Friday, August 14, 2020
Ninth Circuit Says Judge Klausner Erred in Dismissing Action, Finding No Viable Claim Under Federal Civil Rights Statute or State Unruh Act
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals has ordered reinstatement of an action against U.S. Bancorp brought by an African American father and daughter who wanted to open up an account in which to deposit a $50,000 check in settlement of a personal injury action but were told they could not do so because they did not live in the area.
The daughter, Mercedes Green, lives in the City of Victorville and the bank branch where she and her father, Hudena James, attempted to set up an account, is 44 miles from there, according to the complaint. Both Victorville and the bank branch in Alta Loma, an area of the City of Rancho Cucamonga, are in San Bernardino County.
Refusal of the bank to accept their business, the plaintiffs assert, is based on their race. To the extent the operative complaint is predicated on alleged violations of 42 U.S.C. §1981, a civil rights statute, and California’s Unruh Civil Rights Act, Wednesday’s memorandum opinion says, District Court Judge R. Gary Klausner of the Central District of California erred in dismissing it without leave to amend.
Klausner’s dismissal of other claims, with prejudice, was affirmed.
Sec. 1981 says, in part, that “[a]ll persons within the jurisdiction of the United States shall have the same right in every State and Territory to…the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens.” It declares:
“The rights protected by this section are protected against impairment by nongovernmental discrimination and impairment under color of State law.”
Civil Code §51, the seminal section of the Unruh Act, provides, in part:
“All persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.”
Section 52 spells out that “for each and every offense for the actual damages, and any amount that may be determined by a jury, or a court sitting without a jury, up to a maximum of three times the amount of actual damage but in no case less than four thousand dollars ($4,000), and any attorney’s fees that may be determined by the court in addition thereto.”
Klausner, on April 10, 2018, dismissed without leave to amend the first amended complaint.
He recited, with respect to the claim under §1981, that the plaintiffs averred they were treated “differently than White citizens who live outside a 5 to 6 mile radius of the bank,” noting in their pleading that bank employees who did not observe the “race or face” of Green agreed by telephone to open an account for her while those who saw her in person declined to do so.
“These threadbare allegations,” Klausner said, “do not plausibly suggest” that the plaintiffs were “intentionally discriminated against because of their race.”
The plaintiffs also set forth:
“During the time Plaintiff was on the [bank’s] premises…, bank accounts were indeed opened for people of the White race that lived outside the 5 to 6 mile radius of the US Bank.”
Klausner held that although “these conclusory allegations suggest a ‘bare possibility’ of discrimination, they are insufficient to state a claim for intentional discrimination under the Unruh Act.”
Ninth Circuit Decision
In partially reversing, a three-judge panel—comprised of Senior Judges Mary M. Schroeder and Michael Daly Hawkins and Judge Kenneth Kiyul Lee—said that “plaintiffs’ allegations, liberally construed, were sufficient to show intentional discrimination.”
For the proposition that intentional discrimination must be alleged, it pointed to a June 11, 2009 opinion of the California Supreme Court in Munson v. Del Taco, Inc. which came in response to a question the Ninth Circuit had certified to it. There, then-Justice Kathryn Werdegar (now retired) wrote that, in light of a recent amendment to the Unruh Act, intentional discrimination need not be shown in an action under that act where it is based on an alleged violation of the federal Americans With Disabilities Act.
The Supreme Court, inferentially, left otherwise undisturbed the proposition stated in its 1991 decision in Harris v. Capital Growth Investors XIV that intentional discrimination is an element of an action for a violation of the Unruh Civil Rights Act.
Possibility of Negligence
The pleading, itself—drafted by James—suggests a possibility that the refusal to open an account for the plaintiffs might have been the product of mere negligence on the part of bank employees, although the complaint expressly alleges intentional discrimination. It says:
“On or about May 31, 2018, I received a phone call from the District Manager of US Bank, an unnamed Defendant, in which he admitted the employees for that US Bank in Alta Loma had indeed made a terrible mistake and that there was no such ‘bank policy’ requiring you to live within a 5 to 6 mile radius of the bank to open an account and that the 5 to 6 mile radius was simply a ‘marketing strategy’ and not a ‘bank policy’. He said we should have been able to open up a bank account at the Alta Loma US Bank and that he himself had several bank accounts where he did not live. He said the employees were sorry for the treatment that they gave us and apologized for their particular behavior.”
The complaint says:
“This civil rights lawsuit is brought to ensure that the promise of equal treatment embodied in federal and state anti-discrimination laws does not become a meaningless guarantee for persons perceived to be of African American Ancestry.”
The case is James v. U.S. Bancorp, 19-55514.
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