Floyd Elmore v. Harbor Freight Tools USA, Inc.

United States Court of Appeals

For the Eighth Circuit

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No. 16-1280

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Floyd G. Elmore, Kansas City, Jackson County, Missouri

lllllllllllllllllllll Plaintiff - Appellant

v.

Harbor Freight Tools USA, Inc., doing business as Harbor Freight Tools

lllllllllllllllllllll Defendant - Appellee

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Appeal from United States District Court

for the Western District of Missouri - Kansas City

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Submitted: November 15, 2016

Filed: December 23, 2016

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Before RILEY, Chief Judge, WOLLMAN and KELLY, Circuit Judges.

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RILEY, Chief Judge.

Floyd Elmore brought suit against Harbor Freight Tools USA, Inc. after a

Harbor Freight manager accused Elmore of stealing from the store earlier in the day.

Elmore filed suit in federal district court, alleging federal claims under 42 U.S.C.

§ 1981 and state law negligence claims. The district court1 dismissed Elmore’s

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The Honorable Roseann A. Ketchmark, United States District Judge for the

§ 1981 claim for failure to plead state action as required under Youngblood v. Hy-

Vee Food Stores, Inc., 266 F.3d 851 (8th Cir. 2001), and, declining to exercise

supplemental jurisdiction, dismissed Elmore’s state law negligence claims without

prejudice. Because we conclude Elmore was required to allege state action as part of

his § 1981 claim and the district court did not abuse its discretion in declining to

extend supplemental jurisdiction to Elmore’s state law negligence claims, we affirm.

I. BACKGROUND

Elmore, an African American, visited his local Harbor Freight hardware store

in Independence, Missouri, on May 9, 2015, at approximately 8:30 p.m. As he was

exiting the store, after choosing not to make a purchase, a female store manager

stated: “I’m watching you. I caught you stealing here earlier today and told you not

to come back any more.” Elmore responded he had not stolen from the store, or even

been at the store earlier that day, and the manager said she would call the police. The

manager’s male companion was also present and yelled at Elmore. After the manager

called the police, Elmore left the store to pick up his wife.

Elmore and his wife returned to the store and took photographs of the

manager’s male companion making an obscene gesture in their direction. Once the

police arrived, they questioned Elmore about the incident and ultimately told him “it

was a civil matter” and that Elmore should leave. Elmore left the premises and later

called Harbor Freight’s district manager to inform him of the event. The district

manager told Elmore the incident “made [him] sick.”

Elmore filed suit against Harbor Freight, claiming federal question jurisdiction

under 28 U.S.C. §§ 1343 and 1331 and supplemental jurisdiction over state law

negligence claims under 28 U.S.C. § 1367. Elmore’s complaint included a claim

under § 1981 alleging “[t]he actions of Harbor Freight’s agents and employees

Western District of Missouri.

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against Plaintiff Elmore on the basis of his race interfered with Elmore’s right to the

full and equal benefit of the law.” Elmore also included two state law negligence

claims, alleging Harbor Freight negligently failed to train and supervise its employees

to prevent them “from wrongfully engaging in racially discriminatory practices.”

Harbor Freight moved to dismiss Elmore’s complaint pursuant to Federal Rule

of Civil Procedure 12(b)(6). On December 30, 2015, the district court granted Harbor

Freight’s motion and dismissed Elmore’s complaint in its entirety. Elmore appeals,

and we have jurisdiction pursuant to 28 U.S.C. § 1291.

II. DISCUSSION

A. Standard of Review

We review a district court’s grant of a motion to dismiss under Rule 12(b)(6)

de novo and take the facts alleged in the complaint to be true. See Blomker v. Jewell,

831 F.3d 1051, 1055 (8th Cir. 2016). “To survive a motion to dismiss, a complaint

must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that

is plausible on its face’” and include “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 (2009) (quoting Bell Atl. Corp. v. Twombly, 550

U.S. 544, 570 (2007)).

B. Section 1981 Claim

To state a claim under § 1981, a plaintiff must plead: “(1) that [the plaintiff] is

a member of a protected class; (2) that [the defendant] intended to discriminate on the

basis of race; and (3) that the discrimination on the basis of race interfered with a

protected activity as defined in § 1981.” Bediako v. Stein Mart, Inc., 354 F.3d 835,

839 (8th Cir. 2004). One such protected activity is the enjoyment of “the full and

equal benefit of all laws and proceedings for the security of persons and property.”

42 U.S.C. § 1981(a). “‘Because the state is the sole source of the law, it is only the

state that can deny the full and equal benefit of the law.’” Youngblood, 266 F.3d at

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855 (quoting Chapman v. Higbee Co., 256 F.3d 416, 421 (6th Cir. 2001), rev’d en

banc, 319 F.3d 825 (6th Cir. 2003), citing Mahone v. Waddle, 564 F.2d 1018, 1029

(3d Cir. 1977)). Therefore, only state action can give rise to a cause of action under

the full-and-equal-benefit clause. See id.

Elmore did not plead any state action in his complaint. We have already

determined “[u]nder the Full-and-Equal Benefit clause [of 42 U.S.C. § 1981, a

plaintiff must] allege that some sort of state action contributed to [the plaintiff] being

discriminated against.” Bediako, 354 F.3d at 838 n.3. Elmore argues we should

overrule Youngblood’s requirement of state action because the plain language of

§ 1981 contemplates private actors can deprive others of the full and equal benefit of

the law. Some courts have agreed with Elmore’s interpretation. See, e.g. Chapman,

319 F.3d at 830, 833; Phillip v. Univ. of Rochester, 316 F.3d 291, 295 (2d Cir. 2003);

Green v. Wal-Mart Stores, Inc., No. 2:09CV00457, 2010 WL 3260000, at *4 (D. Utah

Aug. 18, 2010); Hunter v. The Buckle, Inc., 488 F. Supp. 2d 1157, 1173 (D. Kan.

2007). However, “‘[i]t is a cardinal rule in [the Eighth Circuit] that one panel is

bound by the decision of a prior panel.’” United States v. Betcher, 534 F.3d 820,

823-24 (8th Cir. 2008) (quoting Owsley v. Luebbers, 281 F.3d 687, 690 (8th Cir.

2002)). Thus, we are bound by Youngblood’s state action requirement. See Bilello

v. Kum & Go, LLC, 374 F.3d 656, 661 n.4 (8th Cir. 2004). The district court did not

err in dismissing Elmore’s § 1981 claim for a failure to plead state action.

C. State Law Negligence Claims

Once the district court dismissed Elmore’s federal claims, it declined to extend

supplemental jurisdiction for his state law negligence claims. A district court has

broad discretion to decline to exercise supplemental jurisdiction over state law claims

after all claims over which the district court had original jurisdiction have been

dismissed. See Crest Constr. II, Inc. v. Doe, 660 F.3d 346, 359 (8th Cir. 2011). “In

exercising its discretion, the district court should consider factors such as judicial

economy, convenience, fairness, and comity.” Brown v. Mort. Elec. Registration

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Sys., Inc., 738 F.3d 926, 933 (8th Cir. 2013); see also 28 U.S.C. § 1367(c)(3) (“The

district courts may decline to exercise supplemental jurisdiction over a claim . . . if

. . . the district court has dismissed all claims over which it has original jurisdiction.”).

The district court determined a Missouri state court should resolve state claims

involving Missouri residents and that it would be more fair and convenient to allow

a Missouri state court to hear these claims. Furthermore, the case was in the nascent

stages. The district court did not abuse its discretion in declining to exercise

supplemental jurisdiction over Elmore’s state law claims once the district court

dismissed the claim over which it had original jurisdiction. See Clark v. Iowa State

Univ., 643 F.3d 643, 645 (8th Cir. 2011).

III. CONCLUSION

We affirm.

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