Unpublished Disposition, 872 F.2d 426 (9th Cir. 1989)

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U.S. Court of Appeals for the Ninth Circuit - 872 F.2d 426 (9th Cir. 1989)

Suyong Franky AN; Min Hee An, Plaintiffs-Appellants,v.GENERAL AMERICAN LIFE INSURANCE COMPANY; H. Edwin Trushuim;Robert J. Banstetter; Barbara Dillon; Donald L.Renetzky; W. Richard Condon,Defendants-Appellees.

No. 86-6771.

United States Court of Appeals, Ninth Circuit.

Submitted*  April 3, 1989.Decided April 12, 1989.

Before EUGENE A. WRIGHT, FARRIS and NELSON, Circuit Judges.


We consider whether an insurer's refusal to issue life insurance policies to a Korean couple based on their inability to communicate in English violates 42 U.S.C. §§ 1981 and 1982, or California's Unruh Civil Rights Act, Cal.Civ.Code Sec. 51 (West.1982 & Supp.1989). Finding no federal or state violation, we affirm the district court's grant of summary judgment in favor of the defendant.


Originally from Korea, Suyong Franky An is a naturalized United States citizen, and his wife, Min Hee An, is a permanent resident of the United States. In February 1984 the Ans submitted applications for two life insurance policies of $25,000 each to General American Life Insurance Company. One month later, General American advised them that it would not consider further their applications because of their inability to communicate in English.

As part of the company's approval process, a General American employee had called the Ans by telephone to conduct a personal history interview and to confirm information contained in their applications. During her telephone call, the employee concluded that they did not have the requisite ability to speak or understand English. According to a company rule then in effect, the Company declined the applications based solely on that finding.

The Ans retained legal counsel. In May 1984, after their lawyer threatened a lawsuit, General American agreed to consider the applications further. The Ans, however, declined the offer because they had already obtained life insurance coverage in the same amount with another carrier.

A few months later the Ans sued General American and several of its personnel, alleging violations of their civil rights under 42 U.S.C. §§ 1981 and 1982, the California Constitution, and California statutes. They stated claims for actual and punitive damages, as well as declaratory and injunctive relief and for attorneys' fees.

Both parties moved for summary judgment. The district court found that the Ans had failed to provide proof that General American had the discriminatory intent necessary to violate the federal statutes and failed to present evidence that the English requirement was arbitrary or unreasonable. The court granted summary judgment in General American's favor.


The Ans challenge the court's ruling. In response, General American contends that the appeal is frivolous and requests attorneys' fees under Fed. R. App. P. 38.

Although the district court did not resolve this issue, we must determine initially whether any or all of the Ans' claims are moot.1  General American argues that the issues in this appeal are moot primarily because it has discontinued the policy at issue and because it had offered to consider the Ans' applications before they filed suit.

In May 1985 General American held a meeting with a representative of the California State Attorney General's office. The company agreed voluntarily that it no longer would refuse to consider applications submitted by Californians on the basis of their perceived abilities to communicate in English.

The Ans' amended complaint states claims for general and punitive damages, as well as injunctive relief enjoining General American from enforcing its language-based policy. We find that the claims for damages are not moot. See, e.g., Wilson v. Nevada, 666 F.2d 378, 380-81 (9th Cir. 1982) (claims for monetary damages survive even though claim for injunctive relief moot); Lokey v. Richardson, 600 F.2d 1265, 1266 (9th Cir. 1979) (claim for actual and nominal damages not moot), cert. denied, 449 U.S. 884 (1980).

However, because General American has discontinued its policy of declining to consider applications from those who cannot speak or understand English, the claim for injunctive relief is moot.2  See Wilson, 666 F.2d at 381-83. Failing to move for class certification, the Ans have not brought a class action. The record presents no facts that would bring their request for injunctive relief within any mootness exception. See DeFunis v. Odegaard, 416 U.S. 312, 317-20 (1974).

II. Federal Claims Under 42 U.S.C. §§ 1981 and 1982

The Ans argue that the court erred in ruling that they failed to provide sufficient proof of discriminatory intent to sustain a cause of action under sections 1981 or 1982. They contend that those statutes prohibit discrimination based on race or national origin and that denial of insurance based on inability to communicate in English reflects the requisite discriminatory intent. We disagree.

General American contends that neither statute proscribes discrimination based on national origin. It argues further that the Ans failed to demonstrate that the insurer's language-based policy discriminated against them based on race or national origin.3 

The Supreme Court has established clearly that sections 1981 and 1982 prohibit racial discrimination. See, e.g., Runyon v. McCrary, 427 U.S. 160, 168 (1976);4  Jones v. Alfred H. Mayer Co., 392 U.S. 409, 413 (1968). This court has recognized that a language-based classification may reflect racial or national origin discrimination. See Gutierrez v. Municipal Court, 838 F.2d 1031, 1039 (9th Cir. 1988) (noting that language-based rules may be mere pretexts for intentional national origin discrimination under Title VII), petition for cert. filed, Feb. 21, 1989; Olagues v. Russoniello, 797 F.2d 1511, 1521 (9th Cir. 1986) (en banc), (distinguishing between "a general classification of English-speaking versus non-English-speaking individuals" and "a specific classification of Spanish-speaking and Chinese-speaking immigrants" in finding an equal protection violation), vacated as moot, 108 S. Ct. 52 (1987).5 

The Ans' reliance on these cases is misplaced. A policy involving an English requirement, without more, does not establish discrimination based on race or national origin. The Ans must provide evidence of the defendant's discriminatory intent. See General Bldg. Contractors Ass'n v. Pennsylvania, 458 U.S. 375, 391 (1982) (section 1981 requires purposeful discrimination); Jurado v. Eleven-Fifty Corp., 813 F.2d 1406, 1410-12 (9th Cir. 1987) (plaintiff failed to produce evidence that English-only order was racially motivated). This they have failed to do.

On the other hand, General American has shown that it has actively pursued business in the Korean community.

At the present time, General American has issued approximately 5,000 life insurance policies to members of the Los Angeles area Korean community. Approximately 98 agents of Korean descent have contracted with the company and are active in the Los Angeles Korean community.

Based on marketing information available to the company, General American is a leading company in the Los Angeles area Korean community. The company believes that its present share of that market is about 40%.

Declaration of Robert J. Banstetter, Vice President and General Counsel of General American (July 21, 1986).

Declarations from its employees confirmed that the decision to reject the Ans' applications was based solely on their inability to speak English. The district court held correctly that the Ans failed to provide evidence of the discriminatory intent required by sections 1981 and 1982.

The Ans allege that General American violated their state rights under the Unruh Civil Rights Act. See Cal.Civ.Code Sec. 51 (West 1982 & Supp.1989). We disagree.

The Ans received services from a "business establishment" within the reach of the Act. See, e.g., Burks v. Poppy Constr. Co., 57 Cal. 2d 463, 370 P.2d 313, 315-16, 20 Cal. Rptr. 609 (1962). Although the Unruh Act has been held to proscribe "any form of arbitrary discrimination," it does not prevent a business from promulgating a reasonable regulation "rationally related to the services performed." Koire v. Metro Car Wash, 40 Cal. 3d 24, 707 P.2d 195, 197-98, 219 Cal. Rptr. 133 (1985); see Ross v. Forest Lawn Memorial Park, 153 Cal. App. 3d 988, 203 Cal. Rptr. 468, 471 (1984). The Act prohibits arbitrary, and not reasonable, discrimination. Koire, 707 P.2d at 197.

General American contends that its policy served a legitimate business purpose in ensuring that applicants understand the contractual relationship between them and that both parties receive accurate and material information relating to the insurance coverage.6  The Ans have presented no evidence to establish that the English requirement was arbitrary.

General American seeks an award of attorneys' fees pursuant to Fed. R. App. P. 38. We do not believe that this appeal was entirely frivolous, taken in bad faith or wholly without merit. See, e.g., Sea Harvest Corp. v. Riviera Land Co., No. 87-4092, slip. op. 1483, 1490-91 (9th Cir. Feb. 28, 1989). We deny the fee request.

The judgment of the district court is AFFIRMED. The appellee's application for attorneys' fees is DENIED.


The panel finds this case suitable for submission without oral argument. Fed. R. App. P. 34(a), Ninth Circuit Rule 34-3


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3


During the summary judgment hearing the court said, "The possibility of this whole case being moot has crossed my mind, but I am willing to go on the theory that it is not moot and that the Court should deal with the case on the merits." Transcript of Summary Judgment Proceedings at 14-15 (Nov. 10, 1986)


Further, the Ans appear to have conceded that all claims, except those for damages, are moot


Because we hold that the Ans failed to provide evidence of discrimination based on national origin or race, we need not reach the question of whether the statutes proscribe national origin discrimination. See London v. Coopers & Lybrand, 644 F.2d 811, 818 & n. 4 (9th Cir. 1981) (holding not based upon any notion that Sec. 1981 prohibits discrimination based on national origin); Gonzalez v. Stanford Applied Engineering, Inc., 597 F.2d 1298, 1299-1300 (9th Cir. 1979) (finding racial discrimination under Sec. 1981 and therefore not resolving issue of whether national origin presents a sufficient claim)


Reconsidering its decision in Runyon, the Supreme Court recently heard oral argument on whether section 1981 reaches private acts of racial discrimination. Patterson v. McLean Credit Union, 805 F.2d 1143 (4th Cir. 1986), cert. granted, 108 S. Ct. 65 (1987). The Patterson decision will not affect the outcome in this case for the Ans have failed to show the requisite discriminatory intent


The Ans rely heavily on this vacated opinion. Recognizing that we are not bound by Olagues, we discuss it here only to show that its analysis does not support their position


W. Richard Condon, Vice President of General American, said:

"Because of the absolute need that there be an actual meeting of the minds before and after the issuance of a policy of insurance written in English, it has been, during the 24 years I have been associated with General American, a requirement that persons proposed for insurance be capable of communicating in English.... This requirement is imposed without reference to a particular applicant's race, color, creed or country of national origin."

Declaration of Condon (Sept. 12, 1985).