The opinion of the court was delivered by: GERARD L. GOETTEL
After a prolonged battle between Democrats in Congress and the White House, a legislative armistice entitled the Civil Rights Act of 1991 was finally hammered out and signed by the President. Since its enactment, the Act has been the eye of a storm driven by political impasse and conflicting precedent whose judicial winds have reached gale force. Those winds have now swept this court into the controversy surrounding the 1991 Act.
Plaintiff Charles E. Stout was an employee of International Business Machines Corporation ("IBM") for some nineteen years. He began working in manufacturing assembly but, after two back operations in 1985-86 left him unable to move with his department to IBM's Kingston office, ended up working in Poughkeepsie in another manufacturing position that required little or no physically demanding work. After two years in this position, plaintiff was terminated.
According to plaintiff, his supervisor complained to him on several occasions that plaintiff was earning too much money considering his restricted work capacity due to his physical limitations. Plaintiff states that many of the employees in his department are "temps" on hourly pay with few or no benefits. Consequently, plaintiff, a full-time employee with nineteen years of experience at IBM and full benefits, earned substantially more than most if not all other employees in the department.
Oddly enough, the events leading up to plaintiff's discharge revolve around a dentist's appointment. On October 6, 1988, plaintiff informed his supervisor, Mr. Cooper, that he would be taking a personal leave the following day to keep a dentist appointment. The next day, before plaintiff left for his appointment, Cooper challenged plaintiff's assertion that he was actually going to the dentist. When plaintiff called the dentist's office, he was told that his appointment had been cancelled by his wife. Upon plaintiff's request, the receptionist agreed to reschedule the appointment for its original time that same day.
On October 8, 1988, plaintiff was discharged for falsification of time records, records which stated that plaintiff was taking personal leave at 12:45 pm. After his termination, plaintiff offered his supervisor a letter from his dentist attesting to the fact that plaintiff visited the dentist's office for his scheduled appointment.
Plaintiff, who is black and fifty years of age, filed a complaint with the New York State Division of Human Rights ("DHR") alleging that he was discharged by his supervisor on account of his race, age, and disabilities. His claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000E et seq. and the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq., were referred to the EEOC. In April 1990, the DHR issued a Determination and Order After Investigation finding no probable cause for plaintiff's discrimination claims under the New York Human Rights Law. On June 26, 1991, the EEOC concluded that the evidence did not support plaintiff's claims of Title VII or ADEA violations. Upon dismissing plaintiff's complaint, the EEOC issued a Notice of Right to Sue Letter.
In August 1991, plaintiff commenced suit in federal court by filing a pro se complaint alleging an unlawful discharge under Title VII on the basis of his race and the ADEA because of his age. Plaintiff later retained counsel who was granted leave to file an amended complaint that added claims under § 1981 and the New York Human Rights Law. Plaintiff is seeking damages in excess of $ 12 million plus reinstatement to his former position and recoupment of back pay and lost pension benefits.
Before the court is defendant's motion to dismiss the additional causes of action sought in plaintiff's amended complaint pursuant to Fed.R.Civ.P. Rule 12 (b)(6) for failure to state a claim upon which relief may be granted and Rule 12(b)(1) for lack of subject matter jurisdiction. Defendant also seeks to strike plaintiff's demands for compensatory and punitive damages and a jury trial also included in plaintiff's amended complaint.
The court can only dismiss plaintiff's claims under 42 U.S.C. § 1981 where "it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957); Branum v. Clark, 927 F.2d 698 (2nd Cir. 1991). Where a complaint alleges civil rights violations, we exercise even greater care in making this assessment.
Plaintiff's amended complaint includes a claim that defendant has violated § 1981 by its discriminatory termination of plaintiff. In his amended complaint, plaintiff also demands a jury trial and seeks compensatory and punitive damages. At the very least, the parties recognize that plaintiff's claims in his amended complaint under § 1981, his requests under Title VII for compensatory and punitive damages and his demand for a jury trial all rise or fall on one crucial but hotly disputed issue, the retroactivity of the Civil Rights Act of 1991. If the Act applies prospectively only, plaintiff's § 1981 claim, his damages requests, and demand for jury trial must be dismissed since the action was filed before the Act was enacted.
At present there is a clear split of authority among the district courts of this circuit over the retroactivity of the 1991 Act. Compare, e.g., Smith v. Petra Cablevision Corp., 793 F. Supp. 417, 1992 U.S. Dist. LEXIS 7618 (E.D.N.Y. May 20, 1992) (finding no retroactivity) and McLaughlin v. New York, 784 F. Supp. 961 (N.D.N.Y. 1992) (similarly) with Jackson v. Banker's Trust Co., No. 88 Civ. 4786, 1992 U.S. Dist. LEXIS 6290 (S.D.N.Y. May 4, 1992) (applying the Act retroactively) and Croce v. V.I.P. Real Estate, Inc., 786 F. Supp. 1141 (E.D.N.Y. 1992) (similarly). This circuit's conflict simply mirrors the general discord among the federal courts regarding the Act's retroactivity.
Before the enactment of the 1991 Civil Rights Act, the Supreme Court, in a decision of enormous impact, held that "section 1981 cannot be construed as a general proscription of racial discrimination in all aspects of contract relations, for it expressly prohibits discrimination only in the making and enforcement of contracts." Patterson v. McLean Credit Union, 491 U.S. 164, 176, 105 L. Ed. 2d 132, 109 S. Ct. 2363 (1989) [hereinafter "Patterson"].
In the wake of Patterson, courts in this circuit held that discrimination claims based upon employment termination did not fall within § 1981's ambit. See, e.g., Patterson v. Intercoast Management of Hartford, 918 F.2d 12, 14 (2d Cir. 1990), cert. denied, U.S. , 114 L. Ed. 2d 81, 111 S. Ct. 1686 (1991). Consequently, if Patterson governs, plaintiff's § 1981 claim would require dismissal.
This line of decisions, however, was interrupted on November 21, 1991 when President Bush signed into law the Civil Rights Act of 1991, Pub. Law No. 102-166, 105 Stat. 1071 (1991) (the "1991 Act"). The 1991 Act, a product of intense political maneuvering, was adopted, at least in part, to reverse a string of Supreme Court decisions regarding the protections afforded by the various Civil Rights statutes.
The 1991 Act made three significant changes which impacted this case during its pendency. First, section 101 of the Act explicitly overruled the Patterson decision. As mentioned earlier, the Supreme Court had interpreted § 1981'S application to the making and enforcement of contracts to exclude claims founded upon discriminatory terminations. The 1991 Act states:
For purposes of this section, the term 'make and enforce contracts' includes the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.
42 U.S.C. § 1981(b). The Act also makes clear that its provisions apply to nongovernmental incidents of discrimination in addition to those occurring under color of state law. See 42 U.S.C. § 1981(c).
The second profound change brought about by the 1991 Act was broadening of the damages available to victims of employment discrimination. Section 102 of the Act allows a party complaining of unlawful intentional discrimination under 42 U.S.C. § 2000e-5 to recover compensatory and punitive damages if the complaining party cannot recover under § 1981. pub. Law No. 102-166 § 102. Lastly, § 102(c) of the Act states that a complaining party who seeks compensatory or punitive damages may demand a jury trial.
In his amended complaint, plaintiff added a § 1981 claim, claims for compensatory and punitive damages, and demanded a jury trial. Defendant has moved to dismiss arguing that the 1991 Act has no retroactive application to plaintiff's pending case. Thus, however unwillingly, we must step into the breach and decide whether the 1991 Act's provisions should be applied retroactively to cases pending at the time of the Act's enactment that involved conduct occurring before its passage.
Unfortunately, the issue of retroactivity has been the victim of an irreconcilable conflict in Supreme Court authority, a divergence of precedent that has helped produce a split among courts on the question of the 1991 Act's retroactivity. The sides are roughly evenly divided at this point. See cases cited infra p. 4 and note 1.
In Bradley v. Richmond School Board, 416 U.S. 696, 40 L. Ed. 2d 476, 94 S. Ct. 2006 (1974), the Court held that "a court is to apply the law in effect at the time it renders its decision." Bradley, 416 U.S. at 712. The Court, however, carved out two exceptions to the general rule of retroactivity, where retroactive application of the law would produce "manifest injustice" to a party or where congressional intent clearly mandated prospective application only. Id. at 713.
More recently, the Supreme Court has spoken on retroactivity in a contrary manner. In Bowen v. Georgetown University Hospital, 488 U.S. 204, 109 S. Ct. 468, 102 L. Ed. 2d 493 (1988), the Court announced that "retroactivity is not favored in the law . . . Congressional enactments and administrative rules will not be construed to have retroactive effect unless their language requires this result." Id. at 471.
The court reiterated this pronouncement in Kaiser Aluminum & Chemical Corp. v. Bonjorno, 494 U.S. 827, 837, 108 L. Ed. 2d 842, 110 S. Ct. 1570 (1990). In Kaiser, however, the court declined to harmonize the "apparent tension" between the two lines of retroactivity cases holding instead that under both "where congressional intent is ...