PATTERSON v. MCLEAN CREDIT UNION

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ORAL ARGUMENT OF PENDA D. HAIR, ESQ. ON BEHALF OF PETITIONER

Chief Justice William H. Rehnquist: We'll hear argument next in number 86-107, Brenda Patterson versus McLean Credit Union.

Ms. Hair, you may proceed whenever you're ready.

Ms Hair: Mr. Chief Justice, and may it please the Court.

We seek reversal of two rulings concerning the scope and application of Title 42 United States Code Section 1981.

Section 1981 guarantees to all persons within the jurisdiction of the United States the same right to make and enforce contracts as is enjoyed by white citizens.

The first issue presented is whether an employer that intentionally subjects a black worker on account of her race to onerous and discriminatory terms and conditions of employment violates Section 1981.

The second issue is whether a black employee who establishes that she was denied a promotion because of her race must additionally affirmatively prove that she was more qualified than the white worker who received the promotion in order to hold her employer liable for promotion discrimination under Section 1981.

In this case, unlike many cases of employment discrimination, the plaintiff presented extensive direct evidence that her employer engaged in blatant intentional discrimination on the basis of race.

According to the evidence, the President and General Manager of McLean Credit Union stated that black workers are slower by nature than white workers.

And he stated that he did not want to hire a black worker because they cause problems.

And there were numerous instances of racial remarks and race-based conduct that were introduced into the record including an admission by one of the Company witnesses that policy of the President was not to hire black workers.

Brenda Patterson was at first the only black worker at McLean Credit Union and later one of only two black workers and she was the victim of racial discrimination during her ten years of employment under the management of the president and general manager, Robert Stevenson.

Patterson filed suit charging the credit union with intentional discrimination in the terms and conditions of her employment and with promotion discrimination.

The District Court dismissed the claim of discrimination in the terms and conditions of employment, and the Court of Appeals affirmed.

The Fourth Circuit concluded that Section 1981 prohibits discrimination only with respect to hiring, firing and promotion.

On the promotion claim, the District Court instructed the jury that the plaintiff had the burden of proving both that she was denied the promotion because of her race, and that she was more qualified than the white employee who received the promotion.

And the Court of Appeals affirmed this jury instruction.

With regard to the scope of Section 1981, under the rule of law adopted by the Fourth Circuit, protection under Section 1981 is afforded only against refusals to enter into a contract or continue in a contractual relationship.

Under that rule of law, a black worker can get a job but the black worker can be forced to pay a very high price for that job in loss of dignity.

The employer can say to that worker, we'll hire you but only if you submit to conditions of employment in which you are humiliated and demeaned because of your race.

It is our position that that type of condition of employment is exactly the badge of inferiority that the Thirteenth Amendment and Section 1981 were designed to prohibit.

It seems obvious that a black worker who is forced to pay the price of stigma and humiliation in order to be able to perform the contract that she has a right to enter into has not been afforded the same right to make and enforce a contract.

The black worker's exercise of her right to make and enforce a contract has been burdened because of her race.

Unidentified Justice: Well, I don't think that's crystal clear, Ms. Hair, that the consequences like you're talking about, bad as they may be, necessarily implicate the right to make or enforce a contract.

That certainly isn't an inclusive term.

Ms Hair: Mr. Justice Rehnquist, I would submit that the right to make and enforce a contract has to include the right to perform that contract free from racial discrimination.

If the right to make and enforce a contract is going to have any meaning, it must include the right not to be burdened in the exercise of your right to make and enforce a contract--

Unidentified Justice: And so you suggest then that there could have been a suit by the employee in a State court to enforce the employment contract and get an injunction against this sort of harassment based on the contract?

Ms Hair: --No, Justice White.

That is not my position.

My position is that it doesn't matter whether the employee, the worker who is racially harassed--

Unidentified Justice: Well, do you think that suit would fail?

Ms Hair: --In North Carolina, I believe that Mrs. Patterson would not have been able to stop the harassment in State Court under State contract law.

Unidentified Justice: Because it was not a provision of the contract, I take it?

Ms Hair: That's right.

Because she was an at-will employee.

She could be terminated under North Carolina law for any reason whatsoever including the bad faith reason.

Unidentified Justice: Well, now that would be a problem with both whites and blacks, I suppose.

And so if she couldn't be protected against racial harassment based on the contract, why is 1981 violated?

Ms Hair: Because 1981 is not concerned with what is a contract.

1981 is concerned by what is meant by the phrase, the same right to make and enforce a contract.

And that's a Federal statute that prohibits discrimination.

And it prohibits more than discrimination in the words that are written into the contract.

It prohibits discrimination in the process of making the contract.

For example, if the employer had imposed conditions on a black worker that were not imposed upon a white worker as a condition of making the contract, that would violate Section 1981.

And in this case, Mrs. Patterson, because she was an at-will employee was essentially making a new contract every day that she went to work.

Unidentified Justice: Well, supposing, Ms. Hair, that an employer hires a black person for $50,000 and the black person later comes in and says, well, if I'd been white, they would have paid me $55,000, so they violated 1981.

Do you think if the black employee can prove that, that's a cause of action under 1981?

Ms Hair: Yes, I do, Mr. Justice Rehnquist.

It's intentional racial discrimination in pay.

Unidentified Justice: So 1981 really covers everything that Title VII does?

Ms Hair: Practically I think that's probably correct because Section 1981 guarantees the same right to make and enforce a contract.

And my position is that when the exercise of that right is burdened by racial discrimination, the same right has not been afforded.

Unidentified Justice: In this case is it discrimination in the making of the contract that you're complaining about?

Ms Hair: I believe that it's discrimination in the making of the contract and in the enforcing of the contract.

Unidentified Justice: In what respect?

Ms Hair: In the making of the contract because Mrs. Patterson is an at-will employee under North Carolina law and everyday that she goes to work, she makes a new contract.

And in order to make that contract, she has to endure conditions of employment that are not required of a white worker.

It's the same as if the employer told her at the time that she showed up to apply for a job, we won't give you a job unless you stand in front of our factory for an hour holding a sign saying, I am inferior.

And that was not required of white workers.

That's not the same right to make a contract.

And by demeaning Mrs. Patterson, by making her dust and sweep the office,--

Unidentified Justice: Well, I suppose you'd make the same argument if that was a contract for six months, an employment contract for six months?

Ms Hair: --I think ultimately it doesn't make any difference.

In that case, if there were a fixed term of contract so that she was not making a new contract everyday, and I would still suggest that because her right to perform the contract is burdened, that she does not have the same right to make and enforce the contract as the white worker, because she is being encouraged not to enforce her contract and receive the benefits of her contract, but to cancel the contract.

That's what the racial discrimination in terms and conditions does.

It encourages cancelling the contract and not obtaining the benefits of the contract.

Unidentified Justice: Well, I mean, that's a question of proof, I would suppose, isn't it?

I mean, you're not asserting that you had to prove that the racial discrimination was of such force and effect as to make it impossible for her to perform her job, thereby causing her to break the contract.

Ms Hair: No.

It is not our position that she must prove constructive discharge.

It's our position that any conduct that's intentional and that's on the basis of race will affect that employee as to whether they want to continue on the job.

It may not be so bad that they actually quit, but it certainly is burdening the exercise of their right.

Unidentified Justice: What right?

It has to burden the right to either make or enforce a contract, right?

Either make or enforce.

Now, your example of the person with the sign is not really accurate.

That isn't what happened here.

If you said, before I will give you a job, you must stand outside in front for an hour with a sign that says, I'm inferior, there you are burdening the making of a contract.

But what happens here is, you give the person the job and after the job, you are making the person hold a sign that says, I am inferior.

Now, if that is so burdensome as to cause the worker to be unable to perform and therefore cause the worker to break the contract, then you're interfering with the right to enforce it, I suppose.

But I don't see how, if it doesn't rise to that level, I don't see how it burdens her right to either make or to enforce the contract.

Ms Hair: Well, with Mrs. Patterson, because she is an at-will employee and she makes the contract every day, I would contend that she is in exactly the same position as the person who is told to hold the sign for an hour before they will be hired.

But even assuming that we're dealing with a person that had a fixed contract, because it has the impact on that person of treating them differently and discouraging them, making them think about whether they want to continue, it doesn't actually have to cause them to quit the job.

It discourages them in enforcing the contract and therefore they have not been afforded the same right to enforce their contract.

There doesn't have to be an absolute barrier against enforcement of the contract which is what constructive discharge would be.

It's just a violation of the same right to enforce the contract.

She has not been afforded the same right to carry out that contract, enforce the contract, and enjoy the benefits of that contract as the white worker.

Unidentified Justice: Ms. Hair, I take it the Solicitor General supports reversal here, but makes an effort to link the theory to the language of Section 1981 in referring, as has been suggested by other Justices this morning, the the making and enforcement.

And as I understand it, the SG would say if there's an implied covenant under State law of good faith and fair dealing, that can be relied upon to show that somehow she was prevented or hindered in her performance under the contract, that that would support reversal.

Ms Hair: The Solicitor General, as I understand his position, comes to the conclusion, as does the Fourth Circuit, that Section 1981 directly protects only the right to enter into a contract, regardless of the conditions of employment after the contract.

Unidentified Justice: Well, I didn't understand it that way, since they refer and rely on the implied obligation of good faith and fair dealing in the enforcement of it.

Ms Hair: Yes, Justice O'Connor, When I said, directly, I meant without looking at State law.

The Solicitor General then says, we can look at State law and if State law gives a breach of contract remedy to a person like Mrs. Patterson, that would be read into and enforceable--

Unidentified Justice: And express or implied.

Ms Hair: --Express or implied, that would be read into and enforceable under Section 1981.

Again I believe that the Solicitor General focuses on the wrong issue.

I would agree that it's appropriate to look to common law to decide what is a contract.

But we have a Federal statute that protects the same right to make and enforce a contract.

And the Solicitor General, by limiting that right only to terms that are read into the contract under State law, does not give effect to the Federal principle of equality that's set out in that language, same right to make enforce.

Unidentified Justice: Well, it does see, though, to at least address itself more to the context and language of the Statute.

Ms Hair: Well, when you say the context of the Statute, what the Solicitor General's approach would do if it had been accepted in 1866 is that it would have incorporated the black codes into the contracts of black workers.

And there is no indication that Congress when it was acting in 1866 wanted to limit the coverage of Section 1981 to what State law provided.

In fact, the indication is to the contrary that Congress was expressly concerned with overruling the black codes which limited and put onerous conditions on the black worker's ability to enter into contracts.

And if there's any doubt about--

Unidentified Justice: I don't understand why that follows from the Solicitor's position.

You were saying that if a State has a law that impacts explicitly on racial minorities that this law can be incorporated into the contract without violating 1981?

Ms Hair: --What the Solicitor General said, as I understand it, is that you look to State law to determine what rights are protected under Section 1981.

And my position is that you look to Federal law.

That this is a Federal statute, an equality statute, and that Congress explicitly did not want to look to State law when it enacted Section 1981; it wanted to overturn the black codes.

Unidentified Justice: Well, there's a difference, isn't there, between State laws that differentially impact on racial minorities and those that are neutral.

The covenant of good faith is a neutral term.

Ms Hair: That's true but there is absolutely no indication that Congress wanted State law to govern the scope of Section 1981.

And let me say with respect to the covenant of fair dealing, that concept really doesn't provide any additional protection beyond what the Fourth Circuit would have provided in covering absolute refusals to enter into contracts.

Because in North Carolina, and in all but four States in the United States, where there is at-will employment, the covenant of good faith and fair dealing simply does not apply to the worker.

The employer has the right to fire the worker, except in four States, for any reason whatsoever, including bad faith, and therefore that employer has the right to harass that worker until she quits.

And the only possible situation under which the Solicitor General's theory would apply is a situation where the worker could quit and claim constructive discharge, but does not quit, stays on the job and instead sues under Section 1981.

Unidentified Justice: That would be protected by Title VII, wouldn't she?

Ms Hair: The worker would be protected by Title VII, if Title VII covers her employer.

But the Court in Johnson v. Railway Express made very clear that the fact that Title VII provides a remedy does not mean that Congress wanted to undo any of the remedies that were provided by earlier Civil Rights Acts.

Unidentified Justice: That's perfectly true but the fact that Title VII covers a lot of this perhaps would suggest to us that we not strain to develop an independent body of Federal contract law governing the terms of contracts.

Ms Hair: I would suggest that it's not an independent body of Federal contract law.

It's a Federal equality law, a Federal antidiscrimination law, and in this case, the type of conduct that Mrs. Patterson complains of, while actionable under Title VII, Title VII would not provide an adequate remedy because Title VII does not provide compensatory damages or punitive damages.

And unless the employee quits her job, unless the conduct is so severe that she quits her job, she's not going to have a significant back pay claim because she's still on the job.

So the only way that employees are going to have an incentive to sue to stop this kind of conduct is if Section 1981 covers it.

And the remedies that Congress wanted to make available to supplement Title VII are made available under Section 1981.

Unidentified Justice: Ms. Hair, I don't see how you can run away from State law and say it's just a matter of Federal law.

I mean, you have a statute that says a black person shall have equal right to make and enforce contracts.

Now, you're either saying that we're going to develop a Federal law of contracts, or what you have to look to in each case is what rights do these State citizens have under State law to make contracts and enforce contracts and are those rights being given equally.

Now, doesn't that put us right in the middle of deciding what the State law is concerning contracts?

Ms Hair: I do not believe it does, Justice Scalia.

I believe that what the court is asked to do under Section 1981 in this situation, as in all other situations where it enforces Section 1981, is to develop a Federal law of what constitutes discrimination.

And Section 1981 was intended to address discrimination.

Unidentified Justice: It may be, but only discrimination in the making and enforcing of contracts.

It's not discrimination in the open air.

It's discrimination in one field.

Now, don't you think that this has... it either refers to a Federal contract law or to State law of contracts.

And you think it's a Federal contract law that we have to develop?

Ms Hair: No, I don't think that you have to develop a Federal law that tells you what is in a contract.

My position is that regardless of what is written in the contract, what are the terms of the contract, if the plaintiff is burdened in performing that contract because of her race, that she has not been afforded the same right to make and enforce a contract.

And I think the Court's cases make clear that Section 1981 and the parallel provision, Section 1982, go beyond merely guaranteeing an absolute right to enter into a contract.

In the case of Tillman v. Wheaton-Haven, under Section 1982, the Court ruled in that case, and again, it did not rest its decision on State property law.

That case involved the right to purchase and hold property under Section 1982, and the right to join a swimming pool association was not a right that was protected under State law.

In fact, under State law it was clear that the swimming pool association had the right to exclude blacks.

And furthermore, the right to join the swimming pool association was not a right that was in the purchaser deed of the house at issue.

The owner of the house had no control over the swimming pool association and the membership in the swimming pool association could not be conveyed along with the ownership of the house.

And nonetheless, the Court held that the membership in the swimming pool association was a benefit that became associated with home ownership because a third party voluntarily made it available to persons in the area, and that the persons who were making it available could not make it available on a racial basis.

Unidentified Justice: I take it that you're saying that the employer here conditioned the contract on being willing to put up with harassment?

Ms Hair: Certainly conditioned performance of the contract.

Unidentified Justice: Is that it?

Ms Hair: Yes, on willingness to put up with harassment.

Otherwise, Mrs. Patterson, it was an absolute requirement that she put up with this harassment in order to continue to work there and perform the contract that she was making on a day by day basis.

Unidentified Justice: It's sort of like saying, well, I'll hire you even though you're black as long as you're willing to accept lower wages.

Ms Hair: That's exactly the same situation in my view.

Unidentified Justice: Suppose this case.

An employer hires a person from a racial minority on absolutely equal conditions.

Then a supervisor comes in here for 30 days and causes great humiliation and degradation.

The employer then fires the supervisor.

Cause of action under 1981?

Ms Hair: It might depend on the level of the supervisor.

I think in the Vincent case which dealt with the issue of sexual harassment under Title VII, the Court explicitly left open--

Unidentified Justice: Assume a high level supervisor who had general authority to act this way, although without the employer's actual knowledge.

Ms Hair: --Again, I think it would depend on the facts of the case.

I assume that you're asking me two questions.

One, is thirty days' worth of harassment actionable.

And two, can the employer be held responsible for that supervisor when it was a temporary assignment and they fired him.

And on the second issue on whether the employer can be held liable.

I think the Court left that open in Vincent under what circumstances if the employer took very prompt action.

And I would see no reason that the same agency principles that apply under Title VII according to Vincent would not also apply under Section 1981.

On whether thirty days of harassment is sufficient to state a cause of action, again, I think you would have to look at the facts of what happened during that thirty days.

I certainly think there could be conduct that's so egregious that even if it only occurred on one or two days that--

Unidentified Justice: So what's the standard, egregious conduct?

Ms Hair: --No.

I think the standard is whether the same right to perform the contract has been afforded.

Unidentified Justice: Well, we know.

We know that white persons were not subjected to this indignity and black persons were.

We know.

That's stipulated in the hypothetical.

Ms Hair: Well, again, if the conduct is intentional and it's on the basis of race and the black person is treated differently than the white person because of race, then that is not the same right to make and enforce a contract in my view.

Unidentified Justice: So your answer is, there is a cause of action in the hypothetical?

Ms Hair: Well, given the stipulations that you have given me, I think that that is my answer.

Yes, Justice Kennedy.

Unidentified Justice: You have another part to your case, I think.

Ms Hair: Yes, Justice White.

I will briefly address the second issue which is the jury instruction.

In this case, Mrs. Patterson was required to prove both that she was denied a promotion on account of race and that she was more qualified.

And that simply is not the law.

The question is whether she was denied the promotion on the basis of race.

There are a number of circumstances in which a person can be denied a promotion on the basis of race, without necessarily being more qualified than the person who received the job.

The most obvious example is where the two candidates were equally qualified.

And even if this employer had promoted fifty whites who were equally qualified with the fifty blacks that it rejected, none of those fifty blacks would be able to bring a case under Section 1981 for promotion discrimination because none of them could prove that they were more qualified.

They were equally qualified.

But an employer is not allowed to choose among equally qualified candidates on the basis of race, and in this case there was more than sufficient evidence to lead to the conclusion that the promotion decision was being made on the basis of race.

Unidentified Justice: Now, did the employer claim that it was on the basis of qualifications?

Ms Hair: The employer articulated the alleged superior qualifications.

Unidentified Justice: And you think you proved that was a phony?

Ms Hair: I think that there was certainly sufficient evidence in the record to allow the jury to conclude, if properly instructed, that the decision was made on the basis of race.

If there are no further questions, I would reserve the rest of my time for rebuttal.

Chief Justice William H. Rehnquist: Thank you, Ms. Hair.

Mr. Davis, we'll hear from you now.

ORAL ARGUMENT OF H. LEE DAVIS, JR., ESQ. ON BEHALF OF RESPONDENT

Mr. Davis: Mr. Chief Justice, and may it please the Court.

This case presents the first opportunity that I'm aware of for the Court to differentiate between the rights available under Title VII as opposed to the rights available under Section 1981.

The petitioner's case in the first instance is a case of adverse working conditions and she bases that case of adverse working conditions on several pieces of evidence of discrete acts.

That is that the President of the credit union stared at her, that he criticized her work, that he made two discrete racial remarks, one in 1972 and one in 1976.

Her allegations of excessive work load.

The question presented to this Court is whether these acts of alleged racial harassment standing alone present a cognizable claim under Section 1981.

I believe that it's obvious that the terms conditions and privileges of employment language which is in Title VII would cover alleged racial harassment, adverse working conditions.

The language in Section 1981, however, is a different kind of language.

The language there is to make and enforce contracts.

And I believe that they're two different things, so I hope that this Court will take the opportunity to define and differentiate the various rights available under each of the two statutes.

Part of the problem in understanding what rights are available in the statutes is the fact that many of the lower courts have used the term, discrimination, synonymous with various things.

As you read the cases, you'll find that discrimination sometimes means racial harassment.

Sometimes discrimination means adverse working conditions.

Sometimes discrimination means disparate treatment in hiring, firing, promotion, wage discrimination.

In this case, we're dealing with discrimination as it means abusive working environment, hostile working environment--

Unidentified Justice: Mr. Davis, why would a plaintiff select 1981 as the basis of the suit instead of Title VII, possibly?

Mr. Davis: --Why would any plaintiff or why would this plaintiff?

Unidentified Justice: Yes, why would any plaintiff?

Mr. Davis: I suppose, Justice O'Connor, the reason--

Unidentified Justice: The statute of limitations may have been the question here.

Mr. Davis: --Well, she received her right to sue letter in this case and had the opportunity to bring her Title VII in this action.

I presume the reason to try to pursue a Section 1981 claim would be the opportunity for greater monetary reward with compensatory damages and punitive damages available.

That would be my assumption as to why a plaintiff would attempt to pursue a claim under Section 1981.

Unidentified Justice: Well, is it your position that once the contract is made, there is no conduct of the employer that's so onerous that it's not actionable under 1981 if it's racially motivated?

Mr. Davis: I think any conduct of the employer which is racially motivated which impacts on the right to make and enforce contracts is actionable.

Unidentified Justice: Well, assume that a contract is made in good faith and in non-discriminatory terms, but once its performance begins, highly onerous conditions are imposed.

Are there no conditions that are so onerous that 1981 would not be implicated?

Mr. Davis: I don't think there are a separate and independent issue.

Now, if those onerous oppressive opprobrious conditions, excessive hostile working environment conditions impact on a promotion decision, impact on a termination decision.

Unidentified Justice: It has to be promotion or termination?

Mr. Davis: Well, the Fourth Circuit limited that somewhat.

I'm not sure, Justice Kennedy, that it wouldn't also impact, if it impacted on a wage discrimination case, I think that the economic impact there may be sufficient to come under Section 1981.

Unidentified Justice: There are standard doctrines in contracts of frustration of purpose, are there not?

Mr. Davis: Yes, there are.

Unidentified Justice: If the employment contract becomes frustrated of its purpose by reason of racial discrimination, is 1981 applicable?

Mr. Davis: I don't think a constructive discharge case is actionable, if that's what you're getting to.

Unidentified Justice: Why?

Mr. Davis: Excuse me.

A constructive discharge case would be actionable if the employee terminated.

Unidentified Justice: Because that is the denial of the right to make a contract or to enforce it?

Mr. Davis: Enforce the contract, because the level of opprobrious conduct became so great, if the evidence supports that, that the employee could no longer continue the employment.

Unidentified Justice: Well, Mr. Davis, what about the SG's argument that if under State law, there's an implied obligation or duty of good faith and fair dealing that 1981 can be implemented?

Mr. Davis: If that is correct and if that is true, then I believe that an employee would have a cause of action in State court.

Unidentified Justice: Well, this case wasn't analyzed on that theory so presumably it would be appropriate then to send it back and let the Court make that kind of analysis if we agreed with the SG?

Mr. Davis: There was no claim for relief.

There was a claim for relief for intentional infliction of emotional distress, a pendant State claim.

Unidentified Justice: I think that your colleague on the other side indicated there would be no cause of action under North Carolina law.

Mr. Davis: Well, I think there is a cause of action for a breach of the contract of fair dealing.

Now, whether such a case has been found cognizable for racial conduct, for hostile working environment of racial conduct, I don't know of any North Carolina case that would uphold that.

But I know of no reason why they shouldn't if it in fact meets the elements of that cause of action under North Carolina law.

Unidentified Justice: But I want to make it clear that you interpret enforce as covering the situation where a contract is frustrated of its purpose.

Mr. Davis: I'm sorry, I didn't understand the question.

Unidentified Justice: Do you interpret, enforce, in the statute to cover a situation where there is a frustration of the contract's purpose by reason of racial animus?

Mr. Davis: I think it if causes a termination, yes, sir, that would then be a constructive discharge case which would be cognizable under Section 1981, the right to enforce the contract.

Unidentified Justice: You don't think enforce means just the right to go to a State court for relief?

Mr. Davis: I believe the lower courts have held, I believe there are decisions which allow you to bring a constructive discharge case under Section 1981 which I think is the question that you've asked me.

Unidentified Justice: But you would not limit it to that?

Mr. Davis: I don't think so, Your Honor.

Unidentified Justice: You think enforcing a contract means not taking it to Court but how else do you enforce a contract?

Mr. Davis: I believe that what Section 1981 grants is the competence and the capacity to take your case to Court.

Unidentified Justice: It doesn't say, make and perform.

It says make and enforce, doesn't it?

Mr. Davis: That's correct.

I believe you have the right to enforce your contract.

Unidentified Justice: Well, we've been talking as though it reads, make and perform, haven't we?

Mr. Davis: No, sir, I don't think so.

Unidentified Justice: How does constructive discharge come into the question?

Mr. Davis: Because--

Unidentified Justice: Unless you're talking make and perform?

Mr. Davis: --I think the cases have held that a constructive discharge where the employee has been forced to resign then therefore they no longer have the opportunity to enforce their contract.

Unidentified Justice: Enforce it or perform it?

I mean, constructive discharge means you stop somebody from performing his contract.

Mr. Davis: Well, maybe I'm having difficulty--

Unidentified Justice: You see no difference between performing a contract and enforcing a contract?

Mr. Davis: --I suppose so in that definition.

Unidentified Justice: You agree with the SG in this case, then?

Mr. Davis: No, I don't.

Unidentified Justice: Well, what's the difference between you on this point?

Mr. Davis: Well, I don't agree with SG as to the facts of this case.

I don't agree that there was a cause of action which existed for frustration of the contract under these facts.

I have no problem with the petitioner in this case bringing a state action for breach of the implied warranty of good faith and fair dealing.

Unidentified Justice: But it's just a disagreement among you as to how his standard applies to the facts of this case?

Mr. Davis: Yes, sir.

Unidentified Justice: And you would say, I really don't see what you've accomplished by the line you're seeking to draw.

You say constructive discharge would do it.

I'm not aware that to establish constructive discharge, you have to quit.

You could continue working and just say that the oppression was such that effectively--

Mr. Davis: I believe, Justice Scalia, the line of lower court decisions hold that termination or quitting is an element of constructive discharge.

Unidentified Justice: --You have to prove that in every case.

All right.

May I ask you, you suggested that under North Carolina law, thee is a cause of action for breach of an implied covenant of fair dealings such as the Solicitor General refers to.

Does that cause of action exist when the employment is at will?

Your opponent says, no.

Mr. Davis: I don't know of any cases, Justice Stevens, holding that.

Part of the problem in understanding the lower court cases is the language.

Discrimination has been intermingled so much in Title VII and Section 1981 cases.

Often times, the plaintiff--

Unidentified Justice: We're really here to decide this case for ourselves.

Perhaps understanding the lower court cases may be helpful in that regard, but you know, the reason we granted certiorari in this case was presumably to render a decision of this Court, rather than to adopt lower court cases.

Mr. Davis: --Yes, sir.

I believe that Section 1981 primarily grants competence and capacity to make and enforce the contracts.

Title VII grants a cause of action for racial harassment, for hostile working environment, and it is under that Section that this plaintiff, this petitioner could have brought her claim.

Unidentified Justice: Well, I suppose you would agree that if an employer puts a condition on contracting with a black that he doesn't insist on with a white, that there's a 1981 cause of action?

Mr. Davis: If he puts a condition--

Unidentified Justice: I will, sure, I'll hire you if so and so.

And it's a condition that he just doesn't insist on with whites.

Mr. Davis: --I think that's in the making of the contract.

Unidentified Justice: Yes.

Mr. Davis: Yes, sir.

Unidentified Justice: So that if an employer expressly said to a black, I'll hire you but remember there's a lot of harassment going on in this work place and you have to agree to that.

Mr. Davis: I think that's a condition attached, a racial harassment which impacts the making of the contract.

Unidentified Justice: But you don't think that analysis applies here?

Mr. Davis: No, sir.

Unidentified Justice: Why not?

Mr. Davis: Because in this case, the allegations were not part of the contract.

They were conduct, hostile working environment.

Unidentified Justice: It went on, say it went on everyday and this was an employment at will?

Mr. Davis: It's a Title VII claim, it's not a Section 1981 claim.

If there are no other questions with regard to the harassment claim, I'd like to go into the promotion claim briefly.

The petitioner has written a magnificent brief concerning all of the ways that you can support your claim for punishing discrimination, none of which are applicable to this case.

In this case, the petitioner came into Court and said three years ago, this Company gave a promotion to somebody else who was working in an entirely different job responsibility, had entirely different functions and you promoted her from account junior to account intermediate.

And I should have had that job.

Faced with that evidence, the articulated reason for giving that promotion was well, this lady's been performing her job satisfactorily and we gave her a pay increase.

And we gave her an upgrade in job description and job scale pay scale and gave her a pay increase.

Under the McDonnell-Douglas proof scheme, after the Court had indicated that the prima facie case had been met, that was our responsibility, that was our burden of persuasion.

The petitioner--

Unidentified Justice: You're arguing now about the instruction, right?

Mr. Davis: --Yes, sir.

And the correct law with regard to the burden or the burden of proof of the petitioner after we have articulated a nondiscriminatory reason for our decision, our nondiscriminatory reason being, number one, the petitioner was not qualified for this job.

She was a clerk, a file clerk.

This was an accountant bookkeeper position.

Unidentified Justice: Well, what if your client, the Credit Union, promoted exclusively by seniority and wasn't particularly interested in qualifications, just whoever had been in line longest would be enabled to have the promotion.

Now, an instruction like this wouldn't be warranted in that case, would it?

Mr. Davis: No, sir, I don't think it would.

But there's absolutely no evidence that seniority, education or any other thing was a criteria in this particular promotion.

Unidentified Justice: Well, was it conceded by the petitioner in this case that qualification or performance was the only standard for a promotion?

Mr. Davis: I don't think the petitioner conceded anything in this case.

This lady was in the job, sitting at a desk doing the job.

One day she was an account junior, next day she was an account intermediate and had a raise.

Unidentified Justice: Well, was there any evidence introduced by the petitioner indicating that performance and qualification was not the only criterion for promotion?

Mr. Davis: No, sir.

No, sir, no evidence whatsoever.

After the respondent, the credit union, had articulated this nondiscriminatory reason for their decision, that is, the qualifications of the lady doing the job, the petitioner offered no further evidence, but simply relied on these various allegations of this ten year course of conduct of hostile working conditions to say that the decision by the credit union was racially motivated.

Unidentified Justice: And the reason given was a sham I suppose?

Mr. Davis: I suppose.

Although there's no evidence of that.

The various ways which the petitioner says that you can prove pretext--

Unidentified Justice: How does this all lead to approving the instruction that was given?

Mr. Davis: --Because I believe, Justice White, that under these facts, there was no evidence of anything other than qualifications upon which--

Unidentified Justice: I know, but what was the instruction on?

Mr. Davis: --The instruction was that in order for the petitioner to prevail, she must show that she was more qualified than the lady who received the promotion.

Unidentified Justice: But the reason the employer gave was that she wasn't qualified for the job.

Mr. Davis: In the first instance, she wasn't qualified and in the second instance, her qualifications did not meet the qualifications of the lady who had the job.

Unidentified Justice: Well, and so you think that the instruction was nevertheless proper that she had to prove she was more qualified?

Mr. Davis: After we had met our burden of persuasion of showing that relative qualifications were the reason for our decision, I believe under Burdine, if we have the right to choose between equally qualified candidates, then it then is her burden to show that she is more qualified.

Unidentified Justice: Yes, but may I ask, do you think you have the right to choose between equally qualified candidates on the basis of race?

Mr. Davis: The right to choose between equally qualified candidates absent any evidence of any other illegal motive.

Unidentified Justice: But supposing she offered evidence that the plaintiff was denied the promotion because of her race?

That they were equally qualified.

The only difference between the two was that one was black and one was white and that because one was white, that one was promoted?

Mr. Davis: I suppose under that then she would have a jury issue as to--

Unidentified Justice: But then if you concede that, the instruction's wrong.

Mr. Davis: --No, sir, I don't believe it is, because there's no evidence that race was a factor.

Unidentified Justice: Well, forget the evidence.

Forget the evidence.

I'm just asking you about the instruction.

So supposing the evidence shows that they're absolutely equally qualified.

And the plaintiff says, yes, they were equal and they had to figure out some way to break the tie.

They could have flipped a coin, they could have done it by alphabetical, they could have done it by age, they could have done it by dark hair versus light hair, but they did it because of race to break a tie.

Is that permissible?

Mr. Davis: I don't think that's permissible.

Unidentified Justice: Well, the instruction says it is.

Mr. Davis: No, sir, I don't believe the instruction says that.

I think what the instruction says is, to the jury, if you find the decision was based on race--

Unidentified Justice: That's one of four factors.

The third factor was also that she was more qualified.

Mr. Davis: --And the reason for that is because the evidence which we presented in rebuttal of the prima facie case was that qualifications were the reason, and the petitioner offered no evidence to rebut that to show that, no, the decision was based on race.

Unidentified Justice: But the lack of evidence, it seems to me is a reason for never sending the case to the jury, not a reason for sending it to the jury with the wrong instruction.

It may well be that there was no evidence that the two of them had equal qualifications and race was the reason for choosing between two people with equal qualifications.

But in that case, the remedy was that it should never have been sent to the jury, and you should have appealed on that ground if the jury verdict wasn't set aside.

But you're not asking that.

You're asking for the giving of erroneous instruction, instead.

Mr. Davis: I agree this case should never have gone to the jury on that issue.

It went to the jury, I think, under the facts of this case where the only evidence for the decision was promotion.

Unidentified Justice: But that's what your brief boils down to.

You say, there wasn't evidence.

That may well be, but that means that no instruction should have been given, not a wrong one.

Mr. Davis: Unfortunately, the trial judge opted to present the case to the jury.

Unidentified Justice: Mr. Davis, you talk about no evidence.

What about this flat statement that negroes are just slower than everybody else?

What do you do with that?

Mr. Davis: Justice Marshall, I dare say that there are a few of us in the world who have not had a prejudice thought or made a prejudice comment whether the prejudice may be racial, sexual or religious or some other basis.

Unidentified Justice: What do you do?

Just ignore it?

Mr. Davis: No, sir, I don't think you ignore it.

Unidentified Justice: Well, how did you accommodate it?

Mr. Davis: I believe, Judge, that just because... and that statement by the way was contradicted.

That wasn't given.

Unidentified Justice: Everybody's heard it before.

Mr. Davis: I don't think that taking one piece of evidence made in 1976 made in 1976.

Unidentified Justice: Well, you've taken 87 other pieces.

I'm going to take one piece.

And I still haven't gotten an answer to it.

Mr. Davis: Yes, sir.

I don't think that was sufficient, Your Honor, to allow a submission of this issue.

I don't think that piece of evidence is sufficient to say that this decision, this promotion decision was based on a racially discriminatory, made in a racially discriminatory context.

Unidentified Justice: Was race a part of the decision?

Mr. Davis: In this case?

Unidentified Justice: Yes.

Mr. Davis: No, sir.

Unidentified Justice: No?

Mr. Davis: No, sir.

Unidentified Justice: Well, what showing do you have that he didn't use race twice, I mean three times.

He used it twice, didn't he?

Well, how do you know he didn't use it the third time?

What evidence do you have that he didn't?

What statement do you have that he didn't?

Mr. Davis: That this girl was sitting in this desk doing this job.

There was no job opening.

There was no position available.

The lady was a bookkeeper accountant.

She received an increase in pay grade.

Unidentified Justice: You say it was a position that wasn't there before?

Mr. Davis: They changed her title is what they did.

She was doing the same job.

She didn't change her job responsibilities.

They changed her title from account junior to account intermediate.

Unidentified Justice: They created a job with a higher grade.

Mr. Davis: Well, they had two or three people in the bookkeeping accounting department doing bookkeeping accounting functions, much like having three lawyers in a law office who are associates, and one day you promote one to partner and you still have two associates.

They didn't create a new position.

They didn't create a new job or a new job title... they did create a new job title but no new position, no new job opening.

Unidentified Justice: Is there any evidence in this record that your client did anything concerning those two statements made by the supervisor?

Mr. Davis: Is there any evidence in the record that he did anything with regard to those statements?

Unidentified Justice: Yes, sir.

Mr. Davis: No, sir, I'm not aware of any.

Unidentified Justice: Thank you.

Did she complain about those statements before this lawsuit?

Mr. Davis: Not to my knowledge.

Unidentified Justice: You really don't know that you brought it to anybody's attention?

Mr. Davis: No, sir, there's no evidence that she brought it to anybody's attention.

Unidentified Justice: It's in the record that he did say it and it's uncontradicted.

Mr. Davis: No, sir, I don't think it's uncontradicted.

I think he denied it.

Unidentified Justice: Well, is it contradicted?

If so, on what page?

Mr. Davis: I'm sorry, sir, I don't know that.

Unidentified Justice: Do you think it was contradicted?

Mr. Davis: To my knowledge, he contradicted those statements.

Unidentified Justice: In the statement?

Well, I'll look in the record and find it for you.

I'll do you that service.

And guess what if I don't find it?

Mr. Davis: If there are no other questions, thank you.

Chief Justice William H. Rehnquist: Thank you, Mr. Davis.

Ms. Hair, you have three minutes remaining.

ORAL ARGUMENT OF PENDA D. HAIR, ESQ. ON BEHALF OF PETITIONER -- REBUTTAL

Ms Hair: May it please the Court.

In my initial argument, I did not reach the legislative history of Section 1981.

If there's any doubt about the language of the Statute, the legislative history makes it overwhelmingly clear that what Congress was concerned about was onerous treatment, onerous conditions of employment that former slave owners were putting on former slaves and other black workers including whipping them, stopping talking on the job, all the way from things that might be considered miner such as talking on the job to whipping, were the types of treatment that Congress was concerned about.

With regard to your question, Justice Scalia, about whether Section 1981 guarantees an equal right to perform a contract, I believed that the Court reached that conclusion in footnote 78 of the Jones v. Mayer, although Jones was a Section 1982 case; footnote 78 discussed Section 1981, and it held where a group of whites terrorized blacks in order to stop them from performing their contract, that those whites had violated the rights of blacks under Section 1981 to dispose of their labor by contract.

With regard to the jury instruction, this is not a case where there were no facts to support the conclusion that the reason given was a sham and that the real reason was racial discrimination.

Justice Marshall referred to two racial statements.

I counted nine different racial statements made by the President of the company.

And Justice Scalia, you asked whether Mrs. Patterson complained about those statements.

The record shows that another employee did complain about the statements and not only statements, he complained about discrimination and refusal to hire a black computer operator.

And that employee was fired.

The District Court found that there was sufficient evidence to submit the promotion claim to the jury and particularly the District Court relied on the fact that Mrs. Patterson introduced evidence to suggest that Susan Williamson was trained for the job for a period of time before she was actually promoted, and she was put into training for that job at a time when she had failed in her training for a computer operator job, and was brought back over, put into a new job.

There was a vacancy that somebody else was filling, and then after she received the training, she was actually promoted into that job.

And given the direct evidence in this case, given the evidence of training, it's simply not true that the jury instruction was harmless, which is essentially what Mr. Davis' argument boils down to.

If there are no further questions, I have nothing further.

Thank you very much.

Chief Justice William H. Rehnquist: Thank you, Ms. Hair.

The case is submitted.

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ORAL ARGUMENT OF JULIUS LeVONNE CHAMBERS ON BEHALF OF THE PETITIONER

Chief Justice William H. Rehnquist: We'll hear argument first this morning in No. 87-107, Brenda Patterson v. McLean Credit Union.

Mr. Chambers, you may proceed whenever you're ready.

Mr. Chambers: Thank you, Mr. Chief Justice, and may it please the Court.

The Court's order of April 25, 1988 directed that the parties address the issue of whether the Court should reconsider its decision in Runyon v. McCrary.

Runyon held that 42 U.S.C. 1981 applies to private contractual relations and in that case prohibited a private school from discriminating on the basis of race in its admission practices.

I will first show that the doctrines of congressional ratification and stare decisis preclude reconsideration of Runyon.

I will then demonstrate in the remaining half of my argument that Runyon was correctly decided.

Thus, even if the Court decides to revisit Runyon, I submit that Runyon was correctly decided and should be reaffirmed.

Congressional ratification and stare decisis, as adopted and applied by this Court, require that Runyon be followed and not reversed.

Runyon and Section 1981 have become a significant part of the web of joint congressional and judicial efforts to rid the country of public and private discrimination.

Reversing Runyon under these circumstances would not only reject congressional reliance and decisions of the Court but legislation specifically designed by Congress incorporating the Court's decision and attempting to encourage the use and enforcement of Section 1981.

It would virtually abandon stare decisis as a fundamental doctrine of a court.

Legislative efforts of Congress since Runyon and its precursor, Jones v. Mayer, show a consistent pattern of congressional adoption and ratification of the Court's holdings that Section 1981 prohibits public and private discrimination in contractual dealings.

Three months after the decision in Runyon, Congress passed a law providing attorney fees to encourage enforcement or use of Section 1981.

The Attorney Fees Act is highly significant.

It is not simply that the Congress was aware of Runyon.

It is not merely that the Attorney Fees Act shows that Congress approved of Runyon.

Both points are true, but there's more.

Runyon and Jones were the foundation building blocks for the Attorney Fees Act and its applicability to Section 1981.

Congress built on Runyon by passing a law that would have made no sense had Runyon not been decided.

That is true because Runyon and Jones held that Sections 1981 and 1982 permitted an individual to use those acts to challenge private discrimination.

If Jones and Runyon are now reversed, there would be no basis for lawsuits based on Section 1981 and 1982 in which attorney fees could be awarded if one is successful.

The Fees Act applies the private attorney general theory under which Congress encouraged private attorneys to use civil rights statutes to vindicate a policy of Congress by providing a fee for litigants who bring Jones and Runyon types of proceedings.

Congress asserted that the people who litigate those claims vindicated congressional policy and Congress wanted--

Unidentified Justice: But the fee-setting, Mr. Chambers... you would still have been able to recover against public bodies in a suit under 1981, wouldn't you?

Mr. Chambers: --That's correct, Your Honor, but we also would have been able to recover under 1983.

And what Congress was doing was building on the Court's decisions in Runyon and Jones which permitted one to challenge private discrimination.

And without Runyon and without Jones, 1981 and 1982 would be of little value at all.

So, Congress noted that one could recover under 1983 in challenging public bodies, and it wanted to encourage the use of 1981 and 1982 to encourage lawsuits challenging private discrimination.

This is of direct congressional endorsement and ratification of Runyon and Jones.

And I don't know of anything else that Congress could do to tell the Court that it accepted and ratified and wanted to use the Court's decisions to encourage enforcement of 1981 and 1982.

Congress expressly said we endorse your decision in Jones and Runyon, and we want to build upon it, and we want to encourage private litigants to use this Act.

As Congressman Drinan said, the way to make that Act effective is to provide attorney fees so that private parties can use it.

Now, this is the same, in our position, as Congress expressly enacting 1981 with an attorney fees provision.

It endorsed, it encouraged, and it wanted to make that Act a part of the civil rights provisions that would permit one to challenge public and private discrimination.

And reversing Runyon under those circumstances would in our opinion fly right in the face of Congress' efforts to use your decision to prohibit public and private discrimination.

And the way the Court and Congress has worked in this area, where Congress has built on what the Court has decided, to try to rid the country of discriminatory practices would be contrary to decisions that this Court has rendered and every precedent that I know of.

And I don't think that under these circumstances it would be appropriate for the Court to strike that building block that Congress had built to remove Runyon as a means for now challenging private discrimination in contractual matters.

Unidentified Justice: Counsel, in this phase of the argument where we are talking about stare decisis, I take it we assume arguendo the premise that you disagree with, that the case was wrongly decided in the first instance.

You disagree with that, but that's part of the premise for the stare decisis argument.

Mr. Chambers: Well, Your Honor, I submit that the case was correctly decided, which I'll address.

Unidentified Justice: I know you do, and I think that that's a very arguable point and there's a lot of merit to that position.

But in this phase of the argument, we're assuming the case is wrongly decided, yet we should retain it in any event.

Isn't that the point?

Mr. Chambers: Your Honor, I go a bit further.

I say that the 1976 Attorney Fees Act creates another step that the Court should not overlook.

And it's something stronger than stare decisis.

Congress has spoken in 1976.

It has done everything it could do except expressly adopt that statute.

Unidentified Justice: Well, it didn't change... it didn't change the word "right".

It didn't say that private persons can recover.

And the President, when he signed the bill, did not necessarily endorse the legislative history.

Mr. Chambers: Your Honor--

Unidentified Justice: So, I think that's... I think you make a legitimate argument.

I do not think it's conclusive.

Mr. Chambers: --All right.

My point is that the Court said that one could use 1981 to challenge private discrimination.

Congress adopted that--

Unidentified Justice: I recognize that, but I'm asking you if we're not assuming that even if we have questions about Runyon, that we should retain it for reasons of stare decisis.

Isn't that the first prong of your argument?

Mr. Chambers: --That is one prong, Your Honor, but my--

Unidentified Justice: Are you aware of any precedent in the jurisprudence of this Court in which we proceed on the assumption that a statute which creates a right has been wrongly construed and yet we continue that precedent on the books?

Mr. Chambers: --Your Honor, you have a number of precedents that say that unless you find that the case is clearly wrong on the findings, and unless you find the other exceptions that you apply in deciding not to follow stare decisis, that you will follow stare decisis.

If you find, for example, that the Court's interpretation is clearly wrong, egregiously wrong, and is causing problems... for example, the Flood case dealing with the antitrust laws.

There you say that Congress has shown that it approves of what the Court has done and isn't changing it.

Unidentified Justice: Of course, the Flood case was isolated to baseball.

Baseball is not part of interstate commerce and antitrust.

We did not use it in order to create further rights.

And that's my point.

Do you have any precedent to show us that a case which is arguably wrongly construed should remain the seminal case for the enforcement and the interpretation of the statute?

Do you have any precedent for that?

Mr. Chambers: Again, Your Honor, I'm saying that the Court... the decisions that the Court has followed in this area where Congress has spoken, and I'm referring, for example, to cases like Bob Jones.

I'm referring to cases like Patsy v. Florida Board.

You have looked at decisions, and you questioned whether those decisions are arguably wrong... the precedents that were being considered.

You questioned whether there are other precedents or exceptions that would warrant the Court deviating from that prior decision.

And in this case, what I'm saying is that the record demonstrates that the original decision was wrong... was right... that is, the Runyon decision was correctly decided.

And even if you had any question about it, what has transpired since Runyon?

What Congress did immediately after your decision in Runyon I submit forecloses the Court now setting aside the Runyon decision.

Unidentified Justice: Mr. Chambers, let me ask also since we're talking about what Congress has done.

If Mrs. Patterson is correct that any lawsuit affecting terms and conditions of employment that alleges discrimination can be filed under Section 1981, then why do you suppose it is Congress established the EEOC and passed Title VII?

They've become a dead letter.

They're not even needed if Section 1981 is available for every such action.

Do you think Congress has spoken at all by passing Title VII?

Mr. Chambers: Your Honor, I think Congress did, and I think that in 1972 Congress made it clear that it wanted to make both remedies available for challenging discrimination in employment.

There was an effort, as the Court knows, by Senator Hruska to make Title VII and the Equal Pay Act the exclusive remedies for challenging private discrimination.

Congress spoke then and said that it wanted to continue both remedies.

And Congress spoke again, as I said a moment ago, in 1976.

Unidentified Justice: Congress spoke 33 to 33.

Mr. Chambers: Congress spoke more than that, Your Honor.

After the 33 to 33 vote, the bill--

Unidentified Justice: Thirty-three/33 and 33 abstaining, I guess.

Mr. Chambers: --Well, Your Honor, Congress voted--

Unidentified Justice: That was just in the Senate.

Mr. Chambers: --The Senate voted larger than that on reconsideration and decided that it wanted to preserve both remedies.

Additionally, I would point out that in 1976 Congress spoke again and said that it wanted to preserve both remedies and wanted to encourage the use of both remedies.

So, again, under congressional ratification, I think that those acts of Congress foreclose the Court from now... for now reconsidering the Runyon decision.

Additionally, I would point out that in applying the doctrine of stare decisis, none of the exceptions that the Court has used is applicable here.

What has happened since Runyon, not only in Congress but in other acts of private entities and governmental bodies, demonstrate that the public accepts and wants to perpetuate the use of the Runyon and the Jones decision.

Unidentified Justice: I'm not sure what this argument is.

Public acceptance?

I mean--

Mr. Chambers: I'm saying that the Runyon decision is consistent with public mores, that the Runyon decision is what the Congress and what the States and what private individuals like to use.

And they are building on it, and they are relying on it.

Unidentified Justice: --Well, if that were entirely... entirely dispositive, it wouldn't be very important what we do on the subject because Congress would simply remedy whatever mistake we might make.

I mean, if they... if there is that overwhelming acceptance, Congress would simply repass... repass 1981 saying very clearly that it applies to all private actions.

Mr. Chambers: Your Honor, in this area, that's not the way that the bodies of government have operated.

Unidentified Justice: Yes.

Mr. Chambers: They have worked with each other and built a body of law to prohibit discrimination.

And where the Court recognizes that Congress has accepted, relied on and built legislation to promote the use of 1981, this Court has respected it.

And that's what I think should happen in this particular instance.

Unidentified Justice: I find some inconsistency between two arguments that are made to us: one being that everybody has accepted it and the society wants it; and the other being that... made by... in one of the amicus briefs that if we should go back on Runyon, Congress wouldn't be able to pass a statute to replace the effect of Runyon.

I mean, it seems to me strange that both could be true.

Mr. Chambers: Well, Your Honor, I don't think that the brief that the Court is referring to poses an inconsistency.

What the brief suggested was that it would impose a burden.

It would be time consuming for Congress to have to go back and enact a law to replace Section 1981 if you reversed it.

Unidentified Justice: Do you think they would enact 1981 in its current form?

Mr. Chambers: Well, Your Honor, I don't... I don't want to speculate on that.

I think that we would have... we have demonstrated Congress' interest in preserving 1981, and we have demonstrated that this Court has respected that act by Congress.

And we are encouraging the Court here to follow the precedents in this civil rights area affecting race and as the Court has done in other areas.

Turning then to the legislative history, as I suggested, Runyon was correctly decided in 1976.

First, let me address the defendant's or Respondent's position that the 1970... 1874 codification of 1981 in some way made 1981 a Fourteenth Amendment act.

We have shown in our brief that the defendant relies here on a headnote and some notes that appeared in a codification of 1981 after Congress had codified the Act.

But more particularly, the legislative history clearly demonstrates that Congress in codifying Section 1981 in 1874 was codifying both the 1866 Act as well as the 1870 Act.

Unidentified Justice: If we had... if we had had to interpret the Act in 1874 and had it been interpreted at that date, would we have even looked at the legislative history?

Mr. Chambers: The legislative history of 1866 or?

I think the Court would have.

Unidentified Justice: Really?

Mr. Chambers: Because, Your Honor, the--

Unidentified Justice: In the 19th century, we looked at legislative history in interpreting statutes?

Mr. Chambers: --I think if the Court had a question about the meaning of 1981, if the Court wanted to fortify a decision that 1981 applied to private discrimination, it would look at what Congress was trying to address in 1866.

Unidentified Justice: I think you'll find, Mr. Chambers, that until probably the 1920s, we wouldn't have looked at it in anywhere near... if at all... in anywhere near the detail that was used to render our decision in Runyon.

So, almost inevitably the decision rendered in 1874 on the meaning of this statute would have been different even assuming that the use of the legislative history in Runyon was correct.

Almost inevitably it would have been different in 1874 than it would have been when Runyon was decided.

Mr. Chambers: Well, Your Honor, I... I would differ with the Court.

But the point is in 1988 when we're looking at Runyon, we look at what Congress meant with the enactment in 1866.

We look at what transpired in 1874, and we know that Congress was trying to address a pervasive problem of enslaving blacks who were recently freed from slavery through the Civil War in the Thirteenth Amendment.

Unidentified Justice: When was--

Mr. Chambers: That's what we were trying to address in 1866.

Unidentified Justice: --When was the first case that was brought under this new statute that was addressed to that major problem?

Mr. Chambers: I don't know the exact... I don't know the date of the first case.

I would refer the Court to the historians' amicus brief in this case.

They refer to some cases that are not reported.

And in addition, the Court may be--

Unidentified Justice: Cases against private individuals who are not such things as innkeepers or transportation companies or perhaps schools, some institutions vested with the public interest, so to speak.

When was the first case that involved a purely private individual?

Mr. Chambers: --Your Honor, again, I don't have the date of the first case against a private individual.

I only point out that--

Unidentified Justice: But isn't that important?

I mean, if the Act was clearly meant to remedy that problem, as you assert the legislative history shows, you would have expected if that's a big problem out there, that almost immediately there would have been plenty of cases--

Mr. Chambers: --Well, Your Honor, do you... well, I don't know the first case that was filed to enforce... challenge the black codes.

Unidentified Justice: --Oh, there--

Mr. Chambers: So, I'm suggesting that there are--

Unidentified Justice: --There were cases against States almost immediately after the passage of--

Mr. Chambers: --Against the black codes?

Unidentified Justice: --Against... against States.

Mr. Chambers: I would suggest, Your Honor, that the collection of cases challenging the enforcement of the black codes equally missing as the cases challenging private discrimination against a purely private individual.

And there are a number of reasons for the nonenforcement of this particular section of the Act: not only the difficulty of getting to the Federal court, the availability of counsel, the fear of individuals in trying to use the courts.

There are a number of explanations.

And I don't think that the fact that you don't find a case in 1874 or 1875 challenging a purely private discrimination suggests one way or the other that the Act didn't reach private discrimination.

Again, I submit that the 1874 codification incorporated the 1866 Act as well as the 1870 Act and that Congress was carrying over the provisions prohibiting public and private discrimination in 1874.

Unidentified Justice: Do you find in the legislative history or in the words of the statute any controlling principle or guidance that we can have for the decision of these cases?

Suppose that a supervisor calls an employee... has a fit of temper and calls an employee a name that's a racial epithet.

Is that actionable?

Mr. Chambers: Well, Your Honor, it depends on whether this is a practice of harassing or making the working environment impossible to work in--

Unidentified Justice: What's the controlling principle that we look to to decide that kind of issue?

We could have all sorts of hypotheticals ranging from an isolated incident to a pattern of conduct to constructive discharge.

What do we look to when we're trying to make up... when we're trying to conclude what the answer should be in these cases given Congress' filing of the amicus brief that they don't want to have the problem?

Mr. Chambers: --Well, Your Honor, I... the Court has applied Title VII to cover harassment in the work place.

Unidentified Justice: So, anything that Title VII covers is not covered by 1981?

Mr. Chambers: There are some... the harassment in the work place would be covered by both Title VII and 1981.

I'm suggesting, however, that--

Unidentified Justice: So, Title VII and 1981 are coextensive?

Mr. Chambers: --In this particular area.

Unidentified Justice: So, in order to see what 1981 covers, we just look to Title VII?

Mr. Chambers: No, Your Honor.

I think the Court looks at the facts.

And the Court hasn't had the difficulty that the Court pictures here in deciding--

Unidentified Justice: We have a difficulty in this case, counsel.

Mr. Chambers: --Well, Your Honor, here I submit that the legislative history shows that Congress wanted to reach this kind of conduct.

It saw that freed blacks were subjected not only to problems in the contract area, but also after they got on the job and were working.

Some employees--

Unidentified Justice: So, my racial epithet example.

What result?

Mr. Chambers: --Sir?

Unidentified Justice: My racial epithet example.

What result?

The supervisor does this with some regularity.

Mr. Chambers: Well, we have to prove, Your Honor, that there is an intent to discriminate.

We have to prove that the supervisor is a person who is responsible for the work by the employer.

And the Court looks to see whether this is simply an isolated incident or whether this is something common to the work place.

Unidentified Justice: But you haven't yet mentioned one of the words of 1981.

So, the statutory words give us no guidance I take it?

Mr. Chambers: The statutory words prohibit discrimination in the making and enforcement of contracts, and that covers the type of conduct that we have involved here with Ms. Patterson.

That's the point.

And as we look at the legislative history, we see a Congress that saw blacks, freed blacks, harassed in the work place, denied pay, and that's the kind of conduct that this Congress was trying to reach.

This case is typical of the conduct that Congress was trying to address in 1866.

So, I don't think there's a problem about applying this statute to cover harassment in the work place.

Looking at the legislative history, I think we go back to look at where Congress was trying to address--

Unidentified Justice: One more question on this, counsel, and then I'll let you proceed.

I assume that the answer would be the same in 1866.

When Congress passed the statute in 1866, it thought that it was forbidding the use of racial epithets in the work place?

Mr. Chambers: --Your Honor--

Unidentified Justice: Or is this an evolving standard?

Mr. Chambers: --I think that in 1866 Congress had egregious conduct and practices that it wanted to correct that were perpetuated by private individuals.

Unidentified Justice: And do we measure those egregious standards by the changing standards of society?

Mr. Chambers: I think we apply the law to the facts and at the time that we are looking at the situation.

I think that Congress meant to reach this kind of conduct.

And we look at it here.

It might different.

It might be a different type of employer.

We're not working the farms now.

We're working in the credit union.

So, the type of discrimination may differ, but the conduct... the discrimination, the enslavement, the badges of slavery are the things that we are trying to reach.

And that's what Congress meant to reach in 1866.

Again, going back looking at the conditions that Congress was addressing in 1866, we had not only pervasive practices by private individuals who were placing blacks back in slavery as before, but we had also some governmental legislation.

And what Congress was looking at in 1866 was a... was a condition in which people were concerned about the Federal Government reaching State practices.

We all concede that the Thirteenth Amendment reaches private and public act.

We all concede that in 1866, the government approved of reaching private practices.

And so Congress, in enacting the 1866 Act, was trying to cover pubic and private practices to rid the country of the slavery that we had just enacted the Thirteenth Amendment to cover.

I want to reserve some time, Your Honor.

Unidentified Justice: Thank you, Mr. Chambers.

Mr. Kaplan, we'll hear now from you.

ORAL ARGUMENT OF ROGER S. KAPLAN ON BEHALF OF THE RESPONDENT

Mr. Kaplan: Mr. Chief Justice, and may it please the Court.

I think the basic problem in the presentation of the Petitioner's arguments in this case is that they start from the wrong baseline.

Instead of looking to 19... the 1960s or 1970s, I think the proper point of departure is really much earlier date, 1883, when the Court handed down the civil rights cases and indicated in a opinion, which was generally respected for a long time thereafter, that this statute would not reach private acts of discrimination.

Many years go by.

The Nation matures.

We encounter other types of problems, particularly in the area of racial discrimination.

And in the late 1950s and early 1960s, there's a movement in Congress that something has to be done.

And after four years or so of angst and anger and controversy, Congress comes up with the Civil Rights Act of 1964.

I think what we are dealing with here is really the force that sets in motion a pattern of congressional action, a decision that it is the legislative branch which must take control of these things, which must provide the remedies, since none apparently exist, and must control how our society is to develop in terms of meeting racial equality in the work place and elsewhere.

The problem that I see with these decisions, Runyon in particular, is they threaten this... this orderly development and this appropriate, I think, allocation of authority to Congress to deal with these... with these measures.

Title VII, for example, which is the primary statute where these cases really come up, has a different thrust, a different emphasis, than Section 1981.

Unidentified Justice: Mr. Kaplan, I'm sure that's always true whenever we come out with the wrong interpretation of a statute.

To some extent, we have interfered with the function of the Congress and violated to a degree the separation of powers, which is the point you're making I suppose.

But surely you wouldn't say that we should have no stare decisis whatever in the field of statutory construction, would you?

Mr. Kaplan: No, I would not say that, certainly.

Unidentified Justice: So, what are the special factors that should... should urge us to disregard stare decisis?

Why is this case special?

Mr. Kaplan: I think that what has to be focused on is the impact of this kind of legislation or rule-making evident in Runyon on the operation of Title VII itself.

And I think this has been discussed and noted, and I think it bears repeating that what that statute is emphasizing is a conciliatory approach involving a government involvement by the EEOC which is a congressional determination as to how things should operate, and also a specific congressionally determined judicial remedy if that fails, which basically is equitable and remedial, back pay, reinstatement.

This rule, the rule of Runyon, allows for punitive damages, for compensatory damages.

It cuts the EEOC out of the process.

It doesn't allow it to escape... to shape the scope of investigations and determine how broad the remedies should be made.

It doesn't certainly encourage a conciliatory approach to settlement of these problems.

But it also disregards something else in Title VII which is federalism.

And that statute specifically encouraged the States to pass laws and create agencies to take care of these problems and solve it in its own jurisdiction through the deferral procedure.

This also threatens that procedure and that concern.

Unidentified Justice: Mr. Kaplan, may I ask a question?

Mr. Kaplan: What we're dealing with is basically a congressionally--

Unidentified Justice: Mr. Kaplan, may I ask you a question?

Mr. Kaplan: --Yes.

Unidentified Justice: Of course, Runyon wasn't an employment case, and what we're really focusing on today is whether Runyon, which was a denial of an opportunity to go to school case... whether that should be overruled.

And your argument really doesn't focus on that all.

Mr. Kaplan: Well, it does in a sense, Your Honor.

What I've focused on, of course, is the employment area which... and this is an employment case that we're dealing--

Unidentified Justice: I know this is, but Runyon was not.

Mr. Kaplan: --But... that's correct.

But even the areas that are left untouched by legislation, such as Title VII or the Fair Housing Act or the Civil Rights Restoration Act, are themselves decisions of Congress not to act.

And that, too, I think has to be respected.

It is not the function, I don't think, of the judiciary--

Unidentified Justice: Did you say there was a decision of Congress not to act--

Mr. Kaplan: --Yes.

Unidentified Justice: --after the legislation that your opponent stressed in his opening part of his argument?

Mr. Kaplan: Pardon me?

Unidentified Justice: Your opponent made quite a point of the fact that Congress did act after Runyon was decided.

So, I don't think you have a decision of Congress not to act in the private school area.

Mr. Kaplan: Well--

Unidentified Justice: Or do you?

How do... explain that to me.

Mr. Kaplan: --Well, I... I think in the... at some point it certainly was aware of the problem from Runyon, and it certainly passed in the... I suppose the Civil Rights Restoration Act could apply where there's funding.

But what Congress has and always had the opportunity to deal with this particular problem and yet it hasn't... it hasn't chosen to do so.

The problem is not a secret.

The problem has been there--

Unidentified Justice: Well, it did choose to do so shortly after Runyon was decided.

That's your opponent's point.

I'm not sure of your response to that point.

Mr. Kaplan: --Well, I think that the fact... I think the focus on Runyon is misplaced on that enactment.

What the response was certainly... was to Alyeska and Runyon happened to be at that particular juncture, but--

Unidentified Justice: Correct, but you do presume that Congress was aware of the Runyon decision, don't you?

Mr. Kaplan: --Well, it cited I think the Santa Fe Trail case, which is a companion.

I presume that there was some knowledge of it.

But I think the focus of Congress in doing that was not so much to place its imprimatur on 1981 as a reexamination and approval of everything that had happened there, but simply as a broad gesture, a sort of a exercise in judicial parity, if you will, to create an equality.

Unidentified Justice: My only point is to question your statement that Congress has affirmatively decided not to act in the school discrimination context.

Mr. Kaplan: Well, I think at least it has not acted, and if it has not acted, that too is an appropriate aspect for the Court to respect whether or not it acts is also part of the congressional judgment.

It doesn't mean that the Court steps in if Congress hasn't simply acted in a particular area.

Unidentified Justice: Once again, that's always the case where the Court makes a mistake in statutory construction and Congress does not act to remedy the mistake.

That's always the case.

What's distinctive in this case that would justify our disregarding the normal rules of stare decisis?

Mr. Kaplan: Well, the... what I am concerned--

Unidentified Justice: You see we've gotten the law wrong, but that's a given.

That's the hypothesis in all of these cases where we say we're not going to look into it.

We may have gotten it wrong, but we've gotten it.

And we're going to leave it alone.

Why is this different here?

Mr. Kaplan: --The... again, having notice... noting that the Court has made its decisions, the fact remains that when Congress addresses these problems, it has an option to address particular issues or not to address particular issues.

And if it doesn't, then I don't think it's the... it's the function of the Court to step in there and fill in all these... all these gaps.

Unidentified Justice: I don't know what to say there.

You're not answering my question.

That is always the case.

Every time we come out with a statutory interpretation that is wrong and Congress doesn't turn around and set it right you can always make that argument.

So, your argument thus far is boiling down to the proposition that we should not have any doctrine of stare decisis in the field of statutory construction.

Mr. Kaplan: No, but I think there are some practical--

Unidentified Justice: Can't you tell me some reason why--

Mr. Kaplan: --Sure.

In this case, I think this is a pretty good illustration which occurred in the oral argument which took place earlier this year.

And what the Court was trying to define there was the statutory... reconcile the statutory language, as I gather, with the argument that the Petitioner was making that any sort of complaint arising out of working conditions, terms and conditions of employment, can fit into this rubric of the right to make and the right to enforce a contract.

If... what is happening here is that the language of a statute which was designed for some other purpose, a more limited purpose, has been used now as a general anti-discrimination device, and what is happening is that the Court is running into a wall as to... as to the interpretation of these... of this enactment which it's going to continue to find problems with.

It's very difficult to square the language of this statute even in a... any sort of case which deals with other than the legal capacity issue.

Where do you draw the line?

How do you determine where... once you go beyond the right to make it, the capacity to make a contract, where do you draw the line as to what is covered and what isn't covered?

I think that your--

Unidentified Justice: --Don't you have the same question under Title VII?

Where do you draw the line in this kind of case?

How many racial epithets is enough and how much pushing around is enough, you know?

You always have line drawing problems in any statute.

Mr. Kaplan: --I know, but often you have a congressional guideline to give you... to judge by.

Unidentified Justice: Well, you don't have a congressional guideline in this kind of case in Title VII either.

Mr. Kaplan: In this kind of case, there is clearly a coverage by Title VII to include all sorts of working conditions.

That has been generally recognized since I think almost day one of that statute.

But in this statute--

Unidentified Justice: No, but your argument goes to the question of when... how many racial epithets are enough to constitute a violation of the statute.

You have that same difficult problem of line drawing under the language of Title VII or under the language of this statute.

Mr. Kaplan: --Yes, you would but the trouble is the language of this statute doesn't talk about or doesn't go to that sort of problem.

What it goes to is the capacity issue of whether or not somebody has the right to make a contract, the legal capacity to make the contract, the legal capacity to enforce it.

What this type of procedure does is to remove really, to cut loose, this statute from its roots and its legislative history.

And what the Congress was concerned with in the Civil War... post Civil War era were these statutes and rules and procedures that were growing up in the States which threatened to deprive the freedmen of their ability to make contracts and to enforce them.

Unidentified Justice: But, Mr. Kaplan, you don't deny that there's a great deal of legislative history that suggests that Congress was also concerned about private discrimination in the south.

Mr. Kaplan: I would suggest to you, sir, that the history, if read in toto, strongly suggests that they recognize that there were incidents--

Unidentified Justice: A good many.

A good many.

Mr. Kaplan: --and quite widespread incidents of private discrimination, but that the means that was selected for dealing with the problem was to try to remove these disabilities and incapacities that were arising from the legislation in the South.

And I guess it was expected that once this was cleaned up, the normal processes of State court adjudication and administration would avail the freedman of his rights under this particular statute.

Unidentified Justice: And if that doesn't take place, does the statute acquire any new meaning on its own terms?

Let me put you this case.

Suppose in 1868 the only grocery store in a small town refused to sell groceries to blacks.

Coverage under the statute?

Mr. Kaplan: No.

Unidentified Justice: And if this persists for 20 years, and the State does nothing to correct it, still no coverage under the statute?

Mr. Kaplan: No, I don't think so.

Unidentified Justice: And Congress... you find no historical evidence that Congress was concerned about this?

Mr. Kaplan: Well, as I said, there were concerns... expressions of concern--

Unidentified Justice: We've all read the legislative history.

Mr. Kaplan: --Yes.

Unidentified Justice: And really there is a brief that can be made for both sides, isn't that true?

Mr. Kaplan: Yes, both sides are arguable, but I think when you come down to it, what the history makes clear... and Senator Trumbull's remarks and the congressional remarks in the House as well... is that what they were aiming at were these black codes and vagrancy laws which would disable... disable the blacks.

In terms of the--

Unidentified Justice: Justice Harlan... Justice Harlan in Jones thought that surely 1982, for example, was aimed at custom.

Mr. Kaplan: --Yes.

Custom I think has a distinct meaning, custom and usage.

Unidentified Justice: Well, how about the 20... how about the 20 year business that Justice Kennedy mentioned?

Mr. Kaplan: Well, it depends on how... okay.

Unidentified Justice: Well, how long does it take to have a custom?

Mr. Kaplan: Well, it's a question not simply--

Unidentified Justice: A hundred years or 20?

Mr. Kaplan: --Okay.

You can have a custom I suppose in any one of those lengths of time that you suggested.

I think the operative characteristic, though, is whether it was given--

Unidentified Justice: Well, anyway you think... you think 1981 reaches custom.

Mr. Kaplan: --The... yes.

I think--

Unidentified Justice: Suing private people who are acting according to a custom.

Mr. Kaplan: --How do you define custom I guess is the question.

Unidentified Justice: Well, I don't know, but whatever it is you agree--

Mr. Kaplan: But I think what they were getting to is--

Unidentified Justice: --1981 covers it.

Mr. Kaplan: --customary law, though, law that arose where there was a practice--

Unidentified Justice: I'm talking about a custom.

Mr. Kaplan: --in the community.

I'm sorry.

Unidentified Justice: I'm talking about just a custom, just a custom that everybody can... let's say whatever custom is, you agree it's there.

Does 1981 cover suits against private people who are acting according to custom?

Mr. Kaplan: No, I don't think it that circumstance it does.

Unidentified Justice: Do you have to answer that way or not?

It's hard to say.

Mr. Kaplan: Pardon me?

Unidentified Justice: It's hard to say.

Mr. Kaplan: It's hard to say.

Unidentified Justice: Maybe that's what this lawsuit is all about.

Mr. Kaplan: I think that a practice that was given judicial effect if it had the force of law that was actually being treated as law, not simply an obnoxious practice that existed.

And I think that's what makes it consistent with the rest of the statute.

The terminology that appears in this law really goes toward public actors, people acting in the... in furtherance of public... of public goals.

And I think that's really why this statute should be interpreted as applying to a narrower field than it has presently been given effect to, and that the decision that Runyon incorporates... and it certainly relies on, for example, the Johnson Railway Express case... should be reviewed.

There are other problems that have come up here involving coverage in terms, for example, of the statute of limitations.

The Court has had to have at least three cases dealing with that issue in trying to resolve it.

What I find concerns me, though, is... and I'm getting back to the Title VII issue because I think that is the... has to be the primary focus because that's where it's primarily being used.

Approximately, from what we could tell, three-quarters or more of the 1981 cases come in the employment area.

And so, I don't think you can ignore that particular focus on this statute.

And what is happening, as we began to mention before, is that it's beginning to push out Title VII as a remedy and, in fact, what it's doing is creating an overlay of additional remedies which Congress did not decide to give.

I don't... I don't think that the Court should be in the position of furthering that, and certainly Congress can consider its... the effectiveness of this legislation in that area and also determine whether or not the need is there in other areas.

Unidentified Justice: Of course, we knew that when we decided Runyon.

I mean, it isn't as... you know, it would be different if Title VII came afterwards, but when we decided Runyon, we knew that we were carrying coals to Newcastle in a way, trumping... trumping legislation that Congress had already passed.

Right?

It's nothing new.

Mr. Kaplan: Well, at that point, yes.

There had been previous decisions.

At least the Johnson case had directly applied--

Unidentified Justice: What is... what is... nothing has happened that makes this statute or this interpretation not just wrong, as you keep telling us, but wrong in some way that makes it different from other statutes that we've gotten wrong.

I expect we've gotten some others wrong over the course of the year, but we just don't go back and look at them anymore.

Mr. Kaplan: --Well--

Unidentified Justice: I'm still waiting to hear that from you.

You keep telling us that it's wrong.

Let's concede that it's wrong.

So what?

Mr. Kaplan: --Well--

Unidentified Justice: Why should we go back and change a decision that we've made?

What is special about this statute?

Mr. Kaplan: --The problem that it... the specialty of the statute that it intrudes on the operation of Congress.

That's basically where the fundamental problem lies.

Unidentified Justice: If that's all you have, Mr. Kaplan, I'm afraid it's nothing because that's always the case when we interpret a statute incorrectly.

What you have--

Mr. Kaplan: Well, I think Runyon was based on an incomplete analysis of the statute.

It had no independent analysis of its own.

It relied on Johnson which itself was a statute that... a case... excuse me... that was not briefed, that did not a thorough consideration of the case.

And Jones itself did not squarely deal... which was the earliest decision... with the 1870 to '74 period.

Unidentified Justice: --And by the way, I take it from your brief and then your argument that if we agree with you about 1981, it raises serious questions about Jones and 1982.

Mr. Kaplan: Well, I don't think you have to overrule Jones as a 1982 case, but because there is a common source--

Unidentified Justice: Well, no, no.

But--

Mr. Kaplan: --there certainly is--

Unidentified Justice: --if a case came here and someone asked us to overrule Jones, if we agree with you in this case, there would be a powerful argument, wouldn't there?

Mr. Kaplan: --It would... it would... I think it would possibly affect the underlying rationale there because the 1866 Act, if it came up in the discussion, certainly would--

Unidentified Justice: It would not just affect the underlying rationale, but your principal argument about overlap between the later statute and the earlier statute applies more forcefully, it seems to me, in Jones than it does here in the housing area.

And the overlap argument was presented in Jones.

And it was specifically considered by Justice Harlan.

Mr. Kaplan: --Yes.

Unidentified Justice: Mr. Kaplan, I might remind you that Jones in the Eighth Circuit, which was reversed, was an opinion that I wrote.

[Laughter]

Mr. Kaplan: I know that, Your Honor.

The--

Unidentified Justice: Do you have any trouble with Jones?

Mr. Kaplan: --I'm sorry?

Unidentified Justice: Do you have any trouble with Jones?

Mr. Kaplan: Do I have any trouble with Jones?

Unidentified Justice: Yes.

You sort of skip over it.

You sort of skip over it.

Mr. Kaplan: I skipped over it because the focus of this discussion was on the Runyon case, which is 1981.

But I think it no use denying the fact that the--

Unidentified Justice: Wouldn't the Jones case still be there?

Mr. Kaplan: --The Jones case would be there.

Unidentified Justice: And you don't mind that.

Mr. Kaplan: It doesn't have to be overruled in this particular proceeding, but nevertheless to the extent that the legislative history--

Unidentified Justice: And you don't mind Jones... you don't mind Jones remaining on the books.

Mr. Kaplan: --Do I mind Jones--

Unidentified Justice: Yes.

Mr. Kaplan: --I don't have a particular view of that at this moment, but I think that to try to get to the bottom line, I think that--

Unidentified Justice: Did you ever read the?

Mr. Kaplan: --the underlying rationale could be affected if you accept our view of the 1866 history.

Unidentified Justice: Well, that was specifically on the 1866 statute.

Jones was.

Mr. Kaplan: Yes, it was.

Yes.

The Jones case--

Unidentified Justice: And that's still the law regardless of what happens in this case.

Mr. Kaplan: --That's the law in... yes, under 1982--

Unidentified Justice: It's still the law.

Mr. Kaplan: --it's still the law until--

Unidentified Justice: That's all right with you.

Mr. Kaplan: --that--

Unidentified Justice: That's all right with you.

Mr. Kaplan: --I'm not expressing an opinion on that particularly.

I am saying that there's... there could be a problem of that rationale being exposed... and I think it would be... if this case were turned on the 1866 legislative history.

You know, I don't think I can address it much further.

I note that the rationale has started to run into some problems other than in this case, which is Title VII, and the Bondari type case which is on... I think it's still on petition here.

The Fifth Circuit has refused to apply this rationale, for example, to alienage discrimination.

And that may yet focus a broader concern.

I guess what's happening is that there's... there's an inevitable push, once you have this statute or endorse it, to keep broadening it.

And as this statute or the coverage of the statute becomes applicable in more and more areas, there are more and more decisions that have to be made.

And, for example, in the Runyon case itself, you had to deal with--

Unidentified Justice: Well, why don't you just argue that we--

Mr. Kaplan: --you're sort of having to define the--

Unidentified Justice: --not broaden it then?

Why don't you just argue that in light of the fact that it was originally wrong, as you've told us, we shouldn't broaden it?

We should leave bad enough alone and narrow it to what we've already held?

Mr. Kaplan: --Well--

Unidentified Justice: That's a quite different argument from saying that we should throw the whole thing away, though, isn't it?

Mr. Kaplan: --Well, it's... the question... I guess the argument is prompted by the fact I believe that it is wrong.

If you're saying that it could be limited to its facts, that I suppose is a possibility.

I note in the Runyon case itself, though, you were immediately... having created this statute, you were immediately testing the constitutional limits, it seems, by having to deal with the problems of association and the problems of privacy.

I mean, this is what I think starts... starts getting to... to happen when you're starting to make this... these rules.

Congress might relieve you of that problem in dealing... in dealing... in making its own statute, but when you have to interpret what doesn't really apply to the situation, the Runyon opinion itself suggests that you may run into... create problems yourself that start approaching a constitutional dimension.

And that's what the discussion in that case seemed to--

Unidentified Justice: Mr. Harbor, didn't we do exactly what Justice Scalia suggests in the baseball area?

We did allow the erroneous decision to remain on the books with respect to baseball, but we never extended it to football or boxing or anything like that.

And Congress then did address baseball and make the rules it thought would be appropriate.

And what's more important than baseball?

[Laughter]

That's right.

Today.

Mr. Kaplan: --Well, I... part of the problem I suppose with the Runyon matter, which concerns me obviously, in employment cases is that it followed the employment decision which was... it sort of put the cart before the horse.

And this established the basic threshold principle that then... then the employment was... was bound up into it.

I think that the... if you're suggesting could it be limited to... to this particular area, I suppose that the Court has done that on occasion.

But I'm not sure where the area would be drawn.

If you're suggesting a purely private school, which... which is unfunded and has no government involvement, I have no idea how... how significant that is, but it might not be a very major area--

Unidentified Justice: Oh, we've gone beyond private schools after Runyon, I mean, in later cases.

We've... we've confronted cases that involve purely private discrimination, haven't we, in this Court?

Mr. Kaplan: --Subsequent to Runyon, yes, purely private.

Unidentified Justice: Sure.

Mr. Kaplan: But the... the question is are we talking about limiting it to a particular institution or... namely, that that type of school... or are we talking about some broader areas.

And I don't know where you would... would draw the line with regard to that in view of the somewhat... the fits and starts that have appeared in this... in this legislative history.

I guess I would just like to... to finish up by mentioning that the types of issues that are coming up are specific and deal with... with problems that I think are better suited to legislative judgments in terms of their breadth, scope and type of remedy that has to be made, and that the Court should not perpetuate lawmaking in the guise of interpretation.

And I think that should provide the resolution for this case.

Thank you.

Unidentified Justice: Thank you, Mr. Kaplan.

Mr. Chambers, you have four minutes remaining.

REBUTTAL ARGUMENT OF JULIUS LeVONNE CHAMBERS

Mr. Chambers: Thank you, Your Honor.

I first would just note that the Respondent really offers no basis for the Court not applying stare decisis here and certainly for not applying the congressional ratification principle.

Unidentified Justice: Well, this is not to say that we've never overruled a statutory precedent.

Mr. Chambers: No, no.

I'm just--

Unidentified Justice: And we have many times.

Mr. Chambers: --I concede the Court has.

Unidentified Justice: But you say that none of the past cases in which we've overruled or severely limited a precedent is any kind of an argument for overruling Runyon.

Mr. Chambers: Not in this instance from what we've heard and really from what we've looked at and what we submitted in our brief.

Second, I would ask the Court, in looking at this Act that's involved in the Patterson case in terms of what the Congress was trying to reach in 1866 and beyond, we're talking about a black person trying to work at a bank who was subjected to harassment and on working in conditions that make it unbearable for a black to survive.

This is an Act that Congress was trying to reach in 1866, and it's part of the contract that the 1866 statute reaches.

We're not asking for an extension of Runyon.

We're asking only that the Court apply the statute as Congress originally enacted it and as this Court has applied it.

When Congress looked at--

Unidentified Justice: Mr. Chambers, certainly this is an extension of Runyon in the sense that in Runyon you're dealing with a one-shot deal: a black person is turned down for enrollment at a private school.

Here it's not a question of a refusal to hire a person; it's a question of the way the person is treated after they're hired.

It's a regular employment code that you're asking--

Mr. Chambers: --Your Honor, that's a... that is one way of looking at it, but we're looking at a black person trying to work on a job.

We're talking about a black person trying to get a job, trying to work with a contract.

And we're talking about--

Unidentified Justice: --A black person trying to get a job fits much more readily under the terms of make and enforce a contract than a black person complaining of harassment on the job.

Mr. Chambers: --No, Your Honor.

We're talking about a black person trying to work and make a living.

That's what Congress was trying to reach in 1866.

Unidentified Justice: But 1981 doesn't say the right to work and make a living.

It says the right to make and enforce contracts.

Mr. Chambers: The right to make the contract to allow one to work and make a living.

Look at... the legislative history talks about this.

And in Johnson, where the Court talked about the applicability of Runyon or 1981 to contractual matters in employment, there we had harassment on the job.

When Congress looked at the Runyon decision and the Johnson cases in 18... 1976, it cited cases that talked about harassment on the job, again, a proving of the decisions that the Courts had rendered.

So, we're not talking about any extension.

We're talking about the applicability of a statute designed to make it possible for a black person to work.

That's the heart of the matter, and that's what Congress was trying to reach with 1866 and what Runyon is trying to reach and what the cases subsequent to Runyon is trying to reach.

In 1976... 1972 and 1964 when Congress was enacting the Title VII or the Civil Rights Act of that time, it was looking at pervasive practices of discrimination, and it wanted to provide a remedy.

And it said it wanted to provide multiple remedies to make it possible for black people and other minorities to challenge this kind of discrimination.

Chief Justice William H. Rehnquist: Thank you, Mr. Chambers.

Your time has expired.

The case is submitted.

Mr. Chambers: Thank you, Your Honor.