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EDWARDS v. PHILADELPHIA ELEC. CO.

January 18, 1974.

John B. EDWARDS, by Rosemary Edwards on her own behalf, Individually and on behalf of all members of a class of customers similarly situated
v.
PHILADELPHIA ELECTRIC COMPANY and The Pennsylvania Public Utility Commission.



The opinion of the court was delivered by: BRODERICK

Plaintiffs instituted this class action suit seeking injunctive relief and damages for the alleged violation of their civil rights when Philadelphia Electric Company (PE) terminated plaintiffs' electricity without prior hearing. Defendants, PE and the Pennsylvania Public Utility Commission (PUC), have moved to dismiss the complaint pursuant to Rule 12(b) F.R. Civ. P. on the ground that the complaint fails to state a claim upon which relief can be granted. No hearing has been held and the Court's determination herein is based solely upon the averments set forth in the complaint which have been accepted as true for the purpose of these motions.

PE is a privately owned and operated Pennsylvania Corporation which is granted a monopoly by the State to provide electricity in the Philadelphia area. PE, being a public utility, is subject to the provisions of the Public Utility Code *fn1" and the regulations of the PUC made pursuant to the Code.

 The named plaintiffs had their electric service terminated for an apparent failure to pay a bill allegedly due and owing PE. Part of the bill under attack is an alleged unwarranted and unlawful 3% surcharge. Plaintiffs, who do not appear to be challenging the reasons for the termination in the instant action, claim that a pre-termination hearing is a federal right to be afforded as a matter of due process. The gravamen of plaintiffs' claim for relief is that PE's action in terminating electric service amounts to such state action in violation of due process as to be subject to federal constitutional restraints under 42 U.S.C. § 1983. *fn2" Plaintiffs contend that pre-termination procedures should be established to allow PE's customers an opportunity to contest the discontinuance of service. As to the defendant PUC, we can only surmise that plaintiffs seek to have this Court require the PUC to affirmatively act to establish more effective termination procedures to eliminate what plaintiffs believe to be constitutionally intolerable circumstances.

 Defendant PE argues that it is not acting "under color of State law" but merely as a private organization and that no deprivation of constitutionally protected rights is alleged by the plaintiffs. Defendant PUC argues that it is not a "person" as contemplated by 42 U.S.C. § 1983 and therefore, no jurisdiction can exist as to it. *fn3"

 Where a complaint rests upon Section 1983 two elements must be established before there can be recovery. First, the plaintiff must prove that the defendant has deprived him of a right secured by the "Constitution and laws" of the United States. Second, the plaintiff must show that the defendant has deprived him of this constitutional right "under color of any statute, ordinance, regulation, custom, or usage, of any State." This second element requires that the plaintiff show that the defendant acted "under color of state law" for private action cannot form the basis for relief under Section 1983. Adickes v. S.H. Kress Company, 398 U.S. 144, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970).

 In this action plaintiffs have named both PE and the PUC as defendants. Because of the different status of the parties defendant, different legal principles are applicable to each defendant. From the standpoint of Section 1983 analysis, the motions to dismiss will therefore be resolved separately. Lucas v. Wisconsin Electric Power Company, 466 F.2d 638 (7th Cir. 1972); Silas v. Smith, 361 F. Supp. 1187 (E.D. Pa., filed July 30, 1973).

 As to PE, we need not reach the due process issue unless the threshold statutory requirement of whether PE acts under color of state law when it disconnects service is satisfied. If not, a cause of action does not arise under Section 1983 even if the utility's conduct would otherwise deprive plaintiffs of a federal right. Lucas v. Wisconsin Electric Power Company, supra.

 The Issue to be decided then is whether the state has so involved itself with the termination procedure of PE that the procedure has become action under color of state law. Similar questions have been answered in a variety of ways by the many courts which have heretofore faced the issue. *fn4" However, based upon the allegations in the plaintiffs' complaint, the factual situation which faces us seems to be controlled by the determination of our Third Circuit in the recent case of Jackson v. Metropolitan Edison Company, 483 F.2d 754 (3d Cir. 1973) rehearing denied October 26, 1974, aff'g 348 F. Supp. (M.D. Pa. 1972).

 In Jackson, our Circuit determined that there was no cause of action under Section 1983 of the Civil Rights Act where the electric utility shut off the electricity to its customer in a situation similar to that alleged in the instant complaint. The basis for the Court's determination was its conclusion that there was no state action under color of state law. The court analyzed the existing decisions and summarized them by stating that there may be a finding of state action or action under color of state law in the following situations:

 1. When a private party's action occurred in conjunction with a business in which the state may be considered a partner or joint venturer in a profit making field ( Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S. Ct. 856, 6 L. Ed. 2d 45 (1961)); or

 2. when a state statute or custom or usage compels the result ( Adickes v. S.H. Kress Company, 398 U.S. 144, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970)); or

 3.when a state agency affirmatively orders or specifically approves the activity in the course of its regulatory rule making ( Public Utility Commission v. Pollak, 343 U.S. 451, 72 S. Ct. 813, 96 L. Ed. 1068 (1952)); or

 4. when a private agency in effect is acting in behalf of and furnishing a typical government service ( Marsh v. Alabama, 326 U.S. 501, 66 ...


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