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Juarez v. The Northwestern Mut. Life Ins. Co., Inc.

United States District Court, S.D. New York

November 14, 2014

RUBEN JUAREZ, on behalf of himself and all others similarly situated, Plaintiff,

For Ruben Juarez, on behalf of himself and all others similarly situated, Plaintiff: Adam T Klein, Lewis M. Steel, Michael Noah Litrownik, Ossai Miazad, LEAD ATTORNEYS, Outten & Golden, LLP (NYC), New York, NY; Thomas Andrew Saenz, LEAD ATTORNEY, PRO HAC VICE, Maldef, Los Angeles, CA; Olivia J. Quinto, PRO HAC VICE, Outten & Golden,LLP (NYC), New York, NY; Victor Viramontes, PRO HAC VICE, Mexican American Legal Defense and Educational Fund, Los Angeles, CA.

For The Northwestern Mutual Life Insurance Company, Inc., Defendant: Christopher Alan Parlo, LEAD ATTORNEY, Brendan Thomas Killeen, Morgan, Lewis & Bockius LLP (New York), New York, NY; John A Haase, Paul F. Heaton, PRO HAC VICE, Godfrey & Kahn, S.C, Green Bay, WI.

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KATHERINE B. FORREST, United States District Judge.

On July 9, 2014, plaintiff Ruben Juarez (" plaintiff" or " Juarez" ) filed this action, individually and on behalf of all others similarly situated, against The Northwestern Mutual Life Insurance Company, Inc. (" defendant" or " Northwestern Mutual" ), alleging alienage discrimination in violation of 42 U.S.C. § 1981. (ECF No. 2 (" Compl." ).) Plaintiff alleges that he was legally authorized to work in the United States, applied for a position at Northwestern Mutual, and was rejected pursuant to a policy that denies employment to all persons who are not U.S. citizens or legal permanent residents (" LPRs" ). On September 4, 2014, defendant filed a motion to dismiss the Complaint for failure to state a claim. (ECF No. 22.) The motion became fully briefed on October 10, 2014 (ECF No. 40) and the Court heard oral argument on the motion on November 3, 2014. For the reasons set forth below, the motion is DENIED.


The Complaint alleges the following facts.[1] The Deferred Action for Childhood Arrivals (" DACA" ) is a federal program that authorizes recipients to remain in the United States for two years[2] and to obtain an Employment Authorization Document (" EAD" ), a federal work permit, and a Social Security number. (See Compl. ¶ ¶ 16-17.) Juarez is a Mexican national residing in New York. (Id. ¶ 2.) On October

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25, 2012, Jaurez obtained DACA status.[3] (Id. ¶ 20.) Juarez obtained an EAD around the same time and received a Social Security number on November 2, 2012. (Id. ¶ ¶ 20-21.)

On October 26, 2012, Juarez submitted a resume to a Northwestern Mutual representative who was recruiting college students to become interns. (Id. ¶ 22.) On December 11, 2013, Juarez interviewed at Northwestern Mutual with Susan Lewandowski (" Lewandowski" ). (Id. ¶ 25.) After the interview, Lewandowski requested Juarez's employment documents. (Id. ¶ 26.) Juarez provided his valid Social Security number. (Id.) Lewandowski then asked Juarez whether he was a U.S. citizen or a green-card holder. (Id. ¶ 27.) Juarez explained that he had DACA status and an EAD and that he was legally authorized to work in the United States. (Id.) On December 17, 2013, Juarez e-mailed Lewandowski and informed her that, based on his research, " he could legally work for Northwestern Mutual regardless of whether he was a citizen or had a visa." (Id. ¶ 29.) Later that day, Lewandowski replied, " [s]orry but you have to be a U.S. citizen or have a green card." (Id. ¶ 30 (internal quotation marks omitted).) According to the Complaint, " Northwestern Mutual advertises its blanket ban against hiring anyone who is not a U.S. citizen or U.S. permanent resident on its website." [4] (Id. ¶ 31.)

On July 9, 2014, Juarez filed this putative class action against Northwestern Mutual, alleging alienage discrimination in violation of 42 U.S.C. § 1981. (ECF No. 2.) On September 4, 2014, defendant filed a motion to dismiss the Complaint for failure to state a claim. (ECF No. 22.) That motion is the subject of this Opinion & Order.


A. Rule 12(b)(6) Motion to Dismiss

To survive a Rule 12(b)(6) motion to dismiss, a complaint must allege " enough facts to state a claim to relief that is plausible on its face." Bell A. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). " A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 556). In applying that standard, the court accepts as true all well-pleaded factual allegations and draws all reasonable inferences in plaintiff's favor, but does not credit " mere conclusory statements" or " [t]hreadbare recitals of the elements of a cause of action." Id. (citing Twombly, 550 U.S. at 555).

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B. Section 1981

Section 1981 provides in relevant part, " All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts . . . as is enjoyed by white citizens . . . ." 42 U.S.C. § 1981(a). The statute, as amended by the Civil Rights Act of 1991, prohibits both public and private actors from discriminating on the basis of race or alienage in the making and enforcement of contracts, including employment contracts. See Anderson v. Conboy, 156 F.3d 167, 170, 180 (2d Cir. 1998). Alienage discrimination is discrimination on the basis of citizenship. See, e.g., Anderson, 156 F.3d at 171 (observing that § 1981's " juxtaposition of 'persons' and 'citizens' suggests that it prohibits alienage discrimination" (emphasis added)); see also 8 U.S.C. § 1101(a)(3) (defining " alien" as " any person not a citizen or national of the United States" ). " Alienage discrimination is distinct from both national-origin and birthplace discrimination." Anderson, 156 F.3d at 171 n.5 (citation omitted).

To state a claim under § 1981, a plaintiff must allege that (1) he or she is a member of a protected class, (2) the defendant intentionally discriminated against him or her on the basis of membership in that protected class; and (3) the discrimination concerned one of § 1981's enumerated activities. See Brown v. City of Oneonta, 221 F.3d 329, 339 (2d Cir. 2000) (citation omitted).[5] " [Section] 1981, like the Equal Protection Clause, can be violated only by purposeful discrimination." Gen. Bldg. Contractors Ass'n, Inc. v. Pennsylvania, 458 U.S. 375, 391, 102 S.Ct. 3141, 73 L.Ed.2d 835 (1982). Purposeful discrimination is " conduct motivated by a discriminatory purpose," rather than conduct that " merely result[s] in a disproportionate impact on a particular class." Id. at 386; see also id. at 388 (quoting a case for the proposition that § 1981 would be violated if a private actor discriminated against someone " solely because" of his race).

C. Relationship Between § 1981 and the Fourteenth Amendment

There is a close relationship between § 1981 and the Fourteenth Amendment. Section 1981 is derived from Section 1 of the Civil Rights Act of 1866 and Section 16 of the Voting Rights Act of 1870. Anderson, 156 F.3d at 172. " Both of these laws, in turn, were legislative cousins of the Fourteenth Amendment" :

The 1866 Act represented Congress' first attempt to ensure equal rights for the freedmen following the formal abolition of slavery effected by the Thirteenth Amendment. As such, it constituted an initial blueprint of the Fourteenth Amendment, which Congress proposed in part as a means of " incorporat[ing] the guaranties of the Civil Rights Act of 1866 in the organic law of the land." The 1870 Act, which contained the language that now appears in § 1981, was enacted as a means of enforcing the recently ratified Fourteenth Amendment.

Gen. Bldg. Contractors, 458 U.S. at 389 (citations omitted). " In light of the close connection between these Acts and the Amendment, it would be incongruous to construe the principal object of their successor, § 1981, in a manner markedly different from that of the Amendment itself." Id. at 389-90. In particular, " purposeful discrimination that violates the Equal Protection Clause of the Fourteenth Amendment

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will also violate § 1981." Gratz v. Bollinger, 539 U.S. 244, 276 n.23, 123 S.Ct. 2411, 156 L.Ed.2d 257 (2003) (citing Gen. Bldg. Contractors, 458 U.S. at 389-90). The pleading standards for two claims are also the same. See Brisbane v. Milano, 443 F.App'x 593, 594 (2d Cir. 2011) (citation omitted).


A. Defendant's argument

Defendant does not dispute that the Complaint sufficiently alleges the first and third elements required to state a claim under § 1981--namely, that plaintiff was a member of a protected class and that the alleged discrimination concerned one of § 1981's enumerated activities. Rather, defendant argues that the Complaint fails because it does not (and cannot) plausibly allege that Northwestern Mutual engaged in intentional, purposeful discrimination on the basis of alienage. (See Defendant's Memorandum of Law in Support of Its Motion to Dismiss (" Def.'s Mem." ) at 1, ECF No. 23.) Defendant cites Iqbal for the meaning of " discriminatory purpose" :

Under extant precedent purposeful discrimination requires more than " intent as volition or intent as awareness of consequences." It instead involves a decisionmaker's undertaking a course of action " 'because of,' not merely 'in spite of,' [the action's] adverse effects upon an identifiable group."

Iqbal, 556 U.S. at 676-77 (citations omitted). According to defendant, Northwestern Mutual's willingness to hire LPRs--" the single largest group of non-U.S. citizens who are authorized to work in the United States" --renders implausible any allegation that the company refused to hire Juarez " because of' his lack of U.S. citizenship. (Def.'s Mem. at 1; see also id. at 15 (" [The] Complaint acknowledges that if he had held a green card, Juarez would have been welcome to apply for a contract notwithstanding his lack of United States citizenship." ); 11/3/14 Tr.[6] at 11 (" [The policy] clearly couldn't be driven by a motive, an intent, purposeful discrimination against someone because of their lack of citizenship, or they would have excluded all of them." ).) According to defendant, the Complaint at most plausibly alleges that Juarez was turned away because of his work authorization or immigration status (that is, his lack of a green card)--a classification that does not fall within the ambit of § 1981. (See Def.'s Mem. at 4; 11/3/14 Tr. at 19 (" Mr. Juarez was not turned away because he was not a citizen. He was turned away because he didn't have a green card . . . ." ).) Relatedly, defendant argues that Juarez has not pled " specific facts giving rise to a reasonable inference of discriminatory animus and purpose" (Def.'s Mem. at 14), as required to state a claim under § 1981. (Id. at 14-15.)

B. The Court's Analysis

The policy alleged in the Complaint--essentially, " Legal aliens without green cards need not apply" --on its face discriminates against a subclass of lawfully present aliens. Juarez's allegations that he was denied employment pursuant this policy are sufficient to state a claim under § 1981. This conclusion follows directly from three premises, each of which is well supported in the law: (1) § 1981's protection against discrimination extends to all

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lawfully present[7] aliens, whether or not they have a green card; (2) a plaintiff need not allege discrimination against all members of a protected class to state a claim under § 1981; and (3) a plaintiff can plead intentional discrimination by alleging that the defendant acted pursuant to a facially discriminatory policy requiring adverse treatment based on a protected trait. The Court elaborates on each of these premises in turn.

The protection of § 1981, like that of the Fourteenth Amendment, extends to all lawfully present aliens, whether or not they have a green card. See 42 U.S.C. § 1981 (" All persons within the jurisdiction of the United States shall have the same right . . . ." (emphasis added)); Anderson, 156 F.3d at 173-74 (explaining that " any prohibition against alienage discrimination [in § 1981] must be derived from Section 16 of the 1870 Act," id. at 173, and later concluding that " Section 16 was to apply to all aliens," id. at 174); see also Torao Takahashi v. Fish & Game Comm'n, 334 U.S. 410, 419-20, 68 S.Ct. 1138, 92 L.Ed. 1478 (1948) (" The protection of [§ 1981 (then codified at 8 U.S.C. § 41)] has been held to extend to aliens as well as to citizens. . . . The Fourteenth Amendment and the laws adopted under its authority thus embody a general policy that all persons lawfully in this country shall abide 'in any state' on an equality of legal privileges with all citizens under non-discriminatory laws." (emphasis added) (footnote omitted)). Indeed, defendant does not dispute that all lawfully present aliens, including those who do not hold green cards, are protected under § 1981. (See 11/3/14 Tr. at 15.)

Defendant also does not dispute that a plaintiff need not allege discrimination against all members of a protected class to state a claim under § 1981. (See Reply Brief in Support of Northwestern Mutual's Motion to Dismiss at 2-3 (acknowledging that the " observation that a principal cannot escape liability for unlawful discrimination against one member of a protected class merely by establishing that it did not discriminate against every member of that protected class" is " unremarkable" and " undisputed" ), ECF No. 40.) In Brown v. Henderson, the Second Circuit explored this issue in the context of a Title VII claim of sex discrimination by virtue of a hostile work environment. See 257 F.3d 246, 252-55 (2d Cir. 2001). Like Juarez, the plaintiff in Brown was required to show that the challenged conduct occurred " because of" her protected characteristic. Id. at 252. Although ultimately concluding that the plaintiff could not show that she was discriminated against because of her sex,[8] id. at 256, the Second Circuit rejected the defendant's argument that " there could be no discrimination 'because of sex' where both a woman ([the plaintiff]) and a man . . . were harassed," id. at 252. The Court explained that " discrimination against one employee cannot be cured, or disproven, solely by favorable, or equitable, treatment of other employees of the same race or sex." Id. (citations omitted). Similarly, " whether an employer discriminates against only a subset of a protected class or discriminates inconsistently, Title VII nevertheless protects any individual so long as that individual is mistreated because of her sex." Id. at 253 (citations omitted). The same principles apply to § 1981 claims. See Whidbee v. Garzarelli Food Specialties, Inc., 223 F.3d 62, 69 (2d Cir. 2000)

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(quoting a case for the proposition that " [i]n analyzing § 1981 claims, we apply the same standards as in Title VII cases" (quoting Hardin v. S.C. Johnson & Son, Inc., 167 F.3d 340, 347 n.2 (7th Cir. 1999)) (internal quotation marks omitted)). A defendant is not insulated from § 1981 liability for intentional discrimination against some members of a protected class merely because not every member of the class becomes a victim of the discrimination.[9]

Finally, while defendant is correct that " § 1981 reaches only purposeful discrimination," Gen. Bldg. Contractors, 458 U.S. at 389, a plaintiff who alleges a policy that is discriminatory on its face is not required to make any further allegations of discriminatory intent or animus. The Second Circuit has explained that there are " several ways for a plaintiff to plead intentional discrimination that violates the Equal Protection Clause," Brown, 221 F.3d at 337, and that the same pleadings standards apply to § 1981 claims, id. at 339. One of the ways to plead intentional discrimination is to point to a law or policy that expressly classifies people on the basis of a protected characteristic. Id. at 337; see also Hazen Paper Co. v. Biggins, 507 U.S. 604, 610, 113 S.Ct. 1701, 123 L.Ed.2d 338 (1993) (" The employer may have relied upon a formal, facially discriminatory policy requiring adverse treatment of employees with [a protected] trait." (citations omitted)); Amini v. Oberlin Coll., 440 F.3d 350, 359 (6th Cir. 2006) (" [P]roof of 'a facially discriminatory employment policy . . . to [avoid hiring] employees in the protected group is direct evidence of discriminatory intent.'" (citations omitted)). It follows that allegations that Juarez's application was rejected pursuant to a policy that expressly denies employment to lawfully present aliens without green cards--a protected subclass--suffice to state a claim under § 1981.

Defendant misinterprets the law when it argues that Northwestern Mutual's willingness to hire some lawfully present aliens renders implausible any allegation of intentional discrimination on the basis of alienage. Iqbal's statement that purposeful discrimination requires that the adverse action be taken " because of' rather than " in spite of' a protected characteristic, see 556 U.S. at 676-77, is consistent with the principle that one of the ways to engage in purposeful discrimination is to apply a policy that is discriminatory on its face. Facial discrimination is discrimination " because of' a protected characteristic. An employer cannot implement a policy, " Members of protected class P need not apply," and then successfully argue that the policy was not motivated by any animus toward the protected class. Similarly, the employer cannot implement a policy that expressly discriminates against members of a protected class (here, lawfully present aliens) with characteristic X (here, lack of LPR status) and then, when a rejected candidate files a lawsuit, successfully argue that case should be dismissed because the discrimination was on the basis of X rather than the

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protected trait. Such an argument fails at pleadings stage irrespective of the nature of characteristic X: X could be a particular eye color (" Aliens with blue eyes need not apply" ) or X could be, as here, a particular immigration status (" Aliens without LPR status need not apply" ).[10] The important point is that the alleged policy facially singles out a protected subclass for adverse treatment.

Hazen Paper Co. v. Biggins, 507 U.S. 604, 113 S.Ct. 1701, 123 L.Ed.2d 338 (1993), does not support defendant's position. In Biggins, the Supreme Court held that an employer does not violate the Age Discrimination in Employment Act of 1967 (" ADEA" ) " just by interfering with an older employee's pension benefits that would have vested by virtue of the employee's years of service." Id. at 613. The Court explained that discrimination on the basis of years of service does not run afoul of the ADEA because " an employee's age is analytically distinct from his years of service" :

An employee who is younger than 40, and therefore outside the class of older workers as defined by the ADEA, see 29 U.S.C. § 631(a), may have worked for a particular employer his entire career, while an older worker may have been newly hired. Because age and years of service are analytically distinct, an employer can take account of one while ignoring the other, and thus it is incorrect to say that a decision based on years of service is necessarily " age based."

Id. at 611. Unlike in Biggins, where the classification was on the basis of a characteristic (years of service) that was merely correlated with a protected trait (age), the classification alleged here is expressly based on a protected trait: the alleged policy singles out a subclass of aliens, namely those without green cards, and denies them employment. A Biggins-like analogue would be a policy that discriminates against employees over 50 with Y years of service.[11]

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C. Equal Protection Cases

The conclusion that Juarez has stated a plausible claim under § 1981 is supported by a long line of precedent interpreting the Equal Protection Clause.[12] In Torao Takahashi, the Supreme Court struck down[13] a California statute that denied commercial fishing licenses to any " person ineligible [for] citizenship," 334 U.S. at 413 (internal quotation marks omitted), explaining that stateae laws which impose discriminatory burdens upon the entrance or residence of aliens lawfully within the United States" are invalid, id. at 419. Then, in Graham v. Richardson, the Supreme Court struck down two state statutes that prevented immigrants from receiving public assistance. 403 U.S. 365, 376, 91 S.Ct. 1848, 29 L.Ed.2d 534 (1971). Notably, neither statute denied benefits to all aliens: one barred aliens who did not qualify under federal assistance programs, and the second barred aliens who did not satisfy a fifteen-year residency requirement. See id. at 367-68. Nonetheless, the Court subjected both statutes to strict scrutiny and held that they violated the Equal Protection Clause. Id. at 376.

Since Graham, the Court has repeatedly applied strict scrutiny to statutes discriminating on the basis of alienage." [14] See Dandamudi, 686 F.3d at 73 (collecting cases). In Nyquist v. Mauclet, resident aliens challenged the constitutionality a New York statutory provision barring certain resident aliens from receiving state financial assistance for higher education. See 432 U.S. 1, 3-5, 97 S.Ct. 2120, 53 L.Ed.2d 63 (1977). The statutory provision provided:

Citizenship. An applicant (a) must be a citizen of the United States, or (b) must have made application to become a citizen, or (c) if not qualified for citizenship, must submit a statement affirming intent to apply for United States citizenship as soon as he has the qualifications, and must apply as soon as eligible for citizenship, or (d) must be an individual of a class of refugees paroled by the attorney general of the United States under his parole authority pertaining to

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the admission of aliens to the United States.

Id. at 3-4. The district court held that this provision violated the Equal Protection Clause by discriminating against resident aliens. Id. at 5-6. On appeal, the defendants argued, inter alia, that the provision should not be subjected to strict scrutiny, id. at 7, because it distinguished " only within the 'heterogeneous' class of aliens," not " between citizens and aliens vel non" : " [a]liens who have applied for citizenship, or, if not qualified for it, who have filed a statement of intent to apply as soon as they are eligible, are allowed to participate in the assistance programs," id. at 8 (internal quotation marks omitted). The Supreme Court, citing Graham, squarely rejected this argument, explaining that " [t]he important points are that [the provision] is directed at aliens and that only aliens are harmed by it. The fact that the statute is not an absolute bar does not mean that it does not discriminate against the class." Id. at 9 (citations omitted). The Court struck down the provision as unconstitutional. Id. at 12.

The Second Circuit also has affirmed the principle that discrimination against a subclass of aliens is subject to strict scrutiny. In Dandamudi, nonimmigrant aliens[15] who had temporary authorization from the federal government to work in the United States challenged the constitutionality of a New York licensing statute that provided that only U.S. citizens and LPRs were eligible for a pharmacist's license. 686 F.3d at 69-70. The district court granted plaintiffs' motion for summary judgment, and the Second Circuit affirmed. Id. at 70. The Second Circuit rejected the state's argument that the statute should be subjected to rational-basis review because it discriminates against only against nonimmigrant aliens: " In our view, . . . a state statute that discriminates against aliens who have been lawfully admitted to reside and work in the United States should be viewed in the same light under the Equal Protection Clause as one which discriminates against aliens who enjoy the right to reside here permanently." [16] Id.; see also id. at 74-75 (" [T]he [Supreme] Court has never distinguished between classes of legal resident aliens. The state's argument that suspect class protection extends no further than to LPRs simply has no mooring in the High Court's prior ventures into this area." (footnote omitted)); id. at 76-77 (" Nothing in the Supreme Court's precedent counsels us to 'judicially craft[] a subset of aliens, scaled by how [we] perceive the aliens' proximity to citizenship.' Rather, the Court's precedent supports drawing a distinction among aliens only as between lawfully admitted aliens and those who are in the United States illegally." (footnotes and citations omitted)).

In these cases, statutes that discriminated against a subclass of lawfully present aliens were subjected to strict scrutiny and struck down as violating the Equal Protection Clause. As in these cases, the policy alleged here is " is directed at aliens and that only aliens are harmed by it," Nyquist, 432 U.S. at 9. Given the close connection between § 1981 and the Equal Protection Clause, Gen. Bldg. Contractors, 458 U.S. at 389-90, these cases suggest that Juarez's allegations, if proven, would establish a violation of § 1981. See Gratz,

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539 U.S. at 276 n.23 (" [P]urposeful discrimination that violates the Equal Protection Clause of the Fourteenth Amendment will also violate § 1981." ).


For the reasons set forth above, defendant's motion to dismiss is DENIED. The Clerk of Court is directed to terminate the motion at ECF No. 22.


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