PHILADELPHIA – A trio of judges from the U.S. Court of Appeals for the Third Circuit has remanded litigation from a Black couple who alleged they were the target of racial epithets during a Pep Boys visit to a District Court for further proceedings on whether or not the store’s conduct violated their contractual rights.
Third Circuit judges Thomas L. Ambro, Thomas M. Hardiman and Peter J. Phipps issued a split ruling on Aug. 13, deciding to uphold the denial of a directed verdict and new trial to plaintiffs Charlotte and Kyle Pinckney – while also vacating a U.S. District Court for the Eastern District of Pennsylvania order precluding the Pinckneys from proving an impairment of their contract rights, aside from a denial of service.
“The Pinckneys, a Black married couple, said they went to a Pep Boys store in Charleston, S.C. with a flat tire, they expected to pay a small fee to have their tire plugged and filled so they could get back on the road. Instead, after waiting several hours to have their car inspected, the Pep Boys manager tried to sell them four new tires even though the Pep Boys technician recommended only two,” Hardiman recounted.
“When Mr. Pinckney declined the new tires and again asked for just a plug, the manager responded, “I’m not doing s—t for you n—s.” The tire was plugged only after the Pinckneys pleaded with the technician, who asked the Pinckneys to ‘occupy’ the manager while he did the work for free.”
The Pinckneys sued Pep Boys under 42 U.S.C. Section 1981, a law passed after the Civil War, which prohibits racial discrimination in the making and enforcement of contracts.
The plaintiffs argued Pep Boys interfered with their right to ‘make and enforce contracts’ in two ways: They called the first a “hostile retail environment” theory and claimed the manager’s use of the “N-word” violated the statute.
Second, they claimed the Pep Boys manager anticipatorily breached a contract when he said, “I’m not doing s—t for you,” in violation of Section 1981’s prohibition on terminating a contract because of race.
“After the Pinckneys’ Section 1981 claim survived summary judgment, Pep Boys filed a ‘Motion to Preclude’ the Pinckneys from pursuing their hostile retail environment theory at trial. In that motion, Pep Boys argued retailers are liable under Section 1981 only if the customer was denied service. The District Court agreed with Pep Boys and issued an order precluding the Pinckneys from proceeding under the hostile retail environment theory and requiring the Pinckneys to prove they were denied service,” Hardiman said.
“The anticipatory breach theory was tried and submitted to the jury. After concluding the Pinckneys were not denied service, the jury returned a verdict in favor of Pep Boys. The Pinckneys moved for a directed verdict and for a new trial, under Rules 50 and 59 based on their anticipatory breach theory. The District Court denied those motions and entered judgment for Pep Boys. The Pinckneys appealed, arguing the District Court erred when it precluded their hostile retail environment theory and denied their Rule 50 4 and 59 motions.”
To prove liability under Section 1981, Hardiman said the Pinckneys needed to prove the presence of three elements: Racial minority status, intentional discrimination and an interference with their right to “make and enforce contracts” as defined in Section 1981(b).
As they had proven the first two beyond dispute, Hardiman said the case was predicated upon whether or not they showed Pep Boys violated their right to make and enforce contracts.
Despite arguments from both parties to the contrary, Hardiman added that Section 1981 prohibits race discrimination in the making and enforcement of contracts, but also that it protects more than contract formation and “does not support a cause of action for every instance of racial discrimination or hostility.”
“So racial discrimination is actionable under Section 1981 only when it interferes with one of the rights enumerated in the statute. This analysis will be fact and context dependent; it cannot be reduced to simple questions like ‘were plaintiffs denied service’ or ‘did they face racial hostility,” Hardiman stated.
“Perhaps because of the atextual way the parties framed their competing versions of the issues, the District Court erred by limiting the Pinckneys to just one way to show a violation of the statute (denial of service). So we will vacate the District Court’s March 28, 2019 order and remand the case so the District Court can consider whether Pep Boys deprived the Pinckneys of the right to make a contract when its manager called them the ‘N-word.”
Though the Pinckneys also challenged the denial of their motions for a directed verdict and new trial, Hardiman and his colleagues found in viewing the evidence in the light most favorable to Pep Boys, the jury had sufficient evidence to find that Pep Boys did not deny the Pinckneys service and that the District Court did not abuse its discretion in denying the motion for a new trial.
“The Pinckneys would have us interpret this as an order not to plug the tire. But the evidence at trial did not require such a conclusion, especially when the technician did plug the tire. It was the jury’s duty to decide whether the manager’s statement was a refusal to provide service or an order to the technician to fix the tire. The jury chose the latter, and the District Court did not err in allowing that decision to stand,” Hardiman said.
“For the reasons stated, we will affirm the District Court order denying the Pinckneys’ motions for a directed verdict and new trial. But we will vacate its order precluding the Pinckneys from proving an impairment of their contract rights apart from a denial of service, and we will remand for further proceedings consistent with this opinion.”
U.S. Court of Appeals for the Third Circuit case 19-3775
U.S. District Court for the Eastern District of Pennsylvania case 2:16-cv-05350
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com