Smith and Roberson's Business Law 16th Edition by Richard Mann,Barry Roberts

Exercise 1

Metropolitan Edison Company is a privately owned and operated Pennsylvania corporation subject to extensive regulation by the Pennsylvania Public Utility Commission. Under a provision of its general tariff filed with the commission, Edison had the right to discontinue electric service to any customer on reasonable notice of nonpayment of bills. Catherine Jackson had been receiving electricity from Metropolitan Edison when her account was terminated because of her delinquency in payments. Edison later opened a new account for her residence in the name of James Dodson, another occupant of Jackson's residence. In August of the following year, Dodson moved away and no further payments were made to the account. Finally, in October, Edison disconnected Jackson's service without any prior notice. Jackson brought suit claiming that her electric service could not be terminated without notice and a hearing. She further argued that such action, allowed by a provision of Edison's tariff filed with the commission, constituted "state action" depriving her of property in violation of the Fourteenth Amendment's guarantee of due process of law. Should Edison's actions be considered state action? Explain.