Arguello v. Conoco, Inc. case brief

ARGUELLO V. CONOCO, INC.
207 F.3d 803 (5th Cir. 2000)

Synopsis:
-Appellant minority consumers challenged an order of the United States District Court for the Northern District of Texas dismissing their disparate impact claim under 42 U.S.C.S. § 2000a, and granting summary to defendant corporation on remaining claims under 42 U.S.C. §§ 1981..


FACTS:
-Arguello (P) and others on three different incidents patronized a Conoco gas station.
-P tried to pay for the items with a credit card and was asked for I.D. P was told an out of state drivers license was not acceptable.
-P disagreed with the clerk and the clerk eventually began to insult P with profanity and racial insults. -The clerk also knocked a six-pack off the counter towards P.
-P left the store and called Conoco's management and had to get the clerk's name.
-When another P attempted to go back into the store, the clerk and another employee locked the doors.
-Management reviewed the store tape which had no audio and determined that the clerk had acted improperly.
-The clerk admitted the profanity and was merely counseled by Connoco. Other plaintiffs met with similar type disdain at other stores when they were told "we don't have to serve you people" and " you people are always acting like this."
-That employee refused to serve them until the police were called and they ordered the employee to serve them.
-Other incidents were of a similar nature. In March 1977, Ps sued under 42 USC 1981 and 2000a for D's failure to serve Hispanic and African-American customers.

PROCEDURAL HISTORY
The district court dismissed some of the claims on disparate impact and eventually granted summary judgment to D on all the remaining claims. Ps appealed, the district court erred when it found no agency relationship between D and its Conoco branded stores and it erred when it held that the clerk acted outside the scope of her employment.

ISSUE:
-Is a petroleum provider liable for the actions of its employees or its independent contractors' employees that occur outside the scope of employment?

RULE
-A master is not liable for his servants' intentional acts if they occurred
beyond the servants' scope of employment.

HOLDING:
-The United States District Court for the Northern District of Texas, dismissed consumers' disparate impact claim and granted summary judgment for owner on remaining claims. Consumers appealed.

The Court of Appeals, Carl E. Stewart, Circuit Judge, held that:
(1) owner did not have agency relationship with independently owned stations;
(2) owner was not entitled to summary judgment on claim of vicarious liability for alleged discriminatory acts of one of its own station's clerks;
(3) duty not to discriminate under § 1981 is not a nondelegable duty;
(4) owner did not ratify clerk's actions; and
(5) consumers failed to adequately allege disparate impact.


ANALYSIS: Appellant minority consumers challenged dismissal of their disparate impact claim and summary judgment on other discrimination claims in favor of appellee, owner and franchiser of gas and retail stores. Appellants alleged defendant violated state and federal statutes barring racial discrimination by refusing to serve minorities, and subjecting them to derogatory remarks. In three separate incidents (two of them at franchisee-owned stores), appellants were subjected to discrimination. Defendant successfully argued before the district court that it was not liable for incidents at franchise stores, and the store clerk was not a supervisory employee. The appellate court affirmed the lower court decisions except for the ruling on defendant's liability for the clerk's conduct, which was reversed because the restricted vicarious liability rule did not apply in the public accommodation context.

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