Domino's Pizza, Inc. v. McDonald, 546 U.S. 470 (2006)
Primary Holding
A plaintiff who lacks any rights under an existing contractual relationship with the defendant, and who has not been prevented from entering into such a contractual relationship, may not bring suit under 42 U.S.C. § 1981.
In the case of Domino's Pizza, Inc. v. McDonald, a businessman named John McDonald claimed that Domino's discriminated against him based on his race while they were trying to work together on restaurant projects. The Supreme Court decided that since McDonald didn't have a contract with Domino's at the time of the alleged discrimination, he couldn't sue them under a specific civil rights law. This ruling matters for consumers because it clarifies that you need to have a direct contractual relationship with a company to bring certain claims against them, which helps define the limits of legal protections in business dealings. This case is relevant if someone feels they've been treated unfairly by a company but doesn't have a formal agreement with them.
AI-generated plain-language summary to help you understand this case
In the case of Domino's Pizza, Inc. v. McDonald, the underlying dispute arose when John McDonald, a black man and the sole shareholder of JWM Investments, Inc. (JWM), alleged that Domino's Pizza had violated his rights under 42 U.S.C. §1981 due to racial discrimination. JWM had entered into contracts with Domino's to construct four restaurants in Las Vegas. However, after the completion of the first restaurant, a Domino's agent, Debbie Pear, refused to execute necessary estoppel certificates that JWM needed for bank financing. The situation escalated when Pear allegedly misrepresented ownership of the land to the Las Vegas Valley Water District, leading McDonald to prove JWM's ownership. McDonald claimed that Pear made racially charged comments and threatened him regarding the contracts, ultimately resulting in the contracts remaining uncompleted and JWM filing for Chapter 11 bankruptcy. Procedurally, after JWM's bankruptcy trustee initiated a breach of contract claim against Domino's, which was settled for $45,000, McDonald filed a personal §1981 claim against Domino's. The trustee did not pursue a §1981 claim during the bankruptcy proceedings, and McDonald sought to hold Domino's accountable for the alleged racial animus that he claimed led to the breach of contract, resulting in personal damages, including emotional distress and humiliation. Domino's subsequently filed a motion to dismiss McDonald's claim. The background context of this case highlights the legal question of whether a plaintiff, who lacks a direct contractual relationship with a defendant and has not been prevented from entering such a relationship, can bring a lawsuit under §1981. The case underscores the intersection of contract law and civil rights, particularly in the context of racial discrimination in business dealings.
Whether a plaintiff who lacks any rights under an existing contractual relationship with the defendant, and who has not been prevented from entering into such a contractual relationship, may bring suit under Rev. Stat. §1977, 42 U.S.C. §1981.
The judgment is reversed.
- Court
- Supreme Court
- Decision Date
- December 6, 2005
- Jurisdiction
- federal
- Case Type
- landmark
- Majority Author
- Scalia
- Damages Awarded
- N/A
- Data Quality
- high
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