author: MR. Justice Rehnquist Mr. Justice Douglas, Mb. Justice Brennan, Mr. Justice Marshall,

text:
    JACKSON v. METROPOLITAN EDISON CO.
    No. 73-5845.
    Argued October 15, 1974
    Decided December 23, 1974
    Rehnquist, J., delivered the opinion of the Court, in which Burger, C. J., and Stewart, White, Blackmun, and Powell, JJ., joined. Douglas, J., post, p. 359, Brennan, J., post, p. 364, and Marshall, J., post, p. 365, filed dissenting opinions.

      Jack Greenberg argued the cause for petitioner. On the briefs were Ala/n Linder and Jonathan M. Stein.

      Thomas M. Debevoise argued the cause and filed a brief for respondent.

      Briefs of amici curiae urging reversal were filed by Franklin A. Martens for the National Consumer Law Center, Inc., et ah, and by Richard A. Weisz, Stefan M. Rosenzweig, Michael B. Weisz, and Anthony G. Amsterdam for the Legal Aid Foundation of Long Beach et al.

        Gilbert Stein filed a brief for the city of Philadelphia as amicus curiae urging affirmance.

        Peter H. Schiff and Richard A. Solomon filed a brief for the Public Service Commission of New York as amicus curiae.

   MR. Justice Rehnquist

delivered the opinion of the Court.

Respondent Metropolitan Edison Co. is a privately owned and operated Pennsylvania corporation which holds a certificate of public convenience issued by the Pennsylvania Public Utility Commission empowering it to deliver electricity to a service area which includes the city of York, Pa. As a condition of holding its certificate, it is subject to extensive regulation by the Commission. Under a provision of its general tariff filed with the Commission, it has the right to discontinue service to any customer on reasonable notice of nonpayment of bills.

Petitioner Catherine Jackson is a resident of York, who has received electricity in the past from respondent. Until September 1970, petitioner received electric service to her home in York under an account with respondent in her own name. When her account was terminated because of asserted delinquency in payments due for service, a new account with respondent was opened in the name of one James Dodson, another occupant of the residence, and service to the residence was resumed. There is a dispute as to whether payments due under the Dodson account for services provided during this period were ever made. In August 1971, Dodson left the residence. Service continued thereafter but concededly no payments were made. Petitioner states that no bills were received during this period.

On October 6, 1971, employees of Metropolitan came to the residence and inquired as to Dodson’s present address. Petitioner stated that it was unknown.to her. On the following day, another employee visited the residence and informed petitioner that the meter had been tampered with so as not to register amounts used. She disclaimed knowledge of this and requested that the service account for her home be shifted from Dodson’s name to that of one Robert Jackson, later identified as her 12-year-old son. Four days later on October 11, 1971, without further notice to petitioner, Metropolitan employees disconnected her service.

Petitioner then filed suit against Metropolitan in the United States District Court for the Middle District of Pennsylvania under the Civil Rights Act of 1871, 42 U. S. C. § 1983, seeking damages for the termination and an injunction requiring Metropolitan to continue providing power to her residence until she had been afforded notice, a hearing, and an opportunity to pay any amounts found due. She urged that under state law she had an entitlement to reasonably continuous electrical service to her home and that Metropolitan’s termination of her service for alleged nonpayment, action allowed by a provision of its general tariff filed with the Commission, constituted “state action” depriving her of property in violation of the Fourteenth Amendment’s guarantee of due process of law.

The District Court granted Metropolitan’s motion to dismiss petitioner’s complaint on the ground that the termination did not constitute state action and hence was not subject to judicial scrutiny under the Fourteenth Amendment. On appeál, the United States Court of Appeals for the Third Circuit affirmed, also finding an absence of state action. We granted certiorari to review this judgment.

The Due Process Clause of the Fourteenth Amendment provides: “[N]or shall any State deprive any person of life, liberty, or property, without due process of law.” In 1883, this Court in the Civil Rights Cases, 109 U. S. 3, affirmed the essential dichotomy set forth in that Amendment between deprivation by the State, subject to scrutiny under its provisions, and private conduct, “however discriminatory or wrongful,” against which the Fourteenth Amendment offers no shield. Shelley v. Kraemer, 334 U. S. 1 (1948).

We have reiterated that distinction on more than one occasion since then. See, e. g., Evans v. Abney, 396 U. S. 435, 445 (1970); Moose Lodge No. 107 v. Irvis, 407 U. S. 163, 171-179 (1972). While the principle that private action is immune from the restrictions of the Fourteenth Amendment is well established and easily stated, the question whether particular conduct is “private,” on the one hand, or “state action,” on the other, frequently admits of no easy answer. Burton v. Wilmington Parking Authority, 365 U. S. 715, 723 (1961); Moose Lodge No. 107 v. Irvis, supra, at 172.

Here the action complained of was taken by a utility company which is privatély owned and operated, but which in many particulars of its business is subject to extensive state regulation. The mere fact that a business is subject to state regulation does not by itself convert its action into that of the State for purposes of the Fourteenth Amendment. 407 U. S., at 176-177. Nor does the fact that the regulation is extensive and detailed, as in the case of most public utilities, do so. Public Utilities Comm’n v. Poliak, 343 U. S. 451, 462 (1952). It may well be that acts of a heavily regulated utility with at least something of a governmentally protected monopoly will more readily be found to be “state” acts than will the acts of an entity lacking these characteristics. [But the inquiry must be whether there is a sufficiently"'dose nexus between the State and the challenged action of the regulated entity so that the action of the latter may be fairly treated as that of the State itself?] Moose Lodge No. 107, supra, at 176. The true nature of the State’s involvement may not be immediately obvious, and detailed inquiry may be required in order to determine whether the test is met. Burton v. Wilmington Parking Authority, supra.

Petitioner advances a series of contentions which, in her view, lead to the conclusion that this case should fall on the Burton side of the line drawn in the Civil Rights Cases, supra, rather than on the Moose Lodge side of that line. We find none of them persuasive.

Petitioner first argues that “state action” is present because of the monopoly status allegedly conferred upon Metropolitan by the State of Pennsylvania. As a factual matter, it may well be doubted that the State ever granted or guaranteed Metropolitan a monopoly. But assuming that it had, this fact is not determinative in considering whether Metropolitan’s termination of service to petitioner was “state action” for purposes of the Fourteenth Amendment. In Pollak, supra, where the Court dealt with the activities of the District of Columbia Transit Co., a congressionally established monopoly, we expressly disclaimed reliance on the monopoly status of the transit authority. 343 U. S., at 462. Similarly, although certain monopoly aspects were presented in Moose Lodge No. 107, supra, we found that the Lodge’s action was not subject to the provisions of the Fourteenth Amendment. In each of those cases, there was insufficient relationship between the challenged actions of the entities involved and their monopoly status. There is no indication of any greater connection here.

/^Petitioner next urges that state action is present because respondent provides an essential public service required to be supplied on a reasonably continuous basis by Pa. Stat. Ann., Tit. 66, § 1171 (1959), and hence performs a “public function.” We have, of course, found state action present in the exercise by a private entity of powers traditionally exclusively reserved to the State. See, e. g., Nixon v. Condon, 286 U. S. 73 (1932) (election); Terry v. Adams, 345 U. S. 461 (1953) (election); Marsh v. Alabama, 326 U. S. 501 (1946) (company town); Evans v. Newton, 382 U. S. 296 (1966) (municipal park). If we were dealing with the exercise by Metropolitan of some power delegated to it by the State which is traditionally associated with sovereignty, such as eminent domain, our case would be quite a different one. But while the Pennsylvania statute imposes an obligation to furnish service on regulated utilities, it imposes no such obligation on the State. The Pennsylvania courts have rejected the contention that the furnishing of utility services is either a state function or a municipal duty. Girard Life Insurance Co. v. City of Philadelphia, 88 Pa. 393 (1879); Baily v. Philadelphia, 184 Pa. 594, 39 A. 494 (1898).

¿Perhaps in recognition of the fact that the supplying of utility service is not traditionally the exclusive prerogative of the State, petitioner invites the expansion of the doctrine of this limited line of cases into a broad principle that all businesses “affected with the public interest” are state actors in all their actions.

We decline the invitation for reasons stated long ago in Nebbia v. New York, 291 U. S. 502 (1934), in the course of rejecting a substantive due process attack on state legislation:

“It is clear that there is no closed class or category of businesses affected with a public interest . . . . The phrase 'affected with a public interest’ can, in the nature of things, mean no more than that an industry, for adequate reason, is subject to control for the public good. In several of the decisions of this court wherein the expressions 'affected with a public interest,’ and 'clothed with a public use,’ have been brought forward as the criteria ... it has been admitted that they are not susceptible of definition and form an unsatisfactory test. . . .” Id., at 536.

See, e. g., Tyson & Brother v. Banton, 273 U. S. 418, 451 (1927) (Stone, J., dissenting).

Doctors, optometrists, lawyers, Metropolitan, and Nebbia’s upstate New York grocery selling a quart of milk are all in regulated businesses, providing arguably essential goods and services, “affected with a public interest.” We do not believe that such a status converts their every action, absent more, into that of the State.

We also reject the notion that Metropolitan’s termination is state action because the State “has specifically authorized and approved” the termination practice. In the instant case, Metropolitan filed with the Public Utility Commission a general tariff — a provision of which states Metropolitan’s right to terminate service for nonpayment. This provision has appeared in Metropolitan’s previously filed tariffs for many years and has never been the subject of a hearing or other scrutiny by the Commission. Although the Commission did hold hearings on portions of Metropolitan’s general tariff relating to a general rate increase, it never even considered the reinsertion of this provision in the newly'filed general tariff. The provision became effective 60 days after filing when not disapproved by the Commission

As a threshold matter, it is less than clear under state law that Metropolitan was even required to file this provision as part of its tariff or that the Commission would have had the power to disapprove it. The District Court observed that the sole connection of the Commission with this regulation was Metropolitan’s simple notice filing with the Commission and the lack of any Commission action to prohibit it.

The case most heavily relied on by petitioner is Public Utilities Comm’n v. Pollak, supra. There the Court dealt with the contention that Capital Transit’s installation of a piped music system on its buses violated the First Amendment rights of the bus riders. It is not entirely clear whether the Court alternatively held that Capital Transit’s action was action of the “State” for First Amendment purposes, or whether it merely assumed, arguendo, that it was and went on to resolve the First Amendment question adversely to the bus riders. In either event, the nature of the state involvement there was quite different than it is here. The District of Columbia Public Utilities Commission, on its own motion, commenced an investigation of the effects of the piped music, and after a full hearing concluded not only that Capital Transit’s practices were “not inconsistent with public convenience, comfort, and safety,” 81 P. U. R. (N. S.) 122, 126 (1950), but also that the practice “in fact, through the creation of better will among passengers, . . . tends to improve the conditions under which the public ride.” Ibid. Here, on the other hand, there was no such imprimatur placed on the practice of Metropolitan about which petitioner complains. The nature of governmental regulation of private utilities is such that a utility may frequently be required by the state regulatory scheme to obtain approval for practices a business regulated in less detail would be free to institute without any approval from a regulatory body. Approval by a state utility commission of such a request from a regulated utility, where the commission has not put its own weight on the side of the proposed practice by ordering it, does not transmute a practice initiated by the utility and approved by the commission into “state action.” At most, the Commission’s failure to overturn this practice amounted to no more than a determination that a Pennsylvania utility was authorized to employ such a practice if it so desired. Respondent’s exercise of the choice allowed by state law where the initiative comes from it and not from the State, does not make its action in doing so “state action” for purposes of the Fourteenth Amendment.

We also find absent in the instant case the symbiotic relationship presented in Burton v. Wilmington Parking Authority, 365 U. S. 715 (1961). There where a private lessee, who practiced racial discrimination, leased space for a restaurant from a state parking authority in a publicly owned building, the Court held that the State had so far insinuated itself into a position of interdependence with the restaurant that it was a joint participant in the enterprise. Id., at 725. We cautioned, however, that while “a multitude of relationships might appear to some to fall within the Amendment’s embrace,” differences in circumstances beget differences in law, limiting the actual holding to lessees of public property. Id., at 726.

Metropolitan is a privately owned corporation, and it does not lease its facilities from the State of Pennsylvania. It alone is responsible for the provision of power to its customers. In common with all corporations of the State it pays taxes to the State, and it is subject to a form of extensive regulation by the State in a way that most other business enterprises are not. But this was. likewise true of the appellant club in Moose Lodge No. 107 v. Irvis, supra, where we said:

“However detailed this type of regulation may be in some particulars, it cannot be said to in any way foster or encourage racial discrimination. Nor can it be said to make the State in any realistic sense a partner or even a joint venturer in the club’s enterprise.” 407 U. S., at 176-177.'

All of petitioner’s arguments taken together show no more than that Metropolitan was a heavily regulated, privately owned utility, enjoying at least a partial monopoly in the providing of electrical service within its territory, and that it elected to terminate service to petitioner in a manner which the Pennsylvania Public Utility Commission found permissible under state law. Under our decision this is not sufficient to connect the State of Pennsylvania with respondent’s action so as to make the latter’s conduct attributable to the State for purposes of the Fourteenth Amendment.

We conclude that the State of Pennsylvania is not sufficiently connected with respondent’s action in terminating petitioner’s service so as to make respondent’s conduct in so doing attributable to the State for purposes of the Fourteenth Amendment. We therefore have no occasion to decide whether petitioner’s claim to continued service was “property” for purposes of that Amendment, or whether “due process of law” would require a State taking similar action to accord petitioner the procedural rights for which she contends. The judgment of the Court of Appeals for the Third Circuit is therefore

Affirmed.

Mr. Justice Douglas,

dissenting.

I reach the opposite conclusion from that reached by the majority on the state-action issue.

The injury alleged took place when respondent discontinued its service to this householder without notice or opportunity to remedy or contest her alleged default, even though its tariff provided that respondent might “discontinue its service on reasonable notice.” May a State allow a utility — which in this case has no competitor — to exploit its monopoly in violation of its own tariff? May a utility have complete immunity under federal law when the State allows its regulatory agency to become the prisoner of the utility or, by a listless attitude of no concern, to permit the utility to use its monopoly power in a lawless way?

In Burton v. Wilmington Parking Authority, 365 U. S. 715 (1961), we said: “Only by sifting facts and weighing circumstances can the nonobvious involvement of the State in private conduct be attributed its true significance.” Id., at 722. A particularized inquiry into the circumstances of each case is necessary in order to determine whether a given factual situation falls within “the variety of individual-state relationships which the [Fourteenth] Amendment was designed to embrace.” Ibid. As our subsequent discussion in Burton made clear, the dispositive question in any state-action case is not whether any single fact or relationship presents a sufficient degree of state involvement, but rather whether the aggregate of all relevant factors compels a finding of state responsibility. Id., at 722-726. See generally Moose Lodge No. 107 v. Irvis, 407 U. S. 163 (1972).

It is not enough to examine seriatim each of the factors upon which a claimant relies and to dismiss each individually as being insufficient to support a finding of state action. It is the aggregate that is controlling.

It is said that the mere fact of respondent’s monopoly status, assuming arguendo that that status is state conferred or state protected, “is not determinative in considering whether Metropolitan’s termination of service to petitioner was 'state action’ for purposes of the Fourteenth Amendment.” Ante, at 351-352. Even so, a state-protected monopoly status is highly relevant in assessing the aggregate weight of a private entity’s ties to the State.

It is said that the fact that respondent’s services are “affected with a public interest” is not determinative. I agree that doctors, lawyers, and grocers are not transformed into state actors simply because they provide arguably essential goods and services and are regulated by the State. In the present case, however, respondent is not just one person among many; it is the only public utility furnishing electric power to the city. When power is denied a householder, the home, under modern conditions, is likely to become unlivable.

Respondent’s procedures for termination of service may never have been subjected to the same degree of state scrutiny and approval, whether explicit or implicit, that was present in Public Utilities Comm’n v. Pollak, 343 U. S. 451 (1952). Yet in the present ease the State is heavily involved in respondent’s termination procedures, getting into the approved tariff a requirement of “reasonable notice.” Pennsylvania has undertaken to regulate numerous aspects of respondent’s operations in some detail, and a “hands-off” attitude of permissiveness or neutrality toward the operations in this case is at war with the state agency’s functions of supervision over respondent’s conduct in the area of servicing householders, particularly where (as here) the State would presumably lend its weight and authority to facilitate the enforcement of respondent’s published procedures. Cf. Adickes v. S. H. Kress & Co., 398 U. S. 144 (1970); Reitman v. Mulkey, 387 U. S. 369 (1967); Railway Employes’ Dept. v. Hanson, 351 U. S. 225 (1956); Shelley v. Kraemer, 334 U. S. 1 (1948).

In the aggregate, these factors depict a monopolist providing essential public services as a licensee of the State and within a framework of extensive state supervision and control. The particular regulations at issue, promulgated by the monopolist, were authorized by state law and were made enforceable by the weight and authority of the State. Moreover, the State retains the power of oversight to review and amend the regulations if the public interest so requires. Respondent’s actions are sufficiently intertwined with those of the State, and its termination-of-service provisions are sufficiently buttressed by state law to warrant a holding that respondent’s actions in terminating this householder’s service were “state action” for the purpose of giving federal jurisdiction over respondent under 42 U. S. C. § 1983. Though the Court pays lip service to the need for assessing the totality of the State’s involvement in this enterprise, ante, at 358, its underlying analysis is fundamentally sequential rather than cumulative. In that perspective, what the Court does today is to make a significant departure from our previous treatment of state-action issues.

Mr. Justice Brandéis in Liggett Co. v. Lee, 288 U. S. 517 (1933), in speaking of the competition among the States to ease the opportunities and methods of incorporation, said: “The race was one not of diligence but of laxity.” Id., at 559 (dissenting opinion). One has only to peruse the 84-part Utility Corporations Report by the Federal Trade Commission (under the direction of its able counsel the late Robert E. Healy) to realize that state regulation of utilities has largely made state commissions prisoners of the utilities. See especially S. Doc. No. 92, 70th Cong., 1st Sess., pt. 73-A (1936); and see id., pt. 72-A, p. 880. In this connection it should be noted that successful attempts by public utilities to exclude themselves from the antitrust laws have been based on the assertion that their monopoly activity constitutes “state action.” See Washington Gas Light Co. v. Virginia Electric & Power Co., 438 F. 2d 248, 250-252 (CA4 1971); Gas Light Co. of Columbus v. Georgia Power Co., 440 F. 2d 1135, 1138-1140 (CA51971).

By like token the tariff prescribing termination-of-service procedures was possible only because of “state action.” And it would be compatible only with administrative abdication of authority to equate “administrative silence with abandonment of administrative duty.” Washington Gas Light Co. v. Virginia Electric & Power Co., supra, at 252.

Section 1983 was designed to give citizens a federal forum for civil rights complaints wherever, by direct or indirect actions, a State, acting “in cahoots” with a private group or through neglect or listless oversight, allows a private group to perpetrate an injury. The theory is that in those cozy situations, local politics and the pressure of economic overlords on subservient state agencies make recovery in state courts unlikely. I realize we are in an area where we witness a great retreat from the exercise of federal jurisdiction which the Congress has conferred on federal courts. The sentiment here is that state courts are as hospitable as federal courts to federal claims. That may well be true, in some instances. But it is for the Senate and the House to make that decision. We should not tolerate an erosion of the policy Congress expressed in drafting § 1983.

Section 1983 addresses itself to grievances inflicted “under color of any statute, ordinance, [or] regulation ... of any State . . . .” The regulatory regime imposed by Pennsylvania on respondent utility seems to fit this statute like a glove. Electrical service, being a necessity of life under the circumstances of this case, is an entitlement which under our decisions may not be taken without the requirements of procedural due process. Fuentes v. Shevin, 407 U. S. 67, 80 (1972); Goldberg v. Kelly, 397 U. S. 254 (1970); Palmer v. Columbia Gas of Ohio, Inc., 479 F. 2d 153 (CA6 1973).

Mb. Justice Brennan,

dissenting.

I do not think that a controversy existed between petitioner and respondent entitling petitioner to be heard in this action. Under Pennsylvania law respondent’s duty under Pa. Stat. Ann., Tit. 66, § 1171 (1959), to provide service was limited by § 25 of the General Rules and Regulations, the Electric Service Tariff, on file with the Pennsylvania Public Utility Commission, to provision of such service only to “customers,” defined as “[a]ny person [s] . . . lawfully receiving service from [the] Company.” Petitioner, as the Court notes, ceased being a “customer” in September 1970 when her account was terminated for nonpayment of bills. That termination was pursuant to Rule 15 of the tariff quoted by the Court in n. 1. From September 1970 to September 1971, respondent’s “customer” was James Dodson; and his delinquency in payment for service during that period, not petitioner’s delinquency before September 1970, was the occasion for the termination of service on October 11, 1971. An effort by petitioner at that time to have service continued if she paid $30 on account on her delinquent 1970 bill failed when respondent rejected the offer and shut off the service. In these circumstances petitioner had no basis in my view for the claimed entitlement under § 1171 quoted by the Court in n. 2, and therefore no controversy existed between petitioner and respondent which could be the subject of her action. I would therefore intimate no view upon the correctness of the holdings below whether the termination of service on October 11, 1971, constituted state action but would vacate the judgment of the Court of Appeals with direction that the case be remanded to the District Court with instruction to enter a new judgment dismissing the complaint. See Golden v. Zwickler, 394 U. S. 103, 109-110 (1969).

Mr. Justice Marshall,

dissenting.

I agree with my Brother Brennan that this case is a very poor vehicle for resolving the difficult and important questions presented today. The confusing sequence of events leading to the challenged termination makes it unclear whether petitioner has a- property right under state law to the service she was receiving from the respondent company. Because these complexities would seriously hamper resolution of the merits of the case, I would dismiss the writ as improvidently granted. Since the Court has disposed of the case by finding no state action, however, I think it appropriate to register my dissent on that point.

The Metropolitan Edison Co. provides an essential public service to the people of York, Pa. It is the only entity, public or private, that is authorized to supply electric service to most of the community. As a part of its charter to the company, the State imposes extensive regulations, and it cooperates with the company in myriad ways. Additionally, the State has granted its approval to the company’s mode of service termination — the very conduct that is challenged here. Taking these factors together, I have no difficulty finding state action in this case. As the Court concluded in Burton v. Wilmington Parking Authority, 365 U. S. 715, 725 (1961), the State has sufficiently “insinuated itself into a position of interdependence with [the company] that it must be recognized as a joint participant in the challenged activity.”

Our state-action cases have repeatedly relied on several factors clearly presented by this case: a state-sanctioned monopoly; an extensive pattern of cooperation between the “private” entity and the State; and a service uniquely public in nature. Today the Court takes a major step in repudiating this line of authority and adopts a stance that is bound to lead to mischief when applied to problems beyond the narrow sphere of due process objections to utility terminations.

A

When the State confers a monopoly on a group or organization, this Court has held that the organization assumes many of the obligations of the State. Railway Employes’ Dept. v. Hanson, 351 U. S. 225 (1956). Even when the Court has not found state action based solely on the State’s conferral of a monopoly, it has suggested that the monopoly factor weighs heavily in determining whether constitutional obligations can be imposed on formally private entities. See Steele v. Louisville & Nashville R. Co., 323 U. S. 192 (1944). Indeed, in Moose Lodge No. 107 v. Irvis, 407 U. S. 163, 177 (1972), the Court was careful to point out that the Pennsylvania liquor-licensing scheme “falls far short of conferring upon club licensees a monopoly in the dispensing of liquor in any given municipality or in the State as a whole.”

The majority distinguishes this line of cases with a cryptic assertion that public utility companies are “natural monopolies.” Ante, at 351-352, n. 8. The theory behind the distinction appears to be that since the State’s purpose in regulating a natural monopoly is not to aid the company but to prevent its charging monopoly prices, the State’s involvement is somehow less significant for state-action purposes. I cannot agree that so much should turn on so narrow a distinction. Initially, it is far from obvious that an electric company would not be subject to competition if the market were unimpeded by governmental restrictions. Certainly the “start-up” costs of initiating electric service are substantial, but the rewards available in a relatively inelastic market might well be sufficient under the right circumstances to attract competitive investment. Instead, the State has chosen to forbid the high profit margins that might invite private competition or increase pressure for state ownership and operation of electric power facilities.

•' The difficulty inherent in this kind of economic analysis counsels against excusing natural monopolies from the reach of state-action principles. To invite inquiry into whether a particular state-sanctioned monopoly might have survived without the State’s express approval grounds the analysis in hopeless speculation. Worse, this approach ignores important implications of the State’s policy of utilizing private monopolies to provide electric service. Encompassed within this policy is the State’s determination not to permit governmental competition with the selected private company, but to cooperate with and regulate the company in a multitude of ways to ensure that the company’s service will be the functional equivalent of service provided by the State.

B

The pattern of cooperation between Metropolitan Edison and the State has led to significant state involvement in virtually every phase of the company’s business. The majority, however, accepts the relevance of the State’s regulatory scheme only to the extent that it demonstrates state support for the challenged termination procedure. Moreover, after concluding that the State in this case had not approved the company’s termination procedures, the majority suggests that even state authorization and approval would not be sufficient: the State would apparently have to order the termination practice in question to satisfy the majority’s state-action test, see ante, at 357.

I disagree with the majority’s position on three separate grounds. First, the suggestion that the State would have to “put its own weight on the side of the proposed practice by ordering it” seems to me to mark a sharp departure from our previous state-action cases. From the Civil Rights Cases, 109 U. S. 3 (1883), to Moose Lodge, supra, we have consistently indicated that state authorization and approval of “private” conduct would support a finding of state action..

Second, I question the wisdom of giving such short shrift to the extensive interaction between the company and the State, and focusing solely on the extent of state support for the particular activity under challenge. In cases where the State’s only significant involvement is through financial support or limited regulation of the private entity, it may be well to inquire whether the State’s involvement suggests state approval of the objectionable conduct. See Powe v. Miles, 407 F. 2d 73, 81 (CA2 1968); Grossner v. Trustees of Columbia University, 287 F. Supp. 535, 547-548 (SDNY 1968). But where the State has so thoroughly insinuated itself into the operations of the enterprise, it should not be fatal if the State has not affirmatively sanctioned the particular practice in question.

Finally, it seems to me in any event that the State has given its approval to Metropolitan Edison’s termination procedures. The State Utility Commission approved a tariff provision under which the company reserved the right to discontinue its service on reasonable notice for nonpayment of bills.

The majority attempts to make something of the fact that the tariff provision was not challenged in the most recent Utility Commission hearings, and that it had apparently not been challenged before. But the provision had been included in a tariff required to be filed and approved by the State pursuant to statute. That it was not seriously questioned before approval does not mean that it was not approved. It suggests, instead, that the Commission was satisfied to permit the company to proceed in the termination area as it had done in the past. The majority’s test puts potential plaintiffs in a difficult position : if the Commission approves the tariff without argument or a hearing, the State has not sufficiently demonstrated its approval and support for the company’s practices. If, on the other hand, the State challenges the tariff provision on the ground, for example, that the “reasonable notice” does not meet the standards of fairness that it expects of the utility, then the State has not put its weight behind the termination procedure employed by the company, and again there is no state action. Apparently, authorization and approval would require the kind of hearing that was held in Pollak, where the Public Utilities Commission expressly stated that the bus company’s installation of radios in buses and streetcars was not inconsistent with the public convenience, safety, and necessity. I am afraid that the majority has in effect restricted Pollak to its facts if it has not discarded it altogether.

C

The fact that the Metropolitan Edison Co. supplies an essential public service that is in many communities supplied by the government weighs more heavily for me than for the majority. The Court concedes that state action might be present if the activity in question were “traditionally associated with sovereignty,” but it then undercuts that point by suggesting that a particular service is not a public function if the State in question has not required that it be governmentally operated. This reads the “public function” argument too narrowly. (The whole point of the “public function” cases is to look behind the State’s decision to provide public services through private parties?? See Evans v. Newton, 382 U. S. 296 (1966) ; Terry v. Adams, 345 U. S. 461 (1953); Marsh v. Alabama, 326 U. S. 501 (1946). In my view, utility service is traditionally identified with the State through universal public regulation or 'ownership to a degree sufficient to render it a “public function.” ■

I agree with the majority that it requires more than a finding that a particular business is “affected with the public interest” before constitutional burdens can be imposed on that business. But when the activity in question is of such public importance that the State invariably either provides the service itself or permits private companies to act as state surrogates in providing it, much more is involved than just a matter of public interest. In those cases, the State has determined that if private companies wish to enter the field, they will have to surrender many of the prerogatives normally associated with private enterprise and behave in many ways like a governmental body. And when the State’s regulatory scheme has gone that far, it seems entirely consistent to impose on the public utility the constitutional burdens normally reserved for the State.

Private parties performing functions affecting the public interest can often make a persuasive claim to be free of the constitutional requirements applicable to governmental institutions because of the value of preserving a private sector in which the opportunity for individual choice is maximized. See Evans v. Newton, supra, at 298; H. Friendly, The Dartmouth College Case and the Public-Private Penumbra (1969). Maintaining the private status of parochial schools, cited by the majority, advances just this value. In the due process area, a similar value of diversity may often be furthered by allowing various private institutions the flexibility to select procedures that fit their particular needs. See Wahba v. New York University, 492 F. 2d 96, 102 (CA2), cert. denied, post, p. 874. But it is hard to imagine any such interests that are furthered by protecting privately owned public utility companies from meeting the constitutional standards that would apply if the companies were state owned. The values of pluralism and diversity are simply not relevant when the private company is the only electric company in town.

II

The majority’s conclusion that there is no state action in this case is likely guided in part by its reluctance to impose on a utility company burdens that might ultimately hurt consumers more than they would help them. Elaborate hearings prior to termination might be quite expensive, and for a responsible company there might be relatively few cases in which such hearings would do any good. The solution to this problem, however, is to require only abbreviated pretermination procedures for all utility companies, not to free the “private” companies to behave however they see fit. At least on occasion, utility companies have failed to demonstrate much sensitivity to the extreme importance of the service they render, and in some cities, the percentage of error in service termination is disturbingly high. See Palmer v. Columbia Gas Co. of Ohio, Inc., 342 F. Supp. 241, 243 (ND Ohio 1972), aff’d, 479 F. 2d 153 (CA6 1973); Bronson v. Consolidated Edison Co., 350 F. Supp. 443, 448 (SDNY 1972). Accordingly, I think that at the minimum, due process would require advance notice of a proposed termination with a clear indication that a responsible company official.can readily be contacted to consider any claim of error.

III

What is perhaps most troubling about the Court’s opinion is that it would appear to apply to a broad range of claimed constitutional violations by the company. The Court has not adopted the notion, accepted elsewhere, that different standards should apply to state-action analysis when different constitutional claims are presented. See Adickes v. S. H. Kress & Co., 398 U. S. 144, 190-191 (1970) (Brennan, J., concurring and dissenting) ; Grafton v. Brooklyn Law School, 478 F. 2d 1137, 1142 (CA2 1973). Thus, the majority's analysis would seemingly apply as well to a company that refused to extend service to Negroes, welfare recipients, or any other group that the company preferred, for its own reasons, not to serve. I cannot believe that this Court would hold that the State’s involvement with the utility company was not sufficient to impose upon the company an obligation to meet the constitutional mandate of nondiscrimination. Yet nothing in the analysis of the majority opinion suggests otherwise.

I dissent.

       Metropolitan Edison Company Electrical Tariff, Electric Pa. P. TJ. C. No. 41, Rule 15. This portion of Metropolitan’s general tariff, filed with the Utility Commission under the notice-filing requirement of Pa. Stat. Ann., Tit. 66, § 1142 (1959) (since the general tariff involved a rate increase), provides in pertinent part:

        “(15) — Cause for discontinuance of service.

      “Company reserves the right to discontinue its service on reasonable notice and to remove its equipment in case of nonpayment of bill. ...”
      Its filed tariff also gives it the right to terminate service for fraud or for tampering with a meter but Metropolitan did not seek to assert these grounds below.

       The basis for this claimed entitlement is Pa. Stat. Ann., Tit. 66, § 1171 (1959), providing in part:
      “Every public utility shall furnish and maintain adequate, efficient, safe, and reasonable service and facilities .... Such service also shall be reasonably continuous and without unreasonable interruptions or delay....”
      Mrs. Jackson finds in this provision a state-law entitlement to continuing utility service to her residence. She reasons that under the Due Process Clause of the Fourteenth Amendment she cannot be deprived of this entitlement to utility service without adequate notice and a hearing before an impartial body: until these are completed, her service must continue. Because of our conclusion on the threshold question of state action, we do not reach questions relating to the existence of a property interest or of what procedural guarantees the Fourteenth Amendment would require if a property interest were found to exist.
      Mr. Justice Brennan, dissenting, post, at 364, concludes that there is no justiciable controversy between petitioner and respondent because whatever entitlement to service petitioner had was previously terminated by respondent in accordance with its tariff. We do not believe this to be any less a determination of the merits of the action than is our conclusion that whatever deprivation she may have suffered was not caused by the State. Issues of whether a claimed entitlement is “property” within the meaning of the Due Process Clause, Board of Regents v. Roth, 408 U. S. 564 (1972), and whether if so its deprivation was consistent with due process, see Arnett v. Kennedy, 416 U. S. 134 (1974), are themselves constitutional questions which we find no occasion to reach in this case.

       Section 1 of the Fourteenth Amendment provides in part:
      "No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State déprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

       The decision is reported at 348 F. Supp. 954 (1972).

       The decision is reported at 483 F. 2d 754 (1973).

       415 U. S. 912 (1974). Compare Kadlec v. Illinois Bell Telephone Co., 407 F. 2d 624 (CA7), cert. denied, 396 U. S. 646 (1969); Lucas v. Wisconsin Electric Power Co., 466 F. 2d 638 (CA7 1972), cert. denied, 409 U. S. 1114 (1973), with Palmer v. Columbia Gas of Ohio, Inc., 479 F. 2d 153 (CA6 1973), modified in Turner v. Impala Motors, 503 F. 2d 607 (CA6 1974). Cf. Ihrke v. Northern States Power Co., 459 F. 2d 566 (CA8), vacated as moot, 409 U. S. 815 (1972).

       Enterprises subject to the same regulatory system as Metropolitan are enumerated in the definition of “public utility” contained in Pa. Stat. Ann., Tit. 66, § 1102 (17) (1959 and Supp. 1974-1975). Included in this definition are all companies engaged in providing gas, power, or water; all common carriers, pipeline companies, telephone and telegraph companies, sewage collection and disposal companies; and corporations affiliated with any company engaging in such activities. Among some of the enterprises held subject to this regulatory scheme are freight forwarding and storage companies (Highway Freight Co. v. Public Service Comm’n, 108 Pa. Super. 178, 164 A. 835 (1933)), real estate developers who, incident to their business, provide water services (Sayre Land. Co. v. Pennsylvania Public Utility Comm’n, 21 D. & C. 2d 469 (1959)), and individually owned taxicabs. Pennsylvania Public Utility Comm’n v. Israel, 356 Pa. 400, 52 A. 2d 317 (1947). In Philadelphia Rural Transit Co. v. Philadelphia, 309 Pa. 84, 93, 159 A. 861, 864 (1932), the court estimated that there were 26 distinct types of enterprises subject to this regulatory system, and a fair reading of Pennsylvania law indicates a substantial expansion of included enterprises since that case. The incidents of regulation do not appear materially different between enterprises. If the mere existence of this regulatory scheme made Metropolitan’s action that of the State, then presumably the actions of a lone Philadelphia cab driver could also be fairly treated as those of the State of Pennsylvania.

       It is provided in Pa. Stat. Ann., Tit. 66, § 1121 (Supp. 1974-1975), that issuance of a certificate of public convenience is a prerequisite for engaging in the utility business in Pennsylvania. The requirements for obtaining such a certificate are described in Pa. Stat. Ann., Tit. 66, §§ 1122,1123 (1959 and Supp. 1974-1975). There is nothing in either Metropolitan’s certificate or in the statutes under which it was issued indicating that the State has granted or guaranteed to Metropolitan monopoly status. In fact Metropolitan does face competition within portions of its service area from another private utility company and from municipal utility companies. Metropolitan was organized in 1874, 39 years before Pennsylvania’s adoption of its first utility regulatory scheme in 1913. . There is no indication that it faced any greater competition in 1912 than today. As. petitioner admits, such public utility companies are natural monopolies created by the economic forces of high threshold capital requirements and virtually unlimited economy of scale. Burdick, The Origin of the Peculiar Duties of Public Service Companies, 11 Col. L. Rev. 514 (1911); H. Trachsel, Public Utility Regulation 7-8, 52 (1947). Regulation was superimposed on such natural monopolies as a substitute for competition and not to eliminate it:
      ‘The primary object of the Public Utility Law is not to establish monopolies or to guarantee the security of investments in public service corporations, but to serve the interests of the public.” Highway Express Lines, Inc. v. Pennsylvania Public Utility Comm’n, 195 Pa. Super. 92, 100, 169 A. 2d 798, 802 (1961); cf. Pottsville Union Traction Co. v. Public Service Comm’n, 67 Pa. Super. 301, 304 (1917).

       The argument has been impliedly rejected by this Court on a number of occasions. See, e. g., Civil Rights Cases, 109 U. S. 3, 8 (1883). It is difficult to imagine a regulated activity more essential or more “clothed with the public interest” than the maintenance of schools, yet wre stated in Evans v. Newton, 382 U. S. 296, 300 (1966):
      "The range of governmental activities is broad and varied, and the fact that government has engaged in a particular activity does not necessarily mean that an individual entrepreneur or manager of the same kind of undertaking suffers the same constitutional inhibitions. While a State may not segregate public schools so as to exclude one or more religious groups, those sects may maintain their own parochial educational systems.”

       See n. 1, supra. The same provision appeared in all of Metropolitan’s prior general tariffs. The sole reason for substituting the new general tariff, which contains all the terms and conditions of Metropolitan’s service, was to procure a rate increase. This was the sole change between Metropolitan’s Electrical Tariff No. 41 and its predecessor.

       Petitioner does not contest the fact that Metropolitan had this right at common law before the advent- of regulation. Brief for Petitioner 31.

       Petitioner concedes that the hearing was solely devoted to the question of the proposed rate increase. Id., at 30.

       See Pa. Stat. Ann., Tit. 66, § 1148 (1959); Pa. P. U. C. Tariff Regulations, § II, “Public Notice of Tariff Changes.” These provisions-specify that utility companies must give 60 days’ notice to the public before changing their rules filed in their general tariff. Since Pa. Stat. Ann., Tit. 66, § 1171 (1959), provides that “[s]ub-ject to . . . the regulations or orders of ■ the commission, every public utility may have reasonable rules and regulations governing the conditions under which it shall be required to render service,” the Commission arguably had the power to disapprove utility rules. There is no evidence that it has ever even considered the provision in question. When the 60-day notice period passed, the provisions became effective.

       Pennsylvania. P. U. C. Tariff Regulations, § VIII, “Discount for Prompt Payment and Penalties for Delayed Payment of Bills,” is the only authority cited for a state-imposed requirement that Metropolitan file its termination provision as part of its general tariff. This section requires the filing of “penalties” imposed upon customers for failures to pay bills promptly. Respondent argues that this applies only to monetary penalties. There is no Pennsylvania case law on the question.

       “The only apparent state involvement with the activity complained of here is in Tariff Reg. VIII of the Pennsylvania P. U. C_ [T]he purpose of Tariff Reg. VIII is to insure that public utilities inform their patrons of any possible penalty for failing to pay their bills. As in Kadlec, defendant here acted pursuant to its own regulations and out of a purely private, economic motive. No state official participated in the practice complained of, nor is it alleged that the state requested or co-operated' in the suspension of service.” 348 F. Supp., at 958.

       See 343 U. S., at 462. At one point the Court states:
      “We find in the reasoning of the court below a sufficiently close relation between the Federal Goveriynent and the radio service to make it necessary for us to consider thise Amendments.” Ibid.

      Later, the opinion states:
      . "We, therefore, find it appropriate to examine into what restriction, if any, the First and Fifth Amendments place upon the Federal Government . . . assuming that the action of Capital Transit . . . amounts to sufficient Federal Government action to make the First and Fifth Amendments applicable thereto.” Id., at 462-463. (Emphasis added.)
      The Court then went on to find no constitutional violation in the challenged action.

       As in Moose Lodge No. 107 v. Irvis, 407 U. S. 163, 173 (1972), there is no suggestion in this record that the Pennsylvania Public Utility Commission intended either overtly or covertly to encourage the practice. See n. 15, supra.

       Rule 15 of the tariff provides in part:
      “Company reserves the right to discontinue its service on reasonable notice and to remove its equipment in case of nonpayment of bill or violation of the Pennsylvania Public Utility Commission’s or Company’s Rules and Regulations; or, without notice, for abuse, fraud, or tampering with the connections, meters or other equipment of Company. Failure by Company to exercise this right shall not be deemed a waiver thereof.”

       The court below in Burton had relied heavily on a number of facts indicating minimal state involvement, but we regarded that court’s analysis as unduly restricted in its scope: “While these factual considerations are indeed validly accountable aspects of the enterprise upon which the State has embarked, we cannot say that they lead inescapably to the conclusion that state action is not present. Their persuasiveness is diminished when evaluated in the context of other factors which must be acknowledged.” 365 U. S., at 723.
      After discussing those additional factors in greater detail, we concluded: “Addition of all these activities, obligations and responsibilities of the Authority, the benefits mutually conferred, together with the obvious fact that the restaurant is operated as an integral part of a public building devoted to a public parking service, indicates that degree of state participation and involvement in discriminatory action which it was the design of the Fourteenth Amendment to condemn.” Id., at 724.

       It seems irrelevant that Metropolitan was organized prior to the inauguration of utility regulation in Pennsylvania, and that a utility of this sort is, for all practical purposes, a natural monopoly. Whatever its origins, the existing situation presents a monopoly enterprise subject to detailed state regulation; the nature and extent of that regulation take on particular significance in light of the lack of any alternative source of service available to Metropolitan’s customers.

       Our disclaimer of reliance upon this factor in Public Utilities Comm’n v. Pollak, 343 U. S. 451, 462 (1952), should not be read as holding that monopoly status is wholly irrelevant; the "disclaimer” on its face simply states that monopoly status was not used as an ingredient of the finding of federal governmental involvement in that case.

       The Public Utility Commission is given extensive control over utility rates, Pa. Stat. Ann., Tit. 66, § 1141 et seq. (1959 and Supp. 1974^-1975), and over the character and quality of utility services and facilities, §§ 1171, 1182-1183; it is given broad power to receive and investigate complaints, §§ 1391, 1398, and to regulate and supervise the activities, rules, and contractual undertakings of utilities, §§ 1171, 1341-1343, 1360.

       There is no requirement for an exhaustion of state remedies before suing under § 1983 (see Wilwording v. Swenson, 404 U. S. 249 (1971)), though suggestions for statutory changes in that regard have been made. Judd, The Expanding Jurisdiction of the Federal Courts, 60 A. B. A. J. 938, 941 (1974).

       The State’s regulatory pattern makes it amply clear that it expects utility companies to behave more like governmental entities than private corporations. The rates are fixed by the Public Utility Commission, as are the standards of service and the company’s system of accounting. Pa. Stat. Ann., Tit. 66, §§ 1141,1149,1171, 1182, 1183, 1211 (1959). The character of the facilities is subject to state approval and continuing supervision, and the State also requires that the service “shall be reasonably continuous and without unreasonable interruptions or delay.” § 1171. The certificate of public convenience confers certain eminent domain rights upon the company, § 1124 (Supp. 1974-1975), as well as the right of entry onto a customer’s property to maintain and inspect its equipment. Pa. P. U. C. Electric Regulations, Rule 14D.

       In the Civil Bights Cases, the Court suggested that state action might be found if the conduct in question were “sanctioned in some way by the State,” 109 U. S., at 17. Later cases made it clear that the State’s sanction did not need to be in the form of an affirmative command. McCabe v. Atchison, T. & S. F. R. Co., 235 U. S. 151 (1914); Nixon v. Condon, 286 U. S. 73 (1932); Public Utilities Comm’n v. Pollak, 343 U. S. 451 (1952). In Burton v. Wilmington Parking Authority, 365 U. S. 715, 725 (1961), the Court noted that by its inaction, the State had “elected to place its power, property and prestige behind the admitted discrimination,” although the State did not actually order the discrimination. See id., at 726-727 (Stewart, J., concurring). And in Reitman v. Mulkey, 387 U. S. 369, 381 (1967), the Court based its “state action” ruling on the fact that the California constitutional provision “was intended to authorize, and does authorize, racial discrimination in the housing market.” Even in Moose Lodge No. 107 v. Irvis, 407 U. S. 163, 176-177 (1972), the Court suggested that if the State's regulation had in any way fostered or encouraged racial discrimination, a state-action finding might have been justified. Certainly this is a less rigid standard than the Court’s requirement in this case that the Public Utility Commission be shown to have ordered the challenged conduct, not merely to have approved it.

       1 cannot accept the majority’s characterization of Poliak as not necessarily deciding the state-action question there presented. Ante, at 356. Whatever doubt on that score may have been created by the original opinion has long since been resolved by this Court. See Evans v. Newton, 382 U. S. 296, 301 (1966); id., at 319-320 (Harlan, J., dissenting); Columbia Broadcasting System, Inc. v. Democratic National Committee, 412 U. S. 94, 119 (1973) (opinion of Burger, C. J.); id., at 133 (Stewart, J., concurring).

       In Bronson, Judge Tyler noted that the state utility commission had found that 16% of the complaints investigated resulted in adjustments in favor of the customer. 350 F. Supp., at 448 n. 11.


source: Caselaw Access Project

license: Public Domain

text:
    MISSISSIPPI v. ARKANSAS
    No. 48,
    Orig.
    Decided February 26, 1974
    Decree entered February 26, 1974
    Amended decree entered December 23, 1974
   AMENDED DECREE

It Is Ordered, Adjudged, and Decreed as Follows:

. 1. Luna Bar, depicted in Mississippi’s Exhibits 1 and 2, constituting, respectively, Appendix A and part of Appendix B to the Special Master’s report, and appended hereto and hereby made a part of this decree, came into existence by accretion to Carter Point and is, and was, a part of the State of Mississippi.

2. The boundary line between the State of Mississippi and the State of Arkansas in the areas between the upstream and the downstream ends of Tarpley Cut-off is as follows:

“That part of the abandoned bed of the Mississippi River between the upstream end of the Tarpley Cutoff and the downstream end of Tarpley Cut-off as defined and identified in Mississippi’s said Exhibit 2, being a plat prepared by Austin B. Smith. The above described State boundary line being more particularly described as follows, to-wit:
“Beginning at the head of Tarpley Cut-off Channel at Point P-36 as shown on said Smith’s Mississippi Exhibit P-2 at Latitude 33°26,24" and Longitude 91°06'46";
“thence west to Point P-1, Lat. 33°26'25" and Long. 91°07/30";
“thence southwesterly to Point P-2, Lat. 33°26'0.0" and Long. 91°07'56" ;
“thence southwesterly to Point P-3, Lat. 33°25'47" and Long. 91°08'17" ;
“thence southwesterly to Point P-4, Lat. 33°25'40" and Long. 91°08'42";
“thence southwesterly to Point P-5, Lat. 33°25'36" and Long. 91°09'0.0";
“thence southwesterly to Point P-6, Lat. 33°25'30" and Long. 91°09'29";
“thence southwesterly to Point P-7, Lat. 33°25'25" and Long. 91°10'0.0";
“thence southwesterly to Point P-8, Lat. 33°25'21" and Long. 91°10'28";
“thence southwesterly to Point P-9, Lat. 33°25/16" and Long. 91°11'0.0";
“thence southwesterly to Point P-10, Lat. 33°25'10" and Long. 91°11'29";
“thence southwesterly to Point P-11, Lat. 33°25'06" and Long. 91°11'46";
“thence southwesterly to Point P-12, Lat. 33°25'00" and Long. 91°12'04";
“thence southwesterly to Point P-13, Lat. 33°24'52" and Long. 91° 12'17";
“thence southwesterly to Point P-14, Lat. 33°24'46" and Long. 91°12'23";
“thence southward to Point P-15, Lat. 33°24'37" and Long. 91°12'28";
“thence southward to Point P-16, Lat. 33°24'23" and Long. 91° 12'32";
“thence southward to Point P-17, Lat. 33°24'11.5" and Long. 91°12'30";
“thence southeasterly to Point P-18, Lat. 33°24'0.0" and Long. 91°12'21";
“thence southeasterly to Point P-19, Lat. 33°23'44.5" and Long. 91°12'0.0";
“thence southeasterly to Point P-20, Lat. 33°23'37" and Long. 91°11'49.5";
“thence southeasterly to Point P-21, Lat. 33°23'06" and Long. 91°11'0.0";
“thence southeasterly to Point P-22, Lat. 33°23'0.0" and Long. 91°10'48";
“thence southeasterly to Point P-23, Lat. 33°22'54" and Long. 91°10/34";
“thence southeasterly to Point P-24, Lat. 33°22'49" and Long. 91°10'18";
“thence eastward to Point P-25, Lat. 33°22'48" and Long. 91°10'10";
“thence eastward to Point P-26, Lat. 33°22'47" and Long. 91°10'0.0";
“thence eastward to Point P-27, Lat. 33°22'43.5" and Long. 91°09'14.5";
“thence eastward to Point P-28, Lat. 33°22'44" and Long. 91°09'0.0";
“thence northeasterly to Point P-29, Lat. 33°22'46.5" and Long. 91o08'45";
“thence northeasterly to Point P-30, Lat. 33°22'53" and Long. 91°08'24/' ;
“thence northeasterly to Point P-31, Lat. 33°23'0.0" and Long. 91°08'04.5";
“thence northeasterly to Point P-32, Lat. 33°23'01.5" and Long. 91o08'0.0'';
“thence northeasterly to Point P-33, Lat. 33°23,09.5,/ and Long. 91°07'40";
“thence northeasterly to Point P-34, Lat. 33°23r13" and Long. 91°07'31";
“thence northeasterly to Point P-35, Lat. 33°23'25" and Long. 91°06/39,/ at the foot of Tarpley Cut-off Channel”;

3. The costs of this suit, including the expenses of the Special Master and the printing of his report, have been paid out of the fund made up of equal contributions by the State of Mississippi and the State of Arkansas and said fund has been sufficient to defray all said expenses to the date of the issuance of the report. Any costs and expenses that may be incurred beyond the amount so contributed by the respective litigants shall be borne by the State of Arkansas.


author: Mr. Justice Powell Mr. Chief Justice Burger,

text:
    FUSARI, COMMISSIONER OF LABOR v. STEINBERG et al.
    No. 73-848.
    Argued October 15-16, 1974
    Decided January 14, 1975
    Powell, J., delivered the opinion for a unanimous Court. Burger, C. J., filed a concurring opinion, post, p. 390. •

      Donald E. Wasik, Assistant Attorney General of Connecticut, argued the cause for appellant. With him on the brief was Robert K. Killian, Attorney General.

      John M. Creane, by appointment of the Court, post, p. 990, argued the cause for appellees. With him on the brief were Raymond J. Kelly and John A. Dziamba

        Dennis R. Yeager, E. Richard Larson, Stephen M. Randels, John M. Levy, Jerry L. Covington, Marttie Louis Thompson, Stephen E. Gottlieb, C. Christopher Brown, and C. Lyonel Jones filed a brief for the National Employment Law Project, Inc., et al. as amici curiae urging affirmance.

        Stephen P. Berzon, Stefan M. Rosenzweig, J. Albert Woll, and Bernard Kleiman filed a brief for Ellenmae Crow et al. as amici curiae.

   Mr. Justice Powell

delivered the opinion of the Court.

This case comes to us on appeal from a three-judge District Court determination that the Connecticut “seated interview” procedures for assessing continuing eligibility for unemployment compensation benefits violate the Due Process Clause of the Fourteenth Amendment. 364 F. Supp. 922 (Conn. 1973). Our independent examination of Connecticut law reveals that the State significantly revised its unemployment compensation system following the District Court’s decision. Some of the amendments are designed to ameliorate problems that the court identified. In these circumstances, we think it inappropriate to decide the issues tendered by the parties. We therefore vacate the decision of the District Court and remand for reconsideration in fight of the intervening changes in Connecticut law.

I

In Connecticut, unemployment compensation benefits are paid from a trust fund maintained by employer contributions. Appellant Fusari, State Commissioner of Labor and Administrator of the Unemployment Compensation Act, administers the fund.. Under the Connecticut statute, a claimant first must file an initiating claim and establish his general entitlement to receive state unemployment compensation benefits. Conn. Gen. Stat. Rev: §§ 31-230 and 31-235 (1973). Thereafter, the claimant must report to the local unemployment compensation office biweekly and demonstrate continued eligibility for benefits for the preceding two-week period. The claimant must submit forms swearing to his availability for work and to his reasonable efforts to obtain employment during the period in question. He also must submit a form listing the persons to whom he has applied for employment during the preceding two weeks.

Upon receipt of the forms, the paying official may make routine inquiries. If no serious question of eligibility arises, immediate payment is made. If, however, the forms or responses to questions raise suspicion of possible disqualification, the claimant is directed to a “seated interview” with a factfinding examiner for a more thorough inquiry into the possible factors that might render him ineligible for benefits. Although the claimant bears the burden of establishing eligibility, Northrup v. Administrator, 148 Conn. 475, 480, 172 A. 2d 390, 393 (1961); Waskiewicz v. Egan, 15 Conn. Supp. 286, 287 (1947), doubtful cases are to be decided in his favor. Conn. Gen. Stat. Rev. | 31-274 (c).

An examiner’s favorable determination of eligibility results in immediate payment of benefits. If, however, the examiner concludes that the claimant is ineligible, no payment is made. Within a few days the claimant receives a written statement indicating the reasons for disqualification and notifying him of the right to appeal. Benefits for the period in question normally are withheld pending resolution of the administrative appeal. The State’s policy, sometimes honored in the breach, is that pendency of an appeal does not affect the claimant’s eligibility to receive benefits for subsequent periods.

This, appeal arises from a class action challenging the legality of the procedures used for determining continued eligibility for benefits. Appellees asserted that Connecticut violated the federal statutory requirement that state procedures be designed reasonably to assure the payment of benefits “when due/’ 42 U. S. C. § 503 and also that the Connecticut seated-interview procedures were constitutionally defective in failing to provide a pretermination hearing satisfying the standards of Goldberg v. Kelly, 397 U. S. 254 (1970). At appellees’ request, a three-judge court was convened to hear the matter.

The District Court’s findings of fact provide some indication of the actual operation of the Connecticut system. The findings reveal that the reversal rate of appealed denials of benefits was significant, ranging from 19.4% to 26.1% during the periods surveyed. The District Court also found that a significant delay was required for obtaining administrative review of the examiner’s determination: 89.9% of the 461 intrastate appeals filed in the month of December 1972 required more than 100 days to resolve. The average delay during that period exceeded 126 days. Moreover, the court determined that the December 1972 figures probably were typical of the delays that might be encountered in other time periods.

The District Court expressed serious reservations whether the Connecticut system satisfied the “when due” requirement of federal law. It felt foreclosed from so ruling on this statutory issue, however, by this Court’s summary affirmance in Torres v. New York State Dept. of Labor, 405 U. S. 949 (1972). The District Court concluded that Torres was distinguishable on the constitutional issue, and held that the Connecticut procedures violated due process “because (a) a property interest has been denied (b) at an inadequate hearing (c) that is not reviewable de novo until an unreasonable length of time.” 364 F. Supp., at 937-938. After suggesting a number of alterations of the state system that might raise its operation to a constitutionally adequate level, the court enjoined appellant from denying unemployment benefits under then-existing procedures without first providing a constitutionally sufficient prior hearing. Id., at 938. At appellant’s request, the District Court stayed its injunction pending resolution of an appeal to this Court. We subsequently noted probable jurisdiction. 415 U. S. 912 (1974).

II

Following our notation of probable jurisdiction, the Connecticut Legislature enacted major revisions of the procedures by which unemployment compensation claims are determined. Conn. Pub. Act 74-339 (1974). Section 31-241, one of the sections under consideration in this appeal, was amended to require that examiners only consider evidence presented in person or in writing at a hearing provided for that purpose. Id., § 14, amending Conn. Gen. Stat. Rev. § 31-241. The legislature also completely altered the structure of the Connecticut system of administrative review, substituting a two-tiered Employment Security Appeals Division for the Unemployment Compensation Commission. Conn. Pub. Act 74^-339, supra, §§ 1-12.

The amended statute provides for the creation of a staff of referees to review the examiners’ decisions de novo. § 15. Referees are to be appointed by an Employment Security Board of Review, § 9, the three members of which are appointed by the Governor. § 3. The statute further provides that the referee section “shall consist of such referees as the board deems necessary for the prompt processing of appeals hearings and decisions and for the performance of the duties imposed by this act.” § 9. Appeals from the referees’ decisions are to be taken to the Employment Security Board of Review and thereafter to the state courts. §§15 and 21, amending Conn. Gen. Stat. Rev. §§ 31-242 and 31-248, and new § 25 added by the 1974 amendments.

The legislative history indicates that the Connecticut Legislature anticipated that these amendments would have a significant impact on the speed and fairness of the resolution of contested claims. Legislators repeatedly characterized the amendments as a “true reform” of important consequence. See Conn. S. Proc. 2578, 2624, 2629 (May 7, 1974). Particular emphasis was placed on the need to improve the State’s treatment of administrative appeals. It was recognized that Connecticut’s torpid system of administrative appeal was markedly inferior to those used in other States. Id., at 2578, 2621; Conn. H. Proc. 5133-5135, 5152 (May 2, 1974). Revision of the appellate system was designed to remedy that problem. In the words of one member of the House: “The bill . . . sets up a unique system which is designed to cut down that [appellate] backlog.” Id., at 5152.

Ill

.The amendments to the Connecticut statute, which became effective on July 1, 1974, Conn. Pub. Act 74-339, § 36 (1974), may alter significantly the character of the system considered by the District Court. Although the precise significance of the amendment to § 31-241 is unclear, the court’s concern for the absence of a right of confrontation, 364 F. Supp., at 935, may be diminished by the requirement that examiners base their decisions only on evidence submitted in person or in writing. Perhaps of greater importance is the revision of the State’s system of administrative appeal. Both in distinguishing Torres and in determining that the Connecticut system failed to satisfy the minimal requirements of procedural due process, the District Court placed substantial reliance on the length of time required to obtain administrative review of the examiner’s decision. The amendments to Connecticut law are designed to remedy this problem.

This Court must review the District Court’s judgment in light of presently existing Connecticut law, not the law in effect at the time that judgment was rendered. Diffenderfer v. Central Baptist Church, 404 U. S. 412, 414 (1972); Hall v. Beals, 396 U. S. 45, 48 (1969); United States v. Alabama, 362 U. S. 602, 604 (1960). We are unable meaningfully to assess the issues in this appeal on the present record.

Both the statutory and constitutional questions are significantly affected by the length of the period of deprivation of benefits. The basic thrust of the statutory “when due” requirement is timeliness. See California Human Resources Dept. v. Java, 402 U. S. 121, 130-133 (1971). While we can determine on this record that Connecticut’s previous system often failed to deliver benefits in a timely manner, we can only speculate how the new system might operate. And, assuming that the federal statutory requirements were satisfied, it would prove equally difficult to assess the question of procedural due process.

Identification of the precise dictates of due process requires consideration of both the governmental function involved and the private interests affected by official action. Cafeteria Workers v. McElroy, 367 U. S. 886, 895 (1961); Goldberg v. Kelly, 397 U. S., at 263-266. As the Court recognized in Boddie v. Connecticut, 401 U. S. 371, 378 (1971): “The formality and procedural requisites for [a due process] hearing can vary, depending upon the importance of the interests involved and the nature of the subsequent proceedings.” In this context, the possible length of wrongful deprivation of unemployment benefits is an important factor in assessing the impact of official action on the private interests. Cf. Arnett v. Kennedy, 416 U. S. 134, 168-169 (1974) (opinion of Powell, J.); id., at 190, 192 (White, J., concurring in part and dissenting in part). Prompt and adequate administrative review provides an opportunity for consideration and correction of errors made in initial eligibility determinations. Thus, the rapidity of administrative review is a significant factor in assessing the sufficiency of the entire process. The record, of course, provides no indication of the promptness and adequacy of review under the new system. We are unable, therefore, to decide this appeal on its merits.

The judgment of the District Court is vacated, and the case remanded for reconsideration in light of the intervening changes in Connecticut law.

It is so ordered.

Mr. Chief Justice Burger,

concurring.

I join the opinion of the Court; however, it may be useful to mention two points which bear further discussion. First, as the Court notes, ante, at 387 n. 12, all parties failed to inform us that after the District Court entered judgment the Connecticut Legislature significantly changed its unemployment compensation system. I agree with the Court that this failure is “difficult to understand.” Ibid. It is disconcerting to this Court to learn of relevant and important developments in a case after the entire Court has come to the Bench to hear arguments.

Even at oral argument we were not informed of the changes in state law although both parties filed their briefs after the new statute was passed. The Connecticut Legislature appears to have changed the system at least in part to expedite administrative appeals and thereby treat claimants more fairly, see ante, at 380, 386, thus meeting in part, at least, the basis of the attack on the system. All parties had an obligation to inform the Court that the system which the District Court had enjoined had been changed; however, only a cryptic reference was made to the change of law. The appellees' brief is 122 pages long and notes the change once, at the end of a footnote. Brief for Appellees 65 n. 52. At that point appellees are contending that the long delay between the seated interview and administrative review of a decision to withhold benefits aggravates the defects which they contend exist in the seated interview itself. There appellees quote Boddie v. Connecticut, 401 U. S 371, 378 (1971), where the Court said: “The formality and procedural requisites for the hearing can vary, depending upon the importance of the interests involved and the nature of the subsequent proceedings.” (Brief for Appel-lees 64; emphasis appellees’.) Given the fact that the changes in the procedures may well have an effect on “subsequent proceedings,” ante, at 386, the Court should have been explicitly advised that changes had occurred. The only reference to changes in the law actually gives the impression that their effect is negligible.

This Court must rely on counsel to present issues fully and fairly, and counsel have a continuing duty to inform the Court of any development which may conceivably affect an outcome.

Second, although I agree wholeheartedly with the Court’s reasoned discussion of the tension between the summary affirmance in Torres v. New York State Dept. of Labor, 405 U. S. 949 (1972), aff’g 333 F. Supp. 341 (SDNY 1971), and the Court’s opinion in California Human Resources Dept. v. Java, 402 U. S. 121 (1971), ante, at 388-389, n. 15, we might well go beyond that and make explicit what is implicit in some prior holdings. E. g., Gibson v. Berryhill, 411 U. S. 564, 576 (1973); Edelman v. Jordan, 415 U. S. 651, 671 (1974). When we summarily affirm, without opinion, the judgment of a three-judge district court we affirm the judgment but not necessarily the reasoning by which it was reached. An unexplicated summary affirmance settles the issues for the parties, and is not to be read as a renunciation by this Court of doctrines previously announced in our opinions after full argument. Indeed, upon fuller consideration of an issue under plenary review, the Court has not hesitated to discard a rule which a line of summary affirm-ances may appear to have established. E. g., Edelman v. Jordan, supra, at 671; Sniadach v. Family Finance Corp., 395 U. S. 337, 343-344 (1969) (Harlan, J., concurring); id., at 350 (Black, J., dissenting); Reynolds v. Sims, 377 U. S. 533, 614 (1964) (Harlan, J., dissenting).

       Prior to the 1974 amendments, the Administrator could authorize payment of benefits during pendency of an administrative appeal if "good cause” was shown. Conn. Gen. Stat. Rev. § 31-241. The record provides no indication of the frequency of such authorizations. One of the 1974 amendments requires that benefits be paid in accordance with the Administrator’s determination, regardless of the filing of an appeal. The amendment removes the Administrator’s specific authority to award benefits during appeal for “good cause shown.” See Conn. Pub. Act 74-339, §14 (1974). We cannot determine whether this amendment was intended to deprive the Administrator of the power to award benefits for cause following an adverse ruling of eligibility.

       The stipulation of facts indicates only that some claimants subsequently were denied benefits because they had appeals pending. App. 39a. It does not reveal the frequency of this occurrence.

       Each of the named plaintiffs had filed a valid initiating claim and received benefits for a period of time. Each subsequently was denied benefits following a seated interview in which the examiner concluded that he or she had made insufficient efforts to obtain employment. The District Court defined the class to be all present and future unemployment benefit recipients whose benefits were or would be subject to termination without a prior hearing, excepting those persons whose benefits terminate due to exhaustion of entitlement. 364 F. Supp. 922, 927-928.

       The “when due” requirement is one of a number of conditions imposed on state receipt of. federal assistance. The Federal Government plays a cooperative role in the implementation of state unemployment compensation programs, bearing the costs of administration of those programs that satisfy federal requirements. On determining that state laws and practices satisfy the standards of § 303 of the Social Security Act, 49 Stat. 626, as amended, 42 U. S. C. § 503, the Secretary of Labor must certify that the State should receive the amount that he considers necessary for the proper and efficient administration of such law during the fiscal year in which payment is made. § 502 (a).
      In addition to imposing restrictions om-the fiscal administration of state unemployment compensation funds, § 303 establishes specific procedural safeguards for benefit claimants. 42 U. S. C. §§ 503 (a) (1) and (a)(3). It provides:
      “(a) The Secretary of Labor shall make no certification for payment to any State unless he finds that the law of such State, approved by the Secretary of Labor under the Federal Unemployment Tax Act, includes provision for—
      "(1) Such methods of administration (including after January!, 1940, methods relating to the establishment and maintenance of personnel standards on a merit basis, except that the Secretary of Labor shall exercise no authority with respect to the selection, tenure of office, and compensation of any individual employed in accordance with such methods) as are found by the Secretary of Labor to be
        reasonably calculated to insure full payment of unemployment compensation when due;

      “(3) Opportunity for a fair hearing, before an impartial tribunal, for all individuals whose claims for unemployment compensation are denied.” (Emphasis added.)

       The action was brought pursuant to 42 U. S. C. § 1983 and 28 U. S. C. §§2201 and 2202. Jurisdiction was alleged under 28 U. S. C. § 1343. This Court’s jurisdiction rests on 28 U. S. C. § 1253.

       During the period July 1971 to June 1972, there were 6,534 appealed denials, of which 26.1% were reversed. The reversal rate for July to October 1972 remained at approximately 26%, but fell to 19.4% during the three-month period from January to March 1973. 364 F. Supp., at 936-937, n. 28. The director of the Waterbury office testified that the reversal rate had fallen to 18.8% by May 1973. See App. 215a.
      A more complete assessment of the operation of the Connecticut system might be obtained by attempting to determine the overall error rate for all denials of benefits. The District Court made no finding on this point.

         The State of Connecticut has entered into reciprocal agreements with other States, enabling claimants who have moved into Connecticut to rely on wage credits earned elsewhere. Appeals of denials of interstate claims often require transfer of information from the reciprocating State and thus consume a greater period of time.

       In 1973, the Connecticut administrative appellate procedure was the slowest in the Nation. Statistics reveal that during that calendar year the Commission decided only 5.3% of the appeals within 30 days. During that same period the Commission decided only 15.5% of appeals within 45 days and resolved appeals within 75 days of filing in only 31.4% of the cases. See Unemployment Insurance Statistics, Table 17B — Appeals Decisions Under State Programs, Time Lapse Between Date of Filing Appeal and Date of Decisions, January-December 1973. U. S. Dept. of Labor, Manpower Administration (March-April 1974).

       The record available to us suggests that the Department of Labor wds instrumental in encouraging reform. See Conn. H. Proc. 5132, 5151 (May 2, 1974). That re.cord is silent as to whether the District Court’s decision or this Court’s notation of jurisdiction provided additional encouragement.

       As noted by the District Court, factfinding examiners often telephoned employers to obtain evidence relating to the validity of benefit claims. 364 F. Supp., at 925. The amendment appears designed to eliminate that practice.

       Under Connecticut’s prior system, the Commissioners who decided appeals were appointed by the Governor. See Conn. Gen. Stat. Rev. § 31-238. The legislative debates indicate that they held other employment and served only on a part-time basis. See Conn. S. Proc. 2630; Conn. H. Proc. 5152. In revising the Connecticut system, the legislators expressed a desire to insulate the referee system from the influences of partisan politics. Conn. S. Proc. 2629; Conn. H. Proc. 5153-5154. The revised Connecticut system provides that referees must be members of the State’s civil service, Conn. Pub. Act 74-339, § 9 (1974), and the history of the amendments clearly indicates that the referees’ commitment to the processing of appeals will be full time. Conn. S. Proc. 2628, 2630; Conn. H. Proc. 5142, 5147.

       Our determination of the existence and significance of Connecticut’s amendments to its unemployment compensation act was largely unassisted by counsel. Indeed, initial examination of the briefs and consideration of oral argument led us to believe that the system considered by the District Court remained substantially intact. We find it difficult to understand the failure of counsel fully to inform the Court of these amendments to Connecticut law.

       The District Court ruled that our summary affirmance in Torres v. New York State Department of Labor, 405 U. S. 949 (1972), precluded any determination that the Connecticut system failed to satisfy the federal “when due” requirement. Appellees did not cross-appeal to question that ruling, and appellant maintains that the issue is not before the Court. We observed in United States v. Raines, 362 U. S. 17, 27 n. 7 (1960), that an appeal under 28 U. S. C. § 1252 brings the “whole case” before the Court. Thus, issues that might provide alternative grounds for support of the District Court judgment can be considered by this Court even though not specifically presented by cross-appeal. The same principle governs appeals brought under 28 U. S. C. § 1253. We therefore have jurisdiction to decide the point, and we would feel compelled to re-examine a statutory claim that may be dispositive before considering a difficult constitutional issue. See Rosado v. Wyman, 397 U. S. 397, 402 (1970); Harmon v. Brucker, 355 U. S. 579, 581 (1958).

       See n. 4, supra.

       The District Court interpreted our summary affirmance in Torres to indicate that benefits are not “due” under §303 until administratively deemed payable. 364 F. Supp., at 930. While this is a plausible reading of the evolution and affirmance of Torres, it is not one that we can endorse. Such a definition of the “when due” requirement of federal law would leave little vitality to Java and would nullify the congressional intention of requiring prompt administrative provision of unemployment benefits. See 402 U. S., at 130-133. By reading our summary affirmance in Torres at its broadest, the District Court heightened the tension between that judgment and our more considered disposition of Java. A narrower interpretation of Torres would have been appropriate.
      Any statutory requirement that embodies notions of timeliness, accuracy, and administrative feasibility inevitably will generate fact-specific applications. In this instance, many of the factual distinctions that the District Court relied on to distinguish Torres on the constitutional issue apply equally to the “when due” question. For example, the delay in resolving administrative appeals is considerably greater in Connecticut than in the New York system, where administrative appeals were, resolved in an average of 45 days. See Torres v. New York State Dept. of Labor, 321 F. Supp. 432, 439 (SDNY 1971). And, as the District Court observed, the Torres court apparently did not consider the probable accuracy of the challenged procedure in determining whether it adequately assured delivery of benefits “when due.” See 364 F. Supp., at 936. We do not undertake to identify the combination of factors that justify the Torres decision. Having once decided the case summarily, we decline to do so again. We only indicate that the District Court should not have felt precluded from undertaking a more precise analysis of the statutory issue than it felt empowered to do in this case.

      Some are quick to use the district court opinion to define this Court’s judgment. See Note, The Supreme Court, 1953 Term, 68 Harv. L. Rev. 96, 102 (1955); Note, Summary Disposition of Supreme Court Appeals: The Significance of Limited Discretion and a Theory of Limited Precedent, 52 B. U. L. Rev. 373, 409 (1972). Another common response to summary affirmances of three-judge-court judgments is confusion as to what they actually do mean. See Currie, The Three-Judge District Court in Constitutional Litigation, 32 U. Chi. L. Rev. 1, 74 n. 365 (1964); Shanks, Book Review, 84 Harv. L. Rev. 256, 257-258, n. 17 (1970); Note, Impact of the Supreme Court’s Summary Disposition Practice on its Appeals Jurisdiction, 27 Rutgers L. Rev. 952, 962 (1974); Note, 52 B. IT. L. Rev., supra, at 407-415.