author: MURRAY M. SCHWARTZ, District Judge.

text:
    William KENNEDY and Karolyne Kennedy, his wife, Plaintiffs, v. John HUGHES, Mayor of the City of Rehoboth Beach, Delaware; Richard Derrickson, Commissioner of the City of Rehoboth Beach, Delaware; James Phelan, Commissioner of the City of Rehoboth Beach, Delaware; Mary Burt Lankford, Commissioner of the City of Rehoboth Beach, Delaware; Eleanor Lynam, Commissioner of the City of Rehoboth Beach, Delaware, and Samuel Cooper, Commissioner of the City of Rehoboth Beach, Delaware, all individually, personally, and in their official capacity as Mayor and Commissioners of the City of Rehoboth Beach, Delaware, respectively, and The City of Rehoboth Beach, Delaware, a Municipal Corporation of the State of Delaware, and Harry Maichle, Chief of Police of the City of Rehoboth Beach, Delaware (Chief Maichle is joined only for injunctive purposes at this time), Defendants.
    Civ. A. No. 82-473 MMS.
    United States District Court, D. Delaware.
    Nov. 7, 1984.

      Robert C. Wolhar, Jr., Wolhar & Moore, Georgetown, Del., for plaintiffs.
    Carl Schnee, and Sam Glasscock, III, Prickett, Jones, Elliott, Kristol & Schnee, Wilmington, Del., for defendants.
   OPINION

MURRAY M. SCHWARTZ, District Judge.

Plaintiffs William and Karolyne Kennedy (“the Kennedys”) brought this action for damages and injunctive relief under 42 U.S.C. § 1983 against the City of Rehoboth Beach, Delaware, and its Chief of Police, Harry Maichle, in his official capacity. Additional defendants, in their official and individual capacities, are the Mayor, John Hughes, and five City Commissioners. The Kennedys challenge the constitutionality of a city ordinance requiring a physician or osteopath to be present whenever a tattoo is applied in Rehoboth Beach. They also allege that the action of the defendants, in enacting and attempting to enforce this ordinance, caused the Kennedys damages by inhibiting the operation of their tattoo studio. Presently before the Court is the defendants’ motion for summary judgment. For the reasons stated below, the motion for summary judgment will be granted.

I. Facts

The relevant facts are either undisputed or, if disputed, are stated as asserted by the plaintiffs, the party opposing the motion. In May, 1982, the Kennedys made inquiries in Rehoboth Beach, Delaware, about opening a tattoo studio. In June, 1982, the Kennedys received a letter from Thomas G. Abbott, the Building and Licensing Inspector, stating that tattoo studios were permitted in Rehoboth Beach if the owners obtained a business license. The Kennedys paid a $250 business license fee and received a license to operate a tattoo studio in Rehoboth Beach until June 30, 1983. Plaintiffs then rented a building in Rehoboth Beach to house their studio, purchased equipment for the premises, and incurred other expenses associated with setting up business.

On June 24,1982, the Mayor of Rehoboth Beach, defendant John Hughes, visited the Kennedys’ tattoo studio and told them that “[t]his kind of a business can’t be operated in Rehoboth Beach” because it was inconsistent with “a nice family type town.” On July 7,1982, neighboring property owners wrote to the Rehoboth Beach Board of Commissioners and asked the Board to close the tattoo studio “because it is not in keeping with the quaint, unspoiled character of this lovely resort.” The Board of Commissioners, which included Mayor Hughes and the five defendant Commissioners, then met on July 9, 1982, with the Kennedys present, and passed the ordinance at issue.

The challenged ordinance amended Chapter 6 of the Municipal Code of Rehoboth Beach by adding a new Article 8, titled “Tattoo Establishments.” Section 6-65 of Article 8 mandates that persons operating tattoo establishments must be authorized to practice medicine or osteopathic medicine in Delaware and must obtain a valid permit from the City to operate a tattoo establishment. This section also provides that all tattooing must be done either by a physician or osteopath or in the presence of a physician or osteopath. Sections 6-74 through 6-78 of the challenged ordinance require the tattoo establishment operator to observe certain health and sanitary requirements that help ensure that the tattooing process itself is sanitary and that persons with communicable diseases, such as hepatitis, will not be tattooed. Section 6-82 enforces Article 8’s requirements by providing that any person violating any provision of Article 8 shall be deemed guilty of a misdemeanor and fined between fifty and two hundred dollars.

For the next two or three weeks after this ordinance was passed, the City police, acting on the orders of the Mayor and the Board of Commissioners, began watching the Kennedys’ studio for violations of the ordinance. Undercover police officers visited the tattoo studio and threatened to arrest Mrs. Kennedy if they saw her tattooing anyone. Mayor Hughes announced to the press, as reported in a July 21, 1982, article in the Wilmington Morning News, that the Kennedys’ studio was under police surveillance. As a result of the ordinance, the police surveillance, and the Mayor’s statements to the press, the Kennedys lost business, although they continued to apply tattoos without a doctor being present, in violation of the ordinance. The Kennedys, however, were never charged with violating the ordinance.

On July 26, 1982, plaintiffs filed this action under 42 U.S.C. § 1983 to enjoin enforcement of the ordinance and to recover damages resulting from the deprivations of their civil rights. Plaintiffs alleged in their complaint that the tattooing ordinance violates their rights under the United States Constitution because it constitutes an ex post facto law, bill of attainder, and impairment of the obligation of contracts, in violation of Article I, Sections 9 and 10; a deprivation of liberty and property without due process of law and a denial of the equal protection of the laws, in violation of the fourteenth amendment; and an abridgment of the freedom of speech, in violation of the first amendment. In addition, plaintiffs have alleged that the statements of the Mayor and the police surveillance and harassment deprived them of liberty and property without due process of law.

Upon completion of discovery, defendants filed the instant motion for summary judgment, alleging that defendants are entitled to judgment on two legal grounds: the individual defendants are immune from suit under the doctrine of legislative immunity, and the tattooing ordinance is a constitutional exercise of the City’s police power to protect public health. At oral argument, plaintiffs’ counsel stated that plaintiffs have abandoned several of their theories and are now only pressing three: that the defendants deprived the plaintiffs of property without due process of law; that the tattooing ordinance violates the fourteenth amendment because it lacks a rational basis; and that the ordinance impaired the obligation of contracts. The Court finds, for the reasons set forth below, that there is no genuine issue as to any material fact and that defendants are entitled to summary judgment as a matter of law.

II. Monetary Claims Against Individual Defendants In Their Individual Capacities

A. Claims Arising Out of Passage of the Ordinance

The individual defendants argue that the claims against them in their individual capacities should be dismissed from this lawsuit because the doctrine of legislative immunity grants them absolute immunity from suit. Plaintiffs do not contest the basic principle that “members of a municipal council acting in a legislative capacity are absolutely immune from damage suits under section 1983.” Aitchison v. Raffiani, 708 F.2d 96, 99 (3d Cir.1983). See also Abraham v. Pekarski, 728 F.2d 167, 174 (3d Cir.), cert. denied, — U.S. -, 104 S.Ct. 3513, 82 L.Ed.2d 822 (1984). This doctrine bars plaintiffs’ claims against the Mayor and City Commissioners for damages caused by the enactment of the ordinance itself, irrespective of the legislators’ motives, because passing an ordinance is legislative activity. See Aitchison, 708 F.2d at 98-99.

B. Claims Arising Out of Enforcement of the Ordinance

The absolute protection afforded by legislative immunity does not apply to acts which are executive or administrative rather than legislative in character. Abraham v. Pekarski, 728 F.2d at 174-75. Plaintiffs have adduced facts showing that the Mayor and Board of Commissioners instructed the Chief of Police to keep the Kennedys’ studio under surveillance, and that the Mayor made public statements about the surveillance. These actions are executive or administrative rather than legislative. See Blake v. Town of Delaware City, 441 F.Supp. 1189, 1202 (D.Del.1977); cf. Marrero v. City of Hialeah, 625 F.2d 499, 505-06 (5th Cir.1980), cert. denied, 450 U.S. 913, 101 S.Ct. 1353, 67 L.Ed.2d 337 (1981). It follows that plaintiffs’ claim that the police activities deprived them of liberty or property without due process of law is not barred by legislative immunity.

The legal basis of plaintiffs’ objection to the actions taken to enforce the statute is not clearly stated in their pleadings or briefs. ■ They apparently assert that the decision of the Mayor and Board of Commissioners to put the tattoo studio under police surveillance, coupled with the May- or’s announcement of the surveillance to the press, deprived them of a property right — their right to do business — without due process of law.

Plaintiffs’ claims arising out of the police surveillance must be dismissed because there is nothing constitutionally objectionable about the police surveillance. Given that the ordinance was valid, see infra at 1495-1496, and the plaintiffs were violating it, the actions of the police— watching the studio to detect violations of the ordinance and warning Mrs. Kennedy that she could be arrested if she violated the ordinance — were simply normal police tactics that do not violate plaintiffs’ constitutional rights. Philadelphia Yearly Meeting of Religious Society of Friends v. Tate, 519 F.2d 1335, 1337 (3d Cir.1975); Coffy v. Multi-County Narcotics Bureau, 600 F.2d 570, 579 (6th Cir.1979).

Plaintiffs’ objections to the May- or’s public statements that the studio was under surveillance are also without merit. Although their claim is sketchy, plaintiffs apparently assert that the Mayor’s statements were defamatory and caused injury to their business reputation and loss of business. An allegation of injury to reputation, when accompanied by an allegation of injury to a more tangible interest, has been held to state a cause of action under section 1983. See Marrero v. City of Hialeah, 625 F.2d at 512-20. It is evident, however, that the Mayor’s statements were simply true statements of fact, because the studio was in fact under surveillance. True statements of fact are not defamatory as a matter of law and do not deprive plaintiffs of any constitutionally protected interest. Id. at 519 n. 25; see DeBonaventura v. Nationwide Mutual Insurance Co., 428 A.2d 1151, 1155 (Del.1981); cf. Codd v. Velger, 429 U.S. 624, 627, 97 S.Ct. 882, 883, 51 L.Ed.2d 92 (1977) (per curiam) (plaintiff must allege that defamatory reasons given in connection with his firing are false in order to maintain his due process claim). Accordingly, judgment will be entered for the defendants on the plaintiffs’ claims arising out of actions taken by defendants to enforce the ordinance.

In summary, the only claims against the individual defendants in their individual capacities arise out of passage and enforcement of the ordinance. Monetary damages against the individual defendants are not available to plaintiffs. The doctrine of legislative immunity bars any claim predicated upon passage of the ordinance, while the method of enforcement of the ordinance violates neither the federal constitution nor, if it was plaintiffs’ theory, any state law. Summary judgment will be entered for the individual defendants in their individual capacities with respect to monetary damages. There remain plaintiffs’ claims for monetary damages against the City and injunctive relief as to all defendants. These claims are predicated upon the unconstitutionality of the ordinance.

III. Constitutional Claims Against the City

A. Due Process and Equal Protection Claims

The heart of plaintiffs’ action is their claim that the tattooing ordinance violates their constitutional rights of equal protection and substantive due process under the fourteenth amendment. The first step in considering the equal protection claim is to determine the appropriate level of judicial scrutiny to be applied to the ordinance. “Unless a classification trammels fundamental personal rights or is drawn upon inherently suspect distinctions such as race, religion, or alienage, our decisions presume the constitutionality of the statutory discriminations and require only that the classification challenged be rationally related to a legitimate state interest.” City of New Orleans v. Dukes, 427 U.S. 297, 303, 96 S.Ct. 2513, 2516, 49 L.Ed.2d 511 (1976) (per curiam). Since the rights asserted by the plaintiffs are not “fundamental” as that term is defined in constitutional jurisprudence, see Pollard v. Cockrell, 578 F.2d 1002, 1012 (5th Cir.1978), and since no suspect class or classification requiring “intermediate scrutiny” is involved, see Plyler v. Doe, 457 U.S. 202, 217-18, 102 S.Ct. 2382, 2395, 72 L.Ed.2d 786 (1982), the ordinance must be upheld against equal protection attack if the statutory classifications are rationally related to a legitimate state purpose. City of New Orleans v. Dukes, 427 U.S. at 303, 96 S.Ct. at 2516.

This rationality standard is essentially the same standard that applies to claims that legislation violates the due process clause. See Harper v. Lindsay, 616 F.2d 849, 854 n. 9 (5th Cir.1980); Malmed v. Thornburgh, 621 F.2d 565, 569 (3d Cir.), cert. denied, 449 U.S. 955, 101 S.Ct. 361, 66 L.Ed.2d 219 (1980); cf. Hodel v. Indiana, 452 U.S. 314, 331-33, 101 S.Ct. 2376, 2386-87, 69 L.Ed.2d 40 (1981) (construing fifth amendment due process and equal protection guarantees). The minimal substantive requirements of the due process clause are satisfied if “there is an evil at hand for correction, and ... it might be thought that the particular legislative measure was a rational way to correct it.” Williamson v. Lee Optical Inc., 348 U.S. 483, 488, 75 S.Ct. 461, 464, 99 L.Ed. 563 (1955). This standard of review is satisfied if the statute has a conceivable, rational basis:

In reviewing a state statute ... under the due process or equal protection clause, a court must determine if the provision rationally furthers any legitimate state objective. “For these purposes, it is, of course, constitutionally irrelevant whether this reasoning in fact underlay the legislative decision____” Flemming v. Nestor, 363 U.S. 603, 612, 80 S.Ct. 1367, 1373, 4 L.Ed.2d 1435 (1960). The court may even hypothesize the motivations of the state legislature to find a legitimate objective promoted by the provision under attack. The legitimate purpose justifying the provision need not be the primary purpose of the provision.

Malmed v. Thornburgh, 621 F.2d at 569 (citations omitted); see also McGowan v. Maryland, 366 U.S. 420, 426, 81 S.Ct. 1101, 1105, 6 L.Ed.2d 393 (1961) (“A statutory discrimination will not be set aside if any state of facts reasonably may be conceived to justify it.”). Thus, the due process and equal protection clauses will be satisfied if the tattooing ordinance has a conceivable legitimate purpose and if the statutory methods used to advance that purpose are rational.

The purpose of the ordinance is recited in the preamble: “regulation of tattoo establishments is essential for the protection of the public health.” This purpose is legitimate, because public health regulation is a “vital part” of a state’s police power. Barsky v. Board of Regents, 347 U.S. 442, 449, 74 S.Ct. 650, 654, 98 L.Ed. 829 (1954).

Plaintiffs do not contest the legitimacy of the public health regulation, nor do they dispute that tattooing can spread disease and create health problems. Moreover, plaintiffs do not urge that the Board’s choice of tattoo establishments for regulation is irrational or discriminatory. Instead, they object to the ordinance’s requirement that a doctor or osteopath be present during tattooing. They have placed in the record two facts from which they infer that the “real” purpose of this requirement is to exclude tattoo businesses from Rehoboth Beach: first, the Mayor’s request that they leave Rehoboth Beach because tattooing was inconsistent with the “nice family type town” image of Rehoboth Beach; second, the Board of Commissioners’ receipt, before passing the ordinance, of a letter that objected to the Kennedys’ business for similar reasons.

The facts from which plaintiffs divine their inferences are irrelevant to the determination of legislative purpose, because “a judiciary must judge by results, not by the varied factors which may have determined legislators’ votes. [The Court] cannot undertake a search for motive in testing constitutionality.” Daniel v. Family Security Life Ins. Co., 336 U.S. 220, 224, 69 S.Ct. 550, 552, 93 L.Ed. 632 (1949). See also Chase Securities Corp. v. Donaldson, 325 U.S. 304, 309 n. 5, 65 S.Ct. 1137, 1140 n. 5, 89 L.Ed. 1628 (1945); Soon Hing v. Crowley, 113 U.S. 703, 5 S.Ct. 730, 28 L.Ed. 1145 (1885); Detroit United Ry. v. City of Detroit, 255 U.S. 171, 178, 41 S.Ct. 285, 287, 65 L.Ed. 570 (1921). Even assuming that one purpose of the ordinance was that inferred by plaintiffs, the proper inquiry under the equal protection and due process clauses is whether the ordinance has any legitimate purpose. Maimed v. Thorn-burgh, supra. A'legitimate purpose of the ordinance — protecting public health — is plain from its language. Plaintiffs’ allegedly contrary facts from which they derive their inferences would lead the Court on an impermissible “search for motive.” An inference which ultimately questions the motive of a legislature in opposition to the purpose stated in the legislative preamble, without more, may not be employed to defeat a motion for summary judgment.

Plaintiffs also argue that the sanitary measures prescribed in unchallenged sections of the statute are adequate to protect against the dangers associated with tattooing, and that the additional requirement that a physician be present is unnecessary. A similar claim was made in Roschen v. Ward, 279 U.S. 337, 49 S.Ct. 336, 73 L.Ed. 722 (1929). The law at issue in Roschen made it unlawful for a store to sell eyeglasses unless a licensed physician or optometrist was present. Id. at 338, 49 S.Ct. at 336. The complainants claimed that this requirement was unnecessary in most instances, and that the cost of employing an optometrist would drive them from the eyeglass business. Id. at 339, 49 S.Ct. at 336. The Court did not examine the necessity of an optometrist’s presence, but simply found that the requirement was rational: “there can be no doubt that the presence and superintendence of the specialist tend to diminish an evil.” Id. The complainants further argued that the legislation did more harm than good, but the Court responded: “[T]he balancing of the considerations of advantage and disadvantage is for the legislature not for the Courts.” Id. at 340, 49 S.Ct. at 336. Accord Williamson v. Lee Optical Inc., 348 U.S. 483, 487, 75 S.Ct. 461, 464, 99 L.Ed. 563 (1955).

Plaintiffs’ assertion that the physician requirement is unnecessary is similar to the claim in Roschen that an optician was unnecessary. Plaintiffs ask the Court to second-guess the decision of the Rehoboth Beach Board of Commissioners that the presence of a physician is needed to protect public health. However, “the judiciary may not sit as a superlegislature to judge the wisdom or desirability of legislative policy determinations ____” City of New Orleans v. Dukes, 427 U.S. 297, 303, 96 S.Ct. 2513, 2516, 49 L.Ed.2d 511 (1976) (per curiam). The physician requirement has a conceivable, rational basis. See Maimed v. Thornburgh, supra; McGowan v. Maryland, supra. As in Roschen, there can be no doubt that the presence of a physician will diminish health problems associated with tattooing. The Board rationally could have concluded that a person with medical training would be better trained than a lay person in recognizing individuals with communicable diseases and monitoring the tattooing process against health hazards. For this reason, other courts that have ruled on constitutional challenges to regulations requiring a physician’s presence during tattooing have upheld the regulations. Grossman v. Baumgartner, 22 A.D.2d 100, 254 N.Y.S.2d 335, 337-38 (1964), affd, 17 N.Y.2d 345, 271 N.Y.S.2d 195, 218 N.E.2d 259 (1966); Golden v. McCarty, 337 So.2d 388, 390-91, 81 A.L.R.3d 1206 (Fla.1976). Indeed, an outright ban on tattooing for health reasons has been upheld against due process attack. Yurkew v. Sinclair, 495 F.Supp. 1248, 1256-57 (D.Minn.1980).

Mrs. Kennedy also contends that since she follows sanitary procedures and can recognize persons with contagious diseases, the ordinance is irrational as applied to her. Even if the Board had accepted this contention, the Board could have rationally concluded that most tattoo studio operators would not possess Mrs. Kennedy’s expertise and that general regulation of tattooing, including the physician requirement, was warranted. See Grossman v. Baumgartner, 254 N.Y.S.2d at 338; cf. Murphy v. California, 225 U.S. 623, 628-29, 32 S.Ct. 697, 698, 56 L.Ed. 1229 (1912) (evidence that defendant ran an orderly, moral pool hall did not controvert legislative finding that pool halls tend to be immoral and disorderly). In short, it is evident that the tattooing ordinance serves a valid purpose — public health protection— and that the physician requirement is rationally related to that purpose. Thus, the challenged ordinance does not violate the due process and equal protection clauses, and judgment will be entered for the defendants on those claims.

B. Impairment of Contracts Claim

Plaintiffs also contend that the business license they obtained in order to open their tattoo studio was a contract between the plaintiffs and the City. They assert this contract entitled them to operate their studio without police interference until their license was revoked in accordance with the procedures described in the business licensing ordinance.

Plaintiffs misunderstand the nature of a business license and the impairment of contracts clause. Absent clear, unequivocal language to the contrary, an ordinary business license is not considered to be a contract between a government and private parties. Seaboard Air Line Ry. v. City of Raleigh, 242 U.S. 15, 18, 37 S.Ct. 8, 9, 61 L.Ed. 121 (1916); City of St. Louis v. United Ry., 210 U.S. 266, 274, 28 S.Ct. 630, 632, 52 L.Ed. 1054 (1908). There is nothing in Article 2 of the Rehoboth Beach Code, setting out the licensing procedure, or on the face of the Kennedys’ license itself that would suggest that it creates a contract between the City and the plaintiffs. Moreover, there is nothing to suggest that the license restricts in any way the ability of the City to impose additional burdens on the license holder, or to regulate the licensee’s business.

It is presumed, absent unequivocal language, that a city, in granting a license, reserves the ability to exercise its police power and place additional regulatory burdens on license holders. City of St. Louis v. United Ry., 210 U.S. 266, 274, 28 S.Ct. 630, 632, 52 L.Ed. 1054 (1908); see City of El Paso v. Simmons, 379 U.S. 497, 508, 85 S.Ct. 577, 583, 13 L.Ed.2d 446 (1965). No such restrictive language concerning the City’s police power is contained in the license or the licensing statute. Consequently, plaintiffs’ claim that the tattooing ordinance and measures taken to enforce it violated the impairment of contracts clause is rejected.

Plaintiffs’ final contention combines their due process and contracts clause attacks. Plaintiffs assert the defendants’ actions had the same effect as the revocation of a business license, and their license could only be revoked if the City followed the revocation procedures set forth in Article 2, section 6-12. This section provides: “The City Manager shall revoke the license of any licensee because of any violation of ... any ... ordinance of the City of Rehoboth Beach.” The licensee has the right to receive notice in advance of the revocation and, upon appeal, to have a hearing. Rehoboth Beach Code §§ 6-12, 6-13.

Although these procedures were not followed, it is undisputed that the plaintiffs’ license was not revoked. It follows that there has been no deprivation of the license to trigger the statutory or constitutional due process requirements. Plaintiffs urge the defendants’ actions amounted to a de facto revocation of the license. This assertion is nothing more than a restatement of their claims, rejected above, that the defendants’ actions deprived them of liberty and property — their business license — without due process, and that the defendants violated the contracts clause. In short, plaintiffs’ attack on the failure of the City to follow statutory revocation procedures is without merit.

IV. Conclusion

For the foregoing reasons, defendants’ motion for summary judgment will be granted.

      . Karolyne Kennedy Deposition at 69.

      . Complaint, Exhibit C.

      . Complaint, Exhibit D.

      . Karolyne Kennedy Deposition at 78.

      . Transcript of Hearing on Defendants' Motion for Summary Judgment, May 22, 1984, (“Tr.”) at 26.

      . According to plaintiffs’ counsel, counsel for the City agreed that the Kennedys would not be arrested until the plaintiffs’ preliminary injunction motion, filed with this Court on July 26, 1982, was resolved. Id. at 19.

      . On the same day this action was filed, the City filed an action in the Court of Chancery in Sussex County to enjoin the Kennedys from violating the ordinance. The state court suit has been stayed pending the outcome of this action. Id. at 6-7.

      . Id. at 1490-1491.

      . Plaintiffs urge that the individual defendants have waived the defense of legislative immunity because they are covered by the City’s liability insurance policy, and 18 Del.C. § 6511 waives the defense of sovereignty for risks covered by state insurance policies. This contention is meritless. The waiver of sovereign immunity, which applies to state entities or municipalities, does not affect legislative immunity, which applies to individual legislators.

      . Hughes Deposition at 68.

      . See Tr. at 23-26.

      . Tr. at 26.

      . Indeed, plaintiffs have not made separate due process and equal protection arguments against the ordinance; their sole objection is that the ordinance is irrational. See Tr. at 3-4.

      . See Tr. at 22; Plaintiffs’ Answering Brief In Opposition to Defendants’ Motion For Summary Judgment at 15-17. Other courts considering the validity of tattooing regulations have found that tattooing creates health problems. See Yurkew v. Sinclair, 495 F.Supp. 1248, 1255-56 (D.Minn.1980); Golden v. McCarty, 337 So.2d 388, 390 (Fla. 1976); Grossman v. Baumgartner, 17 N.Y.2d 345, 271 N.Y.S.2d 195, 197, 218 N.E.2d 259, 261 (1966).

      . Id. at 17.

      . Karolyne Kennedy Deposition at 69.

      . Complaint, Exhibit C.

      . In equal protection terms, plaintiffs' contention apparently is that the discrimination between physician tattooers and lay tattooers is irrational.

      . See Appendix to Plaintiffs’ Answering Brief In Opposition To Defendants’ Motion For Summary Judgment, Dkt. 41, at A-2-A-7.

      . In fact, the Kennedys continued to operate their tattoo studio and apply tattoos, in violation of the ordinance, for the remainder of the license period. Tr. at 17-18, 23.


source: Caselaw Access Project

author: CHARLES R. RICHEY, District Judge.

license: Public Domain

text:
    INVESTMENT COMPANY INSTITUTE, Plaintiff, v. C.T. CONOVER, et al., Defendants.
    Civ. A. No. 83-0549.
    United States District Court, District of Columbia.
    Nov. 8, 1984.

      Harvey L. Pitt, Henry A. Hubschman, and David M. Miles of Fried, Frank, Harris, Shriver & Kampelman, Washington, D.C. and Matthew P. Fink, Gen. Counsel, Thomas D. Maher and Catherine L. Heron, Asst. Gen. Counsel, Investment Company Institute, Washington, D.C., for plaintiff.
    J. Paul McGrath, Asst. Atty. Gen., U.S. Dept, of Justice, Brian W. Smith, Ronald R. Glancz, L. Robert Griffen, Deborah S. Hechinger, Eric Thompson, Andrew J. Levinson and Ginger S. Barnum, Washington, D.C., for defendant Comptroller.
    Arnold M. Lerman, Michael S. Heifer, Christopher R. Lipsett and Daniel M. Drory of Wilmer, Cutler & Pickering, Washington, D.C., for defendant-intervenor Citibank, N.A.; John R. Roche, Shearman & Sterling, New York City, of counsel.
   CHARLES R. RICHEY, District Judge.

INTRODUCTION

This action for declaratory and injunctive relief challenges an October 28, 1982, final Ruling (the “Ruling”) issued by the Comptroller of the Currency (the “Comptroller”) which approved a plan by Citibank, N.A., to establish a “Collective Investment Trust” for individual retirement account (IRA) trust assets exempt from taxation under the Employee Retirement Income Security Act (“ERISA”), 26 U.S.C. § 408. Plaintiff Investment Company Institute is a national association of open-ended investment companies, their investment advisors, and principal underwriters. Plaintiff claims that the Ruling allows Citibank to establish a “mutual fund” in direct contravention of the prohibitions against banks becoming involved in the sale and marketing of securities found in the Glass-Steagall Banking Act of 1933 (“Glass-Steagall”), 48 Stat. 162 (codified as amended in various sections of 12 U.S.C.), one of several depression-era pieces of legislation designed to restore and maintain public confidence in financial institutions. Defendants counter that Citibank’s Common Investment Trust, as authorized by the Comptroller’s Ruling, is not a prohibited mutual fund, but a common trust fund which does not violate the strictures of Glass-Steagall, and which is in any event specifically authorized by statute in ERISA. There being no genuine issue of material fact present in this case, the parties have filed cross-motions for summary judgment.

STATUTORY AND REGULATORY BACKGROUND

In 1974, Congress enacted the Employee Retirement Income Security Act (“ERISA”). As part of ERISA, the Internal Revenue Code was amended to add § 408, which permits qualified individuals to deduct from taxable income up to a specified amount (currently $2,000 annually, not to exceed 100% of salary), I.R.C. § 408(a)(1). Such tax-deductable contributions and earnings on trust assets are not taxed until they are distributed or withdrawn. Id., § 408(d)(1). Withdrawals are not permitted until the individual establishing the account dies or reaches the age of 59V2, without a 10% tax penalty being imposed. I.R.C. § 408(f)(1). In addition, § 408(a)(2) requires that only banks and other institutions which receive specific approval of the Secretary of the Treasury may serve as trustees for IRA trust assets. These IRA trust assets may only be commingled in a common trust fund or common investment fund. I.R.C. § 408(a)(5).

In addition to the statutory framework laid out by ERISA, there is another regulatory scheme applicable to this case. 12 C.F.R. § 9.18 contains the Comptroller’s regulations relating to the establishment and operation of collective trusts by national banks with trust powers. Under these regulations, a national bank acting as trustee, or in a similar capacity, may invest funds held in that capacity in a common trust fund. 12 C.F.R. § 9.18(a)(1). Similarly, 12 C.F.R. § 9.18(a)(2) permits a national bank acting in a fiduciary capacity for retirement or similar trusts exempt from federal taxation to invest collectively any funds so received. Retirement fund assets may also be invested in common trust funds. 12 C.F.R. § 9.18(b)(2).

Finally, the Glass-Steagall Act provides that national banks are forbidden to engage in the securities business. Section 16 of Glass-Steagall provides that national banks shall not underwrite or deal in “securities or stock.” 12 U.S.C. § 24 (Seventh). Section 21 of the Act in turn prohibits any person in the business of selling, underwriting or distributing “stocks, bonds, debentures, notes or other securities” from engaging “at the same time to any extent whatsoever” in the business of taking deposits, except to the extent permitted in Section 24 of the Act. 12 U.S.C. § 378(a)(1). The term “securities” is not defined anywhere in Glass-Steagall.

FACTUAL BACKGROUND

In 1982, Citibank, which serves as trustee for IRA trusts, applied to the Comptroller to establish a common trust exclusively for IRA trusts for which it is trustee. This common trust is entitled the Collective Investment Trust for Citibank IRAs (“CIT”). It establishes optional portfolios into which an individual may, by way of a written Trust Agreement with Citibank, require the bank to place his IRA trust assets. The CIT is one of several options which an IRA settlor may choose when selecting Citibank as IRA trustee. Such Trust Agreement is freely revocable subject to the penalty provided for in I.R.C. § 408. However, assets may be freely transferred between portfolios within the CIT, as well as between any of Citibank’s other IRA trust options, free from penalty. The purpose of the CIT is to provide an opportunity for the individual small IRA trust to be combined with assets of many other IRA trusts to create a sum large enough to allow the kind of diversification and professional financial management which it otherwise would be unable to obtain.

The interest of each IRA trust in the CIT is expressed by “units of beneficial interest.” These units are available only to IRA trusts of which Citibank is trustee and are not transferable. There is no charge for the acquisition or withdrawal of these units. Citibank acts as trustee and investment advisor of the CIT and receives a monthly fee based partly on the net value of the CIT’s portfolios.

The Securities and Exchange Commission has at various times stated its opinion that the units of interest in collective funds such as the one in issue here are securities within the meaning of the federal securities laws. Citibank, while not conceding that the Commission is correct on this point, and without raising that particular issue here, filed registration statements with the Commission to have the CIT registered as an investment company under the Investment Company Act of 1940, and to register the units of beneficial interest as securities under the 1933 Act. Citibank asserts that this was done merely to avoid a long and costly exemption proceeding before the Commission.

Citibank then sought approval of the CIT from the Office of the Comptroller. In its application, Citibank asked for a ruling that the CIT did not violate the prohibition against national banks marketing securities, found in §§ 16 and 21 of Glass-Steagall. In addition, Citibank asked to be exempted from those parts of the Comptroller’s regulations which might be in conflict with those of the Investment Company Act.

THE COMPTROLLER’S RULING

On October 28, 1982 the Comptroller issued a detailed and reasoned final Ruling which approved the Citibank CIT as being lawful under 12 C.F.R. Part 9 and not in conflict with the proscriptions of GlassSteagall. The Comptroller initially determined that the CIT was a proper exercise of Citibank’s fiduciary powers under either 12 C.F.R. § 9.18(a)(1) or (a)(2). The CIT was found to fall under the former provision because the assets invested therein are received and held by Citibank in trust. The latter provision was found also to apply as the trust assets invested in the CIT are retirement plan assets. (Ruling 4-5). Next, the Comptroller found that such a collective investment of IRA trust assets was specifically authorized by ERISA. (R. 8). The Ruling went on to state the Comptroller’s finding that “there is no GlassSteagall Act impediment to a bank collectively investing IRA trust assets.” (R. 9).

In so finding, the Comptroller distinguished this case from that presented in Investment Company Institute v. Camp, 401 U.S. 617, 91 S.Ct. 1091, 28 L.Ed.2d 367 (1971) (“Camp”). In that case, the Comptroller had approved a commercial bank’s plan for the collective investment of managing agency funds not held by the bank in trust. Id. at 622, 91 S.Ct. at 1094. The Supreme Court invalidated the Comptroller’s ruling, holding that such a collective investment of managing agency assets held by a national bank violated Glass-Steagall’s prohibition against national banks issuing, marketing or underwriting securities. The Comptroller found that the “most significant difference” between the invalid fund in Camp, and the Citibank CIT was that the latter involves assets held in trust, which would render it lawful under the Supreme Court’s analysis in Camp. (R. 10). The Comptroller found that the CIT is “the formal manifestation of a traditional banking service,” i.e. trust activities, (R. 15), unlike the service offered in Camp. Finally, the Comptroller concluded that the hazards which the Supreme Court noted in Camp as being behind the necessity for the prohibitions in Glass-Steagall, were “nonexistant or negligible in the context of commingled IRA trusts.” (R. 12).

For the reasons set forth in discussion which follows, this Court declines to invalidate the Comptroller’s Ruling. Instead, it is the opinion of this Court that the Comptroller acted reasonably when he made his Ruling. The Citibank CIT does not violate the Glass-Steagall Act in that the units of beneficial interest are not “securities” under that Act, and the same holding enunciated in Camp, which Glass-Steagall was intended to prevent, are simply not present in this case, the CIT presents no other violations of the Act, and, finally, the collective investment of IRA trust assets is specifically authorized by ERISA.

I). THE COMPTROLLER’S CAREFUL AND REASONED DECISION IS ENTITLED TO GREAT WEIGHT.

Plaintiff would have this Court accord little weight to the Comptroller’s interpretation of Glass-Steagall. As support for this contention, plaintiff points to Securities Industry Association v. Board of Governors, — U.S. -, 104 S.Ct. 2979, 82 L.Ed.2d 107 (1984) (“Becker”). In that case, however, the Supreme Court, while invalidating the sale of commercial paper by a national bank as being a “security” under Glass-Steagall, held that the Court accords “substantial deference” to an interpretation by an administrative agency charged with administering the Act “whenever its interpretation provides a reasonable construction of the statutory language and is consistent with legislative intent.” Becker, supra at 2983; Zemel v. Rusk, 381 U.S. 1, 11, 85 S.Ct. 1271, 1278, 14 L.Ed.2d 179 (1965); Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965). In Camp, the Supreme Court held that this principal of according great deference to any reasonable construction of a regulatory statute by the agency charged with the statute’s enforcement finds particular application to the Comptroller of the Currency in regards to the Glass-Steagall Act. Id. 401 U.S. at 626-27, 91 S.Ct. at 1097; NYSE v. Smith, 404 F.Supp. 1091, 1096 (D.D.C.1975). This was reiterated in Securities Industry Ass’n v. Board of Governors, — U.S.-, 104 S.Ct. 3003, 3009, 82 L.Ed.2d 158 (1984), decided the same day as Becker. Nothing in Becker acts to change this principal as applied to the Comptroller. The Court finds that the Comptroller’s interpretation was indeed reasonable, and will be accorded the weight it so deserves.

Plaintiff then points out the language in Becker which admonishes against post hoc rationalizations by counsel, specifically those in Becker involving some of the same arguments put forth by counsel in the present case. Defendant apparently would have the Court consider most, if not all, of the defendants’ arguments to be post hoc, and therefore entitled to little or no weight. The Court is not persuaded by plaintiff’s view of the holding in Becker. Unlike the present case, the counsel in Becker was advancing an argument not present in the agency ruling. The Supreme Court justifiably limited its consideration to only those arguments put forth in the Ruling itself. Here, there are no post hoc rationalizations being thrust upon this Court, merely detailed arguments raised and answered by the Comptroller in his Ruling. See, Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168-169, 83 S.Ct. 239, 245-246, 9 L.Ed.2d 207 (1962). Therefore, the Court declines to ignore any of the defendants’ arguments based upon the plaintiff’s interpretation of Becker.

II) THE COMPTROLLER ACTED REASONABLY IN INTERPRETING GLASS-STEAGALL AS NOT PROHIBITING THE COLLECTIVE INVESTMENT FUND PROPOSED BY CITIBANK.

a) The “units of beneficial interest are not “securities” under Glass-Steagall.

The Comptroller’s Ruling found that the units of beneficial interest in the Citibank CIT were not “securities” under the Glass-Steagall Act. Plaintiff argues that the Comptroller was in error in this interpretation. As the definition of “securities” exists nowhere in Glass-Steagall itself, the issue, as noted above, is whether the Comptroller’s interpretation was reasonable in light of the purpose and intent of the statute. Becker, supra. Initially, plaintiff argues that since the CIT and its units of beneficial interest have been registered with the SEC, that in effect acts as an admission by Citibank that they are dealing in the marketing of securities. This argument is without merit. Although it is clear that the term “securities” is broadly enough defined by the securities laws to encompass interests in common trust funds, See, 15 U.S.C. § 77b(l), it is also equally clear that not all such funds are to be considered securities for Glass-Steagall purposes. Camp, supra, 401 U.S. at 638, 91 S.Ct. at 1102. The Court in Camp drew a distinction between trust assets received “for a true fiduciary purpose rather than for investment,” Id., the former being exempt from the Act. Thus, it does not necessarily follow that the mere fact of registration under the securities laws is proof that the fund or interest so registered is a security for Glass-Steagall purposes.

The distinction drawn in Camp, between fiduciary purpose and investment, formed the crux of the holding in Investment Company Institute v. Conover, et al., 593 F.Supp. 846 (N.D.Cal.1984) (“ICI”). In that case, plaintiff was challenging a separate but identical Ruling by the Comptroller authorizing two California banks to offer the same service involved in this case. The Northern District of California found the funds in that case to be solely for the purpose of investment and invalidated the Comptroller’s Ruling. Plaintiff would have this Court do the same here. However, this Court believes, with great respect for the careful analysis shown by the Court in ICI, that the conclusion there was in error. By focusing only on whether the funds in question fit into the mold of a “common trust fund,” the Court in ICI failed to recognize that both Glass-Steagall and ERISA permit collective investment by banks of trust assets held either in “common trust funds” or “common investment funds.” I.R.C. § 408(a)(5). Such “investment” of assets of statutory tax exempt retirement plans is a traditional banking function, as evidenced by the Comptroller’s own longstanding regulations, 12 C.F.R. § 9.18 et seq., and the legislative history of ERISA.

ERISA itself is clear on this point, allowing the commingling of IRA trust assets in either a common trust or a common investment fund. I.R.C. § 408(a)(5). Such funds have long been considered traditional banking services for retirement assets, and there is a clear indication that Congress fully intended IRA assets to be “invested” in this manner. The Conference Report on ERISA, quoted in part by the Court in ICI, goes on to state that “the conferees intended that, for the purposes of diversification of investments, the assets of qualified individual retirement accounts may be pooled with the assets of qualified § 401(a) trusts...” H.R.Conf.Rep. No. 1280, 93rd Cong., 2d Sess. 337 (1974), U.S.Code Cong. & Admin.News 1974, 4639, 5117. Thus, Congress evidenced its intention that IRA trusts were to be treated by banks in accordance with their recognized authority to collectively invest other statutory retirement plan assets. The legislative history of ERISA goes on to show Congress’ explicit understanding that it is “common practice for banks____ to maintain pooled investment funds for [retirement] plans.” H.R.Conf.Rep. No. 1280, 93rd Cong., 2d Sess. 316, U.S.Code Cong. & Admin.News 1978, 5096. Thus, it is clear that the funds invalidated by the Court in ICI, and at issue here, were considered by Congress to be a natural extension of traditional banking activities and therefore the units of beneficial interest are not “securities” in violation of Glass-Steagall.

b) Glass-Steagall does not prohibit a National Bank from establishing collective investment trusts for IRA trust assets.

As noted above, Glass-Steagall prohibits national banks from marketing, issuing, or underwriting any issue of security or stock. 12 U.S.C. § 24. Conversely, Glass-Steagall also forbids anyone “in the business of issuing, underwriting, selling, or distributing____ stocks, bonds, debentures, notes, or other securities, to engage at the same time to any extent whatsoever in the business of receiving deposits.” 12 U.S.C. § 378(a)(1). In short, banks are not to be involved in the securities field and those involved in the securities field are not to act as traditional banks. The Comptroller, using his expertise as the agency administrator responsible for the application of the Act, and in a carefully reasoned and crafted Ruling, interpreted this to mean that Glass-Steagall poses no impediment to the Citibank CIT. The Court, as discussed fully below, finds this interpretation reasonable, and will not overturn it.

Initially, the forgoing discussion relating to funds such as these being considered by Congress to be a natural extension of traditional banking functions is dispositive in and of itself. Glass-Steagall says banks must act like banks alone. Here, Congress has shown its recognition that the collective investment of IRA trust assets is to be considered the same as pooled investment of other types of retirement plans, which have always been considered to be a traditional banking function. Camp, supra at 638, 91 S.Ct. at 1102. See also, H.R.Conf. Rep. No. 1280, 93rd Cong., 2d Sess. 316 (1974).

Here, Citibank is selling its fiduciary services, consistent with its authority under ERISA. There is no sale of prohibited “investments,” due to the fiduciary nature of the IRA trust. Camp, supra at 624-25, 91 S.Ct. at 1095-96. ERISA imposes upon Citibank a set of fiduciary duties and obligations which ensure that Citibank is engaged in a proper banking and fiduciary service. Unlike the fund struck down in Camp, the Citibank CIT is bound by the restrictions set forth in ERISA on all IRA trusts. These restrictions assure that Citibank cannot serve simply as a vehicle for investment, as was the case in Camp. These restrictions, as the Comptroller noted in his Ruling, include restrictions on self-dealing of various sorts, I.R.C. § 408(a)(5); requirements of reports and accounting, I.R.C. § 408(i); and provisions which prevent a bank as trustee from causing any forfeiture of IRA trust assets. I.R.C. § 408, et seq. In addition, the IRA settlor himself is constrained by various statutory restrictions such as the $2,000.00 limit on tax-free investment per year. I.R.C. § 408(d), and the 10% tax penalty for withdrawal of IRA assets before reaching the age of 5972. I.R.C. § 408(f). In sum, there exists a strong statutory framework which ensures the fiduciary nature of the Citibank CIT. The Comptroller acted reasonably when he relied on this in his Ruling.

c) The “hazards” which Glass-Steagall was designed to prevent are not present in the Citibank Collective Investment Trust.

The Supreme Court in Camp enunciated several “hazards” which the GlassSteagall Act was designed to prevent. Based on the purpose of the Act, the Supreme Court concluded that the managing agency account in Camp was replete with these very hazards and struck down the Ruling. The Comptroller’s Ruling distinguished the Citibank CIT from the managing agency account in Camp, noting that the “fiduciary services being considered here do not present the hazards and potential abuses that Congress sought to avoid when it enacted the Glass-Steagall Act.” (R. 9). The Court holds that the Comptroller acted reasonably in making this finding.

In Camp, the Supreme Court noted that “[t]he hazards that Congress had in mind were not limited to the obvious danger that a bank might invest its own assets in frozen or otherwise imprudent stock or securities investments.” Id. at 630, 91 S.Ct. at 1098. What Congress was also focusing on were some of the more “subtle hazards that arise when a commercial bank goes beyond the business of acting as a fiduciary____and enters the investment banking business.” Id. Included in the list of “hazards” Glass-Steagall was intended to prevent are the risk of a bank making unsound loans, to its “affiliate” or to others connected with the investment; that a bank’s “reputation for prudence and restraint” would be lent to its securities business, thus glossing over the risks inherent in such endeavors; and, finally, the risk that a bank’s “promotional interest” would lead to an inability to give its customers sound and impartial financial advice. Id. at 630-32, 91 S.Ct. at 1098-99. Finding these very dangers present in the managing agency account, the Supreme Court declared it invalid.

In the present case, however, the situation is quite different than in Camp. The Court agrees with the Comptroller’s Ruling that the dangers found in Camp, which Glass-Steagall was designed to prevent, are simply not present in this kind of collective IRA trust asset fund. Initially, there is no danger of misuse of a bank’s lending power to support speculative securities activity. Citibank cannot lend money to its CIT. 12 C.F.R. § 9.18(b)(8)(i). Further, the Comptroller’s regulations and ERISA itself preclude Citibank from making a loan to an individual holder of a unit of beneficial interest in the fund. 12 C.F.R. § 9.18(b)(8)(i), I.R.C. § 408(a)(4). Finally, as the Comptroller found, it is “implausible” that Citibank would put its own assets at risk by making unsound loans to companies whose securities the CIT owns. The entire structure of the fund is towards diversification. Any such loans would only minimally affect the value of the fund itself.

Secondly, there is no danger of the bank using its reputation to hide the dangers involved with the securities market. As noted above, this is a fiduciary relationship involving tightly regulated and statutorily restricted IRA trust assets. The safeguards built into ERISA itself act so as to protect the IRA account holder in a way the ordinary securities investor could never be protected. The IRA account holder knows that his money is protected. That is precisely why he has opened such an account. The securities investor, on the other hand, ought to be aware of the risk he is taking and so ought not to be in a position to be fooled into thinking his money is just as safe as if deposited. That is one of the purposes behind Glass-Steagall, but it simply is not present here.

Third, and finally, the “promotional interests” hazard is also “non-existent or negligible.” (R. 9). It is the IRA settlor who directs, in writing, which of several available IRA investment options his trust assets are to be placed into. (R. 3). The CIT is only one of many choices. The bank has no “salesman’s stake” in selling units in the CIT. What it is selling is its services as an IRA trustee in general. Moreover, Citibank imposes no sales charge or commission to IRA trusts to acquire units in the CIT. (R. 12). The Court agrees with the Comptroller’s finding that this creates no greater or different risks “than when a bank engages in its customary fiduciary functions.” (R. 13). There exists further no greater risk to the bank’s solvency, good name and good will should the CIT fail than if a traditional fiduciary trust were to likewise fare badly. (R. 12). For all these reasons, the Comptroller was correct and acted reasonably when he ruled that the Citibank CIT involved none of the Glass-Steagall hazards enumerated in Camp.

d) The fact that the Citibank Collective Investment Fund is advertised does not make it illegal under the Glass-Steagall Act.

Plaintiff makes much of the fact that Citibank has aggressively advertised the Collective Investment Fund to the public. Plaintiff argues that this is a prohibited act of “marketing” under Glass-Steagall, and shows further that the fund involves “securities” under that Act. The Court, however, finds this argument to be strained at best, and completely inaccurate.

Without repeating the analysis gone through above, the Court reiterates that the units of beneficial interest in the Citibank CIT are not “securities” under the Glass-Steagall Act regardless of their being “mass-marketed.” Citibank is not advertising the CIT itself. Rather, Citibank is marketing its entire IRA trust service. The advertising of the CIT is used to attract customers to utilize Citibank as their IRA trustee. There is nothing improper about a bank advertising its various services to the public. Franklin National Bank v. New York, 347 U.S. 373, 74 S.Ct. 550, 98 L.Ed. 767 (1953). See also, NYSE v. Smith, 404 F.Supp. 1091, 1097 (D.D.C. 1975), vacated on other grounds sub nom., NYSE v. Bloom, 562 F.2d 736 (D.C.Cir. 1977), cert. denied, 435 U.S. 942, 98 S.Ct. 1520, 55 L.Ed.2d 538 (1978).

Moreover, there is nothing in ERISA, Glass-Steagall or any other statute which prohibits the marketing of a bank’s IRA trust services by way of its advertising its collective investment fund for IRA accounts. The only limitation on advertising any common trust is inapplicable to the Citibank CIT since it is a fund consisting solely of tax exempt retirement assets. 12 C.F.R. § 9.18(a)(1), (2); (b)(5)(v).

Finally, to find that the advertising of such IRA trust services was in violation of Glass-Steagall would be to totally frustrate the purpose of ERISA. Congress was concerned with encouraging retirement savings. In order to fulfill its mission as a means of reaching such a goal, an IRA account service must be advertised to the general public. Only by the type of “mass-marketing” which plaintiff complains of here will the general public be aware of the opportunities available for beneficial methods of preparing for one’s retirement.

CONCLUSION

For all the reasons above, the Court concludes that the Comptroller acted reasonably when he made his Ruling approving the Citibank Collective Investment Trust for IRA trust assets. There being no genuine issue of material fact in dispute, the Court, by Order of even date herewith, denies plaintiff’s motion for summary judgment, and grants the defendants’ motions for summary judgment to the extent hereinbefore stated.


author: LONGOBARDI, District Judge.

text:
    Roy HICKS, Plaintiff, v. Robert C. FEENEY, Defendant.
    Civ. A. No. 83-185 LON.
    United States District Court, D. Delaware.
    Nov. 8, 1984.

      Joseph M. Bernstein, Wilmington, Del., for plaintiff.
    Matthew J. Lynch, Jr., Dept, of Justice, Wilmington, Del., for defendant.
   OPINION

LONGOBARDI, District Judge.

This case is a civil rights action brought under 42 U.S.C. § 1983. The Plaintiff, Roy Hicks (“Hicks”), was formerly a patient at the Delaware State Hospital (“DSH”). The Defendant, Robert C. Feeney (“Feeney”), the director of the DSH, is a Defendant in both his individual and official capacities. The Plaintiff seeks declaratory and injunctive relief against the Defendant in his official capacity and compensatory damages from him as an individual.

The basis for the complaint is that Hicks was confined at DSH without legal authority and the confinement deprived him of a liberty interest in violation of the fourteenth amendment of the United States Constitution. The Plaintiff also alleges that even if his confinement by the hospital was entirely lawful, his fourteenth amendment liberty interest was still violated because he was not granted the least restrictive conditions of possible confinement.

Background

Presently before the Court are cross motions for summary judgment. The facts underlying the claims are not in dispute. On November 18, 1982, the Plaintiff was found guilty of contempt of court by Family Court Judge Jay H. Conner. Judge Conner sentenced Hicks to 30 days in jail and suspended the sentence in favor of one year’s probation. Two of the conditions of probation were that Hicks present himself at DSH for a period of 72 hours for evaluation and then follow the Hospital’s recommendation for continued treatment or hospitalization. The commitment order signed by Judge Conner authorized Hicks to stay in DSH “for such time as may be permitted by law, unless sooner discharged according to law.”

Hicks was sent directly to DSH from Family Court and arrived on the afternoon of November 18,1982. Upon admission, he was examined by Dr. Felix Vergara and assigned to the Comegys Building. Shortly thereafter, he was examined by the forensic treatment team who concluded that the “court is to be informed of the situation that the patient needs some in-patient treatment gradually phased to an out-patient program.”

On November 23, 1982, 5 days after Hicks’ admission, Dr. Levy, a member of the forensic team, wrote to Judge Conner that Hicks required further evaluation at DSH. On November 24, Dr. Levy again wrote to the judge and stated that Hicks had “been exhibiting signs and symptoms of a major mental illness____ It is recommended that he receive further treatment ... by way of a Civil Commitment.”

No formal action was initiated until almost 3 weeks later. On December 13, 1982, Dr. Levy prepared a certificate determining that Plaintiff was mentally ill. A verified complaint seeking a judicial determination of Plaintiff’s mental status was signed by Defendant Feeney on December 20, 1982, and was filed in the Superior Court on December 27, 1982. The complaint noted that Hicks “was provisionally admitted as an involuntary mental patient on December 13, 1982.”

On December 22, 1982, Hicks was transferred to the M-2 ward from the Comegys Building, a building designed to house criminals who were mentally disturbed.

After the complaint seeking a hearing on Hicks’ mental status was filed on December 27, the Superior Court scheduled a probable cause hearing for January 14, 1983. That hearing never took place because the Plaintiff was discharged from the Delaware State Hospital on January 12, 1983.

Statutory Involuntary Commitment Procedure

The Plaintiff contends that the events surrounding his stay at DSH must be examined in light of the provisions of the Delaware Involuntary Commitment Statute, 16 Del.C., Ch. 50, and the fourteenth amendment. The Involuntary Commitment Statute limits the power of the State to involuntarily confine an individual in a mental hospital, 16 Del.C. § 5002, and establishes a three step procedure for the involuntary commitment of an individual. The first step requires that an individual be provisionally admitted only pursuant to the particularized, written certification of a psychiatrist that the individual is mentally ill. 16 Del. C. § 5003.

If the provisional admission certificate is done by a psychiatrist other than an employee of the hospital, the hospital has 3 days to “independently determine whether or not the involuntary person is a mentally ill person.” 16 Del.C. § 5005(2). If the hospital then finds an individual to be mentally ill, it has “6 working days from the date of the provisional admission” to file a verified complaint seeking a judicial determination of the involuntary patient’s mental status. 16 Del.C. § 5007(a). Judicial proceedings must begin no later than 18 working days from the filing of the complaint. 16 Del.C. § 5008(1). The proceedings begin with a probable cause hearing to determine whether an individual is legally being held at the hospital. Once probable cause is found by the court, a hearing to determine whether or not the patient is mentally ill must be held on the “earliest practicable date.” 16 Del.C. § 5008(4).

Contentions of the Parties

This statutory procedure was obviously not followed in Hicks’ case. The provisional admission certificate was prepared 16 days after Hicks’ admission rather than 3 days after admission as mandated by statute. 16 Del.C. § 5005. The verified complaint was filed 26 days after Hicks’ admission rather than within 9 days as required by statute. 16 Del.C. § 5007. Hicks’ probable cause hearing was scheduled 40 days after his admission rather than within 27 days as prescribed by statute. The Plaintiff maintains that the procedure followed deprived him of his fourteenth amendment interest in remaining free from unwarranted confinement in a mental hospital without due process of law. On the other hand, the Defendant maintains that Hicks’ constitutional rights were not violated and that he is entitled to summary judgment on three grounds. First, he contends that the statutory commitment procedure was not necessary because Judge Conner had the legal authority to impose as a condition of Plaintiff’s probation his compliance with the directives of the Delaware State Hospital and that the condition could include continuing hospitalization. Next, he states that even if the probation order could not properly authorize an indefinite stay, the Plaintiff has no cause of action because neither count of his complaint alleges a deprivation of due process actionable under 42 U.S.C. § 1983. Finally, he claims that even if a constitutional violation occurred, he is entitled to official immunity which bars the imposition of any monetary liability.

In deciding these motions for summary judgment, the Court is mindful of the clearly established summary judgment standard. Rule 56(c) of the Federal Rules of Civil Procedure provides that, upon motion of a party, summary judgment shall be granted if the record before the court shows that there is 'no issue as to any material fact and that the moving party is entitled to judgment as a matter of law. The burden of proving that the standard has been met is on the moving party. In the instant case, where both sides have moved for summary judgment, the record reveals no material factual disputes between the parties.

Requirements for a 1983 Action

In any section 1983 action, the initial inquiry must focus on two elements: (1) whether the conduct complained of was committed by a person acting under color of state law, and (2) whether the conduct deprived the person of rights, privileges or immunities secured by the Constitution or laws of the United States. Parratt v. Taylor, 451 U.S. 527, 535-36, 101 S.Ct. 1908, 1912-1913, 68 L.Ed.2d 420 (1981). In this case, Feeney, as director of the state mental hospital, was clearly acting under color of state law. Thus, the Court’s inquiry must focus on whether his conduct deprived the Plaintiff of any rights protected by the Constitution or laws of the United States.

The Plaintiff has alleged violations of procedural and substantive due process rights under the fourteenth amendment. The Court will first address his procedural claim.

Procedural Due Process

In order to prevail in an action alleging a violation of the fourteenth amendment right to procedural due process, a plaintiff must show:

(1) that the interest deprived was protected under the fourteenth amendment;
(2) that the deprivation was without due process; and
(3) that the charged defendant subjected the plaintiff or caused him to be subjected to the deprivation.

Parratt v. Taylor, 451 U.S. 527, 536-37, 101 S.Ct. 1908, 1912-13, 68 L.Ed.2d 420.

Both sides agree that the Plaintiff had a constitutionally protected liberty interest in remaining free from unwarranted hospitalization in a state mental hospital. Also, there is no dispute that Feeney, as director of the DSH, was the person officially charged with the care and custody of the Plaintiff. If there was a deprivation of a liberty interest, Feeney would be the person held accountable. Thus, the question facing the Court is whether the deprivation of Hicks’ liberty interest took place without due process of law.

The Defendant first contends that the Plaintiffs stay at DSH was not without due process of law because it was pursuant to a probation order of the Family Court. He maintains that the proceeding in which Hicks was found in contempt of court gave him all the process he was due prior to confinement at DSH. This argument has only a facial appeal. Even though an individual may be referred to a mental hospital for evaluation and treatment as a condition of probation, United States v. Mercado, 469 F.2d 1148 (2d Cir.1972), precedent suggests that an indefinite confinement in a mental hospital cannot be imposed as a condition of probation. For example, in McNeil v. Director, Patuxent Institution, 407 U.S. 245, 92 S.Ct. 2083, 32 L.Ed.2d 719 (1972), the Court found that confinement in a mental hospital for observation and treatment cannot extend longer than an individual’s sentence. Due process is denied when an individual is held on the basis of an ex parte order committing him for observation without the procedural safeguards commensurate with a long-term commitment. Id. at 250, 92 S.Ct. at 2087.

Even a prisoner is entitled to procedural protections including notice, an adversary hearing and counsel before he is involuntarily transferred from a prison to a mental hospital. Vitek v. Jones, 445 U.S. 480, 488, 100 S.Ct. 1254, 1261, 63 L.Ed.2d 552 (1979). Because the involuntary commitment to a mental hospital engenders a loss of liberty with greater constitutional implications than that occasioned by a prison sentence, even “a convicted felon ... is entitled to the benefit of procedures appropriate in the circumstances before he is found to have a mental disease and transferred to a mental hospital.” Id. at 493, 100 S.Ct. at 1263.

Concern for protection of this liberty interest is heightened in a situation such as the one in which Mr. Hicks found himself. Judge Conner’s only temporal limitation upon Hicks’ stay was that he should remain in the hospital “as may be permitted by law.” Unless that phrase is read to incorporate the limits of the Delaware Commitment Statute or at a minimum the constitutional right to a hearing before involuntary commitment, Hicks could have remained in the Hospital indefinitely.

Faced with the relevance of the cited precedents and understanding now the jeopardy of liberty interests involved, it is not enough for a Family Court Judge to throw the onus of constitutional interpretation on the shoulders of lay people charged with the responsibility of carrying out his order. The words “as may be permitted by law” could have reasonably been interpreted as window dressing legalese without specific constitutional connotation to a non-lawyer. Under the circumstances of this particular case, there is no shelter from constitutional redress for any court merely to say “as may be permitted by law.” In short, the requirements of procedural due process mandate reference to established commitment procedures if something more than a brief mental evaluation period is required when a judge imposes such a term of probation. To do otherwise denies a constitutionally protected liberty interest of the probated defendant without due process of law. The sentencing power of a judge, no matter how broad, does not abridge those rights.

Clearly then, Hicks’ initial appearance before Judge Conner and his sentencing on a contempt charge did not provide Hicks with adequate process to justify his indefinite commitment to a mental hospital. The Defendant maintains, however, that even if Hicks’ confinement was not acceptable as a condition of his probation, his due process rights were not violated because numerous avenues of post-deprivation process were available to correct any procedural defect in his admission to DSH. . Procedural due process requires that an individual be given the opportunity to be heard at a meaningful time and in a meaningful manner when the state deprives him of his life, liberty or property. Armstrong v. Manzo, 380 U.S. 545, 552, 85 S.Ct. 1187, 1191, 14 L.Ed.2d 62 (1965). The Supreme Court has rejected the idea, however, that every deprivation must be preceded by such a hearing. The Court has recognized situations where post-deprivation hearings satisfy procedural due process requirements. Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976); Boddie v. Connecticut, 401 U.S. 371, 379, 91 S.Ct. 780, 786, 28 L.Ed.2d 113 (1971). Post-deprivation hearings satisfy due process demands, for instance, when the exigencies of a particular situation make it impossible to provide a full and meaningful hearing prior to the deprivation. Parratt, 451 U.S. at 540-541, 101 S.Ct. at 1915-1916.

In Parratt v. Taylor, the Court found that the normal pre-deprivation notice and opportunity to be heard procedure may not be necessary where the state provides a post-deprivation remedy. This is particularly the case in situations where the deprivation occurred because of a random and unauthorized act and not because of any established state procedure. Id. at 538, 101 S.Ct. at 1914. Parratt concerned the rights of a prison inmate who sued prison officials on the ground that they had lost a hobby kit he had ordered. The kit was received by the prison but lost at some point before it could be given to Taylor. Taylor filed suit under section 1983, contending that he had been negligently deprived of property without due process of law. The Supreme Court agreed that the plaintiff had shown a deprivation of property under the fourteenth amendment yet denied Taylor’s claim because he had not shown that the deprivation was without due process.

Parratt may be distinguished from this case in that it involved a property interest while this case involves a liberty interest. However, since the Parratt decision, a majority of courts have extended its analysis to situations involving a deprivation of a liberty interest. Rutledge v. Arizona Bd. of Regents, 660 F.2d 1345, 1352 (9th Cir. 1981); Daniels v. Williams, 720 F.2d 792, 795 (4th Cir.1983); Thibodeaux v. Bordelon, 740 F.2d 329, 337 (5th Cir.1984); Gil- mere v. City of Atlanta, 737 F.2d 894, 908 (11th Cir.1984); Wolf-Lillie v. Sonquist, 699 F.2d 864, 871 (7th Cir.1983); Ellis v. Hamilton, 669 F.2d 510, 515 (7th Cir.), cert. denied, 459 U.S. 1069, 103 S.Ct. 488, 74 L.Ed.2d 631 (1982); Juncker v. Tinney, 549 F.Supp. 574, 576 (D.Md.1982); Barnier v. Szentmiklosi, 565 F.Supp. 869, 877 (E.D.Mich.1983); Hickman v. Hudson, 557 F.Supp. 1341, 1347 (W.D.Va.1983); Eberle v. Baumfalk, 524 F.Supp. 515, 517-18 (N.D.Ill.1981). The Parratt decision itself implies that such an extension is appropriate by its citation to Ingraham v. Wright, 430 U.S. 651, 97 S.Ct. 1401, 51 L.Ed.2d 711 (1977), a case involving a protected liberty interest. In Ingraham, the Court held that corporal punishment in schools administered without a prior hearing did not violate the students fourteenth amendment rights because “traditional common law remedies are fully adequate to afford due process.” Id. at 672, 97 S.Ct. at 1413.

The more compelling evidence that Parratt applies to liberty interests, however, lies in the logic of the decision itself. The Parratt court found a post-deprivation remedy would have been impossible. Since the loss occurred “as a result of a random and unauthorized act by a state employee” the state could not “predict precisely when the loss will occur.” 451 U.S. at 541, 101 S.Ct. at 1916. In such cases it is “not only impracticable, but impossible, to provide a meaningful hearing before the deprivation.” Id.

This reasoning was expatiated in Hudson v. Palmer, — U.S.-, 104 S.Ct. 3194, 82 L.Ed.2d 393 (1984). In Hudson, the Court extended Parratt, which concerned negligent deprivations of a prisoner’s property by a state employee, to intentional deprivations of property. -

While Parratt is necessarily limited by its facts to negligent deprivations of property, it is evident ... that its reasoning applies as well to intentional deprivations of property. The underlying rationale of Parratt is that when deprivations of property are effected through random and unauthorized conduct of a state employee, predeprivation procedures are simply “impracticable” since the state cannot know when such deprivations will occur. We can discern no logical distinction between negligent and intentional deprivations of property insofar as the “practicability” of affording pre-deprivation process is concerned. The State can no more anticipate and control in advance the random and unauthorized intentional conduct of its employees than it can anticipate similar negligent conduct____

Id. 104 S.Ct. at 3203. Thus, it is this logic of Parratt that permits no principled distinction between deprivations of property and liberty interests. The relevant distinction is not between property and non-property deprivations but between isolated acts of misconduct which are not amenable to prior control and those deprivations resulting from established state procedure. Daniels v. Williams, 720 F.2d 792 (4th Cir.1983). If a deprivation results from a “random and unauthorized act” by a state official, the state is no more able to provide a pre-deprivation hearing when the deprivation involves a liberty interest rather than a property interest. Juncker v. Tinney, 549 F.Supp. at 576. Thus, post-deprivation remedies may suffice as procedural due process protection where the state itself had no control over the initial deprivation.

In the present case, Hicks’ deprivation did not occur because of the “state system itself.” The state system itself normally affords appropriate procedures to individuals such as Hicks, either through the Involuntary Commitment Statute, 16 Del.C., Ch. 50, or through the usual categories of approved court ordered commitments. DSH Reg. 12.6. However, because of the failure of the Defendant to follow such procedures, Hicks fell through the cracks of the system and was never given a statutory hearing as to his mental status. Hicks lost his liberty not through the madequacy of the state procedure but because that procedure was ignored.

Once it is determined that the individual’s deprivation of liberty resulted from a “random and unauthorized act by a state employee”, the means of redress provided by the state must be evaluated in light of the requirements of the due process clause. Cohen v. City of Philadelphia, 736 F.2d 81 (3d Cir.1984). In the present case, Hicks had a wide variety of legal avenues available to him both to challenge his admission to DSH and to obtain damages for any wrongful acts by DSH. He could have moved for a new trial or appealed Judge Conner’s decision to Delaware’s Superior Court. Family Court Rules 280 and 300. Pending such appeal, Hicks could have sought a stay of the Family Court’s order. Family Court Rule 300(e). He could also have sought post-dispositional relief after his time for appeal had expired. Family Court Rule 290. He could have sought the assistance of Family Court’s probation department who could have altered the terms of his probation. Family Court Rule 270. In addition, habeas corpus relief was available to him under either 16 Del.C. § 5013 or 10 DelC, Ch. 69. These procedures alone satisfied Hicks’ due process rights. As the Third Circuit stated in Cohen v. City of Philadelphia, 736 F.2d at 86, “substantive mistakes ... in applying local ordinances do not create a federal claim so long as correction is available by the state’s judiciary.” In addition to such procedural remedies, Hicks could have brought a suit for damages under state tort law.

Thus, the state provided adequate procedure to remedy any wrong the Plaintiff has suffered at the hands of a state employee. The state can do no more; it had no control over the Defendant’s failure to follow the prescribed statutory procedures. And where the state can do nothing to provide an opportunity to be heard in advance, a chance to achieve redress after the deprivation has occurred must satisfy due process. Parratt at 541.

Substantive Due Process

The availability of state relief provided Hicks with ample procedure to protect his liberty interest under the fourteenth amendment. Thus, his right to procedural due process was not violated by Feeney’s actions. However, Hicks has asserted that Feeney’s actions violated his substantive due process rights as well. It is clear that unlike procedural rights, if substantive constitutional rights are violated, the constitutionally recognized deprivation is complete at the time of the action, irrespective of the procedures available before or after the deprivation. Parratt does not apply to substantive due process claims. Duncan v. Poythress, 657 F.2d 691, 704 (5th Cir.1981); Wolf-Lillie, 699 F.2d at 871. However, Hicks’ substantive due process claims are without merit and deserve only brief discussion.

Hicks asserts that he had a substantive liberty interest in the procedures of the Involuntary Commitment Act. The suggestion that state procedures can rise to the level of constitutionally protected interests was rejected by this district in Brandywine Affiliate NCCEA/DSEA v. Brandywine Bd. of Ed., 555 F.Supp. 852 (D.Del.1983). State procedural safeguards do not rise to the level of constitutionally protected interests. “Although the existence of a liberty or property interest may be ascertained by reference to state law, once such an interest is identified, the task of defining the procedural protections which attach to that interest is wholly a matter of federal constitutional law____” Shango v. Jurich, 681 F.2d 1091, 1097-98 (7th Cir.1982).

Thus, the fact that the exact procedures of the Involuntary Commitment Act were not followed in this case did not deprive Hicks of a substantive right protected by the constitution. The state statute may have helped define Hicks’ liberty interest but the procedures which attach to that interest are created by the minimum due process requirements of federal constitutional law, not by the state statute itself. 681 F.2d at 1098.

In Count II of his complaint, the Plaintiff asserts that the actions of the Defendant deprived him of his right as an involuntary mental patient to the least restrictive confinement consistent with professional judgment as guaranteed by the fourteenth amendment. In Youngberg v. Romeo, 457 U.S. 307, 102 S.Ct. 2452, 73 L.Ed.2d 28 (1982), the Supreme Court held that a patient’s constitutional right to reasonably non-restrictive conditions of confinement is not abridged as long as the confinement decision is made in the context of a professional judgment as to its necessity. Id. at 321, 102 S.Ct. at 2461.

In the present case, professional judgment was exercised in the decision to place the Defendant in the Comegys Building. The record indicates that Hicks was examined by a DSH doctor before being assigned to the Comegys Building. Therefore Hicks’ substantive right to the least restrictive conditions of confinement was not violated.

Immunity

As the previous discussion indicates, the Court finds that Feeney did not deprive Hicks of any rights in violation of the due process clause of the fourteenth amendment. However, even if the Court had found that Hicks had stated a cognizable claim under the fourteenth amendment, Feeney would have been protected by qualified immunity in this case. Qualified immunity is granted to state officials to allow them to conduct their day to day duties without the constant fear of incurring monetary damages liability. The important function of such immunity has created a strong presumption against monetary liability for state officials.

These principles are recognized in Harlow v. Fitzgerald, a recent Supreme Court opinion clarifying the scope of qualified immunity. Under the standard set forth in Harlow, immunity is available only to officials whose conduct conforms to a standard of objective legal reasonableness. Id. 457 U.S. 800 at 819, 102 S.Ct. at 2739. This standard mandates that an official is protected by qualified immunity except when his conduct violates “clearly established statutory or constitutional rights of which a reasonable person would have known.” 457 U.S. at 818, 102 S.Ct. at 2738.

Even if the Court had found that Feeney’s actions violated Hicks’ fourteenth amendment due process rights, his failure to institute commitment proceedings in no sense violated clearly established constitutional rights. In a recent decision, the Third Circuit defined “clearly established rights” for the purposes of qualified immunity. The court did not hold that precedent with an exact factual match to the situation at hand was necessary for a legal proposition to be considered “clearly established.” The court held, however, that a proposition is not “clearly established” when there are no precedents on point and critical aspects of the case have not been subject to judicial scrutiny. The People of Three Mile Island, et al. v. Nuclear Regulatory Commissioners, 747 F.2d 139 at 148 (3d Cir.1984).

The Plaintiff in this case argues that all of the constitutional rights which the Plaintiff seeks to vindicate were clearly established as of November, 1982. He cites O’Connor v. Donaldson, 422 U.S. 563, 95 S.Ct. 2486, 45 L.Ed.2d 396, (right of patient not to be involuntarily confined unless he is “dangerous”) and Vitek v. Jones, 445 U.S. 480, 100 S.Ct. 1254, 63 L.Ed.2d 552, (due process requires hearing prior to involuntary commitment) as concrete examples. Certainly such rights were clearly established with regard to individuals who arrived at the hospital through different avenues than those upon which Hicks arrived. However, Hicks’ presence at DSH came about because of the conditions of his probation. It is a well-accepted legal principle that terms of probation may impinge upon constitutional freedoms as long as the terms are reasonably related to rehabilitation and public safety. United States v. Stine, 675 F.2d 69, 71 (3d Cir.), cert. denied, 458 U.S. 1110, 102 S.Ct. 3493, 73 L.Ed.2d 1373 (1982); United States v. Pierce, 561 F.2d 735, 739 (9th Cir.1977), cert. denied, 435 U.S. 923, 98 S.Ct. 1486, 55 L.Ed.2d 516 (1978).

Title 10, section 942 of the Delaware Code gives the Family Court the power to place an individual on probation under “such terms and conditions as the court deems proper.” In light of the Family Court’s discretion and the fact that courts have consistently allowed wide latitude in the imposition of conditions of probation, it cannot be said that the constitutional rights of Hicks as a probationer were clearly established. There was no reason for the Defendant to know that the practice he followed with Hicks, who came to the hospital with a court order requiring him to comply with the recommendations of DSH as a condition of his probation, was violating any constitutional rights. Feeney simply treated the order as an acceptable condition of probation imposed by the Family Court and even contacted the Family Court twice for guidance on what to do with Hicks.

As was the situation in The People of Three Mile Island, “this case is a far cry from situations involving a clearly established and well litigated general proposition in which the case at hand merely presents a new factual wrinkle.” Id. at 148. There was no reason for Feeney to believe that his actions were improper. He had never encountered any situation where confinement to the hospital was not allowed as a condition of probation. Indeed, after a thorough search, this Court has found absolutely no precedent discussing analogous situations. Hicks’ claim focuses on a complicated interplay between the constitutionally accepted discretion given judges in imposing conditions of probation and the constitutional limits on involuntary commitment to a mental hospital. It is a nether world of imprecise dimensions, the constitutionally approved powers of a judge and the constitutional protection of individual rights. Under such circumstances, Feeney had no obligation to predict the future course of constitutional law, Pierson v. Ray, 386 U.S. 547, 577, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967), and it would be unjust to deny him qualified immunity.

The Plaintiff goes on to claim that Feeney is not entitled to immunity because he violated clearly established “statutory rights.” It is true that the Harlow court acknowledged that officials may lose their immunity by violating “clearly established statutory ... rights.” 457 U.S. at 818, 102 S.Ct. at 2738. However, the Harlow court was referring to federal statutory rights which formed the basis for the cause of action under section 1983 in that case. Mere violation of a state statute that does not create a cause of action under 1983 cannot be used to overcome qualified immunity. Davis v. Scherer, — U.S.-, 104 S.Ct. 3012, 82 L.Ed.2d 139 (1984). In this case, the Plaintiff claims that the failure to follow the procedures of the Involuntary Commitment Statute did implicate constitutional rights actionable under 1983. However, as the Court has already noted, the State Involuntary Commitment statute creates no such substantive rights actionable under section 1983. Therefore, in light of Davis v. Scherer, the fact that Feeney did not follow the procedures of the Delaware Involuntary Commitment Statute does not defeat his qualified immunity.

For the foregoing reasons, the Defendant’s motion for summary judgment is granted.

      . Section 5006 defines the rights of an individual whom the hospital has determined to be a mentally ill person. Such person is entitled to: (1) notice of the factual grounds upon which the proposed hospitalization is based; (2) a hearing and a judicial determination of whether the confinement is based upon probable cause and whether or not the involuntary patient is a mentally ill person; (3) representation by counsel at all judicial proceedings; (4) discovery proceedings and the right to summon and cross-examine witnesses and present evidence on his own behalf; and (5) a full record of the proceedings, including findings adequate for review.

      . Liberty interests may either originate in the Constitution or be created by state law. Meachum v. Fano, 427 U.S. 215, 96 S.Ct. 2532, 49 L.Ed.2d 451 (1976). In O'Connor v. Donaldson, 422 U.S. 563, 95 S.Ct. 2486, 45 L.Ed.2d 396 (1975), the Supreme Court clearly established that an individual has a constitutionally protected liberty interest in remaining free from unwarranted hospitalization in a state mental hospital.

      . No cases have specifically dealt with this issue, a factor that is important in the later discussion of official immunity. See, pp. 1514 to 1515, infra.

      . Hicks was given a 30 day jail sentence yet he spent 54 days at the Delaware State Hospital.

      . Of course, the involuntary commitment procedures would not apply to situations where the mental status of the defendant is an issue in the case. A separate set of statutory guidelines applies to the situations where a judicial determination of the defendant’s status has already been made. See, 11 Del.C. § 403 (verdict of "not guilty by reason of insanity’’); 11 Del.C. § 404 (confinement of persons too mentally ill to stand trial); 11 Del.C. § 405 (confinement of persons who become mentally disabled after conviction but before sentencing).
      These categories are recognized in the Delaware State Hospital manual which states that a court may commit an. individual to the Delaware State Hospital under a court order for the following specific purposes; a pretrial investigation to determine either fitness to stand trial or criminal responsibility; a presentence investigation to aid in the determination of the sentence; for treatment of a person found unfit to stand trial because of mental illness when a person is found not guilty on grounds of mental illness. Delaware State Hospital Regulation 12.6. Hicks does not appear to fall into any of these categories.

      . The arguments for not extending Parratt to liberty interests deserve a brief mention here. Some courts have suggested that extending Parratt beyond its facts would effectively impose an exhaustion requirement in section 1983 cases, a result forbidden in Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961). See Brewer v. Blackwell, 692 F.2d 387, 394 n. 10 (5th Cir.1982); Wakinekona v. Olim, 664 F.2d 708, 715 (9th Cir.1981), rev'd on other grounds, 461 U.S. 238, 103 S.Ct. 1741, 75 L.Ed.2d 813 (1983). This exhaustion requirement objection misperceives Parratt's import by confusing the rights accorded by the fourteenth amendment’s due process clause with the remedy afforded by section 1983. Parratt did not deny Taylor a remedy; it defined his rights. The decision does not require that state remedies be exhausted. It held that no constitutional violation occurred. Haygood v. Younger, 718 F.2d 1472 at 1480.
      Another objection to an extension of Parratt to liberty interests is that post-deprivation damages cannot fully compensate for a loss of liberty. See, Ingraham v. Wright, 430 U.S. 651, 701, 97 S.Ct. 1401, 1427-28, 51 L.Ed.2d 711 (1977) (Stevens, J., dissenting). This argument also fails. A loss is as incompensable under section 1983 as under state tort law. Hudson v. Palmer, — U.S.-, 104 S.Ct. 3194, 3204, 82 L.Ed.2d 393 (1984).

      . The Plaintiff contends that the exception to Parratt carved out in Logan v. Zimmerman Brush, 455 U.S. 422, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982), applies in this case. The Court strongly believes that it does not. Logan concerned an employee’s charge filed with the Illinois Fair Employment Practices Commission alleging a wrongful discharge. The Illinois Fair Employment Statute gave the Commission 120 days within which to convene a fact-finding conference on the claim. However, through inadvertence, the Commission scheduled the fact-finding conference for a date 5 days after the expiration of the period. On appeal, the Supreme Court reversed the Illinois Supreme Court holding that the failure to comply with the 120 day requirement deprived the Commission of jurisdiction to consider the charge. The court found that the state system itself, i.e., the state procedural rule, violated the complainant’s due process rights because the state system itself destroyed "a complainant's property interest by operation of law whenever the Commission fails to convene a timely conference____" 455 U.S. at 436, 102 S.Ct. at 1158. Logan is distinguishable from Parratt and the present case because it condemned a defect in the state system itself, not a defect in the way the system was administered.

      . The Plaintiff maintains that pursuit of a post-deprivation state tort remedy would place an undue burden upon him since he would be forced to'prove “gross or wanton negligence.” This is not relevant to a determination of what process is due. Only a meaningful opportunity to be heard is required. Parratt, 451 U.S. at 540, 101 S.Ct. at 1915. The fact that the state remedies may not provide the individual with all the relief which would have been available under section 1983 does not mean that the state remedies do not provide due process. Id. at 544, 101 S.Ct. at 1917. Daniels v. Williams, 720 F.2d at 798.

      . In Brandywine Affiliate, the District Court of Delaware rejected a discharged teacher’s claim that the statute describing termination procedure created a constitutionally protected interest in that exact procedure. The court acknowledged the constitutional interest in continued employment but refused to hold that the state procedures used to protect that interest were constitutionally protected in and of themselves.

      . The only exception to this rule is where “an individual has reasonably relied on agency regulations promulgated for his guidance or benefit and has suffered substantially because of their violation by the agency.” United States v. Caceres, 440 U.S. 741, 752-53, 99 S.Ct. 1465, 1471-72, 59 L.Ed.2d 733 (1979). In this case, the Plaintiff was never expressly offered any assurances or reason to believe that his commitment would be in accordance with the procedures of the act. In fact, no evidence has been offered to show that he even knew of the act’s existence.

      . The Court does not accept Feeney’s argument that he is entitled to absolute judicial immunity because his actions were taken pursuant to judicial order. Although such judicial immunity has occasionally been extended to protect activities of individuals carrying out a "judicial function”, see Lockhart v. Hoenstine, 411 F.2d 455 (3d Cir.1969); Williams v. Wood, 612 F.2d 982 (5th Cir.1980); Slotnick v. Staviskey, 560 F.2d 31 (1st Cir.1977), cert. denied, 434 U.S. 1077 (1978); Fowler v. Alexander, 478 F.2d 694 (4th Cir.1973), the scope of absolute immunity has recently been limited. In Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982), the Supreme Court established a stringent functional test for absolute immunity. In order to claim such immunity, an official must show that "the responsibilities of his office embrace a function so sensitive as to require a total shield from liability.” Harlow at 813, 102 S.Ct. at 2736. As director of a state mental hospital, Feeney does not meet that burden. Feeney is simply an executive official of the state charged with carrying out the laws of the state with respect to the involuntary commitments made under the act. The application of absolute immunity to Feeney’s position would serve no necessary policy function since his position as Hospital Director is not “a function so sensitive as to require a total shield from liability.” Id.

      . In Maine v. Thiboutot, 448 U.S. 1, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980), the Supreme Court held that section 1983 creates a cause of action against state officials for violating federal statutes.

      . Davis involved a claim filed by a highway patrolman asserting that Florida officials had violated the due process clause of the fourteenth amendment by discharging him without a formal pretermination or a prompt post-termination hearing. Both the District Court and the Court of Appeals held that the officials could be sued because they had not followed “clearly established" administrative regulations in effectuating the discharge. The Supreme Court reversed and limited denial of qualified immunity to violations of law that formed the basis for the 1983 action. In Davis, the plaintiff had made no claim that violation of the state administrative regulation implicated any constitutional rights actionable under 1983.

      . The Plaintiff relies heavily on Scott v. Plante, 691 F.2d 634 (3d Cir.1982) to illustrate that a violation of statutory procedure can serve to abrogate qualified immunity. In Scott, the Third Circuit stated that even if the precise dimensions of an individual’s constitutional basis for recovery were unsettled at the time of the action, violation of statutory rights were enough to lose qualified immunity. 691 F.2d at 639. This ruling is obviously changed in light of the Supreme Court’s subsequent opinion in Davis holding that violation of statutory rights, cannot overcome qualified immunity unless the statute forms the basis of the action under section 1983.