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November 11, 1974


The opinion of the court was delivered by: HIGGINBOTHAM

Higginbotham, J.


 Plaintiffs, Mark and Margaret Isaacs, filed this action subsequent to the termination of their employment as faculty members in the School of Communications and Theatre of Temple University -- of the Commonwealth System of Higher Education (hereinafter "Temple"). In their complaint, they invoked the jurisdiction of this Court pursuant to 28 U.S.C. § 1343(3) and (4) (1970) and specified provisions of the Civil Rights Act of 1871, 42 U.S.C. §§ 1983 and 1985 (1970), and alleged that the defendants in this action, Temple's Board of Trustees and certain administrative officials of the University, had deprived them of rights secured to them by the First, Fifth and Fourteenth Amendments to the Constitution of the United States. Defendants did not answer the complaint. Instead, pursuant to Rule 56 of the Federal Rules of Civil Procedure, they filed a motion for summary judgment, challenging the subject matter jurisdiction of this Court. They asserted that Temple was a "purely private" institution and that, as a result, defendants' termination of plaintiffs' employment was neither "state action" for the purposes of the Fourteenth Amendment *fn1" nor action "under color of" state law for the purposes of 42 U.S.C. § 1983 (1970). *fn2" Plaintiffs then sought, and were granted, extensive discovery to enable them to determine the precise relationship between Temple and the Commonwealth of Pennsylvania (hereinafter "the Commonwealth"). At the close of the discovery process, both plaintiffs and defendants submitted comprehensive memoranda of law in support of their respective positions and vigorously defended those positions before this Court during oral argument.

 The record thus developed reveals that for more than a decade Temple has attempted to walk nimbly on both sides of the line demarcating "state action" from "nonstate action." At any time its ultimate rationale seems solely dependent upon whether it is more profitable for Temple to adopt the "state action" or "nonstate action" mantle. When seeking an increased largesse from the state's treasury, the predominant pitch was that Temple should get more because it is a state-related institution, and with such salesmanship (or should we call it "statesmanship"), Temple has received more than 270 million dollars in direct appropriations or benefits over the last nine years. When confronted with the possibility of a vigorous federal enforcement of the National Labor Relations Act against Temple, once again Temple emphasized its state-related status as the basis of exemption from enforcement of the federal statute. *fn3" Though it succeeded in these instances by flying the flag of state-relatedness, Temple's position dramatically shifts in this forum where it is faced with a federal civil rights statute which is applicable to all institutions which function under color of any statute, ordinance, regulation, custom, or usage of any state. Temple's prior state-related voices have become muted; they now croon a counter lullaby that "after all, Temple is merely a private institution," and thus not subject to the "state action" prohibitions of the federal civil rights statutes.

 Emerson once said "A foolish consistency is the hobgoblin of little minds." Temple can never be charged with having a little mind, but its adroit and nimble legal maneuvering has finally caught up with it. It must now either fish or cut bait. On the facts of record here, the cases require that all of Temple's actions be designated as "state action" under the Fourteenth Amendment and therefore action "under color of" state law under 42 U.S.C. § 1983 (1970). *fn4" While this conclusion as to Temple appears to me to be patently obvious, over the years there have been enough dicta in other cases and enough contrary results based on substantially different factual records that I am compelled to write an opinion more extensive in factual and legal analysis than it otherwise would have been. However, because of the remand in the University of Pittsburgh case to a judge in the Western District of Pennsylvania, *fn5" I have concluded that it is safer to err by excessive citation of the record than to fail to state what one might think is obvious. In any event, defendants' motion for summary judgment must be denied.

 The Origins of the Temple University-Commonwealth Act of 1965.

 My analysis of the present relationship between Temple and the Commonwealth begins with a review of the genesis and legislative history of the Pennsylvania statute which controls that relationship, the Temple University-Commonwealth Act of 1965 (hereinafter "the Act"), 24 P.S. § 2510-1, et seq. The association between Temple and the Commonwealth which has been put in issue by defendants' motion for summary judgment began some ten years ago. The then Governor of Pennsylvania and his Budget Secretary suggested to Temple that it "explore means by which the Commonwealth and Temple University could develop an arrangement to provide greater educational opportunity at lower cost than was being provided at that time." (Plaintiffs' Supplemental Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment, May 24, 1974 (hereinafter "Plaintiffs' Memorandum"), Exhibit B at 14.) In 1964, Temple officials responded to this suggestion and proposed such an arrangement. Their proposal led to the Temple University-Commonwealth Act of 1965, 24 P.S. § 2510-1 et seq. That the Commonwealth hoped to benefit substantially from the arrangement is indisputable. As one party to the many lengthy discussions that preceded the passage of the Act phrased it:


"The Commonwealth decided that this offered the Commonwealth an opportunity to do what it wanted to do in the least expensive way for the Commonwealth that possibly could be found and the quickest way -- namely, to provide the educational opportunities at the kind of cost to the student. To build an entirely new institution, to start from scratch, not only was expensive and time-consuming -- but also, because Temple University already had a very -- an extensive public image as the kind of an institution that transition would be very easy from its former status to become a State-related institution." (Plaintiffs' Memorandum, Exhibit B at 15.)

 The legislative history of the Act, as contained in the "Report of the Higher Education Committee, The House of Representatives, Commonwealth of Pennsylvania, 1965-1966 (hereinafter the "Report"), confirms the mutual benefits that Temple and the Commonwealth hoped to secure, and did in fact secure, through passage of the Act. (Defendants' Motion for Summary Judgment, December 26, 1973 (hereinafter "Defendants' Motion"), Affidavit of William G. Willis, Attachment 1.)

 The Higher Education Committee called the Act "one of the high points of higher education legislation in Pennsylvania's recent history." (Report at 34.)


"By the enactment of this legislation, the Commonwealth has, for the first time, directly and explicitly made it a matter of public policy that opportunities for Higher Education should be expanded and that costs to the student should be reduced. Temple University will now be the instrumentality of the Commonwealth to implement this policy in southeastern Pennsylvania." (Id.)

 The Act, the Committee foresaw, would allow Temple, by 1970, to expand its enrollment by 10,000 students. Furthermore, "the prevailing tuition charge for full-time Pennsylvania resident students will be more than cut in half." ( Id. at 35.)

 These benefits would flow to Temple because "[in] essence, the Temple University-Commonwealth Act establishes a working partnership between the University and the State. Temple retains its private corporate identity, but the Commonwealth shares in the control of the institution" through the appointment of one-third of Temple's Board of Trustees and through the financial accountability provisions written into the Act." (Id.) The Act thus created an "organic relationship between Temple University and the Commonwealth" that is "the same as that between the Commonwealth and the Pennsylvania State University. Both of these institutions, while private in corporate identity, are invested with a quasi-public character and charged with certain public responsibilities, obligations and commitments." (Id.)

 In a review of the factors that influenced it to recommend the relationship the Act established, the Committee singled out for special notice the need to expand enrollment and to reduce tuition in higher educational institutions within the Commonwealth, and the contribution that expanded opportunities for higher education could make to economic development. ( Id. at 35-38.)


"Within the context of all of these considerations, as they focused on the critical area of southeastern Pennsylvania, the Committee on Higher Education quite naturally settled on Temple University as the institution which could best implement the objectives of the Committee and could best offer the advantages of a public university to that region." ( Id. at 38.)

 According to the Committee, the Temple-Commonwealth relationship actually began in 1962 when, after discussions between the then Governor of Pennsylvania and Temple's Board of Trustees, Temple agreed to accept six Commonwealth Trustees on its board and to expand its undergraduate enrollment of students from Pennsylvania by 900, in return for an appropriation from the Commonwealth that would enable Temple to avoid a projected tuition increase and even reduce tuition by $100. ( Id. at 38-39.) In fiscal 1963-1964 and 1964-1965, however, there were no Commonwealth appropriations for Temple, and the institution was forced to increase its tuition charges. At the same time, it was under "exceptionally heavy pressures for enrollment." ( Id. at 39.) The net result was that in September of 1964, Temple's trustees approached the Commonwealth with a "Proposal for Cooperation." That proposal served as a basis for the discussions that led to the passage of the Act. ( Id. at 2.)

 In the conclusion of its report, the Committee stated that "the 'state-related' aspect of the Temple arrangement is of immense potential significance for the Commonwealth. All the advantages of a public university in southeastern Pennsylvania have been gained by the Commonwealth without incurring the extremely high costs that other states have incurred in taking such a step. Through the Commonwealth representation and the post-audit controls incorporated into the legislation, the Commonwealth is assured of its rightful place in the control of the institution, *fn6" and the General Assembly is assured at all times of the right to require such information on the operations of the institution as will enable it to perform its proper legislative functions." *fn7" ( Id. at 41.)

 The Provisions of The Temple University-Commonwealth Act of 1965.

 As plaintiffs freely concede, "prior to the mid-1960's Temple University was, both in law and in fact, a 'purely private' institution whose actions were beyond the scope and reach of the Fourteenth Amendment." (Plaintiffs' Memorandum at 5.) With the passage of the Act, however, Temple's relationship to the Commonwealth underwent a significant change. In its legislative findings, the Pennsylvania State Legislature stated, inter alia, that Temple was "an integral part of a system of higher education in Pennsylvania, and that it [was] desirable and in the public interest to perpetuate and extend the relationship between the Commonwealth of Pennsylvania and Temple University for the purpose of improving and strengthening higher education by designating Temple University as a State-related university; . . ." 24 P.S. § 2510-2(7). On the basis of this and related findings, the Legislature declared that the Act's purpose was "to extend Commonwealth opportunities for higher education by establishing Temple University as an instrumentality of the Commonwealth to serve as a State-related institution in the Commonwealth system of higher education." Id. The Act directed that Temple's name be changed to "Temple University -- of the Commonwealth System of Higher Education." 24 P.S. § 2510-3. It specified that, of Temple's thirty-six-member Board of Trustees, twelve would be designated Commonwealth trustees -- four of whom would be appointed by the Governor with the approval of a two-thirds majority of the Pennsylvania State Senate, four by the President pro tempore of the Senate, and four by the Speaker of the House of Representatives -- and that the Governor of Pennsylvania, the Superintendent of the Department of Public Instruction (whose official title has since been changed to Secretary of the State Department of Education), and the Mayor of Philadelphia would be members of the Board ex officio. 24 P.S. § 2510-4(a) and (b). The Act directed Temple to maintain precisely those tuition and fee schedules for Pennsylvania resident and non-Pennsylvania resident full-time students that were set forth by the legislature in its annual act making appropriations to Temple, so long as those appropriations sufficed to meet the tuitions and fee schedules. 24 P.S. § 2510-6. The Act provided that Temple would share comparably with land grant institutions of higher learning and state colleges in the benefits available under Commonwealth programs for capital development and improvement, and that the Commonwealth might, by agreement with Temple's Board of Trustees, erect and equip buildings, and provide facilities, for Temple's use. 24 P.S. § 2510-7. The Act required Temple to present certified payrolls and vouchers before it would receive the funds appropriated by the Legislature; gave the State Auditor General the right to post-audit all expenditures of appropriated funds; required Temple to set up a special Commonwealth Appropriations Account for those funds; restricted the expenditure of those funds to the purposes for which they were appropriated; required Temple to maintain proper records of those expenditures; directed Temple to file with the Commonwealth a detailed statement of those expenditures; gave the State Auditor General the right to review all expenditures made by Temple and, in the case of expenditures from the Commonwealth Appropriations Account, the right to audit and disallow expenditures for purposes not permitted by the annual appropriations act. 24 P.S. § 2510-8. The Act further permitted Temple to issue tax-exempt bonds, 24 P.S. § 2510-9, and required Temple's President to submit to the Governor and the Legislature, through the Board of Trustees, an annual "report of all the activities of the university, instructional, administrative and financial . . ." 24 P.S. § 2510-10.

 Even this brief survey of the Act's provisions reveals that the enactment profoundly altered the relationship between Temple and the Commonwealth. The Act designated Temple as an instrumentality of the Commonwealth; incorporated it, as a state-related institution, into the Commonwealth's system of higher education; changed Temple's name; reorganized Temple's Board of Trustees, one-third of whom would thereafter be appointed by elected public officials of the Commonwealth; authorized the Legislature to set fee and tuition schedules for all full-time Temple students; gave Temple access to Commonwealth funds for capital development and to buildings and facilities erected at Commonwealth expense; made Temple accountable to the Commonwealth for the public monies it received; empowered Temple to issue tax-exempt bonds; and required Temple to report annually to the Commonwealth on all of its activities, not merely its financial affairs.

 While a review of the Act is instructive in assisting the Court to determine the present relationship between Temple and the Commonwealth, it does not delineate with adequate specificity the precise details of the relationship. The Act became effective on July 1, 1965. For the past nine years, Temple has been subject to the Act's provisions in the conduct of its affairs. History has put flesh on the bare bones of the legislative enactment. This review of the Act must therefore be supplemented by an examination of the Temple-Commonwealth relationship in the nine years subsequent to the passage of the Act. The Court of Appeals for this Circuit has ordered just such a factual examination in a case involving an institution that stands in virtually the same relationship to the Commonwealth as does Temple. Braden v. University of Pittsburgh, supra.

 The Implementation of The Temple University-Commonwealth Act of 1965. For both laymen and lawyers alike, the most significant aspect of the relationship between Temple and the Commonwealth initiated by the 1965 Act has been the transfer of substantial amounts of public funds to Temple, on an annual basis, under the provisions of the Act. Prior to passage of the Act, Temple did receive appropriations from the Commonwealth, but those sums never exceeded $6,515,744.00 in a single fiscal year. With the passage of the Act, the sums appropriated by the Commonwealth increased dramatically in absolute dollar amounts and, with one exception, have consistently risen in each subsequent fiscal year. The following chart states the appropriated funds in both absolute dollar amounts and as percentages of Temple's operating income for each fiscal year. It reveals that the word "substantial" is not used inadvisedly in describing this transfer of funds. Percent of Temple's Commonwealth Operating Income From Year Appropriation Commonwealth 1965-1966 $11,547,266.00 23.0% 1966-1967 $20,106,998.00 32.7% 1967-1968 $28,061,146.00 35.6% 1968-1969 $33,440,567.00 36.6% 1969-1970 $41,392,000.00 37.7% 1970-1971 $41,392,000.00 33.1% 1971-1972 $44,568,000.00 32.2% 1972-1973 $49,711,000.00 33.7%


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