Barfield v. Commerce Bank, N.A.
484 F.3d 1276 (2007)
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Rule of Law:
Under 42 U.S.C. § 1981, a proposed exchange of money, such as requesting change at a bank, constitutes an attempt to enter into a 'contractual relationship' even if no immediate profit is made by the service provider, as long as the elements of a contract, including consideration, are present under state common law.
Facts:
- Chris Barfield, an African-American man, entered a Commerce Bank branch and requested change for a $50 bill but was refused on the ground that he was not an account-holder.
- The next day, James Barfield asked a white friend, John Poison, to make the same request from the bank; Mr. Poison was given change without being asked whether he held an account.
- A few minutes later, James Barfield entered the bank, asked for change for a $100 bill, and was told that he would not be given change unless he was an account-holder.
- James Barfield then enlisted a white news reporter and his African-American colleague; the African-American man was asked whether he was an account holder for change, while the white man was not.
Procedural Posture:
- The Barfields filed suit under 42 U.S.C. § 1981 in federal district court, alleging racial discrimination in the impairment of the ability to contract.
- Commerce Bank, the defendant, moved to dismiss the complaint for failure to state a claim.
- While the motion to dismiss was pending, the Barfields moved for class certification and to amend their complaint to include a claim under Title VI of the Civil Rights Act of 1964.
- The district court judge denied both of the plaintiffs' motions (for class certification and to amend the complaint) and granted the defendant's motion to dismiss.
- The Barfields, as appellants, timely appealed the district court's decision.
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Issue:
Does a customer's request for change for a large-denomination bill at a bank constitute an attempt to 'make and enforce contracts' within the meaning of 42 U.S.C. § 1981, even if the bank does not receive immediate remuneration for the service, and did the district court abuse its discretion by denying leave to amend a complaint that contained only generalized conclusions without supporting facts?
Opinions:
Majority - McConnell, Circuit Judge
Yes, a customer's request for change at a bank constitutes an attempt to 'make and enforce contracts' under § 1981, and no, the district court did not abuse its discretion in denying leave to amend the complaint. The Tenth Circuit reversed the district court's dismissal of the Barfields' § 1981 claim, holding that the proposed exchange of money (a large-denomination bill for smaller ones) constitutes a contract of exchange, fulfilling the consideration requirement under Kansas common law. The court reasoned that consideration does not need to have a quantifiable financial value, and profit-making establishments often offer transactions without immediate direct gain to induce other business, which still qualifies as contractual. The bank's argument that the service was 'gratuitous' was rejected, and the court distinguished Hampton v. Dillard Dep’t Stores, Inc. by explaining that Hampton turned on the plaintiff's failure to comply with the offer's specific terms, not a broad exclusion of 'gratuitous' offers from § 1981 coverage. The court affirmed the district court's denial of the Barfields' motion to amend their complaint, finding that the proposed amendments contained only generalized conclusions without specific factual allegations (e.g., identities, dates, specific instances), thus failing to meet the notice pleading requirements of Fed.R.Civ.P. 8(a)(2) by not providing the defendant fair notice of the claims.
Analysis:
This case significantly clarifies the scope of 'contractual relationship' under 42 U.S.C. § 1981, particularly in retail and service contexts. It establishes that attempts to engage in seemingly 'gratuitous' transactions, such as exchanging money, can still form the basis of a contract for § 1981 purposes, provided there is valid consideration (even if unquantified or indirect). This broad interpretation reinforces the statute's purpose of preventing racial discrimination in all phases of contractual relationships, potentially opening avenues for plaintiffs challenging discriminatory practices in a wider range of public accommodations where direct profit isn't immediately apparent. It also reaffirms the specificity required for pleading amendments, preventing broad, unsubstantiated claims.
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