Lyons v. Citi Trends, Inc.

Background

Tarsha Lyons alleged that she visited a Citi Trends retail location in Middletown, New York, on October 8, 2020. According to the amended complaint, an employee demanded to take Lyons’s bags even though the employee acknowledged that the store had no bag-check policy. When Lyons refused, the employee allegedly said, “I don’t want your kind shopping here” and told her that she could not shop unless she gave up her bags. Lyons alleged that the employee imposed this condition because of her race and that she saw a shopper who was not African American carrying a bag in the store.

Lyons reported the incident to the Middletown Police Department and Citi Trends. She alleged that a Citi Trends representative, Tony Dargan, reviewed store video and confirmed her account. She brought claims under 42 U.S.C. § 1981, a federal law protecting equal rights to make and enforce contracts, and Article 15, section 296 of the New York State Human Rights Law. Citi Trends moved to dismiss the amended complaint.

Section 1981 Claim

The court denied the motion to dismiss the Section 1981 claim. At the motion-to-dismiss stage, the court accepted the complaint’s factual allegations as true and drew reasonable inferences in Lyons’s favor.

The court held that Lyons plausibly alleged the elements of a Section 1981 claim: membership in a protected racial class, intentional racial discrimination, and interference with a protected contracting activity. The statement about not wanting “your kind” to shop could reasonably be understood as referring to race. The court also concluded that requiring Lyons to surrender her bag as a condition of shopping plausibly alleged that she was forced to transact on different terms from nonminority customers. The court therefore denied Citi Trends’ motion as to this claim.

New York State Human Rights Law Claim

The court granted the motion to dismiss the New York State Human Rights Law claim and dismissed that cause of action without prejudice. The court explained that, under the law it applied, an employer is not liable for an employee’s discriminatory act unless the employer encouraged, condoned, or approved the conduct.

The court found that Lyons had not plausibly alleged that Citi Trends encouraged, approved, or condoned the employee’s conduct. Her allegations that she complained to Citi Trends, that Dargan reviewed the video, and that she believed the employee might have been terminated did not supply sufficient facts showing that Citi Trends had participated in or approved the alleged discrimination. The court also noted that the allegations suggested Citi Trends may have taken remedial measures.

Disposition

The court granted in part and denied in part Citi Trends’ motion to dismiss. It denied the motion as to the Section 1981 claim and granted it as to the New York State Human Rights Law claim. Lyons was granted leave to file a second amended complaint concerning the state-law claim by March 10, 2023. The court stated that, if she failed to file it on time without showing good cause, the claims dismissed without prejudice would be deemed dismissed with prejudice. The defendant was directed to answer or otherwise respond according to the deadlines in the order.