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Daimler Trust v. Prestige Annapolis, LLC

United States District Court, D. Maryland

June 7, 2016

DAIMLER TRUST, ET AL., Plaintiffs,
v.
PRESTIGE ANNAPOLIS, LLC, Defendant.

          MEMORANDUM OPINION

          ELLEN LIPTON HOLLANDER, District Judge.

         Plaintiffs Daimler Trust and Daimler Title Company ("Daimler Title") filed suit on February 25, 2016, against defendant Prestige Annapolis, LLC ("Prestige"), to obtain possession of a 2016 Mercedes-Benz. ECF 1. The Complaint, which is supported by two exhibits (filed collectively as ECF 1-2), contains five counts: violation of plaintiffs' due process rights under the Fourteenth Amendment, pursuant to 42 U.S.C. § 1983 ("§ 1983") (Count I); replevin (Count II); deprivation of property without due process of law, in violation of Article 24 of the Maryland Declaration of Rights (Count III); conversion (Count IV); and Declaratory Relief (Count V). Id. ¶¶ 44-106. Plaintiffs also rely on 42 U.S.C. § 1988 ("§ 1988"). They allege that this Court has federal question jurisdiction under 28 U.S.C. § 1331 and diversity jurisdiction pursuant to 28 U.S.C. § 1332. Id. ¶¶ 3-4.[1]

         Pursuant to Fed.R.Civ.P. 12(b)(1), 12(b)(2), and 12(b)(6), Prestige has filed a "Motion to Dismiss and Incorporated Memorandum of Law" (ECF 13, the "Motion"), which challenges, inter alia, the Court's subject matter jurisdiction. Plaintiffs oppose the Motion. ECF 15 ("Opposition"). Prestige has not replied and the time to do so has expired. See Local Rule 105.2.

         On March 16, 2016, plaintiffs filed a "Motion to Release Motor Vehicle Upon Court Approval of Bond and Request for Issuance of Show Cause Order." ECF 9. I issued the requested "Order to Show Cause" on March 28, 2016. ECF 12. Prestige responded on April 29, 2016 (ECF 22), seeking to dissolve the show cause order. By Order of May 9, 2016 (ECF 23), I postponed the show cause hearing and directed plaintiffs to submit further briefing as to the propriety of holding a show cause hearing in federal court under § 16-206 of the Commercial Law Article of the Maryland Code (2013 Repl. Vol., 2015 Supp.). Plaintiffs subsequently filed a "Reply Memorandum of Law in Further Support of Motion to Release Motor Vehicle Upon Court Approval of Bond" (ECF 24), which advances additional arguments in opposition to the Motion.

         No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I will grant the Motion as to Count I and Count III and deny it in all other respects.

         I. Factual Background

         On April 25, 2015, William Betteridge leased a silver, two-door 2016 Mercedes Benz AMG GT S (the "Vehicle") from an automobile dealership in Annapolis, Maryland, pursuant to a closed-end lease agreement (the "Lease Agreement"). ECF 1 ¶ 19; ECF 1-2 at 1-2. The lessee has failed to make monthly lease payments since September 18, 2015. ECF 1 ¶ 24. Plaintiffs maintain that the Vehicle is currently worth $137, 576. ECF 1 ¶¶ 10, 43.[2]

         Title to the Vehicle was issued on June 2, 2015, and is held by Daimler Trust as owner. ECF 1 ¶¶ 21, 22. Plaintiffs allege that "[t]he Lease Agreement was assigned to and became the property of Daimler Trust, and as part of the transaction Daimler Title Co. obtained a lien" on the Vehicle. Id. ¶ 20. Daimler Title has held the first priority lien on the Vehicle since June 2, 2015. Id. ¶ 23.

         "Daimler Trust is a Delaware Trust, whose trustee, BNY Mellon Bank of Delaware, is a Delaware banking corporation. The sole beneficiary of Daimler Trust is Daimler Trust Holding LLC, whose sole member is Mercedes-Benz Financial Services USA LLC, whose sole member is Daimler Investments U.S. Corporation, a Delaware Corporation." ECF 11 at 2; see also ECF 1 ¶ 7. Daimler Title is "a corporation organized and existing by virtue of the laws of the State of Delaware...." ECF 1 ¶ 8.

         Plaintiffs contend that Prestige is currently "in control" of the Vehicle. Id. ¶ 9. According to plaintiffs' supplemental briefing (ECF 11 at 2), Prestige "is a Limited Liability Company organized under the laws of Maryland, with a principal place of business in Maryland, and a registered agent in Maryland. Public records indicate Prestige's sole member is Omid Shaffaat, and public records indicate Mr. Shaffaat is a Maryland resident."

         Plaintiffs maintain that Prestige made "modifications to make the vehicle a racing-type car." ECF 1 ¶ 32. According to plaintiffs, "Daimler Trust and Daimler Title Co. did not grant permission, consent or authority for any racing-type or any other modifications to be done" to the Vehicle. Id. ¶ 31. An invoice from Prestige in Betteridge's name, dated December 22, 2015, reflects a "TOTAL AMOUNT DUE" from Betteridge to Prestige of $11, 730. ECF 1-2 at 1. According to plaintiffs, the "charges were not for repair" to the Vehicle, but rather for the modifications made to it. ECF 1 ¶ 32.

         As noted, Betteridge, the lessee of the Vehicle, made no lease payments after September 18, 2015, and is in default of the Lease Agreement. Id. ¶ 24. On November 20, 2015, an individual identifying himself as Betteridge's father notified Daimler Trust that Betteridge could no longer pay the lease payments and would return the Vehicle. Id. ¶ 25. On December 1, 2015, the same individual notified Daimler Trust that the Vehicle was in Prestige's possession. Id. ¶ 26. On December 4, 2015, Betteridge "telephoned Daimler Trust's representative to advise that Prestige would return the vehicle...." Id. ¶ 27.

         Plaintiffs allege that they negotiated unsuccessfully with Prestige for the return of the Vehicle. See id. ¶¶ 28-35. Plaintiffs assert, id. ¶ 36: "On January 8, 2016, and without notice to Daimler Trust or Daimler Title Co., Prestige requested that a lien company named Nationwide Lien & Recovery, Inc. enforce a lien against [the Vehicle] in the amount of $49, 084.00." Further, plaintiffs aver, ECF 1 ¶ 37: "Prestige's act of raising its lien demand from $11, 730.00 to $49, 084.00 was done without the knowledge, consent or authority" of the plaintiffs. Plaintiffs also allege, id. ¶ 38: "Prestige then served a Notice of Sale on the Lessee asserting that [the Vehicle] would be auctioned on March 2, 2016 pursuant to state law in order to enforce a lien claim of $50, 534.00." See ECF 1-2 at 2, "Notice of Sale of Motor Vehicle to Satisfy a Lien."[3]

         According to plaintiffs, "Prestige invoked the power of the State of Maryland to impress a nonconsensual (supposed) lien for $50, 534.00 in charges for unauthorized... modifications" to the Vehicle. ECF 1 ¶ 11. And, it did so without affording plaintiffs notice and a hearing to protect their interests by contesting the validity of Prestige's claims. Id. ¶ 15. Plaintiffs contend, id. ¶ 39: "Prior to impressing a purported lien for $11, 730.00, and prior to increasing that lien claim to $49, 084.00 and again to $50, 534.00, Prestige had not provided any hearing before an impartial decisionmaker, with adequate notice...." See also id. ¶ 15.

         II. Standard of Review

         As discussed, the Motion (ECF 13) is premised on Fed.R.Civ.P. 12(b)(1) and 12(b)(6).[4]

         A. Fed.R.Civ.P. 12(b)(1)

         Under Fed.R.Civ.P. 12(b)(1), a motion to dismiss for lack of subject matter jurisdiction raises the issue of "whether the court has the competence or authority to hear and decide the case." Davis v. Thompson, 367 F.Supp.2d 792, 799 (D. Md. 2005). The question of subject matter jurisdiction may be raised by the parties or the court, sua sponte, at any stage of the litigation. Arbaugh v. Y & H Corp., 546 U.S. 500, 506 (2006); see Ellenburg v. Spartan Motors Chassis, Inc., 519 F.3d 192, 197 (4th Cir. 2008). Upon a challenge to subject matter jurisdiction, the plaintiff bears the burden of proving, by a preponderance of evidence, the existence of jurisdiction. Robb Evans & Assocs., LLC v. Holibaugh, 609 F.3d 359, 362 (4th Cir. 2010); Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999); see also United States ex. rel . Vuyyuru v. Jadhau, 555 F.3d 337, 347 (4th Cir. 2009), cert. denied, 558 U.S. 875 (2009); cf. Zoroastrian Ctr. & Darb-E-Mehr of Metro. Washington, D.C. v. Rustam Guiv Found. of New York, ___ F.3d ___, 2016 WL 2343251, at *5 (4th Cir. May 4, 2016).

         Federal courts are courts of limited jurisdiction and "may not exercise jurisdiction absent a statutory basis." Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005). They "have an independent obligation to determine whether subject-matter jurisdiction exists, even when no party challenges it." Hertz Corp. v. Friend, 559 U.S. 77, 94 (2010).

         A challenge to subject matter jurisdiction under Rule 12(b)(1) may proceed "in one of two ways": either a facial challenge, asserting that the allegations pleaded in the complaint are insufficient to establish subject matter jurisdiction, or a factual challenge, asserting "that the jurisdictional allegations of the complaint [are] not true.'" Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009)(citation omitted); see also Buchanan v. Consol. Stores Corp., 125 F.Supp.2d 730, 736 (D. Md. 2001). In a facial challenge, "the facts alleged in the complaint are taken as true, and the motion must be denied if the complaint alleges sufficient facts to invoke subject matter jurisdiction." Kerns, 585 F.3d at 192; see also Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997).

         In a factual challenge, on the other hand, "the district court is entitled to decide disputed issues of fact with respect to subject matter jurisdiction." Kerns, 585 F.3d at 192. In that circumstance, the court "may regard the pleadings as mere evidence on the issue and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment. Velasco v. Gov't of Indonesia, 370 F.3d 392, 398 (4th Cir. 2004); Evans, 166 F.3d at 647. That is, "the court may look beyond the pleadings and the jurisdictional allegations of the complaint and view whatever evidence has been submitted on the issue to determine whether in fact subject matter jurisdiction exists." Khoury v. Meserve, 268 F.Supp.2d 600, 606 (D. Md. 2003) (citation omitted), aff'd, 85 Fed.Appx. 960 (4th Cir. 2004).

         Here, Prestige raises a facial challenge in that it asserts that the allegations pleaded in the Complaint are insufficient to establish subject matter jurisdiction. Under the "well-pleaded complaint" rule, the facts showing the existence of subject matter jurisdiction "must be affirmatively alleged in the complaint." Pinkley, Inc. v. City of Frederick, 191 F.3d 394, 399 (4th Cir. 1999) (citing McNutt v. Gen'l Motors Acceptance Corp., 298 U.S. 178 (1936)). "A court is to presume, therefore, that a case lies outside its limited jurisdiction unless and until jurisdiction has been shown to be proper." United States v. Poole, 531 F.3d 263, 274 (4th Cir. 2008) (citing Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994)).

         B. Fed.R.Civ.P. 12(b)(6)

         A defendant may test the legal sufficiency of a complaint by way of a motion to dismiss under Rule 12(b)(6). Goines v. Valley Cmty. Servs. Bd., ____ F.3d ____, 2016 WL 2621262, at *3 (4th Cir. May 9, 2016); McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010), aff'd sub nom. McBurney v. Young, ___ U.S. ___, 133 S.Ct. 1709 (2013); Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). A Rule 12(b)(6) motion constitutes an assertion by a defendant that, even if the facts alleged by a plaintiff are true, the complaint fails as a matter of law "to state a claim upon which relief can be granted." Whether a complaint states a claim for relief is assessed by reference to the pleading requirements of Fed.R.Civ.P. 8(a)(2). It provides that a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." The purpose of the rule is to provide the defendant with "fair notice" of the claim and the "grounds" for entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007).

         To survive a motion under Fed.R.Civ.P. 12(b)(6), a complaint must contain facts sufficient to "state a claim to relief that is plausible on its face." Id. at 570; see Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) ("Our decision in Twombly expounded the pleading standard for all civil actions'...." (citation omitted)); see also Simmons v. United Mortg. & Loan Inv., LLC, 634 F.3d 754, 768 (4th Cir. 2011). But, a plaintiff need not include "detailed factual allegations" in order to satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555. Moreover, federal pleading rules "do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted." Johnson v. City of Shelby, ___ U.S. ___, 135 S.Ct. 346, 346 (2014) (per curiam).

         Nevertheless, the rule demands more than bald accusations or mere speculation. Twombly, 550 U.S. at 555; see Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013). A complaint is insufficient if it provides no more than "labels and conclusions, " or "a formulaic recitation of the elements of a cause of action, " is insufficient. Twombly, 550 U.S. at 555.

         To satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth "enough factual matter (taken as true) to suggest" a cognizable cause of action, "even if... [the] actual proof of those facts is improbable and... recovery is very remote and unlikely." Twombly, 550 U.S. at 556 (internal quotations omitted). Put another way, in reviewing a Rule 12(b)(6) motion, a court "must accept as true all of the factual allegations contained in the complaint, '" and must "draw all reasonable inferences [from those facts] in favor of the plaintiff.'" E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (citations omitted); see Houck v. Substitute Tr. Servs., Inc., 791 F.3d 473, 484 (4th Cir. 2015); Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011), cert. denied, ___ U.S. ____, 132 S.Ct. 402 (2011); Monroe v. City of Charlottesville, 579 F.3d 380, 385-86 (4th Cir. 2009), cert. denied, 559 U.S. 992 (2010). But, a court is not required to accept legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286 (1986). "A court decides whether [the pleading] standard is met by separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer" that the plaintiff is entitled to the legal remedy sought. A Society Without A Name v. Virginia, 655 F.3d 342, 346 (4th Cir. 2011), cert. denied, ___ U.S. ___, 132 S.Ct. 1960 (2012).

         A motion asserting failure to state a claim typically "does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Edwards, 178 F.3d at 243 (quotation marks omitted); see Houck, 791 F.3d at 484; Tobey v. James, 706 F.3d 379, 387 (4th Cir. 2013). But, "if all facts necessary to the affirmative defense clearly appear[] on the face of the complaint, '" or in other material that is the proper subject of consideration under Rule 12(b)(6), such a defense can be resolved on the basis of the facts alleged in the complaint. Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007) (en banc) (citation omitted) (emphasis in Goodman ); see Houck, 791 F.3d at 484.

         Ordinarily, in resolving a motion under Rule 12(b)(6), a court is "generally limited to a review of the allegations of the complaint itself." Goines, 2016 WL 2621262, at *3. See Bosiger v. U.S. Airways, Inc., 510 F.3d 442, 450 (4th Cir. 2007); Clatterbuck v. City of Charlottesville, 708 F.3d 549, 557 (4th Cir. 2013) ( abrogated on other grounds by Reed v. Town of Gilbert, Ariz., ____ U.S. ____, 135 S.Ct. 2218 (2015), as recognized in Cahaly v. Larosa, 796 F.3d 399 (4th Cir. 2015)). Under certain limited exceptions, however, a court may consider documents beyond the complaint without converting the motion to dismiss to one for summary judgment. Goldfarb v. Mayor & City Council of Baltimore, 791 F.3d 500, 508 (4th Cir. 2015).

         Of relevance here, a court may properly consider documents that are "explicitly incorporated into the complaint by reference and those attached to the complaint as exhibits...." Goines, 2016 WL 2621262, at *3 (citations omitted); see U.S. ex rel. Oberg v. Pennsylvania Higher Educ. Assistance Agency, 745 F.3d 131, 136 (4th Cir. 2014) (quoting Philips v. Pitt Cty. Memorial Hosp., 572 F.3d 176, 180 (4th Cir. 2009)); see Anand v. Ocwen Loan Servicing, LLC, 754 F.3d 195, 198 (4th Cir. 2014); Am. Chiropractic Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004), cert. denied, 543 U.S. 979 (2004); Phillips v. LCI Int'l Inc., 190 F.3d 609, 618 (4th Cir. 1999). A court may also "consider a document submitted by the movant that was not attached to or expressly incorporated in a complaint, so long as the document was integral to the complaint and there is no dispute about the document's authenticity." Goines, 2016 WL 2621262, at *3 (citations omitted). To be "integral, " a document must be one "that by its very existence, and not the mere information it contains, gives rise to the legal rights asserted.'" Chesapeake Bay Found., Inc. v. Severstal Sparrows Point, LLC, 794 F.Supp.2d 602, 611 (D. Md. 2011) (citation omitted) (emphasis in original).

         However, "before treating the contents of an attached or incorporated document as true, the district court should consider the nature of the document and why the plaintiff attached it." Goines, 2016 WL 2621262, at *5 (citing N. Indiana Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 455 (7th Cir. 1998)). "When the plaintiff attaches or incorporates a document upon which his claim is based, or when the complaint otherwise shows that the plaintiff has adopted the contents of the document, crediting the document over conflicting allegations in the complaint is proper." Goines, 2016 WL 2621262, at *5. Conversely, "where the plaintiff attaches or incorporates a document for purposes other than the truthfulness of the document, it is inappropriate to treat the contents of that document as true." Id.

         On this basis, I have considered the exhibits that plaintiffs appended to their Complaint.

         III. Discussion

         The Motion advances two primary arguments. First, Prestige contends that plaintiffs fail to state a claim under § 1983 and, accordingly, that this Court lacks federal question jurisdiction pursuant to 28 U.S.C. § 1331. See ECF 13 at 5. Second, Prestige maintains that this Court lacks diversity jurisdiction because "the amount in controversy between the diverse parties does not in fact exceed $75, 000 as required by 28 USC §1332...." Id. at 2. I shall address each argument in turn.

         A. 28 U.S.C. § 1331; 42 U.S.C. § 1983; and 42 U.S.C. § 1988

         1.

         Section 1331 of Title 28 of the United States Code grants federal district courts "original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." As the Supreme Court has noted, "there is no serious debate that a federally created claim for relief is generally a sufficient condition for federal question jurisdiction, " because in that case "federal law creates the right of action and provides the rules of decision." Mims v. Arrow Fin. Servs., LLC, ___ U.S. ____, 132 S.Ct. 740, 748 (2012) (internal citations and quotation marks omitted). The "presence or absence of federal-question jurisdiction is governed by the well-pleaded complaint rule, ' which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint.'" Rivet v. Regions Bank of La., 522 U.S. 470, 475 (1998) (citation omitted).

         Section 1983 of Title 42 of the United States Code states: "Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory... subjects, or causes to be subjected, any citizen of the United States or other person with 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...." It provides a private cause of action for constitutional violations committed by persons acting under color of state law. However, it "is not itself a source of substantive rights, ' but merely provides a method for vindicating federal rights elsewhere conferred.'" Albright v. Oliver, 510 U.S. 266, 271 (1994) (quoting Baker v. McCollan, 443 U.S. 137, 144 n. 3 (1979)). Accordingly, a civil action under § 1983 allows "a party who has been deprived of a federal right under the color of state law to seek relief." City of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687, 707 (1999); see also West v. Adkins, 487 U.S. 42, 49 (1988); Lugar v. Edmondson Oil Co., 457 U.S. 922, 928-930 (1982).

         To establish a claim under § 1983, a plaintiff must prove: (1) that the defendant, a person, "deprived [the plaintiff] of a right secured by the Constitution and laws of the United States;" and (2) that the defendant acted "under color of [State] statute, ordinance, regulation, custom, or usage." Mentavlos v. Anderson, 249 F.3d 301, 310 (4th Cir. 2001) (citation and internal quotation marks omitted), cert. denied, 534 U.S. 952 (2001). Thus, in order successfully to assert a claim of violation of constitutional rights under § 1983, the defendant must be a state actor. In other words, "the under-color-of-state-law element of § 1983 excludes from its reach merely private conduct, no matter how discriminatory or wrongful.'" American Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 50 (1999) (citation omitted).

         In this regard, the Fourth Circuit has described the "Bill of Rights as a shield that protects private citizens from the excesses of government, rather than a sword that they may use to impose liability upon one another." Holly v. Scott, 434 F.3d 287, 292 (4th Cir. 2006), cert. denied, 547 U.S. 1168 (2006). Notably, the Fourth Circuit has said: "[P]rivate activity will generally not be deemed state action' unless the state has so dominated such activity as to convert it to state action: Mere approval of or acquiescence in the initiatives of a private party' is insufficient.'" Wahi v. Charleston Area Med. Ctr., Inc., 562 F.3d 599, 616 (4th Cir. 2009) (quoting DeBauche v. Trani, 191 F.3d 499, 507 (4th Cir. 1999) (alterations in Wahi ), cert. denied, 558 U.S. 1158 (2010).

         However, "there are infrequently arising circumstances under which the actions of an ostensibly private party will be deemed to satisfy the color-of-law requirement." Philips, 572 F.3d at 181. As the Fourth Circuit has noted, "cases deciding when private action might be deemed that of the state have not been a model of consistency...." Mentavlos, 249 F.3d at 313 (citations and quotation marks omitted). But, "the critical inquiry has remained constant. After examining the relevant facts and circumstances, the inquiry in each case is whether the conduct is fairly attributable to the state." Id. (citations and quotation marks omitted); see Philips, 572 F.3d at 182 ("In the end, however, there is no specific formula' for determining whether state action is present.... What is fairly attributable [to the state] is a matter of normative judgment, and the criteria lack rigid simplicity.'")(quoting Holly, 434 F.3d at 292 (4th Cir. 2006)(alterations in Philips )).

         In Mentavlos, 249 F.3d at 313, the Fourth Circuit explained various tests that it has employed to determine whether the conduct of a private party may be "fairly attributable' to the State." The Court said, id. at 313-14:

[I]n Andrews v. Federal Home Loan Bank, 998 F.2d 214 (4th Cir. 1993), we identified four circumstances under which the Supreme Court had held that a private party may be deemed a state actor for purposes of § 1983 liability:
(1) when the state has coerced the private actor to commit an act that would be unconstitutional if done by the state; (2) when the state has sought to evade a clear constitutional duty through delegation to a private actor; (3) when the state has delegated a traditionally and exclusively public function to a private actor; or (4) when the state has committed an unconstitutional act in the course of enforcing a right of a private citizen.
Id. at 217; see also DeBauche v. Trani, 191 F.3d 499, 507 (4th Cir. 1999), cert. denied, 529 U.S. 1033, 120 S.Ct. 1451, 146 L.Ed.2d 337 (2000).
In Haavistola [ v. Community Fire Co. of Rising Sun, 6 F.3d 211 (4th Cir. 1993)], another panel of this court summarized three situations in which conduct by a private entity could be fairly attributable to the state: (1) when a sufficiently close nexus exists between a regulated entity and a state such that the actions of the former are fairly treated as those of the state; (2) when the state "has exercised coercive power or has provided such significant encouragement that the action must in law be deemed to be that of the state"; and (3) "when the private entity has exercised powers that are traditionally the exclusive prerogative of the state." [ Id. ] at 215 (internal citations and quotation marks omitted).
Most recently, in Goldstein [ v. Chestnut Ridge Volunteer Fire Co., 218 F.3d 337 (4th Cir. 2000)], we emphasized the fact-based nature of the state action inquiry, reiterating that "the state action determination requires an examination of all the relevant circumstances, in an attempt to evaluate the degree of the Government's participation in the private party's activities." [ Id. ] at 342 (internal quotation marks omitted). There, we identified several considerations which are pertinent to the inquiry: (1) "whether the injury caused is aggravated in a unique way by the incidents of governmental authority"; (2) "the extent and nature of public assistance and public benefits accorded the private entity"; (3) "the extent and nature of governmental regulation over the institution"; and (4) "how the state itself views the entity, i.e., whether the state itself regards the actor as a state actor." Id. at 343 (internal quotation marks omitted). Like its predecessors in this circuit, however, the Goldstein decision summarized considerations already set forth by precedent, and did not purport to overrule our prior precedents or espouse new areas of inquiry. Indeed, Haavistola summarized the standard set forth by the Supreme Court in Blum [ v. Yaretsky, 457 U.S. 991, 1004-05 (1982)], see Haavistola, 6 F.3d at 215, which is still relied upon by the Court today, see Brentwood [ Acad. v. Tennessee Secondary Sch. Athletic Ass'n, 531 U.S. 288 (2001)].

         The Fourth Circuit concluded by identifying "the ultimate inquiry": "Is there a sufficiently close nexus' between the challenged actions of [the defendants] and the State... such that their actions may be fairly treated as that of the State itself.'" Mentavlos, 249 F.3d at 314 (quoting Brentwood Acad., 531 U.S. at 295).

         Plaintiffs also rely on Title 42 U.S.C. § 1988. It provides that in federal civil rights actions "the court, in its discretion, may allow the prevailing party... a ...


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