Johnson, Robert v. Apna Ghar Inc

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 01-2015
ROBERT JOHNSON,
Plaintiff-Appellant,
v.
APNA GHAR, INC.,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 00 CV 7752—Milton I. Shadur, Judge.
____________
ARGUED DECEMBER 5, 2002—DECIDED JUNE 4, 2003
____________
Before BAUER, DIANE P. WOOD, and WILLIAMS, Circuit
Judges.
WILLIAMS, Circuit Judge. Robert Johnson sued Apna
Ghar, Inc. for discrimination in employment, in violation
of Title VII of the Civil Rights Act, asserting that Apna
Ghar rejected his job application because he is male. In
granting Apna Ghar’s motion to dismiss for lack of subject
matter jurisdiction, the district court relied on United
States v. Morrison, 529 U.S. 598 (2000) and United States
v. Lopez, 514 U.S. 549 (1995), and found that it would be
an unconstitutional exercise of the commerce clause to
subject Apna Ghar to Title VII. Because we find Morrison
and Lopez inapplicable, and that Apna Ghar is an employ-
er whose business affects commerce, we reverse.
2 No. 01-2015
I. BACKGROUND
Apna Ghar is an Illinois not-for-profit organization that
provides transitional shelter and walk-in social services
to victims of domestic violence who are primarily Asian
women and children. One of the services it provides is
assistance with legal matters. In March 1999, Apna Ghar
placed a “help wanted” advertisement in the Chicago
Reader, a newspaper distributed in Chicago and neighbor-
ing suburbs (including some in nearby Indiana), advertising
a “legal advocate” position that paid up to $27,000. Robert
Johnson submitted an application and resume; Apna Ghar
reviewed his resume and informed him it was not going to
interview or hire him because he is male and it “preferred
a female legal advocate.”
Johnson filed a timely charge of discrimination with
the Equal Employment Opportunity Commission, which
determined there was reasonable cause to believe Apna
Ghar discriminated against Johnson because of his gen-
der, attempted to conciliate, and ultimately issued Johnson
a right to sue letter. Johnson filed suit in federal court
alleging discrimination in violation of Title VII. Apna Ghar
filed a Rule 12(b)(1) motion to dismiss, claiming that sub-
ject matter jurisdiction was lacking because it was not an
“employer” within the meaning of Title VII. The district
court determined that “it would impermissibly stretch the
Commerce Clause to read that provision (which is the
source of power for the enactment of Title VII) as extend-
ing to . . . Apna Ghar[’s] activity.” It therefore granted
Apna Ghar’s motion to dismiss, and Johnson now appeals.
II. ANALYSIS
We review de novo a district court’s dismissal under Rule
12(b)(1). Long v. Shorebank Dev. Corp., 182 F.3d 548, 554
(7th Cir. 1999); see also Selbe v. United States, 130 F.3d
1265, 1266 (7th Cir. 1997). “When reviewing a dismissal
No. 01-2015 3
for lack of subject matter jurisdiction, we note that a
district court must accept as true all well-pleaded factual
allegations and draw all reasonable inferences in favor of
the plaintiff.” Long, 182 F.3d at 554 (citing Rueth v. United
States Envtl. Prot. Agency, 13 F.3d 227, 229 (7th Cir. 1993)).
When considering such a motion, “ ‘[t]he district court may
properly look beyond the jurisdictional allegations of the
complaint and view whatever evidence has been submit-
ted on the issue to determine whether in fact subject matter
jurisdiction exists.’ ” Id. (quoting Capitol Leasing Co. v.
FDIC, 999 F.2d 188, 191 (7th Cir. 1993)).
Title VII applies to organizations that are “employers,”
that is, organizations that are “engaged in an industry
affecting commerce.” 42 U.S.C. § 2000e(b);1 Walters v.
Metro. Educ. Enter., Inc., 519 U.S. 202, 205 (1997); Sharpe
v. Jefferson Distrib. Co., 148 F.3d 676, 677 (7th Cir. 1998).
In Title VII cases, this court has held that “a district court
does not lack subject matter jurisdiction in cases where
the defendant fails to meet the statutory definition of
‘employer.’ ” Komorowski v. Townline Mini-Mart & Rest.,
162 F.3d 962, 964 (7th Cir. 1998) (citing Sharpe v. Jeffer-
son Distrib. Co., 148 F.3d 676, 677 (7th Cir. 1998); Ost v.
W. Suburban Travelers Limo., Inc., 88 F.3d 435, 438 n.1
1
Title VII defines “employer” as “a person engaged in an in-
dustry affecting commerce who has fifteen or more employees
for each working day in each of twenty or more calendar weeks
in the current or preceding calendar year, and any agent of such
a person.” 42 U.S.C. § 2000e(b). A “person” under Title VII
“includes one or more individuals, governments, governmental
agencies, political subdivisions, labor unions, partnerships,
associations, corporations, legal representatives, mutual compa-
nies, joint-stock companies, trusts, unincorporated organiza-
tions, trustees, trustees in cases under Title 11, or receivers.” Id.
§ 2000e(a). Apna Ghar does not challenge that it has more than
15 employees or that it is a “person” for Title VII purposes.
4 No. 01-2015
(7th Cir. 1996)). If Johnson presents “a non-frivolous claim
under federal law; no more is necessary for subject-matter
jurisdiction. A plaintiff’s inability to demonstrate that the
defendant [is an ‘employer’] is just like any other failure
to meet a statutory requirement. There is a gulf between
defeat on the merits and a lack of jurisdiction.” Sharpe, 148
F.3d at 677 (citing Steel Co. v. Citizens for a Better Env’t,
523 U.S. 83, 87-93 (1998); Ost, 88 F.3d at 438 n.1); see
also Komorowski, 162 F.3d at 965-66; Martin v. United Way
of Erie County, 829 F.2d 445, 447 (3d Cir. 1987) (“ ‘[e]le-
ments of a claim that are called jurisdictional because
they relate to Congress’s jurisdiction remain questions of
the merits, and the Supreme Court has made clear that a
court may resolve them only in the manner that the court
may resolve all other questions of the merits’ ”) (quoting
Kulick v. Pocono Downs Racings Ass’n, Inc., 816 F.2d
895, 898 (3d Cir. 1987); cf. 2 MOORE’S FEDERAL PRACTICE
§ 12.30(1) (3d ed. 1997) (“Subject matter jurisdiction in
federal-question cases is sometimes erroneously conflated
with a plaintiff’s need and ability to prove the defendant
bound by the federal law asserted as the predicate for re-
lief—a merits related determination.”).
Because Johnson’s claim arises under the laws of the
United States and is neither “immaterial and made
solely for the purpose of obtaining jurisdiction” nor “wholly
insubstantial and frivolous,” Bell v. Hood, 327 U.S. at 682-
83, the district court has federal-question jurisdiction pur-
suant to 28 U.S.C. § 1331. Dismissal under Rule 12(b)(1)
was therefore erroneous. The district court’s reasoning,
however, suggests that it dismissed Johnson’s complaint
on the ground that his allegations did not state a claim
cognizable under Title VII. Because the question of wheth-
er Apna Ghar is an “employer” for purposes of Title VII
has been briefed extensively on appeal by both parties
No. 01-2015 5
and amicus,2 we proceed to evaluate the district court’s
resolution of this question.
In dismissing Johnson’s complaint, the district court
concluded that the “clear teaching of Morrison [529 U.S. 598(2000)] is that it would impermissibly stretch the com-
merce clause to read that provision (which is the source
of power for the enactment of Title VII) as extending to . . .
Apna Ghar[’s] activity.” The district court, however, mis-
understands Morrison and Lopez, 514 U.S. 549 (1995),
which both struck down federal statutes as unconstitu-
tional exercises of Congress’s Commerce Clause power. In
Lopez, the Supreme Court stated that for an activity to be
regulated by Congress under the Commerce Clause, it must
be an activity that substantially affects interstate com-
merce. 514 U.S. at 559. The Court found that the activity
that the Gun-Free School Zone Act sought to regulate—the
possession of a gun in a local school zone—is not an eco-
nomic activity that might, through repetition elsewhere,
have a substantial effect on interstate commerce. Id. at 561.
Furthermore, the Court found the Act “is not an essential
part of a larger regulation of economic activity, in which
the regulatory scheme could be undercut unless the intra-
state activity was regulated. It [could not], therefore, be
sustained under [the Court’s] cases upholding regulations
of activities that arise out of or are connected with a
commercial transaction, which viewed in the aggregate,
substantially affect interstate commerce.” Id. The Mor-
rison Court then relied on Lopez to find that the Violence
Against Women Act similarly did not regulate activity
2
The court appointed Jerold Solovy of the law firm Jenner &
Block, LLC to file an amicus curiae brief in support of Johnson,
who had filed his appeal pro se. The court thanks Mr. Solovy,
Barry Sullivan, Jacob Corre, John Joyce, and Jenner & Block
for their assistance in our consideration of this appeal.
6 No. 01-2015
that substantially affected interstate commerce. See Mor-
rison, 529 U.S. at 609-17.
Unlike the parties in Lopez and Morrison, Apna Ghar
does not contend that Title VII’s regulation of employment
is an invalid exercise of Congress’s commerce power.
Rather, Apna Ghar merely contends that it is not an
employer within the meaning of the statute because it is
not “engaged in an industry affecting commerce.” Morrison
and Lopez are therefore inapposite, as they do nothing
to disturb the well-settled doctrine that, so long as the
regulatory statute bears a substantial relation to com-
merce, a single entity may be constrained by it despite
the entity’s arguably minimal impact on interstate com-
merce. Lopez, 514 U.S. at 558 (“ ‘[W]here a general regula-
tory statute bears a substantial relation to commerce, the de
minimis character of individual instances arising under
that statute is of no consequence.’ ”) (quoting Maryland
v. Wirtz, 392 U.S. 183, 197 n.27 (1968)) (emphasis in orig-
inal); Lopez, 514 U.S. at 560 (citing Wickard v. Filburn, 317
U.S. 111, 128 (1942)).3
Thus, the narrower question remains whether Apna Ghar
is an “employer” for the purposes of Title VII. Under the
statute, an “employer” must be “a person engaged in an
3
We previously have rejected similar challenges to other
congressional acts that require showing that the defendant’s
conduct affected interstate commerce. See United States v.
Peterson, 236 F.3d 848, 851-52 (7th Cir. 2000) (“We have long held
that the government need only show some actual, even if de
minimis, effect, or, where there is no actual effect, a realistic
probability of an effect, on interstate commerce to bring rob-
bery within its prosecutorial reach.”) (Hobbs Act) (citing United
States v. Bailey, 227 F.3d 792, 797 (7th Cir. 2000)); see also United
States v. Stillo, 57 F.3d 553, 558 n.2 (“Nor did the Lopez decision
undermine this Court’s precedents that minimal potential effect
on commerce is all that need be proven. . . .”) (Hobbs Act).
No. 01-2015 7
industry affecting commerce,” 42 U.S.C. § 2000e(b). An
“industry affecting commerce” is defined as:
any activity, business, or industry in commerce or
in which a labor dispute would hinder or obstruct
commerce or the free flow of commerce and in-
cludes any activity or industry “affecting commerce”
within the meaning of the Labor-Management
Reporting and Disclosure Act of 1959, and further
includes any governmental industry, business, or
activity.
42 U.S.C. § 2000e(h). The Labor-Management-Report-
ing and Disclosure Act, 29 U.S.C. § 401 et seq., in turn,
incorporates the definition of “affecting commerce” as
that set forth in the Labor Management Relations Act
(LMRA) and the Railway Labor Act, 29 U.S.C. § 402. The
LMRA defines “affecting commerce” to mean “in commerce
or burdening or obstructing commerce, or having led or
tending to lead to a labor dispute burdening or obstruct-
ing commerce or the free flow of commerce.” 29 U.S.C.
§ 152(7).
When the labor law definition of “affecting commerce”
was incorporated into Title VII, “the term ‘affecting com-
merce’ had been interpreted as vesting in the Na-
tional Labor Relations Board ‘the fullest jurisdictional
breadth constitutionally permissible under the Commerce
Clause.’ ” Martin, 829 F.2d at 448 (quoting NLRB v. Reli-
ance Fuel Oil Corp., 371 U.S. 224, 226 (1963)). Similarly, in
Polish Nat’l Alliance v. NLRB, 322 U.S. 643 (1944), the
Court stated that, “when [Congress] wants to bring as-
pects of commerce within the full sweep of its constitu-
tional authority, it manifests its purpose by regulating not
only ‘commerce’ but also matters which ‘affect’, ‘interrupt’,
or ‘promote’ interstate commerce.” Id. at 647 (citations to
statutes omitted). Indeed, courts have found activity to
affect commerce in situations where a defendant merely
8 No. 01-2015
used items that at some point in time moved through
interstate commerce, see United States v. Dye Constr. Co.,
510 F.2d 78 (10th Cir. 1975) (defendants purchased trucks
and insurance policies produced by out-of-state sources), or
engaged in arguably local activity that would affect the
dynamics of an interstate market, see Wickard v. Filburn,
317 U.S. 111 (1942) (farmer’s production of wheat for home
consumption). Thus, the “affects commerce” hurdle is
very low.
Apna Ghar satisfies this low threshold of “affecting
commerce.” As indicated above, Apna Ghar is a not-for-
profit corporation that employs over 20 employees and
provides a variety of worthwhile services to its clientele.4
In the process, it solicits and receives employment ap-
plications from out-of-state individuals, maintains tele-
phone service for both in-state and toll-free out-of-state
contact, works with out-of-state universities, performs
extensive counseling services, accompanies clients to assist
with negotiations, provides legal services and transpor-
tation services, and provides referrals for shelters, legal
services, medical agencies, and housing organizations.
4
Apna Ghar’s not-for-profit status does not alter its coverage
by Title VII. “Although the term ‘industry affecting commerce’
may suggest a limitation to commercial enterprises, it is clear
that Congress intended to cover all activities affecting commerce,
to the extent permitted by the Constitution, regardless of wheth-
er they are operated for non-profit or charitable purposes.”
Martin, 829 F.2d at 448. It has long been held that such entities
may be “employers” engaged in “industry affecting commerce” for
purposes of Title VII. See id. (non-profit organization); See also
Bryant v. Int’l Sch. Servs., Inc., 675 F.2d 562 (3d Cir. 1982)
(non-profit organization engaged in placing American teachers
in foreign schools was subject to Title VII as an “employer”
engaged in an “industry affecting commerce”); Sibley Mem’l Hosp.
v. Wilson, 488 F.2d 1338 (D.C. Cir. 1973) (non-profit hospital
subject to Title VII).
No. 01-2015 9
In addition, Apna Ghar receives financial and in-kind
support from a variety of individuals and organizations,
including some located outside Illinois, and these contribu-
tions necessarily impact the interstate flow of such aid
to other similarly deserving organizations. Moreover, Apna
Ghar provides residential and child support services, and
to do so it purchases or receives goods that were man-
ufactured or transported in interstate commerce at some
point during their life. Because Apna Ghar’s activities,
as described above, are “matters which ‘affect’, ‘interrupt’,
or ‘promote’ interstate commerce,” Polish Nat’l Alliance, 322
U.S. at 647, Apna Ghar is engaged in an industry that
affects commerce and is properly classified as an “employer”
for purposes of Title VII. Dismissal of Johnson’s claim
was therefore erroneous.
III. CONCLUSION
For the foregoing reasons, the decision of the district
court is REVERSED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—6-4-03