Flagg Bros., Inc. v. Brooks, 436 U.S. 149 (1978)

Flagg Bros., Inc. v. Brooks

No. 77-25

Argued January 18, 1978
Decided May 15, 1978 *
436 U.S. 149

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

After respondent Brooks and her family had been evicted from their apartment and their belongings had been stored by petitioner storage company, Brooks was threatened with sale of her belongings pursuant to New York Uniform Commercial Code § 7-210 unless she paid her storage account. She thereupon brought this class action under 42 U.S.C. § 1983, seeking damages and injunctive relief and a declaration that the sale pursuant to § 7-210 (which provides a procedure whereby a warehouseman conforming to the provisions of the statute may convert his lien into good title) would violate the Due Process and Equal Protection Clauses of the Fourteenth Amendment. Subsequent interventions by respondent Jones as plaintiff and petitioners warehouse associations and the New York State Attorney General as defendants were permitted. The District Court dismissed the complaint for failure to state a claim for relief under § 1983 which provides, inter alia, that every person who under color of any state statute subjects any citizen to the deprivation of any rights secured by the Constitution and federal laws shall be liable to the injured party. The Court of Appeals reversed, holding that state action might be found in the exercise by a private party of "some power delegated to it by the State which is traditionally associated with sovereignty," and that,

by enacting § 7-210, New York not only delegated to the warehouseman a portion of its sovereign monopoly power over binding conflict resolution . . . , but also let him, by selling stored goods, execute a lien and thus perform a function which has traditionally been that of the sheriff.

Held: A warehouseman’s proposed sale of goods entrusted to him for storage, as permitted by § 7-210, is not "state action," and since the allegations of the complaint failed to establish that any violation of respondents’ Fourteenth Amendment rights was committed by either the storage company or the State of New York, the District Court properly concluded that no claim for relief was stated by respondents under 42 U.S.C. § 1983. Pp. 155-166.

(a) Respondents’ failure to allege the participation of any public officials in the proposed sale plainly distinguishes this litigation from decisions such as North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601; Fuentes v. Shevin, 407 U.S. 67; and Sniadach v. Family Finance Corp., 395 U.S. 337, which imposed procedural restrictions on creditors’ remedies. P. 157.

(b) The challenged statute does not delegate to the storage company an exclusive prerogative of the sovereign. Other remedies for the settlement of disputes between debtors and creditors (which is not traditionally a public function) remain available to the parties. Terry v. Adams, 345 U.S. 461; Smith v. Allwright, 321 U.S. 649; Nixon v. Condon, 86 U.S. 73; and Marsh v. Alabama, 326 U.S. 501, distinguished. Pp. 157-163.

(c) Though respondents contend that the State authorized and encouraged the storage company’s action by enacting § 7-10, a State’s mere acquiescence in a private action does not convert such action into that of the State. Moose Lodge No. 107 v. Irvis, 407 U.S. 163. Pp. 164-166.

553 F.2d 764, reversed.

REHNQUIST, J., delivered the opinion of the Court, in which BURGER, C.J., and STEWART, BLACKMUN, and POWELL, JJ., joined. MARSHALL, J., filed a dissenting opinion, post, p. 166. STEVENS, J., filed a dissenting opinion, in which WHITE and MARSHALL, JJ., joined, post, p. 168. BRENNAN, J., took no part in the consideration or decision of the cases.