Vance v. Southern Bell Tel. & Tel. Co.

• Decision Date: 05 February 1993
• Docket Number: No. 90-3559,90-3559
• Citation: 983 F.2d 1573
• Parties: 61 Fair Empl.Prac.Cas. (BNA) 925, 60 Empl. Prac. Dec. P 42,049 Mary Ann VANCE, Plaintiff-Appellee, Cross-Appellant, v. SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY, a Georgia Corporation, Defendant-Appellant, Cross-Appellee, Joyce Foskey, et al., Defendants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1573

983 F.2d 1573

61 Fair Empl.Prac.Cas. (BNA) 925,

60 Empl. Prac. Dec. P 42,049

Mary Ann VANCE, Plaintiff-Appellee, Cross-Appellant, v. SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY, a Georgia Corporation, Defendant-Appellant, Cross-Appellee Joyce Foskey, et al., Defendants.

No. 90-3559.

United States Court of Appeals Eleventh Circuit.

Feb. 5, 1993.

Dana G. Bradford, II, Lee S. Haramis, Baumer, Bradford & Walters, P.A., Jacksonville, FL, for appellant.

Robert L. Wiggins, Jr., Birmingham, AL, Scott Fortune, Atlantic Beach, FL, for appellee.

Appeals from the United States District Court for the Middle District of Florida.

Before TJOFLAT, Chief Judge, FAY and EDMONDSON, Circuit Judges.

EDMONDSON, Circuit Judge:

Mary Ann Vance won a jury verdict on her claim that Southern Bell Telephone and Telegraph Company ("Southern Bell") violated her rights under 42 U.S.C. § 1981. Southern Bell appeals the denial of its motions for summary judgment, directed verdict and judgment notwithstanding the verdict on Vance's section 1981 claim. We reverse.

I. Background

A. The First Trial: Vance I

This case is detailed in Vance v. Southern Bell Tel. and Tel. Co., 863 F.2d 1503 (11th Cir.1989) ("Vance I "). To review, Mary Ann Vance in 1986 brought an action under 42 U.S.C. § 1981 ¹ against her former employer, Southern Bell. Vance said that various acts of racial harassment had injured her and driven her from her job. ² A jury returned a verdict for Vance on her racial harassment claim and awarded multi-million dollar damages, but the district court granted Southern Bell's motion for JNOV or a new trial. Vance v. Southern Bell Tel. and Tel. Co., 672 F.Supp. 1408 (M.D.Fla.1987). On appeal, we reversed the JNOV, but allowed a new trial. 863 F.2d at 1506. The Vance I panel decided that the evidence was sufficient to hold Southern Bell liable for racial harassment, but that the size of the jury's award was "outside the realm of reasonableness" given the evidence. Id. at 1516. This appeal arises from the retrial of the action.

B. The Second Trial

After we decided Vance I, the Supreme Court decided Patterson v. McLean Credit Union, 491 U.S. 164, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989). ³ In Patterson the Court held that racial harassment claims "[are] not actionable under § 1981, which covers only conduct at the initial formation of the contract and conduct which impairs the right to enforce contract obligations through legal process." 491 U.S. at 179, 109 S.Ct. at 2374. Relying on Patterson, Southern Bell moved for summary judgment. The district court acknowledged the "inescapable conclusion that the holding in Patterson would preclude maintenance of this suit if it were filed today," but refused to apply the Patterson holding retroactively based on the equitable considerations outlined by the Supreme Court in Chevron Oil v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971). ⁴

This case then went to a jury trial in April 1990. The jury awarded Vance about a million dollars in compensatory and punitive damages on her section 1981 claim. The district court entered judgment for Vance and denied Southern Bell's renewed motions for directed verdict, JNOV or a new trial. In June 1990, Southern Bell appealed the section 1981 rulings.

In November 1991, while this appeal was pending, Congress enacted the Civil Rights Act of 1991, which, among other things, enlarges the range of behavior subject to section 1981 to include the "performance, modification, and termination" of contracts. ⁵ Under Patterson, plaintiffs alleging most kinds of post-hiring discrimination were limited to the set of equitable remedies provided under Title VII. ⁶ But under the Civil Rights Act of 1991, such plaintiffs may sue under section 1981 for damages.

II. Issues Presented

We must decide two related issues: First, whether the district court erred by refusing to apply Patterson retroactively; and second, whether the Civil Rights Act of 1991 overrules Patterson retroactively. We hold that the Supreme Court's decision in Patterson v. McLean Credit Union, which interpreted 42 U.S.C. § 1981 as it existed during all times material to this action, applies retroactively and barred Vance's section 1981 claim. We further hold that the Civil Rights Act of 1991, which extended the scope of section 1981 to performance and termination of contracts, applies prospectively and, therefore, has no bearing on Vance's bar under Patterson. ⁷

III. The 42 U.S.C. § 1981 Claim

A. The Nature of Vance's 42 U.S.C. § 1981 Claim

Vance claims that Southern Bell discriminated against her during her employment at Southern Bell's Western Way service facility between August 1984 and October 1985. Supra note 2. Vance further says that by these "cumulative actions," Southern Bell effectively "terminated" her employment. R.Vol. 6-208, p 46. We understand Vance's claim to state three separate theories of liability: racial harassment, discriminatory denial of a transfer, and constructive discharge.

Vance's allegations describe the kinds of "postformation ... incidents relating to the conditions of employment" that were unactionable under section 1981. Patterson, 491 U.S. at 179, 109 S.Ct. at 2374. Vance's allegations about her initial months of work at the Western Way facility describe the same kind of behavior--post-hiring racial harassment--that the Court held to be outside the scope of section 1981 in Patterson. Id. 491 U.S. at 177, 109 S.Ct. at 2373. In a similar way, Vance's claim that Southern Bell wrongfully refused to transfer her to a different assignment within the company is unactionable under section 1981 because such "lateral transfers [do] not rise 'to the level of an opportunity for a new and distinct relation between the employee and the employer.' " Jones v. Firestone Tire and Rubber Co., 977 F.2d 527 (11th Cir.1992) (Tjoflat, C.J.), quoting Patterson, 491 U.S. at 185, 109 S.Ct. at 2377. And it is settled in this circuit that, under the Patterson rule, section 1981 provides no relief on claims of discriminatory discharge. E.g., Pearson v. Macon-Bibb Co. Hosp. Auth., 952 F.2d 1274, 1277-78 (11th Cir.1992); Weaver v. Casa Gallardo, 922 F.2d 1515, 1519-20 (11th Cir.1991). Thus we conclude that Vance's section 1981 claim is among the kinds of post-hiring claims that Patterson bars. ⁸

B. Retroactive Application of Patterson v. McLean Credit Union

The district court declined to apply Patterson retroactively based on the pragmatic and equitable considerations set out in Chevron Oil v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971). We think the Supreme Court's recent decision in James B. Beam Distilling Co. v. Georgia, --- U.S. ----, 111 S.Ct. 2439, 115 L.Ed.2d 481 (1991), forecloses Chevron Oil analysis in this case and commands retroactive application of Patterson.

In Beam, the Supreme Court held that if the court applies a rule to the parties in the case in which the rule is announced, the rule must be applied retroactively to cases pending at the time the rule issues. "[T]he question is whether it is error to refuse to apply a rule of federal law retroactively after the case announcing the rule has already done so. We hold that it is, principles of equity and stare decisis here prevailing over any claim based on a Chevron Oil analysis." Beam, --- U.S. at ----, 111 S.Ct. at 2446. Under Beam, the dispositive question is whether the Patterson court applied its interpretation of section 1981's "make and enforce" language to the parties in the Patterson case. See Lufkin v. McCallum, 956 F.2d 1104, 1106-07 (11th Cir.1992) (applying Beam ).

The Court in Patterson did apply its interpretation of section 1981 to the litigants there. See Patterson, 491 U.S. at 177-80, 189, 109 S.Ct. at 2373-74, 2379 (affirming court of appeals' dismissal of racial harassment claim as unactionable under section 1981). So, even assuming for the sake of argument that Patterson did announce a new rule (as opposed to declaring what section 1981 always meant), that rule would apply to all cases then pending, such as this one.

Based on the principles announced in Beam, we conclude that the district court erred in refusing to apply Patterson v. McLean Credit Union to dismiss the section 1981 claim in this case.

C. Prospectivity of the Civil Rights Act of 1991

The remaining question is whether the Civil Rights Act of 1991 applies retroactively to overrule Patterson to save Vance's section 1981 claim. One effect of the 1991 Act, in cases where it applies, is to make the rule in Patterson obsolete by statutorily adding certain categories of post-hiring discrimination to the list of practices liable to suit under section 1981. In Baynes v. AT & T Technologies, Inc., 976 F.2d 1370 (11th Cir.1992), we decided that section 101 has no retroactive application in cases in which entry of judgment predates the effective date of the Act. ⁹ Because judgment in this case was entered in May 1990, before the effective date of the Act, ¹⁰ the Act does not apply retroactively to Vance's action. ¹¹

IV. Conclusion

The district court's order denying Southern Bell's motion for summary judgment on Count I, the 42 U.S.C. § 1981 claim, is REVERSED.

FAY, Circuit Judge, concurring in part and dissenting in part:

Part I

I reluctantly concur with the majority that the existing case law compels both retroactive application of Patterson ¹ and prospective application of the Civil Rights Act of 1991, thus eliminating Vance's § 1981 claim. The law of this circuit was settled on these two issues in Baynes v. AT & T Technologies, Inc., 976 F.2d 1370 (11th Cir.1992) (per curiam). ² Nevertheless, I cannot help but feel that the application of the rules articulated in Baynes lead, in Mary Ann Vance's case, to a manifest injustice. Two all-white juries, on two separate occasions, have heard all of the evidence and concluded that Southern Bell discriminated against Mrs. Vance and awarded her multi-million dollar...