Brief Fact Summary. The Petitioner, Jackson (Petitioner), a customer of the Respondent, Metropolitan Edison Company (Respondent), claimed that the Respondent performed a public function and therefore could not shut off her electricity without notice and hearing pursuant to the Fourteenth Amendment’s Due Process Clause.
Synopsis of Rule of Law. The actions of a private entity are not considered state action unless there is a sufficiently close nexus between the State and the challenged action.
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.View Full Point of Law
Issue. Does the operation of a utility by a private party constitute state action?
Held. No, there must be a sufficiently close nexus between Pennsylvania and challenged action to find a state action subject to the Fourteenth Amendment of the United States Constitution (Constitution). Just because a business is subject to detailed and extensive state regulation does not convert its action into state action. The Respondent is not performing a public function because state law imposes no duty on the state to furnish utility service.
Dissent. Justice Thurgood Marshall (J. Marshall) dissents because the Respondent has a monopoly, is extensively regulated by the State and received state approval in many aspects of their service.
State authorization and approval is enough to make it a State Action
There is extensive interaction between the State and the Respondent.
Also, Pennsylvania approves their termination procedures.
Discussion. It is established that private action is immune from the Fourteenth Amendment of the Constitution. Here, it is hard to distinguish where the Respondent falls because although it is a private company, it is heavily regulated by the State. However, regulation by the State does not necessarily mean it is a public function. The test is took look if there is a sufficiently close nexus between the State and challenged action so that the action of the private actor may be fairly treated as that of the State itself.
The Respondent has a monopoly, but that does not mean it is a State action
The Respondent performed an essential public function (service of electricity), but that does not make it a State action.
The government regulates all doctors, lawyers and grocers, but they are not state actors and the same should be true in this case.