Shirley v. State National Bank of Connecticut

• Decision Date: 14 February 1974
• Docket Number: Docket 73-1783.,No. 222,222
• Citation: 493 F.2d 739
• Parties: Joyce SHIRLEY, Plaintiff-Appellant, v. STATE NATIONAL BANK OF CONNECTICUT, Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

493 F.2d 739 (1974)

Joyce SHIRLEY, Plaintiff-Appellant, v. STATE NATIONAL BANK OF CONNECTICUT, Defendant-Appellee.

No. 222, Docket 73-1783.

United States Court of Appeals, Second Circuit.

Argued December 10, 1973.

Decided February 14, 1974.

Neal Ossen, Hartford, Conn. (Mary R. Hennessey, Robert Dombroff, Hartford, Conn., on the brief), for plaintiff-appellant.

Francis J. McNamara, Jr., Stamford, Conn. (John F. Spindler, Robert W. Worley, Jr., Fredric H. Weisberg, and Cummings & Lockwood, Stamford, Conn., on the brief), for defendant-appellee.

Before KAUFMAN, Chief Judge, and MANSFIELD and MULLIGAN, Circuit Judges.

MULLIGAN, Circuit Judge:

This is an appeal from a judgment of the United States District Court for the District of Connecticut, Hon. Jon O. Newman, Judge, granting defendant's motion to dismiss the complaint for failure to state a claim pursuant to 42 U.S. C. § 1983 upon which relief can be granted. We agree with the district court that the alleged conduct does not constitute state action and therefore affirm.

The plaintiff, Joyce Shirley, commenced this action on September 12, 1972, seeking money damages, as well as a judgment declaring the Connecticut Retail Instalment Sales Financing Act, Conn.Gen.Stat.Rev. § 42-83 et seq., and, in particular, section 42-98, unconstitutional. Section 42-98 provides that upon default by a purchaser under a retail instalment contract, the holder of the contract may repossess the goods without the requirements of any prior hearing or of notice to the purchaser, if the contract expressly makes the default a ground for retaking the property.

The complaint alleged that on or about October 7, 1971, the plaintiff entered into a contract of conditional sale with Hart Volkswagen Corp. of West Hartford for the purchase of a Ford Thunderbird. The contract provided for 24 monthly instalment payments by the plaintiff starting on November 1, 1971. In the contract, plaintiff acknowledged receipt of an exact copy of the completed and executed instrument. The contract on its face warned the buyer not to sign if there were any blank spaces and advised the purchaser that she had the right to pay in advance the full amount due and to obtain a partial refund of the finance charge. The contract further advised that the purchaser had the right to redeem the property if it was repossessed for default, as well as the right to require, under certain conditions, a resale of the property. The contract defined defaults, which included the failure to pay any part of the purchase price when due. The plaintiff agreed to return the automobile in the event of default and further acknowledged the right of the seller in such event, with or without previous notice, to repossess the vehicle. On or about October 7, 1971, the seller assigned the conditional sales contract to the defendant bank, State National Bank of Connecticut. After seven instalments, the plaintiff defaulted and made no payments for June, July or August, 1972. On or about August 23, 1972, the defendant repossessed the automobile.

On November 30, 1972, the defendant moved to dismiss the complaint for failure to state a claim pursuant to 42 U.S. C. § 1983 upon which relief could be granted and for lack of subject matter jurisdiction under 28 U.S.C. § 1343. On April 2, 1973, Judge Newman, having heard the parties, dismissed the complaint on the former ground, finding "no action under color of state law." On April 3, 1973, the judgment appealed from was entered.

The initial, and here the key question is whether or not the defendant Bank's peaceful repossession of the plaintiff's automobile on August 23, 1972, constitutes "state action" so as to support a claim under 42 U.S.C. § 1983. Since the Civil Rights Cases, 109 U.S. 3, 3 S.Ct. 18, 27 L.Ed.2d 835 (1883), it has been recognized that the Fourteenth Amendment applies only to actions of the "States" and not to actions which are "private." The "under color of state law" provision in section 1983 is equivalent to the state action requirement of the Fourteenth Amendment. Adickes v. S. H. Kress & Co., 398 U.S. 144, 152 n. 7, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); United States v. Price, 383 U.S. 787, 794-795 n. 7, 86 S.Ct. 1152, 16 L.Ed.2d 267 (1966).

The existence of state action appears significantly in prejudgment seizures where a state official participates in the action which is the subject of complaint. Thus, in Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct. 1820, 23 L. Ed.2d 349 (1969), a court clerk's ex parte issuance of a summons, pursuant to a Wisconsin statute authorizing prejudgment garnishment of wages, provided a sufficient intrusion of the State to constitute state action. In Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L. Ed.2d 556 (1972), state statutes authorized creditors to initiate replevin procedures by summary writs issued by state courts and executed by state officials. The seizure complained of here, on the other hand, was by a private individual without the intrusion of state process or state officials.

Nevertheless, it is established that a private person may act under color of law. "`To act "under color" of law does not require that the accused be an officer of the State. It is enough that he is a willful participant in joint activity with the State or its agents.' United States v. Price, 383 U.S. 787, 794, 86 S.Ct. 1152, 16 L.Ed.2d 267 (1966)." Adickes v. S. H. Kress & Co., supra 398 U.S. at 152, 90 S.Ct. at 1606.

Has there been any joint activity between the State of Connecticut and the Bank in the repossession of the plaintiff's car? When the plaintiff purchased the Thunderbird on credit, she agreed to make monthly payments over a two-year period and on default agreed that the seller "may, with or without legal process, and with or without previous notice or demand for performance, enter any premises wherein the chattels may be, and take possession of the same . . . ." The plaintiff agreed in advance to the seizure of her vehicle. There was therefore no conspiracy between the defendant and the State of Connecticut, but rather a contract between the plaintiff and the defendant.

How then has the State of Connecticut become sufficiently implicated so that the seizure can be interpreted as state action? Plaintiff argues that Conn.Gen.Stat.Rev. § 42-98(a)¹ authorizes the retaking. But if the peaceful repossession of the chattel authorized by the contract is valid in any event, how does the statute constitute a state involvement? The first inquiry must be, whether, absent a state statute, a Connecticut creditor would have the self-help remedy complained of. There is no dispute but that under the common law of Connecticut, the right of peaceful repossession without a hearing was recognized.² See Sager v. Schmidt, 98 Conn. 736, 120 A. 504 (1923); Crompton v. Beach, 62 Conn. 25, 25 A. 446 (1892); Swift's Digest of Laws of Connecticut 376-77, 468-69 (Dutton & Cowdrey Rev.1864). The statute in Connecticut, therefore, does not create any right otherwise unavailable. But the appellant argues that there is more than codification here; Connecticut now has a detailed statutory scheme—the Retail Instalment Sales Financing Act—which displays a strong concern for consumer protection.³ See Keyes v. Brown, 155 Conn. 469, 232 A.2d 486 (1967).

While Connecticut legislation unquestionably exists, we do not believe that this in any way constitutes such a significant state involvement as to constitute state action. The injury complained of here is the seizure of the plaintiff's car. Paragraph 5 of the complaint, entitled "Statement of Claim," alleges that the Act, "§ 42-83 et seq., and in particular § 42-98, enables creditors and their agents to obtain immediate possession of goods from those lawfully in possession thereof, without the requirement of any prior hearing or of notice to those in said lawful possession." But the statute did not authorize the seizure, as we have pointed out. Actually, the statute made the seizure more difficult. Since the passage of the Act, seizure can only be had if the seller has accorded the purchaser all of the protection set forth in the statute.⁴ Thus, the State does not encourage seizure, nor does it in any way aid or abet the seller. The partnership, if any, is with the purchaser and not the defendant. See Adickes v. S. H. Kress & Co., supra.

We see nothing in Coleman v. Wagner College, 429 F.2d 1120 (2d Cir. 1970), relied upon by appellant, contrary to our position here. In Coleman, the State of New York had moved into the field of private college disciplinary procedures and enacted legislation, one purpose of which was "to deter student disturbances by the clear announcement of rules of conduct and of the penalties for disobedience." 429 F.2d at 1126 (Friendly, J., concurring). It was the imposition of the disciplinary policy by the State which created the mischief complained of and allegedly constituted state action (a proposition not determined in that case). But here the State is not a "joint participant in the challenged activity." Burton v. Wilmington Parking Authority, 365 U.S. 715, 725, 81 S.Ct. 856, 862, 6 L.Ed.2d 45 (1961). The state enactment was amelioratory not regressive; it did not "move in" on the plaintiff or other buyers, but rather on the instalment sellers.⁵ See Fairfield Credit Corp. v. Donnelly, 158 Conn. 543, 264 A.2d 547 (1969), striking down waiver of defense clauses in consumer goods conditional sales contracts.

We are reduced then to the proposition that the mere fact that the State has legislated in the area of peaceful repossession constitutes sufficient participation to be appropriately denominated "state action." As Chief Judge Kaufman pointed out in Male v. Crossroads Associates, 469 F.2d 616, 621 (2d Cir. 1972): "Although the mere existence of a state or federal regulatory scheme standing alone with nothing more is not sufficient to bring those regulated within the scope of...