Gerena v. Puerto Rico Legal Services, Inc.

• Decision Date: 30 April 1982
• Docket Number: No. 80-829.,80-829.
• Citation: 538 F. Supp. 754
• Parties: Julio C. Lopez GERENA, Plaintiff, v. PUERTO RICO LEGAL SERVICES, INC., Defendant.
• Court: U.S. District Court — District of Puerto Rico

538 F. Supp. 754

Julio C. Lopez GERENA, Plaintiff, v. PUERTO RICO LEGAL SERVICES, INC., Defendant.

No. 80-829.

United States District Court, D. Puerto Rico.

April 30, 1982.

A. J. Amadeo Murga, Hato Rey, P. R., for plaintiff.

Jose E. Fernandez Sein, Santurce, P. R., for defendant.

ORDER AND MEMORANDUM

GRANT, Senior District Judge, sitting by designation.

This is an action brought pursuant to the due process clauses of the Fifth and Fourteenth Amendments by an attorney formerly associated with the Puerto Rico Legal Services Corporation (PRLS). He alleges that he was dismissed from employment without procedural due process. More specifically, plaintiff charges that he was dismissed "without prior hearing and in violation of the statutes and regulations applicable to all employees of Servicios Legales de Puerto Rico, Inc....." Plaintiff's Complaint, ¶ 6. Jurisdiction was sought pursuant to 5 U.S.C. § 701, 42 U.S.C. §§ 1981, 1983 and 28 U.S.C. §§ 1331, 1361 and 1343. The factual circumstances surrounding the dismissal are not important to the matter presently before the Court so a recitation of the facts will not be included.

On July 2, 1980, defendant filed a motion to dismiss for lack of subject matter jurisdiction. In its accompanying memorandum, PRLS argued that neither federal nor state action was present; i.e., PRLS is not the federal government for purposes of jurisdiction under 28 U.S.C. § 1331 and is not the state government for purposes of jurisdiction under 42 U.S.C. § 1983.

In response to PRLS's motion to dismiss, plaintiff cited the decisions in Rivas Tenorio v. Liga Atletica Interuniversitaria, 554 F.2d 492 (1st Cir. 1977) and Varela v. Olivero, No. 77-749 (D.P.R.1977). In the latter case, the late Judge Toledo, formerly Chief Judge of this Court, had concluded that actions of the PRLS constituted federal governmental action. After being granted the opportunity to file an additional response, PRLS rejected any applicability of Rivas Tenorio to the circumstances in this case and further argued that Varela was wrongly decided. On May 11, 1981, PRLS's motion to dismiss was denied by Judge Cerezo "on the grounds expressed in this Court's opinion and order in Varela."

A pretrial order was filed by the parties and approved by the Court on December 9, 1981. In it, the parties state that the case was one brought under 42 U.S.C. §§ 1981, 1983. Plaintiff's claim under the Fifth Amendment was not included. Pursuant to Fed.R.Civ.P. 16, this Court treated the order as controlling this action. Immediately prior to trial, PRLS renewed its motion to dismiss for the same reasons as earlier asserted. Not wanting to delay trial in an already heavily congested calendar, the Court summarily denied the motion based upon Judge Cerezo's previous action in the case.

The jury trial began on January 18, 1982. The Court treated this case solely as a § 1983 action and the jury was so instructed without any objection from plaintiff. On January 20, 1980, the jury returned with a verdict in favor of plaintiff and awarded damages in the total amount of $65,000, comprised of $33,150 for loss of income and $31,850 for mental suffering.

On February 24, 1982, PRLS renewed its motion to dismiss the entire action for lack of subject matter jurisdiction. A conference was held with counsel on this and other motions filed by both sides on February 26, 1982. At that time, discussion centered upon the jurisdiction question. The Court admitted that after reflection and careful review of all the materials, it had some doubts whether governmental action was present. Plaintiff Gerena was asked to file a memorandum on this issue before the Court would rule. He has done so and now the Court will decide this very important and extremely difficult question.

The initial argument this Court needs to address is raised by plaintiff Gerena. He argues that this issue has already been decided and that Judge Cerezo's decision should be accorded full deference. This Court is mindful of the law of the case doctrine but further believes its duties with respect to the pending matter are governed by the principles articulated by the Court of Appeals for the Seventh Circuit in Champaign-Urbana News, etc. v. J. L. Cummins, 632 F.2d 680, 683 (7th Cir. 1980):

The law of the case is not entitled to the same respect as the doctrine of stare decisis. The law of the case does not demand obsequiousness right or wrong. Mr. Justice Holmes said that the phrase "law of the case" merely expressed the practice of courts generally to refuse to reopen what had been decided but was not a limit on their power. Messenger v. Anderson, 225 U.S. 436, 444, 32 S.Ct. 739, 740, 56 L.Ed. 1152 (1912). The only sensible thing for a trial court to do is to set itself right as soon as possible when convinced that the law of the case is erroneous. There is no need to await reversal. 1B Moore's Federal Practice ¶ 0.4041, at 407. To modify the law of the case is primarily a matter of "good sense." Uniformed Sanitation Men Association, Inc. v. Commissioner of Sanitation of City of New York, 426 F.2d 619, 628 (2d Cir. 1970), motion denied, 403 U.S. 917, 91 S.Ct. 2223, 29 L.Ed.2d 693 (1917), cert. denied, 406 U.S. 961, 92 S.Ct. 2055, 32 L.Ed.2d 349 (1972).

(emphasis added).

It is also important at the outset to clearly distinguish "behavior attributable to the federal government from behavior attributable to a state government and from behavior of private persons." Cervantes v. Guerra, 651 F.2d 974, 977 (5th Cir. 1981). For purposes of this lawsuit, either federal or state action must exist in order for this Court to have jurisdiction. Although the standards utilized to find federal action for purposes of the Fifth Amendment are identical to those utilized to find state action for purposes of the Fourteenth Amendment, see Warren v. Government National Mortgage Ass'n, 611 F.2d 1229, 1232 (8th Cir.), cert. denied, 449 U.S. 847, 101 S.Ct. 133, 66 L.Ed.2d 57 (1980) and Geneva Towers Tenants Organization v. Federated Mortgage Inv., 504 F.2d 483, 487 (9th Cir. 1974), the distinction between the two must never be forgotten or overlooked. The due process clause of the Fifth Amendment applies to federal government action while the Fourteenth Amendment's due process clause applies to state action. Each will be examined separately.

I. State Action

There are two necessary elements of any claim brought under 42 U.S.C. § 1983.

First, the plaintiff must prove that the defendant has deprived him of a right secured by the "Constitution and laws" of the United States. Second, the plaintiff must show that the defendant deprived him of this constitutional right "under color of law."

Adickes v. Kress & Co., 398 U.S. 144, 150, 90 S.Ct. 1598, 1604, 26 L.Ed.2d 142 (1970). The pending matter, of course, concerns only the second of these requirements: whether the actions of PRLS constituted state action. As the Supreme Court itself realized in Jackson v. Metropolitan Edison Co., 419 U.S. 345, 349-50, 95 S.Ct. 449, 452-53, 42 L.Ed.2d 477 (1974), this "question whether particular conduct is `private' on the one hand, or `state action,' on the other, frequently admits of no easy answer."

Only recently has the Court of Appeals for the First Circuit had an opportunity to articulate the criteria to be applied in determining whether state action is present. In Rendell-Baker v. Kohn, 641 F.2d 14 (1st Cir.), cert. granted, ___ U.S. ___, 102 S.Ct. 385, 70 L.Ed.2d 205 (1981), the court was called upon to decide whether a particular non-profit but state subsidized high school, organized as a non-profit corporation under the laws of Massachusetts and located on private property, could be treated as the state for purposes of § 1983. More specifically, the court framed the issue before it as "whether the action of the New Perspectives School in discharging the plaintiffs `may fairly be said to be that of the State.'" 641 F.2d at 21.¹ The court discussed at length the three leading Supreme Court precedents governing the determination of state action. See Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974); Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972); and Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961). In response to an argument raised by the defendant that the standard set forth in Jackson implicitly overruled Burton, the court pointed to its earlier decision in Downs v. Sawtelle, 574 F.2d 1, 9 (1st Cir.), cert. denied, 439 U.S. 910, 99 S.Ct. 278, 58 L.Ed.2d 255 (1978), wherein it expressed its belief that Burton had not been overruled. Thus, there remain two separate tests, Jackson and Burton, which this Court must apply.

Jackson Test

In Rendell-Baker, the First Circuit summarized the decision in Jackson as follows:

There the Court found no state action in the discontinuation of service to a customer, without a hearing, by a privately owned and operated, but heavily regulated, utility company. The Court defined the inquiry as "whether there is a sufficiently close nexus between the state and the challenged action of the regulated entity so that the action of the latter may fairly be treated as that of the state itself." Id. 419 U.S., at 351, 95 S.Ct. at 453. To answer this question, the court considered whether the state had directly encouraged or approved the particular practice under challenge, and found that it had not. But the Court did not stop there. It again distinguished Burton, without expressing any disapproval of that case, finding that extensive regulation and performance of a public service "affected with a public interest" were not enough to show the "symbiotic relationship" found in that case.

641 F.2d at 22 (footnote omitted). The Jackson "state function" test was further refined in Flagg Brothers, Inc. v. Brooks, 436 U.S. 149, 98 S.Ct. 1729, 56 L.Ed.2d 185 (1978), where the Court narrowed...