Plaintiff ?MacDonald ?was ?African-American? and the sole shareholder and president of JWM. ?After a contractual dispute between JWM and Defendant Domino?s, JWM filed bankruptcy. ?The bankruptcy trustee settled a breach of contract claim against Domino?s. ?MacDonald filed a section 1981 claim against Domino?s in his personal capacity alleging that Domino?s broke its contracts with JWM because of racial animus towards MacDonald. ?He sought?? ?economic,?? ?emotional,?? ?and?? ?punitive damages. ?The trial court dismissed holding that MacDonald had no claim because he was not a party?? to?? the?? contracts.???? ?The?? Ninth?? Circuit reversed?? holding?? that?? a?? nonparty?? suffering injuries distinct from the corporation may bring suit.?? Reversing the Ninth Circuit, the Supreme Court declared ?Any claim brought under ?1981, therefore, ?must ?initially ?identify ?an ?impaired?contractual relationship,? ?1981(b) under which the plaintiff has rights.??? The Court noted that corporations? and? third-party ?intended beneficiaries may have rights under section 1981 but did not take this occasion to decide either issue.?? Rejecting the argument that MacDonald had a claim because he was the ?actual target? of discrimination, ?the ?Court ?concluded:?? ??Section 1981? plaintiffs? must? identify? injuries? flowing from a racially motivated breach of their own contractual relationship, not of someone elses.? Dominos?s Pizza, Inc. v. McDonald, No. 04-593 (Feb.? 22,? 2006,? Scalia? for? all? justices,? except Alito who did not participate).
Shareholder/President Has No Personal 1981 Claim for Breach of Company Contracts Based on Racial Animus Towards Him
Feb 22, 2006