United States District Court, Northern District of Illinois, E.D
November 17, 1981
HARVEY L. FERGUSON, PLAINTIFF,
JOLIET MASS TRANSIT DISTRICT AND EDWARD A. LAWSON, DEFENDANTS.
The opinion of the court was delivered by: Will, District Judge.
In the plaintiff's second amended complaint, he alleges that
the conditions of his employment by the Joliet Mass. Transit
District and the termination of that employment were racially
discriminatory in violation of Title VII and 42 U.S.C. § 1981. As
part of the relief for the alleged violation of section 1981, the
plaintiff requests an award of punitive damages. The defendant
Joliet Mass. Transit District, in a motion to strike that request,
argues that punitive damages cannot be awarded under section 1981
against a municipal corporation. For the reasons hereinafter
stated, the defendant's motion is granted.
The Supreme Court held recently that "a municipality is immune
from punitive damages under 42 U.S.C. § 1983." County of Newport
v. Fact Concerts, Inc., ___ U.S. ___, ___, 101 S.Ct. 2748, 2762,
69 L.Ed.2d 616 (1981). In reaching that decision, the Court first
determined whether the immunity claimed by the defendant in that
case was well established at common law at the time the statute
was enacted. Id. at 2755-58. Finding that it was, the Court next
examined the legislative history of section 1983 for evidence of
congressional intent to abolish that immunity in suits under
section 1983. Id. at 2758-59. Finding none, the Court considered
the compatibility of the immunity with the purposes of the
statute and with public policy. Id. at 2759-62. A similar
analysis of "both history and policy," id. at 2755, is
appropriate in construing section 1981.
Since section 1981 was enacted only five years before section
1983 became law, the analysis of section 1981 begins in this case
at the same point the analysis of section 1983 began in City of
Newport: municipal immunity from punitive damages was well
established at common law when the statute was passed. See id. at
2756-58. The first relevant factor, therefore, supports a holding
that a municipal corporation is immune from damages under section
1981 as well as under section 1983.
Although the plaintiff is correct that the legislative history
of section 1983 which was cited in City of Newport is irrelevant
to an analysis of section 1981, when the plaintiff also argues
that that fact justifies a construction of section 1981 which is
different from the Supreme Court's construction of section 1983,
he misconceives the role of legislative history in the analysis
in City of Newport. While the Court did note that "the limited
legislative history relevant to [the issue of punitive damages
against municipalities] suggests" that in enacting section 1983
Congress did not intend to abolish municipal common law immunity
from punitive damages, id. at 2759, the Court's decision to
maintain that immunity in suits under section 1983 was not based
on the presence of such evidence in the legislative history but
on the absence of any evidence that Congress intended to abolish
The plaintiff has not cited any evidence that Congress intended
to allow an award of punitive damages against municipal
corporations under section 1981, while retaining the immunity
under section 1983, nor has our examination of the legislative
history revealed any such intent. When an immunity is well
established in the common law, the courts presume that, in
enacting a statute, "`Congress would have specifically so
provided had it wished to abolish the doctrine.'" Id. at 2758,
quoting Pierson v. Ray, 386 U.S. 547, 555, 87 S.Ct. 1213, 1218,
18 L.Ed.2d 288 (1967). In light of that presumption, therefore,
the silence of Congress and the neutrality of the legislative
history of section 1981 on this issue support a conclusion that
the immunity of municipal corporations from punitive damages
extends to suits under section 1981.
The plaintiff's argument that municipal immunity from punitive
damages is contrary to the goals of section 1981 exaggerates both
the scope of that statute and the efficacy of an award of
punitive damages. In what is apparently the only other case to
decide this issue, Boyd v. Shawnee Mission Public Schools,
522 F. Supp. 1115 (D.Kan. 1981), the court held that punitive damages
were available against a municipality in a suit under section
1981 because section 1981, unlike section 1983, was enacted
pursuant to the thirteenth amendment and had as its goal the
total eradication of the badges and incidents of slavery. Those
considerations, however, do not necessarily require different
constructions of the two statutes. For example, although noting
that section 1983 was enacted pursuant to the thirteenth
amendment, many courts have held that in section 1981 suits as
well as section 1983 suits, the plaintiff must prove
discriminatory intent because of the close relationship between
section 1981 and the fourteenth amendment. See, e.g., Golden v.
Local 55 of the International Association of Firefighters,
633 F.2d 817 (9th Cir. 1980); Craig v. County of Los Angeles,
626 F.2d 659 (9th Cir. 1980), cert. denied, 450 U.S. 919, 101 S.Ct.
1364, 67 L.Ed.2d 345 (1981); Mescall v. Burrus, 603 F.2d 1266
(7th Cir. 1979); Grigsby v. North Mississippi Medical Center,
Inc., 586 F.2d 457 (5th Cir. 1978). The cases which hold that
neither section 1981 nor section 1983 prohibit unintentional
discrimination establish that the different goals and
constitutional bases for the two statutes do not necessarily mean
that section 1981 must be interpreted more broadly than section
Furthermore, allowing punitive damages against municipal
corporations would not significantly advance the purposes of
section 1981 beyond what is already accomplished by allowing
awards of compensatory damages against a municipality and awards
of compensatory and punitive damages against defendant officials.
Punitive damages are awarded to deter a tortfeasor and others
from similar conduct and to punish a tortfeasor who acted
maliciously. In City of Newport, the Supreme Court rejected the
argument that the threat of punitive damages would deter a
municipal corporation from future constitutional violations for
several reasons. First, it noted that municipal officials,
including those at the policymaking level, would probably not be
deterred from wrongdoing by the possibility that large punitive
damages awards might be assessed against the municipality. 101
S.Ct. at 2760. Second, according to the Court, offending public
officials were as likely to be removed from office out of concern
for public funds generated by an award of compensatory damages
and for the government's integrity than as a reaction to a
punitive damage award. Id. at 2761. Third, an award of punitive
damages against the offending official is a more direct and
effective deterrent than an award against the municipal employer.
The Court in City of Newport also held that the retribution
objective of punitive damage awards does not justify such an
award against a municipality.
Under ordinary principles of retribution, it is the
wrongdoer himself who is made to suffer for his
unlawful conduct. If a government official acts
knowingly and maliciously to deprive others of their
civil rights, he may become the appropriate object of
the community's vindictive sentiments . . . . A
municipality, however, can have no malice independent
of the malice of its officials. Damages awarded for
punitive purposes, therefore, are not sensibly
assessed against the government entity itself.
Id. at 2760. Moreover, "punitive damages imposed on a
municipality . . . are likely accompanied by an increase in taxes
or a reduction of public services for the citizens footing the
bill. Neither reason nor justice suggests that such retribution
visited upon the shoulders of blameless or unknowing taxpayers."
Id. According to the Court, what small increase in accomplishing
the goals of the statute might be gained by awarding punitive
damages against a municipal corporation is outweighed by the
serious risk to the financial integrity of municipal corporations
inherent in the burden of exposure for the malicious conduct of
individual government employees. Id. at 2761. The Court
[b]ecause evidence of a tortfeasor's wealth is
traditionally admissible as a measure of the amount
of punitive damages that should be awarded, the
unlimited taxing power of a municipality may have a
prejudicial impact on the jury, in effect encouraging
it to impose a sizable award. The impact of such a
windfall recovery is likely to be both unpredictable
and, at times, substantial, and we are sensitive to
the possible strain on local treasuries and therefore
on services available to the public at large. Absent
a compelling reason for approving such an award, not
present here, we deem it unwise to inflict the risk.
Id. at 2761-62. Since the objectives underlying punitive damages
and the applicable principles of public policy are the same
whether an award of punitive damages is being considered under
section 1981 or section 1983, the rationale of the Supreme Court
in City of Newport that municipal immunity from punitive damages
is compatible with the purposes of section 1983 compels the same
conclusion with regard to section 1981.
The plaintiff's attempts to justify an exception to municipal
immunity from punitive damages based on the nature of the
defendant mass transit district and its functions are
unpersuasive. The plaintiff argues that the concern for taxpayers
which prompted, in part, the Supreme Court's decision in City of
Newport is not implicated here because no general taxing
authority is involved. That claim ignores the financial status of
public transportation. The defendant district receives financial
support from a sales tax levied in the area in which it operates
and from state funds. The plaintiff's theory that, if the
defendant must pay large punitive damages awards in a section
1981 suit, the public, which is innocent of any malice, will not
be significantly affected by resulting service curtailments or
higher taxes is unrealistic and unsupported by fact or reason.
The plaintiff's argument that the defendant district is not a
municipal corporation as the term was used when section 1981 was
enacted is also unavailing. Since municipal immunity stems from
state sovereign immunity, the State of Illinois, in creating the
defendant and in defining defendant as a municipal corporation,
Ill.Rev.Stat., ch. 111 2/3, § 353, endowed the defendant with the
same immunities as every other municipal corporation.
The plaintiff also argues that punitive damages should be
available against a municipal corporation in a section 1981 suit
where the defendant is performing a proprietary rather than a
governmental function. The operation of a public utility such as
the mass transportation system involved in this case is regarded
as a proprietary function. See James, F., Tort Liability of
Governmental Units and Their Officers, 22 U.Chi.L.Rev. 610, 627
(1955); City of Albuquerque v. New Mexico State Corporation
Commission, 93 N.M. 719, 605 P.2d 227 (1980). In Owen v. City of
Independence, 445 U.S. 622, 100 S.Ct. 1398, 63 L.Ed.2d 673
(1980), while discussing the history of municipal immunity, the
Supreme Court explained the distinction.
On the one hand, the municipality was a corporate
body, capable of performing the same "proprietary"
functions as any private corporation, and liable for
its torts in the same manner and to the same extent
as well. On the other hand, the municipality was an
arm of the State, when acting in the "governmental"
or "public" capacity, it shared the immunity
traditionally accorded the sovereign.
445 U.S. at 644-45, 100 S.Ct. at 1412.
Although that historical difference may superficially appear to
support the distinction
suggested by the plaintiff, we conclude that immunity from
punitive damages as distinguished from sovereign immunity as to
all damages should apply regardless of the particular function of
the municipal corporation which is involved in the suit. The
policy bases of the decision in City of Newport with respect to
immunity from punitive damages and our decision with regard to
section 1981 apply to the same extent whether the municipality is
performing a proprietary or a governmental function. Furthermore,
the statement in Owen that municipal corporations performing
proprietary functions have historically been held responsible "to
the same extent as a private corporation under like
circumstances," 445 U.S. at 645 n. 27, 100 S.Ct. at 1412, is
inaccurate insofar as it implies that municipal corporations have
been held liable for punitive damages if they are performing a
proprietary function. Contrary to that implication, many courts
have held that punitive damages were not available against a
municipal corporation even when the municipality was performing
a proprietary function. See, e.g., City Council of Montgomery v.
Gilmer & Taylor, 33 Ala. 116 (1858); City of Chicago v. Langlass,
52 Ill. 256 (1869); Wilson v. Wheeling, 19 W. Va. 323 (1882);
Bennett v. Marion, 102 Iowa 425, 71 N.W. 360 (1897); Willett v.
Village of St. Albans, 69 Vt. 330, 38 A. 72 (1897); Town of
Newton v. Wilson, 128 Miss. 726, 91 So. 419 (1922); Ranells v.
City of Cleveland, 41 Ohio St.2d 1, 321 N.E.2d 885 (1975);
Costich v. City of Rochester, 68 A.D. 623, 73 N.Y.S. 835 (1902);
Chappell v. City of Springfield, 423 S.W.2d 810 (Mo. 1968). The
Supreme Court relied on those cases in City of Newport, 101 S.Ct.
at 1256 and 1256 n. 21, and that reliance implies that the
function of the municipal corporation is irrelevant to the
question of punitive damages and indicates that the historical
basis for the decision that punitive damages cannot be recovered
against a municipality is the same regardless of whether the
municipality is performing a proprietary or a governmental
function. We hold therefore, that the defendant Joliet Mass.
Transit District cannot be held liable under section 1981 for
For the reasons stated above, we grant the defendant's motion
to strike paragraph d of count II of the plaintiff's second
amended complaint insofar as it relates to the Joliet Mass.
Transit District. An appropriate order will enter.
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