Walter K. GILMORE, Plaintiff-Appellant,
v.
SALT LAKE COMMUNITY ACTION PROGRAM, a Utah corporation; Hal
J. Schultz, Executive Director; Robert E. Philbrick,
President, Board of Trustees; Richard Fields, Personnel
Administrator; Fred Geter, Chairman, Personnel Committee;
Ann O'Connell, Terry Williams, John E. Delaney, Ted L.
Wilson, Jennings Phillips, Glen Greener, Pete Kutulas,
William Dunn, Ralph McClure, Jess Agraz, Don Mierva, Lucy
Otero, Glen M. Larsen, Bernice Benns, Lambertus Jensen,
Solomon Chacon, Leon Reese, Palmer Depaulis, Richard Ligh,
Victor Delgado, Norbest Martinez, Mavis Lindsay, M.C.
Eberhardt, Clement Jay, Eva Maez, Jerri Brown, Wayne
Horrocks, Hermoine Jex, constituting the Board of Trustees
of the Salt Lake Area Community Action Program, their
officers, employees, successors and assigns, Defendants-Appellees.
No. 81-1167.
United States Court of Appeals,
Tenth Circuit.
April 18, 1983.
Rehearing Denied July 27, 1983.
Kathryn Collard of Collard, Kuhnhausen, Pixton & Downes, Salt Lake City, Utah, for plaintiff-appellant.
Stephen W. Cook of Littlefield, Cook & Peterson, Salt Lake City, Utah, for defendants-appellees.
Before SETH, Chief Judge, and McWILLIAMS and McKAY, Circuit Judges.
McKAY, Circuit Judge.
Walter K. Gilmore served as Fiscal Director of the Salt Lake Community Action Program ("SLCAP") from 1974 to 1977. In 1977, the Executive Director of SLCAP reorganized the Fiscal Department, assumed the position of Fiscal Director, and terminated Mr. Gilmore's employment as a "reduction in force." Mr. Gilmore appealed the termination to the SLCAP Personnel Committee, which sustained the Executive Direсtor's decision. He then filed this suit under section 19831 against SLCAP, its officers, and its trustees. He alleged that the termination was state action that deprived him of a property interest without due process in violation of the fourteenth amendment. He also included a Bivens claim,2 alleging that the termination was federal action that deprived him of a property interest without due process in violation of the fifth amendment. The district court concluded that neither state nor federal action was present and entered judgment for the defendants. Mr. Gilmore challenges this determination on appeal. He claims that governmental action is present because SLCAP is a "community action agency."3
* The concept of the community action agency originated in Title II of the Economic Opportunity Act of 1964 (the "EOA"), 42 U.S.C. Secs. 2781-2837 (1976) (repealed 1981). Through the EOA's provisions, Congress sought to encourage the creation of community operated agencies that would coordinate federal, state, and private resources to combat povеrty at a local level.4 Congress defined the basic structure and functions of these agencies and established requisites for federal funding. See EOA Secs. 210-221, 42 U.S.C. Secs. 2790-2808. However, Congress left broad discretion to the local communities in the operation of the agencies. See H.R.Rep. No. 1458, 88th Cong., 2d Sess., reprinted in 1964 U.S.Code Cong. & Ad.News 2900, 2909.
Congress established a number of requirements of particular relevance to this appeal. It provided that "[a] community action agency shall be a State or political subdivision of a State ... or а combination of such political subdivisions, or a public or private nonprofit agency or organization which has been designated by a State ...." EOA Sec. 210(a), 42 U.S.C. Sec. 2790(a). It also specified that "[n]o political subdivision of a State shall be included in the community action program of a community action agency designated under section 2790(a) of this title if the elected or duly appointed governing officials of such political subdivision do not wish to be so included." EOA Sec. 210(e), 42 U.S.C. Sec. 2790(e).
Congress set forth specific requiremеnts for the governing board of the community action agencies, providing,
Each board to which this subsection applies shall consist of not more than fifty-one members and shall be so constituted that (1) one-third of the members of the board are elected public officials, or their representatives, except that if the number of elected officials reasonably available and willing to serve is less than one-third of the membership of the board, membership on the board of appointive public officials may be cоunted in meeting such one-third requirement ....
EOA Sec. 211(b), 42 U.S.C. Sec. 2791(b).5 Regarding the authority of the board, Congress provided,
The powers of every community action agency governing board shall include the power to appoint persons to senior staff positions, to determine major personnel, fiscal, and program policies, to approve overall program plans and priorities, and to assure compliance with conditions of and approve proposals for financial assistance under this subchapter.
EOA Sec. 211(e), 42 U.S.C. Sec. 2791(e).
SLCAP is a community action agency created pursuant to the EOA. Its avowed purpose is to "prevent and alleviate poverty and its causes." Articles of Incorporation, Record, vol. 2, at 208, 209. It is eligible for and has received federal funding under the EOA.6
SLCAP is organized as a private nonprofit corporation under the laws of Utah,7 as permitted by section 210 of the EOA. See 42 U.S.C. Sec. 2790(a). During the period of interest in this suit, its Board of Trustees consisted of thirty members, of whom eleven were apparently public officials,8 thus meeting the requirements of section 211(b) of the EOA. See 42 U.S.C. Sec. 2791(b).
The SLCAP Board of Trustеes promulgated personnel policies for SLCAP and delegated power over personnel decisions to the Executive Director, as authorized by section 211 of the EOA. See 42 U.S.C. Sec. 2791. Mr. Gilmore claims that both the policies promulgated by the Board and the specific decision by the Executive Director to terminate his employment constitute governmental action because of the extensive government involvement in creating, regulating, funding, and operating SLCAP.
II
The Constitution promotes individual liberty by forbidding the governmеnt, and the government alone, from engaging in certain activities.9 See Lugar v. Edmondson Oil Co.,
The Supreme Court has approached the concept of governmental action flexibly. It has pragmatically examined ostensibly private activities to determine if they constitute governmental action. In this regard, the Court has inquired whether a private party is performing a "public function," see Terry v. Adams,
These cases, taken together, impart at least two important principles. First, they recognize that power entrusted to the government by the people can ultimately be exercised through nominally private entities, be it through the government's delegation, compulsion, concerted action, or acquiescence. Second, they provide that when these nominally private parties exercise governmental powеr, they shall not exercise it insulated from constitutional constraints.
The problem remains in distinguishing the exercise of governmental power from benign or tangential governmental involvement. This problem is resolved by "sifting facts and weighing circumstances" in each case. Burton v. Wilmington Parking Authority,
* The appellant asserts that federal action is present in this case because of the extensive federal funding and regulation of SLCAP. The Court of Appeals for the Ninth Circuit accepted this argument in Mathis v. Opportunities Industrialization Centers, Inc.,
Last term, the Supreme Court twice concluded that governmental funding and regulation of an ostensibly private organization, in the absence of other factors, is insufficient to establish governmental action. In Rendell-Baker v. Kohn,
Federal involvement in community action agencies is аnalogous to state involvement in the private school in Rendell-Baker and the nursing homes in Blum. Indeed, in describing community action agencies and the provisions of the EOA in a different context, the Supreme Court stated,
Nothing could be plainer than the congressional intent that the local entities here in question have complete control over operations of their own programs with the Federal Government supplying financial aid, advice, and oversight only to assure that federal funds not be diverted to unauthorized purposes.
United States v. Orleans,
The appellant also claims that his termination was state action subject to the fourteenth amendment.
In Ginn v. Mathews,
The Supreme Court's decision in Lugar v. Edmondson Oil Co.,
First, the deprivation must be caused by the exercise of some right or privilege created by the state or by a rule of conduct impоsed by the state or by a person for whom the state is responsible .... Second, the party charged with the deprivation must be a person who may fairly be said to be a state actor.
Examining the second prong of the test first, we inquire whether SLCAP may fairly be considered a state actor. Lugar states that a person may be a state actor "because he is a state official, because he has acted together with or has obtained significant aid from state officials, or because his conduct is otherwise chargeable to the state."
Our conclusion that SLCAP is a state actor does not resolve the issue of whether it engaged in state action in the termination of Mr. Gilmore's employment. Lugar instructs that, in addition, we must determine whether the deprivation of federal rights that Mr. Gilmore alleges resulted from the exercise of a right, privilege, or rule of conduct having its source in state authority.
Mr. Gilmore claims that hе was deprived of his property interest in employment without due process. He claims that SLCAP personnel policies provided inadequate notice and hearing, and that in any event his termination did not comply with the policies SLCAP set forth. Our examination of the facts surrounding these claims reveals no basis for attributing the alleged deprivation to the exercise of rights, privileges, or decisions originating in the state. While we acknowledge that SLCAP is a state actor, we also recognize that not all actions by state actors are state action.13 See Lugar,
It is true that the personnel policies were formulated by a board of trustees partially composed of public officials; indeed, we considered the composition of the board highly relevant in our determination that SLCAP is a state actor. However, this characteristic of the board, standing alone, does not compel an inference that the personnel practices formulated by the board are the product of a state policy or decision. Although the public officials serve on the board as representatives of local government and as advocates of governmental objectives, there are no allegations that they represent or advocate a governmental position on рersonnel policy. Likewise, there is no indication that the Executive Director's decision to terminate Mr. Gilmore's employment in any way reflected a governmental policy or decision. Accordingly, we conclude that the appellant has failed to meet one of the two prongs of the Lugar test, and we hold that there is no state action in this case.14
III
In conclusion, we hold that SLCAP's termination of Mr. Gilmore's employment was not federal action. Federal funding and regulation of SLCAP are insufficient to establish federаl action. We also hold that the termination was not state action. While we conclude that SLCAP is a state actor, we find that this personnel decision did not result from any rule, policy, or decision attributable to the state. Accordingly, the judgment of the district court is AFFIRMED.
Notes
Section 1983 provides in part as follows:
Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.
42 U.S.C. Sec. 1983 (Supp. IV 1980). Section 1983 provides a remedy only for acts "under color" of state law. However, state action under the fourteenth amendment is a species of action under color of state law. Lugar v. Edmondson Oil Co.,
See Bivens v. Six Unknown Named Agents,
The appellees pose a threshold procedural challenge. The appellees claim that Mr. Gilmore failed to file a notice of appeal within the 30-day time limit prescribed by the federal rules. See Fed.R.App.P. 4. The district court entered a final judgment on December 30, 1980, and Mr. Gilmore served a "Motion to Vacate Judgment" on January 9, 1981. This application to the court constituted a timely motion under Federal Rules of Civil Procedure 59(e) to alter or amend the judgment. It was clearly designated a Rule 59(e) motion, and it called into question the correctness of the judgment on material questions of fact and law. See St. Paul Fire & Marine Ins. Co. v. Continental Casualty Co.,
Section 201(a) of the EOA set forth the goals of Title II as follows:
Its specific purposes are to promote, as methods of achieving a better focusing of resources on the goal of individual and family self-sufficiency--
(1) the strengthening of community capabilities for planning and coordinating Federal, State, and other assistance related to the elimination of poverty, so that this assistance, through the efforts of lоcal officials, organizations, and interested and affected citizens, can be made more responsive to local needs and conditions;
(2) the better organization of a range of services related to the needs of the poor, so that these services may be made more effective and efficient in helping families and individuals to overcome particular problems in a way that takes account of, and supports their progress in overcoming, related problems;
(3) the greater use, subjeсt to adequate evaluation, of new types of services and innovative approaches in attacking causes of poverty, so as to develop increasingly effective methods of employing available resources;
(4) the development and implementation of all programs and projects designed to serve the poor or low-income areas with the maximum feasible participation of residents of the areas and members of the groups served, so as to best stimulate and take full advantage of capabilities for self-advancement and assure that those programs and projects are otherwise meaningful to and widely utilized by their intended beneficiaries; and
(5) the broadening of the resource base of programs directed to the elimination of poverty, so as to secure, in addition to the services and assistance of public officials, private religious, charitable, and neighborhood organizations, and individual citizens, a more active role for business, labor, and professional groups able to provide employment opportunities or otherwise influence the quantity and quality of service of concern to the poor.
42 U.S.C. Sec. 2781(a).
This subsection provides that of the remaining two-thirds of the board, at least one-third shall be democratically chosen representatives of the poor in the area, and the remainder shall be officials or members of business, industry, labor, religious, welfare, education, or other major groups and interests in the community. EOA Sec. 211(b)(2) & (3), 42 U.S.C. Sec. 2791(b)(2) & (3). Members of the board, other than public officials, may serve no more than five consecutive years, or more than a total of ten years. Id. No limitation is placed on the length of service of public officials
SLCAP states that federal grants and contracts comprised sixty-five percent of its total revenues in 1977, while donations, gifts, and contributions provided twenty-eight percent, and contracts with the State of Utah provided five percent. Brief of the Appellees at 8
See Utah Code Ann. Secs. 16-6-18 to 16-6-53 (1953 & Supp.1981)
The public officials at that time included Salt Lake City Mayor Ted Wilson; City Commissioners Jennings Phillips, Jr., Glen M. Greener, and Jess A. Agraz; and County Commissioners Pete Kutulas, William E. Dunn, and Ralph McClure. Don Mierva, Lucy Otero, Robert Philbrick, and John E. Delaney are also listed as public officials in the record. See Deposition Exhibit No. 4, Record, vol. 8
Constitutional restrictions that apply to the government alone provide a double-edged protection of individual liberty. As is commonly recognized, they limit government encroachment on fundamental rights. In addition, they preserve an area of individual freedom by exempting private action from the reaсh of the Constitution's prohibitions. Lugar v. Edmondson Oil Co.,
In Polk County, the Supreme Court held that a public defender's actions, when performing a lawyer's traditional functions as counsel in a state criminal proceeding, would not support a Sec. 1983 suit. The Court concluded that the public defender's employment by the state was insufficient to meet the "under color of state law" requirement of Sec. 1983. The Court later noted in Lugar that a public defender's employment by the state, standing alone, was insufficient to meet the state action requirement of the fourteenth amendment as well. Lugar v. Edmondson Oil Co.,
In presenting his fifth amendment claim, the appellant also asserts a cause of action under a Community Service Administration "instruction" regarding personnel practices. This instruction is simply a condition to a grant of federal funds requiring that "employee grievanсes shall be given prompt and fair consideration." Record, vol. 2, at 393. It provides no independent cause of action to the appellant
The Eighth Circuit recently reached a similar conclusion in McVarish v. Mid-Nebraska Community Mental Health Center,
It may seem anomalous that not all action by state actors is state action; however, Lugar clearly contemplates this result. In discussing Polk County v. Dodson, described ante note 10, the Supreme Court stated that "although state emplоyment is generally sufficient to render the defendant a state actor under our analysis, ... it was 'peculiarly difficult' to detect any action of the State in the circumstances of that case." Lugar,
The appellant's brief can be read to suggest a Sec. 1983 claim based on the violation of a federal regulation under color of state law. The appellant has failed, however, to present this claim with sufficient clarity or support to permit this court to rule on the issue
