Unreported / Non-Citable
Background
Alton Thompson, Jinique Segno, and Brittany August, who are African American, sued Nunn Investments, LLC, doing business as Once Upon a Child, under 42 U.S.C. § 1981. They alleged that the store refused to consider purchasing their used children’s clothing and other items because of their race, thereby interfering with their right to make contracts.
Once Upon a Child moved for traditional and no-evidence summary judgment, challenging the elements of the plaintiffs’ claims. The trial court granted the motion without stating its reasons, and the plaintiffs appealed.
The Court’s Holding
The Texas First Court of Appeals reversed. Viewing the evidence under the no-evidence summary-judgment standard, the court held that Thompson and Segno presented more than a scintilla of evidence that the store refused to do business with them because of race. Thompson testified that the owner rejected their clothing without explanation, while the store accepted a white customer’s clothing presented in a bag. Conflicting testimony about whether that customer used a bag or a bin created a fact question rather than establishing a basis for summary judgment.
The court also held that August raised a fact issue. August testified that employees rejected her clothing first because it was in a tote bag and then because it was on hangers, directing her to buy a bin. She later saw a white customer enter with clothing in a trash bag and leave without it. A factfinder could conclude that the store imposed more onerous conditions on August than on the white customer, denying August an equal opportunity to negotiate a proposed contract.
Because each plaintiff produced evidence sufficient to permit reasonable jurors to differ on whether race impaired a prospective contractual relationship, the court reversed the summary judgment in all respects and remanded for further proceedings. It did not reach the plaintiffs’ additional appellate issues.
Key Takeaways
- Section 1981 protects prospective contractors as well as parties to existing contracts.
- Evidence that a merchant accepted a white customer’s goods while refusing comparable goods from Black customers may create a fact issue concerning discriminatory intent.
- Requiring a Black customer to satisfy more onerous conditions before negotiations can proceed may interfere with the equal right to make contracts.
Why It Matters
The decision confirms that Section 1981 can apply at the pre-contract stage of a retail transaction. A plaintiff need not prove that a completed contract existed when the alleged discrimination blocked the opportunity to negotiate or transact on equal terms.
The opinion also underscores the limited role of courts at the no-evidence summary-judgment stage. Conflicting accounts about how similarly situated customers were treated generally present credibility and fact questions for the factfinder.