Garrett v. Tandy Corporation
2002 WL 1431836, 2002 U.S. App. LEXIS 13656, 295 F.3d 94 (2002)
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Rule of Law:
Racially discriminatory conduct by a merchant that occurs after a retail transaction is complete does not violate 42 U.S.C. § 1981 unless it actually impairs a right protected by the contract. Separately, a statement of "suspicion" that someone committed a crime is not automatically a non-actionable opinion and may be defamatory if it implies the existence of undisclosed false facts.
Facts:
- John Garrett, a black man, entered a Radio Shack store in Brunswick, Maine, and was the only African-American person on the premises.
- Three white employees monitored Garrett's movements and accompanied him throughout his visit.
- Garrett purchased a book, a telephone, and batteries, and provided his name and address to the store manager, Steven Richard, upon request.
- After Garrett left, Richard discovered a laptop computer was missing.
- Richard reported the theft to the Brunswick police, identified Garrett as a suspect, and provided his address.
- Richard did not provide the police with information about any of the white customers who were in the store at the same time.
- A police officer from the neighboring town of Bath went to Garrett's home to investigate.
- Garrett consented to a search of his home and car, which revealed no trace of the stolen computer.
Procedural Posture:
- John Garrett filed an administrative complaint with the Maine Human Rights Commission (MHRC), which found reasonable grounds for discrimination and issued a right-to-sue letter.
- Garrett sued Tandy Corp. (Radio Shack's parent) in the U.S. District Court for the District of Maine, asserting claims under 42 U.S.C. §§ 1981 & 1982, the Maine Human Rights Act, and for defamation.
- The defendant moved to dismiss the amended complaint for failure to state a claim upon which relief could be granted.
- The district court granted the motion to dismiss the federal civil rights claims (§ 1981) and the defamation claim.
- The district court later dismissed the remaining state law claim without prejudice.
- Garrett (appellant) appealed the dismissal of the federal and defamation claims to the U.S. Court of Appeals for the First Circuit.
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Issue:
Does racially motivated surveillance and a subsequent police report of theft, which occur after a customer has successfully completed a purchase, interfere with the right to make and enforce contracts under 42 U.S.C. § 1981? Separately, is a store manager's statement to the police that he "suspects" a customer of theft a non-actionable statement of opinion as a matter of law?
Opinions:
Majority - Selya, J.
No, this conduct does not violate § 1981, but no, the statement is not necessarily a non-actionable opinion. To state a claim under § 1981 in a retail context, a plaintiff must allege an actual interference with the ability to make, perform, modify, or enjoy the benefits of a contract. Here, the in-store surveillance did not prevent Garrett from making his purchases, and the post-purchase police visit did not deprive him of the use or ownership of the goods he bought. Garrett's claim that he was deterred from potentially returning the items is too speculative to constitute an actual loss of a contract interest. However, the defamation claim was improperly dismissed. A statement of 'suspicion' is not automatically protected opinion; its meaning is context-dependent. Citing Milkovich, the court reasoned that such a statement can imply the existence of undisclosed defamatory facts that are provable as true or false, making it potentially actionable. Because the factual context was undeveloped, the claim should not have been dismissed.
Concurring-in-part-and-dissenting-in-part - Boudin, C.J.
Yes, this conduct could violate § 1981. The majority's reading of § 1981 is too narrow and relies on 'pettifogging' distinctions. The 1991 amendment, which protects the 'enjoyment of all benefits...of the contractual relationship,' should be read to include freedom from a humiliating, racially motivated police investigation immediately following a purchase. This is not a benefit a customer would expect to forego. Furthermore, Garrett's allegation that he intended to return items and was deterred by the police visit should not be rejected on a motion to dismiss, as returning an item is a modification of a contract protected by § 1981.
Analysis:
This decision significantly narrows the application of 42 U.S.C. § 1981 in retail settings, requiring a plaintiff to show a tangible, actual interference with a specific contractual interest, rather than just discriminatory harassment related to a transaction. It sets a high bar by distinguishing post-contract-formation harassment from interference with the contract itself. Conversely, the ruling on defamation reinforces the principle from Milkovich v. Lorain Journal Co., making it more difficult for defendants to dismiss defamation claims at the pleading stage by arguing that an accusation was merely couched in opinion-based language like 'I suspect' or 'I think.'
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