Gregory v. Dillard's, Inc.

COLLOTON, Circuit Judge.

Thirteen African-Americans appeal the decisions of the district court1 dismissing their claims against Dillard’s, Inc., based on alleged race discrimination at the Dillard’s department store in Columbia, Missouri. We affirm the district court’s dismissal of the plaintiffs’ claims under 42 U.S.C. § 1981, and remand with directions to modify the final judgment so as to dismiss the plaintiffs’ claims under the Missouri Human Rights Act without prejudice.

I.

In July 2002, plaintiffs Crystal Gregory, Alberta Turner, and Carla Turner filed their original complaint, alleging that Dillard’s violated 42 U.S.C. § 1981 by discriminating on the basis of race in the making and enforcement of contracts on specific occasions in 2001 and 2002. The complaint alleged that Dillard’s actions *467also constituted discrimination on the basis of race in a place of public accommodation, in violation of the Missouri Human Rights Act (“MHRA”), Mo.Rev.Stat. § 213.065. The complaint was amended three times, once for the purpose of asserting allegations on behalf of a class, and later to add fourteen more individual plaintiffs, for a total of seventeen.2 In October 2004, the district court denied the plaintiffs’ request to certify a class pursuant to Federal Rule of Civil Procedure 23.3

In January 2005, the district court granted Dillard’s motion to dismiss the claims of eleven plaintiffs under § 1981. The court observed that these plaintiffs “tersely allege” that they “have each experienced, within the time period of 1998 to the present, instances at Dillard’s Columbia, Missouri, store in which they were followed and/or otherwise subjected to surveillance based upon their race.” Order, R. Doc. 159, at 2. Relying on Garrett v. Tandy Corp., 295 F.3d 94 (1st Cir.2002), where the court held that “[s]o long as watchfulness neither crosses the line into harassment nor impairs a shopper’s ability to make and complete purchases, it is not actionable under section 1981,” id. at 101, the district court ruled that the failure of the eleven plaintiffs to allege “that they were questioned, searched, detained, or subjected to any physical activity other than being followed or subjected to surveillance” was fatal to their claims. Order, R. Doc. 159, at 3-4. The court reasoned that “[b]ecause Section 1981 requires a per se interference with plaintiffs’ ability to contract, and because plaintiffs have failed to allege facts demonstrating a per se interference,” the motion to dismiss should be granted. Id.

In July 2005, the district court considered motions for summary judgment with respect to the remaining plaintiffs, including Gregory, the Turners, and Jeff McKinney.4 As to Gregory and the Turners, the court concluded that except for one claim raised by Gregory, all of the claims asserted by these plaintiffs amounted to “dis*468criminatory surveillance.” Gregory v. Dillard’s, Inc., No. 02-04157, 2005 WL 1719960, at *8 (W.D.Mo. July 22, 2005). Citing authority that “[discriminatory surveillance ... on its own [is] not actionable under § 1981,” Hampton v. Dillard’s, Inc., 247 F.3d 1091, 1109 (10th Cir.2001), the court granted summary judgment for Dillard’s on these claims. The district court opined that “[a]llowing the Turners and Gregory to proceed on a theory of discriminatory surveillance ‘would come close to nullifying the contract requirement of Section 1981 altogether, thereby transforming the statute into a general cause of action for race discrimination in all contexts.’ ” Gregory, 2005 WL 1719960, at *8 (quoting Lewis v. J.C. Penney Co., 948 F.Supp. 367, 371-72 (D.Del.1996)). On Gregory’s remaining claim that a Dillard’s employee once refused to let Gregory walk through the store while carrying a bedding set that she had purchased on an earlier date, the court concluded that Gregory presented no evidence that she intended or attempted to purchase merchandise on the day of the incident, and that she therefore failed to demonstrate an interference with an actual contractual interest or relationship.

The district court granted summary judgment in favor of Dillard’s on McKinney’s claim under § 1981. Observing that McKinney made no attempt to purchase merchandise, and that he left the store voluntarily after being subjected to what he believed to be rude behavior, the court ruled that because McKinney chose to leave the store of his own accord, Dillard’s could not be liable under § 1981. Gregory, 2005 WL 1719960, at *8 (citing Bagley v. Ameritech Corp., 220 F.3d 518, 521-22 (7th Cir.2000)). The court further held that a 15-minute delay endured by McKinney while waiting for service from a Dillard’s store clerk was insufficient to sustain a § 1981 claim.

As to the state-law claims under the MHRA, the district court observed that the Missouri statute prohibits discrimination on the basis of race in “any place of public accommodation.” Mo.Rev.Stat. § 213.065. After analyzing the statutory definition of “places of public accommodation,” id. § 213.010(15), the district court concluded that the phrase does not include retail establishments. On that basis, the court dismissed the plaintiffs’ claims against Dillard’s under the MHRA.

II.

We first consider the claims arising under federal law. Section 1981 provides that all persons within the jurisdiction of the United States shall have “the same right ... to make and enforce contracts ... as is enjoyed by white citizens.” 42 U.S.C. § 1981(a). First enacted in 1866, the statute was amended in 1991 to define “make and enforce contracts” to include “the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.” Id. § 1981(b).

While § 1981 prohibits racial discrimination in “all phases and incidents” of a contractual relationship, Rivers v. Roadway Express, Inc., 511 U.S. 298, 302, 114 S.Ct. 1510, 128 L.Ed.2d 274 (1994), the statute “does not provide a general cause of action for race discrimination.” Youngblood v. Hy-Vee Food Stores, Inc., 266 F.3d 851, 855 (8th Cir.2001). Rather, the 1991 amendments retained the statute’s focus on contractual obligations. Id. Congress “positively reinforced that element by including in the new § 1981(b) reference to a ‘contractual relationship.’ ” Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470, 477, 126 S.Ct. 1246, 163 L.Ed.2d 1069 (2006) (emphasis in original). “Any claim brought under § 1981, therefore, *469must initially identify an impaired ‘contractual relationship’ under which the plaintiff has rights.” Id. at 476, 126 S.Ct. 1246; accord Youngblood, 266 F.3d at 855. Section 1981 is not, however, limited to existing contractual relationships. The statute “protects the would-be contractor along with those who already have made contracts,” Domino’s Pizza, 546 U.S. at 476, 126 S.Ct. 1246, and it thus applies to discrimination that “blocks the creation of a contractual relationship” that does not yet exist. Id.; see Runyon v. McCrary, 427 U.S. 160, 172, 96 S.Ct. 2586, 49 L.Ed.2d 415 (1976).

Our court has identified several elements to a claim under § 1981, which we divide into four parts for analysis: (1) membership in a protected class, (2) discriminatory intent on the part of the defendant, (3) engagement in a protected activity, and (4) interference with that activity by the defendant. See Green v. Dillard’s, Inc., 483 F.3d 533, 538 (8th Cir.2007); Bediako v. Stein Mart, Inc., 354 F.3d 835, 839 (8th Cir.2004). The disputed issues in this appeal are elements (3) and (4). There is no dispute that the plaintiffs are members of a protected class, and while Dillard’s disputes that it acted with any racial animus, it does not urge dismissal of the claims on the ground that the plaintiffs failed to allege or present a disputed issue of fact concerning discriminatory intent.5 We focus, therefore, on whether each plaintiff engaged in protected activity and whether Dillard’s interfered with such activity.6

*470 To show protected activity, the third element, a plaintiff alleging interference with the creation of a contractual relationship in the retail context must demonstrate that he or she “actively sought to enter into a contract with the retailer,” and made a “tangible attempt to contract.” Green, 483 F.3d at 538 (quoting Morris v. Dillard Dep’t Stores, Inc., 277 F.3d 743, 752 (5th Cir.2001)). In view of the statute’s focus on protecting a contractual relationship, a shopper advancing a claim under § 1981 must show an attempt to purchase, involving a specific intent to purchase an item, and a step toward completing that- purchase. See Green, 483 F.3d at 538 (holding that shopper satisfied third element by selecting a specific item in display case and communicating to sales clerk her desire to purchase that item); Denny v. Elizabeth Arden Salons, Inc., 456 F.3d 427, 435 (4th Cir.2006) (holding that plaintiffs who had purchased and received a gift package entitling the recipient to a variety of salon services had demonstrated a contractual relationship); Williams v. Staples, Inc., 372 F.3d 662, 668 (4th Cir.2004) (holding that the plaintiff sought to enter a contractual relationship when he offered payment by check); Christian v. Wal-Mart Stores, Inc., 252 F.3d 862, 874 (6th Cir.2001) (holding that a plaintiff who had selected merchandise for purchase by placing it in her cart, had the means to purchase, and would have purchased the merchandise had she not been asked to leave the store had shown a sufficient contractual relationship to bring a § 1981 claim); cf. McQuiston v. K-Mart Corp., 796 F.2d 1346, 1348 (11th Cir.1986) (holding that-when a customer lifts an item from a shelf or rack to determine its price, there is no contractual relationship with the seller).

To the extent that the plaintiffs urge us to expand our interpretation of the statute beyond the elements stated in Green, and to declare that a shopper need only enter a retail establishment to engage in protected activity under § 1981, we decline to do so. The Tenth Circuit in Hampton addressed a comparable contention that § 1981 “protects customers from harassment upon entering a retail establishment.” 247 F.3d at 1118. Stating that it could not “extend § 1981 beyond the contours of a contract,” the Hampton court rejected the claim of a plaintiff who failed “to make or attempt to make a purchase” at a department store. Id. In reaching this conclusion, the court found itself “aligned with all the courts that have addressed the issue” in requiring that “there must have been interference with a contract beyond the mere expectation of being treated without discrimination while shopping.” Id. (citing Wesley v. Don Stein Buick, Inc., 42 F.Supp.2d 1192, 1201 (D.Kan.1999); Sterling v. Kazmierczak, 983 F.Supp. 1186, 1192 (N.D.Ill.1997); Lewis v. J.C. Penney Co., 948 F.Supp. 367, 371 (D.Del.1996)); see also Morris v. Office Max, Inc., 89 F.3d 411, 413-15 (7th Cir.1996) (upholding dismissal of a claim brought by two shoppers who were exam*471ining time stamps and discussing the advantages and disadvantages of three or four models when they were approached by police, because interference with “prospective contractual relations” was insufficient to state a claim under § 1982, which is “construed in tandem” with § 1981). We agree with this analysis.

To demonstrate unlawful interference by a merchant under § 1981, the fourth element, a plaintiff must show that the retailer “thwarted” the shopper’s attempt to make a contract. Green, 483 F.3d at 539. By “thwart,” we mean that interference is established where a merchant “blocks” the creation of a contractual relationship. Domino’s Pizza, 546 U.S. at 476, 126 S.Ct. 1246. This element is satisfied, for example, where a retailer asks a customer to leave a retail establishment in order to prevent the customer from making a purchase. Christian, 252 F.3d at 873. In Green, our court held that where a sales clerk “explicitly refused service” to two shoppers based on race, “treated them at all times with pronounced hostility,” “discouraged her coworker from assisting them by questioning their ability to pay,” directed “a most egregious racial slur” and “forceful racial insult” at the shoppers,7 and “actively hindered” the efforts of another sales clerk to serve the customers, the plaintiffs had shown conduct sufficiently severe to constitute actionable interference. 483 F.3d at 539.

Several courts have concluded, however, that not all conduct of a merchant that offends a customer is sufficient to constitute actionable interference with a contractual relationship for purposes of § 1981. The Fifth Circuit, for example, has held that where a shopper abandoned his purchase due to a merchant’s mistreatment of the shopper’s daughter, the merchant did not “actually interfere” with or “thwart” an attempted purchase in a manher that violated § 1981. Arguello v. Conoco, Inc., 330 F.3d 355, 358-59 (5th Cir.2003). In that circuit, “a § 1981 claim must allege that the plaintiff was actually prevented, and not merely deterred, from making a purchase or receiving a service after attempting to do so.” Id. (emphasis in original) (internal quotations omitted); accord Morris v. Dillard Dep’t Stores, Inc., 277 F.3d at 752-53; see Henderson v. Jewel Food Stores, Inc., No. 96 C 3666, 1996 WL 617165, at *3-4 (N.D.Ill. Oct.23, 1996).

The Seventh Circuit similarly has held that where a shopper opts not to contract with a merchant because the shopper is offended by certain racially motivated activity of an employee of the store, there is no claim under § 1981. In Bagley v. Ameritech Corp., 220 F.3d 518 (7th Cir.2000), a customer left a store after he was offended by the behavior of an assistant sales manager, who said she “would not serve” the customer and “gave him the finger.” Id. at 520. The court held that while it could not fault the customer for taking offense, this offensive conduct was insufficient to state a claim under § 1981, because the merchant was “not responsible for terminating the transaction.” Id. at 522.

In particular, we agree with two other circuits that discriminatory surveillance by a retailer is insufficient to establish interference with protected activity under § 1981. The First Circuit, observing that “[i]n a society in which shoplifting and vandalism are rife, merchants have a legitimate interest in observing customers’ movement,” held that an allegation of dis*472criminatory surveillance is insufficient to state a claim under § 1981. See Garrett, 295 F.3d at 101. The Tenth Circuit reached the same conclusion, stating that “discriminatory surveillance” is “not actionable under § 1981.” Hampton, 247 F.3d at 1108. Racially biased watchfulness, however reprehensible, does not “block” a shopper’s attempt to contract.8

Judge Murphy’s dissent, by contrast, advocates an expansive interpretation of § 1981 that acknowledges no limiting principle on actionable interference in the retail shopping context, such that virtually any case in which there is a disputed issue regarding the merchant’s motivation would be submitted to a jury. Indeed, the dissent’s rationale does not exclude the possibility that even surveillance unknown to a shopper constitutes actionable interference. Post, at 491 n. 18. This approach not only conflicts with the decisions of several circuits, but it is inconsistent with the dissent’s own purported adherence to the standard established in Green.

III.

A.

Turning to the specific claims at issue in this appeal, the district court resolved nine of them on a motion to dismiss, holding that an allegation of discriminatory surveillance alone was insufficient to state a claim under § 1981. We review the district court’s decision de novo. Carter v. Arkansas, 392 F.3d 965, 968 (8th Cir.2004).

The complaint in this case involved seventeen plaintiffs, thirteen of whom have appealed. In the complaint, each plaintiff made a summary allegation that he or she had “sought to make and enforce a contract for services ordinarily provided by Dillard’s,” and had been “deprived of services” while similarly-situated white persons were not, or had received services “in a markedly hostile manner and in a manner which a reasonable person would find objectively discriminatory.” Appellants’ App. 50-85. To explain the grounds on which their claims rested, plaintiffs Crystal Gregory, Alberta Turner, and Carla Turner included factual allegations concerning their shopping experiences at Dillard’s, and alleged that employees of Dillard’s had taken certain actions based on race in those instances that gave rise to liability under § 1981. In sharp contrast to Gregory and the Turners, the nine appellants considered on the motion to dismiss alleged in their factual section of the complaint only that “each experienced ... instances at Dillard’s Columbia, Missouri *473store in which they were followed and/or otherwise subjected to surveillance based upon their race.” Appellants’ App. 50.9

Even before the Supreme Court’s recent decision in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), we held that a civil rights complaint “must contain facts which state a claim as a matter of law and must not be conclusory.” Frey v. City of Herculaneum, 44 F.3d 667, 671 (8th Cir.1995); see also Nickens v. White, 536 F.2d 802, 803 (8th Cir.1976). Twombly confirmed this approach by overruling Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), and establishing a plausibility standard for motions to dismiss. 127 S.Ct. at 1966. After Twombly, we have said that a plaintiff “must assert facts that affirmatively and plausibly suggest that the pleader has the right he claims ..., rather than facts that are merely consistent with such a right.” Stalley v. Catholic Health Initiatives, 509 F.3d 517, 521 (8th Cir.2007); see Wilkerson v. New Media Tech. Charter Sch., 522 F.3d 315, 321-22 (3d Cir.2008). While a plaintiff need not set forth “detailed factual allegations,” Twombly, 127 S.Ct. at 1964, or “specific facts” that describe the evidence to be presented, Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007) (per curiam), the complaint must include sufficient factual allegations to provide the grounds on which the claim rests. Twombly, 127 S.Ct. at 1965 n. 3. A district court, therefore, is not required “to divine the litigant’s intent and create claims that are not clearly raised,” Bediako, 354 F.3d at 840, and it need not “conjure up unpled allegations” to save a complaint. Rios v. City of Del Rio, 444 F.3d 417, 421 (5th Cir.2006) (internal quotation omitted).

In this case, the nine motion-to-dismiss appellants did spell out the limited factual basis for their claims. The grounds upon which their claims rest is an assertion that Dillard’s caused them to be followed and surveilled while they were in the store. Appellants’ App. 50. This factual allegation fails to state a claim. Absent an allegation that the plaintiffs attempted to purchase merchandise, the complaint fails to meet the foundational pleading requirements for a suit under § 1981, because it does not satisfy the third element that the plaintiffs attempted to make a contract. Protected activity under the statute does not extend to “the mere expectation of being treated without discrimination while shopping.” Hampton, 247 F.3d at 1118; accord Garrett, 295 F.3d at 101.

Nor does the complaint allege sufficient interference with asserted protected activity to state a claim under the fourth element. An allegation of discriminatory surveillance is insufficient to state a claim under § 1981. See Garrett, 295 F.3d at *474101; Hampton, 247 F.3d at 1108. We believe that the district court’s reference to “per se interference” — made when applying Garrett and discussing the claims of plaintiffs who had not alleged anything “other than being followed or subjected to surveillance” — was simply another way of expressing the same conclusion. We thus agree with the district court that these claims must be dismissed.

B.

The § 1981 claims of four other appellants were dismissed on a motion for summary judgment. We review the district court’s decision de novo, drawing all reasonable inferences in favor of the plaintiffs without resort to speculation. Johnson v. Ready Mixed Concrete Co., 424 F.3d 806, 810 (8th Cir.2005). We conclude that the district court properly applied the law to the applicable facts, and that the grant of summary judgment should be affirmed.

As to appellant Jeff McKinney, we adopt the rationale of the three-judge panel that previously considered this claim. See Gregory v. Dillard’s, Inc., 494 F.3d 694, 708 (8th Cir.2007) (Murphy, J.). McKinney and his cousins had sampled cologne testers while waiting for sales assistance. Although McKinney believed he had previously made eye contact with the sales associate who subsequently moved the cologne testers, there is no evidence that McKinney ever communicated a desire to make a purchase as opposed to testing samples, cf. Green, 483 F.3d at 538-39, spoke to the sales associate about any merchandise when she came to the counter where he and his cousins were standing, or had more than a “general interest” in the cologne. Morris v. Office Max, Inc., 89 F.3d at 414: McKinney thus failed to present sufficient evidence of interference with a protected contract interest, and the district court correctly granted summary judgment for Dillard’s on this claim. The expansive interpretation of § 1981 now advocated by the principal dissenting opinion leads Judge Murphy and Judge Melloy to dissent from their own panel opinion, post, at 488-89, but we adhere to their previous views.

Appellant Crystal Gregory presented evidence that a sales associate followed her as she selected a couple pairs of pants from a rack and took them to a fitting room at Dillard’s. Gregory testified that when she came out of the fitting room, the sales associate had a “little smirk on her face,” and that two officers were right outside the fitting room leaning on clothing racks. Appellants’ App. 286. Gregory saifi she returned to the fitting room, removed the pants, and then took the pants to the counter, where the sales clerk was “getting ready to ring me up.” Id. at 287. Gregory, however, was offended by the conduct of the sales associate, and she told the sales clerk that she was not buying the pants. Gregory testified that she then spoke with a manager, but concluded that “she was not of much help, almost as if she did not care, and so I left and I left very upset.” Id. at 288. The record does not disclose what Gregory asked the manager to do, or what the manager offered to do.

The district court correctly concluded that this evidence does not establish interference with protected activity sufficient to prove the fourth element of a claim under § 1981. As discussed, evidence of surveillance or watchfulness is insufficient to state a claim. Garrett, 295 F.3d at 101; Hampton, 247 F.3d at 1108. In Garrett, for example, three employees monitored the plaintiff throughout his visit to a store, and “at least one of them accompanied him throughout his visit.” 295 F.3d at 96. When the, plaintiff later complained to a store manager about racially discriminato*475ry treatment, the manager responded with “patently false” information. Id. at 97. Nonetheless, the Garrett court held that this active trailing of a minority shopper in the store amounted to no more than an “unadorned” — and legally insufficient— claim that the plaintiff was carefully watched while on the premises. Id. at 101. The addition of an inconsiderate smirk on the face of a Dillard’s sales clerk, or Ms. Gregory’s subjective belief that the store manager was “not of much help,” does not meaningfully distinguish this case from Garrett, particularly where Gregory admits that Dillard’s did not refuse to contract, but rather that a sales clerk was “getting ready to ring [her] up” when Gregory herself declared that she would not make a purchase. Appellant’s App. 287.

The claims of Alberta and Carla Turner were properly dismissed for similar reasons. The Turners presented evidence that after Alberta purchased several pairs of shoes at the Dillard’s store, she, Carla, and Carla’s children began to examine clothing in the children’s department. Carla took her daughter to a fitting room, and when she exited the room, a sales associate and a security guard were outside looking at them. Carla asked the security guard why he was following them, but received no answer. The security guard then followed Carla as she walked through the store to rejoin Alberta. As the two women approached the cash register, Alberta asked whether they really wanted to buy the clothes. Carla said that it was Alberta’s decision, and Alberta said that she really did not think that she wanted to make the purchase. Upset by the surveillance, Alberta took the clothing items to the sales counter and told the clerk that she would not make a purchase. She then approached the first sales associate and told her “you just made someone lose a sale,” at which time the sales associate allegedly snickered and said, “So?” Appellants’ App. 260a; Appellee’s App. 170, 185. The Turners then left the store. Alberta returned shortly thereafter and told a manager that Dillard’s management needed to let the employees know that “everybody who comes in here is not out to ... take things from them.” When the manager asked what had happened, Alberta said that she did not want to discuss it. Appellants’ App. 260a.

As with Ms. Gregory’s claim, the evidence presented by the Turners shows at most discriminatory surveillance and watchfulness, which is not actionable interference under § 1981. Dillard’s also demonstrated its willingness to contract by selling shoes to Alberta Turner on the same visit, but the Turners nonetheless abandoned their effort to purchase children’s clothing. On this record, the district court properly dismissed the claims. See Arguello, 330 F.3d at 358-59; Garrett, 295 F.3d at 101; Bagley, 220 F.3d at 521-22; Morris v. Office Max, Inc., 89 F.3d at 414-15.10

*476We recognize that the plaintiffs were offended by the alleged conduct of Dillard’s employees, but we do not believe the facts asserted here are sufficient to establish interference under § 1981. As noted, several courts have concluded that not all offensive conduct of a merchant constitutes actionable interference. See Arguello, 330 F.3d at 358-59 (holding no actionable interference where plaintiff voluntarily set product on counter and left without trying to buy it after sales clerk made racially derogatory remarks and mistreated plaintiffs daughter); Garrett, 295 F.3d at 101 (holding no actionable interference where plaintiff alleged that three employees monitored him throughout his visit to the store because of his race); Bagley, 220 F.3d at 519-22 (holding no actionable interference where plaintiff left store after customer was “offended” by sales clerk who refused to serve him, made obscene gesture, and previously stated that “I hate fucking Mexicans”); Morris v. Office Max, Inc., 89 F.3d at 415 (holding no actionable interference under § 1982, although store’s conduct was “undoubtedly disconcerting and humiliating” and may have “discouraged” plaintiffs from patronizing the store); see also Hampton, 247 F.3d at 1108 (stating that “discriminatory surveillance” is not actionable under § 1981) (citing Lewis, 948 F.Supp. at 371); cf. Elmahdi v. Marriott Hotel Servs., Inc., 339 F.3d 645, 652-53 (8th Cir.2003) (holding that “offensive” racial comments in the workplace fell short of the “severe and pervasive” harassment required to establish a legally cognizable claim of racial harassment under § 1981).

The Green decision goes as far as any in declaring that offensive conduct of a retailer amounts to interference, and we decline here to extend it. To recognize a § 1981 claim on the facts in this case, we believe, would dilute the requirement that a defendant “block” or “thwart” the creation of a contractual relationship. Domino’s Pizza, 546 U.S. at 476, 126 S.Ct. 1246; Green, 483 F.3d at 539.

By affirming Judge Wright’s dismissal of these claims, however, we do not express the view (as suggested by plaintiffs’ counsel at oral argument) that a certain level of race discrimination in retail establishments is “acceptable.” Private parties engage in a variety of behavior that individual federal judges may deem unacceptable, but not all of it is unlawful. Whether and how federal law should regulate particular activity that is considered morally or socially unacceptable is a policy judgment made by Congress and the President. That judgment presumably involves inquiry into such matters as the scope and severity of the problem, the potential that private industry or decentralized regulators will address the problem, see post, at 477-78 (opinion of Benton, J.) (concluding that the plaintiffs have a cause of action under Missouri law); post, at 480 n. 14 (opinion of Murphy, J.) (same), the likely effectiveness of federal legislation in solving the problem, and the collateral costs to the national economy of additional federal regulation. In a significant economic sector such as retail shopping, the potential benefits of sanctioning and deterring offensive and undesirable conduct through federal legislation likely must be weighed against the costs of litigation (including non-meritorious claims) that may be gen*477erated by expanded regulation,11 the potential costs of different retail security measures that may be necessitated by such legislation, and the potential increase in shoplifting (presently estimated to be a $13 billion annual drain on retailers)12. if merchants are discouraged from conducting legitimate security activity for fear of triggering additional lawsuits. We make no judgment about the wisdom of any policy option, but we conclude that § 1981 as presently drawn does not regulate the retail shopping environment to the extent urged by the plaintiffs in this case. Accordingly, we affirm the judgment of the district court with respect to § 1981.13

C.

The district court also dismissed with prejudice the appellants’ claims under the MHRA. These claims were before the district court based on supplemental jurisdiction under 28 U.S.C. § 1367(a). Whether the MHRA, through its definition of “place -of public accommodation,” extends to retail establishments is a novel question of state law. Because we conclude that the district court properly dismissed the federal claims, we remand the case with directions to modify the final judgment so as to dismiss the claims under the MHRA without prejudice, so they may be decided by the courts of Missouri. See Birchem v. Knights of Columbus, 116 F.3d 310, 314-15 (8th Cir.1997); Ivy v. Kimbrough, 115 F.3d 550, 552-53 (8th Cir.1997) (“In most cases, when federal and state claims are joined and the federal claims are dismissed on a motion for summary judgment, the pendent state claims are dismissed without prejudice to avoid needless decisions of state law ... as a matter of comity and to promote justice between the parties.”) (internal quotation and citation omitted).

. The Honorable Scott O. Wright, United States District Judge for the Western District of Missouri.

. The fourteen new plaintiffs were Treva Gage, Debra Hamilton, Capria Lee, Antwinette Avery, Jeff McKinney, Arnel Monroe, Michael Richmond, Maren Snell, Felicia Turner, Michael Warrick, LaShanda Wisham, Cecilia Young, Michael Butler, and Deidre Golphin. Butler and Golphin did not appeal, and Avery and Young withdrew from the appeal after it was filed, thus leaving a total of thirteen appellants.

. The third amended complaint sought to assert class-wide claims in three areas, described by the district court as "(1) surveillance/hostile shopping environment, (2) returns and exchanges, and (3) check-writing.” As to the first area, the court concluded that none of the named plaintiffs had been "denied” an opportunity to make purchases at Dillard's, and that whether particular plaintiffs had been "deterred” or "discouraged” from making a purchase required individualized fact-finding that made class certification improper. With respect to claims pertaining to returns and exchanges, the court determined that there was "no evidence” that any discriminatory actions of Dillard’s employees was "the result of an official or de facto company policy,” and that the proposed class thus failed the commonality requirement of Rule 23(a)(2). As to claims pertaining to check-writing, the court determined that only one plaintiff asserted a check-writing claim, and that this claim was "borderline-frivolous.” The court thus found insufficient evidence that the plaintiffs could satisfy the numerosity requirement of Rule 23(a)(1).

. The court also considered and dismissed a claim brought by Cecilia Young, who has withdrawn her appeal. Another plaintiff, Deirdre Golphin, voluntarily withdrew her claims, and they were dismissed with prejudice on stipulation of the parties. The district court denied Dillard's motion for summary judgment as to the claim of Michael Butler. Butler and Dillard's later reached a settlement, and Butler's claim was dismissed with prejudice.

. In connection with the motion for summary judgment, the plaintiffs presented evidence from several witnesses to support their allegation that Dillard’s acted with discriminatory intent. Theresa Cain, a Dillard’s employee from September 1999 to October 2000, averred in an affidavit that “other Dillard’s employees often stereotyped African American customers as likely shoplifters,” that she "regularly observed security officers and sales clerks watching and/or following African-American customers for no reason except that the customers were African American,” and that "Dillard’s security officers so focused their surveillance on African American customers to the exclusion of Caucasian customers that on numerous occasions [she] observed Caucasian customers openly shoplift items without being noticed by store security.” Appellants’ App. 163. Maren Snell, who worked at the store in 2001, testified that she saw store employees ask for receipts from black customers seeking to return merchandise, but that white customers were not asked for receipts. Id. at 187. Tammy Benskin, an employee from 1997 to 1998, testified that the store’s security code — directing staff to be "on the lookout” — was announced over the employee intercom "ninety percent more” when African Americans entered the store than when non-African Americans entered. Benskin saw the store manager follow African Americans around the store, but could not recall seeing him follow non-African Americans. Id. at 131-33. Kenneth Gregory, husband of a plaintiff, worked at Dillard's as a security guard during 1995, 1997, and 1998. Gregory testified that he once followed a white man in the store on suspicion that he intended to shoplift a hat, but the store manager stopped and questioned the man before he exited the store, and the man left without the hat. Gregory concluded that the manager would not have stopped a similarly-situated black person, but would have allowed him to leave the store and face arrest. Id. at 141-43. Another former employee, Roderick Beasley, testified that he witnessed what he believed was discrimination when he worked at the store from 1996 to 1999. Beasley identified two employees, saying that he "wouldn’t call them racists,” but that "maybe they had tendencies to watch folks that should not [sic].” Id. at 153. Beasley said that the employee behavior was "systematic,” and "if it's not brought to [the store manager’s] attention with credible evidence, he can't do anything about it.” Id. at 155. For a record-based discussion of other facts recounted by the principal dissent, post, at 483-84, see Gregory v. Dillard's, Inc., 494 F.3d 694, 714 n. 7, 722 n. 8 (8th Cir.2007) (dissenting opinion), vacated and reh’g en banc granted.

. At oral argument, plaintiffs suggested that each plaintiff need not satisfy each element of *470a § 1981 claim, and that the court should "lump them together” when analyzing the sufficiency of the evidence presented. We reject the notion that Dillard's may be liable under § 1981 based on a hypothetical composite plaintiff even if it did not unlawfully interfere with the right of any individual to make or enforce a contract. Indeed, the district court refused to certify a class action in this case precisely because the claims-of the various plaintiffs required individual fact-finding on the interference element of § 1981, and the plaintiffs have not appealed that ruling. Cf. Broussard v. Meineke Disc. Muffler Shops, Inc., 155 F.3d 331, 345 (4th Cir.1998) ("[C]ourts considering class certification must rigorously apply the requirements of Rule 23 to avoid the real risk, realized here, of a composite case being much stronger than any plaintiff's individual action would be.”).

. After one of the customers in Green presented his identification and credit cards, identified himself as a police officer, and expressed desire to make a purchase, the sales clerk “stepped back and said, ‘Fucking niggers’ and stalked off.” 483 F.3d at 535.

. In opposition to Garrett and Hampton, Judge Murphy’s dissent relies on a thirty-one year-old decision of the Third Circuit in Hall v. Pennsylvania State Police, 570 F.2d 86 (3d Cir.1978). The court in Hall held that a § 1981 claim withstood a motion to dismiss where the plaintiff alleged that the State of Pennsylvania, with the cooperation of a bank, initiated a program to photograph "suspicious-looking blacks” who entered the bank, and to preserve the photographs for unlawful purposes. Id. at 88. The Third Circuit reasoned that the allegations set out a cognizable claim against the bank under § 1981, because the plaintiff’s "photograph was taken for the police by bank employees pursuant to a racially based surveillance scheme,” and the bank allegedly had adopted a policy "to offer its services under different terms dependent on race.” Id. at 92. The court framed the issue as one involving "contractual customers,” id., and it thus appears that the plaintiff already had a contractual relationship with the bank before he entered to transact business and was photographed. The court did not hold that the alleged photography program blocked the creation of a contractual relationship, see Domino’s Pizza, 546 U.S. at 476, 126 S.Ct. 1246, such that it interfered with the plaintiff's equal right to make contracts. We find the brief discussion in Hall inapposite to the claims of retail shoppers in this case.

. The section of the complaint on “jurisdiction and venue” alleged that the plaintiffs had been "deterred from making shopping purchases, impaired in their ability to make shopping purchases, and/or deprived of services enjoyed by non-minorities because of defendant’s racial profiling, following, harassing, and engaging in other acts designed to directly or indirectly refuse or withhold services from African American customers who enter Dillard’s.” Appellants' App. 33. Because this section refers to all plaintiffs and uses the "and/or” formulation, it does not connect any particular plaintiff to any particular allegation. A section of the complaint asserting "class action allegations” similarly uses "and/ or” within a series of allegations and refers to "one or more” actions taken by Dillard’s without specifying which action or actions allegedly apply to which plaintiff or plaintiffs. See generally Ollilo v. Clatskanie Peoples’ Util. Dist., 170 Or. 173, 132 P.2d 416, 419 (1942) (observing that the use of "and/or” "generally tends toward confusion” and describing "and/ or” as "a sort of verbal monstrosity which courts have quite generally condemned”).

. Judge Benton agrees with our conclusion, supra, at 472-74, that the plaintiffs’ allegation that they were "followed and/or otherwise subjected to surveillance based upon their race” fails to state a claim under § 1981. His opinion, however, also "joins the dissenting opinion” with respect to the claims of Gregory and the Turners, and thus joins Judge Murphy's view that the merit of these claims "may be seen” by recognizing that the taking of photographs constitutes actionable interference with the right to make a contract. Post, at 490-91 & n. 18 (relying on Hall, 570 F.2d at 92). With respect, we find these conclusions internally inconsistent.

Judge Benton also relies on language from the First Circuit’s decision in Garrett to conclude that the alleged conduct of Dillard’s involving Gregory and the Turners constitutes actionable interference, because the store’s "active surveillance crossed the line into harassment and impaired their ability to *476make purchases.” Post, at 478. Garrett, however, held that racially-motivated surveillance is not actionable "harassment” under § 1981, and the First Circuit has not defined what conduct it would view as actionable. In any event, as we have explained, supra, at 474-75, we do not perceive a material difference between the "surveillance” alleged by the motion-to-dismiss plaintiffs, which Judge Benton agrees is not actionable, and the "active surveillance” of Gregory and the Turners that Judge Benton deems actionable.

. See, e.g., Hearings on H.R. 4000, The Civil Rights Act of 1990 — Volume 3; Hearings Before the H. Comm. on Education and Labor, 101st Cong. 2-8, 229-239 (1990) (statements of Edward E. Potter, President, National Foundation for the Study of Equal Employment Policies, and Theodore Eisenberg, Professor, Cornell Law School) (discussing the costs and benefits of expanding federal anti-discrimination legislation), reprinted in 6 The Civil Rights Act of 1991: A Legislative History of Public Law 102-166 (Bernard D. Reams, Jr. & Faye Couture eds., 1994).

. See National Association for Shoplifting Prevention, Shoplifting Statistics, http://www. shopliftingprevention. org/WhatNASPOffers/NRC/PublicEducStats.htm (last visited May 6, 2009); see also National Retail Mutual Association, The 2007 National Retail Security Survey' — Highlights, http://www. theftdatabase.com/ news-stories/2007-nrsshighlights.html (last visited May 6, 20Ó9) (citing statistics from the 2007 National Retail Security Survey conducted by Dr. Richard Hollinger of the Criminology, Law and Society Program at the University of Florida).

. Judge Murphy's dissent responds to these observations by ascribing to us the belief that "a certain level of racial harassment is legally , tolerable to facilitate modern retailing." Post, at 479. Our opinion, of course, says no such thing. We do not know whether the political branches even thought about retail establishments when they amended the statute in 1991 — given that a principal purpose of the legislation was to address a Supreme Court decision concerning employment discrimination, see H.R.Rep. No. 102-40, pt. 1, at 89-93 (1991, U.S.Code Cong. & Admin.News, at pp. 627-630) — much less whether Congress acted with the motivation posited by the dissent. In reaching our decision based on the text of § 1981 and the Supreme Court's guidance regarding the scope of the statute, we simply correct counsel’s misconception that a court deems "acceptable” any undesirable conduct that is not unlawful, and observe that any additional regulation of the retail shopping environment raises potentially complex policy questions.