ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA Civil Action No. 76,3060
Before Adams, Weis and Higginbotham, Circuit Judges.
In modern society, the state has come to play an increasingly pervasive role in peoples' lives, and citizens have become ever more dependent on the government for the fulfillment of basic needs, such as of jobs. This development has focussed heightened attention on the requirement that the government should act, with respect to individuals whose interests are affected by its conduct, in a non-arbitrary, procedurally fair manner, according to the dictates of due process.
In this case, we are called upon to analyze the contours of the right to due process of one who has been discharged from public employment. Specifically, Leroy McKnight contends that he was denied such constitutional right when in the absence of a hearing or an opportunity to be heard he was terminated from employment with the Southeastern Pennsylvania Transportation Authority (SEPTA), on the grounds that he had been intoxicated and had not fulfilled his work- related responsibilities. The district court granted defendants' motion to dismiss McKnight's complaint. For the reasons set forth herein, we vacate the judgment of the district court and remand.
The complaint alleges that McKnight was employed from September 17, 1970, until November 22, 1975, as a special investigator in SEPTA's security force. SEPTA is an instrumentality of the Commonwealth of Pennsylvania operating under the Metropolitan Authorities Act of 1963, (66 P.S.A. § 2001 Et seq. (Purdon's Supp.1978)) (the Act), for the purpose of providing public transportation to the residents of the greater Philadelphia area. SEPTA's security force was not represented by a union, and its relationship with the employer was not governed by a collective bargaining agreement. However, § 25(a) of the Act (66 P.S.A. § 2025(a)) provides that no employee of an agency such as SEPTA may be discharged except for "just cause."
On November 22, 1975, SEPTA's Director of Security discharged McKnight "on the alleged grounds that he (McKnight) had been intoxicated while at work and that he had failed to perform his designated duties." McKnight denied the validity of the allegations. He also offered to undergo a test for sobriety, but his employers refused the offer. The employers did not allow McKnight to discuss the discharge with his immediate supervisor. Furthermore, McKnight was not given a written statement of the reasons for his discharge, and was provided with no opportunity to contest the charges that led to his dismissal. See McKnight v. SEPTA, 438 F. Supp. 813, 815 (E.D.Pa.1977).*fn1
McKnight brought the present action on September 30, 1976, against SEPTA, eleven individuals who comprise SEPTA's Transportation Board and other officials of SEPTA, including its General Manager and Chief Executive Officer, Director of Industrial Relations and Director of Security. Jurisdiction of the federal court was asserted under 28 U.S.C. § 1343(3), and under the grant of general federal question jurisdiction conferred by 28 U.S.C. § 1331.
Defendants are charged in the complaint with denying the rights of McKnight to procedural and substantive due process. The complaint also asserts pendent state claims against the defendants for violating § 25 of the Act, Supra, and for breaching McKnight's employment contract.
As a result of his discharge, the complaint declares, McKnight suffered a deprivation of "income, economic hardship and emotional distress," as well as a loss of accumulated vacation pay and retirement benefits. Also, it is said that he sustained a "loss of reputation in the community and the loss of opportunity for other employment." For relief, McKnight seeks compensatory damages and costs; a judgment pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202, stating that SEPTA's practices are unconstitutional; and an order compelling a hearing, reinstating him to his former position, and granting him accumulated backpay, vacation and retirement benefits.
Defendants moved jointly to dismiss the action for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. See Fed.R.Civ.P. 12(b)(1) and (6).
In a carefully crafted opinion filed on October 4, 1977, the district court held that SEPTA was excluded from liability under the Civil Rights Act of 1871 because that Act imposes liability only upon "persons," and "it is now firmly established that a state governmental entity such as SEPTA is not a "person' within the meaning of the Act." McKnight v. SEPTA, 438 F. Supp. at 816. Inasmuch as SEPTA is excluded from the reach of the Act, the district court reasoned, jurisdiction over the claims lodged against SEPTA could not be predicated on 28 U.S.C. § 1343(3), for the latter statute is operative only as the jurisdictional vehicle for claims satisfying the Act's requirements.
With respect to McKnight's argument that the district court has federal question jurisdiction over the action pursuant to 28 U.S.C. § 1331, the trial court concluded that such jurisdiction extends only to the prayers for declaratory and injunctive relief against SEPTA. The claim for damages, it ascertained, was barred by the principle that "an action for damages against a state governmental entity may not be asserted directly under the Fourteenth Amendment." 438 F. Supp. at 816; See also Jones v. McElroy, 429 F. Supp. 848, 853-60 (E.D.Pa.1977).*fn2
Upon reaching the merits, the district court determined that the question whether McKnight had been deprived without due process of a "property" interest which depends on there being an independently-created property right of which McKnight had been stripped was "sufficiently unclear (so as) to warrant abstention." In declining to deal with the question of McKnight's property-based claim to due process, the district court left its resolution to the state courts.*fn3
The district court then discussed McKnight's contention that he had suffered grave detriment to his reputation and his future employment prospects and thus to a protected "liberty" interest as a consequence of his discharge on the grounds of intoxication. The court ruled that defendant's accusation regarding McKnight's intoxication was "not sufficiently stigmatizing" of him to rise to the level of an abridgement of his "liberty" interest, and thus could not act to trigger due process safeguards.*fn4
After thus disposing of the constitutional issues, the district court exercised its discretion and dismissed the pendent state law claims.
We turn first to the district court's analysis of the scope of federal jurisdiction over the present action.
In concluding that an action under § 1983 may not be maintained against SEPTA, for "a state governmental entity such as SEPTA is not a "person' within the meaning of the (Civil Rights) Act," the district court relied on a line of Supreme Court cases reaching back to Monroe v. Pape, 365 U.S. 167, 187-92, 81 S. Ct. 473, 5 L. Ed. 2d 492 (1961). See also City of Kenosha v. Bruno, 412 U.S. 507, 511-13, 93 S. Ct. 2222, 37 L. Ed. 2d 109 (1973); Moor v. County of Alameda, 411 U.S. 693, 706-10, 93 S. Ct. 1785, 36 L. Ed. 2d 596 (1973). The theory of Monroe, with respect to the point in question, is ...