Appeal from the United States District Court for the Western District of Pennsylvania; D.C. No. 89-00887.
Stapleton, Hutchinson, and Rosenn, Circuit Judges.
Framed against a background of government largesse, this appeal presents a recurring picture of employment discharge allegedly in violation of statutory and constitutional protection. The Governor's Veterans Outreach & Assistance Center (VOAC) is an unincorporated organization funded through the federal Job Training Partnership Act (JTPA), 29 U.S.C. sections 1501 et seq. JTPA requires that VOAC maintain a grievance procedure for participants in its employment program pursuant to 29 U.S.C. section 1554. VOAC employed Robert G. Boyle until his dismissal in August of 1988. Boyle filed a timely request for a hearing regarding his termination. Upon VOAC's denial of his request for hearing, Boyle filed suit in the United States District Court for the Western District of Pennsylvania pursuant to 42 U.S.C. sections 1983 and 1988 and the fifth and fourteenth amendments to the United States Constitution alleging that he was dismissed from his employment without due process.
Following a hearing conducted by a United States Magistrate, the district court adopted the magistrate's recommendation to dismiss the action for lack of federal jurisdiction, holding that VOAC's termination of Boyle's employment did not constitute state action as required by section 1983. Boyle appealed. We vacate the order of dismissal and remand to the district court with directions to enter summary judgment for the defendant.
Boyle's complaint, including a demand for jury trial, was assigned to Magistrate Robert C. Mitchell for pretrial proceedings. The magistrate sua sponte raised the question of federal jurisdiction based on whether or not VOAC was a state actor for purposes of alleged civil rights and constitutional violations. The magistrate scheduled a hearing for this purpose at which two witnesses testified: Boyle and Edward Neminski, director of the North Huntington office of VOAC. At the conclusion of the hearing, Boyle's counsel requested a continuance so that depositions might be taken of employees of the Commonwealth of Pennsylvania Department of Labor and Industry ("Department of Labor") in Harrisburg. The magistrate denied the continuance.
Following the hearing, the magistrate found the following facts: VOAC is an unincorporated association created by the Governor of Pennsylvania under the JTPA for the purpose of providing personal assistance to American veterans. VOAC's federal funding under the JTPA is administered by the Department of Labor, Bureau of Job Training Partnership.
The magistrate noted Boyle's argument that VOAC must be found to be an agent of the State because of the following factors: the Governor performs central planning, supervisory, and administrative functions; VOAC is required to submit audit and financial reports to the Commonwealth; the Commonwealth is committed to providing future financial support to VOAC; and that the JTPA creates a statutory relationship between the federal government, the State, and VOAC.
The magistrate rejected Boyle's contention that these factors rendered VOAC an instrumentality of the State, finding that VOAC's actions in discharging the plaintiff and denying him a hearing could not be attributed to the State because the State neither coerced nor encouraged VOAC's action. The magistrate, relying on Neminski's testimony, found that no state regulation compelled or influenced the discharge, and that the State showed little interest in personnel matters. The magistrate found that VOAC employees were not employees of the Commonwealth and that it did not exercise any degree of control or authority over VOAC or its employees. The magistrate also concluded that VOAC did not receive any state funding.
The magistrate also rejected plaintiff's argument that VOAC was an instrumentality of the State because of a statutorily created relationship with the State. The magistrate found that no such comprehensive statutory relationship existed; rather, federal legislation, the JTPA, "affects VOAC actions." Thus, he concluded that the extent and nature of the overall relationship between the Commonwealth and VOAC was too tenuous to establish state action. The magistrate found that "the only connection with the Commonwealth appears to be the limited action of the Pennsylvania Department of Labor and Industry in transmitting the federal JTPA funds to VOAC."
The plaintiff, in compliance with Fed. R. Civ. P. 72(b), filed written objections to the magistrate's proposed findings and recommendations. Plaintiff alleged that the magistrate erred in failing to find as a fact that the employees of VOAC were required to abide by the Governor's Code of Conduct applicable to state employees; that VOAC maintained satellite offices in buildings owned by the Department of Labor and used furniture which were the Department's property; that the Department of Labor has employee monitoring duties; that Boyle's duties included developing and maintaining working linkages with numerous government organizations; and that he received training from a state officer. Boyle also contended that the magistrate abused its discretion in denying a continuance to permit taking of additional depositions in Harrisburg.
The district court, by order dated May 23, 1990, adopted the magistrate's report and recommendation as the opinion of the court and dismissed the action for lack of subject matter jurisdiction on the basis that VOAC's action in ...