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Jackson v. Metropolitan Edison Co.

Supreme Court of the United States · 1974 · Constitutional Law

Constitutional LawState ActionFourteenth AmendmentDue ProcessSection 1983state actionclose nexusFourteenth Amendment

Facts

Metropolitan Edison was a privately owned Pennsylvania electric utility holding a certificate of public convenience and subject to extensive regulation by the Pennsylvania Public Utility Commission. Its filed general tariff stated that it could discontinue service on reasonable notice for nonpayment of bills. After service to petitioner's residence had been carried under another occupant's account and payments were concededly not made after that occupant left, Metropolitan disconnected service without further notice to petitioner. Petitioner claimed the shutoff, authorized by the filed tariff, was state action depriving her of property without due process.

Issue

Whether a privately owned but heavily regulated utility's termination of electric service pursuant to a tariff filed with and not disapproved by the state utility commission constitutes state action attributable to the State for purposes of the Fourteenth Amendment and § 1983.

Rule

The mere fact that a business is heavily regulated, provides an essential public service, or enjoys a monopoly does not by itself make its conduct state action. The inquiry is whether there is a sufficiently close nexus between the State and the specific challenged action of the private entity so that the action may be fairly treated as that of the State itself; a privately initiated practice merely permitted or not forbidden by the State is not thereby transformed into state action.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Lakeview Waterworks, a privately owned water supplier in Akron, Ohio, serves most neighborhoods under a dense state regulatory code governing rates, billing, service quality, and recordkeeping. After a billing dispute, it cuts off Dana Ruiz's water pursuant to its internal collections policy, and no state official participated in the shutoff decision.

If Dana brings a § 1983 due process claim, what is the strongest argument against finding state action?

Explanation. The majority held that even extensive and detailed regulation of a privately owned utility does not by itself convert the utility's conduct into state action. The proper inquiry is whether there is a sufficiently close nexus between the State and the specific challenged action. The importance of the service and the presence of regulation are not enough standing alone, and the Court did not say a private utility could never be a state actor.