Phillips v. Youth Development Program, Inc. , 390 Mass. 652 ( 1983 )

Wilkins, J.

In October, 1979, the defendant Youth Development Program, Inc. (YDP), discharged the plaintiff as its supervisor of supportive services in circumstances that would entitle her to relief under 42 U.S.C. § 1983 (1970), if YDP’s action in discharging her was “State action” for the purposes of § 1983 and the Fourteenth Amendment to the United States Constitution. The trial judge concluded that YDP engaged in State action in firing the plaintiff. He ordered her to be reinstated with a full restoration of rights, including back pay, and awarded her attorney’s fees and $4,000 in compensatory damages. On appeal, by a divided (two to one) vote, the Appeals Court reversed the judgment for the plaintiff and ordered dismissal of the action. Phillips v. Youth Dev. Program, Inc., 14 Mass. App. Ct. 626 (1982).

The opinions in the Appeals Court — there were three — considered principles the Supreme Court of the United States had recently stated in three opinions issued on the same day. See Blum v. Yaretsky, 457 U.S. 991 (1982); Lugar v. Edmondson Oil Co., 457 U.S. 922 (1982); Rendell-Baker v. Kohn, 457 U.S. 830 (1982). The three Supreme Court opinions, each authored by a different Justice, state tests for the determination of State action that may not be entirely consistent. Nevertheless, based on the reasoning of the Supreme Court collectively expressed in these opinions, we conclude, in agreement with the Appeals Court, that the act of discharging the plaintiff is not State action for the purpose of § 1983 or of the Fourteenth Amendment. We reject the plaintiffs claim for relief on common law contract grounds and decline to pass on her claim for relief under the Constitution of the Commonwealth because the claim is raised too late.

In claiming that her discharge by YDP was State action, the plaintiff relies on the relationship of YDP with the Springfield Juvenile Court. There is no doubt that YDP, a private corporation, had a close association with that court. In fact the Juvenile Court was YDP’s sole client. Three of YDP’s nine directors were employees of that court. YDP’s by-laws provided that the “Intensive Juvenile Probation Program” was subject “in all phases” to the final approval of the presiding judge of the Juvenile Court. Probation officers of the Juvenile Court referred juveniles to YDP and recommended the services they wished YDP to provide. YDP’s program was not, however, required by statute, and, as far as appears in the record, no statute or regulation required the Commonwealth to provide services of the type furnished by YDP to the juveniles. Prior to July 1, 1979, YDP was funded solely by Hampden county pursuant to contracts between the county commissioners and YDP. For the fiscal year commencing July 1, 1979, the Commonwealth provided funding pursuant to a contract between the administrative office of the Trial Court and YDP.¹ All salaries of YDP employees were paid from the office of the State Treasurer. Nothing in the contract, however, gave any representative of the Commonwealth the right to hire or fire YDP personnel. There was no evidence that the Juvenile Court judge, or any employee of the State acting as such participated in the decision to discharge the plaintiff.

1. If a nominally private entity is performing a function that is “traditionally the exclusive prerogative of the State,” then all the acts of that entity are State action. Jackson v. Metropolitan Edison Co., 419 U.S. 345, 353 (1974). See Blum v. Yaretsky, supra at 1011; Rendell-Baker v. Kohn, supra at 842. The evidence would not support a conclusion that YDP was performing a traditional, exclusive function of the Commonwealth. The Supreme Court has taken a narrow view of what functions are traditionally reserved exclusively to the State.² YDP did not displace the role of the Juvenile Court probation department. Rather, it engaged in innovative counseling, recreational and educational programs not normally associated with traditional probation.

The decision to discharge the plaintiff could have been State action, even if YDP was not carrying out a traditionally exclusive prerogative of the State, if the discharge was required or substantially influenced by State policy or regulation or by YDP’s contract with the State. The Appeals Court was correct in noting that the fact that YDP received referrals only from the court and received 100 % of its financing from the State did not make the discharge State action. 14 Mass. App. Ct. at 637. Nor did the Juvenile Court’s regulation of YDP warrant a conclusion that State action was involved in the discharge. Id. at 637-638.

The focus of an inquiry into State action must be on the Commonwealth’s involvement in YDP’s decision to discharge the plaintiff, and not on the over-all relationship of YDP and the Juvenile Court. There was no evidence that the Juvenile Court judge passed on this or any other individual discharge decision. The plaintiff argues that a provision in the by-laws of YDP, set forth in the Appeals Court opinion, id. at 638, required the Juvenile Court judge’s approval of all termination decisions. Even if we were to accept that construction of the by-law provision, the plaintiff has failed to show that the judge’s possible involvement rose above the level of “[mjere approval of or acquiescence in the initiatives of a private party . . . .” Blum v. Yaretsky, supra at 1004.

The decision to discharge the plaintiff was “not compelled or even influenced by any state regulation.” Rendell-Baker v. Kohn, supra at 841. Similarly, the Appeals Court properly concluded that there was no mutually beneficial or “symbiotic” relationship between YDP and the Commonwealth warranting the conclusion that the Commonwealth was a joint participant or profited in any way from the challenged activity. 14 Mass. App. Ct. at 639.

The view taken by the Appeals Court, which we endorse, is consistent with the reasoning of recent opinions of various Federal Circuit Courts of Appeals. Unless the private entity is performing a traditional and exclusive State function, the focus must be on whether government action was involvéd in the particular conduct that is challenged as wrongful. See Gilmore v. Salt Lake Community Action Program, 710 F.2d 632, 638-639 (10th Cir. 1983) (no State action in the discharge of plaintiff from a federally funded community action program, some of whose trustees were public officials); Gomez v. North Dakota Rural Dev. Corp., 704 F.2d 1056, 1058-1059 (8th Cir. 1983) (no Federal government action and hence no Fifth Amendment violation in the discharge of the plaintiff by a nonprofit corporation that had a contract with the United States Department of Labor requiring departmental approval of hiring policies); McVarish v. Mid-Nebraska Community Mental Health Center, 696 F.2d 69, 71 (8th Cir. 1982) (State action involved where plaintiff was discharged by vote of governing board, a majority of whose members were appointed by governmental units for the purpose of permitting them to supervise and allocate resources efficiently); Milonas v. Williams, 691 F.2d 931, 939 (10th Cir.), cert. denied, 460 U.S. 1069 (1982) (private residential school in which some youths were involuntarily placed by Juvenile Court authorities for rehabilitation engages in State action in its treatment of students). Only when government action is involved can it “be said that the State is responsible for the specific conduct of which the plaintiff complains” (emphasis in original). Blum v. Yaretsky, supra at 1004. Implicit in the requirement that consideration be given to the extent of the State’s involvement in the particular act alleged to be wrongful is the possibility that an entity may be engaged in State action for one purpose and not for another. See Milonas v. Williams, supra at 940; Rendell-Baker v. Kohn, 641 F.2d 14, 26 (1st Cir. 1981), aff’d, 457 U.S. 830 (1982). We thus agree with the Appeals Court that the evidence would not warrant a conclusion that the defendant’s discharge was State action entitling her to relief under 42 U.S.C. § 1983 (1970).

2. We also agree with the Appeals Court that the evidence would not warrant a decision in favor of the plaintiff on her claim that she was discharged in violation of the imposed obligation of good faith and fair dealing inherent in her employment arrangement. See 14 Mass. App. Ct. at 639. There is no evidence that she lost reasonably ascertainable future compensation based on past services, that YDP received any financial benefit from her discharge, or that her discharge without cause was for a reason that, as a matter of public policy should be rejected as adequate ground for her discharge. See Gram v. Libery Mut. Ins. Co., 384 Mass. 659, 667-669, 672 (1981); Fortune v. National Cash Register Co., 373 Mass. 96, 104-106 (1977).

3. In this court for the first time, in a supplemental brief filed after this court granted further appellate review, the plaintiff argues that we should adopt a broader definition of State action to be applied under the Constitution of the Commonwealth. The record and briefs demonstrate that the plaintiff did not argue to the trial judge, to the Appeals Court, or to this court in her application for further appellate review that State action for State constitutional purposes may be different from State action for Federal constitutional purposes.

General Laws c. 12, §§ 11H, 11I, inserted by St. 1979, c. 801, § 1 (the State analogues to 42 U.S.C. §§ 1983, 1988 [1970]), were not in effect when the plaintiff was discharged.³ We would grant, however, that a person whose constitutional rights have been interfered with may be entitled to judicial relief even in the absence of a statute providing a procedural vehicle for obtaining relief.⁴

Although we have held that at least one constitutional right (ballot access) will be protected even in the absence of State action (see Batchelder v. Allied Stores Int’l, Inc., 388 Mass. 83, 89-90 [1983]), the concept of due process of law (“the law of the land” — art. 12 of the Massachusetts Declaration of Rights) inherently is concerned with governmental action.⁵ There is little doubt that this court may fashion its own concepts of due process of law under the Constitution of the Commonwealth and apply them within the permissible limits of the Constitution of the United States. See Moe v. Secretary of Admin. & Fin., 382 Mass. 629, 649 (1981). Thus, in determining what is State action for State due process of law purposes, we need not define State action as the Supreme Court of the United States has defined State action for Fourteenth Amendment and § 1983 purposes.⁶

This said, however, we decline the belated invitation to define State action in this case for due process purposes under the State Constitution. This important constitutional question should not be resolved on an argument raised as an afterthought and not fully briefed on both sides. Although it is within our power to do so, we would not, barring exceptional circumstances, expect to address an issue not already raised in a case at the time we grant further appellate review. See Albert v. Municipal Court of the City of Boston, 388 Mass. 491, 494 (1983).

4. The judgment of the Superior Court is reversed and a new judgment shall be entered dismissing the action.

So ordered.

1 The contract effective July 1,1979, was not executed until October 11, 1979. At the time of the decision to discharge the plaintiff there was no agreement in effect. YDP makes no particular point of this fact.

2 Activities said to have this status are running a company town (Marsh v. Alabama, 326 U.S. 501 [1946]); elections (Terry v. Adams, 345 U.S. 461 [1953]); and perhaps the exercise of eminent domain (Jackson v. Metropolitan Edison Co., 419 U.S. 345, 352-353 [1974]). Activities excluded from this category include nursing care (Blum v. Yaretsky, supra); education (Rendell-Baker v. Kohn, supra); resolution of private disputes (Flagg Bros. v. Brooks, 436 U.S. 149,161 [1978]); and providing utility service (Jackson v. Metropolitan Edison Co., supra at 358-359).

3 It should be noted that, because of language differences, the scope of § 1983 and the scope of §§ 11H and 11I are not identical.

4 It seems uncontroverted that 42 U.S.C. § 1983 (1970) does not provide a statutory vehicle for the enforcement of State constitutional rights. See Parratt v. Taylor, 451 U.S. 527, 535 (1981); Paul v. Davis, 424 U.S. 693, 700-701 (1976). There was, therefore, no statutory vehicle available, at the time of her discharge, pursuant to which the plaintiff could seek redress for the alleged violation of her State constitutional rights.

The absence of a statutory remedy for the violation of constitutional rights cannot absolutely and in all cases bar judicial protection of those rights. The Supreme Court of the United States has recognized this principle and, in the absence of special factors or an explicit alternative statutory remedy, has allowed direct actions to protect rights under the Federal Constitution. See Carlson v. Green, 446 U.S. 14, 18-19 (1980); Davis v. Passman, 442 U.S. 228, 242-243 (1979); Bivens v. Six Unknown Named Agents of the Fed. Bureau of Narcotics, 403 U.S. 388, 396-397 (1971).

The Supreme Court of New Jersey has recognized that, although it is desirable, there is no need for “legislative implementation to afford an appropriate remedy to redress a violation of [explicit State constitutional] rights.” Cooper v. Nutley Sun Printing Co., 36 N.J. 189, 197 (1961). See Peper v. Princeton Univ. Bd. of Trustees, 77 N.J. 55, 76-77 (1978). The Supreme Court of California reached the same conclusion where the plaintiffs had no administrative (or other) remedy available. Gay Law Students Ass’n v. Pacific Tel. & Tel. Co., 24 Cal. 3d 458, 475 & n.10 (1979). On the other hand, the Supreme Court of Hawaii would not allow a direct right of action for money damages against the State itself based on a claimed violation of the State Constitution. Figueroa v. State, 61 Hawaii 369, 381-382 (1979). The Supreme Court of Alaska, citing “special factors counselling hesitation” (Bivens v. Six Unknown Named Agents of the Fed. Bureau of Narcotics, supra at 396), denied a direct action against the State housing authority. King v. Alaska State Hous. Auth., 633 P.2d 256, 260-261 (Alaska 1981).

5 The Court of Appeals of New York has recognized that the due process clause of the New York Constitution dealt with State action but that “the absence of any express State action language [in the State Constitution] simply provides a basis to apply a more flexible State involvement requirement than is currently being imposed by the Supreme Court with respect to the Federal provision.” Sharrock v. Dell Buick-Cadillac, Inc., 45 N.Y.2d 152, 160 (1978). The court (by a four to three vote) proceeded to decide that under the New York Constitution the case involved the equivalent of State action (“sufficient and meaningful State participation,” id. at 161), where it was questionable, but not necessary to decide, whether State action was involved for the purposes of the due process clause of the Fourteenth Amendment. Id. at 159. The Supreme Court of California, in considering due process provisions of its Constitution, has acknowledged that State action is inherent in those provisions, that it was not bound by Federal definitions of State action, but, in the context of the particular case, it would not depart from the Federal definitions. Garfinkle v. Superior Court, 21 Cal. 3d 268, 281-282 (1978).

Other State courts have concluded, unanimously as far as we can discern, that the due process provisions of their State Constitutions have an implicit requirement of State action or involvement. See USA I Lehndorff Vermoegensverwaltung v. Cousins Club, Inc., 64 Ill. 2d 11, 20-21 (1976); Campbell v. St. Mary’s Hosp., 312 Minn. 379, 384 (1977); Federal Nat’l Mortgage Ass’n v. Howlett, 521 S.W.2d 428, 439 (Mo. 1975); Duffley v. New Hampshire Interscholastic Athletic Ass’n, 122 N.H. 484, 490-491 (1982); North Carolina Nat’l Bank v. Burnette, 297 N.C. 524, 534-535 (1979); Kennebec, Inc. v. Bank of the West, 88 Wash. 2d 718, 726 (1977). As to the general view that State action must be involved under equal protection of the laws clauses of State Constitutions, see Schreiner v. McKenzie Tank Lines & Risk Management Servs., Inc., 408 So. 2d 711, 715-716 (Fla. Dist. Ct. App. 1982), and cases cited, aff’d, 432 So. 2d 567 (Fla. 1983).

6 The plaintiff also relies on the free speech provisions of art. 16 of the Declaration of Rights, as amended by art. 77 of the Amendments to the Massachusetts Constitution, which provides in part, “The right of free speech shall not be abridged.” The plaintiff does not argue, even in her supplemental brief, that art. 16 (free speech) should be interpreted to provide protection against the acts of private parties, a point we left open in Batchelder v. Allied Stores Int’l, Inc., supra at 91-92. She argues only that this court should adopt less stringent standards in defining State action under the Constitution of the Commonwealth.