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June 15, 1972


The opinion of the court was delivered by: Will, District Judge.


The defendant bases its motion on the grounds that 42 U.S.C. § 1981 only applies to actions done under color of state law, that the applicable statute of limitations has expired, that the Court lacks subject matter jurisdiction over the complaint and personal jurisdiction over the defendant, and that the complaint fails to state a cause of action for which relief can be granted.

As the defendant is an Illinois corporation, it is clear that this Court has personal jurisdiction over it. It is also equally clear that the Court has subject matter jurisdiction over a complaint brought pursuant to 42 U.S.C. § 1981 and 28 U.S.C. § 1331(a), 1343(4) because a federal district court always has jurisdiction to entertain a suit brought under the Constitution or laws of the United States unless the claim appears to a legal certainty to be wholly insubstantial and frivolous. Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939 (1946); Wheeldin v. Wheeler, 373 U.S. 647, 83 S.Ct. 1441, 10 L.Ed.2d 605 (1963). As plaintiff's claims are not clearly frivolous, this Court has subject matter jurisdiction over the complaint.

The defendant further claims that 42 U.S.C. § 1981 does not give rise to any cause of action for private discrimination unless those acts can be deemed as action under color of state law and that the statute of limitations under this statute has run in any event. Both of these issues have been resolved in this Circuit in Waters v. Wisconsin Steel Works of International Harvester Company, 427 F.2d 476 (7th Cir. 1970). In that case, the Seventh Circuit held that 42 U.S.C. § 1981 was designed to prohibit among other things, private job discrimination based upon race even though it does not expressly mention employment contracts, and that the statute of limitations for suits under § 1981 was five years. As this decision is binding upon this Court, we conclude that plaintiff's complaint is not defective because it alleges acts of discrimination that do not involve any state action or because it was filed more than two years after the cause of action accrued.

The defendant next alleges that the complaint fails to state a claim upon which relief can be granted because no facts are alleged which even remotely indicate a violation of § 1981. That statute reads as follows:

  All persons within the jurisdiction of the United
  States shall have the same right in every State and
  Territory to make and enforce contracts, to sue, be
  parties, give evidence, 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 punishment,
  pains, penalties, taxes, licenses and exactions of
  every kind, and to no other.

In response to this argument, the plaintiff initially contended that the facts of this case indicate that the defendant is guilty of violating Section 704(a) of Title VII of the 1964 Civil Rights Act, 42 U.S.C. § 2000e-3, in that it discharged the plaintiff because the latter had filed complaints concerning the defendant's promotional policies with the Equal Employment Opportunity Commission. The plaintiff has argued that having alleged this violation of Title VII, he has alleged a claim upon which relief can be granted and that the complaint cannot be dismissed.

We would readily agree with the plaintiff's conclusion were he suing under the jurisdiction created by Title VII. The fact of the matter, however, is that he is not so suing and cannot. After pursuing his Title VII administrative remedies and receiving a right to sue notice from the EEOC, he referred the matter to an attorney who, after the statute of limitations on Title VII claims had expired, filed a suit in federal court which was dismissed because of the jurisdictional defect created by the tardy filing of the claim. The mere fact that the defendant may have violated the prohibition of § 704(a) of Title VII against retaliating against any person complaining to the EEOC does not mean that the defendant has also violated 42 U.S.C. § 1981.

From the obvious wording of § 1981, no doubt exists that a party, to state a cause of action under it, must allege some form of discrimination in his employment based upon his race. Because the plaintiff's first amended complaint specifically alleges that he was discharged from his employ (and discriminated against in other ways prior to discharge) because of his race, the defendant's motion to dismiss for failure to state a claim under § 1981 must be denied.

One final question remains on the subject of stating a claim. The Court has raised the issue of whether a party's failure to prosecute a Title VII suit based upon alleged racial employment discrimination bars a suit under § 1981 which alleges the same underlying factual occurrences. We conclude that, although there may be circumstances where the complaining party may be precluded from bringing the § 1981 suit, the instant case does not present such circumstances and the plaintiff's complaint may not be dismissed because of his failure timely to prosecute his claims in the form of a Title VII suit.

In Waters, supra, the Seventh Circuit held that a party complaining of employment discrimination may not bring a § 1981 suit if he intentionally bypassed the administrative procedures created by Title VII for attempting conciliation of the underlying claim. The Court stated that a party who had a reasonable excuse for failing to exhaust his administrative remedies under Title VII could sue directly under § 1981. To resolve the issues presented herein, we must determine whether (1) as a matter of interpreting Waters, the Seventh Circuit meant to include the bringing of a court suit under Title VII in its description of Title VII remedies which must be exhausted prior to the allowance of a § 1981 suit, and (2) if such suit is included, the plaintiff has alleged a reasonable excuse for his failure.

The initial question is easily resolved. The Court in Waters continuously referred to Congressional concern for resolution of disputes by conciliation rather than by court action. It was for this reason that the Court construed Title VII to modify 42 U.S.C. § 1981 by creating the prerequisite for a § 1981 suit that the complainant must have attempted to secure the full administrative benefits of proceedings before the EEOC which, through conciliation, might resolve the dispute prior to any court action. With this rationale as the basis for its conclusion, it is difficult to see how the Court could have meant to include the actual bringing of a Title VII suit as a prerequisite for a § 1981 suit. Not only does a Title VII court action add nothing to the administrative conciliation process, but the requiring of such prior suit would render the existence of the right to sue under § 1981 a superfluous right. Without a clear statement to this effect, we would be most hesitant to conclude that the Seventh Circuit, after first finding a right to sue under § 1981, then added as a prerequisite for such a suit the existence of a prior suit which would make the § 1981 suit totally unnecessary.

The language that the Court utilized also indicates that it did not mean to include the bringing of a suit under Title VII as a prerequisite for ...

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