Source: cases/42usc1981/us-546-470-dominos-pizza-v-mcdonald.case
Case source: https://www.neochart.com/catalog/cases/us/volume_546/0470_01/index.html
Any claim brought under § 1981, therefore, must initially identify an impaired “contractual relationship,” § 1981(b), under which the plaintiff has rights.
McDonald’s complaint does identify a contractual relationship, the one between Domino’s and JWM. But it is fundamental corporation and agency law — indeed, it can be said to be the whole purpose of corporation and agency law — that the shareholder and contracting officer of a corporation has no rights and is exposed to no liability under the corporation’s contracts. McDonald now makes light of the law of corporations and of agency — arguing, for instance, that because he “negotiated, signed, performed, and sought to enforce the contract,” Domino’s was wrong to “insist that [the contract] somehow was not his ‘own.’ ” Brief for Respondent 4. This novel approach to the law contradicts McDonald’s own experience. Domino’s filed a proof of claim against JWM during its corporate bankruptcy; it did not proceed against McDonald personally. The corporate form and the rules of agency protected his personal assets, even though he “negotiated, signed, performed, and sought to enforce” contracts for JWM. The corporate form and the rules of agency similarly deny him rights under those contracts.
Any claim brought under § 1981, therefore, must initially identify an impaired “contractual relationship,” § 1981(b), under which the plaintiff has rights. Such a contractual relationship need not already exist, because § 1981 protects the would-be contractor along with those who already have made contracts. We made this clear in Runyon v. McCrary, 427 U. S. 160 (1976), which subjected defendants to liability under § 1981 when, for racially motivated reasons, they prevented individuals who “sought to enter into contractual relationships” from doing so, id., at 172 (emphasis added). We have never retreated from what should be obvious from reading the text of the statute: Section 1981 offers relief when racial discrimination blocks the creation of a contractual relationship, as well as when racial discrimination impairs an existing contractual relationship, so long as the plaintiff has or would have rights under the existing or proposed contractual relationship.
Nor has Congress indicated that we should. We held in Patterson that the prior version of § 1981 did “not apply to conduct which occurs after the formation of a contract and which does not interfere with the right to enforce established contract obligations.” 491 U. S., at 171. In 1991, Congress amended the statute, see 105 Stat. 1071, adding § 1981(b), which defines “make and enforce” to bring postformation conduct, including discriminatory termination, within the scope of § 1981. See Jones v. R. R. Donnelley & Sons Co., 541 U. S. 369, 383 (2004). But while Congress revised Patterson’s, exclusion of postformation conduct, it let stand Patterson’s focus upon contract obligations. In fact, it positively reinforced that element by including in the new § 1981(b) reference to a “contractual relationship.”
casedsl 1 case /us/546/0470-01 name Domino’s Pizza, Inc. v. McDonald cite 546 U.S. 470 (2006) court Supreme Court of the United States date 2006-02-22 url catalog/cases/us/volume_546/0470_01/index.html source ir/caselaw/us_546.jsonl sha1=1fd8723b1aeb06cd5c055f91acdf19b2b2d453ed chars=17353 law 42usc1981 role applied posture Review of dismissal for failure to state a claim; shareholder claims personal injuries from racial breach of corporation's contracts; Ninth Circuit reversed. result claimant-lost element own-contract : not-satisfied [law] variant corporate-separateness/shareholder-agent-contract-rights party McDonald personally theory Direct contract discrimination fact @307..457 [cuts-against] | Respondent John McDonald, a black man, is the sole shareholder and president of JWM Investments, Inc. (JWM), a corporation organized under Nevada law. fact @683..838 [cuts-against] | JWM and Domino’s entered into several contracts under which JWM was to construct four restaurants in the Las Vegas aréa, which would be leased to Domino’s. fact @2676..2986 [supports] | The gravamen of McDonald’s complaint was that Domino’s had broken its contracts with JWM because of racial animus toward McDonald, and that the breach had harmed McDonald personally by causing him “to suffer monetary damages and damages for pain and suffering, emotional distress, and humiliation.” Id., at 16. rule @6665..6820 | Any claim brought under § 1981, therefore, must initially identify an impaired “contractual relationship,” § 1981(b), under which the plaintiff has rights. held @9057..10154 | McDonald’s complaint does identify a contractual relationship, the one between Domino’s and JWM. But it is fundamental corporation and agency law — indeed, it can be said to be the whole purpose of corporation and agency law — that the shareholder and contracting officer of a corporation has no rights and is exposed to no liability under the corporation’s contracts. McDonald now makes light of the law of corporations and of agency — arguing, for instance, that because he “negotiated, signed, performed, and sought to enforce the contract,” Domino’s was wrong to “insist that [the contract] somehow was not his ‘own.’ ” Brief for Respondent 4. This novel approach to the law contradicts McDonald’s own experience. Domino’s filed a proof of claim against JWM during its corporate bankruptcy; it did not proceed against McDonald personally. The corporate form and the rules of agency protected his personal assets, even though he “negotiated, signed, performed, and sought to enforce” contracts for JWM. The corporate form and the rules of agency similarly deny him rights under those contracts. gloss The legal defect is absence of McDonald’s own contractual rights, not failure to allege racial animus or personal injury. Corporation and agent remain distinct despite his negotiating and signing the contracts. element contractual-impairment : not-reached role rule-announced variant contract-scope/formation-and-postformation rule @6665..7639 | Any claim brought under § 1981, therefore, must initially identify an impaired “contractual relationship,” § 1981(b), under which the plaintiff has rights. Such a contractual relationship need not already exist, because § 1981 protects the would-be contractor along with those who already have made contracts. We made this clear in Runyon v. McCrary, 427 U. S. 160 (1976), which subjected defendants to liability under § 1981 when, for racially motivated reasons, they prevented individuals who “sought to enter into contractual relationships” from doing so, id., at 172 (emphasis added). We have never retreated from what should be obvious from reading the text of the statute: Section 1981 offers relief when racial discrimination blocks the creation of a contractual relationship, as well as when racial discrimination impairs an existing contractual relationship, so long as the plaintiff has or would have rights under the existing or proposed contractual relationship. rule @8244..9056 | Nor has Congress indicated that we should. We held in Patterson that the prior version of § 1981 did “not apply to conduct which occurs after the formation of a contract and which does not interfere with the right to enforce established contract obligations.” 491 U. S., at 171. In 1991, Congress amended the statute, see 105 Stat. 1071, adding § 1981(b), which defines “make and enforce” to bring postformation conduct, including discriminatory termination, within the scope of § 1981. See Jones v. R. R. Donnelley & Sons Co., 541 U. S. 369, 383 (2004). But while Congress revised Patterson’s, exclusion of postformation conduct, it let stand Patterson’s focus upon contract obligations. In fact, it positively reinforced that element by including in the new § 1981(b) reference to a “contractual relationship.” gloss The Court explains the reach of existing and proposed contract rights and Congress’s displacement of Patterson. It makes no independent finding that racial discrimination impaired McDonald’s own rights. misfit The intended-third-party-beneficiary issue is expressly reserved at 15779..16583. Personal-injury allegations cannot bootstrap an own-contract finding. Racial intent and modern Comcast but-for causation are not adjudicated.