Brooks v. Flagg Bros.

HOLDEN, District Judge,

dissenting:

I respectfully dissent. I am persuaded, as Judge Werker was, that his court was without jurisdiction and would affirm the dismissal of the action.

The unfortunate plight which confronted the plaintiff Brooks, following her eviction in June 1973, inspires concern. And Mrs. Jones was similarly situated when she was evicted in November of the same year. According to the complaints they were victimized by the overbearing of the defendant warehouseman. But on the facts alleged the State of New York was not a participant in the action taken by the defendant Flagg.

The defendant retained the bailed property under an ancient possessory lien conferred by the common law.1 See Schmidt v. Blood, 9 Wend. 268, 271 (N.Y.Sup.Ct.1882); cf. Knapp, Stout & Co. v. McCaffrey, 177 U.S. 638, 644-645, 20 S.Ct. 824, 44 L.Ed. 921 (1900). See also R. Whitaker, A Treatise of the Law Relative to the Rights of Lien and Stoppage in Transitu 13-14 (1816). While the complaints speak of threats of sale, that drastic remedy was not applied; the property has been returned to both plaintiffs.2

The power of sale asserted by the defendant was first conferred on warehousemen by an enactment of the New York Legislature in 1879. Ch. 336 [1879] N.Y. Laws 417. Thus, for nearly a century warehousemen in New York have had the authority to sell goods stored with them to satisfy delinquent charges. The majority of the court concludes that the “statutory delegation of government power and its corresponding expansion of his common law remedies suffices to thrust the state’s involvement Jn the challenged activity over the threshold of state action.” According to the majority, that thrust is sufficient to generate the judicial power to uproot a statutory provision that has governed the rights and remedies between warehousemen and their bailors for many years without interdiction by the courts of New York.

I agree that the question to be searched is whether the State of New York has become so involved in the retention and threatened sale of the plaintiff’s goods that defendant’s action “may be fairly treated as that of the State itself.” Jackson v. Metropolitan Edison Co., supra, 419 U.S. at 351, 95 S.Ct. at 453. Without such participation the Fourteenth Amendment affords no protection. Id.

Of course a state can act only by way of its legislative, executive and judicial branches. Ex parte Virginia, 100 U.S. 339, 347, 25 L.Ed. 676 (1880). Here there is no suggestion of state participation by judicial action. To the contrary, it is the want of judicial action that is the predicate of the complaint. And the State’s executive officers were not participants in either the creation of the lien or the threat to enforce it. The State quit the arena when the evictions were accomplished, before the present controversy began. The only state involvement is through the action of the legislature in adopting the challenged provisions of the Uniform Commercial Code § 7-210.

The question, as I perceive it, is whether the remedies provided by §§ 7-209 and 7-210 of the New York Uniform Commercial Code are “commanded” by the State, or “so entwined with governmental policies or so impregnated with a governmental character as to become subject to the constitutional limitations placed upon state action.” *776Evans v. Newton, 382 U.S. 296, 299, 86 S.Ct. 486, 488, 15 L.Ed.2d 373 (1966).

The roots of the present controversy are embedded in private dealings between the warehouseman and the bailors of the property that was stored in the warehouse facility. No state agency or official has intervened to sell or threaten to sell the property entrusted by the plaintiffs to the defendant warehouseman. As to non-commercial storage, such as here involved, the Uniform Commercial Code merely retained the detailed provisions for notice, publication and public sale found in Section 33 of the Uniform Warehouse Receipts Act. Uniform Commercial Code § 7-210, Official Comment 1.

In Shirley v. State National Bank, 493 F.2d 739 (2d Cir.), cert. denied, 419 U.S. 1009, 95 S.Ct. 329, 42 L.Ed.2d 284 (1974), the court was concerned with state action in the context of the Connecticut Retail Installment Sales Financing Act. Writing for the majority, Judge Mulligan pointed out:

Here the right to private repossession always existed. Codification did not encourage the practice one whit. As we have pointed out, the legislation made it less attractive by providing greater safeguards to the consumer in the conditional sales contract.

Id. at 744.

By the law of New York the enforcement of a warehouseman’s lien, for nearly a hundred years, has not been the function of the sheriff. As will be seen from what is written in the margin, the historical background of the challenged statute tells us that the State of New York has not been significantly involved in the enforcement of the warehouseman’s lien since 1879 unless, of course, either the bailor or bailee elected to resort to judicial action. And the statute makes no “command” that §§ 7-209 and 7-210 shall be pursued as the warehouseman’s exclusive remedy. Compare Peterson v. City of Greenville, 373 U.S. 244, 248, 83 S.Ct. 1119, 10 L.Ed.2d 323 (1963). The statutory history of the contested provisions of the New York Uniform Commercial Code indicates that there has been an accretion of safeguards to the mutual benefit of the parties to the bailment. Cf. Bond v. Dentzer, 494 F.2d 302, 307-09 (2d Cir.), cert. denied, 419 U.S. 837, 95 S.Ct. 65, 42 L.Ed.2d 63 (1974); Shirley v. State National Bank, supra, 493 F.2d at 742.

Resolution of the question of government action “hinges on the weighing of a number of variables, principally the degree of government involvement, the offensiveness of the conduct, and the value of preserving a private sector free from the constitutional requirements applicable to government institutions.” Wahba v. New York University, 492 F.2d 96, 102 (2d Cir.), cert. denied, 419 U.S. 874, 95 S.Ct. 135, 42 L.Ed.2d 113 (1974); Friendly, The Dartmouth College Case and the Public-Private Penumbra (1969).

Here we are not confronted with offensive discriminatory conduct by a private entity. There is nothing mandatory about the challenged statute; the State is neutral. The facts of the present controversy fail to establish involvement by the State of New York sufficient to constitute state action. Bond v. Dentzer, supra. See Shirley v. State National Bank, supra, 493 F.2d at 744.

Unlike the majority, I am persuaded that the adoption of § 7-210 of the New York Commercial Code does not constitute state action. The reasoning pursued in Melara v. Kennedy, 541 F.2d 802 (9th Cir. 1976) on the very question presented here, appears to me to be sound. See also Smith v. Bekins Moving & Storage Co., 384 F.Supp. 1261 (E.D.Pa.1974).

As we have seen, New York Uniform Commercial Code §§ 7-209 and 7-210 afford a choice of remedies to both bailor and bailee. The defendant warehouseman’s exercise, or threatened exercise, of the power of sale allowed by the Code, “where the initiative comes from it and not from the State, does not make its action in doing so ‘state action’ for purposes of the Fourteenth Amendment.” Jackson v. Metropolitan Edison Co., supra, 419 U.S. at 357, 95 S.Ct. at 457.

Absent the jurisdictional requisite of state action, I would affirm the order of the *777District Court without reaching the due process claim.

. The common law remedy in New York gave the warehouseman a possessory lien on the stored goods until the storage charges were paid.

. After the action was brought, by agreement of counsel, the plaintiff Brooks removed her goods without paying the storage charges. The plaintiff Jones’ storage charges were paid with protest against the amount of the charges and the goods were removed.