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April 2020

United States Supreme Court Issues Landmark Unanimous Decision Helpful to Employers Defending Against Racial Discrimination Claims Under Section 1981

Amidst all of the COVID-19 news, on March 23, 2020, the United States Supreme Court issued a landmark unanimous decision helpful to employers defending against racial discrimination claims brought under 42 U.S.C. § 1981 of the Civil Rights Act of 1866. The Court clarified in Comcast Corp. v. National Association of African American-Owned Media, that lawsuits brought under Section 1981, which prohibits racial discrimination in contracts, require the plaintiff to show “but for” causation—that is, that the defendant would have made a different contracting decision were it not for the plaintiff’s race—including during the initial pleading stage. See Comcast Corp. v. Nat’l Ass’n of African American-Owned Media, No. 18-1171, -- U.S. --- (2020).

The case arose several years ago, when Entertainment Studios Network, owned by African American entrepreneur Byron Allen, and the National Association of African American-Owned Media filed a lawsuit against Comcast in federal court in California. ESN and the NAAAM alleged that Comcast’s decision not to carry several television channels that ESN offered to it was motivated by racial discrimination and therefore violated Section 1981. The district court dismissed the claims, but on appeal the Ninth Circuit reversed, holding that ESN only needed to plead facts plausibly showing that race was a “motivating factor” in Comcast’s decision not to carry the channels offered by ESN, rejecting the opinions from other circuits that a Section 1981 plaintiff must show racial animus was a “but for” cause of the defendant’s conduct.

Relying on “textbook tort law” and statutory clues to resolve the circuit split, the Supreme Court unanimously reversed the Ninth Circuit, rejecting ESN’s arguments that (1) a Section 1981 plaintiff only bears the burden of showing that race was a motivating factor in the defendant’s challenged decision or that (2) even if “but for” causation applies at trial, a plausible motivating factor showing is all that is necessary to overcome a motion to dismiss at the pleading stage. Instead the Supreme Court held that a Section 1981 plaintiff has the burden to establish “but for” causation throughout the lawsuit, including the pleading stage.

Writing for the Court, Justice Neil Gorsuch rejected ESN’s attempts to rely on Title VII of the Civil Rights Act of 1964, which uses a less stringent “motivating factor” causation test. Justice Gorsuch noted that at the same time that Congress added the “motivating factor” test to Title VII in 1991, it amended Section 1981—without adding the “motivating factor” test there as well. The Court remanded the case to the Ninth Circuit to evaluate ESN’s pleading in light of the more stringent “but for” standard.

The Court further noted:

  • a neighboring section of the 1866 Act uses the terms “on account of” and “by reason of,” §2, 14 Stat. 27—phrases often held to indicate but-for causation—and gives no hint that a different rule might apply at different times during a lawsuit;
  • the “ancient and simple ‘but-for’ common law causation test” is the default rule against which Congress is normally presumed to have legislated when creating new causes of action such as Section 1981; and
  • the essential elements of a claim normally remain constant through the life of a lawsuit—to determine what a plaintiff must allege at the outset of a lawsuit, courts generally ask what the plaintiff must prove in trial at its end.

Why It Matters 

The Court’s decision will be helpful to employers defending Section 1981 suits, as plaintiffs will be obligated to meet the more stringent “but for” causation standard, even at the pleading stage. Although most circuits already followed the more stringent standard, the Court’s decision reinforces that a plaintiff alleging racial discrimination under Section 1981 has the burden to plead and prove that race was the “but-for” factor in suffering the loss of a legally protected right. This decision should also encourage employers to ensure the filing of a Motion to Dismiss for Failure to State a Claim under Federal Rule of Civil Procedure 12(b)(6) whenever a Section 1981 claim is involved.

Employment Law

Laura E. De Santos

Employment Law