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MURPHY v. VILLANOVA UNIV.

September 2, 1982

John F. MURPHY
v.
VILLANOVA UNIVERSITY



The opinion of the court was delivered by: POLLAK

 John Murphy graduated from the Villanova University School of Law in the spring of 1981. In the fall of 1980, during the first semester of his final year of law school, Mr. Murphy brought this 42 U.S.C. § 1983 action pro se against Villanova and two of its employees. *fn1" Mr. Murphy's complaint alleges that defendants, having determined that Mr. Murphy's eligibility for employment under the federally funded College Work-Study Program had run out (a determination not challenged in the complaint) wrongfully terminated his employment with the University in contravention of rights asserted under federal law.

 A protracted period of discovery ensued, and defendants moved for summary judgment, contending (1) that plaintiff's § 1983 claim must fail because the undisputed facts reveal that defendants' conduct was not tantamount to state action, and (2) that, as a matter of law, the federal College Work-Study statute, 42 U.S.C. § 2751 et seq., under which plaintiff also claims to proceed, creates no private cause of action.

  I.

 The undisputed facts are these. Villanova is a private university incorporated under Pennsylvania law in 1848. The University's Board of Trustees is a self-selecting body. None of its members is chosen by public officials. Since its inception, Villanova has had what its by-laws term "a special relationship" to the Order of Saint Augustine, Province of Saint Thomas of Villanova, and the by-laws provide that "no less than one-third plus one" of the members of the Board of Trustees shall be members of that Order. By-laws of the Board of Trustees of Villanova University In the State of Pennsylvania (Exhibit B, Memorandum in Support of Defendants' Motion for Summary Judgment).

 During the fiscal year ending May 31, 1981, the University had expenditures of $45,386,000; during the same fiscal year it had revenues from the Commonwealth of Pennsylvania in the total amount of $494,000. *fn2" In other words, the Commonwealth's funds received by Villanova constituted about 1.1% of its budget. During the 1981 fiscal year Villanova received no other grant of property or services from the Commonwealth. The University leases no property from the Commonwealth, nor has the Commonwealth undertaken to provide any form of financial assistance to Villanova for capital development.

 Mr. Murphy's dispute with Villanova arises from his dealings with the University's Financial Aid Office. Pursuant to annual contracts between the University and the Pennsylvania Higher Education Assistance Agency ("PHEAA"), and between the University and the federal Secretary of Education ("the Secretary"), the Financial Aid Office administers a number of student financial assistance programs which are funded by state and federal monies. *fn3"

 For the academic year 1980-81, Mr. Murphy received financial aid from two such programs, the state Guaranteed Student Loan Program and the College Work-Study Program (CWSP).

 A.

 The function of the Financial Aid Office in implementing the Guaranteed Student Loan Program is merely to certify students' eligibility for guaranteed loans according to the controlling state and federal regulations. *fn4" Such loans are then guaranteed by PHEAA which in turn is reimbursed by the Secretary for any insurance claims it pays out to lenders.

 Administering the CWSP, *fn5" is a considerably more demanding responsibility. Under the work-study program institutions of higher education receive federal funds which enable them to provide students with part-time work opportunities. The federal government pays 80% of the student's wages; the student's employer (here, the University), pays the remaining 20%. The annual agreements between an institution and the Secretary of Education (formerly the Commissioner of Education) require the institution to comply with the provisions of the Act and the regulations promulgated under it. *fn6" The Act and regulations set guidelines for determining student eligibility, including, inter alia, financial need; they also set limits upon the amount of assistance a student may receive under the program. Within those guidelines and limits the university decides which students to hire for what jobs and the amount of work-study funds allocated to each individual student's employment.

 CWSP also provides for federal funding of "off-campus" student employment in federal, state or local government agencies and in private, non-profit community organizations. During the period embraced by this suit, off-campus jobs were made available to Villanova students by PHEAA pursuant to an agreement between PHEAA and Villanova. The University referred students eligible for work-study assistance to PHEAA which undertook to find them appropriate employment. PHEAA also contributed state funding to pay for 30% of the students' wages at these off-campus jobs. The University paid the remainder of the students' wages using federal CWSP funds. See Plaintiff's Memorandum, Exhibit "C", Agreement between Villanova University and PHEAA dated August 18, 1980.

 B.

 In March, 1980 Mr. Murphy applied to the Financial Aid Office for assistance for the 1980-81 school year. The office determined that Mr. Murphy's financial need for the year was $7,500. The office awarded Mr. Murphy a net grant of $2,500 in work-study funds and it authorized him to participate in the state (PHEAA) Guaranteed Student Loan Program. Mr. Murphy then applied for, and, in September, 1980, received, a $5,000 guaranteed student loan.

 In the summer of 1980, plaintiff secured, via PHEAA, a work-study job off-campus in the United States Bankruptcy Court for the Eastern District of Pennsylvania. In the course of the summer, plaintiff earned the bulk of his work-study grant; about $500 remained of the ...


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