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November 4, 1980

Thomas LESTRANGE, Plaintiff,

The opinion of the court was delivered by: RAMBO


Plaintiff, who was employed by Erie Lackawanna Railroad Co. as an engineer prior to the amputation of his left hand and a portion of his left forearm in 1971, brings this action against defendant, successor in interest to the Erie Lackawanna Railroad, requesting injunctive relief, compensatory damages, punitive damages and attorney's fees. In his complaint, which was filed on September 22, 1978, plaintiff alleges defendant has violated the equal protection clause of the Fourteenth Amendment, the Civil Rights Act, 42 U.S.C. § 1983, and section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794. On October 26, 1979, plaintiff filed an amended complaint to which defendant filed a motion to dismiss on December 3, 1979, supported by a brief filed December 4, 1979. Plaintiff filed a reply brief on February 8, 1980.

 Plaintiff alleges that shortly after the amputation of his left hand and a portion of his left forearm, he was refused employment (by Erie Lackawanna Railroad) without a hearing or medical examination. In 1973 defendant became the successor in interest to Erie Lackawanna Railroad pursuant to the Regional Rail Reorganization Act of 1973, 45 U.S.C. §§ 701-779 (hereafter Rail Act) receiving federal assistance in the form of "loans". Plaintiff alleges that from 1973 to April 4, 1978, defendant refused plaintiff employment without the benefit of a medical evaluation or a hearing. Plaintiff was examined by a physician on April 4, 1978 and was classified as not qualified for employment as an engineer by defendant on May 2, 1978. Plaintiff was afforded the opportunity to participate in a field test given by defendant on February 15, 1979. Defendant concluded that plaintiff failed the field test and plaintiff charged that the test was unfair. As a result, a second field test was scheduled but was not conducted as plaintiff refused to cooperate, alleging the second field test also was unfairly designed to disqualify him as an engineer.

 In its motion, defendant contends plaintiff has failed to state a cause of action under the equal protection clause of the Fourteenth Amendment and 42 U.S.C. § 1983 as plaintiff has not alleged the required "state action" for the Fourteenth Amendment claim or "acting under color of state law" for the § 1983 claim. Plaintiff contends that defendant does operate under color of state law in that it is an interstate common carrier, uses public railways throughout the state, and has received federal financial assistance. Plaintiff concludes that if defendant uses state property and receives federal financial assistance, "one can hardly say that government action is not involved." (Plaintiff's brief, p. 5).

 Plaintiff has apparently failed to make a distinction between "state action" and "government action," whether it be state or federal. Receipt of federal financial assistance has no bearing on whether defendant is operating under "color of state law. Further, the mere fact that a common carrier uses public property does not show "state action". Were that true, any private trucking company using state highways would be considered acting "under color of state law". The U. S. Supreme Court dealt with the issue of "state action" in regard to a regulated electric utility in Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S. Ct. 449, 42 L. Ed. 2d 477 (1974). In Jackson the Court stated:

The mere fact that a business is subject to state regulation does not by itself convert its action into that of the State for purposes of the Fourteenth Amendment. Nor does the fact that the regulation is extensive and detailed, as in the case of most public utilities, do so. Public Utilities Comm'n v. Pollak, 343 U.S. 451, 462 (, 72 S. Ct. 813, 820, 96 L. Ed. 1068) (1952). It may well be that acts of a heavily regulated utility with at least something of a governmentally protected monopoly will more readily be found to be "state" acts than will the acts of an entity lacking these characteristics. But the inquiry must be whether there is a sufficiently close nexus between the State and the challenged action of the regulated entity so that the action of the latter may be fairly treated as that of the State itself. Moose Lodge No. 107, supra (407 U.S. 163) at 176 (407 U.S. 163, 92 S. Ct. 1965 at 1973, 32 L. Ed. 2d 627). The true nature of the State's involvement may not be immediately obvious, and detailed inquiry may be required in order to determine whether the test is met. Id. at 350-351, 95 S. Ct. at 453. (footnotes omitted) (citations omitted).

 The Court went on to find that there was no relationship between the utility's action and its monopoly status as would establish "state action," that the utility was not performing a "public function" since there was no obligation on the state to furnish utility service, that the state utility commission's approval of the utility's general tariff did not constitute state action, and that the state was not a joint participant in the utility's enterprise. In conclusion, the Court held:

Metropolitan is a privately owned corporation, and it does not lease its facilities from the State of Pennsylvania. It alone is responsible for the provision of power to its customers. In common with all corporations of the State it pays taxes to the State, and it is subject to a form of extensive regulation by the State in a way that most other business enterprises are not. But this was likewise true of the appellant club in Moose Lodge No. 107 v. Irvis, supra, where we said:
"However detailed this type of regulation may be in some particulars, it cannot be said to in any way foster or encourage racial discrimination. Nor can it be said to make the State in any realistic sense a partner or even a joint venturer in the club's enterprise." 407 U.S., at 176-177 (92 S. Ct., at 1973).
All of petitioner's arguments taken together show no more than that Metropolitan was a heavily regulated, privately owned utility, enjoying at least a partial monopoly in the providing of electrical service within its territory, and that it elected to terminate service to petitioner in a manner which the Pennsylvania Public Utility Commission found permissible under state law. Under our decision this is not sufficient to connect the State of Pennsylvania with respondent's action so as to make the latter's conduct attributable to the State for purposes of the Fourteenth Amendment. Id., 419 U.S. at 358, 95 S. Ct. at 457.

 Plaintiff in the instant case has not been able to show that the actions taken by defendant are distinguishable from those taken by Metropolitan in the Jackson case, nor has plaintiff shown any other salient facts that would establish the requisite "state action" for a claim under the Fourteenth Amendment.

 The requirement in § 1983 actions that the challenged activity be "under color of state law" is treated as equivalent to the "state action" requirement for actions under the Fourteenth Amendment. Parks v. "Mr. Ford", 556 F.2d 132 (3rd Cir. 1977). Therefore, since defendant's activity did not constitute the required "state action" for purposes of the Fourteenth Amendment claim, it does not constitute "under color of state law" activity for the § 1983 claim. Plaintiff's Fourteenth Amendment claims, as well as his § 1983 claims, therefore, will be dismissed.

 Defendant next moves to dismiss plaintiff's claim under § 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794 (hereinafter § 794). In essence, defendant contends that 42 U.S.C. § 2000d-3, which limits claims to those where a primary purpose of the federal funding was to provide employment, applies to the instant case and since creating employment was not a primary objective of the Regional Rail Reorganization Act of 1973, plaintiff has no cause of action under § 794. Defendant further argues that even assuming plaintiff did have a cause of action under § 794, his claim should be dismissed because plaintiff has failed to exhaust his administrative remedies.

 Defendant does not contest that there is a right to bring a private action under § 794. Despite the absence of express statutory language to that effect, a private right to sue has been found to exist. *fn1" Davis v. Bucher, 451 F. Supp. 791 (E.D.Pa.1978); Doe v. Colautti, 454 F. Supp. 621 (E.D.Pa.1978); Trageser v. Libbie Rehabilitation Center, Inc., 590 F.2d 87 (4th Cir. 1978), cert. denied, 442 U.S. 947, 99 S. Ct. 2895, 61 L. Ed. 2d 318 (1979); Carmi v. Metropolitan St. Louis Sewer District, 620 F.2d 672 (8th Cir. 1980). Defendant asserts, however, that any right to bring a private cause of action that may exist under § 794 is coextensive with those provided for in title VI of the 1964 ...

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