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Supreme Court Issues Unanimous Opinion Upholding But-For Causation in Section 1981 Discrimination Cases

The U.S. Supreme Court has issued a unanimous opinion holding that a plaintiff who sues for racial discrimination in contracting under 42 U.S.C. § 1981 bears the burden of showing that race was a but-for cause of the plaintiff’s injury throughout all stages of the litigation.

In Comcast Corp. v. National Association of African American-Owned Media, plaintiffs Entertainment Studios Network (ESN) and the National Association of African American-Owned Media sued Comcast after ESN—an African-American-owned television-network operator—sought unsuccessfully to contract with Comcast. Over years of negotiations, Comcast refused to carry ESN’s channels, citing lack of demand for ESN’s programming, bandwidth constraints and its preference for news and sports programming that ESN did not offer. ESN’s lawsuit pursued billions of dollars in damages and alleged that Comcast systematically disfavored African-American-owned media companies. ESN did not dispute, however, that Comcast had offered legitimate business reasons for refusing to carry its channels during negotiations. ESN instead contended that these reasons were merely pretextual and claimed that its programming was at least as popular as the programming of non-minority companies contracting with Comcast. ESN alleged that Comcast’s behavior violated Section 1981(a), which guarantees all persons the same right to make and enforce contracts “as is enjoyed by white citizens.”

Comcast moved to dismiss ESN’s complaint for failure to state a claim under Section 1981, arguing it failed to plausibly show that, but for racial animus, Comcast would have contracted with ESN. The U.S. District Court for the Central District of California agreed. Despite two opportunities to amend, ESN failed to establish plausibility under the but-for standard, and the district court entered a final judgment for Comcast. The Ninth Circuit reversed the dismissal and held that the district court used the wrong causation standard. Instead of establishing but-for causation, the Ninth Circuit held that the plaintiff must only plead facts plausibly showing that race played “some role” in the defendant’s decision-making process.

In an opinion penned by Justice Gorsuch, the Supreme Court reversed the Ninth Circuit’s decision. Resolving a circuit split, the Supreme Court held that but-for causation applies to Section 1981 claims. Justice Gorsuch rejected ESN’s argument that the “motivating factor” causation applicable to Title VII cases applies to Section 1981 cases. That argument had been rejected by the Supreme Court before (see, e.g., Gross v. FBL Fin. Servs., Inc., 557 U.S. 167 (2009)), and when the motivating factor test was added to Title VII through the Civil Rights Act of 1991, Congress also amended Section 1981 without mentioning “motivating factors.” Also incorrect was ESN’s contention that, even if but-for causation applied at trial, a lower “motivating factor” showing was sufficient to overcome a motion to dismiss at the pleadings stage. The statute provides no language suggesting that different standards could apply at different stages of a lawsuit.

In Johnson v. Roe Wig Express Agency, 421 U.S. 454, 459-60 (1975), the Supreme Court noted:

[I]t is well settled among the Federal Court of Appeals – and we now join them – that § 1981 affords a federal remedy against discrimination and private employment on the basis of race.

In Johnson, the Supreme Court highlighted the independence between § 1981 and Title VII, noting that the two statutes differ in their coverage aspects, jurisdictional prerequisites, procedures and available relief. Nonetheless, Section 1981 remains a meaningful statute in the employment discrimination concerns of private employers. This most recent decision highlights the appropriate standard to be applied in the context of Section 1981 cases.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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