cstr

Domino’s Pizza, Inc. v. McDonald
Supreme Court of the United States, 2006
126 S.Ct. 1246, 163 L.Ed.2d 1069

1. FACTS
McDonald is the Plaintiff and Domino’s Pizza, Inc. is the Defendant. The Plaintiff, an African American, is the sole shareholder of the JWM having a contract with the Defendant. And the JWM and the Defendant later had a contract dispute that was later resolved.
The Plaintiff sued the Defendant in the United States District Court for the District Court of Nevada against the Defendant’s violations of 42 U.S.C. §1981, which bars relying on race to make and enforce contracts, and also for personal damages. The Plaintiff asserted that the Defendant and its employees had broken the contracts with the JWM because of his race.
The Plaintiff lost and appealed to the United States Court of Appeals for the Ninth Circuit (“Ninth Circuit”). Later, the Ninth Circuit ruled in favor of the Plaintiff because a non-contracting party like the Plaintiff may bring suit under §1981 when there are injuries distinct from that of the corporation. So the Defendant appealed to the Supreme Court of the United States which revised the Ninth Circuit’s decision.

2. ISSUE
Under 42 U.S.C. §1981, is the Defendant liable if he/she relies on the race of the shareholder or contracting officer to make or enforce contractual relationship with the Company of the shareholder or contracting officer?

3. HOLDING
No.

4. RATIONAL
42 U.S.C. §1981 defines “make and enforce contracts” to include the making performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship. However, §1981 provides the right to give and receive contractual relationship on one’s own behalf.
Additionally, the corporation and agency law says that the shareholder or contracting officer has no rights and is exposed to no liability under the corporation’s contracts.
Thus, since it was the JWM that had a contractual relationship with the Defendant and the Plaintiff was only a shareholder of the JWM, the Plaintiff has no right under §1981 to claim damages over the Defendant.

5. DICTUM
N/A