Mary Ann Vance won a jury verdict on her claim that Southern Bell Telephone and Telegraph Company ("Southern Bell") violated her rights under 42 U.S.C. § 1981. Southern Bell appeals the denial of its motions for summary judgment, directed verdict and judgment notwithstanding the verdict on Vance's section 1981 claim. We reverse.

This case is detailed in Vance v. Southern Bell Tel. and Tel. Co., 863 F.2d 1503 (11th Cir.1989) ("Vance I "). To review, Mary Ann Vance in 1986 brought an action under 42 U.S.C. § 19811 against her former employer, Southern Bell. Vance said that various acts of racial harassment had injured her and driven her from her job.2 A jury returned a verdict for Vance on her racial harassment claim and awarded multi-million dollar damages, but the district court granted Southern Bell's motion for JNOV or a new trial. Vance v. Southern Bell Tel. and Tel. Co., 672 F. Supp. 1408 (M.D.Fla.1987). On appeal, we reversed the JNOV, but allowed a new trial. 863 F.2d at 1506. The Vance I panel decided that the evidence was sufficient to hold Southern Bell liable for racial harassment, but that the size of the jury's award was "outside the realm of reasonableness" given the evidence. Id. at 1516. This appeal arises from the retrial of the action.

After we decided Vance I, the Supreme Court decided Patterson v. McLean Credit Union, 491 U.S. 164, 109 S. Ct. 2363, 105 L. Ed. 2d 132 (1989).3 In Patterson the Court held that racial harassment claims "[are] not actionable under § 1981, which covers only conduct at the initial formation of the contract and conduct which impairs the right to enforce contract obligations through legal process." 491 U.S. at 179, 109 S.Ct. at 2374. Relying on Patterson, Southern Bell moved for summary judgment. The district court acknowledged the "inescapable conclusion that the holding in Patterson would preclude maintenance of this suit if it were filed today," but refused to apply the Patterson holding retroactively based on the equitable considerations outlined by the Supreme Court in Chevron Oil v. Huson, 404 U.S. 97, 92 S. Ct. 349, 30 L. Ed. 2d 296 (1971).4

This case then went to a jury trial in April 1990. The jury awarded Vance about a million dollars in compensatory and punitive damages on her section 1981 claim. The district court entered judgment for Vance and denied Southern Bell's renewed motions for directed verdict, JNOV or a new trial. In June 1990, Southern Bell appealed the section 1981 rulings.

In November 1991, while this appeal was pending, Congress enacted the Civil Rights Act of 1991, which, among other things, enlarges the range of behavior subject to section 1981 to include the "performance, modification, and termination" of contracts.5 Under Patterson, plaintiffs alleging most kinds of post-hiring discrimination were limited to the set of equitable remedies provided under Title VII.6 But under the Civil Rights Act of 1991, such plaintiffs may sue under section 1981 for damages.

We must decide two related issues: First, whether the district court erred by refusing to apply Patterson retroactively; and second, whether the Civil Rights Act of 1991 overrules Patterson retroactively. We hold that the Supreme Court's decision in Patterson v. McLean Credit Union, which interpreted 42 U.S.C. § 1981 as it existed during all times material to this action, applies retroactively and barred Vance's section 1981 claim. We further hold that the Civil Rights Act of 1991, which extended the scope of section 1981 to performance and termination of contracts, applies prospectively and, therefore, has no bearing on Vance's bar under Patterson.7

A. The Nature of Vance's 42 U.S.C. § 1981 Claim

Vance claims that Southern Bell discriminated against her during her employment at Southern Bell's Western Way service facility between August 1984 and October 1985. Supra note 2. Vance further says that by these "cumulative actions," Southern Bell effectively "terminated" her employment. R.Vol. 6-208, p 46. We understand Vance's claim to state three separate theories of liability: racial harassment, discriminatory denial of a transfer, and constructive discharge.

Vance's allegations describe the kinds of "postformation ... incidents relating to the conditions of employment" that were unactionable under section 1981. Patterson, 491 U.S. at 179, 109 S. Ct. at 2374. Vance's allegations about her initial months of work at the Western Way facility describe the same kind of behavior--post-hiring racial harassment--that the Court held to be outside the scope of section 1981 in Patterson. Id. 491 U.S. at 177, 109 S. Ct. at 2373. In a similar way, Vance's claim that Southern Bell wrongfully refused to transfer her to a different assignment within the company is unactionable under section 1981 because such "lateral transfers [do] not rise 'to the level of an opportunity for a new and distinct relation between the employee and the employer.' " Jones v. Firestone Tire and Rubber Co., 977 F.2d 527 (11th Cir.1992) (Tjoflat, C.J.), quoting Patterson, 491 U.S. at 185, 109 S.Ct. at 2377. And it is settled in this circuit that, under the Patterson rule, section 1981 provides no relief on claims of discriminatory discharge. E.g., Pearson v. Macon-Bibb Co. Hosp. Auth., 952 F.2d 1274, 1277-78 (11th Cir.1992); Weaver v. Casa Gallardo, 922 F.2d 1515, 1519-20 (11th Cir.1991). Thus we conclude that Vance's section 1981 claim is among the kinds of post-hiring claims that Patterson bars.8

B. Retroactive Application of Patterson v. McLean Credit Union

The district court declined to apply Patterson retroactively based on the pragmatic and equitable considerations set out in Chevron Oil v. Huson, 404 U.S. 97, 92 S. Ct. 349, 30 L. Ed. 2d 296 (1971). We think the Supreme Court's recent decision in James B. Beam Distilling Co. v. Georgia, --- U.S. ----, 111 S. Ct. 2439, 115 L. Ed. 2d 481 (1991), forecloses Chevron Oil analysis in this case and commands retroactive application of Patterson.

In Beam, the Supreme Court held that if the court applies a rule to the parties in the case in which the rule is announced, the rule must be applied retroactively to cases pending at the time the rule issues. "[T]he question is whether it is error to refuse to apply a rule of federal law retroactively after the case announcing the rule has already done so. We hold that it is, principles of equity and stare decisis here prevailing over any claim based on a Chevron Oil analysis." Beam, --- U.S. at ----, 111 S. Ct. at 2446. Under Beam, the dispositive question is whether the Patterson court applied its interpretation of section 1981's "make and enforce" language to the parties in the Patterson case. See Lufkin v. McCallum, 956 F.2d 1104, 1106-07 (11th Cir.1992) (applying Beam ).

The Court in Patterson did apply its interpretation of section 1981 to the litigants there. See Patterson, 491 U.S. at 177-80, 189, 109 S. Ct. at 2373-74, 2379 (affirming court of appeals' dismissal of racial harassment claim as unactionable under section 1981). So, even assuming for the sake of argument that Patterson did announce a new rule (as opposed to declaring what section 1981 always meant), that rule would apply to all cases then pending, such as this one.

Based on the principles announced in Beam, we conclude that the district court erred in refusing to apply Patterson v. McLean Credit Union to dismiss the section 1981 claim in this case.

C. Prospectivity of the Civil Rights Act of 1991

The remaining question is whether the Civil Rights Act of 1991 applies retroactively to overrule Patterson to save Vance's section 1981 claim. One effect of the 1991 Act, in cases where it applies, is to make the rule in Patterson obsolete by statutorily adding certain categories of post-hiring discrimination to the list of practices liable to suit under section 1981. In Baynes v. AT & T Technologies, Inc., 976 F.2d 1370 (11th Cir.1992), we decided that section 101 has no retroactive application in cases in which entry of judgment predates the effective date of the Act.9 Because judgment in this case was entered in May 1990, before the effective date of the Act,10 the Act does not apply retroactively to Vance's action.11

The district court's order denying Southern Bell's motion for summary judgment on Count I, the 42 U.S.C. § 1981 claim, is REVERSED.

FAY, Circuit Judge, concurring in part and dissenting in part:

I reluctantly concur with the majority that the existing case law compels both retroactive application of Patterson1 and prospective application of the Civil Rights Act of 1991, thus eliminating Vance's § 1981 claim. The law of this circuit was settled on these two issues in Baynes v. AT & T Technologies, Inc., 976 F.2d 1370 (11th Cir.1992) (per curiam).2 Nevertheless, I cannot help but feel that the application of the rules articulated in Baynes lead, in Mary Ann Vance's case, to a manifest injustice. Two all-white juries, on two separate occasions, have heard all of the evidence and concluded that Southern Bell discriminated against Mrs. Vance and awarded her multi-million dollar verdicts on her claim. We reversed her first verdict as excessive three months before the decision in Patterson was announced. Now, her second verdict is ground to dust between the upper millstone of the decision not to apply the Civil Rights Act of 1991 to her case, and the lower millstone of Patterson, a decision on which no one in this case could be said to have relied.3 Much of what I could say on the fairness question has already been said by others, so I will not belabor the point here. See, e.g., Mozee v. American Commercial Marine Service Co., 963 F.2d 929, 940 (7th Cir.1992) (Cudahy, J. dissenting).4 I would add only that, for me, this application of Patterson also raises troubling questions of separation of powers.

In Patterson the Supreme Court was engaging in statutory interpretation, not constitutional interpretation, when it interpreted § 1981 to preclude the cause of action upon which Vance has relied. Theoretically, the Court's role in statutory interpretation is to uphold legislative intent, not to make new law. Nevertheless, new interpretations of statutes often have that practical effect, as Patterson did when it sub silentio overruled prior court of appeals opinions (such as our own)5 interpreting § 1981 more expansively. Judicial "law making" is an inevitable byproduct of our system,6 albeit one that, at times, seems to be barely tolerated--like a relative you'd rather not acknowledge--because it is difficult to square with the theory of the courts' role. But whatever theoretical difficulties judicial law making poses in the ordinary course of things, the practice is more troubling still when Congress rejects the Supreme Court's interpretation of a statute. It is difficult to argue then that the court is merely effectuating the Congress' intent. In that case, I would think our constitutional role is to limit the operation of that erroneous interpretation, not expand it.

To keep Patterson on "life support" by applying it to cases beyond those tried in reliance upon it, like Baynes, or for which it provided the governing standard at the times the acts occurred, makes the Court's reassurance in Patterson, that "Congress remains free to alter what we have done," ring hollow, Patterson, 491 U.S. at 173, 109 S.Ct. at 2370. Whatever Congress' intent on retroactivity,7 it is clear Congress intended to alter what the Court had done. Disregarding that aspect of the legislative intent and focusing exclusively on the intent with regard to retroactivity might well be viewed as a refusal to implement Congressional will or as not reflecting the appropriate respect for our co-equal branch.

Finally, while I share the majority's concerns for equity and stare decisis, it is far too late in the day to ensure that everyone similarly situated will be treated equally with respect to § 1981.8 Moreover, consistency is only one of many values with which we must be concerned. As we have said elsewhere, " 'justice is better than consistency.' " Westbrook v. Zant, 743 F.2d 764, 768 (11th Cir.1984) (citations omitted).9 Nevertheless, while I believe that upholding Vance's verdict in this case would be just, I cannot say that the majority has misread the precedent or has clearly erred, therefore I concur in its ruling.

I cannot join the majority in its assessment of Vance's state law claim. See majority opinion supra at n. 7. The District Court decided that the tort of intentional infliction of emotional distress "is incident specific,"10 and that as the judge found "no incident subsequent to July of '85," the statute of limitations barred Vance's claim. That ruling is erroneous. Under the Federal Rules of Civil Procedure Vance's amended complaint relates back to her original filing because there is no question that the basis for her claim of intentional infliction of emotional distress arises out of the same "conduct, transaction, or occurrence" as her § 1981 claim. Fed.R.Civ.Pro. 15(c).11 See also Forzley v. Avco Corp., 826 F.2d 974, 981 (11th Cir.1987). Southern Bell's argument to the contrary is simply spurious.12

The only thing that is changed by Vance's amended complaint is some of the legal inferences to be drawn from the same conduct. Vance's amendment does not so vary from her original complaint that Southern Bell did not have notice as to the facts alleged or the evidence which would be relevant. Southern Bell cannot reasonably assert that it was prejudiced by her amendment. Indeed, because of the change in the law, if anyone is prejudiced it is Vance. Therefore, she ought to be allowed the opportunity to amend her complaint to assert a claim that she understandably did not assert before, as long as Southern Bell was given "fair notice of the general fact situation out of which" her claim arose. Forzley, 826 F.2d at 981 (citation omitted).

As the United States Supreme Court noted in Lewis v. Continental Bank Corp., 494 U.S. 472, 110 S. Ct. 1249, 108 L. Ed. 2d 400 (1990) in a related context:

Our ordinary practice in disposing of a case that has become moot on appeal is to vacate the judgment with directions to dismiss. However, in instances where the mootness is attributable to a change in the legal framework governing the case, and where the plaintiff may have some residual claim under the new framework that was understandably not asserted previously, our practice is to vacate the judgment and remand for further proceedings in which the parties may, if necessary, amend their pleading or develop the record more fully.

Id. at 482, 110 S.Ct. at 1256 (emphasis added) (citations omitted). This quote reflects the liberal amendment policy that has been the practice of the federal courts. See also Comments to 1991 amendments of Rule 15(c) ("Whatever may be the controlling body of limitations law, if that law affords a more forgiving principle of relation back than the one provided in this rule, it should be available to save the claim.") (indicating that, notwithstanding the supremacy of federal procedural rules in federal court, the courts are to use whichever rule allows more liberal relation back).

The District Court also ruled as a matter of law that Vance's claims did not rise to the level of "outrageousness" necessary to support her claim. The Florida Supreme Court has stated the necessary standard as follows:

Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. Generally, the case is one in which the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim, "Outrageous!"

Eastern Airlines, Inc. v. King, 557 So. 2d 574, 576 (Fla.1990) (quoting Restatement (Second) of Torts, § 46 (1965), comment d). If the conduct which two juries found that Southern Bell engaged in does not meet this standard, I can scarcely conceive of the case which would.

The question of whether a complaint will support a cause of action sufficient to go to the jury on the issue of intentional infliction of emotional distress is initially one for the judge. But the district court judge in this case did not appear to correctly apply the standard employed by the Florida courts.

Whether the conduct is outrageous enough to rise to the level required by the tort may be decided as a question of law when the facts of a case can under no conceivable interpretation support the tort, but where significant facts are disputed, or where differing inferences could reasonably be derived from undisputed facts, the question of outrageousness is for the jury to decide.

Williams v. Minneola, 575 So. 2d 683, 692 (Fla.Dist.Ct.App.1991) (citations omitted). See also Mundy v. Southern Bell Tel. & Tel. Co., 676 F.2d 503, 505 n. 4 (11th Cir.1982) (per curiam) (degree of outrageousness is a mixed question of law and fact). Cf. McAlpin v. Sokolay, 596 So. 2d 1266, 1269-70 (Fla.Dist.Ct.App.1992) (holding that question is one for the court, but nevertheless reversing trial court's dismissal of claim, suggesting that standard for the judge is whether any reasonable juror could find the conduct sufficiently outrageous); with Baker v. Florida National Bank, 559 So. 2d 284, 287 (Fla.Dist.Ct.App.1990) (question is one for the court, no elaboration on standards to guide judge). There is no question that there were disputed facts in this case,13 quite apart from the issue of whether the facts could under "no conceivable interpretation support the tort"14 as would seem necessary to support the district judge's directed verdict.

Although the transcript does not reveal the authority on which the district court relied, the majority opinion cites only two15 cases to support this ruling; Lay v. Roux Laboratories, Inc., 379 So. 2d 451, 452 (Fla.Dist.Ct.App.1980) (per curiam), and Mundy, 676 F.2d at 505-506. I fail to see how either of these cases support this position. Not only are both cases over 10 years old,16 (a point to which I will return later), neither can be said to stand for much beyond its own facts.

In Lay a Florida court of appeals merely determined that the facts in that case would not sustain a claim of intentional infliction of emotional distress.17 The plaintiff claimed that her supervisor threatened her with the loss of her job and " 'began using humiliating language, vicious verbal attacks, racial epithets and called [her] a "nigger" ' when an argument arose concerning a parking space." Id. at 452. There is no indication in the recitation of the facts that any more than this single altercation was at issue there, or that any pattern of harassment was alleged. This is a far cry from the pattern of conduct in which Vance alleged that Southern Bell engaged. Lay cannot reasonably be read to hold that racially hostile misconduct can never support a claim of intentional infliction of emotional distress, and if it can not be so read I fail to see how it supports the district court's ruling.

Mundy is of even less value to the majority. Mundy is precedent from this circuit.18 At that time it was not even clear "whether Florida recognize[d] an independent cause of action for intentional infliction of emotional distress," Mundy, 676 F.2d at 505, let alone what sort of conduct would meet the standard. The majority suggests that the relevance of Mundy is that Florida rejects this cause of action in the employment context based on this court's survey of Florida precedent. In an aside the panel in Mundy observed that, "although there are numerous Florida cases in which plaintiffs have made claims of intentional infliction of emotional distress against their former employers ... we find none, in which the plaintiff has prevailed." Id. at 506. This is not only far short of a pronouncement that employees could never recover on this theory, it is also no longer true.

Since Mundy was decided the law has undergone rather significant expansion by the Florida Supreme Court. First, in Metropolitan Life Ins. Co. v. McCarson, 467 So. 2d 277, 278 (Fla.1985) the supreme court clarified that intentional infliction of emotional distress was indeed a separate cause of action. Later, in Byrd v. Richardson-Greenshields Securities, Inc., 552 So. 2d 1099, 1103-04 (Fla.1989) the court held workers could sue their employers for sexual harassment under a theory of intentional infliction of emotional distress.19 Id. at 1104. Thus, in McCarson and Byrd, the Florida Supreme Court clarified the question in Mundy and provided an example from the state's highest court that an employee could sue under this theory.20

Justice Barkett, writing for the majority in Byrd found that "[p]ublic policy now requires that employers be held accountable in tort for the sexually harassing environments they permit to exist, whether the tort claim is premised on a remedial statute or on the common law." Id. She based this conclusion on the extensive state and federal civil rights legislation, as well as Supreme Court precedent, which addressed sexual harassment or had been interpreted to encompass it. Id. at 1102-04.

Given that the recognition of sexual harassment as an injury to civil rights is of relatively recent vintage, (compared to racial harassment), I find it unlikely that under current Florida law Vance's claims would be deemed too insubstantial to support her claim. Every factor cited by Justice Barkett which supported the finding in Byrd applies with equal, if not more, vigor to racial harassment, if only because the public policy condemning racism is of even longer standing.21

Mary Ann Vance testified to a continuous and oppressive pattern of intimidation and harassment on the part of her fellow workers and supervisors at Southern Bell. That Southern Bell would allow such an atmosphere to develop, or having been apprised of it, fail to take the firmest possible steps to eradicate it, is by itself outrageous. But of all of the incidents, two stand out as particularly horrific--the nooses twice left at Vance's work station. The noose in this context is a symbol not just of racial discrimination or of disapproval, but of terror. Those of us for whom a particular symbol is just that--a symbol--may have difficulty appreciating the very real, very significant fear that such symbols inspire in those to whom they are targeted. No less than the swastika or the Klansman's hood, the noose in this context is intended to arouse fear.22 If a jury would not cry "Outrageous!" upon hearing these facts (and I think these juries did through their verdicts), I cannot think of a set of facts for which it would.

For all of the foregoing reasons I believe we should remand this case for retrial on the state law claim, and therefore I respectfully DISSENT. Subject to my reservations expressed in Part I, I CONCUR in the majority's resolution of Vance's § 1981 claim.