The opinion of the court was delivered by: Charles P. Kocoras, District Judge
This matter is before the Court on Defendant Mario Tricoci Hair Salons and Day Spas, Inc. ("MT") and Defendant Elizabeth Arden Spas, LLC ("EA Spas") (collectively, "Defendants")' motion for summary judgment. For the following reasons, Defendants' motion is granted in part and denied in part.
The following material undisputed facts have been taken from only those portions of the parties' statements of material facts that conform with Local Rule 56.1. See Brasic v. Heinemann's Inc., 121 F.3d 281 (7th Cir. 1997). At issue in this litigation is the cost of Plaintiff Kimberly Williams-Ellis ("Ellis")'s haircut at one of MT's salons. Ellis says she was quoted a price of $40 for her haircut, but when she examined her receipt, she learned that she was charged $65 for an "Ethnic Women's Haircut."
In December 2004, Ellis consulted MT's internet website, and learned that prices for haircuts at MT "start at" $40. She also made two separate telephone calls to MT's call center. During her first call, Ellis spoke with an MT representative about various treatments. She was informed that the cost of a haircut at MT was "generally" $40. A few days later, Ellis called again to schedule a series of appointments for April 7, 2005. During the call, she informed the MT representative that she was African-American because she "wanted somebody who knew what they were doing on [her] hair." Ellis testified that the MT representative informed her that her haircut would cost $40. Ellis's reservation was entered into MT's computer reservation system and booked to SKU #2122, an "Ethnic Women's Haircut."
There exists significant dispute as to the reasons and criteria for charging a woman the higher "ethnic" hair charge. Defendants submit the affidavit of one of MT's call center managers and trainers, Aileen Cordero, who attests that the higher "ethnic" charge is imposed by the stylist when the texture of an individual's hair requires extra skill, time, tools, and product to style. Ellis contends that the charge was instead imposed on the basis of race, rather than upon the basis of actual time and skill required to style an individual's hair. In support of this argument, she points to testimony of MT hair stylists as well as documents evidencing that MT stylists have two "base" rates - one for ordinary haircuts and one for "ethnic" haircuts. Further, the parties dispute the extent to which non-African-American women are charged the "ethnic" hair charge. While Cordero attests that "ethnic hair" is a standard term used to describe hair texture, rather than race, Ellis points to testimony from MT's hair stylists, who testified that the vast majority of their "ethnic" hair charges are applied to African-American women, and to testimony from other MT educators and trainers, who are unaware of the term "ethnic hair."
On April 7, 2005, Ellis arrived at MT's Oakbrook, Illinois, salon and was given a list of services she would receive that day as well as a written brochure stating that prices for haircuts "start at" $40. Ellis' hair stylist, Taylor, was a senior stylist who had worked for MT for 15 years (Taylor is the salon name used by Laurie Festag). Taylor cut and blow-dried Ellis' hair. Ellis testified that Taylor used no special tools or chemicals, and merely trimmed her ends. Ellis felt that her haircut was "fine" and she visited her regular stylist a few days later to have her hair done again.
A dispute exists over whether or not Taylor charges the same rate to all new customers and whether or not Taylor would have charged Ellis $65 regardless of her ethnicity. While Cordero attests that Taylor's standard price is $65, the same price as Ellis was charged, documents produced by MT indicate that Taylor charges clients a range of prices, and that her base price for a woman's haircut is $10 less than her base price for an "ethnic" woman's haircut.
Ellis never discussed the price of a haircut with Taylor, or with anyone else at MT on April 7th. She paid for her services with two gift certificates and either a credit or a debit card. She was handed a receipt, which she signed, and kept the customer copy for her records. She did not realize she had been charged $65 for her haircut until the next day.
On April 8, 2005, Ellis called the MT call center to complain that she had been overcharged and requested a $25 refund. She did not tell the representatives that she had been quoted a $40 price for the haircut. Ellis was directed to Tom Bell, whom she believed to be a regional manager. She left two messages with Bell, in which she informed him that she had been quoted a price of $40 for her haircut but was charged $65. Bell never returned her calls; MT refused to refund her $25, and Ellis filed the instant lawsuit.
Although this litigation is styled as a class action, Defendants have moved for summary judgment on all of Ellis's individual claims. During briefing on summary judgment, the parties continued to conduct discovery, in the form of a survey of MT customers who were charged the "ethnic hair" charge. Dr . Ricardo Cossa , a statistics expert, was given the results from the survey. He explained that because of the small sample (586 people), the results could be interpreted in one of two ways. Under the first interpretation, the survey results indicate that there is a 53% confidence level that of the persons surveyed, 80.1% and 86.1% were African-American. Under the second interpretation, there is a 90%-95% confidence level that between 74.9% and 91.3% of the sample were African-American. Ellis argues that these results demonstrate that the majority of MT customers charged for an "ethnic women's haircut" are African-American. Alternatively, MT argues that the survey results do not indicate a discriminatory practice, but rather demonstrate that MT charged persons of other races for an "ethnic women's haircut." Once discovery was completed, the parties were permitted to supplement their briefs. Now that the issues are fully briefed and investigated, the instant motion is ripe for decision.
Summary judgment is appropriate only when the pleadings, depositions, answers to interrogatories, admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fed. R. Civ. P. 56(c). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact by specific citation to the record, at which time the burden shifts to the non-moving party to set forth specific facts showing that there is a genuine issue of fact for trial. Fed. R. Civ. P. 56(e); Celotex Corp. v. Catrett, 477 U.S. 317 (1986). A "genuine issue" in the context of a motion for summary judgment is not simply a "metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); rather, "[a] genuine issue exists when the evidence is such that a reasonable jury could find for the non-movant." Buscaglia v. United States, 25 F.3d 530, 534 (7th Cir. 1994). At summary judgment, we construe all facts and draw all inferences from the record in favor of the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
Decisions on the merits in a putative class action may be made prior to the certification of a class pursuant to Fed. R. Civ. P. 23. Cowen v. Bank United of Texas, FSB, 70 F.3d 937, 941 (7th Cir. 1995) (recognizing that class certification may not be "practicable" prior to summary judgment, and that class action defendants may be permitted to take the calculated risk of dismissing only the named plaintiffs' claims). A decision on the merits prior to class certification binds only the named plaintiff. See Harold Washington Party v. Cook County, Illinois Democratic Party, 984 F.2d 875, 878 (7th Cir. 1993). DISCUSSION
Ellis, on her own behalf and on behalf of a putative class of similarly situated individuals, filed this lawsuit alleging that MT and EA Spas employ an undisclosed, two-tier pricing system, by which they charge minority clients higher prices than similarly situated Caucasian clients for identical salon services. Ellis contends that Defendants' alleged practices violate federal and state statutes prohibiting racial discrimination and amount to fraud and breach of contract under state law. She seeks equitable remedies as well as compensatory and punitive damages. Defendants have moved for summary judgment, arguing that Ellis's claims lack sufficient factual support and are deficient as a matter of law.
Ellis claims that Defendants' undisclosed pricing structure, under which she alleges that minority clients are charged more for the same services, violates her right to make and enforce contracts on equal terms as white citizens as provided by 42 U.S.C. § 1981(a). Section 1981's guarantee of equal rights in contracting includes "the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship." § 1981(b). To sustain a claim of racial discrimination under § 1981, Ellis must show that she is a member of a racial minority, that defendants intended to discriminate against ...