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Domino's Pizza, Inc. v. McDonald

546 U.S. 470, 126 S. Ct. 1246, 163 L. Ed. 2d 1069 (2006)

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Domino’s Pizza, Inc. v. McDonald

United States Supreme Court
546 U.S. 470, 126 S. Ct. 1246, 163 L. Ed. 2d 1069 (2006)

Facts

John McDonald (plaintiff), a Black man, was the president and sole shareholder of JWM Investments, Inc. (JWM). In his capacity as president of JWM, McDonald signed a contract with Domino’s Pizza, Inc. (Domino’s). Pursuant to the contract, JWM agreed to build four buildings in Las Vegas and lease the buildings to Domino’s from which it could operate restaurants. McDonald alleged that after the contract was signed, Domino’s employees, motivated by McDonald’s race, refused to perform their contractual obligations, intentionally driving JWM into bankruptcy. The bankruptcy trustee brought an adversary proceeding against Domino’s but did not include a claim that Domino’s had violated 42 U.S.C. § 1981. The parties settled the breach-of-contract claim, and JWM executed a complete release of all claims against Domino’s. McDonald subsequently sued Domino’s in his personal capacity pursuant to § 1981, alleging that Domino’s had violated its contract with JWM because of McDonald’s race, causing him to lose control of his closely held corporation. The district court dismissed McDonald’s claim. The court of appeals reversed, reasoning that McDonald had a cause of action under § 1981 because he had sustained a personal loss. The United States Supreme Court granted certiorari.

Rule of Law

Issue

Holding and Reasoning (Scalia, J.)

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