Petition — Anastasia v. Cosmopolitan National Bank of Chicago

No. %5-891™

Iu the | . 1975

Supreme Court pf the United States

Ocrosper Term, 1975

R., Cl ERK

ANN ANASTASIA, et al.

Petitioners,

vs.

COSMOPOLITAN NATIONAL BANK OF CHICAGO, etc., et al,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIROUIT

SHELDON ROODMAN

SEYMOUR J. MANSFIELD

FRED L. LIEB

Legal Assistance Foundation

of Chicago

843 South Dearborn Street

Chicago, Illinois 60604

341-1070

Counsel for Petitioners

—_—_—_

UNITED STATES LAW PRINTING CO., CHICAGO, ILLINOIS 60618 (312) 525-6581

ae :

INDEX

PAGE

| en sedans: ateipunsiniaibsieiaiinesiidann ii

A eae ae a Eo 2

Ne TTIII ~ scstarchictsitehiniineeiilecititeanpeaindinimiginiiicitinpiinenin 2

NN ciel atailceinealiliitntalnettli 2

Constitutional provisions and statutes involved ............ » 3

IID GE GD CD ecinettetcsensicnesenetcninresstinnsincticintnteai 7

Reasons for Granting the Writ ...ccccccccccecccesseseeeeeeees 9

A. The Decision Of The Seventh Cireuit Court Of

Appeals Is In Conflict With The Decisions Of

Other Courts Of Appeal On The Same Matter... 9

B. The Seventh Cireuit Court Of Appeals Has De-

cided An Important Question Of Federal Law

Which Has Not Been, But Should Be, Settled By

TEE TITS: setiduiinnisakthannasaentidaenenttinbasanemnomian 13

GUI cereetteenrerienncienininnnmeniin 15

Appendices :

A. Opinion of District Court oo... cece App. 1

B. Opinion of Seventh Circuit Court of Appeals ..App. 5

C. Culbertson vy. Leland, No, 73-1749 (9th Cir.,

ee ee App. 21

ii

AUTHORITIES CITED

Cases

PAGE

Adams vy. Joseph F. Sanson Investment Co,, 376 F,

Mammen. GE (DD. He. BOGE) cceccccsscssscscssnssescsonssosvecssserssocsnece 13

Barber v. Rader, 350 F. Supp, 188 (S8.D, Fla, 1972) .. 18

Barrera vy. Sec, Bldg. and Inv, Corp., No, 74-2656

BGs Cl. Tame. Tha, BG) secsccsscsssceseseremcnssncstonentnntoncnnes 10

Blye v. Globe-Wernicke Realty Co., 33 N.Y, 2d 15

COTE - cekcshsenbisinsnsstnitersstanentansastasdusnsiastticinindinneaniaiielsibibuiittas 13

Collins v. Viceroy Hotel, 338 F. Supp, 390 (N.D, LI.

| | a ne 8,13

Culbertson vy. Leland, No, 73-1749 (9th Cir., October

is TI secestentetaieenesinnsseeetntsenpecsessntinsetianntinniscinitnninnitinnitie’ 10, 12

Davis v. Richmond, 512 F, 2d 201 (1st Cir, 1975) .......... 11

Dielen v. Levine, 344 I’, Supp. 828 (D, Neb, 1972) ...... 13

Evans v. Newton, 382 U.S. 296 (1966) occ 12

Hall v. Garson, 430 F, 2d 480 (Sth Cir, 1970) .............. 9,12

Holt v. Brown, ?36 F. Supp. 2 (W.D. Ky. 1971) ........ 13

Jackson vy. Metropolitan Edison Co,, 419 U.S, 345

ERED cccincssncacetasmsebieemnevsieniihasndiiesuinisitaasdaiidbainaasoemmitenniienti 11,15

James vy. Pinnix, 495 F. 2d 206 (Sth Cir, 1974) ........... 10, 12

Johnson v. Riverside Hotel, No. 74-1544—Civ WM

ee 13

Klim v, Jones, 315 F. Supp. 109 (N.D, Cal, 1970) ........ 13

In the

Supreme Court of the United States

Ocropen ‘erm, 1975

No.

ANN ANASTASIA, et al,

Petitioners,

V8.

COSMOPOLITAN NATIONAL BANK OF CHICAGO, etc., et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Petitioners, Ann Anastasia, Ozzie Glass, Jesse and Edda

Smith, and June Jackson, individually and on behalf of

all others similarly situated, pray that a writ of certiorari

issue to the United States Court of Appeals for the Sev-

enth Circuit to review the judgment of that Court entered

on September 30, 1975, affirming the order of the Honor-

able Frank J. MeGarr of the United States District Court

for the Northern District of Illinois, Eastern Division,

(dismissing this cause.

2

OPINIONS BELOW

The order and opinion of Judge MeGarr of the United

States District Court for the Northern District of Illinois

is unreported and is attached hereto as Appendix A, The

opinion of the United States Court of Appeals for the

Seventh Circuit, not yet reported, is attached as Appen-

dix B.

JURISDICTION

The judgment of the United States Court of Appeals

for the Seventh Circuit was entered on September 30, 1975,

Before filing, the opinion was circulated to all judges of

the Court in regular active service. A majority voted

against a rehearing en banc, but Judges Luther M, Swy-

gert and John Paul Stevens voted for such a rehearing.

(Appendix B, at 19 n, 17), Because of this vote the peti-

tioners chose not to request a rehearing, but instead have

petitioned directly to this Court.

This petition for certiorari was filed with this Court

within 90 days of the date of the Seventh Cireuit’s judg-

ment, This Court’s jurisdiction is invoked pursuant to

28 U.S.C, §1254(1).

QUESTIONS PRESENTED

1. Whether the actions of the defendant hotel keepers

who seized and detained t'» personal property of their

residents pursuant to the authority of the Illinois Inn-

keepers’ Lien Law, Jll. Rev. Stat., ch, 82, §57 and ch, 71,

$2, are ‘state action’’ within the meaning of the Fourteenth

Amendment to the United States Constitution or action

‘‘under color of law’’ within the meaning of 42 U.S.C,

$1983,

—— ey

3

2. Whether the powers and functions the State of IIli-

nois has allowed hotel proprietors to assume in enforcing

the innkeepers’ lien are inherently governmental in na-

ture and thus circumscribed by constitutional standards.

3. Whether through the enactment of the Innkeepers’

Lien Law and other statutes, which expand the power of

hotels, approve and authorize the enforcement of the inn-

keepers’ lien, and grant hotels protected status and aid,

the State of Lllinois has so significantly involved itself in

the actions of hotel proprietors that their conduct must be

circumscribed by constitutional standards.

4. Whether the Illinois Innkeepers’ Lien Laws violate

the Due Process Clause of the Fourteenth Amendment

and the Fourth Amendment’s prohibition of unreasonable

searches and seizures.

CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED

The Fourteenth Amendment to the United States Con-

stitution provides, in part:

. . » No state shall make or enforce any law which

shall abridge the privileges and immunities of citizens

of the United States; nor shall any State deprive any

person of life, liberty, or property, without due pro-

cess of law; nor deny to any person within its juris-

diction the equal protection of the laws.

The Fourth Amendment to the United States Constitu-

tion provides:

The right of the people to be secure in their persons,

houses, papers, and effects, against unreasonable

searches and seizures, shall not be violated, and no

Warrants shall issue, but upon probable cause, sup-

ported by Oath or affirmation, and particularly de-

scribing the place to be searched, and the persons or

things to be seized.

42 U.S.C. $1983 provides:

Every person who, under color of any statute, ordi-

nance, regulation, custom or usage, of any State or

Territory, 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 proceed-

ing for redress.

28 U.S.C. §$1343(3) and (4) provide:

The district courts shall have original jurisdiction of

any civil action authorized by law to be commenced

by any person:

(3) To redress the deprivation, under color of any

State law, statute, ordinance, regulation, cus-

tom, or usage, of any right, privilege or im-

munity secured by the Constitution of the

United States or by any Act of Congress pro-

viding for equal rights of citizens or of all per-

sons within the jurisdiction of the United

States;

(4) To recover damages or to secure equitable or

other relief under any Act of Congress provid-

ing for the protection of civil rights, including

the right to vote.

Ill. Rev. Stat. ch. 82, $57,.provides:

Hotel, inn and boarding house keepers shall have a

lien upon the baggage and other valuables of their

guests or boarders brought into such hotel, inn or

boarding house by such guests or boarders, for the

proper charges due from such guests or boarders, for

their accommodations, board and lodgings and such

extras as are furnished at their request.

Ill. Rev. Stat. ch. 141, $3, provides in pertinent part:

All persons other than common carriers having a

lien on personal property by virtue of [ch. 82, §57, et

A AE TES SoeRU

er

5

seq.] ... may enforce said lien by a sale of said prop-

erty, on giving the owner thereof, if he and his resi-

dence be known to the person having such lien, 10

days’ notice, in writing of the time and place of such

sale, and if said owner or his place of residence be

unknown to the person having such lien, then upon

his filing his affidavit to that effect with the Clerk of

the County Court in the county where said property

is situated; notice of said sale may be given by pub-

lishing the same once in each week for 3 successive

weeks in some newspaper of general circulation pub-

lished in said county, and out of the proceeds of said

sale ail cash and charges for advertising and making

the same, and the amount of said lien shall be paid,

and the surplus, if any, = be paid to the owner of

the property.

Ill. Rev. Stat. ch. 71, $2, provides:

Every hotel proprietor shall have a lien upon all the

baggage and effects brought into said hotel by his

guests for any and all proper charges due him from

such guests for hotel accomunodations, and said hotel

proprietor shall have the right to detain such baggage

and effects until the amount of such charges shall have

been fully paid, and unless such charges shall have

been paid within sixty days from the time when the

same accrued, said hotel proprietor shali have the

right to sell such baggage and effects at public auc-

tion after giving ten day’s notice of time and place of

such wale, by publication of such notice in a newspaper

of general circulation in the county in which said hotel

is situated, and also by mailing, ten days before such

sale, a copy of such notice addressed to such guest at

his post office address, if known to said hotel proprie-

tor, and if not known, then to his place of residence

registered by said guest in the register of such hotel;

and after satisfying such lien out of the proceeds of

6

such sale, together with any costs that may have been

incurred in enforcing said lien, the residue of said pro-

ceeds of sale, if any, shall, within six months after such

sale, on demand, be paid by said hotel proprietor to

such guest; and if not demanded within six months

from the date of such sale, such residue or remainder

shall be deposited by such hotel proprietor with the

county treasurer of the county in which such hotel is

situated, together with a statement of such hotel pro-

rietor’s claim, the amount of costs incurred in en-

forcing the same, a copy of the published notice, and the

amount received from the sale of said property so

sold at said sale; and said residue shall, by said coun-

ty treasurer, be accredited to the general revenue

fund of said county, subject to the right of said guest

or his representative to reclaim the same at any time

within three years from and after the date of such

deposit with said county treasurer, and such sale

shall be a perpetual bar to any action against said

hotel proprietor for the recovery of such baggage or

property, or of the value thereof, or for any damages

growing out of the failure of such guest to receive

such baggage or property.

Ill. Rev. Stat. ch. 71, $4c provides in pertinent part:

The word ‘‘hotel’’ within the meaning of this act in-

cludes every building or structure kept, used, main-

tained, advertised, and held out to the public to be a

place where lodging, or lodging and food, or apart-

ments, or suites, or other accommodations are offered

for adequate pay to travelers and guests, whether

transient, permanent, or residential, in which 25 or

more rooms are used for the lodging, or lodging and

food, or apartments, or suites, or other accommodations

of such guests.

7

STATEMENT OF THE CASE

The named petitioners were residents of the respective

defendant hotels located in Chicago, Illinois. They paid

their rents on a weekly basis and lived in the hotels con-

tinuously for various periods of time ranging from six

weeks to one year. All petitioners’ personal property, in-

cluding clothing, cooking and eating utensils, medicines

and personal papers, were kept in their rooms, which were

used as their permanent and exclusive residences. In each

instance, they returned to their rooms to find that the

hotel keepers had changed or plugged the locks on the doors

of their rooms so that they could not gain admittance to

the rooms or access to their personal property. Upon in-

quiry, the petitioners were told by hotel agents that they

would not be allowed to enter their rooms and regain pos-

session of their belongings until they paid alleged rent

arrearages. The hotel keepers claimed that their actions

were taken pursuant to and authorized by the Lllinois

Innkeepers’ Lien Law, J//l. Rev. Stat., ch. 82, $57 and ch.

71, §2. Attorneys for the petitioners made demands on

the hotel keepers for the release and return of the peti-

tioners’ personal property. When these demands were

refused, this lawsuit was filed on September 15, 1972 in

the United States District Court for the Northern District

of Illinois, Eastern Division.

This suit was instituted as a plaintiff and defendant

class action for declaratory judgment and injunctive re-

lief pursuant to 42 U.S.C. $1983 for deprivation of rights

guaranteed by the Fourth and Fourteenth Amendments

to the Constitution of the United States.’ The plaintiffs,

individually and on behalf of all others similarly situated,

sought to have the Court declare unconstitutional and en-

join the operation, execution, and enforcement of the Illi-

nois Innkeepers’ Lien Laws, Ill. Rev. Stat., ch. 71, $2 and

1 Each of the named plaintiffs also sought damages from the re-

spective defendant hotels for the wrongful taking of their property

and violation of their civil rights.

8

ch. 82, $57, by the defendant class of Chicago-area hotels,

for the reasons that: the statutes authorize the depriva-

tion of personal property without notice and a prior hear-

ing, in violation of the Due Process Clause of the Four-

teenth Amendment of the Constitution of the United

States; and they authorize limitless searches of hotel

guests’ rooms and seizures of their personal property

without the consent of the gvest and without prior judi-

cial determination of probable cause, in violation of the

Fourth Amendment to the Constitution of the United

States. Plaintiffs noted in their complaint that a federal

court of the same district, in an individual action, Collins

v. Viceroy Hotel, 338 F.Supp. 390 (N.D. Ill. 1972), had

declared the subject lien statutes unconstitutional as viola-

tive of due process, but that, in spite of that decision, defen-

dants and the defendant class had continued to seize, detain,

and sell hotel residents’ personal property pursuant to the

Illinois Innkeepers’ Lien Law, thus making injunctive relief

running against the defendant class essential.

The jurisdiction of the Court was invoked pursuant to

28 U.S.C. $$13843(3) and (4), which provide for original

jurisdiction in the federal district courts of civil rights

suits filed under 42 U.S.C. $1983.

On January 6, 1973, the district court granted leave to

intervene as defendants to several of Chicago’s large

hotels, and on June 5, 1973, the court granted plaintiffs’

motion to proceed as a plaintiff and defendant class action.

On September 30, 1974, in response to plaintiffs’ mo-

tion for summary judgment, the District Court dismissed

the action for lack of jurisdiction. Raising the issue of

state action sua sponte, the Court concluded that the ac-

tions of the defendant hotels were not taken ‘‘under color

of law’’ within the meaning of 42 U.S.C. $1983. Plaintiffs

appealed to the United States Court of Appeals for the

Seventh Cireuit seeking a reversal of the District Court’s

decision. On September 30, 1975, the Court of Appeals

affirmed the District Court’s decision.

REASONS FOR GRANTING THE WRIT

A. THE DECISION OF THE SEVENTH CIRCUIT

COURT OF APPEAL IS IN CONFLICT WITH THE

DECISIONS OF OTHER COURTS OF APPEAL

ON THE SAME MATTER.

Four courts of appeals have considered the question of

whether the execution of hotel keepers’ or landlords’ liens

by private persons without the assistance of state officials

constitutes ‘‘state action’’ or action ‘‘under color of law.’’

Two courts of appeals, the Fifth and Ninth Cireuits, have

answered this question in the affirmative while two others,

the Fir st and the Court below, have found no state action

to exist.

In Hall v. Garson, 430 F.2d 430 (Sth Cir. 1970), the Fifth

Circuit found state action where a private landlord had

entered the dwelling of a tenant to remove the tenant’s

television set pursuant to a Texas law giving landlords a

lien on the personal property of their tenants for unpaid

rent. As in the case of the Illinois statute attacked here-

in, no court order was required to effect the seizure nor

was the landlord assisted in any way by a government

official. Nevertheless, the Court found that by entering a

person’s home to seize his property the landlord was per-

forming a function that was by its nature inherently gov-

ernmental, thereby subjecting the landlord to the stric-

tures of the Fourteenth Amendment.

... {T]he action taken, the entry into another’s home

and seizure of another’s property, was an act that

possessed many, if not all, of the characteristics of

an act of the State. The execution of a lien, whether

a traditional security interest or a quasi writ of at-

ee Se

10

tachment or judgment lien, has in Texas traditionally

heen the function of the Sheriff or Constable. Jd, at

439,

Since the //all decision was rendered in 1970, the Fifth

Cireuit has reaffirmed its holding on two separate occa-

sions. In James v. Pinn's, 495 F.2d 206 (Sth Cir, 1974),

the Court found no state action in the repossession of an

automobile by a secured creditor pursuant to the Uniform

Commercial Code, and in Barrera vy. Sec, Bldg. and Inv.

Corp., No, 74-2656 (Sth Cir, Sept. 25, 1975), the Court

found no state action in a nonjudicial mortgage fore-

closure pursuant to a power of sale provision in a deed

of trust authorized by a Texas statute. In both cases, the

Court distinguished Hall on the grounds that James and

Barrera, in contrast to Hall, did not involve entry into the

debtor’s dwelling, seizure of property over which the

creditor had no security interest or contractual right to

repossess, or a statutory expansion of pre-existing rights.

In Culbertson v. Leland, No, 73-1749 (9th Cir., October

3, 1975) (attached as Appendix C), a case decided three

days after Anastasia, the Ninth Circuit, in a two-to-one

decision, found state action in the execution of the Arizona

Innkeepers’ Lien statute, a statute which is virtually iden-

tical to the Illinois provisions herein challenged. Judge

Weigel, in a separate opinion, concluded that the state

had signifi-antly involved itself in the hotel’s action for

mueh the same reasons put forth by plaintiffs and rejected

by the Seventh Cireuit; (1) the statute granted hotel,

hoardinghouse and roominghouse keepers new powers

which they did not have at common law; (2) there was no

contractual agreement between the parties giving the

hotel keepers the right to seize the residents’ property in

case of nonpayment, and the purchase of the seized prop-

erty had not created the original debt; and (3) the seizure

11

of unsecured property in satisfaction of an unrelated debt

is a type of activity which the state ordinarily reserves

exclusively to itself, (Appendix C at 24-32),

Judge Ely, separately concurring in the result, followed

the rationale of //al/ in finding the hotel keeper was exer-

cising a function governmental in nature and therefore

subject to due process strictures. Quoting the Fifth Cir-

cuit’s explication of //all in a subsequent decision, he ob-

served that ‘* ‘[sJuch a taking closely resembles a seizure

in satisfaction of a judgment-—a function traditionally

performed by a Sheriff or other state agent,’ ’’ (Appendix

C at 35-36), and concluded that the state ‘‘has, and must

retain, a monopoly’’ over the exercise of this power. 7d. at

35. In reaching this conclusion, Judge Ely drew substan-

tial support from this Court’s decision in Jackson vy, Met-

ropolitan Edison Co., 419 U.S, 345 (1974). Id. at 36-7,

In Davis vy. Richmond, 512 F.2d 201 (1st Cir. 1975), the

First Cireuit found no state action in the seizure and de-

tention of personal property pursuant to the Massachu-

setts Boardinghouse Lien statute. The Massachusetts’

statute is similar to the Illinois statutes although it is more

limited in its reach and in the powers granted.? The Court

expressly rejected the reasoning of Hall and the argu-

ments which the Ninth Cireuit later found persuasive in

Culbertson. While the Court conceded that the Massachu-

2 The Massachusetts’ statute extends the inkeepers’ common law

lien to goods of boarders and lodgers whereas the Illinois lien at-

taches to all persons living in statutorily defined hotels, including

many persons such as the Petitioners themselves who could properly

be called tenants, Furthermore, under the Illinois statutes the hotel

keeper can sell the goods after sixty days to satisfy the alleged debt

without repairing to the courts whereas in Massachusetts the goods

can only be sold after notice and a judicial hearing. Compare JI.

Rev. Stat., ch. 71 §2, ch. 141, §3, with Mass Gen, Laws, ch. 255,

§§26-29.

12

setts’ statute went beyond the common law, the First Cir-

cuit surmised that it was ‘‘a fairly unremarkable product

of the continuing legislative function to define creditors’

rights.’’ Thus, the state had not significantly involved

itself in the private actions of the boardinghouse keeper

by authorizing his actions through a statutory enactment.

Id, at 208,

The Seventh Cireuit’s opinion in this case is in direct

conflict with the Fifth Cireuit’s decision in Hall and Ninth

Cireuit’s decision in Culbertson. The Court below recog-

nied that Hall was indistinguishable from the case at bar,

but rejected the Fifth Cireuit’s reasoning: ‘‘Fundamen-

tally, we simply disagree with the result in Hall.’’ (Ap-

pendix B at 18-19). The Seventh Cireuit felt that the execu-

tion of the Lllinois Innkeepers’ lien could not be deemed

a publie function as long as it could be said that, in part at

least, some types of liens historically had not been ea-

clusively executed by state officers. /d, at 35-37. In so

doing, the Court rejected the Fitth and Ninth Cireuits’

determination that the test was whether the statutes had

endowed hotel keepers with ‘powers and functions govern-

mental in nature’’ regardless of who historically had ex-

ercised similar or antecedent liens. Lvans v. Newton, 382

U.S. 296, 308 (1966). See /Hall v, Garson, supra at 439;

James v. Pinnix, supra at 208; Culbertson v, Leland, supra

at 34-36,

Moreover, the Seventh Cireuit, citing the First Cireuit

in Davis, coneluded that the Innkeepers’ lien law and

other Illinois statutes, which had coneededly expanded

the power of hotels, approved and authorized the enforce-

ment of the lien, and granted hotels protected status and

aid, had a ‘‘minimal’’ impact on ‘‘private ordering’’ and

thus did not significantly involve the state in hotel keep-

ers’ actions, even though the Court would have apparently

agreed with Judge Weigel’s observation in Culbertson

13

that tho lien statutes were the defendants ‘‘sole authority

for the seizure[s], which would not otherwise have been

even colorably legal.’’ (Appendix C at 32; Appendix B at

13-15),

In summary then, there is a two-way split between four

cireuit courts of appeals on the questions presented by

petitioners for review.’ It is clear that the conflict is one

that can be effectively resolved only by the prompt action

of this Court. Accordingly, this Court should grant peti-

tioners’ request for a writ of certiorari.

B. THE SEVENTH CIRCUIT COURT OF APPEALS

HAS DECIDED AN IMPORTANT QUESTION OF

FEDERAL LAW WHICH HAS NOT BEEN, BUT

SHOULD BE, SETTLED BY THIS COURT.

The Seventh Cireuit Court of Appeals has decided that

the actions of hotel keepers who seize and detain prop-

erty of residents kept in their rooms for alleged nonpay-

ment of a bill, pursuant to the authority of Illinois law,

are not state action and therefore not circumscribed by the

Fourth and Fourteenth Amendments. While this decision

is limited to the Illinois Innkeepers’ Lien Law, it has

nationwide significance. Except for Alaska and South

Carolina, all of the states and the District of Columbia

%Except for the District Court's opinion in this case, the lower

federal courts have consistently found state action in the execution of

landlord and innkeepers’ liens. Alim vy. Jones, 315 F. Supp. 109

(N.D. Cal. 1970); Collins v. Viceroy Hotel Corp., 338 F. Supp.

390 (N.D. Ill. 1972); Holt v. Brown, 336 F. Supp. 2 (W.D. Ky.

1971) ; Barber v. Rader, 350 F. Supp. 183, 188-89 (S.D. Fla, 1972) ;

Dielen v. Levine, 344 F. Supp. 823, 824 (D.Neb. 1972); Adams v.

Joseph F, Sanson Investment Co., 376 F. Supp. 61 (D.Nev, 1974) ;

Johnson vy. Riverside Hotel, No, 74-1544—Civ. WM (S.D. Fila,

August 7, 1975). See also, Blye v. Globe-Wernicke Realty Co., 33

N.Y. 2d 15, 19-20 (N.Y. Ct. of Appeals 1973).

14

have innkeepers’ lien statutes which are virtually identi-

cal to the Illinois’ law, wherein the seizure and deten-

tion of property for an alleged bill is authorized without

judicial order and without prior notice or hearing. In

every case, the seizure can be effected by a private person

without the aid of a state officer.| Furthermore, many

states have distress for rent or landlord lien statutes simi-

lar to the Texas statute considered in Hall which autho-

rize a private landlord to enter the dwelling of his tenant

and seize the tenant's property in satisfaction of a claim

of past due rent before the tenant has been afforded no-

{ice and the opportunity for a hearing to determine the

validity of the landlord’s claim, The Seventh Cireuit de-

‘33 Code Ala, §§29-30; Ariz Rev. Stat., §§33-951, 33-952; Ark.

Stat. ch, 11, $$17-1111, 77-1113; Cal. Civil Code, Tit. 3, ch. 2, Art. 4,

$1861; Colo. Rev. Stat., §§38-20-102, 104; Gen, Stat. Conn, ch, 847,

$49.69; Del. Code, Tit. 25, $3901; D.C, Code, §34-107; Fla. Stat.

$713.68, $85.19; Ga. Code §§52-105, 52-106; Haw. Rev. Stat. ch.

507, §§7-8; Idaho Code ch. 18, $§39-1826, 39-1827; Ind. Stat.

§§32-8-27-1, 2; Iowa Code $583.1 et seq.; Kans, Stat. §36-201 et

seg.; Ky. Rev. Stat. $376,340; La, Civil Code, Art, 3233; Me. Rev.

Stat. Tit. 30, $§2951-52; Code Md. Art. 71, §4; Mass, Gen, Laws

cl), 255, §23-29; Mich. Compiled Laws §$427.201-.207; Minn.

Stat. $§327.05-.06; Miss. Code §§75-73-15, 75-73-17; Mo, Stat.

§§419.060, 419.070; Mont. Rev. Code §§34-103, 104; Neb. Rev.

Stat. §$41-124, 125; Nev. Rev. Stat. §§108.480, 490; N, Hamp

Rey, Stat. §448.1; N.J. Rev. Stat. §2A:44-48; N. Mex, Stat.

§861-2-14, 61-3-11; N.Y. Liens Stat. Art. 7, §181, Art. 9, §200 ef

sq; N. Car, Gen, Stat. $44.30; N. Dak, Code §35-19-01 et seq.;

Ohio Rev. Code §$4721.04, .05; Okl. Stat. Tit. 42, §39, Tit. 15, §501;

Oreg. Rev. Stat. ch. 87, $§87.525, .530; Penn, Stat. Tit. 37, §71-74;

Gen. Laws RI. §$34-33-1; S, Dak, Laws §44-11.5; Tenn, Code

864-1701; Tex. Civ. Stat. Tit. 73, Art. 4594, 4595; Utah Code,

§§38-2-2, 38-2-4; Vt. Stat. Tit. 13, §2585; Code Va., §43-31;

Wash. Rev. Code §60.64.010; W.Va, Code §38-11-5; Wisc. Stat.

§289.43; Wy. Stat. §33-249,

15

cision therefore has nationwide ramifications and in light

of the conflict between the circuit courts of appeals on this

matter, the questions decided therein should be settled hy

this Court,

This Court has never ruled on the questions presented

for review by the petitioners, In Jackson vy, Metropolitan

Edison Co,, 419 U.S. 345 (1974), this Court found that the

termination of electric service by a publie utility company

for nonpayment of bills was not state action where the

state had not directly authorized or encouraged the termi-

nation. In Jackson, however, in contrast to this case,

there was no entry into a private dwelling to effectuate

the termination, nor was there a direct grant of power by

the state to a non-governmental entity. Jackson, then, is

not dispositive of the instant case.

Accordingly, this Court should grant a writ of certiorari

to review the important questions of federal law presented

herein.

CONCLUSION

Petitioners respectfully request that this Court issue a

Writ of Certiorari to the United States Court of Appeals

for the Seventh Cireuit to review the judgment of that

court entered on September 30, 1975.

Respectfully submitted,

SueLtpon RoopMan

Seymour J. MANSFIELD

Frep L, Lies

Legal Assistance Foundation

of Chicago

343 South Dearborn Street

Chicago, Illinois 60604

APPENDIX

APPENDIX A

IN THE UNITED STATES DISTRICT COURT

For The Northern District Of Illinois

Eastern Division

ANN ANASTASLA, et al.,

Plaintiffs,

v.

COSMOPOLITAN NATIONAL BANK, 2135 S. MICHI-

GAN CORPORATION, an Illinois corporation, et al.,

Defendants.

No. 72 C 2303

MEMORANDUM OPINION AND ORDER

This suit was originally filed pursuant to 42 U.S.C.

$1983. It is an action seeking declaratory and injunctive

relief against the enforcement of the Illinois Innkeeper’s

Lien Law, Ch. 71 §2 and Ch. 82 $57 of the Illinois Revised

Statutes, and seeking damages which the individual named

plaintiffs have allegedly suffered at the hands of the

named defendant innkeepers: Since the filing of this law-

suit two years ago, both plaintiffs and defendants have

evolved into classes under Rule 23, F.R.C.P. At no time

have any of the defendants challenged the jurisdiction of

this Court. The parties are now before the Court on a

motion for summary judgment filed by the plaintiffs.

Consideration of the summary judgment issue has

caused the Court to advert sua sponte to the question

whether jurisdiction exists under 42 U.S.C. $1983. This

section provides relief to any person who ‘‘under color of

any statute, ordinance, regulation, custom, or usage, of

App. 2

any State or Territory’’, is subjected to a violation of his

rights under the constitution of the United States. The

problem in the instant case is that the wrongs complained

of, the detention of the plaintiffs’ personal property by

the defendants, involve no action of any official of the

State of Illinois or any action under color of State author-

ity. Judge Abraham Lincoln Marovitz [sic] has found an

analogous factual situation sufficient to confer jurisdiction

on the Federal courts. Collins v. Viceroy Hotel Corp., 338 F.

Supp. 390 (1972). Although this Court gives great weight

to the opinion of Judge Marovitz, it must be noted that

his is one of several opinions which stand on one side of

a very definite split of authority on this issue.

The situations wherein it is found that there is action

by private individuals ‘‘under color’’ of state law involve

circumstances clothing individuals with a sovereign au-

thority to a much greater degree than the facts here re-

veal. Examples would be where the state acts as a silent

partner in the actions of which complaint is made, Burton

v. Wilmington Parking Authority, 365 U.S. 715, 6 L.Ed.2d

45. 81 S.Ct. 856), or where state law compels a private

individual to deprive another of his rights (Adickes v.

S.H. Kress € Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d

142).

The application of Section 1983 requires a situation

where an individual performs an essentially public or

governmental function under a delegation of authority by

the state, such that his action must be characterized as

‘‘under color’’ of state law.

The Court of Appeals for this circuit recently refused

to extend this concept to a suit against a garageman who

had exercised his authority under the Indiana Mechanics

Lien Law. Phillips v. Maney, No. 72-1772 (7th Cir. Sept.

App. 3

13, 1974). The only case in which the Supreme Court has

found action to be ‘‘under color’’ of state law, where both

the action and the impetus therefor were private, is Reit-

man v. Mulkey, 387 U.S. 369, 87 S.Ct. 1627, 18 L.Ed.2d 830.

The Reitman case is relied on heavily by those courts

which have held that jurisdiction exists under $1983. There

are, however, a line of cases which distinguish the Reitman

situation from situations similar to that here. Oller v.

Bank of America, 342 F.Supp. 21 (N.D. Cal. 1972); Kirk-

sey v. Theilig, 351 F.Supp. 727 (D. Colo. 1972); Baker v.

Keeble, 362 F.Supp. 355 (M.D. Ala. 1973). The rationale

in Kirksey v. Theilig, supra, is particularly persuasive.

351 F.Supp. 727, 731. In Reitman, the purpose of a Cali-

fornia constitutional provision was held to be void under

the Constitution of the United States because it circum-

spectly authorized racial discrimination against home

buyers, which had been forbidden by state law. The fact

that racial discrimination was involved, an area in which

the states have long exercised indirect power to further

constitutional ends, was a controlling factor in the Su-

preme Court’s decision.

More recently, in Woose Lodge No. 107 v. Irvis, 407 U.S.

163 (1972), the Supreme Court stated:

‘‘The Court has never held, of course, that discrimi-

nation by an otherwise private entity would be viola-

tive of the Equal Protection Clause if the private

entity receives any sort of benefit or service at all

from the state, or if it is subject to state regulation

in any degree whatever ... Our holdings indicate that

where the impetus for the discrimination is private,

the state must have ‘significantly involved itself with

invidious discriminations’, [citing Reitman], in order

for the discriminatory action to fall within the ambit

of the constitutional prohibition.’’ p. 173

App. 4

Moose Lodge involved racial discrimination by private

clubs which were licensed to sell liquor by the state. The

Court refused to find action ‘‘under color’’ of state law.

An individual who exercises the authority granted him

by the state under the Illinois Innkeeper’s Lien Law is

bringing about a very minimal involvement of the state’s

police power. The impetus for the action is private, and

the action is carried out without the aid of any state per-

sonnel. This Court will not conelude that the state’s au-

thorization for the action is ‘‘significant involvement’’.

Accordingly, this action must be dismissed for lack of

jurisdiction.

Enter:

/s/ Frank J. McGarr

United States District Judge

Dated: September 30, 1974

App. 5

APPENDIX B

In the

United States Court of Appeals

For the Seventh Circuit

No. 74-1995

Ann Anastasia, et al.,

Plaintiff s-A ppellants,

vs.

Tue Cosmopouitan NaTionaL Bank or Cuicaco, ete., et al.,

Defendants-A ppellees.

On Appeal from the United States District Court

for the Northern District of Lllinois,

Eastern Division.

No. 72C 2. 3

Frank J. McGarr, Judge.

Argued June 6, 1975—Decided September 30, 1975

Before Moore, Senior Circuit Judge,* Cumm™tnes, and

Bauer, Circuit Judges.

* Senior Circuit Judge Leonard Page Moore of the United States

Court of Appeals for the Second Circuit was sitting by designation.

App. 6

Moore, Senior Circuit Judge: Mllinois Revised Statutes

ch. 82, $57' and ch. 71, $2? give hotelkeepers a lien on the

‘The statute provides ;

Hotel, inn and boarding house keepers shall have a lien upon

the baggage and other valuables of their guests or boarders

brought into such hotel, inn or boarding house by such guests

or boarders, for the proper charges due from such guests or

boarders, for their accommodations, board and lodgings and

such extras as are furnished at their request.

2 The statute provides :

Every hotel proprietor shall have a lien upon all the baggage

and effects brought into said hotel by his guests for any and all

proper charges due him from such guests for hotel accommoda-

tions, and said hotel proprictor shall have the right to detain

such baggage and effects until the amount of such charges shall

have been fully paid, and unless such charges shall have been

paid within sixty days from the time when the same accrued,

said hotel proprietor shall have the right to sell such baggage

and effects at public auction after giving ten days’ notice of the

time and place of such sale, by publication of such notice in a

newspaper of general circulation in the county in which said

hotel is situated, and also by mailing, ten days before such sale,

a copy of such notice addressed to such guest at his post office

address, if known to said hotel proprietor, and if not known,

then to his place of residence registered by said guest in the

register of such hotel; and after satisfying such lien out of the

proceeds of such sale, together with any costs that may have

been incurred in enforcing said lien, the residue of said proceeds

of sale, if any, shall, within six months after such sale, on de-

mand, be paid by said hotel proprietor to such guest; and if not

demanded within six months from the date of such sale, such

residue or remainder shall be deposited by such hotel proprietor

with the county treasurer of the county in which such hotel is

situated, together with a statement of such hotel proprietor’s

claim, the amount of costs incurred in enforcing the samie, a

copy of the published notice, and the amount received from the

App. 7

personal property brought into their establishments by

guests to the extent of charges incurred for lodging, board

or other services.’ Ch. 71, $2 also authorizes the hotel-

keeper to detain and eventually, upon continued nonpay-

ment of charges, after notice to the guests‘ to sell such

property in order to realize on the lien. Such a sale bars

any subsequent action against the hotel proprietor for the

recovery of the property or the value thereof. This case

represents a constitutional challenge to these provisions.

(Footnote continued)

sale of said property so sold at said sale; and said residue shall,

by said county treasurer, be accredited to the general revenue

fund of said county, subject to the right of said guest or his

representative to reclaim the same at any time within three

years from and after the date of such deposit with said county

treasurer, and such sale shall be a perpetual bar to any action

against the hotel proprietor for the recovery of such baggage or

property, or of the value thereof, or for any damages growing

out of the failure of such guest to receive such baggage

or property.

STll, Rev. Stat. ch. 71, §4c¢ defines “hotel” as follows:

The word “hotel” within the meaning of this act includes every

building or structure kept, used, maintained, advertised, and

held out to the public to be a place where lodging, or lodging

and food, or apartments, or suites, or other accommodations are

offered for adequate pay to travelers and guests, whether tran-

sient, permanent, or residential, in which 25 or more rooms are

used for the lodging, or lodging and food, or apartments, or

suites, or other accommodations of such guests.

‘Similar, but not identical, sale provisions for realization on the

lien provided by ch, 57, §82 are contained in Ill. Rev. Stat. ch. 141,

§3.

App. 8

I,

The named plaintiffs in this class action were residents

of hotels located in Chicago. In each instance they re-

turned to their rooms one day to find that the hotelkeeper

had either changed or ‘‘plugged’’ the lock on the door to

the room so that the plaintiffs were unable to gain admit-

tance. Upon inquiry, each plaintiff was told by their re-

spective hotelkeepers that they would not be readmitted

and the personal property that had been located in the

room would not be released until such time as arrearages

in rent had been paid. When efforts by the plaintiffs and

their attorneys to regain possession of their property

proved unavailing, this lawsuit was filed.°

*

The suit, brought under 42 U.S.C. §1983 and its juris-

dictional counterpart, 28 U.S.C. $1343, challenged the sei-

zures of the personal possessions of the plaintiffs as both

a deprivation of property without due process of law in

violation of the Fourteenth Amendment in that no notice

or hearing in which the plaintiffs could raise defenses to

the alleged nonpayments of rent® was provided, and an

unreasonable search and seizure in contravention of the

fourth Amendment. In addition to damages, the plaintiffs

sought a declaration that ch. 82, $57 and ch. 71, §2 were

unconstitutional and an injunction restraining the defen-

* The property of plaintiffs Anastasia and Smith has now been re-

turned to them, Plaintiff Glass was offered the return of his prop-

erty, but he refused to accept it on the ground that certain items

were missing.

® See North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S.

601 (1975); Mitchell v. W. T. Grant, Co., 416 U.S. 600 (1974) ;

Fuentes v. Shevin, 407 U.S. 67 (1972); Sniadach v. Family Fi-

nance Corp., 395 U.S, 337 (1969).

App. 9

dants from acting pursuant to these sections. On January

6, 1973, the district court granted leave to intervene as de-

fendant to several of Chicago’s large hotels, and on June

5, 1972, granted plaintiffs’ motion to proceed as a plaintiff

and defendant class action."

After the plaintiffs had submitted a motion for sum-

mary judgment, the district court sua sponte raised the

issue of state action and issued a memorandum dismissing

the complaint for lack of jurisdiction upon concluding that

the action of the defendant hotels was not taken ‘‘under

color’’ of law within the meaning of 42 U.S.C. §1983.°

From the judgment entered thereon, the plaintiffs ap-

pealed. We affirm.

Ever since the Civil Rights Cases, 109 U.S. 3 (1883), it

has been recognized that the Fourteenth Amendment

serves as a limitation only on governmental action and

does not affect purely private conduct. But while this

7 The district court defined the plaintiff class as:

Those persons in Chicago, Illinois, except for the owners, man-

agers and operators of hotels, whose personal property is now

detained by a hotel pursuant to the Illinois Innkeepers’ Lien

Law.

The defendant class included:

Those owners, managers, and operators of hotels in Chicago,

Illinois, who now have the personal property of the class of

plaintiffs detained pursuant to the Illinois Innkeepers’ Lien

Law.

®We note that the proper disposition, given the district court's

conclusion, would have been to dismiss the claims for failure to state

a claim upon which relief could be granted, Bell v. Hood, 327 U.S.

678 (1946); Adams v. Southern California First National Bank,

492 F.2d 324, 338 (9th Cir. 1973), cert. denied, 419 U.S. 1006

(1974).

App. 10

proposition is easily stated, the distinction between gov-

ernmental and private action is seldom very clear. With

increasing frequency in recent years, the federal courts

have been drawn into the sphere of creditor-debtor rela-

tions to decide whether certain statutorily authorized

creditor conduct constitutes action ‘‘under color’’ of state

law within the meaning of section 1983,° or, what is essen-

tially the same question,” whether the conduct is ‘‘state

action’’ under the Fourteenth Amendment. A number of

cases have considered the issue in the context of the self-

help repossession remedy provided to secured creditors by

sections 9-503 and 9-504 of the Uniform Commercial

Code."' Only last year this court considered an Indiana

common law and statutory mechanic’s lien, finding no

state action where an automobile repairman detained a

®42 U.S.C. $1983 provides :

Every person who, under color of any statute, ordinance, regu-

lation, custom or usage, of any State or Territory, subjects, or

causes to be subjected, any citizen of the United States or other

person within the jurisdiction thereof by 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.

1 United States v. Price, 383 U.S. 787, 794 n.7 (1966) ; Phillips

v. Money, 503 F.2d 990, 992 (7th Cir. 1974), cert. denied, 420 U.S.

934 (1975).

'! To cite only the cases decided by the Circuit Courts of Appeals

which have unanimously held that these provisions of the UCC are

not a basis for finding state action: Calderon v. United Furniture

Co., 505 F. 2d 950 (Sth Cir. 1974); Brantley v. Union Bank &

Trust Co., 498 F.2d 365 (Sth Cir.), cert. denied, 419 U.S. 1034

(1974) ; James v. Pinnix, 495 F.2d 206 (Sth Cir. 1974) ; Turner v.

Impala Motors, 503 F.2d 607 (6th Cir. 1974); Gibbs v. Titebnan,

502 F.2d 1107 (3rd Cir.), cert. denied, 419 U.S. 1039 (1974) ;

Nichols v. Tower Grove Bank, 497 F.2d 404 (8th Cir. 1974) ; Now-

lin v. Professional Auto Sales, Inc., 496 F.2d 16 (8th Cir.), cert.

App. 11

ear after the owner refused to pay the bill for repairs.

Phillips v. Money, 503 F.2d 990 (7th Cir. 1974), cert. de-

nied, 420 U.S. 934 (1975). And the context in which the

state action question in this case arises—detention of per-

sonal property pursuant to a statutory landlords’ or inn-

keepers’ lien—is by no means unique, having been the sub-

ject of a number of court decisions.” In fact, detention of

property under authority of the very statutes challenged

herein has in another case been declared unconstitutional

by the United States District Court for the Northern Dis-

trict of Illinois. Collins v. Viceroy Hotel Corp., 338 F.

Supp. 390 (N.D, Ill. 1972).

(Footnote continued)

denied, 419 U.S. 1006 (1974); Bichel Optical Laboratories, Inc. v.

Marquette National Bank of Minneapolis, 487 F.2d 906 (1974) ;

Adams v. Southern California First National Bank, 492 F.2d 324

(9th Cir. 1973), cert. denied, 419 U.S. 1006 (1974). For related

state action cases see also Bryant v. Jefferson Savings & Loan Assn.,

509 F.2d 511 (D.C. Cir, 1974); Hardy v. Gissendaner, 508 F.2d

1207 (Sth Cir. 1975); Fletcher v. Rhode Island Hospital Trust Na-

tional Bank, 496 F.2d 927 (1st Cir.), cert. denied, 419 U.S, 1001

(1974) ; Bond v. Dentzer, 494 F.2d 302 (2d Cir.), cert. denied, 419

U.S. 837 (1974); Shirley v. State National Bank of Connecticut,

493 2d 739 (2d Cir.), cert. denied, 419 U.S. 1009 (1974),

12 Davis v. Richmond, 512 F.2d 201 (1st Cir. 1975) (innkeep-

ers’ lien; no state action); Hall v. Garson, 430 F.2d 430 (Sth Cir.

1970) (landlords’ lien; state action); Johnson v. Riverside Hotel,

Inc., 44 U.S.L.W, 2075 (S.D. Fla. 1975) (innkeepers’ lien; state

action); Barber v. Rader, 350 F. Supp. 183 (S.D. Fla. 1972)

(landlords’ lien; state action); Alim v, Jones, 315 F. Supp. 109

(N.D. Cal. 1970) (innkeepers’ lien; state action); Holt v. Brown,

336 F. Supp. 2 (W.D. Ky. 1971) (landlords’ lien; state action) ;

Blye v. Globe Wernicke Realty Co., 33 N.Y, 2d 15, 300 N.E. 2d

710, 347 N.Y.S. 2d 170 (1973) (innkeepers’ lien; state action).

13 The district court in this case cited Collins, which had not been

brought as a class action, and although giving “great weight” to

that opinion, noted that it was but “one of several opinions which

stand on one side of a very definite split of authority” on this issue.

App. 12

Before moving to an analysis of the plaintiffs’ conten-

tions, it is important to note that this case involves only

the seizure of personal property by the defendant hotels.

‘here have been no sales of the property of the named

plaintiffs although ch. 71, §2 authorizes sales under cer-

tain conditions. And the plaintiff class is defined as

‘‘It/hose persons ... whose personal property is now

detained by a hotel. ...’’ (See note 7 supra). There is

110 mention made of a sale. Therefore, we have in this

case no occasion to consider whether a statutorily autho-

rized sale, with the concomitant bar on any subsequent

action by a guest against a hotel proprietor for the recov-

ery of any property or the value thereof, would constitute

state action. C/., Lucas v. Wisconsin Electric Power Co.,

466 F.2d 638, 656 (7th Cir. 1972) (en bane), cert. denied,

409 U.S. 1114 (1973) (State had authorized electric com-

pany to enter private property but that authority had not

been invoked in the case at bar; had it been invoked, ‘‘an

entirely different issue would [have been] presented.’’)

It is appropriate, however, to note Mr. Justice Clark’s

caveat made with regard to state action cases: ‘* ‘Differ-

ences in cireumstances ... beget appropriate differences

in law....'’’ Burton v. Wilmington Parking Authority,

365 U.S. 715, 726 (1961), quoting, Whitney v. Tax Com-

mission, 309 U.S. 530, 542 (1940),

The plaintiffs advance two theories under which they

contend that state action is present in this case. The first

might properly be termed an ‘‘entwinement’’" theory

whereby the state has assertedly significantly involved it-

self in the action of the hotelkeepers, so as to make the

4 See Clark & Landers, Sniadach, Fuentes and Beyond: -The

Creditor Meets the Constitution, 59 Va, L.Rev. 355, 379 (1973).

wa %

App. 13

acts of these private individuals state action for the pur-

poses of the Fourteenth Amendment and section 1983.

The second theory is the so-called ‘‘publie function’’ the-

ory: that the State of Lilinois has allowed hotel propri-

etors to perform a governmental function in enforcing

their lien, and therefore that their actions must be gov-

erned by constitutional limitations.

A. Entwinement

The proper focus for determining whether state action

exists under this theory was recently stated by the Su-

preme Court as follows:

[T]he inquiry must be whether there is a sufficiently

close nexus between the State and the challenged ac-

tion of the regulated entity so that the action of the

latter may be fairly treated as that of the State itsell.

Jackson v. Metropolitan Edison Co., 419 U.S. 345, 351

(1974) (holding that the termination of electric service

by a public utility for nonpayment of bills was not state

action). The test is whether the state has significantly

involved itself in the challenged conduct. Moose Lodge

No. 107 v. Irvis, 407 U.S. 163, 173 (1972). And a con-

clusion as to degree of involvement can be reached only

by ‘‘sifting facts and weighing circumstances.’’ Burton

v. Wilmington Parking Authority, supra, 365 U.S. at 722.

The plaintiffs argue that by passing a statute authoriz-

ing the private seizure of the possessions of hotel resi-

dents, the State of Lilinois has lent affirmative support and

encouragement to hotel proprietors. They point out that

ch. 71, $2 in particular has altered the nature of the com-

mon law innkeepers’ lien by expanding the class of estab-

lishments which can invoke it—a fact acknowledged by

the defendants. At common law, the lien existed only in

favor of innkeepers—one who took in transient guests,

App. 14

was bound by law to do so, and was absolutely liable for

injury to the guest’s person or property. Keepers of

boardinghouses or lodginghouses had no corresponding

obligations and liabilities, and possessed no comparable

lien until granted by statute.*® Plaintiffs observe as well

that Illinois has eliminated the principal raison d’etre of

the common law innkeepers’ lien by placing dollar ceilings

on the extent of a hotelkeeper’s liability and for some types

of property abolishing absolute liability by requiring a

showing of fault on the part of the hotelkeeper. See IIl.

Rev. Stat. ch. 71, $$ 1, 3, 3.1, 4.

Primary reliance is placed on Reitman v. Mulkey, 387

U.S. 369 (1967), where the Supreme Court found state

action in an amendment (art. 1, §26 [Proposition 14] to

the California constitution providing that the state could

not limit a person’s right to rent or sell real estate to

whomever he chooses. A black couple had sued under

California statutes providing for equal accommodations,

alleging that the defendants had refused to rent them an

apartment solely on account of their race. The trial court

rendered summary judgment for the defendants on the

cround that the statutes had been rendered void by the

adoption of art. 1, $26. The California Supreme Court

reversed the trial court, and the Supreme Court affirmed

that decision. While superficially Reitman is similar to

this case—in both instances a state enactment authorized

the actions of private individuals—we consider it by no

means controlling. The immediate purpose of Proposition

14 was to override recently enacted state anti-discrimina-

15 See J. Beale, The Law of Innkeepers and Hotels §298 (1906) ;

Hogan, The Innkeeper’s Lien at Common Law, 8 Hastings LJ. 33

(1956).

App. 15

tion legislation, including a fair housing act. The Cali-

fornia Supreme Court, which was familiar with the back-

ground of the enactment and the milieu in which it would

operate, had made a finding that the provision would have

the effect of significantly involving the state in matters

of private discrimination. By constitutionalizing the right

privately to discriminate, the amendment immunized such

conduct ‘‘from legislative, executive, or judicial regulation

at any level of the state government.’’ 387 U.S. at 377. It

effectively removed the issue of private discrimination

from the political arena, or at least placed severe handi-

caps on those striving for its elimination. See Black,

Foreword: ‘‘State Action,’’ Equal Protection, and Cali-

fornia’s Proposition 14, 81 Harv. L.Rev. 69, 81-82 (1967).

Furthermore, Proposition 14 operated in direct opposition

to an express constitutional goal embodied in the post-

Civil War amendments: the elimination of racial discrimi-

nation. A number of courts have acknowledged that racial

discrimination involved in a case may be an appropriate

factor for consideration in the sifting and weighing of

circumstances required in an analysis of state action ques-

tions. E.g., Adams v. Southern California First National

Bank, supra, 492 F.2d at 333, and n.23; Grafton v. Brook-

lyn Law School, 478 F.2d 1137, 1142 (2d Cir. 1973)

(Friendly, J.).

What is present in this case differs substantially from

Reitman. The statutes involved here were not enacted

in contravention of a constitutional goal. Ch. 82, $57 was

passed in 1874 and ch. 71, $2 in 1909. Both provisions

remain unchanged from their original form. To be sure,

these provisions allowed hotel proprietors to take action

that the common law did not previously permit. But we

do not attach overriding significance to this limited expan.

sion of the common law. It is but one consideration to

App. 16

be included in the mix. The First Cireuit has recently

failed to be persuaded that a statutory expansion of the

common law innkeepers’ lien was basis for finding state

action:

The statute at issue is a fairly unremarkable product

of the continuing legislative function to define cred-

itors’ rights... . If it goes beyond the common law,

it does so merely by broadening the class (innkeep-

ers) having traditional right to a possessory lien.

And even this modest change occurred 115 years ago.

Davis vy. Richmond, 512 F.2d 201, 203 (1st Cir. 1975), (cita-

tion omitted). And although the Supreme Court in Jackson

v. Metropolitan Edison Co., supra, noted that there existed

a common law right to terminate service for non-payment,

419 U.S. at 354 n.11, the Court apparently did not consider

this a crucial factor in finding an absence of state action.

At the turn of the century, the concept of due process had

not evolved to its present-day point where summary re-

possession of property with participation of state officers

is constitutionally impermissible in all but the most limited

circumstances.*® And it cannot be persuasively argued, in

light of the then existing remedy of self-help for innkeep-

ers and others, that the Fourteenth Amendment upon its

enactment was intended to do away with summary self-

help procedures. Adams v. Southern California First Na-

tional Bank, supra, 492 F.2d at 337.

Nor do the hotelkeepers’ remedies possess an exalted

constitutional status where they are insulated from the

possibility of legislative reforms. They are subject to the

operation of normal political forces. This is also not a

case in which the state has actively involved itself in the

16 See the cases cited in note 6 supra.

App. 17

affairs of hotel proprietors. There is no continuing inter-

dependence such as characterized the lessor-lessee rela-

tionship between the parking authority and the coffee shop

in Burton v. Wilmington Parking Authority. Nor is there

even an ongoing regulatory scheme such as the liquor

licensing in Moose Lodge or the public utility regulation

in Jackson v. Metropolitan Edison Co., both of which the

Supreme Court found were in any event an insufficient

basis for finding state action. All that the State of Illinois

has done is to enact statutes which permit a private hotel

proprietor to detain the property of guests in an estab-

lishment owned by him. The statutes do not compel such

a procedure. See Adickes v. S.H. Kress & Co., 398 U.S.

144, 170-71 (1970); Peterson v. City of Greenville, 373

U.S. 244, 248 (1963); Moose Lodge No. 107 v. Irvis, supra,

407 U.S. at 178-79 (Although State action was not other-

wise present, it did exist where a state regulation required

adherence to a racially restrictive bylaw). They merely

permit it, much in the same way as Georgia law in Evans

v. Abney, 396 U.S. 435 (1970), permitted interpretation

of Senator Bacon’s will to require the closing of a public

park rather than apply the cy pres doctrine and make the

park racially integrated. The impact on private ordering

is minimal. See Burke & Reber, State Action, Congres-

sional Power and Creditors’ Rights: An Essay on the

Fourteenth Amendment, 47 S. Cal. L.Rev. 1, 47 (1973).

This degree of involvement falls short of the significant

degree of encouragement or affirmative support necessary

to the existence of state action.

B. Public Function

The actions of private individua!s or entities on whom

the state has conferred powers and functions traditionally

exclusively reserved to the state may become subject to

constitutional! limitations. E.g., Evans v. Newton, 382 U.S.

App. 18

296 (1966) (operation of a municipal park); Terry v.

Adams, 345 U.S. 461 (1953) (condueting of a pre-primary

election by a political organization); Marsh v. Alabama,

326 U.S. 501 (1946) (operation of a company-owned town),

See also Jackson v. Metropolitan Edison Co., supra, 419

U.S. at 352-53 (‘‘1f we were dealing with the exercise by

Metropolitan of some power delegated to it by the State

which is traditionally associated with sovereignty, such

as eminent domain, our case would be quite a different

one.’’). The plaintiffs argue that by allowing hotel pro-

prietors to seize the personal property located in a resi-

dent’s room without any prior adjudication to the pro-

prietor’s claim for charges, the state has delegated a state

function traditionally performed by officers of the law and

court. The plaintiffs rely most heavily on Hall v. Garson,

430 F.2d 430 (Sth Cir. 1970). There a private landlord

had entered the dwelling of a tenant and removed a tele-

vision set pursuant to a Texas statute giving landlords a

lien on the personal property of their tenants. The court

found state action on the ground thet the landlord was

performing what was ordinarily a state function:

In this ease the alleged wrongful conduct was admit-

tedly perpetrated by a person who was not an officer

or official of any state agency. But the action taken,

the entry into another’s home and the seizure of an-

other’s property, was an act that possessed many, if

not all, of the characteristics of an act of the State.

The execution of a lien, whether a traditional security

interest or a quasi writ of attachment or judgment

lien, has in Texas traditionally been the function of

the Sheriff or constable.

Id. at 439.

Perhaps distinctions can be drawn between this case

and Hall, but we do not think that they would be very

satisfactory ones. For example, the Texas statute in Hall

App. 19

expressly granted landlords the right to enter a dwelling

by authorizing them ‘‘to take and retain possession’’ of

‘*property found within the dwelling.’’ Jd. at 482 n.1. Ch.

71, $2 does not contain the same language, cf. Calderon v.

United Furniture Co., 505 F.2d 951 (Sth Cir. 1974), but the

right to enter a room may be implicit in the statute. Also,

involved in this case is a hotel room, rather than an apart-

ment or house. But there is no question that the plain-

tiffs in this case used the hotels as their principal long-

term residences. Thus, the distinctions do not cut very

deeply. Fundamentally, we simply disagree with the re-

sult in Hall.7 The historical accuracy of that case’s as-

sertion that the execution of liens was traditionally a state

function has been questioned. Burke & Reber, State Ac-

tion, Congressional Power and Creditors’ Rights: An Es-

say on the Fourteenth Amendment, 47 S. Cal. L. Rev. 1,

50 (1973). And this assessment seems correct, except in-

sofar as Hall may have relied on particular characteris-

tics of prior Texas law. Plaintiffs freely acknowledge the

hoary nature of the innkeepers’ lien, and a landlord’s right

to seize property of a tenant whose rent is in arrears has

common law roots as well.** Thus, while the sheriff un-

17 Because we are choosing one of the views on which there is a

conflict between circuits, this opinion was circulated, before filing,

to all judges of this Court in regular active service. A majority

voted against a hearing en banc on this issue, but Judges Swygert

and Stevens voted for such a hearing.

182 F. Pollock & F. Maitland, The History of English Law 576

(2d ed. 1898). In Illinois a landlord has the right to seize and de-

tain the property of a nonpaying tenant, Ill. Rev. Stat. ch. 80, $16,

although apparently only after a distress proceeding has been com-

menced. Cottrell v. Gerson, 296 Ill. App. 412, 16 N.E. 2d 529

(1938), aff'd, 371 Ill. 174, 20 N.E. 2d 74 (1939).

Other courts have recognized the existence of some form of self-

help repossession at common law. E.g., Gibbs v. Titelman, 502 F.2d

1107, 1114 (3d Cir.), cert. denied, 419 F.2d 1039 (1974) ; Adams

v. Southern California First National Bank, supra, 492 F.2d at 337.

App. 20

questionably is often the party who executes a lien, the

function can hardly be said to be traditionally and exclu-

sively that of the state. At most it is one that has been

shared by the state with private persons. We see little

similarity between this case and the publie function cases

decided by the Supreme Court and therefore find no basis

for concluding that there is state action here.

Because we hold that there is no state action, we have

no occasion to consider whether the actions of the hotel

proprietors would be violative of the Fourth or Fourteenth

Amendments had state action been present.”

AFFIRMED,

A true Copy:

Teste:

Perr reer. SP eee eee ee ee

Clerk of the United States Court of

Appeals for the Seventh Circuit

19 We note that the plaintiffs are not left remediless if their prop-

erty was seized without good cause. They should be entitled to

bring an action for replevin and collect whatever damages might

have been caused by the loss of their property. Ill. Rev. Stat., ch.

119, §1, et seg. (Supp. 1975-76).

App. 21

APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CHARLES CULBERTSON and HELEN CULBERTSON,

his wife,

Plaintiff s-A ppellants,

vs.

ALICE LELAND, TRANSAMERICA TITLE

INSURANCE COMPANY OF ARIZONA, a

corporation and HARRY DOLINS,

Defendants-A ppellees.

No. 73-1749

[October 3, 1975]

Appeal from the United States District Court of Arizona

OPINION

Before: ELY and CHOY, Circuit Judges,

and WEIGEL, District Judge*

WEIGEL, District Judge:

The Arizona Innkeeper’s Lien Statute authorizes the

keeper of a hotel or lodging house to seize, without notice

or judicial procedure, the personal property of a lodger

who fails to pay rent. This appeal presents the question

whether a private person acting under the authority of

the statute does so under color of state law within the

meaning of 42 U.S.C. $1983.

*Honorable Stanley A. Weigel, United States District Judge,

Northern District of California, sitting by designation.

App. 22

In September 1972, Helen and Charles Culbertson moved

into a room in the New Windsor Hotel in Phoenix, Arizona,

for which they agreed to pay twenty dollars per week. For

several weeks they paid their rent on time, but in Novem-

ber they fell one week in arrears and were evicted by the

hotel manager, Alice Leland. At eviction, she seized, as

security for the unpaid rent, personal possession of the

Culbertsons which remained in the room. Leland was at

no time an official of the State of Arizona. She sought no

help from state officials and received none, except that a

member of the Phoenix police department told her she had

the right to hold her tenants’ belongings.

The Culbertsons sued in federal district court for the

return of their possessions: for declaratory and injunctive

relief against the provisions of the Arizona Innkeeper’s

Lien Statute (set forth in full in the margin)’; and for

1 Arizona Revised Statutes (1956):

§ 33-951. Lien on baggage and property of guests

Hotel, inn, boarding house, lodging house, apartment house

and auto camp keepers shall have a lien upon the baggage and

other property of their guests, boarders or lodgers, brought

therein by their guests, boarders or lodgers, for charges due for

accommodation, board, lodging or room rent and things fur-

nished at the request of such guests, boarders or lodgers, with

the right to possession of the baggage or other property until

the charges are paid.

§ 33-952. Sale of property; notice

A. When baggage or other property comes into the posses-

sion of a person entitled to a lien as provided by § 33-951 and

remains unclaimed, or the charges remain unpaid for a period

of four months, the person may proceed to sell the baggage or

property at public auction, and from the proceeds retain the

charges, storage and expense of advertising the sale. ;

B. The sale shall not be made until the expiration of four

weeks from the first publication of notice of the sale, published

in a newspaper once a week for four consecutive weeks. The

App. 23

damages under 42 U.S.C. §1983 on the claim that the sei-

zure of their property was made under color of state law

and, in the absence of notice and hearing, violated their

constitutional right to due process of law. After suit was

filed, Leland abandoned her claimed lien and returned the

Culbertsons’ belongings to them. She and her two co-de-

fendants, the record owner and the beneficial owner of the

New Windsor Hotel, then moved to dismiss. The court

granted the motion on the ostensible ground that since

Leland no longer asserted a lien, any challenge to

the Innkeeper’s Lien Statute was moot, and that the

court lacked jurisdiction. Clerk’s Record at 128-29. Sub-

sequently the court also denied a motion to vacate its dis-

missal order. C.R. at 157. The Culbertsons appeal in

forma pauperis.

The jurisdictional issue presented by the appeal is easily

resolved. If appellants’ demand for damages under 42

U.S.C. $1983 survives, so too does federal jurisdiction.

Lidie v. California, 478 F.2d 552, 554 (9th Cir. 1973). In

their complaint the Culbertsons sought $10,000 compensa-

tory damages for the period for which they were deprived

(footnote continued)

notice shall contain a description of each piece of property, the

name of the owner, if known, the name of the person holding

the property, and the time and place of sale. If the indebted-

ness does not exceed sixty dollars, the notice may be given by

posting at not less than three public places located at the place

where the hotel, inn, boarding house, lodging house, apartment

house or auto camp is located.

C. Any balance from the sale not claimed by the rightful

owner within one month from the day of the sale shall be paid

into the treasury of the county in which the sale took place,

and if not claimed by the owner within one year thereafter, the

money shall be paid into the general fund of the county.

App. 24

of their medicines and other belongings. That claim is

cognizable under 42 U.S.C. $1983, Donovan v. Reinbold,

433 F.2d 738, 743 (9th Cir. 1970), and it remains a live

issue despite Leland’s renunciation of the claimed lien. It

was error to dismiss for lack of jurisdiction. See C.R. at

129, lines 12-14.

However, if the ground of dismissal was failure to state

a cause of action, and if there was such a failure, the dis-

missal should be aftirmed. Montana-Dakota Utilities Co. v.

Northwestern Public Service Co., 341 U.S. 246, 249-50

(1951). In this case the district court was concerned with,

and requested briefs on, the effects of Ouzts v. Maryland

National Insurance Co., 470 F.2d 790 (9th Cir. 1972). See

Reporter’s Transcript at 6-7; Appellees’ Brief at 3. (Ouzts

has subsequently been reheard en banc and has been re-

affirmed. 505 F.2d 547 (9th Cir. 1974).) The central issue

in Ouzts was whether defendants who were not state offi-

cials had acted under color of state law. From the em-

phasis in the briefs below, from the interpretation of appel-

lees (.\ppellees’ Brief at 5-6), and from the district court’s

oral statements (R.T. at 6-7), it is apparent that what

underlay the dismissal here was the conclusion that Le-

land’s actions were not, as a matter of law, taken under

color of state law, and thus did not give rise to a federal

eause of action under 42 U.S.C. $1983. We therefore take

up that issue.

It is settled that $1983 covers some actions taken by pri-

vate citizens. The principle established by the Supreme

(‘ourt, and often repeated, is that

Misuse of power, possessed by virtue of state law and

made possible only because the wrongdoer is clothed

with the authority of state law, is action taken ‘‘under

eolor’’ of state law.

United States v. Classic, 313 U.S. 299, 325-26 (1941).

App. 25

In factual settings very similar to the present one, one cir-

cuit has found state action in a landlord’s exercise of a lien

against the possessions of a tenant, Hall v. Garson, 430 F.

2d 430 (5th Cir. 1970), and one circuit has found no state

action. Davis v. Richmond, 512 F.2d 201 (1st Cir. 1975).

The leading case in our circuit is Adams v. Southern

California First National Bank, 492 F.2d 324 (9th Cir.

1973), rehearing en banc denied, cert. denied, 419 U.S. 1006

(1974). In Adams—the facts of which are outlined below—

we held that a private person’s use of the self-help repos-

session provisions of the Uniform Commercial Code, as

adopted by the state of California, did not amount to ac-

tion ‘‘under color’’ of state law, and that therefore a due

process challenge to the repossession statutes failed to

state a federal cause of action, 492 F.2d at 329. The opinion

warned that ‘‘({s]tatutes and laws regulate many forms of

purely private activity, such as contractual relations and

gifts, and subjecting all behavior that conforms to state law

to the Fourteenth Amendment would emasculate the state

action concept.’’ 492 F.2d at 330-31. The existence of a

state statute authorizing certain private action ‘‘is not the

final answer to the touchstone of state action.’’ 492 F.2d

at 330. Equating the ‘‘under color’’ requirement of $1983

with the state action requirement of the Fourteenth

Amendment, Adams gauged the repossession activity by

the ‘‘significant state involvement’’ test derived from Bur-

ton v. Wilmington Parking Authority, 365 U.S. 715 (1961),

and Moose Lodge No. 107 v. Irvis, 407 U.S. 163 (1972), 492

F.2d at 330-31. Because the statute in Adams merely codi-

fied a right already present in the common law, 492 F.2d

at 330, and because the right involved, arising from a

written contract, was essentially ‘‘a private remedy rather

than a [delegated] state power,’’ 492 F.2d at 336, the in-

volvement of the state in enacting the statute was found

App. 26

not significant. On the latter ground Hall v. Garson, supra,

was distinguished; the authority exercised under the Texas

landlord’s lien statute was found to be of a type which

‘‘was normally exercised by the State and had historically

been a function of the State of Texas.’’ 492 F.2d at 336.

It is worth noting that when this court sat en banc to re-

consider the state action issue in Ouzts, it followed the

same approach as ddams, focusing on common law ante-

cedents and private contractual rights. See 505 F.2d at 550-

54.

The transactions in ddams were installment purchases

of automobiles. The purchasers signed written security

agreements which explicitly set forth the sellers’ right to

repossess on default; and title remained with the sellers,

492 F.2d at 328. The eventual repossessions were only of

the chattels covered by the security agreements—the auto-

mobiles—and they were performed by the title holders.

They were thus as much a matter of private contractual

law as of state statute.

The Adams holding is limited to repossession of a chat-

tel subject to a specific security agreement. When a credi-

tor, acting solely on the authority of statute, takes posses-

sion of a debtor’s property which is unrelated to the debt

and which is not subject to prior contractual agreement, we

cannot say that .1dams dictates the conclusion that no

state action is involved. As in Adams, therefore, we must

look to the elements of the case to determine whether

Arizona has significantly involved itself in the actions of

appellee Leland.

A. Rights at Common Law

It is apparent that, as in Davis v. Richmond, supra, the

lien statute here gave Leland a right which she would not

App. 27

have had at common law. At common law only innkeepers

—and not hotel, boarding house and lodging house keepers

—had a lien on the belongings of their guests.

Beginning in medieval times, an innkeeper had the near-

ly absolute duty at common law to take in all travelers

and to accept their belongings for safekeeping. With minor

exceptions he was absolutely liable to his guests for the

full value of those belongings. At the same time, the com-

mon law gave him a lien on such property until the bill of

its owner was paid. See generally Klim v. Jones, 315 Fs

Supp. 109, 118-20 and authorities cited. The leading En-

glish case is Mulliner v. Florence, [1878] 3 Q.B. 484.

Historians debate whether the innkeeper’s lien arose in

the common law to compensate for the innkeeper’s strict

duty and liability, or whether it had its origins in a sep-

arate, equally venerabie custom of the realm. See, e.g.,

Hogan, The Innkeeper’s Lien at Common Law, 8 Hast1Nos,

L.J. 33 (1956). Nevertheless, what passed into American

common law with surprising unanimity was the former

theory. The Harvard Law Review explained in 1895 that

As the innkeeper’s lien is grounded .. . on the extra-

ordinary liability imposed on him by law, it seems only

just that on all goods which he is bound to receive he

should have his lien....

Note, 9 Harvarp L. Rev. 216 (1895).

See also 43 C.J.S. Innkeepers §26(2)(b); 40 Am.Jr. 2d

Hotels, Motels, and Restaurants $187. Under that inter-

pretation of the common law, it was clear to American

courts that where the extraordinary liability did not exist,

neither did the common law lien. The crux of the matter

was the relationship between the guest and the owner of

the premises. Cedar Rapids Investment Co. v. Commodore

App. 28

Hotel Co., 218 N.W. 510, 511 (Iowa 1928), Dixon v. Rob-

bins, 246 N.Y. 169, 158 N.E. 63, 53 A.L.R. 986 (1927); and

the innkeeper-guest relationship with its particular duties

was an ‘‘essential’’ predicate for the existence of the com-

mon law lien. Brams v. Briggs, 260 N.W. 785 (Mich. 1935).

Hotel, boarding house and lodging house keepers had no

absolute duty to accept all transient guests and keep their

belongings safe; therefore they had no common law lien

against those belongings. See, e.g., Turner v. Priest, 171

S.E. 881, 882 (Ct.App.Ga. 1933) ; Nicholas v. Baldwin Piano

Co., 71 Ind. App. 209, 123 N.E. 226 (1919); Halsey v.

Svitak, 203 N.W. 968, 969 (Minn. 1925); Jackson v. Engert,

453 S.W.2d 615, 618 (Mo.App. 1970). Several states in-

eluding Arizona gave them statutory liens to protect them

from fraud (cf. Nance v. O.K. Houck Piano Co., 128 Tenn.

1, 155 S.W. 1172, 1173 (1913)), but courts have narrowly

construed such statutes and have carefully distinguished

between common law and statutory liens. In Turner v.

Priest, supra, for example, the court explained:

At common law a boarding house keeper had none of

the privileges of an innkeeper, and could not detain

the baggage and effects of a delinquent boarder which

were in the boarding house. This state and the several

states of the Union have passed laws placing boarding

house keepers upon the same footing as to the privi-

leges of an ipnkeeper in detaining the baggage and

effects of a delinquent guest to pay for his charges.

The lien given to such innkeepers and boarding house

keepers is not created by contract, but by law. Stat-

utes giving to boarding house keepers a lien on the

goods of their boarders and the means to enforce the

same are in derogation of the common law, and should

be strictly construed. [Citations omitted. ]

171 S.E. at 882.

App. 29

The courts of Arizona itself are silent on the common

law rights of hotel, boarding house and rooming house

keepers. But Arizona has adopted common law rules of

decision. Ariz. Rev. Stat. $1-201; Howell v. War Finance

Corp., 71 F.2d 237, 242-43 (9th Cir. 1934) ; John W. Masury

é Son v. Bisbee Lumber Co., 49 Ariz 443, 68 P.2d 679, 687-

88 (1937); Valley National Bank of Ariz. v. Avco Develop-

ment Co., 14 Ariz. App. 56, 480 P.2d 671 (1971). It has

consistently held to the corhmon law since the first legisla-

ture of the Arizona territory passed the Howell Code of

1864. See Boquillas Land & Cattle Co. v. Curtis, 213 US.

339, 345 (1909); John W. Masury & Son, supra, 68 P.2d at

686. Following the usual practice, Arizona looks to the law

of sister states where necesssry to determine common law

principles. See e.g., Shulansky v. Michaels, 14 Ariz. App.

402, 484 P.2d 14, 17 (1971). We must therefore conclude

that, in accord with the American rule, hotel and rooming

house keepers have no common law lien against the be-

longings of their guests in Arizona. Whatever lien exists

is purely statutory.

From the facts of this case, it is clear that appellee Le-

land did not enjoy the status of innkeeper.

At common law an innkeeper entitled to a lien was one

who held out his place as one for the entertainment

of al! respectable transient persons who chose to come

to him. The lien was given largely because of his so

holding himself out and his consequent duty to en-

tertain all transients or travelers who offered them-

selves as guests. [Citation omitted.} It was the tran-

sient nature of the entertainment contracted for that

distinguished the innkeeper from the lodging house or

boarding house keeper. [Citations omitted. ]

Cedar Rapids Inv. Co. v. Commodore Hotel Co.,

supra, 218 N.W. at 511.

App. 30

There is no evidence that appellee held herself out to tran-

sients, and appellants were not transients; the rented room

was their permanent residence. Appellee offered nothing

but lodging: **{|A]| place where travelers could obtain

lodging only, without other entertainment, was not an

inn.’’ Dixon v. Robbins, supra, 53 A.L.R. at 987. See also

Cochrane v. Schryver, 12 Daly (N.Y.) 174 (1883), JZardin

v. State, 47 Tex. Crim. Rep. 493, 84 S.W. 591 (1905). By

the common law standard, appellee was a hotel or lodging

house keeper and not an innkeeper. See generally Annot.,

53 A.L.R. 988; Annot. 19 A.L.R. 517.

-ldams appears to call for the foregoing investigation of

the common law, and it suggests that state action is more

likely found where the common law did not permit the ac-

tion in question. However the common law analysis can-

not, by itself, be dispositive. To rely on it alone might,

in soine cases, be to induct anomalous, technical or out-

dated results. Cf. Davis v. Richmond, supra, 512 F.2d at

203-04. Rather than resting solely on history, we must

therefore consider other indicia of state action as well.

Bb. Relationship of Property to Debt

The Adams holding is limited to repossession, and in

that context it has been broadly accepted. See, e.g.,

Turner v. Impala Motors, 503 F.2d 607 (6th Cir. 1974),

James v. Pinnix, 495 F.2d 206 (Sth Cir. 1974), Bichel Opti-

cal Laboratories v. Marquette Nat’l Bank, 487 F.2d 906

(Sth Cir. 1974). In adopting it the Fifth Cireuit did not

see fit to alter its ruling in //all v. Garson, supra; instead

it left //all intact and distinguished the Adams-type situa-

tion on the ground that there ‘‘the property seized was

the property whose purchase had created the debt and in

which the seizor had a security interest.’’ Calderon v.

United Furniture Co., 505 F.2d 950, 951 (Sth Cir. 1974).

App. 31

The same distinction is appropriate in this case. Special

interests of the conditional seller attach to the specific

goods which serve as his collatera!, interests which are not

present in the case of a general debt and indiscriminate

seizure of property as collateral. Cf. Mitchell v. W. T.

Grant Co., 416 U.S. 600, 607-08 (1974). Moreover, repos-

session of the specific chattel giving rise to a debt is an

activity much more narrowly confined than general sei-

zures of collateral. The former, particularly where a writ-

ten instrument defines the rights of the parties, can be left

and has traditionally been left to private hands. See

Adams, supva, 492 F.2d at 336. The latter, because its ex-

tent is broad and undefined and because its impact is po-

tenially much more severe, is the type of activity which

is a function of the state and over which, ordinarily, the

state has a monopoly. Cf. Shirley v. State National Bank,

493 F.2d 739, 745-47 (2d Cir. 1974) (Kaufman, C.J., dis-

senting).

C. Private Contractual Remedies

Finally, appellants and appellees here had no contrac-

tual relationship covering appellants’ property, nor does

the record show that appellants had any notice or knowl-

edge at the time of renting that appellee Leland could seize

their belongings on eviction. Nothing in the dealings of

the partics permits the conclusion that appellants agreed

or consented in advance to the seizure, either explicitly or

by implication. In Adams the written agreement of the

parties set forth their respective rights and liabilities;

the statute there merely reiterated and confirmed their

arrangement. Thus, entire apart from the statute, the

repossession did no violence to the expectations of the

debtor, nor did it deprive him of any rights which he had

not already yielded voluntarily and for consideration. In

that context the involvement of the state, through its

statute, was nearly superfluous.

App. 32

In the present case, the statute was appellee Leland’s

sole authority for the seizure, which would not otherwise

have been even colorably legal.* And since the statute was

the sine qua non for the activity in question, the state’s in-

volvement through that statute is not insignificant.

For the above reasons, we find that the State of Arizona

has significantly involved itself in appellee Leland’s seizure

of appellants’ property, under the standards set forth in

adams vy. Southern California First National Bank, supra.

We recognize that our decision puts us squarely in con-

tlict with the First Cireuit. The facts in Davis v. Rich-

mond, supra, could hardly be closer to the ones in this case.

We agree with the court in Davis that ‘*The focus for state

action purposes should always be on the impact of the

law upon private ordering.’”’ 542 F.2d at 204, quoting

Burke and Reber, State Action, Congressional Power and

Creditors Rights: An Essay on the Fourteenth Amend-

ment, 47 S.Cau.L.Rev., 1, 47 (1973). But we disagree with

the proposition that lien statutes which create new rights

in favor of creditor landlords have only a minimal impact

on private ordering, especially when the parties themselves

have failed to agree on a like ordering in the particular

case,

Davis seems to turn on the judgment of the court that

a landlord's seizure of the belongings of an evicted tenant

Was something to be expected in the ordinary course of

private affairs, statute or no; the court described that

action as ‘‘an obvious and not surprising course.’ 512 F.

2d at 203. In the cireumstances of this case, we find our-

selves unable to agree, since we cannot say with confidence

that appellants should have expected appellee Leland to

do what she did.

2 See section A., “Rights at Common Law’, supra.

App. 33

The dismissal below is reversed and the case is remanded

for further proceedings.

ELY, Cireuit Judge (Concurring) :

I concur in the result reached by Judge Weigel in his

carefully studied opinion. Since | cannot agree, however,

with all that Judge Weigel has written, see infra n.d, I

have concluded that I should separately state my views.

Acting under the authority conferred by Arizona’s inn-

keeper’s lien statutes, Alice Leland seized clothing, food,

medicines, and stereo equipment that belonged to her rent-

ers, the Culbertsons, in order to satisfy rent claimed by

Leland to be unpaid. Leland owned no security interest in

the seized items, nor did she possess any other form of

contractual right thereto. Rather, after informing the

Cubertsons that they were evicted from the $20 per week

room in which they had been living, she indiscriminately

seized and held all of the belongings that remained in the

room. By summarily depriving the Culbertsons of their

property, without their consent, in order to satisfy an al-

leged debt, Leland performed a function that, in my view,

belongs only to the state.

The facts here presented are virtually identical to those

in Hall v. Garson, 430 F.2d 430 (Sth Cir. 1970), in which a

landlady, acting pursuant to the Texas landlord’s lien stat-

ute, seized a television set from a tenant’s apartment in

order to satisfy the landlady’s claim for unpaid rent.

Reasoning that the landlady had performed a function in-

distinguishable from that of executing a judgment, a func-

tion that has normally and traditionally been reserved for

governmental officers, the Fifth Circuit held that the land-

lady’s action constituted state action. 430 F.2d at 438-40,

App. 34

In Adams v. Southern California First National Bank,

492 F.2d 324 (9th Cir. 1973), cert. denied, 419 U.S. 1006

(1974), our court held that a creditor’s repossession of an

automobile pursuant to the self-help provisions of the

Uniform Commercial Code is not state action. In Adams,

we expressly distinguished the different facts of Hall. We

noted that the landlady in Hall had seized property in

which she owned no interest, while in Adams, creditors had

repossessed vehicles in which they held a security interest

or ownership rights pursuant to an installment sales con-

tract. Further, we observed that repossession of property

by a creditor or conditional seller has long been accepted

as a private remedy,’ while, on the other hand, the outright

seizure of property unrelated to any alleged debt, which

was at issue in //all, had been a function traditionally re-

served io the state. 492 F.2d at 335-37.

Since our decision in Adams, the Fifth Circuit has had

an opportunity to reexamine Hall in the context of facts

similar to those considered by us in Adams. That oppor-

tunity arose in James v. Pinniz, 495 F.2d 206 (Sth Cir.

1974). There, an automobile dealer repossessed a vehicle

from a customer to whom he had sold the machine on an

installment contract basis. Agreeing with our Adams de-

cision, the Fifth Cireuit held that such self-help reposses-

sion does not constitute state action. The court distin-

guished //al/ in much the same way as was done by us in

ldams, writing that

[the] Hall state function concept does not carry over

to the present case with sufficient force to compel a

finding of state action. In Hall the landlady seized

goods to satisfy a debt arising out of an agreement

1Cf. Mitchell v. W.7. Grant Co.. 416 U.S. 600, 607-08 (1974)

(discussing the special interests of the creditor or conditioned seller

in the specific goods that serve as his security).

App. 35

having nothing to do with the goods. Such a taking

closely resembles a seizure in satisfaction of a judg-

ment—a function traditionally performed by a sheriff

or other state agent. In the present case, by contrast,

the appellant-creditor possessed and claimed no roving

commission to extract appellee’s goods to satisfy a

separate debt. Rather, he had a specific purchase

money security interest in a particular item, and he

seized only that item.

495 F.2d at 208. See also Calderon vy. United Furniture Co.,

505 F.2d 951 (Sth Cir. 1974) (per curiam) (finding the self-

help repossession of a washing machine in which the

creditor held a security interest to be governed by James,

rather than //all).

In my view, the principle that has emerged from Hall is

unquestionably sound. The state has, and must retain, a

monopoly over the power to exercise ‘‘a roving commission

to extract |a debtor’s] goods to satisfy a separate debt.’’

James v. Pinnix, supra at 208. As held in Hall and recog-

nized in Adams, such a power has traditionally reposed

only in the officers of the state. Furthermore, I hold the

firm conviction that the exercise of such a power is so

fraught with dangers that it must be retained in the state

so that it can be circumscribed by due process protections.’

2 Cf. Boddie v. Connecticut, 401 U.S. 371, 374-75 (1971) ; Shirley

v. State Nat'l Bank, 493 F.2d 739, 745-47 (2d Cir.) (Kaufman,

Chief Judge, dissenting), cert. denied, 419 U.S. 1009 (1974). One

commentator has observed that Fuentes v. Shevin, 407 U.S. 67

(1972), seems to endorse the principle that “. . . the power of the

state to interfere physically with the status quo may not be dele-

gated in law or fa€t to private persons.” Yudof, Reflections on Pri-

vate Repossession, Public Policy, and the Constitution, 122 U.Pa.L.

Rev. 954, 972 (1974). From such a broad view of Fuentes, our

court has already carved an exception for self-help repossession by

a creditor or conditional seller. Adams v. Southern Cal. First Nat'l

Bank, 492 F.2d 324 (9th Cir. 1973), cert. denied, 419 U.S. 1006

(1974).

OE

App. 36

Significant perils necessarily attend the arbitrary seizure,

even by disinterested state officers, of an alleged debtor’s

personal belongings. The asserted debt may not be valid,

and the seizure may therefore be wholly unjustified. Re-

sistance from the debtor, with concomitant violence, may

occur. The property seized may have a vale that greatly

exceeds the debt, or, on the other hand, the property seized

may be essential to the satisfaction of the basic human

needs of the alleged debtor and his family. Cf. Fuentes v.

Shevin, 407 U.S. 67, 80-81 (1972). These perils are not

diminished but are undeniably magnified when the state

delegates power to conduct such a seizure to the person to

whom the debt is allegedly owed.* Cf. Lindsey v. Normet,

405 U.S. 56, 71 (1972).

There is substantial support in Supreme Court prece-

dent for the application of a public function test, like that

applied in //all, to determine whether certain acts of a pri-

vate party constitute state action. In Jackson vy. Metropoli-

tan Edison Co., 419 U.S. 345 (1974), the Court held that

a state regulated, but privately owned, electrie utility cor-

poration did not act as the state when it terminated a

%One can scarcely imagine seizures more egregiously indiscrimi-

nate than the one before us now. According to the Culbertsons’

complaint, Helen Culbertson is a diabetic and almost totally blind.

Among the items that Leland seized were Helen Culbertson’s spe-

cially-processed diabetic food, prescription medicine for her eyes,

and other medici.ie, prescribed by a veterinarian, for her seeing-eye

dog. Leland also seized Charles Culbertson’s prescription medicines

and special clothing that was required for his job as a cook. None

of these items could have had more than minimal resale value; con-

sequently, they could have been of little use to Leland in satisfying

the Culbertsons’ alleged debt. But they were of critical and undeni-

able importance to the Culbertsons. I have no doubt that the items

would have been exempt from any execution ordered by a state

court.

App. 37

customer’s service because the customer allegediy had not

paid her bills. Noting that the State of Pennsylvania, where-

in the incident occurred, had obligation to provide its citi-

zens with electric power, the Court rejected the argument

that the utility’s action was state action because the utility

was performing a public function. The Court left open the

possibility, however, that the utility’s action could be state

action if the utility engaged in functions that were truly

those of the state. The Court noted:

We have, of course, found state action present in the

exercise by a private entity of powers traditionally ex-

clusively reserved to the State. See e.g., Nixon v.

Condon, 286 U.S. 73 (1932) (election; Terry v.

Adams, 345 U.S. 461 (1953) (election); Marsh v.

Alabama, 326 U.S. 501 (1946) (company town) ; Evans

v. Newton, 382 U.S. 296 (1966) (municipal park). If

we were dealing with the exercise by Metropolitan of

some power delegated to it by the State which is tradi-

tionally associated with sovereignty, such as eminent

domain, our case would be quite a different one.

419 U.S. 352-53. *

Believing that the case at hand falls squarely within the

rationale of Hall, I concur in Judge Weigel’s conclusion

that Leland’s seizure of the Cubertsons’ property pursuant

*The Court’s mention of eminent domain as an example of a

power “traditionally associated with sovereignty” is, I think, par-

ticularly instructive within the context of this case. Like the power

exercised here, the power of eminent domain, when conferred by a

state on a private party, would enable that party to seize the prop-

erty of another for his own purposes.

App. 38

to the Arizona innkeeper’s lien statutes constituted action

by the state.®

CHOY, Circuit Judge (dissenting) :

I respectfully dissent.

In Adams v. Southern California First National Bank,

492 F.2d 324 (9th Cir. 1973), cert. denied, 419 U.S. 1006

(197+), this court rejected a due process challenge to the

self-help repossession provisions of the Uniform Commer-

cial Code. A number of theories had been advanced to

establish state action in the statutory authorization of re-

possession, each of which we rejected. Our discussion in

-ldams of each of these proposed grounds for finding state

action is, with one exception, equally applicable to our con-

sideration of Arizona’s innkeeper’s lien statute. That one

exception is the ‘‘publie function’’ analysis upon which the

Supreme Court relied to invalidate racially discriminatory

* The aspect of Judge Weigel’s scholarly opinion with which I

cannot agree is that wherein reliance is placed upon a distinction

between rights conferred by the common law and those created by

later statutory enactment. I think it preferable to follow the ap-

proach taken in Hall and suggested in .Wetropolitan Edison, an ap-

proach which focuses upon the power or function being exercised in

its relationship to the state, rather than to perpetuate common law

distinctions which may have become obsolete. To this extent alone

I agree with the First Circuit's comments in Davis v. Richmond, 512

F.2d 201, 203-04 (1st Cir. 1975). But cf. Addams v. Southern Cal.

First Nat'l Bank, supra n.2. A distinction drawn upon the basis of

common law rights vis-a-vis statutory rights creates unfortunate

anomalies. This is dramatically illustrated by the fact that, under

Judge Weigel’s analysis, the actions of Alice Leland, who operated

a small, low rent boarding house, were those of the state while the

same actions of the operator of a large, modern hotel, who caters to

transient guests, provides food and entertainment, and therefore

qualifies as an “innkeeper,’”’ are not. I cannot conscientiously accept

such a disparity.

App. 39

practices in political party primaries. Smith v. Allwright,

321 U.S. 649 (1944); Terry v. Adams, 345 U.S. 461 (1953).

The Fifth Circuit relied on this public function analysis

to find state action and invalidate a landlord’s lien in Hall

v. Garson, 430 F.2d 430 (Sth Cir. 1970). The court found

that the action taken by the landlord, ‘‘the entry into an-

other’s home and the seizure of another’s property was an

act that possesses many, if not all, of the characteristics of

an act of the State.’’ Jd. at 439. The Court quoted from

United States v. Classic, 313 U.S. 299, 326 (1941): ‘* Mis-

use of power, possessed by virtue of state law and made

possible only because the wrongdoer is clothed with the

authority of state law, is action taken ‘under color of’ state

law.”’

The landlady in Hall had entered the tenant’s apart-

ment, as authorized by the Texas lien statute, and seized a

television set as payment for overdue rent. The tenant

returned to her apartment and discovered the set gone.

Under those facts, I might agree that the landlady was

‘‘clothed with the authority of state law,’’ and thus subject

to the restrictions of procedural due process. Unlike the

landlady in Hall, however, Mrs. Leland did not invade the

tenants’ dwelling in order to seize the property. Having

exercised her right of eviction to terminate the tenancy,

she necessarily came into possession as bailee of the

Culbertsons’ property. The Culbertsons now demand that

she restore their goods to them despite her doubt that she

will receive the rent owed her.

The Fifth Cireuit found in Hall that Texas law au-

thorized the landlady to serve a governmental function in

two respects: entry into the tenant’s residence and seizure

of his property. 403 F.2d at 439. Both are delegations by

the state of the power—a power over which the state pos-

App. 40

sesses a natural monopoly—to interfere coercively with

possessory interests in property. See Yudot, Reflections

on Private Repossession, Public Policy and the Constitu-

tion, 122 U. Pa. L. Rev. 954, 972 (1974). I agree with my

Brother Ely regarding the dangers attendant on parceling

this power out to individual creditors. Nevertheless, we

clearly held in Adams that the state could delegate the

power to repossess an automobile pursuant to U.C.C.

$ 9-503 without becoming ‘‘significantly involved’’ in the

creditor’s activities. The dangers inherent in such dele-

gations include the potential for violence and the invasion

of the individual’s reasonable expectations of privacy.

Id. at 978-80. Seizure of an automobile, or of other proper-

ty which can be repossessed without the need of invading

the debtor’s residence, arouses less concern on both points

than does a repossession which requires entering a home.

Furthermore, section 9-503 explicitly restricts the right of

repossession to those instances when it can be accomplished

without a breach of the peace.

I would interpret Adams as holding without qualification

that a creditor authorized by state law to seize property

of his debtor, where this can he done without a breach of

the peace, does not perform a public function so as to con-

stitute state action. Two possible limitations have been

suggested, neither of which I can accept.

Judge Weigel believes that Adams should be limited to

repossessions authorized by a security agreement con-

tracted between the parties. I do not believe that the exis-

tence of such an agreement is material. The debtor’s de-

fense might be a denial of the existence and validity of such

an agreement. Until a hearing has been held, the claims

that the debtor has granted a security interest to the ¢redi-

tor and has consented to repossession in case of default,

App. 41

as well as that he has defaulted, or no more than allega-

tions by the creditor. Until the debtor’s consent to repos-

session has been judicially established, all attempts to re-

claim goods by self-help run the same risks of v.olence

and invasion of privacy, regardless of the purported exis-

tence of a security agreement. If state action is not present

in one case, it should not be found in the other.

Another possible limitation proposed by Judge Weigel is

suggested by language in Adams itself. I strongly ques-

tion ddams’ dictum that Hall might be distinguished be-

cause in Hall the creditor had seized property which ‘‘be-

longed to the tenant’’ rather than property ‘‘that had been

entirely his and that, practically and according to the terms

of the contract, the debtor had not yet paid for.’’ 492 F.2d

at 336. Fuentes v. Shevin, 407 U.S. 67, 86-87 (1972), em-

phasises that the critical property interest at stake in the

context of prejudgment seizure is the right of the possessor

to continued possession pending litigation of the claimant’s

claim. Until a hearing has been held, the creditor’s owner-

ship of the property is entirely speculative and unresolved,

and the only undisputed issue is the debtor’s present pos-

session of the property.

If we are to hold that Adams’ application depends on the

‘relationship of property to debt,’’ the creditor finds his

power to repossess before a hearing depending paradoxi-

cally on a fact that will not be established until a hearing

is held. Even with the caveat that the creditor may not

repossess if a breach of the peace is threatened, the possi-

bility of violence is obviously increased when the debtor’s

right to resist repossession before a hearing turns on a

necessarily undetermined fact. Furthermore, the appeal to

history—asserting that a creditor’s power to repossess an

App. 42

item sold under contract was recognized at common law

while his right to seize property unrelated to the debt is a

statutory invention—seems immaterial to determining the

existence of state action. I concur in Judge Ely’s rejec-

tion of this spurious distinction in footnote 5 of his con-

curring opinion.

As 1 would interpret Adams, I could concur in Hall only

because of the grave threat to privacy interests occasioned

by permitting a creditor to intrude upon the residential

privacy of the debtor in quest of collateral. Cf. Stanley v.

Georgia, 394 U.S. 557 (1969); Breard v. Alexandria, 341

U.S. 622 (1951). Mrs. Leland, on the other hand, entered

the Culbertsons’ apartment only after their tenancy had

been terminated lawfully, and their right to expect and

demand privacy had ended.* The state permitted Leland

the exercise of no ‘‘ public function”’’ in authorizing her to

retain a bailment as security for a debt. The First Circuit

has held analogously that a bank may set off deposits

against debts unrelated to the deposits. Fletcher v. Rhode

Island Hospital Trust National Bank, 496 F.2d 927 (1st

1 [We are disinclined to decide the issue of state involvement

on the basis of whether a particular class of creditor did or did

not enjoy the same freedom to act in Elizabethan or Georgian

England.

Davis v. Richmond, 512 F.2d 201, 203 (1st Cir. 1975).

2In Davis v. Richmond, 512 F.2d 201 (1st Cir. 1975), the court

found no state action even when the tenancy was not, apparently,

terminated. The landlord did not enter the tenant’s room to seize

his personal effects, but prevented him from removing them from

the premises. Where the landlord has an effective control over the

entry to the rented premises, this procedure would protect his lien

in the tenant’s goods without necessitating an invasion of the tenant's

dwelling.

——— Se

App. 43

Cir.), cert. denied, 419 U.S. 1001 (1974). The Seventh Cir-

cuit has held that retention of an automobile pursuant to

a mechanic's lien is not the exercise of a public function

so as to be state action. Phillips v. Money, 503 F.2d 990

(7th Cir. 1974), cert. denied, 420 U.S. 934 (1975). I agree

with the court’s common-sense statement in Fletcher:

|W Jjhatever the truth of the old saw that possession

is nine-tenths of the law, a creditor who holds some-

thing of value to his debtor is differently situated from

one who does not: he does not need the state to facili-

tate his collection efforts.

496 F.2d at 930. See Davis v. Richmond, 512 F.2d 201 (1st

Cir. 1975).

The great central theme of Fuentes is that the state

should not disrupt the possessory status quo until a hear-

ing has been held to resolve the merits of the conflicting

claims. The state has not obstructed this objective by al-

lowing Mrs. Leland to retain her control over property to

which the legal rights are in dispute. More broadly, in the

absence of an invasion of the privacy interests of the home,

I believe that Adams forecloses any claim that the state

has deprived the debtors of due process by allowing self-

help repossession pursuant to an asserted consensual or

statutory lien.

I would affirm the dismissal by the district court.