A recent decision from the Fourth Circuit Court of Appeals, Nadendla v. Wakemed, No. 21-1300 (4th Cir. Jan. 21, 2022) provides a reminder of a plaintiff’s burden when asserting claims of race discrimination under a federal statute commonly referred to as Section 1981.
Haritha Nadendla is a physician of Indian origin who had clinical privileges and was on the staff of Wakemed Cary Hospital in North Carolina until May 2017. After being notified that her privileges and employment would end, Nadendla sought a hearing pursuant to the Hospital’s bylaws. The Hospital’s decision was upheld and Nadlenda then filed suit, alleging a variety of state law claims and a claim under 42 U.S.C. § 1981.
Section 1981 is a federal statute prohibiting race discrimination in the “making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms and conditions of the contractual relationship.” Section 1981(b). In the employment context, Section 1981 is another avenue through which employees can assert race discrimination claims (such as, for example, Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, sex, religion, and national origin). Along with being limited to race claims, Section 1981 differs from Title VII in that there is no administrative exhaustion requirement and no cap on damages. This case highlights yet another difference between Title VII and Section 1981 – under the latter the plaintiff’s burden is to show that race was the but-for cause of the action, but under Title VII race need only be a motivating factor.
Nadendla alleged that the hearing lacked fairness and that she was not afforded adequate process under the Hospital’s bylaws. More specifically, Nadendla alleged that she presented evidence as to why the Hospital’s decision was incorrect – including testimony about the appropriate standard of care – but the Hospital did not support at the hearing the clinical concerns underlying its decision.
After Wakemed moved to dismiss Nadendla’s claims, the trial court initially denied the motion as to the race discrimination claim (and two state law claims). The Hospital then requested that the court reconsider its decision based on the Supreme Court’s decision in Comcast Corp. v. Nat’l Assoc. of African-American Owned Media, 140 S. Ct. 1009 (2020), which was decided prior to the trial court’s initial decision, but after briefing on the motion. In Comcast, the Supreme Court held that a Section 1981 plaintiff must show that the interference with a contractual interest would not have happened but for the plaintiff’s race. Therefore, to survive a motion to dismiss, a plaintiff must allege facts that, if accepted as true, allow the court to draw a reasonable inference that the contractual interference would not have occurred but for the race of the aggrieved individual.
The appellate court agreed — it concluded that Nadendla did not meet the pleading requirements. Her complaint contained “extensive and specific allegations regarding Wakemed’s failure to abide by the Bylaws during the hearing,” but did not include allegations linking those failures to race, which in the court’s words were “conspicuously absent” from the complaint. Nadendla did not sufficiently allege that the things that happened to her were because of her race. The closest Nadendla came was to vaguely allege that the Hospital treated her differently from other similarly situated individuals. In the court’s words: “Nadendla provides no details about any of these conclusory allegations. For example, she does not give any facts to suggest that WakeMed’s treatment of other physicians of Indian descent was unjustified. She does not provide any details about how the peer review process for physicians of Indian descent was different from the process for white physicians either. She does not even describe how she was treated differently than the similarly situated white physicians.” Absent allegations of fact, the court was “unable to infer that WakeMed intended to interfere with a contractual interest of Nadendla on the basis of race.”