Plaintiffs filed suit in the U.S. District Court for the Northern District of Illinois against the Defendant-construction company, alleging that the installment contracts the Defendant entered into with minority Plaintiffs contained less favorable terms than those offered to white home purchasers. Plaintiffs filed suit under federal civil rights states, 42 U.S.C. 1981, 1982, arguing that the Supreme Court's ruling in Jones v. Alfred H. Mayer Co., 392 U.S. 409 (1968), provided them with a cause of action for unfavorable credit terms based on race. The District Court upheld the Plaintiffs' claim under Section 1982. On January 6, 1970, the Seventh Circuit affirmed the District Court's ruling and rejected the Defendant-appellant's argument that the statute of limitations barred the Plaintiffs' suit under Section 1982. Baker v. F & F Inv., 420 F.2d 1191 (7th Cir. 1970). The Supreme Court denied the Defendant-appellants' petition for writ of certiorari on October 12, 1970. Universal Builders, Inc. v. Clark, 400 U.S. 821 (1970).

During trial U.S. District Court Judge Joseph Sam Perry granted the Defendants' motion for a directed verdict, finding that Plaintiffs' exploitation theory could not support a cause of action under 42 U.S.C. 1982. The Seventh Circuit reversed Judge Perry on July 26, 1974, holding that Section 1982 is violated if the facts demonstrate that Defendants exploited a situation created by socioeconomic forces tainted by racial discrimination. Clark v. Universal Builders, Inc., 501 F.2d 324, 330 (7th Cir. 1974). The Supreme Court denied the Defendants' petition for a writ of certiorari. Universal Builders, Inc. v. Clark, 419 U.S. 1070 (1974).

On remand, U.S. District Court Judge Austin denied the Defendants' motion to dismiss the Plaintiffs' causes of action in their amended complaint under 42 U.S.C. 1981, 1982, and 1985(3), but granted the motion to strike with respect to a claim under 42 U.S.C. 1983. Clark v. Universal Builders, Inc., 409 F. Supp. 1274 (N.D. Ill. 1974). The District Court subsequently entered judgment for the Defendants, finding that the Plaintiffs had failed to adduce evidence proving either a traditional or an exploitation theory of unlawful discrimination in lending. The Seventh Circuit affirmed the District Court's ruling on April 19, 1983. Clark v. Universal Builders, Inc., 706 F.2d 204 (7th Cir. 1983).

Andrew Nash - 06/02/2008


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