Opinion ID: 196780
Heading Depth: 2
Heading Rank: 1

Heading: Direct State Action

Text: 11 Plaintiffs contend that Defendants' actions may be fairly attributed to the state because, they claim, the AEELA is a public corporation and therefore, an arm of the state. Although [t]he Act which creates the Association does not define whether it is an agency, a department, an instrumentality or a public corporation, Vasquez-Perez, slip op. at 24, both federal and state courts have held that the AEELA is not a governmental agency, see Morales, slip op. at 2 (noting that the Supreme Court of Puerto Rico has, since 1932, consistently ruled that the Employees Association is not a part of the Government); Vasquez-Perez, slip op. at 26. 12 Admittedly, technical labels are not dispositive. In Lebron v. National R.R. Passenger Corp., --- U.S. ----, 115 S.Ct. 961, 130 L.Ed.2d 902 (1995), the Supreme Court addressed direct state action and technical labels, ruling that, despite a statutory disclaimer of agency status, the National Railroad Passenger Corp. (Amtrak) was nonetheless a government entity. In deciding that Amtrak was a state actor when it refused to lease advertising space to an artist's display because it was political, the Court stated that it is not for Congress to make the final determination of Amtrak's status as a government entity for purposes of determining the constitutional rights of citizens affected by its actions. Id. at ----, 115 S.Ct. at 971. The Court, in dicta, indicated that the issue of state action and technical labels that it was addressing also had relevance to the states, stating that it cannot be that government, state or federal, is able to evade the most solemn obligations imposed in the Constitution by simply resorting to the corporate form [since] [o]n that thesis, Plessy v. Ferguson [163 U.S. 537, 16 S.Ct. 1138, 41 L.Ed. 256 (1896)] can be resurrected by the simple device of having the State of Louisiana operate segregated trains through a state-owned Amtrak. Id. at ----, 115 S.Ct. at 972 (citations omitted). 13 While the logic of Lebron applies to the present case, we conclude that it does not avail Plaintiffs. The Court held that where 14 the Government creates a corporation by special law, for the furtherance of governmental objectives, and retains for itself permanent authority to appoint a majority of the directors of that corporation, the corporation is part of the Government for purposes of the First Amendment. 15 Id. at ----, 115 S.Ct. at 974-75. The Supreme Court in Lebron focused on the degree of control that the federal government had over Amtrak. In contrast, neither party in the instant case has contended that the Government of Puerto Rico has retained permanent authority over the directors of the AEELA. This distinction becomes clearer when we compare the facts surrounding Amtrak and the AEELA. The President appoints the majority of Amtrak's directors, the federal government owns all of Amtrak's voting stock, and the government subsidizes Amtrak's perennial losses. Id. at ----, 115 S.Ct. at 967. By contrast, the government of Puerto Rico does not retain the power to appoint any of the AEELA's directors. Instead, the directors are elected by delegates who themselves are elected by the AEELA's membership at large. Furthermore, the AEELA's losses, if any, are not regularly subsidized by the government of Puerto Rico. As a result of these facts, we conclude that the AEELA does not constitute an extension of the government of Puerto Rico, and so Defendants must be treated as private parties. Thus, direct state action is not present in this case.