Opinion ID: 149043
Heading Depth: 1
Heading Rank: 5

Heading: The District Court Erred as a Matter of Law in Affording Relief to NREIS

Text: a. No § 1983 Claim Was Stated because REBA Is Not a State Actor Unless REBA was a state actor there can be no § 1983 claim against REBA. Tomaiolo v. Mallinoff, 281 F.3d 1, 8 (1st Cir.2002); Yeo v. Town of Lexington, 131 F.3d 241, 248-49 & n. 3 (1st Cir.1997). The § 1983 counterclaim posited that REBA, an otherwise private association, became a state actor by virtue of the role given it by § 46B. The district court agreed, holding that REBA, by bringing suit under § 46B and making the allegations it did, became a state actor because REBA had assumed a traditional public function. REBA I, 609 F.Supp.2d at 144 n. 67. No other theory of state action was argued or considered. The public function theory requires a plaintiff to show more than the mere performance of a public function by a private entity. Perkins v. Londonderry Basketball Club, 196 F.3d 13, 19 (1st Cir. 1999). A plaintiff must show that the private party performed a public function that has been `traditionally the exclusive prerogative of the state,' Estades-Negroni v. CPC Hosp. San Juan Capestrano, 412 F.3d 1, 5 (1st Cir.2005) (quoting Blum v. Yaretsky, 457 U.S. 991, 1005, 102 S.Ct. 2777, 73 L.Ed.2d 534 (1982)). This is a demanding standard, and the plaintiff has the burden to meet it. See Perkins, 196 F.3d at 19. Here it is clear that NREIS failed to meet its burden. And the district court's ruling, which involved no analysis of whether REBA's filing of a lawsuit and advocacy of a position in court was traditionally and exclusively reserved to the state, was in error. Section 46B does not delegate to private actors functions that are traditionally  exclusively reserved to the State. Id. (emphasis in original). It does nothing more than grant bar associations, along with three or more members of the Massachusetts bar, the attorney general, and district attorneys, standing to bring suit enforcing the unauthorized-practice-of-law statute. Mass. Gen. Laws ch. 221, § 46B. An action undertaken by a private party does not become state action merely because the action is authorized by state statute. Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 164-66, 98 S.Ct. 1729, 56 L.Ed.2d 185 (1978) (holding that the defendant warehouseman's sale of goods pursuant to a statute authorizing self-help was not state action); Estades-Negroni, 412 F.3d at 6. The Commonwealth, as a matter of policy, chose to give bar associations a defined role in bringing court actions to seek a judicial determination whether the challenged actions constitute the unauthorized practice of law. But that role was a limited one. Section 46B grants the bar association itself no power to make a determination as to whether the challenged activity is the unauthorized practice of law. REBA could not itself determine whether its interpretation was correct, nor could it enforce its interpretation. Thus, while defining what is the unauthorized practice of law is the exclusive function of state government, cf. Goldfarb, 421 U.S. at 792, 95 S.Ct. 2004, that is not what is at issue here. See Lawline v. Am. Bar Ass'n, 956 F.2d 1378, 1384-85 (7th Cir.1992) (holding that bar associations that formulated but could not decide unauthorized-practice-of-law rules were not state actors). What is at issuethe bringing of a lawsuit to obtain a declaration as to legalityis far from an exclusive function of government. See Estades-Negroni, 412 F.3d at 8-9 (holding that parties that filed a court petition seeking the plaintiff's involuntary commitment did not thereby become state actors); cf. Nowicki v. Ullsvik, 69 F.3d 1320, 1324 (7th Cir.1995) (finding that an attorney's successful motion to exclude a paralegal from participating in judicial proceedings on unauthorized-practice-of-law grounds was not state action). Further, § 46B specifically includes private entities and people as well as public officials. It does not by its terms make those private entities into public entities. REBA is not an integrated bar, nor is it a Massachusetts state agency. That a private entity performs a function which serves the public does not make its acts state action. Rendell-Baker v. Kohn, 457 U.S. 830, 842, 102 S.Ct. 2764, 73 L.Ed.2d 418 (1982). Nor is there another statute giving REBA enforcement powers. [6] Statutes restricting standing do not thereby transform those granted standing into government actors. REBA also could not be found a state actor under either the state-compulsion or joint-action tests. See Estades-Negroni, 412 F.3d at 4-5. Neither has been alleged. As to the state-compulsion test, there is no claim that the state has exercised coercive power or has provided such significant encouragement, either overt or covert, that the [challenged conduct] must in law be deemed to be that of the State. Id. at 5 (quoting Blum, 457 U.S. at 1004, 102 S.Ct. 2777) (internal quotation marks omitted) (alteration in original). For similar reasons, REBA also could not be found a state actor under the joint-action test. There is no claim that the state has so far insinuated itself into a position of interdependence with [REBA] that it must be recognized as a joint participant in the challenged activity. Perkins, 196 F.3d at 21 (quoting Burton v. Wilmington Parking Auth., 365 U.S. 715, 725, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961)). REBA is a private organization that operates independently of the state government and is not a state actor. b. No Dormant Commerce Clause Claim Was Stated In addition, because REBA is not a state actor, but a private actor, REBA itself cannot have violated the dormant Commerce Clause. The dormant Commerce Clause is addressed to actions by states. Or. Waste Sys., Inc. v. Dep't of Envtl. Quality, 511 U.S. 93, 98, 114 S.Ct. 1345, 128 L.Ed.2d 13 (1994) ([T]he [Commerce] Clause has long been understood to have a `negative' aspect that denies the States the power unjustifiably to discriminate against or burden the interstate flow of articles of commerce.); Family Winemakers of Cal., 592 F.3d at 4 n. 1. For this reason as well, the dormant Commerce Clause claim based on REBA's filing of the lawsuit should have been dismissed.