On Appeal from the United States District Court for the Middle District of Pennsylvania. D.C. Civil No. 86-0438.
HIGGINBOTHAM and BECKER, Circuit Judges and DUMBAULD, District Judge*fn*
This appeal in a civil rights case concerns the authority of a district court to use its factual findings about the existence of state action made during a preliminary injunction proceeding as a basis for determining its own jurisdiction. The plaintiff, Robert J. Kulick, owns horses which he races at Pocono Downs, a harness track in Wilkes-Barre, Pennsylvania. Defendants are Pocono Downs Racing Association, Inc. and its President and principal stockholder, Joseph Banks. Kulick sued pursuant to 42 U.S.C. § 1983 for damages and injunctive relief, alleging that he had been ejected from the race track under Banks' order without due process of law and thereby lost the right to bet at the track and to be on the premises when his horses were racing.*fn1
Following a preliminary injunction hearing, the district court dismissed the action for want of matter jurisdiction*fn2 on the basis of its conclusion that Kulick had not established that the actions of defendants were taken under color of state law. It may be that Kulick will ultimately have difficulty proving state action or any of the other elements of his due process claim. We conclude, however, that the court should not have treated its preliminary injunction because the presence of state action was properly a concern not of jurisdiction but of the merits. We therefore reverse and remand for further proceedings.
The requirements in a section 1983 case that the challenged conduct be taken "under color of state law" has been treated identically to the "state action" requirement of the fourteenth amendment. Lugar v. Edmondson Oil Co., 457 U.S. 922, 929, 73 L. Ed. 2d 482, 102 S. Ct. 2744 (1982). Of the various state action tests summarized in Krynicky v. University of Pittsburgh, 742 F.2d 94, 98 (3d Cir. 1984), two are relevant to this case: the "symbiotic relationship" test and the "nexus" test. The Supreme Court has found state action where the state has so far insinuated itself into the position of interdependence with a private party that the relationship of the two becomes symbiotic.Burton v. Wilmington Parking Auth., 365 U.S. 715, 725, 6 L. Ed. 2d 45, 81 S. Ct. 856 (1961. The Court has also held that state action may exist when there is a sufficiently close nexus between the state and the challenged action of a private entity such that the actions of the private actor may fairly be attributed to those of the state. Jackson v. Metropolitan Edison Co., 419 U.S. 345, 351, 42 L. Ed. 2d 477, 95 S. Ct. 449 (1974).
Kulick concedes that the mere state regulation of harness racing, albeit heavy, is not along sufficient to satisfy the "symbiotic relationship" test for state action. He relies, however, on Fitzgerald v. Mountain Laurel Racing, Inc., 607 F.2d 589 (3d Cir. 1979), in which a sharply divided panel found the nexus requirement satisfied because state officials, acting in their official capacity, participated in the decision of racing track management to expel the plaintiff.
At the preliminary injunction hearing, Kulick tried to satisfy the nexus test by pointing out that his injection slip listed Kulick's violation of a state Racing Commission rule as one reason for ejection. Further, Kulick attempted to establish that state racing officials participated in the decision to expel him through the testimony of Eugene Lipsi, a director of the track. Mr. Lipsi testified that Banks, the track president, had told him that the racing judges had told the general manager that Kulick should be ejected.*fn3 According to Lipsi, Banks was informed that the presiding state racing judge felt that he had no hard evidence to evict Kulick, but "he suggested that Pocono Downs evict him."
On the other hand, Banks' direct testimony was that he had "received no information from anyone, under any circumstances, which indicated what [the racing judge's] opinion might be of Mr. Kulick" or whether the judge though Kulick should be evicted. The district court, which heard the evidence and observed the witnesses, properly proceeded to weigh the conflicting testimony before ruling on the preliminary injunction motion. The court concluded that the racing judges "played no part" in Banks' decision to evict Kulick and accordingly denied the motion for failure to demonstrate a likelihood of success on the merits.
Following its denial of the preliminary injunction, the district court proceeded to dismiss the complaint for lack of jurisdiction on the grounds that Kulick had not established state action. The court relied on its preliminary injunction finding that state officials had not participated in the decision to expel Kulick from the track. Kulick does not challenge this finding as support for the district court's denial of the preliminary injunction. Kulick does challenged the district court's reliance on this finding for dismissal of the case, however, and we agree that this dismissal was in error.
The district court had jurisdiction over Kulick's § 1983 civil rights claim under 28 U.S.C. § 1331's general grant of federal question jurisdiction and under 28 U.S.C. § 1343(3)'s grant of civil rights jurisdiction.*fn4 Under either section, a court has jurisdiction over the dispute so long as the plaintiff alleges that defendant's actions violate the requisite federal law: under § 1331, any federal law: under § 1343, only laws that relate to civil rights. Once the plaintiff has met this threshold pleading requirement, however, the truth of the facts alleged in the complaint is a question on the merits, as is the legal question whether the facts alleged establish a violation. See Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 70-71, 57 L. Ed. 2d 595, 98 S. Ct. 2620 (1978); Bell v. Hood, 327 U.S. 678, 682, 90 L. Ed. 939, 66 S. Ct. 773 (1946).*fn5 Otherwise, the district court could turn an attack on the merits, against which ...