Barfield v. Commerce Bank

United States Court of Appeals for the Tenth Circuit · Contracts

ContractsSection 1981ConsiderationPleadingAmendment of Pleadings42 U.S.C. § 1981contract formationmake and enforce contracts

Facts

Chris Barfield, an African-American man, requested change for a $50 bill at a Commerce Bank branch and was refused because he was not an account-holder. The next day, a white friend making the same request received change without being asked about an account, while James Barfield, also African-American, was denied change unless he was an account-holder. Additional testing by a white reporter and his African-American colleague produced the same pattern: the African-American man was asked whether he was an account holder, and the white man was not. The Barfields alleged this race-based refusal to exchange currency impaired their right to contract under § 1981.

Issue

Whether a bank customer's request to exchange a large-denomination bill for smaller bills is a contract-related transaction protected by 42 U.S.C. § 1981. Also, whether the district court properly denied leave to amend where the proposed new allegations were only generalized conclusions lacking supporting facts.

Rule

A § 1981 claimant must show (1) membership in a protected class, (2) intentional racial discrimination, and (3) interference with a protected activity under § 1981. A proposed exchange transaction qualifies as contract formation when it is supported by consideration under state contract law, and consideration does not fail merely because the defendant receives no direct fee or immediate remuneration. By contrast, an amended complaint may be denied when it does not provide enough factual specificity to give the defendant fair notice of the conduct alleged to violate federal law.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

At a currency desk inside Lakeside Market in Tulsa, DeShawn Avery, an African-American man, asked to exchange a $100 bill for two $50 bills. The clerk refused, saying the desk only performs exchanges for "known regulars," but moments later completed the same exchange for Ethan Cole, a white man who was not a regular.

Assuming DeShawn can prove intentional racial discrimination, what is the strongest argument that his complaint states a claim under § 1981?

Explanation. The majority held that an exchange of a large bill for smaller bills can be a contract supported by consideration because one thing of value is exchanged for another. The defendant's lack of direct remuneration does not defeat consideration. Thus, if intentional racial discrimination is shown, refusal to engage in that exchange can interfere with making a contract under § 1981. (Derived from Barfield v. Commerce Bank (n.d.).)