John Garrett v. Tandy Corporation

United States Court of Appeals for the First Circuit · 2002 · Contracts

295 F.3d 94 (2002)

Updated July 26, 2026

Contracts42 U.S.C. § 198142 U.S.C. § 1982retail transactionscontractual relationshipracial discriminationsurveillancedefamation

Facts

Garrett, a black customer, entered a Radio Shack store to buy a police scanner, but the scanner was not in stock. Store employees monitored him while he shopped, but he was able to buy a book, a telephone, and batteries, and employees helped him at checkout and checked other stores for the scanner. After he left, the store manager discovered a laptop missing, reported the theft to police, said he suspected Garrett, and gave police Garrett's address; police then searched Garrett's home and car but found nothing. Garrett later alleged the manager's statement was false and discriminatory, and that he did not attempt to return the purchased goods because he feared another accusation.

Issue

Did Garrett's complaint state a federal claim under 42 U.S.C. §§ 1981 or 1982 by alleging racially motivated surveillance and a post-purchase report to police? Did the complaint also state a viable Maine defamation claim where the manager allegedly told police he suspected Garrett of theft?

Rule

In a retail setting, a plaintiff states a claim under 42 U.S.C. § 1981 only by alleging that race-based animus actually denied him the ability to make, perform, enforce, modify, or terminate a contract, or to enjoy the fruits of a contractual relationship; discriminatory surveillance alone is not actionable unless it negatively affects the shopper's ability to contract, and a speculative unpursued future return does not constitute actual loss of a contract interest. For defamation, a statement framed as "I suspect" is not automatically protected opinion; if, in context, it reasonably implies undisclosed false and defamatory facts, dismissal at the pleading stage is improper.

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

Nia Brooks, a Black customer, entered a fictional electronics shop in Columbus, Ohio to buy headphones and a charger. Two employees followed her through the aisles and watched her closely, but they answered her questions, rang up both items without delay, and she left with the merchandise.

If Nia sues under 42 U.S.C. § 1981 alleging race-based discriminatory surveillance, what is the strongest argument for dismissal?

Explanation. The majority held that § 1981 is not a general ban on retail discrimination; it requires a contractual nexus. Surveillance alone is not actionable unless it crosses into harassment or otherwise negatively affects the shopper's ability to contract. Because Nia successfully purchased the items and the employees facilitated the sale, the strongest basis for dismissal is the absence of any actual impairment of contract rights. (Derived from John Garrett v. Tandy Corporation (2002).)