Arguello, et al v. Conoco Inc

United States Court of Appeals
Fifth Circuit
F I L E D
May 5, 2003
Charles R. Fulbruge III
Clerk
In the
United States Court of Appeals
for the Fifth Circuit
_______________
m 01-11549
_______________
DENISE ARGUELLO, ET AL.,
Plaintiffs,
DENISE ARGUELLO AND ALBERTO GOVEA,
Plaintiffs-Appellants,
VERSUS
CONOCO, INC.,
Defendant-Appellee.
_________________________
Appeal from the United States District Court
for the Northern District of Texas
_________________________
Before SMITH, BARKSDALE, and
EMILIO M. GARZA, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
Denise Arguello and Alberto Govea appeal
(1) a judgment as a matter of law (“j.m.l.”) on
their claims of race discrimination in violation
of 42 U.S.C. § 1981 and (2) the denial of their
claims for injunctive relief under 42 U.S.C.
§ 2000a. Arguello and Govea, both of whom
are Hispanic, entered a store owned by Con-
oco, Inc. (“Conoco”), intending to purchase
gasoline and other items. There was a heated

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confrontation, during which the employee
made several racially derisive remarks. Argu-
ello and Govea allege that they were deprived
of their ability to enter into a contract on non-
discriminatory terms as prohibited by § 1981.
The jury decided for plaintiffs, but the district
court granted Conoco’s motion for j.m.l. un-
der FED. R. CIV. P. (50)(b). See Arguello v.
Conoco, Inc., 2001 U.S. Dist. LEXIS 18471
(N.D. Tex. Nov. 9, 2001) (No. 397-CV-0638-
H). Finding no error, we affirm.
I.
Arguello and Govea stopped with their
family at a Conoco store. After Arguello’s
husband pumped gas into her car, Arguello
and Govea (her father) went inside to pay for
the gas and buy some beer. As they stood in
line, Cindy Smith, one of the two clerks on du-
ty, waited on other customers. Arguello tes-
tified that Smith was rude to her when she
reached the counter and that her demeanor
was less friendly than it had been with the cus-
tomers she had previously served. After Ar-
guello presented her credit card as payment,
Smith requested identification. Arguello tes-
tified that Smith singled her out by demanding
that she provide identification; Smith contends
that she requested identification because Argu-
ello was attempting to buy beer.
Arguello, an Oklahoma resident, presented
Smith with her valid Oklahoma driver’s
license. Smith initially refused to accept it,
claiming she could not take an out-of-state li-
cense, but she eventually accepted it and com-
pleted the transaction. During Arguello’s pur-
chase, Govea became increasingly frustrated
with the manner in which Smith was treating
his daughter. Consequently, he left the beer he
had intended to purchase on the counter and
walked out of the store.
After Smith completed Arguello’s sale, the
tension between them escalated into a
confrontation. Arguello testified that Smith
began shouting obscenities at her and making
racially derogatory remarks. Arguello began
to leave with her purchase, but realized that
she had the wrong copy of the credit card slip
and approached the counter again. After an-
other argument, Arguello and Smith ex-
changed copies. As Arguello walked away the
second time, Smith shoved a six-pack of beer
off the counter and onto the floor.
Plaintiffs testified that after Arguello left the
store, Smith began screaming racist remarks
over the intercom. At the same time, Smith
laughed at Arguello and her family and made
several crude gestures. Govea and other
family members telephoned Conoco from a
payphone outside the store to lodge a
complaint. During that telephone
conversation, the Conoco official indicated
that he wanted to know the name of the clerk
in question. When Govea attempted to re-
enter the store to determine Smith’s name,
Smith locked him out while laughing and
making crude gestures.
Arguello and Govea sued Conoco under 42
U.S.C. §§ 1981 and 2000a.1 The jury found
for plaintiffs on the § 1981 claim and awarded
1 As initially filed, the suit included claims by
various additional plaintiffs alleging that Conoco
was in violation of §§ 1981 and 2000a and state
law for subjecting minority customers to substan-
dard service and racially derogatory remarks. The
district court dismissed or granted summary judg-
ment for defendants on all claims. On appeal, a
panel of this court reinstated and remanded for trial
the claims raised by Arguello and Govea in this
appeal, but affirmed the rejection of all other
claims and plaintiffs. See Arguello v. Conoco,
Inc., 207 F.3d 803, 813 (5th Cir. 2000).

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compensatory and punitive damages. The
court granted j.m.l., finding that the record
provided no basis upon which a reasonable
jury could conclude that plaintiffs were
prevented, on a discriminatory basis, from
entering into a contractual relationship in
violation of § 1981.
II.
We review a j.m.l. de novo. Coffel v. Stry-
ker Corp., 284 F.3d 625, 630 (5th Cir. 2002).
A j.m.l. is appropriate only where “there is no
legally sufficient basis for a reasonable jury to
find for [a] party.” FED. R. CIV. P. 50(a)(1);
accord Reeves v. Sanderson Plumbing Prods.,
Inc., 530 U.S. 133, 139 (2000). Thus, a
motion for j.m.l. in a jury case is a challenge to
the sufficiency of the evidence supporting the
verdict. Flowers v. S. Reg’l Physician Servs.,
247 F.3d 229, 235 (5th Cir. 2001).
In assessing the legal sufficiency of the evi-
dence, we consider the entire trial record in the
light most favorable to the nonmovant,
drawing reasonable inferences in his favor.
Burch v. Coca-Cola Co., 119 F.3d 305, 313
(5th Cir. 1997). An issue is properly
submitted to the jury where there is a conflict
in substantial evidenceSS“evidence of such
quality and weight that reasonable and fair-
minded men in the exercise of impartial
judgment might reach different conclusions.”
Boeing Co. v. Shipman, 411 F.2d 365, 374-75
(5th Cir. 1969) (en banc), overruled on other
grounds, Gautreaux v. Scurlock Marine, Inc.,
107 F.3d 331 (5th Cir. 1997) (en banc).
To succeed on a § 1981 claim, a plaintiff
must establish “(1) that she is a member of a
racial minority; (2) that [the defendant] had
intent to discriminate on the basis of race; and
(3) that the discrimination concerned one or
more of the activities enumerated in the
statute. Morris v. Dillard Dep’t Stores, Inc.,
277 F.3d 743, 751 (5th Cir. 2001). The first
element is not disputedSSall parties concede
that Arguello and Govea are Hispanic.
Further, the testimonial and other evidence
provides a basis for concluding that Smith
subjected Arguello to substandard service. In
conjunction with that evidence of
maltreatment, the testimony regarding the
racially charged nature of Smith’s comments
sufficed to create a jury question regarding
whether Smith intentionally discriminated
against plaintiffs on the basis of race.
Therefore, this case turns on the third element,
namely, whether Smith’s conduct implicated
rights guaranteed by § 1981.
A.
Section 1981 does not provide a general
cause of action for race discrimination.2 Ra-
ther, it prohibits intentional race discrimination
with respect to certain enumerated activities.3
At issue here is plaintiffs’ ability “to make and
enforce contracts” on nondiscriminatory terms.
2 Garrett v. Tandy Corp., 295 F.3d 94, 100 (1st
Cir. 2002); Youngblood v. Hy-Vee Food Stores,
Inc., 266 F.3d 851, 855 (8th Cir. 2001), cert. de-
nied, 535 U.S. 1017 (2002); Hampton v. Dillard
Dep’t Stores, Inc., 247 F.3d 1091, 1118 (10th Cir.
2001).
3 42 U.S.C. § 1981(a) provides that
[a]ll persons within the jurisdiction of the
United States shall have the same right in
every State and Territory to make and en-
force contracts, to sue, be parties, give evi-
dence, and to the full and equal benefit of all
laws and proceedings for the security of
persons and property as is enjoyed by white
citizens, and shall be subject to like pun-
ishment, pains, penalties, taxes, licenses,
and exactions of every kind, and to no other.

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42 U.S.C. § 1981(a).
To establish a deprivation of § 1981 rights
in the retail context, the plaintiff must
demonstrate “the loss of an actual, not
speculative or prospective, contract interest.”4
An allegation of “the mere possibility that a
retail merchant would interfere with a
customer’s right to contract i n the future” is
insufficient to support recovery under § 1981.
Morris, 277 F.3d at 752 (collecting cases).
Instead, the plaintiff “must offer evidence of
some tangible attempt to contract” that in
some way was “thwarted” by the defendant.
Id.
The law in this circuit for § 1981 claims in
the retail context is established by Morris.
There, this court plainly stated the rule that
“where a customer has engaged in an actual at-
tempt to contract that was thwarted by the
merchant, courts have been willing to
recognize a § 1981 claim.” Morris, 277 F.3d
at 752 (emphasis added.) The Morris court
cited with approval, inter alia, Henderson v.
Jewel Food Stores, Inc., 1996 U.S. Dist.
LEXIS 15796 (N.D. Ill. Oct. 23, 1996) (No.
96-C-3666), as “holding that ‘a § 1981 claim
must allege that the plaintiff was “actually
prevented, and not merely deterred, from
making a purchase or receiving service after
attempting to do so.’” Morris, id. (emphasis
added). The Morris court summarized its
holding by stating that “Morris must offer
evidence of some tangible attempt to contract
with Dillard’s during the course of the ban,
which could give rise to a contractual duty
between her and the merchant, and which was
in some way thwarted.” Id. (emphasis
added).5
Govea cannot make that showing.
Although his decision to abandon his purchase
resulted from Smith’s mistreatment of his
daughter, Smith did not actually interfere with
an attempted purchase. According to Govea’s
own testimony, he voluntarily set the beer on
the counter and left without trying to buy it.
Consequently, there is no basis on which a
reasonable jury could conclude that Smith pre-
vented Govea from making a purchase. Nor
can Smith’s later conduct in locking him out of
the store support a claim under § 1981, be-
cause his subsequent attempts to gain entry in-
to the store were, again by his own admission,
not to buy anything but to determine Smith’s
name so he could provide it to a Conoco rep-
resentative.
B.
Arguello likewise cannot establish
interference with an actual contract interest.
Her claim must fail, because she successfully
completed the transaction.6 Having received
4 Morris, 277 F.3d at 751-52; see also Bellows
v. Amoco Oil Co., 118 F.3d 268, 275 (5th Cir.
1997) (denying recovery under § 1981 because
plaintiff failed to introduce evidence that defendant
actually interfered with the contract).
5 At least one circuit has embraced Morris, and
none has questioned it. In Garrett, 295 F.3d at
100-101, the court held that “to satisfy the foun-
dational pleading requirements for a suit under
section 1981, a retail customer must allege that he
was actually denied the ability either to make,
perform, enforce, modify, or terminate a contract,
or to enjoy the fruits of a contractual relationship,
by reason of a race-based animus.”
6 There was some question whether Arguello
intended to purchase the beer left behind by her
father when he exited the store. Arguello testified
that she had expected Smith to ring up her father’s
beer along with her purchases. She asserts that,
absent Smith’s offensive behavior, she would have
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all she was entitled to under the retail-sales
contract, she cannot demonstrate any loss
recoverable under § 1981.7
1.
Plaintiffs argue for a broader interpretation
of the § 1981 right to “make and enforce
contracts” on equal terms such that it would
cover conduct occurri ng after the
consummation of a retail-sales contract. They
note that 42 U.S.C. § 1981(b), enacted as part
of the Civil Rights Act of 1991, extends the
reach of § 1981 by defining the term “make
and enforce contracts” to include “the making,
performance, modification, and termination of
contracts, and the enjoyment of all benefits,
privileges, terms, and conditions of the
contractual relationship.” 42 U.S.C.
§ 1981(b).
This provision was enacted as a direct re-
sponse to the narrow view of § 1981 ex-
pressed in Patterson v. McLean Credit Union,
491 U.S. 164 (1989). The enactment of
§ 1981(b) was an explicit rejection of Patter-
son, in which the Court had refused to impose
liability for discriminatory conduct occurring
after the formation of an employment contract.
The new provision displaced Patterson’s un-
derstanding of § 1981 by expanding the
statute’s reach to “all phases and incidents of
the contractual relationship.” Rivers v.
Roadway Express, Inc., 511 U.S. 298, 306-07
(1994).
Arguello and Govea correctly observe that
under § 1981, the “making” of a contract must
include the opportunity to enter into
negotiations on equal terms. That much was
true even before the 1991 modification of the
statute. Plaintiffs go further, however, and
argue that in light of Congress’s response to
Patterson, the statute should be read to
impose liability for racial discrimination or
harassment occurring after the formation of
any contract.
There is a significant distinction, however,
between employment agreements and retail
transactions. A contract for employment in-
volves a continuing contractual relationship
that lasts for the duration of the agreement.
As a result of the 1991 amendments, the right
to enjoy the benefits of that relationship on a
nondiscriminatory basis remains enforceable
under § 1981 so long as the relationship
continues.
In the retail context, by contrast, there is no
continuing contractual relationship. Instead,
the relationship is based on a single discrete
transactionSSthe purchase of goods.8 There
6(...continued)
purchased the beer in a second, separate trans-
action.
Irrespective of whether Arguello intended to
make the purchase, the only action she took with
respect to the beer was to slide it across the counter
nearer to her purchases after her father left the
store. After she completed her purchase, it was
obvious that she had not bought her father’s beer.
Nevertheless, she did not tell Smith that she desired
to purchase it, and she took no other action that
would indicate that she intended to do so. Her
conduct therefore did not constitute an actual
attempt to contract and provides insufficient sup-
port for a claim under § 1981.
7 Cf. Hampton, 247 F.3d at 1118 (“We are
aligned with all the courts that have addressed the
issue that there must have been interference with a
contract beyond the mere expectation of being
treated without discrimination while shopping.”).
8 A sale is defined as a contract between two
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fore, t he appropriate comparison is not the
application of § 1981 during the period in
which an employment contract is in force. Ra-
ther, what Arguello and Govea are claiming in
the retail context is akin to the use of § 1981
to enforce rights under an employment
contract that has already expired.
2.
The remaining cases Arguello and Govea
cite for the proposition that a § 1981 plaintiff
may recover despite having successfully com-
pleted his purchase fall into two broad
categories. The first group involves
discriminatory service in restaurants and clubs.
These cases are easily distinguishable, because
dining at a restaurant generally involves a
contractual relationship that continues over the
course of the meal and entitles the customer to
benefits in addition to the meal purchased.9
Restaurants are, in that respect, significantly
different from retail establishments.
The second category is cases involving dis-
criminatory prepayment or check-writing poli-
cies.10 There, the plaintiff does not have to
demonstrate inability to contract, because dis-
criminatory contractual terms violate § 1981
even if parties willingly enter into the
contracts.11 The plaintiff is able to show the
loss of an actual contractual interest merely by
8(...continued)
parties involving the transfer of property in con-
sideration of the payment of a certain price in mon-
ey. BLACK’S LAW DICTIONARY 1337 (6th ed.
1990); Grinnell Corp. v. United States, 390 F.2d
932, 947-48 (Ct. Cl. 1968)(citing Comm’r of In-
ternal Revenue v. Brown, 380 U.S. 563, 571
(1965); see also Eusco, Inc. v. Huddleston, 835
S.W.2d 576, 579 (Tenn. 1992) (“The elements
necessary to constitute a sale are (1) a transfer of
title or possession, or both of (2) tangible personal
property, for a (3) consideration.”) (citation and
internal quotation marks omitted); Berger v. Alas-
ka, 910 P.2d 581, 586 (1996) (Alaska 1996) (“A
sale is the payment of money by a buyer to a seller
in exchange for title and possession of property.”);
Youngblood, 266 F.3d at 854 (“[T]he key is
whether any contractual duty remained after [plain-
tiff] made his purchase. Once [he] paid the cashier
and received [his purchase] . . ., neither party owed
the other any duty under the retail-sales contract.”)
In the retail context, the exchange of goods for
payment occurs simultaneously, and thus any
contractual obligations are quite limited in
duration.
9 See McCaleb v. Pizza Hut of Am., Inc., 28 F.
Supp.2d 1043 (N.D. Ill. 1998) (“[Pizza Hut] failed
to provide [the customers] the full benefits of the
contract in that, among other things, they failed to
provide [the customers] with the proper utensils
and created a disturbing atmosphere in which to
eat.”); Charity v. Denny’s, Inc., 1999 LEXIS
11462, at *11 (E.D. La. 1999) (“[I]t could rea-
sonably be said that a customer who enters a res-
taurant for service is contracting for more than just
food . . . . Dining in a restaurant includes being
served in an atmosphere which a reasonable person
would expect in the chosen place.”).
10 Hill v. Shell Oil Co., 78 F. Supp.2d 764
(N.D. Ill. 1999) (holding that customers could pro-
ceed with § 1981 claims despite the fact that they
completed their purchases, because the gas station
had a discriminatory prepayment policy); Hill v.
Amoco Oil Co., 2001 U.S. Dist. LEXIS 3082
(N.D. Ill. Mar. 19, 2001) (No. 97-C-7501)
(same); Buchanan v. Consol. Stores Corp., 125 F.
Supp.2d 730 (D. Md. 2001) (holding that custo-
mers could proceed with § 1981 claim based on
discriminatory check writing policy).
11 According to § 1981(a), read in conjunction
with § 1981(b), the right to make and enforce con-
tracts includes the right to enjoy “benefits, priv-
ileges, terms, and conditions of the contractual re-
lationship” on a nondiscriminatory basis.

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demonstrating that he was party to a
discriminatory contract.
In this case, however, there are no
allegations of discriminatory contractual terms.
Arguello paid the same price for her purchase
as any other customer would have, and she
was not required to use a nonpreferred
payment method. Each of the incidents of the
contract was identical to that which would
apply to any other customer. When one views
Arguello’s claim in this light, it is apparent that
her only complaint is Smith’s offensive
conduct. Egregious as that conduct may have
been, it neither prevented the formation of a
contract nor altered the substantive terms on
which the contract was made.
III.
Arguello and Govea appeal the denial, for
want of standing, of their claim for injunctive
relief under § 2000a. We review questions of
standing de novo. Castillo v. Cameron Coun-
ty, 238 F.3d 339, 347 (5th Cir. 2001).
“It goes without saying that those who seek
to invoke the jurisdiction of the federal courts
must satisfy the threshold requirement imposed
by Article III of the Constitution by alleging an
actual case or controversy.” City of Los
Angeles v. Lyons, 461 U.S. 95, 101 (1983)
(citations omitted). If a litigant is unable to
establish standing, he may not seek relief on
behalf of any party. James v. City of Dallas,
254 F.3d 551, 563 (citing O’Shea v. Littleton,
414 U.S. 488, 494 (1974)).
In addition to the general standing
requirements of injury in fact, causation, and
redressability, a litigant seeking injunctive
relief must demonstrate “that [he is] likely to
suffer future injury by the defendant and that
the sought-after relief will prevent that future
injury.” Id. Although Arguello and Govea
allege past wrongful conduct by Conoco,
“[p]ast exposure to illegal conduct does not in
itself show a present case or controversy
regarding injunctive relief.” Lyons, 461 U.S.
at 102 (citation and internal quotation marks
omitted). Moreover, if Arguello and Govea
have no cause of action under § 1981, they
have no closer relationship to future conduct
than does any member of the general public.
AFFIRMED.12
12 Plaintiffs challenge the exclusion of evidence
of complaints of racial discrimination by other
Conoco employees at other Conoco stores. The
excluded evidence, however, would have no impact
on our disposition of their substantive claims, and,
as we have explained, they have no standing to
pursue an injunction.

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