Supreme Court Requires But-For Causation for Section 1981 Claims

Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

On March 23, 2020, the Supreme Court of the United States, in Comcast Corp. v. National Association of African-American Owned Media, ruled that a plaintiff who alleges race discrimination under 42 U.S.C. § 1981 must plead and has the ultimate burden of showing that race was a but-for cause of the plaintiff’s injury, and that burden remains constant over the life of the lawsuit.

The 9-0 opinion was authored by Justice Neil Gorsuch (Justice Ruth Bader Ginsburg filing an opinion concurring with the exception of one footnote, and concurring in the judgment).

Background

Entertainment Studios Network (ESN), an African-American owned television network operator, sought to have its channels carried by Comcast Corporation (Comcast). Comcast refused, citing lack of programming demand, bandwidth constraints, and a preference for programming not offered by ESN. ESN and the National Association of African American-Owned Media (collectively ESN) sued, alleging that Comcast’s behavior violated Section 1981, which guarantees “[a]ll persons … the same right … to make and enforce contracts … as is enjoyed by white citizens.”

The district court granted Comcast’s motion to dismiss the complaint for failing plausibly to show that, but for racial animus, Comcast would have contracted with ESN. The U.S. Court of Appeals for the Ninth Circuit reversed, holding that ESN needed only to plead facts plausibly showing that race played “some role” in the defendant’s decision-making process and that, under this standard, ESN had pleaded a viable claim.

The Supreme Court vacated the Ninth Circuit’s ruling and remanded for further proceedings to allow the Ninth Circuit to determine the sufficiency of ESN’s pleadings under the correct but-for causation standard.

The Impact on Employment Cases

The Comcast case, although not an employment law claim, directly affects the analysis of employment discrimination lawsuits. In employment lawsuits, plaintiffs often assert claims of race discrimination both under Section 1981 and Title VII of the Civil Rights Act of 1964. Title VII is the federal employment statute prohibiting discrimination based on all protected classes, while Section 1981 only prohibits discrimination based on race and is not limited to the employment context. Plaintiffs often assert race discrimination claims under Section 1981 because, unlike Title VII, it has a longer statute of limitations and there are no caps on a plaintiff’s damages.

Previously, federal courts generally applied the same burden of proof for race discrimination claims brought under Title VII and Section 1981, which is that the plaintiff only bears the burden of showing that race was a “motivating factor” in the defendant’s actions. However, according to the Comcast ruling, the standard applied in Title VII cases is no longer the model for determining Section 1981 claims. Rather, a Section 1981 plaintiff must now show, even at the pleadings stage, that race was the but-for cause of the injury, meaning the defendant would have acted differently if it were not for the plaintiff’s race. The Supreme Court explained the text of Section 1981 “suggests but-for causation: An ordinary English speaker would not say that a plaintiff did not enjoy ‘the same right’ to make contracts ‘as is enjoyed by white citizens’ if race was not a but-for cause affecting the plaintiff’s ability to contract. Nor does the text suggest that the test should be different in the face of a motion to dismiss.”

The ruling is a potential significant victory for corporations and employment defense attorneys, as it will be harder now for Section 1981 plaintiffs alleging race discrimination to prove their claims.

On a practical note, employers may want to review and revise affirmative defenses pled recently in Section 1981 cases to include the but-for causation standard. Employers may also want to review all new Section 1981 complaints with this standard in mind and actively seek dismissal based on a plaintiff’s failure to plead but-for causation or to establish the but-for causation standard.

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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