The Supreme Court agreed Monday to decide whether legal aliens are protected from discrimination in private jobs and business dealings by longstanding federal civil rights laws.
The question arose when a Maryland insurance company refused to sell a homeowners policy to a Baltimore man who is an Australian citizen. But it illuminates a far-reaching dispute over the rights of legal aliens.
The case, to be heard this fall, does not concern illegal immigrants, nor does it involve government discrimination against non-citizens, such as denying them certain public jobs or benefits.
However, the ruling will have an impact on companies that could find themselves liable for failing to deal on equal terms with non-citizens, and on resident aliens, who could find themselves without the protection of civil rights laws.
The justices must determine the meaning of a law enacted just after the Civil War to protect newly freed slaves.
The law says: "All persons within the jurisdiction of the United States shall have the same right in every state and territory to make and enforce contracts . . . as is enjoyed by white citizens."
Some courts have said that because the law speaks of "all persons," it protects citizens and non-citizens alike. But others have concluded that it bars only racial discrimination against Americans because it speaks of the rights "enjoyed by white citizens."
The law itself has a noteworthy history. For nearly a century after its enactment, it was viewed as meaningless because other measures had superseded it.
But in 1968, the Supreme Court revived the old law in a case involving a black man who was blocked from buying a home in an all-white suburban development. Ruling before Congress passed the Fair Housing Act, the high court said that the Reconstruction statute "prohibits all racial discrimination," both private and public.
Violators could be forced to pay damages. In recent years, the court has defined racial discrimination broadly to include discrimination against Jews and Arabs.
But it has yet to rule on whether the law covers discrimination against legal aliens.
The case arose in 1991 when Vincent Duane, a Baltimore resident who is an Australian citizen, tried to buy a homeowners insurance policy from the Government Employees Insurance Co.
The company, known as Geico, had quit selling any kind of insurance to non-citizens after discovering that these policyholders were 30% more likely to file auto damage claims.
"In the Washington area, we had an unusually large number of non-citizens--diplomats and the like--seeking insurance, but we found they were a poor risk," said John D. Ruff, a Geico attorney. Geico has since suspended its policy.
Duane filed a suit seeking damages for illegal discrimination, and both a federal judge in Baltimore and the U.S. appeals court in Richmond agreed that the law prohibits discrimination based on citizenship.
Before the case could be tried, the insurance company appealed to the high court, noting that the U.S. appeals court in New Orleans had ruled that the law does not cover legal aliens.
The justices can be expected to rule in the case early next year.