Opinion ID: 2372686
Heading Depth: 2
Heading Rank: 2

Heading: Close Nexus

Text: The Third Circuit has instructed us that the second theory advanced by appellant is independently adequate to constitute state action. Thus, it is possible that a symbiotic relationship between a state and private enterprise could give rise to state action, or in the absence of such a relationship, state action still might be found if the state is closely involved in the very activity challenged. Fitzgerald v. Mountain Laurel Racing, Inc., 607 F.2d 589 at 595 (3rd Cir., 1979) quoting Braden v. University of Pittsburgh, 552 F.2d 948 at 958 (3rd Cir., 1977). The enquiry before us then is two-fold: what type of state activity can constitute close state involvement sufficient for a finding of state action; and, did such activity occur here? In determining what can constitute close state involvement, it will be helpful to determine what involvement is insufficient. Regulation of the private institution in general does not sufficiently involve the state in the challenged activity. By virtue of a broad regulatory scheme, the challenged activity does not become a state activity. The contention that New York's regulation of educational standards in private schools, colleges and universities, e.g., Education Law §§ 207, 215, 305(2), makes their acts in curtailing protest and disciplining students the acts of the State is equally unpersuasive. It overlooks the essential point  that the state must be involved not simply with some activity of the institution alleged to have inflicted injury upon a plaintiff but with the activity that caused the injury. Putting the point another way, the state action, not the private action, must be the subject of the complaint. Powe v. Miles, 407 F.2d 73 at 81 (2nd Cir., 1968). [3] This rule has been applied to situations very similar to the one before us  the hiring or firing of hospital staff members. There can be little doubt that the State of New York plays a substantial role in supervising the operations of private hospitals within its borders. However, this fact does not get us very far. The state, as part of its general regulatory scheme, does not in any way associate itself with or influence the internal decisions of a hospital's board of trustees to hire or fire staff members. The mere fact that New York regulates the facilities and standards of care of private hospitals or offers them financial support does not make the acts of these hospitals in discharging physicians the acts of the state. Mulvihill v. Butterfield Memorial Hospital, 329 F.Supp. 1020 at 1023 (S.D.N.Y., 1971). See also Schlein v. Milford Hospital, Inc., 561 F.2d 427 (2nd Cir., 1977). Under the relevant test, then, the state involvement must be greater than general regulation of the institution. We must determine whether, . . . to some significant extent the State in any of its manifestations has been found to have become involved in it. Burton v. Wilmington Parking Authority, 365 U.S. 715 at 722, 81 S.Ct. 856 at 860, 6 L.Ed.2d 45 (1961) (emphasis supplied). A more specific definition is found in the landmark case for this type of state action, Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974). But the inquiry must be whether there is a sufficiently close nexus between the State and the challenged action of the regulated entity so that the action of the latter may be fairly treated as that of the State itself. Jackson, supra, at 352, 95 S.Ct. at 453. Jackson found that state commission approval of a practice did not create a sufficiently close nexus and indicated that the state would have to more directly mandate the challenged activity. Approval by a state utility commission of such a request from a regulated utility, where the commission has not put its own weight on the side of the proposed practice by ordering it, does not transmute a practice initiated by the utility and approved by the commission into state action. Jackson, supra, at 358, 95 S.Ct. at 456-7. Four years later, Justice Rehnquist repeated that . . . a State's mere acquiescence in a private action [does not] convert that action into that of the State. Flagg Bros., Inc. v. Brooks, 436 U.S. 149 at 165, 98 S.Ct. 1729 at 1737, 56 L.Ed.2d 185 (1978). He went on to quote, with emphasis, the necessity for the ordering element of the above quote from Jackson. Flagg, supra, 436 U.S. at 165, 98 S.Ct. at 1737-8. See also Adickes v. Kress & Co., 398 U.S. 144 at 171, 90 S.Ct. 1598 at 1615, 26 L.Ed.2d 142 (1970); Jeffries v. Georgia Residential Finance Auth., 678 F.2d 919 at 923 (11th Cir., 1982). This rule has also been applied to the discharge of personnel. Graseck v. Mauceri, 582 F.2d 203 at 208-9 (2 Cir., 1978). Of course, even if the state has demanded the discharge, the question would remain whether the discharge was in response to their requests. Id. This nexus and causation was present in a case in which state officials participated with management in the decisional process that resulted in an employee's discharge. Fitzgerald, supra, 607 F.2d at 600. We are satisfied that the nexus requirement for state action is also present here. The direct involvement of the Commissioner and Deputy Commissioner of Health amounted at least to participation in the decisional process. It would appear to have also taken on a quality of compulsion or ordering. Nor is there any doubt that the termination of appellant's staff privileges was causally related to their intervention. Having found that there was state action in this case, we must next determine whether the termination of appellant's staff privileges involved an interest protectible under the Fourteenth Amendment.