McCoy, et al v. Homestead Studio, et al

In the
United States Court of Appeals
for the Fifth Circuit
_______________
m 05-20505
Summary Calendar
______________
WILLIAM FRANKLIN MCCOY; XUEYUAN WU;
BEI GOU; YANQIN CHEN; JUN LIU; ET AL.,
Plaintiffs-Appellants,
VERSUS
HOMESTEAD STUDIO SUITES HOTELS;
HVI, INC.,
DOING BUSINESS AS HOMESTEAD STUDIO SUITES HOTELS;
BRE/TX PROPERTIES L.P.,
DOING BUSINESS AS HOMESTEAD STUDIO SUITES HOTELS;
BRE/HOMESTEAD VILLAGE, L.L.C.;
BRE/TX PROPERTIES, L.L.C.,
DOING BUSINESS AS HOMESTEAD STUDIO SUITES HOTELS,
Defendants-Appellees.
_________________________
Appeal from the United States District Court
for the Southern District of Texas
m 4:03-CV-3648
_________________________
United States Court of Appeals
Fifth Circuit
F I L E D
April 26, 2006
Charles R. Fulbruge III
Clerk

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Before SMITH, GARZA and PRADO,
Circuit Judges.
PER CURIAM:*
Plaintiffs appealthe dismissal of their claims
for unlawful discrimination under 42 U.S.C.
§§ 1981, 1982, 2000a, and 1985(3), and their
pendent claims under the Texas Deceptive
Trade Practices Act (“DTPA”) and for breach
of contract. We find no error in the district
court’s opinion and affirm.
Plaintiffs are practitioners of Falun Gong,
a spiritual belief system whose members are
persecuted by the People’s Republic of China
(“PRC”). When it was announced that Jiang
Zemin, the former president of the PRC,
intended to visit Houston and stay in the Inter-
continental Hotel, plaintiffs made reservations
at the nearby Homestead Studio Suites hotel
(“Homestead”) to protest his presence.
Homestead later made arrangements with a
representative of the PRC to rent a substantial
number of rooms to PRC members at a
premium rate for the duration of Jiang’s visit.
Because this contract with the PRC resulted in
overbooking, Homestead implemented its
“walk policy” with respect to persons
scheduled for short-term stays, including
plaintiffs.
Under the “walk policy,” Homestead pro-
vides displaced patrons free transportation to,
and a complimentary one-night stay at, a
neighboring Homestead hotel. If no Home-
stead in the area has a vacancy, Homestead
will pay for the first night’s stay at a compara-
ble hotel. Plaintiffs rejected the alternate ac-
commodations, claiming that Homestead im-
plemented its “walk policy” because they were
members of Falun Gong. Plaintiffs and Home-
stead filed cross-motions for summary
judgment.
We review a grant of summary judgment de
novo, applying the same legal standards as the
court below. Vulcan Materials Co. v. City of
Tehuacana, 369 F.3d 882, 886 (5th Cir.
2004). Summary judgment is appropriate
where there is no genuine issue of material fact
and the moving party is entitled to judgment as
a matter of law. FED. R. CIV. P. 56(c). We
must view the evidence in the light most
favorable to the non-moving party. See Vul-
can, 369 F.3d at 886.
Plaintiffs allege that Homestead violated
their right to make and enforce contracts under
§ 1981.1 To prove a § 1981 claim, a plaintiff
must show that (1) he is a member of a racial
minority, (2) the defendant had an intent to
discriminate on the basis of race, and (3) the
discrimination concerns one of the activities
listed in the statute. See Green v. State Bar,
27 F.3d 1083, 1086 (5th Cir. 1994). Assum-
ing arguendo that plaintiffs state a claim under
parts (1) and (3) of this test, as persons of
Chinese national origin who sought specific
enforcement of their contracts with Home-
* Pursuant to 5TH CIR. R. 47.5, the court has
determined that this opinion should not be pub-
lished and is not precedent except under the limited
circumstances set forth in 5TH CIR. R. 47.5.4.
1 “All persons within the jurisdiction of the
United States shall have the same right in every
State and Territory to make and enforce contracts,
to sue, be parties, give evidence, and to the full and
equal benefit of all laws and proceedings for the
security of persons and property as is enjoyed by
white citizens, and shall be subject to like pun-
ishment, pains, penalties, taxes, licenses, and ex-
actions of every kind, and to no other.” 42 U.S.C.
§ 1981.

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stead, they cannot demonstrate that Home-
stead had any intent to discriminate. First,
Homestead filled the rooms previously re-
served by plaintiffs with members of the PRC,
who are also of Chinese national origin. Sec-
ond, there is no evidence that Homestead did
not also exercise the “walk policy” with re-
spect to non-Chinese patrons with short-term
reservations. Third, there is no evidence that
Homestead, once it decided to implement its
“walk policy,” offered different alternate ac-
commodations to plaintiffs than to non-Chin-
ese guests. For these reasons, plaintiffs fail to
demonstrate a genuine issue of material fact on
their § 1981 claim.2
Plaintiffs allege violations of § 1982,3 which
guarantees the right to be free from dis-
crimination based on race in the leasing of
property. “A cause of action based upon sec-
tion 1982 likewise requires an intentional act
of racial discrimination by a defendant.”
Vaughner v. Pulito, 804 F.2d 873, 877 (5th
Cir. 1986). Therefore, plaintiffs’ § 1982 claim
suffers from the same fatal flaw as their § 1981
claim: an inability to provide evidence of racial
animus. The record merely reflects that
Homestead took advantage of a legitimate
business opportunity by implementing its
“walk policy” and renting out its rooms at a
premium rate.
Plaintiffs argue that Homestead violated
their right to be free from racial or religious
discrimination in places of public accommo-
dation under § 2000a.4 We have already ex-
plained why plaintiffs fail to make a prima
facie claim of racial discrimination, and the
same logic applies to their claim for religious
discrimination.
Assuming arguendo that Falun Gong quali-
fies as a religion, plaintiffs have offered no evi-
dence that Homestead did not also “walk”
non-practitioners of Falun Gong, nor that
plaintiffs received unequal alternate accom-
modations, nor that Homestead had any
knowledge whether the particular patrons be-
ing “walked” practiced Falun Gong. There-
fore, plaintiffs cannot demonstrate that Home-
stead engaged in “discrimination . . . on the
ground of . . . religion.” Id. at § 2000a.
Plaintiffs maintain that Homestead con-
spired with the Chinese government to deny
them the equal protection of the laws under
§ 1985(c).5 To state a § 1985(c) claim, a
2 To the extent that plaintiffs allege that we
should not consider them as part of the same pro-
tected class as members of the PRC, because they
are practitioners of Falun Gong plaintiffs fail to
state a claim under § 1981 because the statute does
not protect against religious discrimination. See
Runyon v. McCrary, 427 U.S. 160, 167 (1976).
3 “All citizens of the United States shall have
the same right, in every State and Territory, as is
enjoyed by white citizens thereof to inherit, pur-
chase, lease, sell, hold, and convey real and per-
sonal property.” 42 U.S.C. § 1982.
4 “All persons shall be entitled to the full and
equal enjoyment of the goods, services, facilities,
privileges, advantages, and accommodations of any
place of public accommodation, as defined in this
section, without discrimination or segregation on
the ground of race, color, religion, or national
origin.” 42 U.S.C. § 2000a(a).
5 “If two or more persons in any State or
Territory conspire . . . for the purpose of depriving,
either directly or indirectly, any person or class of
persons of the equal protection of the laws . . . the
party so injured or deprived may have an action for
the recovery of damages, occasioned by such injury
or deprivation, against any one or more of the
(continued...)

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plaintiff must demonstrate (1) a conspiracy
between two or more people, (2) for the pur-
pose of depriving a person or class of the
equal protection of the laws, and (3) an act
that furthers the conspiracy, (4) whereby a
person is injured in his person or property or
denied any right or privilege of a citizen of the
United States. See Deubert v. Gulf Fed. Sav.
Bank, 820 F.2d 754, 757 (5th Cir. 1987). “Es-
sential to the [§ 1985(c)] claim . . . is that the
conspiracy be motivated by racial animus.”
Word of Faith World Outreach Ctr. Church v.
Sawyer, 90 F.3d 118, 124 (5th Cir. 1996).
We have declined to extend § 1985(c)
claims into the realm of religious discrimina-
tion. See id. Therefore, because plaintiffs
cannot demonstrate that Homestead acted out
of racial animus, a fortiori they cannot dem-
onstrate that Homestead conspired with the
Chinese government to act out of racial ani-
mus.
Plaintiffs bring state law actions under the
DTPA and for breach of contract. The DTPA
applies to all transactions for goods and ser-
vices and prohibits “any unconscionable action
or course of action” that causes damages. See
TEX. BUS. & COM. CODE § 17.50(a)(3). To
prevail, plaintiffs must show that Homestead
“took advantage of [plaintiffs’] lack of
knowledge and that the resulting unfairness
was glaringly noticeable, flagrant, complete
and unmitigated.” See Bradford v. Vento,
48 S.W.3d 749, 760 (Tex. 2001) (internal
quotations omitted).
Because the evidence suggests that Home-
stead’s “walk policy” is a standard practice in
the hotel industry, and because Homestead of-
fered plaintiffs reasonable alternative lodgings,
plaintiffs cannot prove the high degree of
unfairness necessary to sustain an action under
the DTPA. Likewise, plaintiffs cannot prevail
on their breach of contract claim because they
have presented no evidence that they suffered
damage as a result of the transfer of their res-
ervation from one hotel to another.
Plaintiffs merely assert, without citing rec-
ord evidence, that theysuffered inconvenience.
Even were there such evidence, supporting
their claim that they suffered inconvenience as
a result of Homestead’s actions, they point to
no evidence that damages from disappointment
or distress from being relocated further from
Zemin and the PRC delegation were within
Homestead’s contemplation when the contract
was formed.6
For the above reasons, we adopt the thor-
ough reasoning of the district court and AF-
FIRM the denial of plaintiffs’ motion for sum-
mary judgment and the grant of defendants’
cross-motion. To the extent that defendants’
counterclaim under the DTPA is before us on
appeal, we AFFIRM the dismissal of the claim
with prejudice.
5(...continued)
conspirators.” 42 U.S.C. § 1985(3).
6 See Mead v. Johnson, 615 S.W.2d 685, 687
(Tex. 1981) (stating that damages for breach of
contract must either arise naturally from the breach
or have been in the contemplation of both parties
when the contract was formed) (citing Hadley v.
Baxendale, 9 Ex. 341, 354, 156 Eng. Rep. 145,
151 (1854)).

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