Woods v. City of Greensboro, 855 F.3d 639 (4th Cir. 2017)
The defendant-municipality initially granted a redevelopment loan to the plaintiff, a minority-owned business. Greensboro City Council later rescinded the loan after learning the plaintiff’s proffered collateral was already securing two other loans, even though the collateral’s value exceeded the balance of all three loans. In response, the plaintiff sued Greensboro for unlawful racial discrimination. The trial court dismissed the case as implausible, claiming no discriminatory intent could exist because the defendant initially prioritized the plaintiff for a loan due to its minority-owned status. However, the Fourth Circuit reversed, ruling that a defendant’s preferential treatment of a minority plaintiff in some instances does not make that plaintiff’s allegation of discrimination under different circumstances implausible.
To support its reversal of the dismissal, the Fourth Circuit’s opinion cites a study indicating Greensboro gave loans to nonminority-owned businesses almost exclusively and other examples of the defendant-municipality’s preferential treatment of nonminority-owned businesses. The court also opines on the relationship between stereotype, stigma, implicit bias, and racism. It notes that the rich history of Black culture in America deters the internalization of racial stereotypes and stigmas, despite the pervasiveness of implicit bias. Though “even well intentioned people unknowingly act on racist attitudes,” the opinion acknowledges racial discrimination stemming from implicit bias is as intentional as overt racism. Because of the pervasiveness and insidiousness of implicit racial biases, the court asserts that “good people” from all racial and gender backgrounds must fight against racism together.