Brief Fact Summary. The Petitioner, Jackson (Petition), claims there was sufficient state action to sue the Respondent, Metropolitan Edison (Respondent), an electricity company, who terminated her electricity without notice or a hearing as the electricity company was heavily regulated by the state.
Synopsis of Rule of Law. Termination of services to a customer without notice or hearing by a utility company under heavy state regulation does not constitute state action.
The Respondent is a privately owned utility company that holds a certificate of public convenience issued by the state authorizing it to provide electricity to its customers. The Respondent is heavily regulated by the state. Under a provision filed with the State, the Respondent has the right to terminate service to a customer on reasonable notice of nonpayment of bills. After a lengthy dispute, the Respondent terminated the Petitioner’s service for nonpayment. The Petitioner brought an action claiming that the termination constituted state action depriving her of property in violation of the due process clause of the Fourteenth Amendment of the Constitution. The Petitioner argues that state action is present because of the monopoly conferred upon the Respondent by the State of Pennsylvania. The Supreme Court of the United States (Supreme Court) dismissed this argument stating that even if there was a monopoly conferred by the state, there was insufficient relationship between
the challenged actions of the Respondent and their monopoly status. The Supreme Court also rejected the argument that the termination of the Petitioner’s electricity was state action because that State had specifically approved the termination practice. At most, the State’s failure to overturn the Respondents ability to terminate, amounted to no more than a determination that the Respondents could employ such a practice if it so desired.
Issue. Whether the heavy regulation of a utility company by the State constitutes significant state action thereby allowing an action under the Fourteenth Amendment of the Constitution.
Held. Affirmed. The state regulation of a utility company does not constitute significant state action thereby permitting an action under the Fourteenth Amendment of the Constitution.
Dissent. Points of Law - for Law School Success
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
The State has given its approval to the Respondent’s termination procedures by approving a provision under which the company reserved the right to discontinue its service on reasonable notice for nonpayment of bills. Discussion.
State action is a prerequisite to the assertion of rights contained in the first eight amendments of the Constitution and the Fourteenth Amendment of the Constitution. State action will be found when a private actor has acted if (1) the state has delegated a traditional state function to a private entity or (2) because the state has become entangled with a private entity or because the state has approved, encouraged or facilitated private conduct.