Patterson v. McLean Credit Union Reply Brief for Plaintiff-Appellant

    UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 90-1729

BRENDA PATTERSON,
Plaintiff-Appellant. 

v.
MCLEAN CREDIT UNION,

Defendant-Appellee.
On Appeal from the United States District Court 

For the Middle District of North Carolina

REPLY BRIEF FOR PLAINTIFF-APPELLANT

HAROLD LILLARD KENNEDY, III 
HARVEY LEROY KENNEDY, SR. 

Kennedy, Kennedy, Kennedy 
& Kennedy

710 First Union Building 
Winston-Salem, NC 27101 
(919) 724-9207

SHEILA Y. THOMAS
NAACP Legal Defense and 

Educational Fund, Inc. 
1275 K Street, N.W.
Suite 301
Washington, D.C. 20005 
(202) 682-1300

JULIUS L. CHAMBERS 
CORNELIA T.L. PILLARD 

NAACP Legal Defense and 
Educational Fund, Inc. 

99 Hudson Street 
Suite 1600 
New York, NY 10013 
(212) 219-1900



TABLE OF CONTENTS

PAGE
TABLE OF AUTHORITIES   ii
INTRODUCTION ...................................... 1
I. THE DISTRICT COURT'S SUA SPONTE 

DISMISSAL OF MRS. PATTERSON'S
PROMOTION CLAIM IS REVERSIBLE ERROR .........  2

II. THE DEFENDANT'S TEST ARBITRARILY 
EXCLUDES PROMOTION CLAIMS THAT MEET
THE "NEW AND DISTINCT RELATION" TEST ....... 5

III. THE DISTRICT COURT'S DECISION MUST BE 
VACATED BECAUSE IT DEPENDS ON FACTUAL
DETERMINATIONS THAT ONLY A JURY CAN MAKE .....  9

IV. IF THE WAIVER DOCTRINE APPLIES IN THIS 
CASE, IT DOES NOT PREVENT PLAINTIFF 
FROM CONDUCTING FURTHER DISCOVERY, BUT 
PRECLUDES MCLEAN FROM RAISING NOW FOR
THE FIRST TIME THE DEFENSE THAT 
SECTION 1981 DOES NOT COVER MRS.
PATTERSON'S PROMOTION CLAIM .................  13

V. THE QUESTION OF WHETHER THE DISTRICT 
COURT HAD PENDENT JURISDICTION IS NOT
BEFORE THIS COURT ...........................  15

CONCLUSION 16



TABLE OF AUTHORITIES

Bennun v. Rutgers State University. 737 F. Supp. 1393
(D.N.J. 1990)   6

Chicaao-Midwest Meat Association v. City of Evanston. 589 
F.2d 278 (7th Cir.), cert, denied. 442 U.S. 946 (1979), 
affirmed . . . . . . . . . . . . .  3

Figures v. Board of Public Utilities. 731 F. Supp. 1479 (D.
Kan. 1990).................................................  10

Griddine v. Dillard Department Stores. 51 FEP 306 (W.D. Mo.
1 9 8 9 ) ...................................................... - 1 0

Hudgens v. Harper-Grace Hospitals. 728 F. Supp. 1321
(E.D.Mich. 1990) ........................................  6

Literature. Inc, v. Quinn. 482 F.2d 372 (1st Cir. 1973) . . 2
Luna v. City and County of Denver Department of Public

Works, et al.. 718 F. Supp. 854 (D. Colo. 1989) . . .  6
Malhotra v. Cotter & Co.. 885 F.2d 1305 (7th Cir. 1989) . . 6
Mallory v. Booth Refrigeration Supply Co.,

Inc. . 882 F. 2d at 910 (4th Cir. 1989)............................ 5
Miller v. Shawmut Bank of Boston. 726 F. Supp. 337 (D.Mass.

1 9 8 9 )  ..............................................  6, 10
Miller v. Svissre Holding Co., Inc.. 731 F. Supp. 129

(S.D.N.Y. 1990) ........................................  6
Mobley v. Pigglv Wiggly. No. 687-66, slip op. (S.D. Ga.

Dec. 19, 1989) ........................................  10
Norman v. McCotter. 765 F.2d 504 (5th Cir. 1985) . . . .  3
Patterson v. McLean Credit Union. 105 L. Ed. 2d 132 (1989) 2, 4,13, 14
Patterson v. McLean Credit Union. 729 F. Supp. 35 (M.D.N.C. •

1 9 9 0 )   9
Patterson v. McLean Credit Union. 887 F.2d at 485 . . . .  4
Powell v. United States. 849 F.2d 1576 (5th Cir. 1988) . . 4

CASES PAGE

ii



CASES PAGE
Rivers v. Baltimore Department of Recreaion and Parks

51 FEP 1886 .......................................... 8
Square D Co. v. Niagara Frontier Tariff Bureau. Inc.. 760

F. 2d 1347 (2d Cir. 1 9 8 5 ) ................................ 2
Tinaler v. Marshall. 716 F.2d 1109 (6th Cir. 1983) . . .  2
United States Development Coro. v. People's Federal Savings

& Loan. 873 F.2d 731 (4th Cir. 1 9 8 9 ) ................  2, 3,4
United States v. One Mercedez-Benz. 542 F.2d 912 (4th Cir.

1 9 7 6 ) .....................................................  13
Utility Control Corp. v. Prince William Const'. . 558 F.2d 716

(4th Cir. 1 9 7 7 ) ............................................. 3
Washington v. Union Carbide. 870 F.2d 957 (4th Cir. 1989) . . 15
Webb v. Bladen. 480 F.2d 306 (4th Cir. 1 9 7 3 ) ................  15
White v. Federal Express. 729 F. Supp. 1536 (E.D. Va. 1990) 7, 10
Williams v. Miracle Plywood Corp.. 1990 U.S. Dist.

Lexis 2502 (S.D.N.Y. Mar. 8, 1990).........................  10
Winborne v. Eastern Airlines. 632 F.2d 219 (2d Cir. 1980) . . 4
STATUTES
42 U.S.C. § 1 9 8 1 ........................................... Passim
Fed.R.Civ.P. 56(c) ......................................  4
Fed.R.Civ.P. 56(f) . . . . . . . . . . .  13

iii •

• -..... - , • . , - - • -



INTRODUCTION
McLean contends that the district court's summary dismissal 

of Mrs. Patterson's promotion-denial claim should be affirmed 
because even full presentation and proper review of the evidence 
on remand could not salvage plaintiff's claim. Plaintiff has, 
however, pointed to evidence already in the record that warrants 
a jury trial on whether the promotion she was denied would have 
placed her in a "new and distinct relation" to McLean.

In order to support its position that no jury findings are 
needed, McLean proposes a drastic narrowing of the "new and 
distinct relation" standard which would be so categorical that 
few findings of fact would be relevant: Defendant contends that
only denial of those promotions that would involve a change from 
a non-supervisory to a supervisory job should be covered by 
section 1981. Although the Supreme Court in this case could 
readily have articulated such a standard if that is what it 
intended, what the Court's opinion requires is merely that the 
promotion involve an opportunity for a "new and distinct" 
relation between employer and employee. Lower courts have held 
that many kinds of distinctions —  including but certainly not 
limited to the distinction between non-supervisory and 
supervisory work —  may meet the Supreme Court's test. In this 
Circuit, the crucial factors are whether the promotion would 
involve a increase in pay and in responsibility.

The record here includes sufficient evidence of both factors 
to preclude summary judgment, but because application of this 
test depends on facts not relevant under prior law, discovery

•mtriy r w  *■ iL ■' 5.--__



should be reopened and the record completed prior to trial. 
Defendant contends that plaintiff has waived her right to 
discovery, but if the waiver doctrine applies at all in this 
case, it precludes McLean from arguing that Mrs. Patterson's 
promotion claim is not actionable, because until now, as the 
Supreme Court observed, McLean "has not argued at any stage that 
[Mrs. Patterson's] promotion claim is not cognizable under § 
1981." Patterson v. McLean Credit Union. 105 L.Ed. 2d 132, 156 
(1989) '.

I. THE DISTRICT COURT'S SUA SPONTE DISMISSAL OF MRS.
PATTERSON'S PROMOTION CLAIM IS REVERSIBLE ERROR
Defendant incorrectly asserts that the district court's 

failure to notify plaintiff of its intention to dismiss her case 
sua sponte and to give her an opportunity to oppose the dismissal 
is harmless error. Deft. Br., at 24-25. In this and other 
Circuits, a district court's sua sponte dismissal without notice 
and an opportunity to respond is an independent ground for 
reversal. See. e.g.. United States Dev. Corp. v. People's 
Federal Sav. & Loan. 873 F.2d 731, 736 (4th Cir. 1989); Square D 
Co. v. Niagara Frontier Tariff Bureau. Inc.. 760 F.2d 1347, 1365 
(2d Cir. 1985); Tinqler v. Marshall. 716 F.2d 1109, 1112 (6th 
Cir. 1983); Literature. Inc, v. Quinn. 482 F.2d 372, 374 (1st 
Cir. 1973). This is true even if the court of appeals believes 
that a full briefing and presentation of evidence in the district 
court might not cause the dismissed claim to be revived.
Defendant contends that no amount of further discovery could

2



salvage plaintiff's promotion-denial claim. Deft. Br. at 27.1 
This Court has held, however, that a requirement that additional 
facts sufficient to defeat summary judgment be identified "misses 
the point" of the per se rule against sua sponte dismissals in 
the absence of the proper procedure. United States Dev. Corp.. 
873 F.2d at 736. "Appellants' right to notice and an opportunity 
to be heard on its claim has nothing to do with the merits of its 
case," id, and enforcement of that right here requires reversal.

Cases upon which defendant relies in support of its 
"harmless error" exception to the rule against premature sua 
sponte dismissals do not support its position. The Courts of 
Appeal in Norman v. McCotter. 765 F.2d 504, 508 (5th Cir. 1985), 
and Chicago-Midwest Meat Ass'n v. City of Evanston. 589 F.2d 278, 
282 (7th Cir. 1978), cert, denied. 442 U.S. 946 (1979), affirmed 
the district courts' failure to give notice of their sua sponte 
decisions to convert motions to dismiss into motions for summary 
judgment, not sua sponte decisions to enter judgment on claims 
where no motion has been filed. Even in the context of 
conversion of a motion to dismiss to a motion for summary 
judgment, failure to give notice is reversible error in the 
Fourth Circuit. See Utility Control Corp. v. Prince William 
Const.. 558 F.2d 716, 719 (4th Cir. 1977). This rule is 
consistent with "the majority of the Circuits that have

1As plaintiff has argued, the evidence already in the record 
precludes entry of summary judgment, and additional discovery 
relating to the distinctions between the two positions at issue 
would further support the claim. See Pltf. Br., points II-IV.

3



considered the effect of noncompliance with the advance notice 
provision of Rule 56(c)[, which] have held that such a procedural 
defect vitiates the entry of summary judgment against the non­
moving party.” Winborne v. Eastern Airlines. 632 F.2d 219, 223 & 
n. 5 (2d Cir. 1980) (citing cases).2

Defendant also cites Powell v. United States. 849 F.2d 1576, 
1580-82 (5th Cir. 1988), which, even if it were not directly 
contrary to the law in this Circuit, see United States Dev.
Coro.. 873 F.2d 731, is inapposite here. The district court in 
Powell gave notice of its intention to grant summary judgment, 
but did not give the full 10 days' notice required by Rule 56(c), 
and the plaintiffs responded that they had no additional evidence 
to present. Here, in contrast, no notice whatsoever was given, 
and plaintiff seeks to discover and introduce additional evidence 
in support of her claim. See Pltf. Br., Point IV; infra, Point 
IV.3

2 There is more reason to reaffirm the rule against sua 
sponte dismissals in this case than in the context of converting 
a Rule 12(b)(6) motion to a Rule 56 motion. In the conversion 
context, motion papers referring to matters outside the pleadings 
have been filed, which at least alerts a plaintiff to the 
possibility that judgment will be entered, and to the defendant's 
grounds.

In view of the fact that the Supreme Court contemplated 
"further proceedings,” Patterson v. McLean Credit Union. 105 L. 
Ed. 2d at 158, and that the Fourth Circuit instructed that the 
promotion-denial claim "should be considered an open one” on 
remand, Patterson v. McLean Credit Union. 887 F.2d at 485, it is 
unclear why defendant believes the "law of the case" doctrine 
obviates the requirement of notice and an opportunity to respond. 
See Deft. Br. at 23-24. Mrs. Patterson does not dispute that the 
district court is bound by the decisions of the Supreme Court and 
the Court of Appeals. Those decisions did not, however, purport

4



II. THE DEFENDANT'S TEST ARBITRARILY EXCLUDES PROMOTION CLAIMS
THAT MEET THE "NEW AND DISTINCT RELATION” TEST
McLean erroneously contends that Mallory v. Booth 

Refrigeration Supply Co.. Inc.. 882 F.2d 908 (4th Cir. 1989), 
requires that a plaintiff's promotion-denial claim involve a 
promotion from a non-managerial to a managerial position before 
it is actionable under § 1981. Deft. Br., at 15. This Court 
held in Mallory that an "increase in responsibility and pay 
satisfies" the Supreme Court's "new and distinct relation" 
standard. 882 F.2d at 910. There is nothing in the opinion to 
support the defendant's assertion that the fact that the 
plaintiffs in that case sought supervisory positions was 
"critical" to this Court's determination that their promotion 
claims were cognizable under § 1981. Deft. Br. at 13. Indeed, 
the district court in this case did not even view supervisory 
responsibilities as relevant to whether the promotion denial is 
covered by § 1981.

Defendant asserts that denial of "a move from a non- 
supervisory to a supervisory position" is required by the Supreme 
Court's "new and distinct relation" standard. Deft. Br. at 15. 
Although denial of such a promotion is generally cognizable, a 
promotion-denial under § 1981 need not involve a lost opportunity

to decide whether plaintiff's promotion claim is actionable under 
the standard the Supreme Court announced. Decisions in other 
cases that do interpret and apply the "new and distinct relation" 
standard indicate that plaintiff is entitled to proceed to 
discovery and trial on her promotion claim. See Pltf. Br., Point 
II; infra. Point II.

5



to become a supervisory employee. Discriminatory denial of a new 
employment relationship that is genuinely "distinct" from the 
former relationship in any number of ways violates § 1981. See. 
Malhotra v. Cotter & Co.. 885 F.2d 1305, 1317 n.6 (7th Cir.
1989)(Cudahy, J., concurring); Hudgens v. Harper-Grace Hosps..
728 F. Supp. 1321 (E.D.Mich. 1990) (promotion from supervisory 
position to technical position); Miller v. Swissre Holding Co.. 
Inc.. 731 F. Supp. 129 (S.D.N.Y. 1990) (promotion from production 
coordinator to supervisor of production control); Miller v. 
Shawmut Bank of Boston. 726 F. Supp. 337 (D.Mass. 1989)
(promotion from customer service representative to personal 
banker); Luna v. City and County of Denver Department of Public 
Works. et al.. 718 F.Supp. 854 (D. Colo. 1989) (promotion from 
Project Inspector I to Engineer III); Bennun v. Rutgers State 
University. 737 F. Supp. 1393 (D.N.J. 1990)(promotion from 
associate professor to full professor).

Mrs. Patterson, undoubtedly, meets this standard. Pltf. Br. 
at 21-24. The defendant concedes that Mrs. Patterson's job and 
the promotion she sought "may have been different", Deft. Br. at 
14, but argues that Mrs. Patterson's claim must fail because both 
jobs were "clerical" positions. However, the record reflects 
that the jobs were not similar in levels of responsibility or pay 
and that Mrs. Williamson's promotion resulted in her obtaining 
some of her supervisor's responsibilities.4 Pltf. Br. 21; 2 Tr.

4 McLean further argues that the "differential in pay is not 
significant," Deft. Br. at 14, and misrepresents to the court 
that Mrs. Patterson argues that a pay increase alone would meet

6



56 (2 JA 23-24). McLean cannot escape its obligation under the 
Supreme Court's decision not to discriminate by sweeping a wide 
range of jobs with significantly different responsibilities into 
a catch-all "clerical" category. Application of the 1866 Act 
does not depend on whether two jobs in 1990 be characterized as 
clerical in the particular organizational structure of McLean 
Credit Union.

Neither of the two opinions of district courts in this 
Circuit upon which defendant relies support its argument that 
Mrs. Patterson's promotion-denial claim must fail. Both cases 
require an examination of job requirements, levels of 
responsibility and pay and neither holds that only a promotion 
from a non-managerial to a managerial position meets the Supreme 
Court's standard.

The court in White v. Federal Express. 729 F.Supp. 1536, 
1546 (E.D. Va. 1990), held that significant changes in 
responsibilities and pay must be shown to meet the "new and 
distinct relation" standard. The court concluded that Mr. 
White's job as a courier and the dispatcher position that he

the Mallorv standard, Deft. Br. at 13. The defendant is mistaken 
on both accounts. First, the relevant differential is between 
the pay Mrs. Patterson would have received if she had been in 
Mrs. Williamson's position and what her pay was at the time 
Williamson was promoted, and not, as defendant contends, between 
Mrs. Williamson's salary as an accountant intermediate and an 
accountant junior. Second, Mrs. Patterson does not argue that an 
increase in salary alone is sufficient to meet the "new and 
distinct relation" test, but instead, asserts that under Mallorv 
a pay increase should be considered in relation to other relevant 
factors in a court's inquiry into the difference between a 
plaintiff's job and the promotion she seeks..

7



sought had "essentially the same" levels of responsibility and no 
significant difference in pay, but noted that Mr. White "state[d] 
a substantial, but not sufficient, case for meeting the contract 
test."

Similarly, the court in Rivers v. Baltimore Department of 
Recreation and Parks, et al.. 51 FEP 1886, 1896 (D.Md 1990), 
dismissed the plaintiff's promotion-denial claims because 
although it was a "close call", the promotion would have resulted 
in "little change in responsibilities, duties, or authority...."
Mrs. Patterson's claim meets the standard in White and Rivers, 
since there was a substantial difference in the levels of 
responsibility between file coordinator and accountant 
intermediate —  a difference which McLean repeatedly stressed at 
trial in its effort to show that Mrs. Patterson was not qualified 
for the intermediate accountant job —  and a significant increase 
in pay of almost two dollars per hour.

Neither this Court nor the district courts in this circuit 
have adopted the narrow interpretation of the "new and distinct 
relation" test that the defendant espouses. McLean's proposed 
test would arbitrarily exclude from § 1981's coverage many 
promotion claims that meet the "new and distinct relation" 
requirement. Whether a promotion is actionable properly depends 
on a wide range of factors showing the degree of difference 
between the plaintiff's former job and the job into which she 
seeks to be promoted, and does not require that the promotion

8



result in the elevation from a non-supervisory to supervisory 
role.

III. THE DISTRICT COURT'S DECISION MUST BE VACATED BECAUSE IT
DEPENDS ON FACTUAL DETERMINATIONS THAT ONLY A JURY CAN MAKE
Defendant concedes that the district court was not empowered 

to make factual determinations; rather it is merely "as a 
threshold inquiry [that] the court determines as a matter of law 
whether there is sufficient evidence to create a material issue 
of fact for the jury." Deft. Br. at 21. But making factual 
findings is precisely what the district court did when it 
determined that Mrs. Patterson's and Mrs. Williamson's 
compensation, the locations and offices in which they worked, and 
their working conditions were not sufficiently distinct that a 
promotion into Mrs. Williamson's job would have placed Mrs. 
Patterson in a "new and distinct relation" with McLean.
Patterson v. McLean Credit Union. 729 F. Supp. 35, 36 (M.D.N.C. 
1990).5 Under the summary judgment standard, defendant 
acknowledges, the court must view the evidence "in the light most 
favorable to plaintiff." Deft. Br. at 19. Because the district 
court failed to do so here, but instead resolved factual

Defendant contends that working conditions "relate to 
post-formation conduct and are no longer actionable under Section 
1981." Deft. Br. at 27. Plaintiff is not seeking to challenge 
Brenda Patterson's working conditions. Rather, she is entitled 
to discover and introduce evidence relating to the relative 
working conditions of her job and the intermediate accountant job 
because the district court viewed working conditions as one 
factor relevant to the determination whether the promotion would 
have created a "new and distinct relation" between Brenda 
Patterson and McLean. See. Patterson. 729 F. Supp. at 36.

9



conflicts and drew inferences in favor of defendant, see, id.. 
Pltf. Br. at 25-28, 12 (citing to material record evidence 
supportive of plaintiff's claim but disregarded by the district 
court), its decision must be vacated.

McLean contends that the district court made no factual 
findings because "whether a promotion claim is actionable is a 
legal standard rather than a question of fact." Deft. Br. at 21. 
Defendant does not argue that there are no factual disputes 
relating to the factors that the district court identified as 
legally relevant. Instead, defendant simply makes the untenable 
assertion that only legal determinations were required.
Plaintiff agrees that it is for the judge to construe the legal 
standard, but where the facts to which the standard applies are 
disputed, the disputes must be resolved by a jury before the 
ultimate issue of liability on the promotion claim can be 
resolved.6

6 The cases upon which defendant relies do not support 
its contention that application of the Supreme Court's section 
1981 promotion standard is a purely legal matter. The courts in 
Rivers v. Baltimore Dept, of Recreation. 51 FEP Cases 1886 (D.
Md. 1990), and Williams v. Miracle Plywood Corp.. 1990 U.S. Dist. 
Lexis 2502 (S.D.N.Y. Mar. 8, 1990), reviewed the allegations of 
the complaints in light of motions to dismiss —  a function that 
is always the exclusive province of the judge. The court in 
White v. Federal Express Corp.. 729 F. Supp. 1536, 1541 (E.D. Va. 
1990), did not rule that facts are irrelevant, but merely that 
the facts material to the plaintiff's promotion-denial claim were 
not in dispute, and that judgment as a matter of law was 
therefore appropriate.

Several courts have specifically emphasized that the 
promotion-denial inquiry is fact-intensive, Mobley v. Piggly 
Wiggly. No. 687-66, slip op. at 8-9 (S.D.Ga. Dec. 19, 1989),
Luna. 718 F. Supp. at 857, that further discovery is appropriate 
in light of the Supreme Court's decision in this case, Griddine

10



In proposing alternative bases on appeal for affirming the 
decision of the district court, defendant repeatedly relies on 
additional factual assertions beyond those facts "found" by the 
district court. The dismissal of plaintiff's promotion claim 
cannot be affirmed on the basis of defendant's assertions 
relating to factual issues that the district court did not even 
purport to address, and which remain in dispute. Affirmance on 
such grounds would only compound the problem of lack of notice to 
plaintiff, see Point I, supra. and would commit the same error 
the district court made in usurping the jury's factfinding role.

In an effort to compensate for the district court's utter 
failure to examine the important question whether the promotion 
Brenda Patterson sought would have changed her responsibilities, 
defendant makes the factual assertion that Mrs. Patterson's level 
of responsibility would have remained the same had she been 
promoted from file coordinator to accountant intermediate. Deft. 
Br. at 12. The job descriptions in the record show, however, 
that if Mrs. Patterson had received this promotion, she would 
have had increased responsibilities. Deft. Ex. 14, 15 (SA 26,
27). This evidence alone precludes this Court from crediting 
defendant's assertion that the promotion Mrs. Patterson sought 
"is properly characterized as a lateral transfer ...." Deft. Br.

v. Dillard Department stores. 51 fep cases 306 (W.D.Mo. 1989), 
and that summary judgment must be denied where facts material to 
the distinction between a plaintiff's job and the position she 
sought remain in dispute, Figures v. Board of Public Utilities. 
731 F. Supp. 1479, 1482 (D. Kan. 1990); Miller v. Shawmut Bank of 
Boston. 726 F. Supp. at 342.

11



at 14.
Defendant makes the additional factual assertion that there 

was no opening for the job into which Mrs. Patterson sought to be 
promoted. Deft. Br. at 6-8. To support this contention, 
defendant also makes the factual assertion that Susan Williamson 
performed the identical job functions before and after her 
promotion from junior accountant to intermediate accountant, and 
that the promotion was therefore really just a "title change" for 
Mrs. Williamson. Deft. Br. at 1. There is testimony in the 
record, however, that Mrs. Williamson received additional 
training for the intermediate accountant position (2 JA 81, 3 JA 
48), that her duties changed (2 JA 24), and that Mrs. Williamson 
herself considered the change a promotion (2 JA 22). A jury 
could reasonably infer from this evidence that Mrs. Williamson's 
new job involved different skills and responsibilities from her 
former one. A jury could further infer that where a new job is 
available within an organization, it creates an opening available 
to other qualified employees, including Mrs. Patterson.

The question whether a job opening existed, unlike the 
issues raised by the "new and distinct relation" standard, was 
not created by the Supreme Court's decision in this case, but was 
specifically addressed by McLean's motion for a directed verdict 
during the first trial.7 The district court denied the directed

Defendant argued then, as it does again here on appeal, 
that "[i]t wasn't a job vacancy. [Mrs. Williamson] was doing the 
same thing before the promotion that she was doing after. She 
got a raise, she got a change in title, but there was no vacancy 
created by her position." 3 Tr. 48 (SA 19).

12



verdict motion and permitted the promotion-denial claim to go to 
the jury, 3 Tr. 76 (3 JA 47), presumably because there was enough 
evidence of a job opening to create a genuine factual issue. 
Because the jury rendered a general verdict on the promotion 
claim, it is not possible to determine whether it credited 
defendant's position that there was no job opening, or whether it 
rendered a verdict for defendant on some other ground. The 
Supreme Court thus properly identified this as an open issue to 
be determined on remand. Patterson v. McLean Credit Union. 105 
L. Ed. 2d at 157 n. 7.

IV. IF THE WAIVER DOCTRINE APPLIES IN THIS CASE, IT DOES NOT 
PREVENT PLAINTIFF FROM CONDUCTING FURTHER DISCOVERY, BUT 
PRECLUDES MCLEAN FROM RAISING NOW FOR THE FIRST TIME THE 
DEFENSE THAT SECTION 1981 DOES NOT COVER MRS. PATTERSON'S 
PROMOTION CLAIM
Defendant contends that Mrs. Patterson is not entitled to 

further discovery because she did not seek to reopen discovery in 
the district court. Under exceptional circumstances, however, an 
appellate court is entitled to consider an issue not raised 
below. United States v. One Mercedez-Benz. 542 F.2d 912, 915 
(4th Cir. 1976). The district court's precipitous dismissal of 
the case in the absence of a motion by McLean for summary 
judgment denied plaintiff notice that the court was preparing to 
review the evidence in the record, and deprived her of an 
opportunity to file an affidavit pursuant to Federal Rule of 
Civil Procedure 56(f) requesting an opportunity to conduct 
further discovery. Under these circumstances, the case should be

13



remanded for further discovery, properly briefed motions for 
summary judgment, and a trial if necessary.

If this Court views the promotion-denial standard announced 
by the Supreme Court as insufficiently changed to warrant new 
discovery beyond that which plaintiff conducted prior to the 
original trial in this case, then it should by the same token 
determine that defendant has waived its defense that section 1981 
does not apply to Mrs. Patterson's promotion-denial claim. 
McLean's current Brief on appeal raises for the first time in the 
six years that this case has been litigated the defense that Mrs. 
Patterson's promotion-denial claim is not cognizable under 
section 1981. Indeed, defendant has consistently contended that 
promotion claims are actionable under the statute, and that Mrs. 
Patterson's promotion claim should fail for other reasons.
Because McLean did not argue in the trial court, on appeal, or in 
the Supreme Court that section 1981 does not cover all or some 
claims of discriminatory promotion-denial, the Supreme Court 
viewed this defense as waived. Patterson v. McLean Credit Union, 
105 L. Ed. 2d at 156 (commenting that "[b]ecause respondent has 
not argued at any stage that petitioner's promotion claim is not 
cognizable under § 1981, we need not address the issue further 
here"). The district court thus acted improperly in disposing of 
plaintiff's promotion claim on this ground.

14



V. THE QUESTION OF WHETHER THE DISTRICT COURT HAD PENDENT
JURISDICTION IS NOT BEFORE THIS COURT
McLean argues that the Court lacks jurisdiction to hear Mrs. 

Patterson's claim of intentional infliction of emotional distress 
because it dismissed her § 1981 claim, but it is well established 
that a federal court may exercise its discretion and decide a 
pendent state claim even after a federal claim has been 
dismissed. Washington v. Union Carbide. 870 F.2d 957 (4th Cir. 
1989); Webb v. Bladen. 480 F.2d 306 (4th Cir. 1973). (Deft. Br. 
34-35). Nothing in the district court's opinion indicates that 
the court concluded it lacked jurisdiction to decide the pendent 
state claim. Consequently, the defendant has no basis for its 
assertion.8

8 However, if this Court were to affirm the dismissal of 
plaintiff's federal claim and determine that it shall not 
exercise its discretion to retain jurisdiction over the state 
claim, the plaintiff requests that this Court dismiss her state 
claim without prejudice and grant her leave to file suit in the 
North Carolina Courts. See. Webb v. Bladen, supra at 309.

15



CONCLUSION
For the foregoing reasons, the decision below should be 

vacated and the case be remanded to the district court for
further discovery and a trial on the merits

HAROLD LILLARD KENNEDY, III 
HARVEY LEROY KENNEDY, SR. 

Kennedy, Kennedy, Kennedy 
& Kennedy

710 First Union Building 
Winston-Salem, NC 27101 
(919) 724-9207

THOMAS 1/
NAACP Legal Defense and 

Educational Fund, Inc 
1275 K Street, N.W. 
Suite 301
Washington, D.C. 20005 
(202) 682-1300

JULIUS L. CHAMBERS 
CORNELIA T.L. PILLARD 

NAACP Legal Defense and 
Educational Fund, Inc 

99 Hudson Street 
16th Floor 
New York, NY 10013 
(212) 219-1900

August 16, 1990



CERTIFICATE OF SERVICE

This will certify that I have this date served counsel
for defendant in this action with true and correct copies of the
foregoing Reply Brief of Plaintiff-Appellant by placing said copies
in the U.S. Mail at New York, New York, First-Class postage thereon
fully prepaid addressed as follows:

George Doughton, Jr., Esq.
H. Lee Davis, Jr., Esq.
Thomas J. Doughton, Esq.
114 W. Third Street 
Winston-Salem, NC 27101

Executed this 16th day of August, 1990 at New York, New
York.

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_ _ _ . v  w  ’

IN THE UNITED STATES DISTRICT COURT FOR THE ',7 
SOUTHERN DISTRICT OF GEORGIA

STATESBORO DIVISION p-r ! ' J -7 '1 -  . C w

HENRY MOBLEY,

CIVIL ACTION 
CV687-66

Defendants *

O R D E R

Before the Court are defendants' self-styled "motion 
to dismiss and/or motion for summary judgment" on plaintiff's 
claims brought pursuant to 42 U.S.C. section 1981 and 
defendants' motion to strike plaintiff's supplemental response 
to the motion to dismiss. The Court allowed defendants to 
file their out of time motion because of the Supreme Court's 
recent holding in Patterson v. McLean Credit Union, ___ U.S.
_, 109 S.Ct. 2363 (1989). Defendants contend that 
plaintiff's section 1981 claim is roreclosed by the Patterson 
decision, which clarified and restricted the applicability of 
section 1981 to claims of racial discrimination. Plaintiff 
counters that his section 1981 claim is not foreclosed by 
Patterson, and that in any event Patterson should not be 
applied retroactively to the instant case. I will first rule 
on the motion to strike.

Plaintiff
vs .

★
★

PIGGLY WIGGLY SOUTHERN, INC, 
and STEVE STANLEY COOPER, *

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Plaintiff was hired as a meat clerk in defendant Piggly 
Wiggly's Sylvania, Georgia store in May, 1976. The following 
year plaintiff became a meat cutter, and in early 1983 
plaintiff became the cutting.room manager in the store s meat 
department. In December, 1985 defendant Cooper became the 
meat department manager, thereby becoming plaintiff's 
supervisor. Plaintiff alleges that defendant Cooper promised 
plaintiff that he would be promoted to assistant manager of 
the meat department, but that instead a white male was brought 
in to be the assistant manager in April, 1986, resulting in 
plaintiff's constructive discharge. Plaintiff subsequently 
brought suit pursuant to 42 U.S.C. § 1981, claiming that he 
was denied a promotion and constructively discharged because 
of his race. Defendants are moving to dismiss and/or for 
summary judgment as to plaintiff's section 1981 claims.

Defendants contend that the Supreme Court's decision in 
Patterson holds that plaintiff's claim that he was 
constructively discharged because of his race is no longer 
actionable under section 1981, and that defendants are 
entitled to summary judgment on plaintiff's section 1981 
claim that he was denied a promotion because of his race. 
Plaintiff contends that Patterson does not require that the 
Court either dismiss or grant summary judgment as to 
plaintiff's section 1981 claims, and that in any event 
Patterson should not be applied retroactively.

The motion to dismiss and/or for summary judgment

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presents two issues. First, whether Patterson should be given 
retroactive effect so as to apply to the instant case, and 
second, whether the holding in Patterson requires the Court 
to either dismiss or grant summary judgment as to either of 
plaintiff's section 1981 claims. I will first decide whether 
Patterson should be applied to the instant case. However, 
before reaching the merits of this issue I must resolve 
defendants' motion to strike.

Defendants contend that I should not reach the issue of 
whether Patterson should be applied retroactively because 
plaintiff raised the issue in a supplemental response which 
was not timely filed. Thus, they argue, the supplemental
response should be stricken and the issues raised therein not 
reached. However, I believe that such issues should be 
decided on the merits rather than on the basis advocated by 
defendants, particularly where the case law on the issue 
presented is just now being developed. In any event, my 
decision on this issue makes defendants' argument moot.

In support of his argument that Patterson should not 
apply retroactively to the case at bar plaintiff cites an 
unpublished opinion from the district court of Kansas, Thomas 
v. Beech Aircraft Corporation, No. 78-4338 (D. Kan. Sept, -u, 
1989). In Thomas the Court, applying Chevron— OjJL— Co^— v^ 
Huson. 404 U.S. 97 (1971), concluded that Patterson should 
not be applied retroactively because the complaint had been
filed in 1978, over ten years before the Patterson decision



had been rendered, and therefore it would be inequitable to
apply Patterson retroactively.

Conversely, the complaint in the instant case was filed 
in June, 1987. While plaintiff may protest that two years is 
a long time to wait for his case to be tried, it is certainly 
not an unreasonable length of time. This court currently has 
well over 300 cases on its active docket.1 2 Moreover, many of 
these cases are criminal cases, which must take priority over 
civil matters. Thus, it would not be inequitable to apply 
Patterson to the instant case, and I can find no cause to 
depart from the general rule that decisions rendered while a 
case is pending must be applied to the pending case.

Having concluded that Patterson applies to the case at 
bar, I must now decide whether that decision mandates that 
"defendants' motion to dismiss and/or for summary judgment on 
plaintiff's section 1981 claims be granted. In Patterson the 
plaintiff alleged that defendant harassed, failed to promote, 
and discharged her on account of her race. The Court held 
that only conduct related to "the formation of a contract, but 
not to problems that may arise later from the conditions of 
continuing employment," was actionable under section 1981.

1 Additionally, the recuperative period required by the 
presiding judge following his accident in May, 1989 nas no 
doubt contributed significantly to the current backlog of 
cases on the Court's docket.

2 In this regard I note that the vast majority of courts
which have considered this issue have reached the same 
conclusion. See, e.g., Prather v. Dayton Power & Light Co_̂ , 
No. C-3-85-491 (S.D. Ohio Sept. 7 , 1989 ).

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The CourtPatterson, ___ U.S. ___/ 109 S.Ct. at 2372.
expressly stated that "the right to make contracts does not 
extend...to conduct by the employer after the contract 
relation has been established, including breach of the terms 
of the contract or imposition of discriminatory working 
conditions." Id- at 2373.

In applying these principles to plaintiff's discharge 
claim it is apparent that plaintiff's discharge claim is not 
actionable under section 1981 because such an action is, at 
worst, a post-formation "breach of the terms of the 
contract." Id. Plaintiff argues that his constructive 
discharge was actually the result of defendant's failure to 
enter into a contract on racially neutral terms at the time 
of plaintiff's hire. However, no such allegation is in the 
complaint. Furthermore, no evidence has been submitted to 
substantiate such a claim. Accordingly, plaintiff s
discharge, even if it resulted from a discriminatory motive, 
cannot form the basis for a cause of action under section 
1981.

Plaintiff also argues that his constructive discharge 
"resulted" from the defendants' failure to enter into a 
contract because of plaintiff's race, i.e., defendants 
failure to promote plaintiff. Employing the jargon of
Patterson, plaintiff contends that defendants' failure to 
enter into a contract with plaintiff on account of his race 
caused plaintiff to breach his contract with defendant Piggly

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Wiggly. However, under Patterson the breach is not actionable 
in a section 1981 suit, even if caused by a failure to enter 
into a contract with plaintiff on account of his race. Any 
conduct relating to the original "contract" between plaintiff 
and defendant, even a refusal to enter into a new contract, 
would necessarily constitute post-formation conduct as to the 
original contract. Post-formation conduct is not actionable 
under section 1981, and plaintiff therefore cannot maintain 
an action under section 1981 for his allegedly discriminatory 
constructive discharge.

Although plaintiff's discharge claim is not actionable 
under section 1981, defendants are not entitled to summary 
judgment on plaintiff's claim that he was denied a promotion 
in violation of section 1981. Summary judgment should be 
granted only if "there is no genuine issue as to any material 
fact and the moving party is entitled to a judgment as a 
matter of law." Fed. R. Civ. P. 56(c). The party moving for 
summary judgment bears the burden of showing that there is no 
genuine dispute as to any material fact in the case. Adickes 
v. S.H. Kress & Co-. 398 U.S. 144, 157 (1970 ); Clemons v .. 
Dougherty County, Ga., 684 F.2d 135c, 1368 (11th Cir. 1982). 
The party moving for summary judgment may meet this burden by 
showing that the nonmovant has failed to make a showing 
sufficient to establish the existence of an element essential 
to the nonmovant's case, and on which the nonmovant will bear 
the burden of proof at trial. Celotex Corp. v. Catrett, 477

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U .S. 317 ( 1986) . If there is any factual issue in the record 
that is unresolved by the motion for summary judgment, then 
the Court may not decide that matter. See Environmental 
Dpfense Fund v. Marsh, 651 F,2d 983, 991 (5th Cir. 1981). All 
reasonable doubts must be resolved in favor of the party 
opposing summary judgment. Casey— Enterprises— v_.— American 
Hardware Mutual Insurance Co;_, 655 F.2d 598, 602 (5th Cir. 
1981). When, however, the moving party's motion for summary 
judgment has pierced the pleadings of the opposing party, the 
burden then shifts to the opposing party to show that a 
genuine issue of material fact exists. Anderson v. Liberty 
Lobby. Inc., 477 U.S. 242 ( 1985). This burden cannot be 
carried by reliance on the pleadings, or by repetition of the 
conclusory allegations contained in the complaint. Mgrri_§__v_j_ 
Ross. 653 F . 2d 1032, 1033 ( 11th Cir. 1981). Rather, the 
opposing party must respond by affidavits or as otherwise
provided in Fed. R. Civ. P. 56.

The file indicates that the clerk notified the nonmovant 
of the consequences for failure to respond to the motion for 
summary judgment. Griffith v. Wainwriqht, 722 F.2d 822 (11th 
Cir. 1985) . The nonmovant having had a reasonable opportunity 
to respond to the motion, I will now rule on movant's motion 
for summary judgment.

In Patterson the Supreme Court held that an employee s 
claim that she had been denied a promotion on account of her 
race was actionable under section 1981 if the "nature of the

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change in position was such that it involved the opportunity 
to enter into a new contract with the employer." id at — , 
109 S.Ct. at 2377. The promotion involves " the opportunity 
to enter into a new contract with the employer" only if the 
"promotion rises to the level of an opportunity for a new and 
distinct relation between the employee and the employer...." 
Id.

Defendants argue that the promotion involved in the 
instant case, a promotion from cutting room manager to
assistant manager of the meat department, did not involve a 
new and distinct relation between defendant Piggly Wiggly and 
plaintiff. Defendants claim that because plaintiff was 
"acting assistant market manager" and performing all the 
duties of an assistant manager, a promotion to assistant 
market manager would not constitute a new and distinct 
relation between plaintiff and defendant Piggly Wiggly.
However, an "acting" or interim assistant manager, who 
occupies another position but is temporarily filling the
position of assistant manager, can certainly not be said to 
occupy the same relation with the employer as would a
permanent assistant manager who may be subject to demotion to 
his old position when a permanent assistant manager is hired. 
Whether this different relation would constitute a new and 
distinct relation" is a question of fact.

Furthermore, plaintiff testified that during this interim 
period he did not receive the pay of an assistant manager.

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See Mobley deposition at 81. Under these circumstances, to
determine whether plaintiff's promotion would constitute a 
"new and distinct relation” between plaintiff and defendant 
Piggly Wiggly would require that I make a factual 
determination as to the respective jobs. See Mallory v. Booth

In ruling on a motion for summary judgment a court may not 
make such factual determinations.

Based on the foregoing, defendants' motion to dismiss 
plaintiff's section 1981 discharge claim is GRANTED. 
Defendants' motion for summary judgment as to plaintiff's 
section 1981 promotion claim is DENIED. Lastly, defendants' 
motion to strike is DENIED as moot.

Refrigeration Supply Co., Inc^, 882 F.2d 908 (4th Cir. 1989).

ORDER ENTERED at Augusta,
December, 1989.

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