Haggard v. PSI Energy, Inc.

• Decision Date: 31 July 1991
• Docket Number: No. 39A01-9103-CV-74,39A01-9103-CV-74
• Citation: 575 N.E.2d 687
• Parties: Millard HAGGARD, Appellant (Plaintiff Below), v. PSI ENERGY, INC., Appellee (Defendant Below).
• Court: Indiana Appellate Court

Page 687

575 N.E.2d 687

Millard HAGGARD, Appellant (Plaintiff Below), v. PSI ENERGY, INC., Appellee (Defendant Below).

No. 39A01-9103-CV-74.

Court of Appeals of Indiana First District.

July 31, 1991.

Transfer Dismissed Oct. 22, 1991.

John Emry, Franklin, Neil R. Comer, Osgood, James B. Morris, Versailles, for appellant.

Eric M. Cavanaugh, Kay E. Pashos, PSI Energy, Inc., Plainfield, George A. Leininger, Jr., Cooper, Cox, Jacobs, Barlow & Leininger, Madison, for appellee.

ROBERTSON, Judge.

Millard Haggard appeals from an adverse summary judgment in his suit against PSI Energy, Inc. [PSI]. PSI refused to provide electrical service to Millard's mobile home in which Millard's son, Michael, was to live because Michael owed PSI $443.41 for electrical service received at a different address. Haggard's suit alleged that PSI violated his federally protected

civil rights giving rise to an action pursuant to 42 U.S.C. Sec. 1983. He also sought redress under state law and made claims under the Indiana Constitution. Haggard claimed $300,000.00 in compensatory and punitive damages. We affirm.

FACTS

The facts in the light most favorable to non-movant, Millard Haggard, indicate that in 1987, Millard bought a mobile home for the purpose of renting it out. Initially, Millard intended to rent the mobile home to his son, Michael Haggard. Michael called PSI and requested electrical service for the mobile home in Millard Haggard's name. When PSI learned that Michael was to live in the mobile home, it refused to provide electrical service because Michael owed PSI $443.41 for electrical service at a different address.

PSI is a corporation consolidated in the State of Indiana and is an investor-owned utility providing electrical service to retail customers within the State of Indiana. PSI is regulated by the Indiana Utility Regulatory Commission of Indiana [IURC] (formerly known as the Public Service Commission) pursuant to the Public Service Commission Act of 1913, as amended, IND.CODE 8-1-2-1 et seq.

PSI has consistently based its denial of service to Haggard based on Section 3.2 of its retail tariff (entitled General Terms and Conditions For Electric Service ) filed with the IURC which reads:

Company shall have the right to reject any application for service made by, or for the benefit of, a former Customer who is indebted to Company for the same class of service previously supplied at any premises in the Company's service area, or for any other valid or legal reason.

Millard contacted PSI's office in Plainfield, Indiana about his inability to obtain electrical service for the mobile home. On June 4, 1987, PSI's representative wrote to Millard explaining PSI's refusal to install service as follows (pertinent part only):

The situation with the refusal of electric service for Michael Haggard in your name is directly related to Michael's unpaid bill from a previous location for $443.41. He has refused to pay the bill or to make suitable arrangements for payment of that bill.

Since the electricity would be for Michael's use, we are refusing to install service until the matter with the unpaid bill is resolved. This could be handled by full payment or set up on a payment schedule.

We hope this letter explains our position in this matter; however, if you disagree you may request an informal review by the Indiana Utility Regulatory Commission by contacting this state agency in writing within seven days from the date of this letter. A copy should also be sent to our office. The address of the Commission is: 901 State Office Building, Indianapolis, IN 46204. ¹

Next, Millard wrote a letter dated October 12, 1987 to the IURC complaining about his inability to obtain electrical service for his mobile home from PSI. Ms. Waneta L. Wampler, Director of the Consumer Affairs Division of the IURC, responded to Millard in a letter dated October 27, 1987 in which she essentially took the side of PSI. The IURC took no action against PSI as a result of Millard's letter. The October 12, 1987 letter was the only attempt Haggard made to obtain relief from the IURC before filing the present lawsuit in the trial court.

DECISION

I. Haggard's Claim Under 42 U.S.C. Sec. 1983

It is well settled that in order to establish a claim for damages under Sec. 1983 of the Civil Rights Act the conduct complained of must have been engaged in under color of law and such conduct must have infringed upon the rights, privileges or immunities secured to the complaining party by the Constitution or laws of the United States. Kadlec v. Illinois Bell Tel. Co. (7th Cir., 1969), 407 F.2d 624, cert. denied, 396 U.S. 846, 90 S.Ct. 90, 24 L.Ed.2d 95. While the principle that private action is immune from the restrictions of the Fourteenth Amendment is well established and easily stated, the question whether particular conduct is "private" on the one hand, or "state action," on the other, frequently admits of no easy answer. Jackson v. Metropolitan Edison Co. (1974), 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477. The Sec. 1983 requirement of conduct taken under color of law can rarely be satisfied in a case involving anyone other than a state official. Kadlec, 407 F.2d 624. A private person does not act under color of state law unless he derives some aid, comfort, incentive, either real or apparent, from the state. Lucas v. Wisconsin Elec. Power Co. (7th Cir., 1972), 466 F.2d 638, cert. denied, 409 U.S. 1114, 93 S.Ct. 928, 34 L.Ed.2d 696.

In the present case (as in Jackson, 419 U.S. 345, 95 S.Ct. 449), the action complained of was taken by a utility company which is privately owned and operated, but which in many particulars of its business is subject to extensive state regulation. The mere fact that a business is subject to state regulation does not by itself convert its action into that of the State for purposes of the Fourteenth Amendment. Jackson, id. Nor does the fact that the regulation is extensive and detailed, as in the case of most public utilities, do so. Id. It may well be that acts of a heavily regulated utility with at least something of a governmentally protected monopoly will more readily be found to be "state" acts than will the acts of an entity lacking these characteristics. Id. But the inquiry must be 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 be fairly treated as that of the State itself. Id. The true nature of the State's involvement may not be immediately obvious, and detailed inquiry may be required in order to determine whether the test is met. Id.

In Jackson, the electric utility terminated the plaintiff's electric service allegedly without notice, a hearing, and an opportunity to pay any amounts found due. The plaintiff alleged that the utilities' action--taken pursuant to its general tariff filed with the state utility commission--deprived her of property without due process of law giving rise to a cause of action under Sec. 1983. The United States Supreme Court held that the plaintiff--having shown no more than that the respondent was a heavily regulated private utility with a partial monopoly and that it elected to terminate service in a manner consistent with its general tariff filed with the state utility commission--failed to show that the utilities' conduct was attributable to the State for purposes of the Fourteenth Amendment. Id.

In Kadlec, 407 F.2d 624, the plaintiff alleged the telephone company violated his constitutional rights giving rise to a Sec. 1983 action when it discontinued a certain service pursuant to its regulations filed with state authorities. The Kadlec court held that the mere filing of the regulation in question with the State neither clothed the utility with State authority nor did it bring it under the aegis of the State. The Kadlec court noted:

Motivated by purely private economic interests and pursuant to its own regulations, Illinois Bell terminated plaintiffs' [service]. The only apparent state connection with the termination rests in the fact that defendant company filed its regulations with state authorities; the state in no sense benefited from, encouraged, requested or cooperated in this suspension of service.

407 F.2d at 626 (emphasis in original).

We believe the resolution of the present case is controlled by Jackson, 419 U.S. at 347, 95 S.Ct. at 451, and Kadlec, 407 F.2d 624. In the present case, PSI refused to connect electrical service to Millard Haggard's mobile home pursuant to Sec. 3.2 of its retail tariff filed with the IURC. PSI was motivated by purely economic interests; it wished to collect the debt owed by Michael Haggard. The State of Indiana in no sense benefited from, encouraged, requested or cooperated in PSI's refusal to provide Haggard with electrical service. We hold the mere filing of Sec. 3.2 of PSI's retail tariff neither clothed PSI with State authority nor brought it under the aegis of the state. We hold that Haggard has failed to show a sufficiently close nexus between the State and PSI's refusal to provide Haggard electrical service such that PSI's denial of service may be fairly treated as State action.

Haggard failed to establish that PSI's conduct in refusing to provide him electrical service was engaged in under the color of law necessary to establish a claim for damages under Sec. 1983 of the Civil Rights Act. Therefore, the trial court committed no error in granting PSI's motion for summary judgment with regard to Haggard's claim for damages brought pursuant to 42 U.S.C. Sec. 1983.

II. Haggard's Claims based on State Law

Haggard asserts that his complaint states a cause of action cognizable under state law. He asserts that under state law he is entitled to be compensated for the loss of rental income from being unable to rent his trailer, the loss or abuse of civil rights, state constitutional rights, statutory rights and privileges, emotional distress, pain...