Andrews v. Consolidated Rail Corp.

• Decision Date: 27 July 1987
• Docket Number: No. 86-1233,86-1233
• Citation: 831 F.2d 678
• Parties: 44 Fair Empl.Prac.Cas. 786, 44 Empl. Prac. Dec. P 37,317, 56 USLW 2114, 1 A.D. Cases 1122 William P. ANDREWS, Plaintiff-Appellant, v. CONSOLIDATED RAIL CORPORATION and United States Department of Labor, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 678

831 F.2d 678

44 Fair Empl.Prac.Cas. 786,

44 Empl. Prac. Dec. P 37,317, 56 USLW 2114,

1 A.D. Cases 1122

William P. ANDREWS, Plaintiff-Appellant, v. CONSOLIDATED RAIL CORPORATION and United States Department of Labor, Defendants-Appellees.

No. 86-1233.

United States Court of Appeals Seventh Circuit.

Argued Sept. 10, 1986.

Decided July 27, 1987.

Before COFFEY and RIPPLE, Circuit Judges, and CAMPBELL, Senior District Judge. ^*

COFFEY, Circuit Judge.

William P. Andrews, the plaintiff-appellant, appeals from the district court's dismissal of his claims against Consolidated Rail Corporation and the Department of Labor. We affirm.

I

The plaintiff-appellant, William P. Andrews, was employed by Penn Central Transportation in 1970 as a stockman when he suffered injuries in January and May of that year necessitating that he discontinue working; in 1973, Penn Central and the plaintiff reached an agreement specifying that Andrews forego presenting himself for reemployment with Penn Central for a period of five years (until 1979). Three years thereafter, on April 1, 1976, Consolidated Rail Corporation ("Conrail"), the defendant-appellee, acquired the assets of Penn Central.

Andrews sought reemployment with Conrail after the agreed upon five-year waiting period. ¹ At this time, Conrail, upon the recommendation of its medical director, refused to reinstate Andrews fearful that his medical condition ² presented the possibility that he might very well injure others as well as aggravate his present medical condition.

On April 12, 1980, the plaintiff Andrews filed a complaint with the Office of Federal Contract Compliance Programs ("OFCCP"), United States Department of Labor. The complaint charged that Conrail had violated section 503 of the Rehabilitation Act of 1973, 29 U.S.C. Sec. 793 ³ a statute that allows an individual to file a complaint with the Department of Labor alleging that a federal contractor (Conrail) has "failed or refuses to comply with the provisions of a contract with the United States, relating to employment of individuals with handicaps ..." ⁴ Based upon the results of its investigation of Andrews' complaint, the Indianapolis, Indiana, OFCCP Area Office issued a Notification of Results of Investigation stating that "[t]here was insufficient evidence to conclude that the contractor [Conrail] violated its obligation under the nondiscrimination and affirmative action provisions of section 503 of the Rehabilitation Act of 1973, as amended."

On January 25, 1983, the plaintiff Andrews requested the director of the OFCCP review the Area Office's decision and also asked leave to file additional medical reports; both requests were granted. After review and upon reconsideration, the OFCCP determined that Conrail was not in violation of section 503 of the Rehabilitation Act of 1973 since the medical reports established that Andrews' physical condition rendered him incapable of performing his duties as a stockman. Conrail offered to employ Andrews in a sedentary work assignment and also agreed to obtain a current medical evaluation to determine whether or not Andrews was presently physically able to perform as a stockman pursuant to the terms of the collective bargaining agreement. ⁵

On November 30, 1983, Andrews initiated this action against Conrail in the district court claiming that Conrail failed to reinstate him in violation of the Fifth and Fourteenth Amendments of the United States Constitution, Article I, Section 1 of the Indiana State Constitution and sections 503 and 504 ⁶ of the Rehabilitation Act of 1973, 29 U.S.C. Secs. 793, 794. Subsequently Conrail moved pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss the action for lack of subject matter jurisdiction and failure to state a claim upon which relief could be granted. Specifically, Conrail alleged that (1) section 503 of the Rehabilitation Act of 1973 provided no cause of action to correct alleged discrimination against handicapped persons by a federal contractor, (2) Andrews failed to state a cause of action under section 504 of the Rehabilitation Act, since he did not allege that Conrail was a recipient of federal financial assistance, and, in any event, Andrews' claim under section 504 was barred by the statute of limitations and (3) Andrews' allegations of due process violations under the federal and state constitutions failed to state a cause of action, since Conrail is neither a federal nor a state agency, and no state action was involved. Shortly thereafter, Andrews filed a motion and was granted leave to file an amended complaint adding the United States Department of Labor as a necessary party to the action to challenge the Department of Labor's disposition of his section 503 complaint as arbitrary and capricious.

In response to Conrail's motion to dismiss, on October 31, 1984, the district court dismissed Andrews' claims based on sections 503 and 504 of the Rehabilitation Act of 1973, the Fourteenth Amendment of the United States Constitution, and Article I, Section 1 of the Indiana Constitution. Andrews v. Conrail, No. IP 83-1888-C, Mem.Op. (S.D.Ind. Oct. 31, 1984).

Initially, the trial court found that Andrews conceded that no private cause of action was available under section 503. Second, the district court found that Andrews' claim under section 504 was barred by the two year statute of limitations provided in the Indiana Code, 34-1-2-1.5 stating:

"Since plaintiff never filed an administrative complaint under Sec. 504, the statute of limitations on that claim began to run in 1979 when Conrail refused to return him to active employment. Measuring from the end of that year, plaintiff's Sec. 504 action, filed on November 30, 1983, comes 23 months after the two year limitations period applicable to Sec. 504 actions had run. Accordingly, plaintiff's Sec. 504 claim is now time barred."

Third, the trial judge referring to Andrews' Fourteenth Amendment of the United States Constitution claim that Conrail's refusal to return him to work denied him property and liberty interests, the trial judge found: "The Fourteenth Amendment affords protection only against state action. See, Burton v. Wilmington Parking Authority, 365 U.S. 715, 721-22, 81 S.Ct. 856, 859-60, 6 L.Ed.2d 45, 50 (1961). Plaintiff makes no allegation that Conrail is associated with the state. The Fourteenth Amendment claim will be dismissed." Finally, the district judge found that Andrews' claim under Article I, Section 1 was without merit since the Indiana Constitution provided "no cause of action to redress injuries which cannot be attributed to the state." The trial judge stated:

"Plaintiff's attempt to state a claim under this provision [Article I, section 1 of the Indiana Constitution] is fundamentally misguided. A constitution provides a set of principles against which the lawfulness of state action by statutory enactment or police power may be evaluated. As such, it provides no cause of action to redress injuries which cannot be attributed to the state.

Plaintiff has not alleged that the state was involved in any way with his alleged injury. His state constitutional claim must therefore be dismissed."

(Footnote omitted). The district court refused to dismiss Andrews' claim under the Fifth Amendment of the United States Constitution that Conrail's refusal to reinstate him deprived him of liberty and property interests finding that:

"The Fifth Amendment imposes restrictions on the federal government, not on private persons. Public Utilities Comm. v. Pollak, 343 U.S. 451, 72 S.Ct. 813, 96 L.Ed. 1068 (1952). Conrail is not an agency or instrumentality of the federal government. See 45 U.S.C. Sec. 741(b). However, the act of a private person may be transformed into that of the federal government where the government is sufficiently involved with the activity that causes the actual injury. See, Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972). Plaintiff has indicated his intention to show that this exception applies to the present case. Granting defendant's motion to dismiss this claim would improperly deny him an opportunity to do so."

On April 17, 1986, the trial court dismissed Andrews' complaint in response to Conrail's renewed motion to dismiss and the Department of Labor's motion to dismiss. Andrews v. Conrail, No. IP 83-1888-C, Mem.Op. (S.D.Ind. Jan. 17, 1986) . Regarding Andrews' claim under the Fifth Amendment of the United States Constitution that Conrail's refusal to return him to work denied him protected liberty and property interests, the district court, relying on the Second Circuit's decision in Myron v. Consolidated Rail Corp., 752 F.2d 50 (2d Cir.1985), ⁷ found that Conrail's relationship with the federal government was insufficient "to transform Conrail's conduct into federal action for purposes of the Fifth Amendment." In Myron the Second Circuit held that "[t]he federal government has not 'so far insinuated itself into a position of interdependence' with Conrail that the latter's personnel decisions can be considered federal action." Id. at 55-56 (footnote omitted).

As to the Department of Labor the trial court found that Andrews failed to state a claim under section 503 of the Rehabilitation Act of 1973 upon which relief could be granted since the OFCCP's decision not to prosecute Andrews' complaint was an unreviewable exercise of agency discretion. The trial judge relied primarily on the Supreme Court's decision in Heckler v. Chaney, 470 U.S. 821, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985) in finding that since Sec. 503 "sets no guidelines by which this Court may review the Department's decision; it commits the decision of whether or not to prosecute a handicap discrimination claim to the Department absolutely."

On appeal Andrews raises three issues: (1) Did the district court err in ruling that the plaintiff had failed to establish significant contacts...