However, John W. McDonald was also noted for having engaged in a significant Supreme Court Case as a result of a lawsuit he filed against Domino’s Pizza.
Oral Arguments before the Court took place on Dec. 6, 2005
JWM Investments, Inc., a company wholly owned by Respondent John McDonald, entered into a contract with Petitioner Domino’s Pizza under which agreed that JVM would build and lease to Domino’s four restaurant buildings. After the relationship began to sour, McDonald, an African-American, demanded that Domino's perform their end of the bargain. Another petitioner Deborah Pear Phillips, employee of Domino's, refused to sign contractually required "estoppel certificates," and the general counsel for Domino's said that it would perform the contracts only if McDonald would agree to amend them, which he refused to do. McDonald claimed that Petitioners' decision to breach the contracts was motivated by racial discrimination and sued under 42 U.S.C § 1981, which protects the right to make and enforce contracts. Petitioners argue that McDonald does not have standing to sue because he was not personally a party to the contract—the parties to the contract were McDonald’s corporation JWM and Domino’s Pizza.. The Supreme Court had to decide whether 42 U.S.C. § 1981 creates a cause of action in one who is not a party to a contract, but who sustained personal injuries as a result of a breach of that contract, where the breach was motivated by racial discrimination against him.Unfortunately for McDonald, The Supreme Court unanimously reversed the Ninth Circuit in a decision delivered by Justice Antonin Scalia. The Court ruled that 42 U.S.C. § 1981 only applies to those who have enforceable rights under the contract. As such, JWM had “rights under the contract,” but John W. McDonald, the individual, did not.