Opinion
Cause No. IP02-0575-C-B/S
July 5, 2002
ENTRY ON DEFENDANT'S MOTION TO DISMISS
I. Introduction.
This is a retaliatory discharge case. The plaintiff, Larissa Woodall, was employed by AES until she became romantically involved with an unnamed union official. She alleges that she was "summarily terminated" because she married the union official and that her discharge violated her First Amendment rights of free association and privacy as made applicable to the states through the Fourteenth Amendment and 42 U.S.C. § 1983. The case is before us on defendant's motion to dismiss pursuant to Fed.R.Civ.P.12(b)(6) on the ground that AES is not a state actor for purposes of the Fourteenth Amendment or section 1983. AES argues, additionally, that Ms. Woodall's cause of action fails to state a claim for retaliatory discharge under Indiana law because marriage is not a protected category for purposes of Indiana's doctrine of employment at will. For the following reasons, we GRANT defendant's motion.
This case was originally filed in Marion County Superior Court. Defendant timely removed it to this court on the ground that the complaint expressly states a claim arising under the Constitution of the United States. Complaint ¶¶ 14-16. Accordingly, this court has original federal question jurisdiction pursuant to 28 U.S.C. § 1331. We have supplemental jurisdiction over Ms. Woodall's state law claim. 28 U.S.C. § 1367.
II. Facts
Since this case is before us on a motion to dismiss, we accept all of plaintiff's well-pleaded complaint allegations as true. Ms. Woodall was employed by AES as an "Expert of Financial Management." Complaint ¶ 1. In September 2000, AES assigned Ms. Woodall to work on AES's acquisition of IPALCO, an electric utility located in Indianapolis. Complaint ¶ 2. During her work in Indianapolis, she became acquainted with, and eventually enamored of, the business manager/financial secretary of IPALCO's principal labor union, the IBEW, Local 1395, whom she married on December 22, 2000. Complaint ¶¶ 6, 9. AES acquired IPALCO in April 2001. Complaint ¶ 7.
As Ms. Woodall's relationship with the union official advanced, AES warned her against a relationship with a union representative. Upon her marriage to the representative, she was terminated. Her discharge was in retaliation for having married the union official. Complaint ¶¶ 9-12.
III. Discussion
A. The Standard on a Rule 12 Motion to Dismiss.
A party moving to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) bears a weighty burden. It must show that the pleadings themselves fail to provide a basis for any claim for relief under any set of facts. Ed Miniat, Inc. v. Globe Life Ins. Group Inc., 805 F.2d 732, 733 (7th Cir. 1986), cert. denied, 482 U.S. 915 (1987). See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101, 2 L.Ed.2d 80 (1957). Wright and Miller remind us that:
As a practical matter, a dismissal under Rule 12(b)(6) is likely to be granted only in the unusual case in which plaintiff includes allegations that show on the face of the complaint that there is some insuperable bar to relief. In other words, dismissal is justified only when the allegations of the complaint itself clearly demonstrate that plaintiff does not have a claim.
Federal Practice Procedure: Civil § 1357. See Berthold Types Ltd. v. Adobe Systems Inc., 242 F.3d 772, 774 (7th Cir. 2001). On a Rule 12 (b)(6) motion, we treat all well-pleaded factual allegations as true and we construe all inferences that reasonably may be drawn from those facts in a light most favorable to the party opposing the motion. Szumny v. American General Finance, 246 F.3d 1065, 1067 (7th Cir. 2001); Latuszkin v. City of Chicago, 250 F.3d 502, 504 (7th Cir. 2001).
B. Color of State Law.
Since the Civil Rights Cases of 1883, Constitutional law has recognized a distinction between public conduct and private conduct. The Fourteenth Amendment prohibits deprivations by public entities — by government — not by private individuals. In order to prove a Constitutional violation, a plaintiff must show that the defendant is a state actor or, the same thing, acted "under color" of state law. Jackson v. Metropolitan Edison Co., 419 U.S. 345, 350, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974). Thus, Ms. Woodall's constitutional claim — that her discharge violated her rights to free association and privacy as guaranteed by the First and Fourteenth Amendments — turns on the question of whether AES may be construed as a state actor for purposes of section 1983 or the Fourteenth Amendment.
The language of "state action" derives from Section 1 of the Fourteenth Amendment which provides, in relevant part: "No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws."
Meanwhile, the analogous phrase "color of state law" comes from 42 U.S.C. § 1983, which provides: "Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress."
See, Wade v. Byles, 83 F.3d 902, 904, n. 4 (7th Cir. 1996) ("Conduct that constitutes state action under the Fourteenth Amendment necessarily satisfies § 1983's under color of state law requirement."), citing, Lugar v. Edmondson Oil Co., 457 U.S. 922, 935, 102 S.Ct. 2744, 2752, 73 L.Ed.2d 482 (1982).
Plaintiff acknowledges that AES is not a state actor per se. It argues, instead, that there is such a close nexus between AES and IPALCO — which owns IPL, a utility that is regulated by state authority — that we are justified in treating AES as if it were cloaked in the mantle of state power. We find no basis for such a conclusion in the case law. Although in principle a private entity may become so empowered by the state as to stand in its stead, the reported cases, including Jackson and its numerous progeny, support the conclusion that even "extensive and detailed" government regulation is insufficient to transform a private business entity into a state actor for purposes of the Constitution or section 1983. Jackson, 419 U.S. at 350; Otto v. S.E.C., 253 F.3d 960, 965 (7th Cir. 2001) (citing the Second and Third Circuits for the proposition that even the comprehensively regulated NASD is not a state actor); Anderson v. National R.R. Passenger Corp. (AMTRAK), 754 F.2d 202 (7th Cir. 1984) (AMTRAK not a state actor).
Indeed, the Supreme Court has held that "[m]ere approval of or acquiescence in the initiatives of a private party is not sufficient to justify holding the State responsible for those initiatives under the terms of the Fourteenth Amendment." Blum v. Yaretsky, 457 U.S. 991, 1004-05 (1982). Instead, "a State normally can be held responsible for a private decision only when it has exercised coercive power or has provided such significant encouragement, either overt or covert, that the choice must in law be deemed to be that of the state." Id. at 1004. Ms. Woodall's complaint does not so much as hint at such a relationship between the State of Indiana and AES.
Finally, the Tenth Circuit recently held in Moongate Water Co., Inc. v. Butterfield Park Mut. Domestic Water Ass'n, 291 F.3d 1262 (10th Cir. 2002) that a private water company acting as a public utility was not a state actor, notwithstanding that its power derived from state law, it was heavily regulated by the state, and it operated on the informal permission of the New Mexico Power Regulatory Commission. Here, AES is not a private entity acting as a public utility. Its only connection to a public utility is through its purchase of IPALCO. This relationship is so attenuated as to raise no hint of state action.
In sum, since "private action is immune from the restrictions of the Fourteenth Amendment," Jackson, 419 U.S. at 349, and since AES is a private entity, we conclude that there is no set of facts under which AES could be construed to have acted under color of state law to deprive Ms. Woodall of her constitutional rights. Accordingly, even assuming that AES fired Ms. Woodall in retaliation for having chosen to marry the union official, her lawsuit alleging retaliatory discharge is not viable under the constitution.
We also conclude that Indiana Constitutional law does not provide Ms. Woodall a cause of action because it too requires a showing of state action. Baker v. American Juice, Inc., 870 F. Supp. 878, 881-882 (N.D.Ind. 1994) (plaintiff must present showing of state action to prevail in lawsuit based on Indiana Constitution); Johnson v. State, 747 N.E.2d 623 (Ind.Ct.App. 2001) (must show state deprived individual of right of free speech); Rumple v. Bloomington Hospital, 422 N.E.2d 1309 (Ind.Ct.App. 1981) (must show state deprived individual of right of privacy).
C. Indiana Retaliatory Discharge Claim.
Although we take a somewhat broader view than defendant of Indiana's law of employment at will and retaliatory discharge, we agree with AES that the public policy exception to employment at will does not include marriage as a protected category. In Orr v. Westminster Village North, 689 N.E.2d 712, 717-718 (Ind. 1997), the Indiana Supreme Court reaffirmed the vitality of the doctrine of employment at will and summarized the three recognized exceptions to it. An employee may not be terminated at the will of the employer where: (1) the employee has provided adequate independent consideration for the employment contract so that the employer must show good cause to terminate the employment; (2) termination would violate a clear statutory expression of the employee's right or duty; and (3) the employee has a valid claim of promissory estoppel against the employer. Also see, NIPSCO v. Dabagia, 721 N.E.2d 294, 299 (Ind.Ct.App. 2000); Remmers v. Remington Hotel Corp., 56 F. Supp.2d 1046, 1052 (S.D.Ind. 1999). St. John v. Town of Ellettsville, 46 F. Supp.2d 834, 841 (S.D.Ind. 1999).
Ms. Woodall asks us to expand the public policy exception to employment at will to include marriage as a protected category. In other words, she asks us to hold that an employer may not discharge an employee in retaliation for marrying the individual of her choice. While such a holding might well accord with common-sense and family values, we must heed Indiana appellate courts' frequent statements that any further exceptions to employment at will must come from Indiana's General Assembly and not its appellate courts (and certainly not a federal court sitting in its district). Smith v. Electrical System Div. of Bristol Corp., 557 N.E.2d 711, 712 (Ind.Ct.App. 1990); Morgan Drive-Away, Inc. v. Brant, 489 N.E.2d 933, 934 (Ind. 1986).
This is particularly true where, as in this case, the Indiana Supreme Court has cited a case in which marriage was not considered an exception to employment at will. In Brant, 489 N.E.2d at 934, the Court observed with implied favor that: "McQueeney v. Glenn (1980), Ind. App., 400 N.E.2d 806, cert. denied (1981), 449 U.S. 1125, 101 S.Ct. 943, 67 L.Ed.2d 112, rejected plaintiff's contention that termination because of her marriage constituted actionable retaliatory discharge." This dicta, coupled with a similar holding in Illinois, McCluskey v. Clark Oil Refining Corp., 498 N.E.2d 559, 561 (Ill.App.Ct. 1986) (the state's laws were designed to regulate marriage and divorce, and not employers' prerogative to discharge), and elsewhere, leads us to conclude that Indiana appellate courts would not look favorably on our expansion of exceptions to employment at will that would include marriage as a protected category.
In addition to the cases cited by defendant, Brief, p. 7, n. 5, see Talley v. Washington Inventory Serv., 37 F.3d 310, 312 (7th Cir. 1994); Sloan v. Tri-County Elec. Membership Corp., 2002 WL 192571 (TennCt.App. 2002), *7.
IV. Conclusion.
We conclude that there is no set of facts under which AES may be viewed as a state actor for purposes of Ms. Woodall's constitutional claims, so that her First and Fourteenth Amendment claims fail to state a viable cause of action. Similarly, we find that Ms. Woodall's Indiana common law claim fails to state a claim upon which relief may be granted. Accordingly, we GRANT defendant's motion to dismiss both claims with prejudice pursuant to Fed.R.Civ.P. 12(b)(6).
IT IS SO ORDERED