We granted plaintiffs’ application for an interlocutory appeal from the denial of their application for a preliminary injunction to enjoin defendants from discharging plaintiffs’ daughter from a private group home for the developmentally disabled. Plaintiffs also filed a general notice of appeal believing the order practically disposed of the merits of their cause. We consolidate the appeals and treat this as a general appeal for reasons discussed herein.
On appeal plaintiffs argue the trial court abused its discretion by denying their request for a preliminary injunction after finding no irreparable harm to plaintiffs and finding that plaintiffs’ claims are not actionable under the Civil Rights Act of 1871, 42 U.S.C.A. § 1983 (West 1981), because no state action was present. On appeal, we review the state action question as a pure ruling of law. Because we hold that a private entity that is under state contract to provide services to mentally disabled persons is a state actor when it makes decisions regarding the treatment and discharge of those persons under its care, we vacate the order denying the requested injunctive relief, reinstate the Section 1983 action and remand for rehearing in light of the legal conclusions expressed in this opinion.
I. FACTS
Plaintiffs’ developmentally disabled daughter, Joanne, began living at a group home owned by defendant Albuquerque Association for Retarded Citizens (AARC) in January 1984. The home is regulated by the Department of Health and Environment under the Developmental Disabilities Community Services Act, NMSA 1978, §§ 28-16-1 to 28-16-12 (Repl.Pamp.1991) (hereinafter “the Act”), and services are provided pursuant to the Mental Health and Developmental Disabilities Code, NMSA 1978, §§ 43-1-1 to 43-1-25 (Repl.Pamp.1989) (hereinafter “the Code”).
On March 24, 1986, Dr. Follingstad, Joanne’s treating physician, who had become increasingly worried about his patient’s uncontrollable anxieties and excitability and resultant high blood pressure during the previous few years, concluded that he was unable to control her blood pressure in the group home environment and recommended that she be removed. On March 26,1987, plaintiffs were asked to attend a meeting held the same day. At that meeting, AARC informed them that Joanne would be discharged from the home on April 1, 1987.
Plaintiffs did not seek administrative review of the decision. They proceeded directly to district court and, on March 30, 1987, filed a complaint seeking injunctive relief and damages. Subsequently, while AARC was under a temporary restraining order requiring it to not discharge Joanne, plaintiffs filed an amended complaint seeking preliminary and permanent injunctions as well as damages. On December 2,1990, the district court denied all requested relief by order providing in pertinent part:
3. The Court’s decision as set out herein practically disposes of the merits of this action, or in the alternative this Order involves a controlling question of law, specifically on the issue of state action, as to which there is substantial ground for difference of opinion, and an immediate appeal from the Order may materially advance the ultimate termination of the litigation, and there is no just reason for delay.
4. An appeal of right lies from this Order because as a practical matter it deposes [sic] of the merits, or in the alternative if it does not practically depose [sic] of the merits this Order involves a controlling question of law, specifically the issue of the existence of state action, as to which there is substantial ground for difference of opinion, and an immediateappeal from the Order may materially advance the ultimate termination of the litigation, and there is no just reason for delay.
Joanne continues to reside in the home, the discharge having been forestalled by a temporary restraining order and a stay pending appeal.
II. DISCUSSION
The legal issue we address is whether state action exists sufficient for Plaintiffs to maintain a cause of action under Section 1983.
Plaintiffs argue Joanne was impermissibly discharged because she was denied predeprivation procedural due process. Plaintiffs’ assertion rests on the grounds that Joanne has a protected liberty interest in retaining her group home placement and that AARC acts under color of state law, thereby making all procedural due process requirements guaranteed by the 14th Amendment to the United States Constitution binding. See U.S. Const. Amend. XIV (West 1987). Plaintiffs’ position was supported by two amicus curiae briefs filed with this court by New Mexico Parents Reaching Out and New Mexico Protection and Advocacy System.
Defendants argue (1) AARC does not act under color of state law, (2) the in-house discharge procedures followed by AARC provide adequate procedural due process, (3) substantial evidence supported the district court ruling, (4) the plaintiffs failed to exhaust their administrative remedies, and (5) a contract, signed at the time of Joanne’s admission to the group home, controlled the rights and responsibilities of the parties in the event of a proposed discharge and all the contract’s requirements were met. Because we find the availability of a Section 1983 action to enforce the fundamental civil rights of perhaps our most-fragile class of citizens to be of the utmost public interest, this court properly has jurisdiction over all of the issues relevant to the propriety of a Section 1983 action. SCRA 1986,12-216(B); see also Newsom v. Norris,
A. Mootness
As a preliminary matter, defendants suggest that the trial court’s decision may be moot because Joanne has retained her placement in the group home and plaintiffs were provided with an opportunity to present evidence on the merits in the district court. We understand defendants to be arguing that the appeal arising out of the denial of the motion for preliminary and permanent injunction is necessarily moot. We disagree. In Carey v. Piphus,
Moreover, defendants do not press the matter strongly and concede that the controlling issue needs resolution for guidance to “agencies such as [AARC].” We agree with this sentiment. See In re Pernell,
B. Standards for Issuance of a Preliminary Injunction
In the absence of New Mexico authority concerning the factors a trial court
The trial court denied plaintiffs’ motion for a preliminary injunction, apparently on the grounds that plaintiffs had not established any possibility of irreparable harm and because they had not demonstrated a substantial likelihood of success on the merits. The lack of irreparable injury finding was apparently based on medical evidence that Joanne should be discharged for health reasons and an absence of evidence that she was deprived of a constitutionally protected right. However, by concluding that AARC did not act under color of state law, the trial court foreclosed the possibility of finding irreparable injury in the form of a constitutionally impermissible deprivation of due process. See Henry v. Green-ville Airport Comm’n,
C. Section 1983 Action in State Court
Plaintiffs’ amended complaint alleged a Section 1983 action for impermissible deprivation of a substantive liberty interest without appropriate procedural due process.
1
The parties agree, and we assume for the purposes of this appeal, that AARC is a private entity. Section 43-1-9 (providing that no private contractor providing services under the Code is an entity of state government); accord Armijo v. Dep’t of Health and Env’t,
To recover under Section 1983, a plaintiff must establish two elements: (1) that the defendants acted under color of state law, and (2) that defendants’ action caused them to be deprived of a right secured by the Federal Constitution or the laws of the United States Lugar v. Edmundsun Oil Co.,
1. State Action
To constitute state action, “the deprivation must be caused by the exercise of some right or privilege created by the State ... or by a person for whom the State is responsible,” and “the party charged with the deprivation must be a person who may fairly be said to be a state actor.” “[S]tate employment is generally sufficient to render the defendant a state actor.” It is firmly established that a defendant in a § 1983 suit acts under color of state law when he abuses the position given to him by the State.
West v. Atkins,
As an initial matter, defendants correctly assert that action undertaken by a private entity is not state action and does not implicate a Section 1983 claim. See § 1983; Shelley v. Kraemer,
Accordingly, the United States Supreme Court has consistently found that a private entity may be characterized as a state actor for purposes of Fourteenth Amendment
Private parties are state actors,
[I]f the State creates the legal framework governing the conduct, if it delegates its authority to the private actor, or sometimes if it knowingly accepts the benefits derived from unconstitutional behavior. Thus in the usual case we ask whether the State provided a mantle of authority that enhanced the power of the harm causing individual.
National Collegiate Athletic Ass’n v. Tarkanian,
It is, of course, true that a State may delegate authority to a private party and thereby make that party a state actor. Thus, we recently held that a private physician who had contracted with a state prison to attend to the inmates’ medical needs was a state actor.
Id. at 195,
To demonstrate the required nexus in this case, plaintiffs alleged, “The state has clearly delegated the authority to provide this care of these vulnerable citizens to private entities through contracts, statutes, regulations, and the expenditure of significant sums of public monies.” AARC has defended on the premise that actions undertaken pursuant to the “delegated authority” by a private entity under contract to the state to provide services such as AARC provides are not state action. 3 We agree with Plaintiffs and disagree with AARC.
The required nexus is best exemplified by the trilateral relationship between the state, the private contractor, and the client established under the Act and the Code. See West v. Atkins,
New Mexico does not distinguish between clients receiving services at private or public facilities and accepts the ultimate
Each resident client receiving developmental disabilities services shall have the right to prompt habilitation services pursuant to an individualized habilitation plan and consistent with the least drastic means principle.
§ 43-1-8 (emphasis added.) Such services are provided directly by the state at state-operated facilities. See N.M. Const, art. XIV; § 23-5-1. Community-based services •are provided through contracts with private “contractors capable of providing habilitation and other needed services.” § 28-16-6. Contract services must be “consistent with and in furtherance of the objectives of the state plan.” Id. The state plan requires “all major state agencies providing or funding services ” to submit plans to the Developmental Disabilities Planning Council. § 28-16-5 (emphasis added). Submissions are made to ensure that each agency shall:
provide for such services as are required within the scope of each respective agency’s applicable federal and state laws and regulations to achieve the goal of facilitating clients to maximize their potential and live as independently as possible in their own homes and communities and to achieve productive lives through involvement in integrated service settings.
§ 28-16-5. Finally, the state sets standards for client services without regard to whether it funds or provides the services. “The department shall promulgate regulations as are appropriate to ensure compliance with recognized minimum professional standards for services and the constitutional and statutory rights of clients. Contractors providing services shall comply with these regulations and standards as a condition of payment and continuation of contract.” § 28-16-7. Accordingly, it is clear from the above analysis that the state sets regulations for state agencies (services it provides) and statutorily binds all private contractors (services it funds) to the same standards. 4
Even without this broad statutory language indicating that, like state agencies making discharge decisions, private contractors providing state-funded services are state actors when making discharge decisions, Section 28-16-8 provides that “the department shall establish minimum requirements for admission, discharge, and withdrawal of clients for services funded by the department.” Thus the state has reserved to itself exclusive authority to control the contours of the very action at issue in this case, namely discharge. A discharge decision, whether made directly by the state or by a private contractor providing services funded by the state, is subject to all binding state statutory sections and regulations and is among the most-regulated of all treatment decisions made by the private contractor. See § 28-16-9 (each agency has responsibility and authority to ensure compliance with its regulations for services it provides or funds).
It is the purpose of the legislature in enacting the Developmental Disabilities Community Services Act [28-16-1 to 28-16-12 NMSA 1978] to authorize the health and environment department to plan and coordinate developmental disabilities community services in the state and to declare that priority shall be given to the development and implementation of community-based services for developmentally disabled minors and adults, which will enable and encourage such individuals to achieve their greatest potential for independent and productive living, which will enable them to live in their own homes and apartments or in facilities located within their own communities and which will assist clients to be diverted or be removed from unnecessary institutional placements.
From this statement of intent it is clear that the state coordinates all community service delivery with the intention of avoiding institutional placements and of encouraging community-based services. Accord § 23-7-1. Conversely, we note that there is no expression of intent that the statutory and constitutional rights of clients receiving the community-based services should receive less protection than those in state-operated institutions. The legislature intended that community-based services be provided, and in doing so, did not intend to insulate private service providers from state-action scrutiny. Accord § 28-16-11.
To avoid the procedural constraints imposed by the Fourteenth Amendment defendants rely primarily on the cases of Blum v. Yaretsky,
In Blum, the plaintiffs objected to patient-transfer decisions initiated without certain procedural safeguards. The United States Supreme Court addressed whether private nursing homes were state actors when determining whether or not patients were receiving the medically necessary level of care. In Blum, the consequence of a determination that a patient was receiving more care than medically necessary was that the state refused to pay for the higher level of care and mandated that the patient be transferred to a lower-care level.
Finding that the challenged decision was not among those controlled by the state’s regulatory oversight, the Court rejected the state-action assertion. The Court focused on the “gravamen of the plaintiff’s complaint” to determine exactly what conduct was challenged and the evidence in the record demonstrating that the challenged conduct was compelled by the state. Id. at 1003,
In Rendell-Baker, the United States Supreme Court considered whether an employment decision, apparently unrelated to
Here, the decisions to discharge the petitioners were not compelled or even influenced by any state regulation. Indeed, in contrast to the extensive regulation of the school generally, the various regulators showed relatively little interest in the school's personnel matters.
Id. at 841,
The Court also rejected the argument that the school was performing a public function, and thus was a state actor, because there was no indication the state legislature intended to make the education of maladjusted high-school students the exclusive province of the state. Id. at 842,
We consider Rendell-Baker distinguishable from the situation in the appeal before us. We are dealing with the decision by a private contractor providing state services to discharge a patient entitled to receive those services, a situation that would be more analogous to a decision by the private school in Rendell-Baker to discharge a student, rather than an employee. In similar situations, physicians providing medical services pursuant to contracts with the state have been found to be state actors when making decisions regarding patients. West v. Atkins.
Moreover, in contrast to the finding in Yaretsky that the challenged decision was essentially a medical one made according to medical decision-making parameters, the statutory language used by our legislature relating to discharge decisions stands in stark contrast to those sections where the legislature intended that a physician could be the sole decision-maker. See § 43-1-10(A)(4) (delegation of police power to licensed physician in emergency); § 43-1-10(E) (same); § 43-l-ll(A) (delegation of parens patriae authority to licensed physicians to seek commitment for treatment and evaluation); § 43-l-12(A) (physician may seek extended commitment); § 43-1-14(C) (physician may seek involuntary commitment); cf. Armijo v. Dep’t of Health and Env’t (for TCA purposes challenged decision medical in nature.).
Moreover, careful analysis of these two cases indicates that the funding of a private entity to perform under public contract duties statutorily imposed on the state by act of the legislature may be a sufficient indicator of state involvement to implicate the state-action doctrine where the contours of duties attendant to the receipt of such funds affect the decision-making process being challenged to the extent that the decision arises out of the attendant constraints and can therefore be said to be fairly attributable to the state. See § 28-16-7 (standards for services); see also West v. Atkins (private physician under contract to the state to provide health care services to prison inmates acts under color of state law while treating inmates because his agenda is the state’s agenda); South Dakota v. Dole,
In sum, if the state provides developmental disability services by delegating those responsibilities to a private entity, while retaining the right to determine discharge terms and the responsibility to protect patients’ constitutional and statutory rights, a sufficient nexus between the private entity’s decision and the state has been demonstrated so that the private entity’s discharge decision will be considered state action for purposes of maintaining a, Section 1983 suit. See Carnes v. Parker,
D. Section 1985 Action
Plaintiffs’ claim in count IV alleging deprivation of equal protection under 42 U.S.C.A. Section 1985(3) (West 1981) requires a showing of state-action which is the result of a racial or other class-based invidious and discriminatory purpose. See Williams v. St. Joseph Hosp.,
E. Procedural Due Process Requirements in This Case
The record reveals plaintiffs had at a maximum, four days to respond to the discharge decision. Because the trial court concluded AARC did not act under color of state law, it is unclear if the court considered the application of cases holding state actors must provide some meaningful pretermination due process prior to depriving a person of any significant protected interest. See Zinermon v. Burch,
Moreover, AARC admitted in its brief filed with this court that by the time of the March 26, 1987 meeting, AARC had already determined that discharge was necessary. Under these circumstances, with inadequate notice and apparent inadequate opportunity to participate meaningfully in the decision to discharge, the meeting could not satisfy even a minimal pretermination due process requirement. Such predetermination under these facts is inconsistent with minimal federal due process as well as with the Act and the Code’s requirements.
At the time of Joanne’s admission to AARC’s residential program, plaintiffs entered into a “Consent Agreement” (contract) with AARC. Defendants have argued on appeal that the contract constitutes written consent to Joanne’s discharge and actual notice of the discharge. This contention is without merit.
The contract contains provisions permitting discharge at the request of the guardian, upon proper notice and a determination, presumably by AARC, that the discharge does not violate any legal or civil right possessed by the client. AARC may seek to discharge a residential client upon appropriate notice and a determination by AARC that continued residence would not be in the best interest of the client or other residents of the facility. The contract also provides that AARC may discharge a residential client without notice if a determination is made that “eminent [sic] harm could result to the resident or other residents” if discharge is not immediately sought.
Of these provisions we merely note that, having determined a constitutionally protected interest exists, the contract terms may not operate so as to frustrate an assertion of rights arising out of federal due process protections for the underlying right. See Perry v. Sindermann,
III. CONCLUSION
Because of the trial court’s greater familiarity with the record and the controlling regulations we think it appropriate that the trial court determine in the first instance the application of the legal opinions expressed herein to the facts of this case. Accordingly, we vacate the order denying the application for preliminary injunction. We reinstate the Section 1983 action and order a stay of any discharge procedures until such time as there is a review on the merits of plaintiffs’ Section 1983 action consistent with this opinion.
IT IS SO ORDERED.
Notes
. Plaintiffs have alleged that a substantive, protected liberty interest arises from the explicit and mandatory character of the language used by the New Mexico Legislature in the Code and in the Act. Plaintiffs predicate their denial of procedural due process claim on state statutory language, as well as on regulatory language issued by both the state and federal governments relating to the termination of services for residential clients. Plaintiffs have also argued the discharge was in contravention of an admission contract containing specific, mandatory discharge procedures. Plaintiffs also alleged in their amended complaint that the discharge violated rights secured by the New Mexico Constitution. However, the state constitutional argument appears to have been abandoned on appeal.
. The assumption that Joanne has a substantive liberty interest is well grounded in the provisions of the Act and the Code. First, Section 43-1-8 contains plain and unambiguous language indicating a statutory right to appropriate habilitation services pursuant to an individualized treatment plan and consistent with the least drastic means principle exists. Section 43-1-9 requires that each residential client have an individualized habilitation plan. The statute requires that the plan must include input from the client, to the maximum possible extent. § 43-1 — 9(B); see also § 43-l-9(C)(l) (requiring written statement of client’s specific needs); § 43-1-9(C)(3) (written timetable for habilitation goal attainment); § 43-l-9(C)(4) (requiring statements of goals, rationales and services necessary to achieve habilitation goals); § 43-1-9(C)(6) (criteria for discharge and projected discharge date). Finally, Section 43-l-9(E) allows the habilitation plan to be altered only after notice and comment to the client and the client’s guardian. The individualized nature of the treatment plan, the personal timeline that controls habilitation service delivery, the inclusion of discharge as an element of habilitation, and the notice-and-comment requirements prior to substantial alteration indicate legislative intent to create a protected interest in receiving state-funded habilitation services. This court has previously made clear that state law can create a substantive right entitled to federal protection. See Garcia v. Las Vegas Med. Ctr.,
. It is well settled that once a state has voluntarily assumed a duty to provide an entitlement such as habilitation services that the state has "considerable discretion” to set the contours of its responsibility. Romeo v. Youngberg,
It is also well settled that if Joanne were admitted to a state-operated hospital, actions and decisions undertaken by employees relating to her habilitation would be state action sufficient to state a claim under § 1983. See West v. Atkins; see also N.M. Const. Art. XIV; NMSA 1978, Chap. 23 (Repl.Pamp.1987 & Cum.Supp. 1991); Lombard v. Eunice Kennedy Shriver Ctr. for Mental Retardation, Inc.,
. Several other sections of the Code support our conclusion that the legislature intended that there be no material distinction in the scope of state oversight between state-operated facilities and state-funded facilities when providing services. See, e.g., § 43-l-3(B) (definition of client includes voluntary admissions, guardian admissions or court-ordered admission to developmentally disabled program); § 43-1-3(1) (definition of evaluation facility includes state-funded and state-operated facilities); § 43-1-4 (legal representation under Code for all clients); § 43-1-6 (personal rights); § 43-1-7 (right to treatment); § 43-1-8 (right to habilitation); § 43-1-9 (individualized habilitation or treatment plan); § 43-1-10 (emergency police power authority to detain without court order given to private “evaluation facility” upon certification by licensed physician); § 43-1-15 (emergency administration of psychotropic drugs permissible upon certification of licensed physician); § 43-1-23 (client right to seek redress under Tort Claims Act). These statutory provisions cover private facilities delivering state-funded services.