In the
United States Court of Appeals
For the Seventh Circuit

No. 00-3613

Pravin Sanghvi, M.D.,

Plaintiff-Appellant,

v.

St. Catherine’s Hospital, Inc., f/k/a
Lakeshore Health System, Inc., and
St. Mary Medical Center, Inc.,

Defendants-Appellees.

Appeal from the United States District Court for the
Northern District of Indiana, Hammond Division.
No. 2:98-CV-202-TS--Theresa L. Springmann, Magistrate Judge.

Argued May 7, 2001--Decided July 3, 2001


  Before Flaum, Chief Judge, and Ripple and
Diane P. Wood, Circuit Judges.

  Flaum, Chief Judge. Dr. Pravin Sanghvi
appeals the adverse grant of summary
judgment on his 42 U.S.C. sec. 1981 claim
against St. Catherine’s Hospital./1 The
plaintiff contends that he has produced
sufficient direct and indirect evidence
of discrimination to warrant a jury
trial. For the reasons stated herein, we
affirm the district court’s decision.

I.   Background

  Dr. Sanghvi, who is dark-skinned and of
Asian-Indian ethnicity, is an
obstetrician/gynecologist licensed in
Indiana. In 1994, he began covering the
practice of Dr. A. P. Bonaventura located
at St. Mary Medical Center, which is
affiliated with St. Catherine’s Hospital,
whenever Dr. Bonaventura was unavailable.
When he covered the practice, Dr. Sanghvi
billed the patients under his own name
and provider number.

  In October, 1996, Dr. Bonaventura sold
his practice to the defendant, which was
then known as Lakeshore Health System.
After this sale, Dr. Bonaventura received
a salary from the defendant and no longer
had the authority to bill patients
directly; rather, the defendant charged
his patients for his services. Dr.
Sanghvi continued to fill in for Dr.
Bonaventura. Dr. Sanghvi was aware that
Dr. Bonaventura no longer charged
patients himself, and the defendant told
Dr. Sanghvi that he would be paid an
hourly wage for covering the practice,
though apparently no amount was agreed
upon. However, the plaintiff continued to
bill the patients directly under his own
name and provider number. While Dr.
Bonaventura knew this, the executives of
St. Catherine’s did not.

  Dr. Bonaventura’s declining health
prevented him from continuing to perform
his duties in May, 1997. On June 11,
1997, the chief executive officer of St.
Mary Medical Center, Milton Triana, met
with Dr. Sanghvi, who expressed an
interest in purchasing Dr. Bonaventura’s
practice if he were unable to return.
Once Dr. Bonaventura’s inability to
resume treating patients became a
certainty, which was apparently a few
days later, Triana offered to sell the
assets to either Dr. Sanghvi or another
physician who regularly covered the
practice.

  On June 19, Triana met with Dr. Sanghvi
to discuss the sale of the practice. At
this meeting, Triana asked Dr. Sanghvi:
"Being an older, foreign-born physician,
how comfortable do you feel dealing with
young, white American women?"/2 Triana
also told Dr. Sanghvi that the hospital
did not want to finance the purchase of
the practice.

  The next day Triana wrote a letter
offering to sell Dr. Sanghvi the practice
for $360,000, payable in full at closing.
This letter also indicated the
defendant’s expectation that the
plaintiff would recruit another
obstetrician/gynecologist to provide
greater depth of coverage, though this
was not a requirement of the sale. The
number of women treated by the practice
was important to the defendant because it
expected that these patients would be
referred to it by whomever purchased the
practice. On June 24, Dr. Sanghvi
responded with a counteroffer of twenty
percent of the gross collection of the
practice for the first year after he took
over, to be paid monthly. This was
rejected by the defendant. That same
evening, Dr. Sanghvi and Triana had a
discussion where the doctor offered to
pay $250,000 for the practice in monthly
installments over a one-year period. If
Dr. Sanghvi failed to deliver the
purchase price within the year, then any
the payments he had made would be
refunded. Triana seemed favorably
inclined towards this arrangement, but
said that he had to run it by a
committee. Dr. Sanghvi made the same
offer in writing on June 25. The
defendant eventually rejected this offer.

  Around this same time, in mid-to-late
June, the Women’s Wellness Center ("WWC")
entered the picture. WWC employed a group
of physicians, who were all white men,
and its president at the time was Jeffrey
Yessenow. A representative of WWC
contacted the defendant about buying the
practice. St. Catherine’s responded that
it would sell the practice for $360,000,
with no financing by the hospital. In
early July, the agents of the defendant
and WWC began negotiations. Triana and
other officers of St. Catherine’s met
with Dr. Sanghvi on July 1, informing him
that they intended to sell to WWC since
they were paying cash, but if that deal
fell through they would accept Dr.
Sanghvi’s June 25 offer. On July 3, a
letter of intent expressing the broad
terms of the sale agreement between the
defendant and WWC was drawn and executed.
They settled on a purchase price of
$250,000, to be paid in full at closing.
However, over the coming months WWC
continued to ask St. Catherine’s to
consider a lower price. On July 7, Dr.
Sanghvi was told that the practice had
been sold.

  Dr. Sanghvi sent a letter dated August
2 to some of Dr. Bonaventura’s former
patients, purporting to explain why he
did not take over the practice. The
letter stated that Dr. Bonaventura’s
practice was simply sold to the higher
bidder without regard for any other
considerations. The letter went on to
state that many of Dr. Bonaventura’s old
patients were coming to Dr. Sanghvi’s
office, and asked the recipients of the
letter to share it with any of Dr.
Bonaventura’s former patients. Around the
same time, Triana discovered that Dr.
Sanghvi had billed Dr. Bonaventura’s
patients directly after the defendant
purchased the practice. This allegedly
diverted $38,000 of receivables belonging
to the defendant to Dr. Sanghvi.

  In part because of these events, by late
September or early October the defendant
acquiesced in a price reduction for WWC
to $125,000. WWC then gave St.
Catherine’s a check for $50,000 with the
remainder to be paid when the paperwork
was formally completed, though the
defendant claimed this check was
accidentally destroyed. On November 1,
WWC took over Dr. Bonaventura’s practice.

  Dr. Sanghvi and Triana spoke by
telephone on November 6. When Triana told
Dr. Sanghvi that the price WWC was paying
for the practice was less than $200,000
and a final agreement had not been
signed, Dr. Sanghvi offered to purchase
the practice outright for up to $200,000
in cash. Triana did not respond. On
January 5, 1998, St. Catherine’s and WWC
executed an asset transfer agreement and
WWC paid the $125,000 purchase price in
full.

  Dr. Sanghvi brought suit in state court
against the current defendant and others,
alleging a violation of 42 U.S.C. sec.
1981 and various state law claims. The
defendant removed the case to federal
court based upon federal question
jurisdiction and brought a counterclaim
seeking damages under state law for Dr.
Sanghvi’s directly billing the practice’s
patients. The defendant moved for partial
summary judgment on all of Dr. Sanghvi’s
claims. The district court granted the
motion on the sec. 1981 cause of action
and some of the state law claims. The
court found that Dr. Sanghvi had not
presented any direct evidence of
discrimination and could not demonstrate
that the defendant’s reasons for refusing
to sell the practice to him were
pretextual. Having disposed of the
federal claim, the district court
remanded the remaining state laws claims
to state court.

II.   Discussion

  42 U.S.C. sec. 1981 prohibits
intentional discrimination on the basis
of race or ethnicity concerning an
activity protected by the statute. Saint
Francis College v. Al-Khazraji, 481 U.S.
604, 613 (1987). Making a contract is
such a protected activity, and Dr.
Sanghvi claims that the defendant refused
to sell him Dr. Bonaventura’s practice
assets because of the plaintiff’s race.
Dr. Sanghvi can proceed under either the
conventional method of proof or under the
burden-shifting method, Von Zuckerstein
v. Argonne Nat’l Lab., 984 F.2d 1467,
1472 (7th Cir. 1993), and he has elected
to use both. Our review of the district
court’s grant of summary judgment is de
novo. Id. at 1471.

A.   Conventional Method

  Dr. Sanghvi argues that Triana’s
question during their June 19
conversation--"Being an older, foreign-
born physician, how comfortable do you
fell dealing with young, white American
women?"--constitutes direct evidence of
discriminatory intent. Dr. Sanghvi
contends that when this interrogatory is
combined with circumstantial evidence,
such as that the defendant rejected his
November 6 offer to pay more money than
WWC and that WWC was allowed to take over
the practice without paying the full
purchase price, he has made a sufficient
case to reach a jury. St. Catherine’s
disputes the characterization of Triana’s
query as direct evidence, since the words
themselves do not show a discriminatory
animus and thus the jury would have to
draw an inference from the statement to
find that the defendant violated sec.
1981. It also argues more generally that
summary judgment was properly granted
because no reasonable jury could return a
verdict for Dr. Sanghvi.

  Courts have noted the difficulty of
defining direct evidence for
discrimination claims. See, e.g.,
Fernandes v. Costa Bros. Masonry, Inc.,
199 F.3d 572, 581-84 (1st Cir. 1999);
Tyler v. Bethlehem Steel Corp., 958 F.2d
1176, 1183 (2d Cir. 1992). Our own
statements on what constitutes direct
evidence are not in complete harmony. One
line of cases holds that "[d]irect
evidence essentially requires an
admission by the decision-maker that his
actions were based on the prohibited
animus." Radue v. Kimberly-Clark Corp.,
219 F.3d 612, 616 (7th Cir. 2000); see
also Hemisphere Bldg. Co., Inc. v.
Village of Richton Park, 171 F.3d 437,
439 (7th Cir. 1999); Kennedy v.
Schoenberg, Fisher & Newman, Ltd., 140
F.3d 716, 722 (7th Cir. 1998). Under this
definition, Dr. Sanghvi has not produced
any direct evidence of discrimination
since Triana’s query clearly is not an
admission. However, other cases hold that
"[r]emarks and other evidence that
reflect a propensity by the decisionmaker
to evaluate employees based on illegal
criteria will suffice as direct evidence
of discrimination even if the evidence
stops short of a virtual admission of
illegality." Walker v. Glickman, 241 F.3d
884, 888 (7th Cir. 2001) (quoting Miller
v. Borden, Inc., 168 F.3d 308, 312 (7th
Cir. 1999)); see also Sheehan v. Donlen
Corp., 173 F.3d 1039, 1044 (7th Cir.
1999); Venters v. City of Delphi, 123
F.3d 956, 973 (7th Cir. 1997). Triana’s
question might be direct evidence under
this broader understanding, since the
question can be read as indicating
Triana’s concern over whether Dr.
Sanghvi, as a non-white physician, will
be able to form doctor-patient
relationships with white women. Cf.
Sheehan, 173 F.3d at 1044-45 (holding
that statement that woman was fired so
she could "spend more time at home with
her children" was direct evidence of
discrimination on the basis of
pregnancy).

  While we acknowledge the tensions in our
case law on this issue, we will assume
without deciding that the broader
definition of direct evidence applies and
that Triana’s question falls within this
definition. Besides having a certain
degree of content that reflects
discriminatory animus, we have held that
to qualify as direct evidence a statement
must also be made by a decisionmaker, as
well as relate to the action at issue.
See Fyfe v. City of Fort Wayne, 241 F.3d
597, 602 (7th Cir. 2001); Hunt v. City of
Markham, Ill., 219 F.3d 649, 652 (7th
Cir. 2000). While the parties do not
discuss the two conditions, these appear
to be satisfied as well, since Dr.
Sanghvi alleges that Triana as CEO of St.
Mary controlled whom the practice would
be sold to, and the query at issue was
asked in the course of a discussion on
the sale of the practice. Thus, for
purposes of this case, we accept that Dr.
Sanghvi has produced what may be labeled
direct evidence.

  However, the plaintiff is not out of the
woods yet. Even in discrimination cases
where the plaintiff has direct evidence,
an adverse grant of summary judgment may
be proper. Davis v. Chevron U.S.A., Inc.,
14 F.3d 1082, 1086-87 (5th Cir. 1994)
(per curiam); FDIC v. Henderson, 940 F.2d
465, 473-74 (9th Cir. 1991)./3 This
follows from Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248-52 (1986), which
held that a grant of summary judgment
against the non-moving party is
appropriate, even where that party has
produced some evidence, if no reasonable
jury could return a verdict in his or her
favor. See also Matsushita Elec. Indus.
Co. v. Zenith Radio Corp, 475 U.S. 574,
587 (1986)./4 While a grant of summary
judgment against the plaintiff should be
rare when he or she has evidence that
could be characterized as direct, cf.
Venters, 123 F.3d at 973 n.7, in a few
select cases a review of the record as a
whole may reveal that the evidence is "so
one-sided that [the defendant] must
prevail as a matter of law," Anderson,
477 U.S. at 252, at least where the
purportedly direct evidence is not an
actual admission. We conclude that this
is such a case. Once the mass of
uncontradicted evidence described below
is taken into account, Triana’s query is
no more than a scintilla of evidence of
racial discrimination and insufficient to
permit a reasonable jury to return a
verdict for Dr. Sanghvi./5

  As briefly explained above, Triana’s
interrogatory is evidence of racial
discrimination, since it suggests that
Triana believed that Dr. Sanghvi could
have difficulty forming patient
relationships with white women because of
his race. However, all of the other
facts, which are basically undisputed,
point to the conclusion that Dr.
Sanghvi’s ethnicity played no role in the
defendant’s decision to sell the practice
assets to WWC. Triana made the initial
offer to sell to Dr. Sanghvi in the days
following June 11, prior to asking the
potentially discriminatory query. After
asking the question, Triana made a formal
offer to Dr. Sanghvi on June 20. The
terms of this initial offer were exactly
the same as the defendant’s opening
position with WWC: $360,000, with no
financing by the hospital. Triana then
began negotiating in apparent good faith
with the plaintiff. However, Dr. Sanghvi
was unwilling or unable during June or
early July to meet St. Catherine’s
requirement that the purchase price be
paid in full. Even despite this fact, on
the evening of June 24, Triana seemed
favorably inclined to accepting an offer
by the plaintiff which called for
financing. Furthermore, Dr. Sanghvi was
informed on July 1 that if a deal with
WWC could not be worked out, the
defendant would sell the assets to him on
the terms laid out in his June 25 letter.
All of this evidence shows that the
defendant was perfectly willing to sell
Dr. Sanghvi Dr. Bonaventura’s practice on
the same terms as it would to any other
buyer.

  Indeed, given the July 1 conversation,
the only reason that the sale was not
made to Dr. Sanghvi was because of the
appearance of a purchaser with a better
offer, WWC. In July, WWC was willing to
meet the no-financing condition of the
hospital, unlike Dr. Sanghvi. The
plaintiff complains that in the end WWC
did not actually satisfy this condition,
since it took over the practice on
November 1, 1997 and did not pay in full
until January 5, 1998. However, the
record provides no indication that the
defendant would have refused to let Dr.
Sanghvi assume running the practice
before his potential deal with the
defendant was final, so long as the full
payment price was tendered at the
closing. Also, while both WWC and Dr.
Sanghvi were offering the same price,
$250,000, WWC’s offer was clearly
preferable from the defendant’s
perspective. Dr. Sanghvi’s June 25, 1997
offer provided that all of the payments
toward the $250,000 price would be
refunded if he did not complete the
twelve monthly installments. Thus, Dr.
Sanghvi potentially could form valuable
relationships with Dr. Bonaventura’s
former patients over an eleven month
period, then claim he was unable to make
the last payment, have all of his money
returned, and be able to lure away a
significant number of the patients to his
own practice. This could have left the
hospital with a greatly devalued asset,
since other potential buyers would be
unlikely to pay much for a practice with
few regular patients, and no money to
show for this depreciation. By contrast,
WWC’s offer did not impose this risk on
the defendant since it would be paying
all of the money at once and the payments
could not be refunded. Finally, the
defendant’s June 20 letter demonstrated
its concern about the limited resources
Dr. Sanghvi could provide as a sole
practitioner. By contrast, WWC, as a
group of obstetrician/gynecologists,
could provide much broader coverage and
thus increase the revenues of the
hospital through referrals.
  In short, even if Triana’s question
might possibly be understood as
suggesting some concern over the
plaintiff’s race, the surrounding facts
demonstrate that St. Catherine’s refusal
to sell to Dr. Sanghvi was not motivated
by racial or ethnic considerations, and
no reasonable jury could find otherwise.
We note that our decision is consistent
with Davis, which affirmed a grant of
summary judgment where an interviewer
asked a female job applicant a "question
concerning [her] ability to supervise and
handle disputes with and among men," 14
F.3d at 1086, an interrogatory obviously
quite similar to Triana’s.

  Dr. Sanghvi also contends that the
rejection of his November 6 offer, which
he claims was more favorable than WWC’s
because he was willing to pay a higher
price, sufficiently supports his claim of
discrimination to send the case to a
jury. However, we have determined that
Triana’s negotiations with Dr. Sanghvi in
June allay any supposition that Triana’s
actions were motivated by an
impermissible animus, and that conclusion
carries over to the rejection of the
November 6 offer. Furthermore, by
November the defendant had additional
reasons not related to race or ethnicity
for rejecting Dr. Sanghvi’s offer. First,
the defendant feared litigation with WWC
for breach of contract if it suddenly
ejected WWC from Dr. Bonaventura’s
practice after agreeing to an outline of
the terms on which the practice would be
sold in July. Second, Dr. Sanghvi’s
August 2 letter showed antagonism toward
the defendant, creating questions as to
whether he would be as willing to refer
patients to the defendant as WWC. Third,
Dr. Sanghvi’s allegedly impermissible
direct billing when he filled in for Dr.
Bonaventura had been discovered. Since
St. Catherine’s was later to file a
counterclaim against Dr. Sanghvi for the
amount of this direct billing, the
defendant understandably did not want to
depend for referrals on a doctor with
whom it would soon be in litigation.
Given all of these additional reasons for
rejecting the November offer, we conclude
that no reasonable jury could find that
the defendant acted with discriminatory
intent at that time.

B.   Burden-Shifting Method

  Under the frequently applied burden-
shifting method established by McDonnell
Douglas Corp. v. Green, 411 U.S. 792
(1973), the plaintiff must establish his
or her prima facie case, then the
defendant must articulate one or more
legitimate, nondiscriminatory reasons for
its action, and finally the plaintiff has
an opportunity to show that the
defendant’s reasons are pretextual. Texas
Dep’t of Community Affairs v. Burdine,
450 U.S. 248, 252-53 (1981). While we do
not underestimate the importance of
requiring a plaintiff to satisfy the
first step, see Coco v. Elmwood Care,
Inc., 128 F.3d 1177, 1178 (7th Cir. 1997)
("emphasiz[ing] that the prima facie case
under McDonnell Douglas must be
established and not merely incanted"), we
will skip to the question of pretext, in
part because of the lack of a well-devel
oped list of elements for a prima facie
sec. 1981 case outside of the employment
context.

  The defendant argues that it did not
sell to Dr. Sanghvi because a better deal
was presented by WWC. This is a
legitimate reason for refusing to sell
the practice assets to the plaintiff and
Dr. Sanghvi cannot show that this reason
is pretextual. The explanation for this
conclusion tracks part of our discussion
of why Dr. Sanghvi’s direct evidence does
not present a genuine issue of material
fact, and so we will only briefly list
the reasons supporting the defendant’s
sale to WWC rather than the plaintiff. In
July, WWC offered to pay the defendant in
a lump sum, something that the hospital
had insisted upon and that Dr. Sanghvi
could not do. Selling to WWC also
increased the number of referrals that
the hospital was likely to receive, since
WWC was a group of physicians rather than
a sole practitioner like Dr. Sanghvi.
WWC’s deal also did not have the refund
provision contained in the plaintiff’s
June 25 offer.

  Nor can Dr. Sanghvi show that the
defendant’s reasons for refusing to
accept his offer on November 6 are
pretextual. The defendant legitimately
was concerned about being sued for breach
of contract if it reclaimed the assets
from WWC. The hospital could have still
preferred WWC, even though it was
offering less money, because its greater
number of doctors would lead to more
referrals and thus greater revenue for
the hospital in the long run. Also, the
discovery of Dr. Sanghvi’s billing
practices when he was filling in for Dr.
Bonaventura and his August 2 letter,
which was hostile to the defendant and
seemingly an attempt to lure away Dr.
Bonaventura’s former patients to his
practice, indicated that the defendant
was unlikely to receive many referrals
from the plaintiff if it sold him the
practice.

III.   Conclusion

  We assume for purposes of this case that
Triana’s question falls within the outer
ambit of direct evidence of racial
discrimination. However, the other
undisputed evidence prevents any
reasonable jury from concluding that the
defendant’s decision to sell Dr.
Bonaventura’s practice to WWC rather than
Dr. Sanghvi was motivated by racial or
ethnic discrimination. Likewise, under
the burden-shifting method Dr. Sanghvi
cannot cast sufficient doubt on the
reasons for the defendant’s refusal to
sell the practice to him to raise a
triable issue as to pretext. Therefore,
the district court’s decision is Affirmed.

FOOTNOTES

/1 St. Mary Medical Center, though named as a defen-
dant in the original suit and included in the
notice of appeal, was dismissed from this action
by order of the district court on June 10, 1999
as per the parties’ stipulations.

/2 Triana denies asking this question, but since the
district court granted summary judgment to the
defendant, we resolve all factual disputes in
favor of Dr. Sanghvi. Ghosh v. Indiana Dep’t of
Envtl. Management, 192 F.3d 1087, 1094 n.2 (7th
Cir. 1999).

/3 Contrary statements appear in some cases. For
example, Cardona Jimenez v. Bancomerico de P.R.,
174 F.3d 36, 40 (1st Cir. 1999) and Alvarez-Fon-
seca v. Pepsi Cola of P.R. Bottling Co., 152 F.3d
17, 24 (1st Cir. 1998), both Age Discrimination
in Employment Act cases, opine that where a
discrimination plaintiff has direct evidence, the
case may be put to the fact finder "without
further ado." However, these single, isolated
statements are both clearly dicta, since direct
evidence was not present in either case. Eisen-
berg v. Insurance Co. of N. Am., 815 F.2d 1285,
1289 (9th Cir. 1987), a diversity contract case,
states that "if the non-moving party adduces
direct evidence of a genuine issue of fact . . .
[the case] is to be submitted to the trier of
fact for resolution." However, this statement
conflicts with the Ninth Circuit’s later decision
in Henderson, which provides the most thorough
discussion of the issue which we have found. To
the extent that other decisions conflict with our
holding, we decline to follow them, largely for
the reasons explained in Henderson, 940 F.2d at
474.

/4 Of course, if the non-moving party has presented
sufficient evidence to permit a reasonable jury
to find for him or her, then a court cannot weigh
the evidence on summary judgment and the motion
must be denied. See Anderson, 477 U.S. at 255.

/5 We hold that no reasonable jury could find that
racial animus was a motivating factor of the
defendant’s decision. However, even if this were
not so, another barrier possibly exists to Dr.
Sanghvi’s recovery. Before the Civil Rights Act
of 1991 ("CRA") was passed, an employer could
escape all liability under Title VII or other
federal anti-discrimination laws where the plain-
tiff presented sufficient evidence for a jury to
conclude that impermissible animus was a motivat-
ing factor in the decision if the employer could
demonstrate that it would have taken the same
action for legitimate reasons alone. Price Water-
house v. Hopkins, 490 U.S. 228 (1989). The CRA
amended Title VII so that in such cases a plain-
tiff need only show that an illegal criterion was
a "motivating factor" of the defendant’s decision
in order to obtain relief, 42 U.S.C. sec. 2000e-
2(m), though his or her recovery will be limited
if the defendant can show that legitimate reasons
alone would have led to the same action, 42
U.S.C. sec. 2000e-5(g)(2)(B). However, Dr. San-
ghvi’s claim is under sec. 1981 rather than Title
VII. At least one circuit court has held that the
framework of Price Waterhouse, rather than 42
U.S.C. sec. 2000e-2(m), continues to apply to
sec. 1981 claims. Mabra v. United Food & Commer-
cial Workers Local Union No. 1996, 176 F.3d 1357
(11th Cir. 1999). If this is correct, then even
if Dr. Sanghvi could raise a genuine issue of
fact as to whether the refusal to sell the
practice to him was racially motivated, St.
Catherine’s would be relieved of all liability if
it could show that it would have taken the same
action because of WWC’s offer even in the absence
of any discriminatory animus. However, since we
conclude that Dr. Sanghvi does not raise a genu-
ine issue as to whether the defendant’s refusal
to sell the practice to him was motivated in part
by racial bias, we need not reach this issue.
