA at issue is titled "Master Services Agreement # 1477-1295" and provides in relevant part that:

Sun may, from time to time, by issuance of a purchase order request that Thinket provide to Sun the services of Thinket's employees on a temporary basis to perform work for Sun at such times and places and in such manner as Sun may designate.... The Services shall conform to the scope of work ... described in the purchase order(s) issued by Sun from time to time.

The MSA also provided for arbitration, specifically stating:

[a]ny and all disputes or controversies whether of law or fact of any nature whatsoever arising from or respecting this Agreement shall be decided by binding arbitration by the American Arbitration Association, (A.A.A.), in accordance with the Commercial rules and regulations of such Association.

Two additional contracts were entered into by the parties after they had entered into the MSA, namely: Services Agreement # 1461-0995 and Services Agreement # 1461-0696. These agreements do not contain the binding arbitration clause contained in the MSA but rather each contains the identical jurisdictional provision stating that:

The parties agree that the exclusive jurisdiction and venue of any action between the parties rising [sic] out of this Agreement, including disputes that may arise following termination of this Agreement, shall be the Superior Court of California for the County of Santa Clara, or the United States District Court for the Northern District of California, and each of the parties hereby submits itself to the exclusive jurisdiction and venue of such courts for purpose of such action.

Sun signed "Services Agreement # 1461-0995" on October 7, 1994; Thinket did not sign the agreement until March 24, 1995. In the interim, that contract was amended via a one-page document titled "Master Services Agreement # 1461-0995 Amendment" which was signed by Sun on March 15, 1995 and by Thinket on March 20, 1995. Although the words "Master Services Agreement" appear in the Amendment to 1461-0995, both the amendment and the original document (which does not contain those words) refer exclusively to specific services, unlike the MSA.

The relationship soured, and Thinket filed this action against Sun under various legal theories alleging that Sun had deliberately refused to contract with Thinket based solely on its status as an African-American owned business. Sun responded by filing a motion to dismiss under Fed.R.Civ.P. 12(b)(6).

In response, the district court held that Thinket's pre-MSA claims were time-barred. As to the claims arising out of the MSA, the district court stated:

The Court finds that each of the subsequent Service Agreements referred to by plaintiffs relates only to a single service order or deliverable to be provided by Thinket; they are not agreements which supersede or displace the original Master Services Agreement entered into by the parties.... The complaint makes no allegations that any particular contract for work was breached by Sun. Thus, [the Services Agreements] are not directly related to the claims made in plaintiffs' complaint.

With that finding, the district court compelled the arbitration of the claims arising under the MSA. The district court dismissed Jackson's claims for lack of standing, but granted him leave to amend. Thinket and Jackson sought permission to file a motion for reconsideration, which the district court denied. The district court granted Jackson additional time in which to file an amended complaint. However, he never did so, and the district court entered judgment against him.

Thinket appealed the order of dismissal, the reconsideration order, and the judgment. Sun filed a motion to dismiss the appeal on the ground that Thinket had not arbitrated its MSA-related claims. A panel of this Court then dismissed the appeal for lack of appellate jurisdiction. The case ultimately proceeded through arbitration, resulting in the eventual entry of a stipulated amended judgment in district court. Thinket now appeals from the amended judgment.

II

A threshold question is whether Thinket, as a corporation, has standing to assert discrimination claims under § 1981. "At the most general level, `[the standing] inquiry involves both constitutional limitations on federal-court jurisdiction and prudential limitations on its exercise.'" Pershing Park Villas Homeowners Ass'n v. United Pacific Ins. Co., 219 F.3d 895, 899 (9th Cir.2000) (quoting Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)). "Together, the constitutional and prudential components of standing ensure that plaintiffs possess `such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions.'" Oregon Advocacy Ctr. v. Mink, 322 F.3d 1101, 1109 (9th Cir.2003) (quoting Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962)).

"Constitutional standing concerns whether the plaintiff's personal stake in the lawsuit is sufficient to make out a concrete `case' or `controversy' to which the federal judicial power may extend under Article III, § 2." Pershing Park Villas, 219 F.3d at 899. "[T]o satisfy Article III's standing requirements, a plaintiff must show (1) it has suffered an `injury in fact' that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)).

There is no dispute that Thinket possesses constitutional standing. It alleges a concrete and particularized harm traceable to the defendant. If successful in its claims, its injury would be redressed by a damage award. Thus, Thinket satisfies the prerequisites of Article III standing.

In addition to the immutable requirements of Article III, "the federal judiciary has also adhered to a set of prudential principles that bear on the question of standing." Valley Forge Christian Coll. v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 474-75, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982). Among these prudential requirements is the requirement that "a plaintiff's grievance must arguably fall within the zone of interests protected or regulated by the statutory provision or constitutional guarantee invoked in the suit." Bennett v. Spear, 520 U.S. 154, 162, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997) (citing Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315 82 L.Ed.2d 556 (1984)). Thus, we must address whether Thinket's claim is within the zone of interests protected by § 1981.

The issue of whether corporations could assert § 1981 claims was cast into doubt by dictum in Village of Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977), in which Justice Powell observed that "as a corporation, [the plaintiff] has no racial identity and...