# Charles E. MacKey v. Nationwide Insurance Companies

> Court of Appeals for the Fourth Circuit · January 6, 1984 · 724 F.2d 419

URL: https://www.frixlaw.com/law-library/cases/9471598

## Case

- **Full name:** Charles E. MACKEY, Appellant, v. NATIONWIDE INSURANCE COMPANIES, Appellee
- **Court:** Court of Appeals for the Fourth Circuit
- **Decided:** January 6, 1984
- **Citations:** 724 F.2d 419; 73 A.L.R. Fed. 885; 33 Empl. Prac. Dec. (CCH) 34,048; 1984 U.S. App. LEXIS 26636
- **Precedential status:** Published
- **Opinion:** Concurring in part by Ervin
- **Judges:** Widener, Ervin, Haynsworth
- **Cited by:** 88 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9471598

## How later opinions describe it (automated extraction)

- holding that former agent of defendant-insurance company who alleged that defendant practiced "redlining," or an "arbitrary refusal to underwrite the risks of persons residing in predominantly black neighborhoods," had standing under the Act because he alleged "an economic inj…
- holding that black insurance agent’s loss of commissions was sufficient injury to challenge former employer's discriminatory practices of arbitrarily refusing to issue insurance policies in predominately-black neighborhoods
- holding that an insurer’s refusal to underwrite hazard insurance in a predominately African-American neighborhood did not “otherwise make [housing] unavailable”
- declining to apply § 3604(b) to defendant's insurance practices, noting the traditional predominance of state regulation of insurance and the principle that non-specific Congressional enactments should not displace such arrangements
- concluding that hazard insurance is not a “service”

## Opinion text

ERVIN, Circuit Judge,
concurring and dissenting:
I concur in parts I, IIB, III, and IV of the majority opinion. I cannot agree, however, that the plaintiff lacks standing to attack Nationwide’s alleged redlining practice under the Civil Rights Act, 42 U.S.C. sections 1981 ,1982 and 1985. The majority concedes that Mackey’s alleged loss of income “probably satisfies” the constitutional requirement of injury in fact, but concludes that because Mackey has brought suit on behalf of others standing should be denied. In my view, the majority has misread Mackey’s complaint and misconstrued the proper relationship between the two prongs of the standing test discussed in Warth v. Seldin, 422 U.S. 490 , 95 S.Ct. 2197 , 45 L.Ed.2d 343 (1975). For this reason, I respectfully dissent from part IIA of the court’s opinion.
I.
In Warth the Supreme Court set forth a two part test to determine whether a party has standing to sue. As a threshold matter, Article III of the Constitution requires the plaintiff in every federal ease to allege “ ‘such a personal stake in the outcome of the controversy’ as to warrant his invocation of federal court jurisdiction and to justify exercise of the court’s remedial powers on his behalf.” Id. at 498-99 , 95 S.Ct. at 2204-05 , quoting Baker v. Carr, 369 U.S. 186, 204 , 82 S.Ct. 691, 703 , 7 L.Ed.2d 663 (1962). The injury claimed must be “distinct and palpable”, 422 U.S. at 501 , 95 S.Ct. at 2206 , and “fairly traceable” to the defendant’s actions. Arlington Heights v. Metropolitan Housing Dev. Corp., 429 U.S. 252, 261 , 97 S.Ct. 555, 561 , 50 L.Ed.2d 450 (1977), quoted in Havens Realty Corp. v. Coleman, 455 U.S. 363, 376 , 102 S.Ct. 1114, 1123 , 71 L.Ed.2d 214 (1983). The injury, however, need not be direct. United States v. SCRAP, 412 U.S. 669, 688 , 93 S.Ct. 2405, 2416 , 37 L.Ed.2d 254 (1973).
In addition to this minimum requirement, certain “prudential” considerations must be satisfied. The plaintiff must “assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.” 422 U.S. at 499 , 95 S.Ct. at 2205 . It is not enough for the plaintiff to allege a “ ‘generalized grievance’ shared in substantially equal measure by ... a large class of citizens.... ” Id. at 499 , 95 S.Ct. at 2205 . The rationale behind these prudential limitations is to ensure that courts are not called upon to decide “abstract questions of wide public significance” where “judicial intervention may be unnecessary to protect individual rights,” Id. at 500 , 95 S.Ct. at 2206 , and to guarantee that “the most effective advocate of the rights at issue is present to champion them.” Duke Power Co. v. Carolina Env. Study Group, 438 U.S. 59, 80 , 98 S.Ct. 2620, 2634 , 57 L.Ed.2d 595 (1978).
The Supreme Court has made clear, however, that prudential concerns should not be used to deny standing to a plaintiff who alleges a particularized claim on his own behalf simply because his complaint merely mentions or implicates the rights of others. In Duke Power, for example, a private environmental group challenged the constitutionality of the Price-Anderson Act on the grounds that the Act’s limitation on liability for nuclear accidents violated the due proc *426 ess clause and “equal protection component” of the fifth amendment. 438 U.S. at 68 , 98 S.Ct. at 2627 . The Court held that the plaintiff had standing to sue, even though the claim clearly implicated the rights of third parties residing in the vicinity of defendant Duke Power Company’s reactors, and even though the relief requested was clearly designed to benefit a general populace. While recognizing that there were “good and sufficient reasons” for invoking prudential limitations when the rights of third parties are implicated, the Court concluded that:
Where a party champions his own rights and where the injury alleged is a concrete and particularized one which will be prevented or redressed by the relief requested, the basic practical and prudential concerns underlying the standing doctrine are generally satisfied when the constitutional requisites are met.
Id. at 80-81 , 98 S.Ct. at 2634-2635 ; see also Arlington Heights v. Metropolitan Housing Corporation, 429 U.S. 252, 263-69 , 97 S.Ct. 555, 562-65 , 50 L.Ed.2d 450 (1977) (individual plaintiff permitted to bring suit alleging particularized harm despite fact that additional claim was brought on behalf of third parties).
The facts of Warth underscore the relatively narrow range and type of claim that prudential considerations were designed to preclude. In Warth , eight individuals and several citizens’ associations challenged the constitutionality of an exclusionary zoning ordinance in Penfield, New York. One of the plaintiff groups — Metro-Act—alleged that 9% of its membership resided in Pen-field and had been indirectly harmed by exclusion of low and moderate income families. The Supreme Court concluded that Metro-Act did not have standing because the organization, as the representative of its members, had not alleged a sufficiently palpable injury to satisfy Article III and because “prudential considerations strongly counseled] against ... allowing Metro-Act to invoke the judicial process.” 422 U.S. at 514 , 95 S.Ct. at 2213 . Central to the Court’s holding was the fact that none of the Pen-field residents had themselves alleged a deprivation of constitutional rights under 42 U.S.C. sections 1981 , 1982 or 1985. Id. at 514-15, n. 22 , 95 S.Ct. at 2213, n. 22 . In short, Metro-Act had raised “putative rights of third parties”, id. at 514 , 95 S.Ct. at 2213 , in an effort to have the judiciary decide a question of “broad social import where no individual rights would be vindicated.” Gladstone Realtors v. Bellwood, 441 U.S. 91, 100 , 99 S.Ct. 1601, 1608 , 60 L.Ed.2d 66 (1979).
II.
Unlike Metro-Act, the harm alleged by Mackey does not hinge on the rights of third parties. Mackey’s claim is not primarily a generalized grievance made on behalf of a class of speculative third parties who have been denied property insurance because of alleged redlining practices; rather, Mackey essentially is championing his own rights as an insurance agent whose business practice has been harmed by the defendant’s practices. Mackey alleges first and foremost that Nationwide’s practice of “arbitrarily and discriminatorily denying insurance coverage to policyholders in black neighborhoods that [he] . .. would present to the company for coverage” has forced him to suffer substantial economic loss. Specifically, Mackey asserts that by refusing to allow him to enter into insurance contracts with potential customers, Nationwide has directly violated contract and property rights secured to him under 42 U.S.C. sections 1981 , 1982 and 1985, and has denied him the same terms and conditions of employment granted white insurance agents of the Company. This discriminatory practice, Mackey argues, resulted in the wrongful termination of his agency contract and consequently caused substantial economic loss to him. Thus, in contrast to Warth , the harm claimed by Mackey is at once particularized, direct, “peculiar” to his position as an insurance agent, and involves a violation of his individual constitutional rights.
Construing the complaint in “favor of the complaining party” and “accepting] as true all material allegations of the complaint,” *427 Warth v. Seldin, 422 U.S. 501 , 95 S.Ct. at 2206 , I cannot say that Mackey has not alleged direct and concrete harm to his insurance practice. There is every reason to believe that the harm will be redressed, and future harm prevented, by the relief requested. 438 U.S. at 80-81 , 98 S.Ct. at 2634-35 . In short, the proper question to ask is not, as the majority phrases it, whether other potential black plaintiffs can be found to challenge Nationwide’s discriminatory practices, but whether Mackey is an appropriate party to assert an individual claim of injury to his insurance practice. I see no reason why Mackey is not well suited to bring such a claim.
In theory, a plaintiff might be found to have satisfied the Article III requirement, and yet still be denied standing because the essential nature of his claim — although alleging some indirect individual harm— was primarily a generalized one brought on behalf of third parties who had not shown harm. Such was the case in Warth. Yet the mere fact that questions of “broad social import” are implicated does not mean that prudential considerations will automatically preclude standing where constitutional requirements are met. If broad social questions are incidental to the essentially individual nature of the claim being made, prudential considerations are inapplicable. Such was the case in Duke Power, and in my view, such is the case here.
In his complaint Mackey mentions that Nationwide’s practices have injured other blacks as well as himself. Indeed, in part IV of the complaint Mackey specifically notes that Nationwide’s actions have “violated rights secured to plaintiff and other citizens” under 42 U.S.C. sections 1982 and 1985. These references to third parties, however, do not alter the essentially individual nature of the harm alleged. The primary purpose of Mackey’s suit is to win relief for injuries he has suffered in violation of section 1981, 1982 and 1985. 1 To fit Mackey’s complaint within the framework of Warth requires either a misreading of the essence of the claim or a misinterpretation of the meaning of “prudential limitations.” This I decline to do.
III.
Because Mackey is asserting his own rights and has alleged a concrete and particularized injury that will be redressed by the relief requested, I would remand this action to the district court with orders to proceed on the sections 1981, 1982 and 1985 redlining claims.
. Mackey’s section 1981 claim makes no reference to third parties.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9471598. Public record. Not legal advice.