February 24, 2006
Supreme Court Decides Domino's Pizza Case
As reported in this entry, on December 5, the Supreme Court heard argument in a case filed by John McDonald, a Nevada businessman seeking to sue Domino’s Pizza Inc. for racial discrimination under 42 U.S.C. § 1981. McDonald claimed that Domino’s breached contracts with his company, JWM Investments, Inc., because of his race. The issue before the Court was whether an individual can bring suit for a contract that his company had with Domino’s. On February 22, 2006, the Court issued an 8-0 decision holding that McDonald “could not state a claim under § 1981 unless he has (or would have) rights under the existing (or proposed) contract that he wishes ‘to make and enforce.’” In other words, a § 1981 plaintiff must “identify injuries flowing from a racially motivated breach of their own contractual relationship, not of someone else’s.” McDonald had no rights or responsibilities under the Domino’s contracts pursuant to general principles of corporate and agency law. Accordingly, the Court reversed the Ninth Circuit and upheld the District Court’s granting of Domino’s motion to dismiss.
Posted by franchiselawblog at February 24, 2006 03:49 PM