This morning the Supreme Court issued its opinion in an important race-discrimination case. The justices unanimously ruled that a lawsuit brought under 42 U.S.C. § 1981, a part of the Civil Rights Act that prohibits racial discrimination in contracts, requires the plaintiff to show “but for” causation – that is, that the defendant would have made a different contracting decision were it not for the plaintiff’s race. The decision was a significant victory not only for Comcast, the defendant in the case, which had been sued for billions of dollars, but for the business community more broadly.
The case began several years ago, when Entertainment Studios Network, owned by African American entrepreneur Byron Allen, and the National Association of African American-Owned Media filed a lawsuit against Comcast in federal court in California. ESN and the NAAAM alleged that Comcast’s decision not to carry several television channels that ESN had offered to it was motivated by racial discrimination and therefore violated Section 1981. The district court threw out the case, but on appeal the U.S. Court of Appeals for the 9th Circuit allowed the lawsuit to go forward. The court of appeals held that ESN only needed to show that race was one “motivating factor” in Comcast’s decision not to carry the channels offered by ESN; ESN did not need to show that Comcast would not have turned ESN down if it were not for Allen’s race. Comcast went to the Supreme Court, which agreed last year to review its appeal.
In an opinion by Justice Neil Gorsuch, the court began by explaining that it is well settled that a plaintiff who is seeking relief for a defendant’s wrongful actions must show that he would not have been harmed were it not for the defendant’s unlawful conduct. What’s more, Gorsuch observed, courts assume that when Congress creates new causes of action, it does so against the background of this “ancient and simple ‘but for’ common law causation test.” In this case, Gorsuch reasoned, the text and history of Section 1981 indicate that the statute follows the general rule requiring “but for” causation, as do the Supreme Court’s cases. For example, Gorsuch noted, although Section 1981 does not specifically refer to causation, it guarantees the same rights as white citizens, which “directs our attention to the counterfactual—what would have happened if the plaintiff had been white?” and “fits naturally with the ordinary rule that a plaintiff must prove but-for causation.” Moreover, the provision that follows Section 1981, which bars racial discrimination in the sale and rental of property, “uses nearly identical language,” which the Supreme Court has interpreted as providing a cause of action when property rights are denied “because of color.”
Gorsuch and the court reject ESN’s efforts to rely on Title VII of the Civil Rights Act of 1964, which uses a “motivating factor” causation test. There is “not a shred of evidence” that Congress meant to use such a standard in Section 1981, Gorsuch stressed. To the contrary, at the same time that Congress added the “motivating factor” test to Title VII in 1991, it amended Section 1981 – but without adding the “motivating factor” test there as well.
Concluding that all “the traditional tools of statutory interpretation persuade us that § 1981 follows the usual rules, not any exception,” the court sent the case back to the 9th Circuit for it to take another look at ESN’s complaint in light of the more stringent “but for” causation rule.
Justice Ruth Bader Ginsburg filed a separate opinion, concurring in part and in the court’s judgment. She agreed with her colleagues that a plaintiff like ESN must plead and show that race was a “but for” cause of its injury. However, she wrote separately to reject an argument, advanced by Comcast, that the rest of the court declined to resolve: the idea that Section 1981 applies only to the final decision to enter into a contract, and not to the earlier stages of contract negotiations. Such a view, Ginsburg argued, would allow discrimination earlier in the contracting process – for example, by allowing a lender to require one reference for prospective white borrowers but five references for prospective black borrowers. “That view,” Ginsburg warned sternly, “cannot be squared with the statute.”
And in this case, Ginsburg continued, ESN contends that Comcast required it to perform “a series of tasks that served no purpose” but wasted hundreds of thousands of dollars in ESN’s money. If “race indeed accounts for Comcast’s conduct,” Ginsburg emphasized, “Comcast should not escape liability for injuries inflicted during the contract-formation process.” Because the Supreme Court left that issue for the lower courts to resolve, Ginsburg concluded, she joined the court’s opinion.
This post was originally published at Howe on the Court.