Niedner v. Salt River Project Agr. Imp. and Power Dist.
| Decision Date | 10 January 1979 |
| Docket Number | No. 13594,13594 |
| Parties | George E. NIEDNER, Sr., and Thelma Niedner, his wife, Appellants, v. THE SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, a municipal corporation, Appellee. |
| Court | Arizona Supreme Court |
Richard T. Weissman, Phoenix, for appellants.
Jennings, Strouss & Salmon by Charles E. Jones, Phoenix, for appellee.
Appellant George E. Niedner brought an action for breach of an employment contract against the Salt River Project Agricultural Improvement and Power District claiming that his employment was unconstitutionally terminated. The Superior Court granted the District's motion to dismiss, and Niedner appealed. This Court acquired jurisdiction pursuant to Rule 19(e), Arizona Rules of Civil Appellate Procedure, 17A A.R.S.
Niedner's complaint alleges that on December 22, 1972, he was notified that his employment as Supervisor of Revenue Receipts was being terminated and that he was given three choices effective January 3, 1973: (1) he could remain as a full-time employee of the District in the position of Disbursements Coordinator with a substantial reduction in pay, (2) he could receive a leave of absence without pay for a period of nine months to be followed by termination, or (3) he could resign from employment. The District concedes that the removal of Niedner from his job was tantamount to discharge.
Niedner has two basic positions. The first is that his employment was terminated in violation of the due process clauses of the Arizona Constitution and the Fourteenth Amendment of the United States Constitution. The basis for this is the assertion that his discharge was without notice or an opportunity to be heard. The second, based on the Equal Protection Clause of the United States Constitution, is that as a member of the class of salaried employees working for the District, he was discriminated against because salaried workers are not protected by the same grievance procedures granted hourly-paid workers through their collective bargaining agreement with the District. Appellant in his complaint also asked the Superior Court to certify that his equal protection claim was maintainable as a class action on behalf of all the District's salaried employees.
The threshold question in any due process or equal protection claim arising out of the federal constitution is whether the claimed deprivation falls within the perimeter of "state action." Private action is immune from the restrictions imposed by the Fourteenth Amendment. See Jackson v. Metropolitan Edison Company, 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). Similarly, Art. 2, § 4 of the State Constitution applies only to state action. Dimond v. Samaritan Health Service, 27 Ariz.App. 682, 558 P.2d 710 (1976). If the termination of appellant's employment by the District was "private" rather than state action, the complaint fails to state a justiciable claim, and the motion to dismiss was properly granted.
The appellee is an agricultural improvement district organized pursuant to A.R.S. § 45-901 et seq., and is designated a political subdivision of the State by Art. 13, § 7 of the Arizona Constitution. As such, it is vested with all the rights, privileges, and immunities of a municipality. It is argued that because of the District's status, its termination practices must be considered state action, but we think otherwise.
The District's powers as a political subdivision are "limited to the purposes justifying its political existence" and the provisions of Art. 13, § 7 do not alter the inherent characteristics of the District as "a business corporation with attributes of sovereignty which are only incidental, conferred for the purposes of better enabling it to function and accomplish the business and economic purposes for which it was organized." City of Mesa v. Salt River Project Agricultural Improvement and Power District, 92 Ariz. 91, 97, 103-4, 373 P.2d 722, 726, 731 (1962). Unlike other municipal corporations owned by the public and managed by public officials, the District is owned and managed by private landowners and, although the District...
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...business enterprises, created by and chiefly benefiting a specific group of landowners. Niedner v. Salt River Project Agricultural Improvement and Power Dist., 121 Ariz. 331, 590 P.2d 447; Uhlmann v. Wren, 97 Ariz. 366, 374, 401 P.2d 113, 124; Local 266, I.B.E.W. v. Salt River Project Agric......
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