Rannels v. Hargrove, Civ. A. No. 89-6155.

Citation731 F. Supp. 1214
Decision Date20 February 1990
Docket NumberCiv. A. No. 89-6155.
PartiesLynn L. RANNELS v. Sarah W. HARGROVE.
CourtUnited States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)


Lynn L. Rannels, Reinholds, Pa., pro se.

Ernest D. Preate, Jr., Atty. Gen., and Claudia M. Tesoro, Deputy Atty. Gen., Philadelphia, Pa., for defendant.


CAHN, District Judge.

Lynn L. Rannels, a citizen of Pennsylvania, has filed a pro se complaint against Sarah W. Hargrove, the Pennsylvania Secretary of Banking, alleging that the "Club 50" program of Meridian Bancorp (hereinafter "Meridian") violates Pennsylvania Code § 38.1; the Age Discrimination Act, 42 U.S.C. §§ 6101 et seq. (hereinafter "ADA"); and the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution. It allegedly does so because it gives certificate of deposit purchasers who are over the age of fifty an extra one-quarter of one percent interest on their certificates; Rannels, who has purchased a certificate of deposit, was denied this bonus.1 Rannels further alleges that Hargrove, by failing to bar and, indeed, by encouraging the illegal practices of Meridian, has visited harm upon him.

Rannels therefore asks for an injunction compelling Hargrove to exercise her supervisory powers under Commonwealth law to compel Meridian to conform its practices to the standards required by the statutes and regulations above. He also asks for general equitable and legal relief. Hargrove has responded with a motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6); along with his reply, Rannels has moved for a preliminary injunction. I shall grant Hargrove's motion; since the action shall be dismissed, the motion for a preliminary injunction is necessarily denied. In this procedural posture, however, I must give Rannels leave to amend his complaint, consistent with the law of the case as developed here.

Under Fed.R.Civ.P. 12(b)(6), "the applicable standard of review requires the court to accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the non-moving party." Rocks v. City of Philadelphia, 868 F.2d 644, 645 (3d Cir.1989). The question before the court is not whether the plaintiff will ultimately prevail; rather, it is whether the plaintiff could prove any set of facts in support of his claim that would entitle him to relief. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984); Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). Similar standards apply under Rule 12(b)(1). Dismissal under this Rule "should be granted very sparingly." Hospital Bldg. Co. v. Trustees of Rex Hosp., 425 U.S. 738, 746, 96 S.Ct. 1848, 1853, 48 L.Ed.2d 338 (1976). In deciding a motion to dismiss under 12(b)(1) filed before an answer is submitted — that is, a facial challenge to jurisdiction — all allegations contained in the complaint must be regarded as true. Cardio-Medical Assocs. v. Crozer-Chester Med. Center, 721 F.2d 68, 75 (3d Cir.1983). Because Rannels is a pro se litigant, I must be especially careful to read these pleadings generously. Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972) (per curiam).

Accordingly, I shall assume that Rannels seeks to proceed under 42 U.S.C. § 1983 for both of his federal claims, as well as under the ADA itself. This belief is consistent with the assumption made by the Commonwealth's attorney and with the assertion made by Rannels in his "Request to Deny Defendant's Motion to Dismiss." I assume as well that he seeks to have this court enjoin Hargrove from violating both the Commonwealth and federal statutes and regulations, and that he seeks both legal and equitable relief.


Hargrove has moved to dismiss all state law claims under Rule 12(b)(1) because this court lacks jurisdiction. I agree. As Hargrove points out, federal courts may not order state officials to conform their conduct to the strictures of state law. Pennhurst State School and Hosp. v. Halderman, 465 U.S. 89, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984) ("Pennhurst II"). By doing so, this court would intrude greatly upon the sovereignty protected by the Eleventh Amendment.2 Pennhurst II, 465 U.S. at 106, 104 S.Ct. at 911; Jones v. Connell, 833 F.2d 503, 505 (3d Cir.1987). To the extent that Rannels seeks damages for Hargrove's purported violation of Pennsylvania law, this court still lacks jurisdiction. Where a suit attempts to recover money, the state is the real party in interest and thus may invoke its sovereign immunity, even though individual officials may be the nominal defendants. Kentucky v. Graham, 473 U.S. 159, 169, 105 S.Ct. 3099, 3107, 87 L.Ed.2d 114 (1985); Ford Motor Co. v. Department of Treasury, 323 U.S. 459, 464, 65 S.Ct. 347, 350, 89 L.Ed. 389 (1945); Lewis v. Kelchner, 658 F.Supp. 358, 361 (M.D.Pa.1986). Immunity thus attaches here as well, and so I am without jurisdiction to hear this claim.

Pennsylvania could have chosen to waive its sovereign immunity to suit by a statute specifically authorizing suit in federal court. Welch v. State Dep't of Highways, 483 U.S. 468, 473-74, 107 S.Ct. 2941, 2945-46, 97 L.Ed.2d 389 (1987); Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 238, 241, 105 S.Ct. 3142, 3146, 87 L.Ed.2d 171 (1985); Skehan v. State Sys. of Higher Educ., 815 F.2d 244, 247 (3d Cir.1987). However, the right-to-sue statute, 42 Pa. Cons.Stat.Ann. § 8521(b) (Purdon 1982), states that "nothing contained in this subchapter shall be construed to waive the immunity of the Commonwealth from suit in Federal courts guaranteed by the Eleventh Amendment to the Constitution of the United States." This effectively bars the relief requested by Rannels. See Laskaris v. Thornburgh, 661 F.2d 23, 24 (3d Cir. 1981). Rannels may, insofar as the statutes of Pennsylvania permit him to, pursue these claims in Commonwealth courts. I am without jurisdiction to hear them here, though, and so I must grant Hargrove's motion to dismiss these under Fed.R.Civ.P. 12(b)(1).3


Generously reading the complaint, Rannels seeks his relief under the ADA itself and under 42 U.S.C. § 1983 as the vehicle for claims under the ADA and the Equal Protection Clause of the Fourteenth Amendment. These shall be addressed in turn.

A. The ADA

Under the ADA, "no person in the United States shall, on the basis of age, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any program or activity receiving Federal financial assistance." 42 U.S.C. § 6102. For a suit brought under the ADA to withstand dismissal, it must leap several statutory and constitutional hurdles. First, does this statute abrogate Pennsylvania's sovereign immunity? Second, is there a private right of action under the ADA? Third, does the ADA permit suits for, in essence, reverse age discrimination? Fourth, has Rannels met the legal requirements for filing an action under the ADA? Fifth, is the program from which he alleges his exclusion within the scope of the statute? These questions are addressed below.

As a threshold issue, though, Hargrove claims that the ruling in Rannels v. Meridian Bancorp, Inc., 718 F.Supp. 10 (E.D. Pa.), aff'd mem., 893 F.2d 1331 (3d Cir. 1989), controls here, precluding suit on the federal claims. In that action, Rannels sued the bank from which he purchased his certificate of deposit under § 1983 for a violation of the Equal Protection Clause of the Fourteenth Amendment, claiming essentially the same age-based discrimination he complains of here. Judge Van Antwerpen, in granting summary judgment for the defendant, held that the defendant was not a state actor and consequently was not subject to suit under the Equal Protection Clause. 718 F.Supp. at 12-13. In the alternative, Judge Van Antwerpen held that, even if Meridian Bancorp were a state actor, the Club 50 program would not violate the Constitution. 718 F.Supp. at 13-14.

Hargrove's arguments are not well taken. First, the holding that the Club 50 plan is constitutional does not mean that it violates no statutes. It means only that the Equal Protection Clause is not infringed upon by the plan. Consequently, Rannels would still be free to pursue his ADA claims. Second, because the constitutional holding in Rannels v. Meridian Bancorp was in the alternative, it does not satisfy the requirements for issue preclusion. The Restatement (Second) of Judgments § 27 comment i (1982) sets forth the general principle that holdings in the alternative by a trial court ought not be used for issue preclusion, a principle applied to subsequent actions between a party to the prior action and a non-party by section 29. See, e.g., Hicks v. Quaker Oats Co., 662 F.2d 1158, 1168-73 (5th Cir. Unit A Dec.1981). This is so because the findings may not be equally well considered, and because they may not all have been appealed with equal vigor (or, indeed, at all). The Restaters acknowledge that holdings in the alternative may be fully litigated and decided at trial, but they prefer the absolute rule "in the interest of predictability and simplicity." Restatement (Second) of Judgments § 27 comment i (1982). Here, I believe that Judge Van Antwerpen's alternative holding is astute and accurate. I shall, however, bow to the will of the Restaters, especially because Rannels is a pro se litigant and hence might not have prosecuted his arguments in the earlier litigation with all of the skill that an attorney could supply. I thus shall not treat the Rannels v. Meridian Bancorp holding as preclusive.

1. Sovereign Immunity

Congress may, if it chooses, abrogate Eleventh Amendment immunity by statute, at least if the statute is enacted pursuant to section 5 of the Fourteenth Amendment. Atascadero, 473 U.S. at 238, 105 S.Ct. at 3145; Fitzpatrick v. Bitzer, 427 U.S. 445, 451-52, 456, 96...

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