Cornelius v. Benevolent Order of the Elks

United States District Court for the District of Connecticut · Property

PropertyTax exemptionPrivate clubsRace discriminationSection 1981State actionMootness42 U.S.C. 1981

Facts

In 1971, Henry O'Reilly submitted an application to the Groton Elks on behalf of Louis Cornelius, Jr. The Groton Elks admitted the application was not even considered because Cornelius was not white, as required by the Elks' constitution at the time. Cornelius sued, alleging that Connecticut's tax exemption for the Elks and Moose unconstitutionally aided discriminatory private conduct and that 42 U.S.C. Section 1981 barred the clubs from denying membership on the basis of race. During the litigation, both the Moose and the Elks amended their governing rules to remove their explicit racial bars, and plaintiff did not allege continuing de facto discrimination.

Issue

Whether Connecticut's tax exemption for the Elks and Moose could be enjoined or retroactively undone as unconstitutional state encouragement of racial discrimination, and whether Section 1981 gives a rejected black applicant a cause of action against a truly private fraternal club for racially discriminatory denial of membership. Also at issue was whether the later removal of the clubs' explicit racial bars rendered the tax-exemption claim moot.

Rule

A challenge to state tax benefits as unconstitutional encouragement of private racial discrimination may become moot when the defendant organizations eliminate the challenged de jure discrimination and no continuing discrimination is alleged. Equitable principles do not justify a mandatory injunction compelling collection of back taxes for past tax exemptions absent special circumstances such as bad faith, especially where federalism, taxation concerns, and harsh retroactive effects are present. Section 1981, though broadly applicable to private contracts, does not extend to the membership contracts of truly private clubs because the private-club exemption of the 1964 Civil Rights Act must be read into Section 1981; whether an organization is a private club depends chiefly on selectiveness in admissions, formal membership procedures, and member control, along with history, nonmember use, dues, advertising, and profit motive.

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

In Cleveland, Adrian Cole, a Black accountant, applied to join Lakeshore Fellows Society, a fraternal dining club. Membership requires sponsorship by two current members, an interview by an admissions committee, and approval by secret ballot of the membership; the club charges substantial annual dues, does not advertise, and is governed entirely by its members.

Adrian sues the club under 42 U.S.C. § 1981, alleging that the club rejected him because of race. What is the strongest argument that his claim should be dismissed?

Explanation. The majority held that although club membership can be contractual, § 1981 must be harmonized with the 1964 Act's private-club exemption. Thus, § 1981 does not apply to membership contracts of truly private clubs. The key indicators are selectiveness, formal membership procedures, and member control, with additional factors such as dues, advertising, nonmember use, history, and profit motive. This club fits that model.