fundamentally different from many private corporations whose business depends primarily on contracts to build roads, bridges, dams, ships, or submarines for the government. Acts of such private contractors do not become acts of the government by reason of their significant or even total engagement in performing public contracts.") Furthermore, "'mere approval of or acquiescence in the initiatives' of [a private actor] . . . is not enough to make the [private actor's] actions those of the Government." San Francisco Arts & Athletics, Inc. v. United States Olympic Comm., 483 U.S. at 547 (quoting Blum v. Yaretsky, 457 U.S. at 1004-05).
Thus the close nexus test establishes a relatively small range of government action for purposes of § 1983: "a government 'normally can be held responsible for a private decision only when it has exercised coercive power or has provided such significant encouragement, either overt or covert, that the choice must in law be deemed to be that of the government' ". San Francisco Arts & Athletics, Inc. v. United States Olympic Comm., 483 U.S. at 546 (quoting Blum v. Yaretsky, 457 U.S. at 1004; Rendell-Baker v. Kohn, 457 U.S. at 840) (citing Flagg Brothers, Inc. v. Brooks, 436 U.S. at 166; Jackson v. Metropolitan Edison Co., 419 U.S. at 357; Moose Lodge No. 107 v. Irvis, 407 U.S. 173, 173 (1972); Adickes v. S.H. Kress & Co., 398 U.S. 144, 170 (1970)) (emphasis added).
Upon application of the close nexus test, the Hadges court found no state action, holding that "there is no evidence that a State official participated in YRC's decision to deny Hadges's application."
Hadges v. Yonkers Racing Corp., 918 F.2d at 1083.
c. The Symbiotic Relationship Test and Close Nexus Test as Applied to the RFPs and CPC/HPD Contracts
In determining whether either of these tests results in a finding of § 1983 state action, this Court must ultimately undertake a detailed factual inquiry. "Neither of these tests lends itself to formulaic applications. Instead, both of these inquiries requires us to sift through and weigh the facts to determine whether the alleged ties between the State and the private actor are sufficiently strong to attribute the private actor's conduct to the state." Hadges v. Yonkers Racing Corp., 918 F.2d at 1081 (citing Burton v. Wilmington Parking Auth., 365 U.S. at 722). See also Jackson v. Metropolitan Edison Co., 419 U.S. at 351 ("The true nature of the State's involvement may not be immediately obvious, and detailed inquiry may be required in order to determine whether the test is met." (citing Burton v. Wilmington Parking Auth., 365 U.S. 715)). For purposes of the instant motions to dismiss, in accordance with Rule 12(b)(6) standards, the Court will accept the facts alleged in the complaint as true and will consider the CPC/HPD Contracts and the RFPs.
CPC was not a state actor under the symbiotic relationship test. Neither municipal defendant had the sort of interdependent economic interest that is required under the Burton test. Municipal defendants did not share a proprietary interest with CPC in the work being done. Nor did the municipal defendants have an "interlinked" business, as was the case with the State's parking lot in Burton. For these reasons, the symbiotic relationship test does not establish § 1983 state action in the instant case.
Under the close nexus test and the facts presently before the Court, however, CPC can be said to be a state actor. On the basis of the CPC/HPD Contracts and the RFPs, plaintiffs have alleged facts which, if proven true, would demonstrate that municipal defendants had "exercised coercive power or has provided such significant encouragement, either overt or covert, that the choice must in law be deemed to be that of the government." San Francisco Arts & Athletics, Inc. v. United States Olympic Comm., 483 U.S. at 546 (citations omitted). In particular, plaintiffs assert that the $ 90-95 cap on the Person Day Rate, which was required by municipal defendants as a condition for awarding the contract, was so low as to make it financially impossible for CPC to pay prevailing wage rates as required under 42 U.S.C. § 5310. In short, plaintiffs have alleged facts asserting that the municipal defendants ensured that any successful bidder would be forced, for economic reasons, to violate 42 U.S.C. § 5310. If proven true, these facts would be sufficient to demonstrate that the municipal defendants "exercised coercive power or . . . provided such significant encouragement" as to establish 42 U.S.C. § 1983 state action under the close nexus test.
Finally, municipal defendants argue that plaintiffs have failed to adequately plead the existence of a municipal custom, practice or policy which caused plaintiffs' injuries. However plaintiffs did allege that HPD's conduct "was pursuant to official custom, policy and usage." Amended Complaint at P55. Moreover, it strains credulity to assert, as municipal defendants have, that a series of contracts, worth millions of dollars in the aggregate, and signed by the Commissioner of HPD, do not reflect official policy or usage.
2. Does 42 U.S.C. § 5310 Create a "Right, Privilege or Immunity," as Required Under 42 U.S.C. § 1983?
a. The Existing Framework
The jurisprudence concerning whether a given statute creates a right, privilege or immunity enforceable under § 1983 is in a state of flux. In Wilder v. Virginia Hospital Ass'n, 110 S. Ct. 2510 (1990), the Supreme Court applied a well-established, three-part test in finding that the Boren Amendment to the Medicaid Act created such a right. However in Suter v. Artist M., 112 S. Ct. 1360 (1992), decided approximately two months ago, the Supreme Court chose not to explicitly apply the Wilder framework when determining whether such a right exists, although it did not explicitly overrule Wilder and provided no alternative analytic framework. Because the Wilder framework was not explicitly overruled,
this Court will apply the Wilder framework, with the modifications suggested by Suter, in ascertaining whether 42 U.S.C. § 5310 created a right enforceable under 1983.
Section 1983 provides a cause of action for violations of federal statutes as well as the Constitution. Maine v. Thiboutot, 448 U.S. 1, 4 (1980); Wilder v. Virginia Hospital Ass'n, 110 S. Ct. at 2517. There is no cause of action, however, when "'the statute does not create enforceable rights, privileges, or immunities within the meaning of § 1983'" Id. (quoting Wright v. Roanoke Redevelopment and Housing Auth., 479 U.S. 418, 423 (1987)).
Under this exception, a mere violation of federal law is not sufficient to trigger § 1983. Rather plaintiff must demonstrate that he or she was deprived of a right, privilege, or immunity. Wilder v. Virginia Hospital Ass'n, 110 S. Ct. at 2517; Golden State Transit Corp. v. City of Los Angeles, 493 U.S. 103, 106 (1989). In determining whether such a right, privilege or immunity exists, the Court must ascertain (1) whether "'the [statutory] provision in question was intended to benefit the putative plaintiff'" Wilder v. Virginia Hospital Ass'n, 110 S. Ct. at 2517 (quoting Golden State Transit Corp. v. City of Los Angeles, 493 U.S. at 106). If so, the provision creates an enforceable right unless (2) "it reflects merely a 'congressional preference' for a certain kind of conduct rather than a binding obligation on the governmental unit," Wilder v. Virginia Hospital Ass'n, 110 S. Ct. at 2517 (citing Pennhurst State School and Hosp. v. Halderman, 451 U.S. 1, 19 (1981)), or unless (3) the asserted interest is "'too vague and amorphous' such that it is 'beyond the competence of the judiciary to enforce.'" Wilder v. Virginia Hospital Ass'n, 110 S. Ct. at 2571 (quoting Golden State Transit Corp. v. City of Los Angeles, 493 U.S. at 108; Wright v. Roanoke Redevelopment and Housing Auth., 479 U.S. at 431-32).
Applying this test in Wilder, the Supreme Court found that the Boren Amendment to the Medicaid Act created a right enforceable by health care providers under § 1983. First, the Court found that "there can be little doubt that health care providers are the intended beneficiaries of the Boren Amendment. The provision . . . is phrased in terms of benefitting health care providers." Wilder v. Virginia Hospital Ass'n, 110 S. Ct. at 2517-18. Second, the Wilder court found that the Boren Amendment was "cast in mandatory rather than precatory terms: the state plan 'must' 'provide for payment of hospitals.'" Wilder v. Virginia Hospital Ass'n, 110 S. Ct. at 2519. "'The Boren Amendment's language succinctly sets forth a congressional command, which is wholly uncharacteristic of a mere suggestion or 'nudge"" Wilder v. Virginia Hospital Ass'n, 110 S. Ct. at 2519 (quoting West Virginia University Hospitals, Inc. v. Casey, 885 F.2d 11, 20 (3d Cir. 1989).
The Suter court did not explicitly apply the three-part "right" test of Wilder and its precursors. Although the Court did not provide an analytic framework for deciding § 1983 right of action cases, it did establish certain guidelines to be followed in determining whether there is a § 1983 right of action.
In Suter, the Court held that there is no private right of action to enforce the Adoption Assistance and Child Welfare Act of 1980 (the "AACWA"), either implicitly, under the AACWA itself, or through a § 1983 action. The Suter court distinguished the AACWA from the statute in Wilder, writing that, "in [Wilder ], we held that the Boren Amendment actually required the States to adopt reasonable and adequate rates, and that this obligation was enforceable by the providers. We relied in part on the fact that the statute and regulations set forth in some detail the factors to be considered in determining the methods for calculating rates." Suter v. Artist M., 112 S. Ct. at 1368. The Suter court concluded that, in providing that the State exercise "reasonable efforts" in maintaining an abused or neglected child in his home or return the child to his home from foster care, the AACWA left the question of how to define "reasonable efforts" up to the State. Id. Thus, the Court reasoned, the AACWA did not create an enforceable right.
In addition, the Suter court wrote that, "careful examination of the language [requiring 'reasonable efforts'], in the context of the entire [AACWA], leads us to conclude that the 'reasonable efforts' language does not unambiguously confer an enforceable right upon the [AACWA's] beneficiaries. The term 'reasonable efforts' in this context is at least as plausibly read to impose only a rather generalized duty on the State, to be enforced not by private individuals, but by the Secretary." Id. at 1370 (emphasis added). Thus, under Suter, any right must be unambiguously conferred.
Finally, the Court noted that the regulations promulgated by the Secretary of Health and Human Services to enforce the AACWA
do not evidence a view that [the AACWA] places any requirement for state receipt of federal funds other than the requirement that the State submit a plan to be approved by the Secretary. . . . What is significant is that the [AACWA] regulations are not specific, and do not provide notice to the States that failure to do anything other than submit a plan with the requisite features, to be approved by the Secretary, is a further condition on the receipt of funds from the Federal Government.
Id. at 1369. Thus the Court found that the burdens placed on the State under the AACWA were procedural, not substantive.
While the Suter court's approach to analyzing the AACWA is ad hoc, there are several guidelines at work. First, the right allegedly created by Congress must be specific and unambiguous. The statutory requirement that the State exercise "reasonable efforts," the Court ruled, was too general and ambiguous to establish a right. Finally, the Court found that the AACWA requirements were merely procedural, not substantive.
b. The Existing Framework as Applied to 42 U.S.C. § 5310
Under the Wilder framework, the first question to be asked is whether the statutory provision was intended to benefit plaintiffs. There can be little doubt that § 5310 is intended to provide laborers with higher wages than they would receive in the absence of this section. The congressional word choice in § 5310, particularly when viewed in contrast to other statutory provisions concerning prevailing wage requirements, reflects an unambiguous focus on construction workers: "all laborers and mechanics employed by contractors or subcontractors in the performance of construction work financed . . . with assistance received under this chapter shall be paid wages at rates not less than those prevailing on similar construction in the locality" (emphasis added). This can be contrasted with a provision in Title II of the HCDA, amending the United States Housing Act of 1937, which provided that,
any contract. . . pursuant to this chapter shall contain a provision requiring that . . . not less than the wages prevailing in the locality, as predetermined by the Secretary of Labor pursuant to the Davis-Bacon Act, shall be provided to all laborers and mechanics employed in the development of the project involved.