Johnson v. Educational Testing Service

• Decision Date: 31 January 1985
• Docket Number: No. 84-1597,84-1597
• Citation: 754 F.2d 20
• Parties: 37 Ed. Law Rep. 30 Susan E. JOHNSON, Plaintiff, Appellant, v. EDUCATIONAL TESTING SERVICE, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

Page 20

754 F.2d 20

37 Ed. Law Rep. 30

Susan E. JOHNSON, Plaintiff, Appellant, v. EDUCATIONAL TESTING SERVICE, Defendant, Appellee.

No. 84-1597.

United States Court of Appeals, First Circuit.

Argued Dec. 6, 1984.

Decided Jan. 31, 1985.

Jack R. Pirozzolo, Boston, Mass., with whom Mary Jeanne Tufano and Willcox, Pirozzolo & McCarthy, Boston, Mass., were on brief, for plaintiff, appellant.

George C. Caner, Jr., Boston, Mass., with whom Wayne H. Scott and Ropes & Gray, Boston, Mass., were on brief, for defendant, appellee.

Before CAMPBELL, Chief Judge, BOWNES, Circuit Judge, and MALETZ, ^* Senior Judge.

MALETZ, Senior Judge.

Plaintiff-appellant Susan Johnson appeals from the district court's entry of summary judgment in favor of defendant-appellee Educational Testing Service, Inc. (ETS) and the court's denial of leave to amend her complaint. We affirm.

I. Background

ETS is a non-profit corporation that prepares and administers the Law School Admission Test (LSAT). Susan Johnson, who was then a college senior, took the LSAT three times and achieved the following scores, on a scale of 200 to 800:

October 1970 ... 317

December 1970 .. 323

April 1971 ..... 623

After ETS reported the 623 score to various law schools, the School of Law of the University of California at Berkeley (Berkeley) accepted Johnson for its fall class. On May 11, 1971, the University of Pennsylvania Law School, which had accepted Ms. Johnson in March, telephoned ETS to question the validity of the 623 score. ETS's Test Security Office then commenced an investigation, which included submission of the answer sheets and registration forms for all three tests to Jan Beck, a handwriting expert. Mr. Beck concluded that the April 1971 answer sheets and registration form were not written by the same person who wrote the first two answer sheets.

After reviewing the documents and Beck's opinion, ETS's Board of Review concluded that there was serious doubt about the validity of the 623 score and that Johnson should be so advised. Accordingly, on June 10, 1971, Louis Fowler, Secretary of the Board of Review and a member of the Test Security Office, wrote to Johnson advising her of the Board's doubts and offering her the following alternatives: (1) retaking the LSAT at no charge; (2) cancelling the 623 score; (3) submitting further information; or (4) doing nothing. Fowler said that ETS would cancel the 623 score if Johnson did nothing, or requested cancellation, or took the examination again but failed to "confirm" the score.

During the following weeks, ETS received further queries about the discrepancies in Johnson's LSAT scores from Berkeley and Columbia Law School. Ultimately, ETS consulted with two other handwriting experts, Ordway Hilton and Paul Osborn, who agreed with Beck's earlier conclusion that the April 1971 examination was not written by the same person who took the first two examinations. For her part, Johnson submitted her own affidavit and affidavits and letters by others to substantiate her claim that she was a person of good character; that she had taken all three examinations; and that the improvement in her score was made possible by, among other things, her receiving tutoring for the LSAT and taking medication to reduce anxiety.

ETS officials met with Johnson and her then attorney on August 5, 1971, and advised that ETS would require a retest to confirm her highest score. ETS proposed to give Johnson the same test that resulted in the 623 score and represented that the score would be confirmed if she came within fifty--or, depending on the circumstances, up to one hundred--points of 623. Johnson declined to take a retest on the ground that ETS could not duplicate her April 1971 "state of non-anxiousness." Later, Johnson presented a report by another handwriting expert, Elizabeth McCarthy who concluded that Johnson had written all the answer sheets.

On September 3, 1971, ETS's Board of Review decided to cancel the 623 score. Berkeley responded by revoking its acceptance of Johnson, but later admitted her on a provisional basis. On October 11, 1971, Berkeley informed ETS that in reliance on the opinion of yet another handwriting expert, Sherwood Morrill--who concluded that all three examinations were written by the same person--it would admit Johnson unconditionally.

Johnson commenced this diversity action in June 1972 and asserted five claims; one federal constitutional claim and four state law claims. She alleged that ETS: (1) arbitrarily invalidated the 623 score, thus denying her due process; (2) breached certain warranties; (3) breached its contract with her; (4) "wrongfully interfered with the advantageous contractual relationship" she had with Berkeley; and (5) defamed her. In January 1974, ETS moved for dismissal and summary judgment on all five counts of the complaint. In February 1974, Johnson filed opposition papers. The district court stayed discovery and, in May 1975, ordered the parties to submit statements of the material facts that, they contended, were or were not at issue. The parties filed such statements within the next several weeks. Thereafter, a period of almost nine years elapsed, during which the district court failed to rule on the pending motions.

Finally, in 1984, the action was reassigned to another district judge, who permitted each party to submit a supplemental memorandum of no more than twenty pages to reflect developments in the law since 1974. On June 8, 1984, the court, in an unpublished memorandum of decision, entered summary judgment for ETS on all counts and denied Johnson's "motion for leave to file a motion to amend the complaint." This appeal followed.

II. The Due Process Claim

To succeed on her first claim, alleging a deprivation of due process, Johnson must show that ETS is a state actor and that its conduct was state action. This is because the Fourteenth Amendment "erects no shield against merely private conduct, however discriminatory or wrongful." Shelley v. Kraemer, 334 U.S. 1, 13, 68 S.Ct. 836, 842, 92 L.Ed. 1161 (1948). Accord, e.g., Blum v. Yaretsky, 457 U.S. 991, 1002, 102 S.Ct. 2777, 2785, 73 L.Ed.2d 534 (1982). In other words, the Fourteenth Amendment "applies to acts of the states, not to acts of private persons or entities." Rendell-Baker v. Kohn, 457 U.S. 830, 837, 102 S.Ct. 2764, 2769-70, 73 L.Ed.2d 418 (1982). Therefore, in reviewing constitutional claims, the Supreme Court has "insisted that the conduct allegedly causing the deprivation of a federal right be fairly attributable to the State." Lugar v. Edmondson Oil Co., 457 U.S. 922, 937, 102 S.Ct. 2744, 2754, 73 L.Ed.2d 482 (1982).

The state action inquiry is two-fold: (1) whether "the deprivation [was] caused by the exercise of some right or privilege created by the State or by a rule of conduct imposed by the State or by a person for whom the State is responsible," id., and (2) whether "the party charged with the deprivation [was] a person who may fairly be said to be a state actor." Id. Since the test has two components, "not all actions by state actors are state action." Gilmore v. Salt Lake Community Action Program, 710 F.2d 632, 638 (10th Cir.1983). See Lugar, 457 U.S. at 935-36 n. 18, 102 S.Ct. at 2753-54 n. 18 (discussing Polk County v. Dodson, 454 U.S. 312, 102 S.Ct. 445, 70 L.Ed.2d 509 (1981)).

Johnson contends that ETS is a state actor because the LSAT, which it administers, is a prerequisite to admission to nearly all law schools, many of which, including Berkeley, are state schools. Therefore, she argues, ETS exercises a virtual veto power over admission to law schools. She also points to ETS's contract with the Law School Admission Council, which provides that the Council (1) has ultimate responsibility for carrying out testing programs used for admission to law school and for the content of the tests and (2) determines general policy concerning conduct of the program in consultation with ETS. Johnson further notes that approximately 45% of the Council's members, including Berkeley, are state schools. Moreover, she alleges that the ETS Board of Trustees included public officials and representatives of bodies that included public institutions.

Although Johnson's conception of state action was arguably tenable when her complaint was filed, the recent decisions in Blum and Rendell-Baker are fatal to her theory. Cf. Cohen v. President of Harvard College, 729 F.2d 59, 60 (1st Cir.) (per curiam) (commenting on devitalization of argument that Harvard, by accepting federal funds, became liable for violations of First and Fifth Amendments), cert. denied, --- U.S. ----, 105 S.Ct. 233, 83 L.Ed.2d 161 (1984).

In Blum, the Court held that private nursing homes did not engage in state action when they discharged or transferred Medicaid patients, even though the state subsidized the operating and capital costs of the facilities, paid medical expenses of more than 90% of the patients, and licensed the facilities. 457 U.S. at 1011, 102 S.Ct. at 2784. The Court reasoned:

That the State responds to such [private discharge and transfer] actions by adjusting benefits does not render it responsible for those actions. The decisions about which respondents complain are made by physicians and nursing home administrators, all of whom are concededly private parties. There is no suggestion that those decisions were influenced in any degree by the State's obligation to adjust benefits in conformity with changes in the cost of medically necessary care.

Id. at 1005, 102 S.Ct. at 2786 (emphasis in original).

Similarly, in Rendell-Baker, the Court declined to find state action in the decision by a private school to discharge certain employees, notwithstanding that "virtually all of the school's income was derived from government funding." 457 U.S. at 840, 102 S.Ct. at 2771. The Court held that the significant presence of public funds was insufficient to comprise state action:

The school, like the nursing homes [in...