a look at the united states court of appeals for the...
TRANSCRIPT
143
A LOOK AT THE UNITED STATES COURT OF
APPEALS FOR THE THIRD CIRCUIT’S HEAVY
HANDED APPLICATION OF QUASI-JUDICIAL
IMMUNITY: KEYSTONE REDEVELOPMENT
PARTNERS, LLC V. DECKER
Jeffrey Kranking*
CONSTITUTIONAL LAW – QUASI-JUDICIAL AND ABSOLUTE IMMUNITY
– The United States Court of Appeals for the Third Circuit extended
quasi-judicial immunity to the Pennsylvania Gaming Control Board,
thus granting its members immunity from Section 1983 of the Civil
Rights Act. – Keystone Redevelopment Partners, LLC v. Decker, 631
F.3d 89 (3d Cir. 2011).
INTRODUCTION ....................................................................... 143
I. Keystone Redevelopment Partners, LLC
v. Decker .................................................................... 144
A. Facts .............................................................. 145
B. The District Court .......................................... 147
C. The Third Circuit ........................................... 148
D. Judge Fisher’s Dissent .................................. 153
II. History ....................................................................... 156
III. Analysis ...................................................................... 160
CONCLUSION ........................................................................... 163
INTRODUCTION
When deciding Keystone Redevelopment Partners, LLC v. Decker,1
the United States Court of Appeals for the Third Circuit upheld a line
of decisions that misconstrues the functional comparability test used
* J.D. Candidate Spring 2013, Duquesne University School of Law; B.A.,
History, B.A., Political Science, University of Pittsburgh, 2009.
1. Keystone Redevelopment Partners, LLC v. Decker, 631 F.3d 89 (3d Cir.
2011).
144 Duquesne Business Law Journal Vol. 14:1
for administering absolute, quasi-judicial immunity.2 Ultimately, the
appellate court and others before it have ignored the reasoning used
for this test, reasoning that has served as the backbone for traditional
immunity decisions. As a result, the appellate court’s decision gave
immunity to officials who had otherwise utilized a discretionary and
discriminatory decision-making method in denying businesses licen-
sure, and thus opened the doors for officials in similar positions to do
the same.
This Case Note examines the current test used to administer abso-
lute immunity to officials acting in a quasi-judicial manner. First, this
Case Note discusses the facts, procedural history, and the analysis
used by the Court of Appeals for the Third Circuit in applying quasi-
judicial immunity. Second, this Case Note examines the doctrine of
absolute immunity and how the traditional test for absolute immunity
has evolved through case law over the last half century. Finally, this
Case Note discusses how the traditional absolute immunity test was
eventually applied to government officers acting in a quasi-judicial
manner and analyzes the problematic test resulting from this applica-
tion.
I. Keystone Redevelopment Partners, LLC v. Decker
The Keystone case involves the Court of Appeals for the Third Cir-
cuit’s implementation of quasi-judicial immunity to members of the
Pennsylvania Gaming Control Board (hereinafter referred to as the
“Gaming Board”) pursuant to a lawsuit filed by a rejected applicant
claiming violations of the Equal Protection Clause3 and the Commerce
Clause4 of the United States Constitution.
5 Generally, to warrant qua-
2. Absolute immunity is defined as “a complete exemption from civil liability,
usu[ally] afforded to officials while performing particularly important functions,
such as a representative enacting legislation and a judge presiding over a lawsuit.”
Black’s Law Dictionary, supra n. 2, at 642 (Bryan A. Garner ed., 9th ed., West
2004). Quasi-judicial immunity is defined as immunity “relating to, or involving an
executive or administrative official’s adjudicative acts.” Id. at 1069.
3. U.S. Const. amend. XIV, § 1 (prohibiting states from “deny[ing] to any per-
son within its jurisdiction the equal protection of the laws”).
4. U.S. Const. art. I, § 8 (empowering Congress to “regulate Commerce . . .
among the several States”). Specifically, Keystone’s alleged violations pertained to
the Dormant Commerce Clause. Under the “[the Commerce] clause [there is] an
implied requirement—the Dormant Commerce Clause—that the states not ‘mandate
differential treatment of in-state and out-of-state economic interests that benefits the
former and burdens the latter.’” Keystone, 631 F.3d at 107 (quoting Granholm v.
2011 Keystone Redevelopment Partners, LLC v. Decker 145
si-judicial immunity from section 1983 of the Civil Rights Act of
1871 (hereinafter referred to as “Section 1983),6 the proceedings of
the agency in question must resemble those of the judicial process.7
The United States District Court for the Middle District of Pennsylva-
nia found such resemblance did not exist among the proceedings of
the Gaming Board.8 The Court of Appeals for the Third Circuit, how-
ever, reversed the district court’s decision, finding that the Gaming
Board’s procedures had sufficiently mirrored the judicial process.9
A. Facts
In December 2005, Keystone Redevelopment Partners, LLC (here-
inafter referred to as “Keystone”) and five other entities applied for a
casino slot-machine license for the City of Philadelphia.10
Subject to
the Pennsylvania Race Horse Development and Gaming Act (herein-
after referred to as the “Gaming Act”),11
the Gaming Board unani-
mously voted to issue the two available licenses to Foxwoods and
HSP Gaming, and denied the applications of Keystone and the other
two applicants.12
Keystone’s denial for licensure ultimately rested on
Heald, 544 U.S. 460, 472 (2005)). As such, “individuals injured by state action that
violates this [negative] aspect of the Commerce Clause may sue and obtain injunc-
tive and declaratory relief” and that this “amounts to a ‘right, privilege, or immuni-
ty’ under [Section 1983].” Id. (quoting Dennis v. Higgins, 498 U.S. 439, 447
(1991)).
5. Keystone Redevelopment Partners, LLC v. Decker, 674 F. Supp. 2d 629, 668
(M.D. Pa. 2009), rev’d, 631 F.3d 89 (3d Cir. 2011).
6. Section 1983 of the Civil Rights Act of 1871 states:
Every person who, under color of any statute, ordinance, regulation, custom, or
usage, of any State or Territory or the District of Columbia, subjects, or causes
to be subjected, any citizen of the United States or other person within the ju-
risdiction thereof to the deprivation of any rights, privileges, or immunities se-
cured by the Constitution and laws, shall be liable to the party injured in an ac-
tion at law, suit in equity, or other proper proceeding for redress, except that in
any action brought against a judicial officer for an act or omission taken in
such officer's judicial capacity, injunctive relief shall not be granted unless a
declaratory decree was violated or declaratory relief was unavailable.
42 U.S.C. § 1983 (2006).
7. Keystone, 674 F. Supp. 2d. at 659.
8. Id.
9. Keystone, 631 F.3d 89.
10. Id. at 93.
11. 4 Pa. Consol. Stat. §§ 1101-1906 (2010).
12. Keystone, 631 F.3d at 92-93. The Gaming Board grants licenses based on
factors enumerated in 4 Pa. Consol. Stat. § 1325(c), including:
146 Duquesne Business Law Journal Vol. 14:1
the fact that Keystone’s parent company, Trump Entertainment Re-
sorts, owned three Atlantic City casinos.13
The Gaming Board rea-
soned that Keystone and Trump Entertainment Resorts may be tempt-
ed to divert Pennsylvania customers to its Atlantic City properties
where they would likely return a higher profit due to lower taxes on
casino revenue.14
Having a duty to issue licenses to those who will
operate in the best interest of the Commonwealth and Philadelphia,
the Gaming Board favored applicants that would operate directly
against Atlantic City competition and therefore denied Keystone a
license.15
Only one of the three unsuccessful applicants, Riverwalk Casino,
LP, appealed the Gaming Board’s decision to the Pennsylvania Su-
preme Court.16
The Court affirmed the Gaming Board’s decision and
acknowledged its existence as a quasi-judicial body.17
(a) the location and quality of the proposed facility; (b) the potential for eco-
nomic development and new job creation, especially for Pennsylvania resi-
dents; (c) a plan for diversity in employment and contracting, (d) the history of
the applicant in developing tourism facilities, meeting commitments to local
agencies and community-based organizations, dealing with its employees, and
complying with the law; and (e) the degree to which potential adverse effects
on the public resulting from the project will be mitigated.
Id.
13. Keystone, 631 F.3d at 93. The Gaming Act stipulates:
Upon the conclusion of the licensing hearings and upon review of the eviden-
tiary record in its entirety, the [Gaming] Board will consider, approve, condi-
tion or deny the slot machine license applications. A final order, accompanied
by the [Gaming] Board's written decision, will be served on the applicants for
slot machine licenses.
Pa. Code tit. 58, § 441a.7(x) (2011).
14. Keystone, 631 F.3d at 93.
15. Id.
16. Id. at 94; see Riverwalk Casino, LP v. Pa. Gaming Control Bd., 926 A.2d
926 (Pa. 2007). Section 1204 of the Gaming Act states:
The Supreme Court of Pennsylvania shall be vested with exclusive appellate
jurisdiction to consider appeals of any final order, determination or decision of
the [Gaming B]oard involving the approval, issuance, denial or conditioning of
a slot machine license or the award, denial or conditioning of a table game op-
eration certificate. Notwithstanding the provisions of [2 Pa. Consol. Stat. §§
701-704] (relating to judicial review of Commonwealth agency action) and [42
Pa. Consol. Stat. § 763 (2011)] (relating to direct appeals from government
agencies), the Supreme Court shall affirm all final orders, determinations or
decisions of the [Gaming B]oard involving the approval, issuance, denial or
conditioning of a slot machine license or the award, denial or conditioning of a
table game operation certificate unless it shall find that the [Gaming B]oard
2011 Keystone Redevelopment Partners, LLC v. Decker 147
B. The District Court
On March 18, 2009, Keystone filed its amended complaint18
in the
United States District Court for the Middle District of Pennsylvania
against the individual members of the Gaming Board (hereinafter re-
ferred to as the “Board Members”)19
alleging violations of its constitu-
tional rights under the Commerce Clause and the Equal Protection
Clause.20
Keystone claimed that the Board Members had reached
their decision through an unlawful and discriminatory consideration.21
committed an error of law or that the order, determination or decision of the
[Gaming B]oard was arbitrary and there was a capricious disregard of the evi-
dence.
4 Pa. Consol. Stat. § 1204.
17. Riverwalk Casino, 926 A.2d at 952. The Court held that “the Gaming Board
serves as a quasi-judicial body with fact-finding and deliberative responsibilities.”
Id. at 935.
18. Keystone’s original complaint was filed on December 18, 2008. Keystone,
674 F. Supp. 2d at 639. The amended complaint filed March 18, 2009 contained the
following counts:
(i) Count I—violation of the Commerce Clause asserted against the Former
Board Defendants; (ii) Count II—violation of the Commerce Clause asserted
against Current Board Defendants; (iii) Count III—violation of the Equal Pro-
tection Clause asserted against Former Board Defendants; (iv) Count IV—
violation of the Equal Protection Clause asserted against Current Board De-
fendants; and (v) Count V—violations of the First Amendment Right to Peti-
tion and Equal Protection Clause asserted against Current Board Defendants.
Id. at 642.
19. Originally, the lawsuit was filed against both the current and former mem-
bers of the Gaming Board in their official and individual capacities. Keystone, 674
F. Supp. 2d 629. The district court dismissed the claims against the current mem-
bers of the Gaming Board on ripeness grounds. Id. at 668. The dismissal of the
current members was not appealed. See Keystone, 631 F.3d 89. Nevertheless, to
prevent confusion this Case Note will hereinafter use the term “Board Members” to
refer to any current or former defendant in the Keystone case.
20. Keystone, 631 F.3d at 94. In alleging these violations,
Keystone asserted that the Gaming Board had reached its licensing determina-
tion based on an illegally discriminatory consideration, namely, that Keystone,
due to its operation of gaming facilities in Atlantic City, might divert com-
merce to New Jersey rather than foster local economic interests. Keystone
demanded relief in the form of declaratory, injunctive, and monetary relief and
attorneys' fees.
Id.
21. Id. This consideration was chiefly based on the fact that “Keystone, due to
its operation of gaming facilities in Atlantic City, might divert commerce to New
Jersey rather than foster local economic interests.” Id.
148 Duquesne Business Law Journal Vol. 14:1
On March 27, 2009, the Board Members and HSP Gaming22
filed a
motion to dismiss, claiming that the Board Members were protected
by quasi-judicial immunity, or in the alternative, qualified immunity.23
In its discussion concerning quasi-judicial immunity, the court de-
clined to follow the decision in Riverwalk where the Pennsylvania
Supreme Court determined the Gaming Board to be a quasi-judicial
body.24
Rather, it stated that the licensure process lacked certain fun-
damentals to establish quasi-judicial applicability, including prohibi-
tions on ex parte communications, the ability to cross-examine, and
the ability to challenge the admissibility or exclusion of evidence.25
The court thus determined that it could not issue quasi-judicial im-
munity to the Board Members.26
Moving to the question of qualified immunity, the court stated that
Keystone had sufficiently pled violations of the Constitution’s Com-
merce Clause and the Equal Protection Clause by alleging that the
Board Members had discriminatorily favored local interests.27
For
this reason, the district court could not issue qualified immunity to the
Board Members, and thus denied their motion to dismiss.28
C. The Third Circuit
The Board Members appealed to the Court of Appeals for the Third
Circuit for review of the district court's denial of their motion to dis-
miss on the basis of quasi-judicial immunity, or in the alternative,
qualified immunity.29
Throughout its analysis of the issue on quasi-
judicial immunity, the court asserted the general rule of law that the
more the proceedings mirror the judicial process, the more likely the
parties will be given the protection of quasi-judicial immunity.30
Moreover, to determine whether an official enjoys quasi-judicial im-
22. Id. It was in the best interest of HSP Gaming to intervene in the matter, con-
sidering the license it had been awarded was at that point in jeopardy. Id.
23. Id. Qualified immunity is defined as “immunity from civil liability for a
public official who is performing a discretionary function, as long as the conduct
does not violate clearly established constitutional or statutory rights.” Black’s Law
Dictionary, supra n. 2, at 643.
24. Keystone, 674 F. Supp. 2d at 657; Riverwalk, 926 A.2d at 935.
25. Keystone, 674 F. Supp. 2d at 659.
26. Id.
27. Id. at 661-62, 667.
28. Id. at 668.
29. Keystone, 631 F.3d at 95.
30. Id. at 97 (quoting Butz v. Economou, 438 U.S. 478, 513 (1978)).
2011 Keystone Redevelopment Partners, LLC v. Decker 149
munity, the court applied the functional comparability test, first estab-
lished by the United States Supreme Court in Butz v. Economou,31
which was expanded, though incorrectly, in its subsequent decision in
Cleavinger v. Saxner to include more concrete and specific factors.32
Furthermore, because the Court of Appeals for the Third Circuit had
previously applied a functional comparability test to a municipal zon-
ing board in Dotzel v. Ashbridge,33
the appellate court found it appro-
priate to apply the same factors utilized in Dotzel with regard to the
Gaming Board.34
The first of the functional comparability factors that the court dis-
cussed involves the ability for the process in question to be performed
without harassment or intimidation from dissatisfied parties.35
The
court explained that if a quasi-judicial proceeding is in fact subject to
a backlash of expensive litigation, it might certainly impact the deci-
sion making process, therefore meriting immunity for the proceed-
31. 438 U.S. at 512. In Butz, the functional comparability test was originally a
three-pronged test which required the defendant to (1) establish a threshold need for
absolute immunity, (2) demonstrate that the adjudicatory process has safeguards to
reduce the need for a damage action, and (3) show that the defendant’s function is
analogous to the function of a judge. Id at 508-12.
32. 474 U.S. 193, 202 (1985); Keystone, 631 F.3d at 95. Additional factors were
added to the functional comparability test by the Supreme Court in Cleavinger. 474
U.S. at 202. The Court of Appeals for the Third Circuit adopted the Cleavinger
functional comparability test as opposed to the original test established in Butz. Id.
at 95. This expanded Cleavinger test includes:
(a) the need to assure that the individual can perform his functions without
harassment or intimidation; (b) the presence of safeguards that reduce the need
for private damages actions as a means of controlling unconstitutional conduct;
(c) insulation from political influence; (d) the importance of precedent; (e) the
adversary nature of the process; and (f) the correctability of error on appeal.
Id. (quoting Cleavinger, 474 U.S. at 202). Notice how the factors in Cleavinger are
more concrete and more specific than the original test used in Butz. Compare Butz,
438 U.S. at 508-12; with Cleavinger, 474 U.S. at 202.
33. 438 F.3d 320, 325-27 (3d Cir. 2006).
34. Keystone, 631 F.3d at 95-96.
35. Id. at 96. In analyzing the Supreme Court’s discussion of the first factor in
Butz, the Court of Appeals for the Third Circuit stated:
[A]dministrative law judges, like other judges, must be extended quasi-judicial
immunity so that they ‘can perform their respective functions without harass-
ment or intimidation’ from dissatisfied parties, such as ‘an individual targeted
by an administrative proceeding [who] will act angrily and may seek venge-
ance in the courts,’ or a ‘corporation [that] will muster all of its financial and
legal resources in an effort to prevent administrative sanctions.’
Id. (citing Butz, 438 U.S. at 512, 515).
150 Duquesne Business Law Journal Vol. 14:1
ing.36
The court concluded that because the financial interests at stake
were so large – each applicant having to expend a $50 million license
fee, and Keystone itself proposing a $444.8 million gaming project
and retaining annual revenues in excess of $300 million – there exists
an inherent rationale to counter the decision through litigation.37
Thus, the Court of Appeals for the Third Circuit found that if the
Board Members lacked immunity from personal liability, they would
be inept in exercising fair judgment due to fear of suit.38
Accordingly,
the court held that the first factor of the functional comparability test
was met, i.e., there was a need to assure that the Gaming Board could
perform its functions without becoming subject to harassment or in-
timidation from gaming license applicants.39
The court then proceeded to look for any elements which may satis-
fy the second factor of the test: the presence of safeguards which were
established to protect the public from improper conduct of the Gaming
Board.40
In reviewing this factor, the court considered five procedural
requirements of the Gaming Board when issuing a gaming license
under Pennsylvania law:41
the Gaming Board must (1) provide notice
to all parties involved,42
(2) hold a public meeting regarding the licen-
sure,43
(3) allow applicants the right to counsel,44
(4) issue a written
decision,45
and (5) transcribe the record.46
The court additionally con-
sidered the Gaming Board’s power to issue subpoenas when analyzing
this factor.47
The court found these elements were met and therefore
concluded that the second factor was likewise satisfied.48
The third factor discussed by the Court of Appeals for the Third
Circuit considered whether the hearing examiner can make decisions
independent of political influences.49
The court concluded that the
36. Id. (citing Butz, 438 U.S. at 512, 515).
37. Id. at 97 (quoting Butz, 438 U.S. at 515) (“‘When millions may turn on regu-
latory decisions [as in this case], there is a strong incentive to counter-attack.’”).
38. Id.
39. Keystone, 631 F.3d at 97.
40. Id.
41. Id.
42. 2 Pa. Consol. Stat. § 504 (2006).
43. 4 Pa. Consol. Stat. § 1205(b).
44. 2 Pa. Consol. Stat. § 502.
45. Pa. Code tit. 58, § 441a.7(x).
46. Id. at § 441a.7(v).
47. 4 Pa. Consol. Stat. § 1202(b)(7).
48. Keystone, 631 F.3d at 98.
49. Id.
2011 Keystone Redevelopment Partners, LLC v. Decker 151
Gaming Board was sufficiently insulated from political influences due
to the following statutory limitations placed upon its members:50
(1)
members serve for fixed terms,51
(2) members can only be removed
for misconduct in office or a criminal conviction,52
(3) members are
prohibited from any political involvement,53
and (4) members must
recuse themselves from the hearing where impartiality may be reason-
ably questioned.54
The court next discussed the fourth factor of the functional compa-
rability test: whether the Gaming Board’s decisions are influenced by
precedent.55
The court noted that the December 2006 licensure deci-
sion was the Gaming Board’s first written opinion regarding an appli-
cation and, therefore, no precedent for the procedure existed.56
How-
ever, it concluded that this factor was meant to establish that the pro-
ceedings were not discretionary in that they operated under the influ-
ence of safeguards.57
Because this was the first decision of the Gam-
ing Board, the court did not penalize the Board Members for lack of
precedent, but instead considered the existence of statute-related safe-
guards to satisfy this factor.58
To satisfy this factor, the court instead
considered the existence of statutory safeguards which included (1)
the Gaming Act’s requirements that the Gaming Board’s decisions be
issued in written form and (2) a clear and convincing evidence stand-
50. Id.
51. 4 Pa. Consol. Stat. § 1201(d).
52. Id. at § 1201(b.1).
53. Id. at § 1202.1(c)(5).
54. Id. at § 1202.1(c)(3).
55. Keystone, 631 F.3d at 98.
56. Id. at 99.
57. Id.
58. Id.
152 Duquesne Business Law Journal Vol. 14:1
ard be applied.59
The court was satisfied these statutory safeguards
were sufficient to satisfy the fourth factor.60
The court then applied the fifth factor, which requires certain ele-
ments to be present in the proceedings that enhance the adversarial
character of the process.61
Applying the Dotzel court’s analysis of this
factor, the Court of Appeals for the Third Circuit in Keystone inter-
preted such elements to consist of (1) notice to all interested parties,
(2) prohibition of ex parte contacts, (3) cross-examination, and (4)
admissibility of evidence.62
Here, the court found almost all of the
Dotzel elements had been met.63
Although applicants had no right to
cross-examination, it found the remaining elements were present and
sufficient to satisfy the fifth factor.64
Finally, the court analyzed the sixth factor: the right to appellate re-
view.65
The court found that gaming applicants have the statutory
right to appeal to the Pennsylvania Supreme Court.66
As such, the
court concluded that Keystone had this right to appeal, yet it chose not
to exercise this right.67
The Court of Appeals for the Third Circuit found that the Gaming
Board had sufficiently met the functional comparability test and there-
fore was deserving of quasi-judicial immunity.68
Thus, the court re-
59. Id. (citing 4 Pa. Consol. Stat. §§ 1302–1305, 1325(c); Pa. Code tit. 58, §
441a.7(e)-(h)) (finding that the Gaming Board is required to use these “statutorily
delineated criteria relating to each applicant's eligibility and suitability for licens-
ing”). The applicable statute states:
At a licensing hearing, an applicant shall appear before the [Gaming] Board
and at all times have the burden to establish and demonstrate, by clear and
convincing evidence, its eligibility and suitability for licensure and to address
the criteria identified in section 1325(c) (relating to license or permit issuance)
of the [Gaming A]ct.
Pa. Code tit. 58, § 441a.7.
60. Keystone, 631 F.3d at 99.
61. Id.
62. Id. (citing Dotzel, 438 F.3d at 327).
63. Id.
64. Id.; see 2 Pa. Consol. Stat. § 504 (requiring notice to be given); 4 Pa. Consol.
Stat. § 1202.1(c), (c.1), (c.2) (prohibiting ex parte communications); Pa. Code tit.
58, § 441a.7(t) (entitling applicants to object to Gaming Board rulings in a competi-
tor’s hearing in addition to their own); Id. at § 441a.7(n), (u), (w) (permitting evi-
dence to be admitted and objected to).
65. Keystone, 631 F.3d at 100.
66. Id.; 4 Pa. Consol. Stat. § 1204.
67. Keystone, 631 F.3d at 101.
68. Id.
2011 Keystone Redevelopment Partners, LLC v. Decker 153
versed the district court’s decision and directed it on remand to enter
an order dismissing all counts against the Board Members.69
D. Judge Fisher’s Dissent
The honorable Judge D. Michael Fisher submitted an opinion con-
curring in part and dissenting in part with the majority opinion.70
Judge Fisher agreed with the majority’s decision to reverse and re-
mand the district court’s holding, but disagreed with its decision that
the Gaming Board merited quasi-judicial immunity.71
Instead of ap-
plying the functional comparability test to establish quasi-judicial
immunity, Judge Fisher believed that the case should have been de-
cided on the basis of qualified immunity.72
Judge Fisher nevertheless discussed the factors for quasi-judicial
immunity, stating that to merit such immunity, the function must be
judicial in nature.73
Whether an administrative function is judicial in
nature is a two-part inquiry, which examines (1) whether the function
is normally one that is undertaken by a judge and (2) whether the pro-
ceedings were performed in a judicial capacity.74
However, Judge
Fisher stated that the primary function of the Gaming Board – to issue
gaming licenses – fails the first part of this test because it is a function
fundamentally different from that of any function performed by a
judge.75
In examining whether the function is normally one that is undertak-
en by a judge, Judge Fisher argued that the Gaming Board based its
decisions on criteria that generally served the best interests of the
Commonwealth, whereas judges, on the other hand, do not make deci-
sions based on such criteria.76
Judge Fisher reasoned that a judicial
69. Id.
70. Id. at 101 (Fisher, J., concurring in part and dissenting in part).
71. Id.
72. Keystone, 631 F.3d at 102.
73. Id. at 103 (quoting Antoine v. Byers & Anderson, Inc., 508 U.S. 429, 436
(1993)) (stating that “[w]hen judicial immunity is extended to officials other than
judges, it is because their judgments are ‘functional[ly] comparab[le]’ to those judg-
es”).
74. Id. (quoting Stump v. Sparkman, 435 U.S. 349, 362 (1978) (stating that “we
must look at the ‘nature of the act itself, i.e., whether it is a function normally per-
formed by a judge, and to the expectations of the parties, i.e., whether they dealt
with the [body] in [its] judicial capacity’”).
75. Id.
76. Id.
154 Duquesne Business Law Journal Vol. 14:1
function must either resolve disputes between parties or adjudicate
private rights – the touchstone of any judicial role.77
He further ex-
plained that the parties before the Gaming Board were requesting nei-
ther, but were merely competing for the privilege to operate a busi-
ness.78
As such, he concluded that the majority’s construction and
application of quasi-judicial authority greatly expanded the meaning
of the word “judicial.”79
In assessing whether the proceedings were performed in a judicial
capacity, Judge Fisher disagreed with the majority’s application of
two of the functional comparability factors.80
First, Judge Fisher stat-
ed that the Gaming Board was not sufficiently insulated from political
pressures because its members are made up of gubernatorial and legis-
lative appointees only.81
Therefore, the members will likely carry out
the functions of the Gaming Board in a manner which reflects the
views held by their appointers.82
Also, the Gaming Act requires there
to be a majority of at least one gubernatorial appointee and four legis-
lative appointees,83
giving the legislature an indirect influence over
the Gaming Board’s decisions.84
Second, Judge Fisher asserted that the Gaming Board lacks prece-
dent and therefore acts almost entirely in a discretionary manner.85
In
noting that the Gaming Act allows the Gaming Board to base its deci-
sion on an array of factors,86
all generally furthering the interest of the
77. Keystone, 631 F.3d at 104.
78. Id. at 104.
79. Id.
80. Id.
81. Id.
82. 4 Pa. Consol. Stat. § 1201(d).
83. Id. at § 1201(f)(1).
84. Keystone, 631 F.3d at 104.
85. Id. at 105.
86. Factors to be considered when determining the issuance of gaming licenses
include:
(1) The location and quality of the proposed facility, including, but not limited
to, road and transit access, parking and centrality to market service area. (2)
The potential for new job creation and economic development which will re-
sult from granting a license to an applicant. (3) The applicant's good faith plan
to recruit, train and upgrade diversity in all employment classifications in the
facility. (4) The applicant's good faith plan for enhancing the representation of
diverse groups.... (5) The applicant's good faith effort to assure that all persons
are accorded equality of opportunity in employment and contracting.... (6)
The history and success of the applicant in developing tourism facilities ancil-
lary to gaming development if applicable to the applicant. (7) The degree to
2011 Keystone Redevelopment Partners, LLC v. Decker 155
Commonwealth,87
Judge Fisher explained that the Gaming Board
may, at its discretion, use any of these factors to justify its decision.88
Thus, although procedural guidelines exist within the Gaming Act, the
inherent broadness of these factors allows for the Gaming Board to
operate wholly in its own discretion.89
In conclusion, Judge Fisher determined that the majority failed to
consider whether the nature of the decision itself mirrors that of a ju-
dicial function, and only focused on whether the administrative pro-
ceedings were performed in a judicial capacity.90
Judge Fisher stated
that in doing this, the majority expanded the term “judicial function”
and therefore violated Section 1983.91
Thus, Judge Fisher rejected the
majority’s holding that the Gaming Board merited quasi-judicial im-
munity concerning its gaming licensure proceedings.92
which the applicant presents a plan for the project which will likely lead to the
creation of quality, living-wage jobs and full-time permanent jobs for residents
of this Commonwealth generally and for residents of the host political subdivi-
sion in particular. (8) The record of the applicant and its developer in meeting
commitments to local agencies, community-based organizations and employ-
ees in other locations. (9) The degree to which potential adverse effects which
might result from the project, including costs of meeting the increased demand
for public health care, child care, public transportation, affordable housing and
social services, will be mitigated. (10) The record of the applicant and its de-
veloper regarding compliance with [Federal, State, and local labor laws.] (11)
The applicant's record in dealing with its employees and their representatives
at other locations.
Id. (citing 4 Pa. Consol. Stat. § 1325(c)).
87. Id. at 104-05.
88. Id. at 105.
89. Keystone, 631 F.3d.at 105.
90. Id. at 106.
91. Id. (citing Harlow v. Fitzgerald, 457 U.S. 800, 807 (1982)).
92. Id. Because this Case Note focuses on the quasi-judicial immunity aspect of
the Keystone case, Judge Fisher’s analysis of the qualified immunity issue was not
included. However, it should be noted that even though Judge Fisher believed that
the Board Members did not warrant quasi-judicial immunity, he believed that the
Board Members should have been granted qualified immunity:
I believe that we should have decided this case on the ground of qualified im-
munity and held that the [b]oard members did not deprive Keystone of a clear-
ly-established constitutional right. Whether the [b]oard members should re-
ceive qualified immunity is subject to a two-pronged test: a court evaluating a
claim of qualified immunity “must first determine whether the plaintiff has al-
leged the deprivation of an actual constitutional right at all, and if so, proceed
to determine whether that right was clearly established at the time of the al-
leged violation.” Conn v. Gabbert, 526 U.S. 286, 290 (1999).
156 Duquesne Business Law Journal Vol. 14:1
II. History
The term “quasi-judicial immunity,” a form of absolute immunity,
is a fairly new doctrine that first took center stage in 1978 in the Unit-
ed States Supreme Court’s decision in Butz v. Economou.93
At com-
mon law, absolute immunity was limited under Section 1983 with
exceptions mostly in the context of judges and legislators.94
However,
the Supreme Court in Butz, expanded the absolute immunity excep-
tions to Section 1983 liability by concluding that certain public offi-
cials deserve absolute immunity when acting in a judicial capacity.95
Post-Butz decisions thereafter signified a departure from prior immun-
ity analyses as they weakened the criteria for absolute immunity, al-
lowing vast numbers of public officials the potential to be protected
under the doctrine.96
To understand the move from the traditional
application of absolute immunity to the broader interpretation used by
the courts today, one must look into the dichotomy between the meth-
ods of analysis used to define “immunity” versus defining “liability”
with regard to Section 1983.
Section 1983 imposed liability on any person who deprived another
of a constitutional or federal right.97
Though broad in its jurisdictional
reach, Section 1983 was seldom seen until the early years of the Civil
Rights movement.98
Courts during this period butted heads over the
language of the statute.99
One camp read the statute literally, implying
that Congress had intended universal liability to be imposed on all
government officials.100
The other camp emphasized the existence of
a common law tradition granting immunity to officials for policy rea-
sons.101
The Supreme Court first recognized the many issues relating to full-
blown liability of public officials and confronted them head-on in its
Id. at 106-07. Judge Fisher concluded that both elements had been satisfied and,
therefore, the Board Members should have been granted qualified immunity. Id.
93. 438 U.S. 478.
94. Catherine A. Daubard, Quasi-Judicial Immunity of State Officials: Butz v.
Economou’s Distorted Legacy, 1985 U. Ill. L. Rev. 401 (1985).
95. 438 U.S. at 478.
96. Daubard, supra n. 94, at 403.
97. 42 U.S.C. § 1983.
98. Daubard, supra n. 94, at 406.
99. Id. at 407-08.
100. Id. at 407.
101. Id. at 407-08.
2011 Keystone Redevelopment Partners, LLC v. Decker 157
1951 decision of Tenney v. Brandhove.102
In Tenney, the defendant, a
state legislator, was accused of inhibiting the plaintiff’s First Amend-
ment right to criticize a legislative committee.103
The Court conclud-
ed that, in order to protect legislative freedom, legislators deserve ab-
solute immunity from Section 1983 liability.104
Furthermore, the
Court reasoned that because common law legislative immunity was so
well grounded, Congress would have had to expressly eliminate this
immunity when drafting Section 1983 in order to invalidate the doc-
trine.105
Subsequent to its decision in Tenney, the Supreme Court addressed
the immunity of judges from Section 1983 liability in 1966.106
In
Pierson v. Ray, the Court bootstrapped the reasoning used for legisla-
tive immunity in the Tenney decision to apply in the context of judg-
es.107
While the Court solidified yet another exception to Section
1983 liability, it simultaneously acknowledged the dangers of granting
absolute immunity and implied that not all governmental functions
were deserving of the doctrine.108
Thereafter, in Scheuer v. Rhodes, the Court followed through with
its acknowledgement and implication set forth in Pierson, and limited
the application of absolute immunity by clarifying the jurisdictional
reach of Section 1983 liability, rather than simply defining Section
1983 immunity.109
Amidst a growing concern over the dangers of ab-
solute immunity, the Court held that governors110
and school offi-
cials111
were not deserving of the doctrine.112
In its analysis, the Court
demonstrated the dilemma in granting immunity to public officials:
the necessity for public officials to perform their jobs adequately and
free from harassment versus the need to uphold the public’s interest in
deterring unconstitutional conduct.113
102. 341 U.S. 367 (1951).
103. Id. at 371.
104. Id. at 377.
105. Id. at 376.
106. Daubard, supra n. 94, at 409.
107. Id. at 410.
108. Id. at 411.
109. Id. at 412.
110. Id. (citing Scheuer v. Rhodes, 416 U.S. 232 (1974)).
111. Daubard, supra n. 94, at 412 (citing Wood v. Strickland, 420 U.S. 308
(1975)).
112. Id.
113. Id. (citing Wood, 420 U.S. at 322)).
158 Duquesne Business Law Journal Vol. 14:1
In its 1976 decision of Imbler v. Pachtman, the Supreme Court
honed in on the jurisdictional reach issue, ruling that absolute immuni-
ty would be granted when the public interest demanded the protection
of an official function of sufficient importance to the judicial system,
such as upholding fair proceedings in criminal actions.114
In Imbler,
the Court held that a public prosecutor who acted within the scope of
his duties and was accused of utilizing false testimony in the convic-
tion of a criminal defendant met this criteria.115
The Court reasoned
that the duties of a public prosecutor were indispensable to the func-
tion of criminal justice, therefore warranted absolute immunity.116
In
arriving at this conclusion, the Court created a benchmark for deter-
mining whether a function is deserving of absolute immunity: whether
such function is integral to the implementation of fair judicial pro-
ceedings.117
In its 1978 decision of Stump v. Sparkman, the Court was presented
with the issue of whether a judge’s out-of-court actions constituted a
judicial function.118
Here, the Court had to establish the criteria of
what encompasses a judicial function.119
Accordingly, the Court stat-
ed that an act constitutes a judicial function if the party dealt with the
judge in a judicial capacity, and the act was a function that a judge
normally performed.120
Because the Court found the judge’s actions
satisfied this two-prong test, it granted the judge absolute immunity.121
Finally, in the 1978 decision of Butz v. Economou, the Court ap-
plied absolute immunity in the context of governmental officers oper-
ating in a judicial manner.122
In Butz, the Court elaborated on the two-
part judicial function analysis from Stump and held that, under certain
circumstances, officers of the Department of Agriculture should re-
114. Imbler v. Pachtman, 424 U.S. 409, 426-29 (1976) (stating “[i]f prosecutors
were hampered in exercising their judgment as to the use of such witnesses by con-
cern about resulting personal liability, the triers of fact in criminal cases often would
be denied relevant evidence”).
115. Id. at 431.
116. Id. at 430, 438 (White, Brennan, & Marshall, JJ., concurring in the judg-
ment).
117. Id. at 430 (majority) (stating “respondent's activities were intimately associ-
ated with the judicial phase of the criminal process, and thus were functions to
which the reasons for absolute immunity apply with full force”).
118. Stump, 435 U.S. at 360.
119. Id. at 360-62.
120. Id. at 362.
121. Id.
122. Butz, 438 U.S. 478.
2011 Keystone Redevelopment Partners, LLC v. Decker 159
ceive absolute immunity.123
The functional comparability test applied
at this point in time,124
was a three-pronged test which required the
defendant to (1) establish a threshold need for absolute immunity,125
(2) demonstrate that the adjudicatory process has safeguards to reduce
the need for a damage action,126
and (3) show that the defendant’s
function is analogous to the function of a judge.127
The Court found that the first prong was met due the controversial
nature of the administrative hearings.128
Disappointed parties would
likely retaliate through litigation, and thus the commission would be
flooded with unmerited suits, inhibiting the officers from adequately
performing their duties.129
In regard to the second prong of the test,
the Court found that the administrative proceedings had adequate
safeguards as required by the Administrative Procedure Act, by im-
posing such requirements as impartiality of officials, detailed records
of the proceedings, and notice to the parties as to the findings and
conclusions.130
Finally, the Court held that the officials met the third
prong, and thus were protected by quasi-judicial immunity; however,
it did not clarify as to how the functions were analogous.131
In Cleavinger v. Saxner, the Court applied a functional comparabil-
ity test and ultimately found that members of the Institution Discipline
Committee were entitled only to qualified immunity.132
However,
instead of applying the three-part Stump influenced functional compa-
rability test utilized in Butz, the Cleavinger Court modified the test by
adding specific factors that the Butz Court likely did not intend to be
solidified in the rule.133
Moreover, the Cleavinger Court essentially
123. Id. at 517.
124. The original three-prong functional comparability test in Butz was subse-
quently expanded in Cleavinger to include more specific and concrete factors.
Compare Butz, 438 U.S. at 508-12; with Cleavinger, 474 U.S. at 202; see also supra
n. 32 (listing factors of functional comparability test).
125. Id. at 508-10.
126. Id. at 512.
127. Id.
128. Butz, 438 U.S. at 512-13.
129. Id.
130. Id. at 513.
131. Id.
132. 474 U.S. 193.
133. Id. at 202-06; see Butz, 438 U.S. at 508-12 (finding that to warrant quasi-
judicial immunity one must establish a threshold need for absolute immunity,
demonstrate that the adjudicatory process has safeguards to reduce the need for a
160 Duquesne Business Law Journal Vol. 14:1
wrote in criteria to the functional comparability test that were intended
by the Butz Court to be specific towards the context of Department of
Agriculture hearing officers.134
When looking at the evolution of absolute immunity case law, it be-
comes clear that the Supreme Court has loosened Section 1983 liabil-
ity, allocating governmental officers acting quasi-judicially to be pro-
tected under the absolute immunity doctrine. The functional compa-
rability test, derived from the Stump decision, has been tailored for use
in determining such issues of quasi-judicial immunity. The test, as it
stands now, is composed of the factors designated in the Cleavinger
decision, which is the same test used by the Court of Appeals for the
Third Circuit in Keystone.
III. Analysis
The standards applied in Butz, weighed individually on importance,
were not exclusive. The Butz Court most likely left the criteria open-
ended in an effort to prevent the formation of a bright line test for ap-
plying absolute immunity; forcing courts to reason on a case-by-case
basis, whether the function in question is actually comparable to that
of a judicial function.
Unfortunately, the Butz Court’s inability to clarify that the criteria
should be applied on an ad-hoc basis, allowed future decisions to ap-
ply a more specific and problematic version. The modified form of
the functional comparability test, as shown in Cleavinger v. Saxner,
makes conclusory comparisons to the reasoning applied in Butz, rea-
soning which was specifically applied for the function and proceed-
ings of the Department of Agriculture’s agency officials.135
The end
product is an overly specific test that analogizes the factors of Butz,
instead of considering the factors on an ad-hoc basis as intended. In
so doing, Cleavinger dissolved any remnants of the common law rea-
soning for the functional comparability test, while creating a bright
line test with no real individual consideration of the importance of
non-judicial functions. Furthermore, the Cleavinger test fails to ana-
lyze the touchstone of a judicial function, specifically whether the
function is analogous to a role normally undertaken by a judge. The
damage action, and show the defendant’s function is analogous to the function of a
judge); see also supra n. 32 (listing factors of functional comparability test).
134. Cleavinger, 474 U.S. at 202.
135. 438 U.S. 478.
2011 Keystone Redevelopment Partners, LLC v. Decker 161
result is a bright line test that is heavily one-sided, focused primarily
on the existence of procedural safeguards.
Keystone Redevelopment Partners, LLC v. Decker illustrates the
danger of wielding a bright line test in regard to applicability of quasi-
judicial immunity. The decision also illustrates a trend that does not
address whether the function is actually a role undertaken by a judge.
Its application of the test has allowed an inherently non-judicial board,
acting in a discretional manner, to deny businesses their equal oppor-
tunity rights without any ramifications. As Judge Fisher illustrated in
Keystone, the utilization of the functional comparability test, as inter-
preted by Cleavinger and applied in Keystone, wildly expands the def-
inition of judicial function.136
Because of this irrational expansion, courts should return to the
original functional comparability test, which required them to analyze,
on an ad-hoc basis, whether a threshold basis for absolute immunity
was met, judicial safeguards were present during the proceedings, and
the role of the parties in the proceeding is analogous to a role under-
taken by judges.137
When establishing a threshold need for quasi-judicial immunity, the
Keystone decision, as in Cleavinger, illogically established that the
determinative factor for this prong is the presence of the potential for
harassment.138
Nowhere in the Butz opinion does it say the presence
of harassment dictates the need for immunity. Butz simply illustrated
that harassment can promote unfair judicial procedures and thus
should be considered when applying quasi-judicial immunity.139
Key-
stone, on the other hand, concluded that the mere possibility of har-
assment of the Gaming Board meant that the there was a need for ab-
solute immunity.140
Because harassment was equated to absolute im-
munity, no actual consideration was given into the degree of harass-
ment or whether qualified immunity may be more appropriate.
The Court of Appeals for the Third Circuit also misconstrued the
test for procedural safeguards in the Keystone case.141
To wit, the
136. Keystone, 631 F.3d at 104.
137. See Butz, 438 U.S. 478.
138. Keystone, 631 F.3d at 96-97 (majority); Cleavinger, 474 U.S. at 202.
139. Butz, 438 U.S. at 512.
140. Keystone, 631 F.3d at 96.
141. Cleavinger had interpreted the second prong of Butz, the existence of proce-
dural safeguards, to encompass prongs two through five, “[2] the presence of safe-
guards that reduce the need for private damages actions as a means of controlling
unconstitutional conduct; [3] insulation from political influence; [4] the importance
162 Duquesne Business Law Journal Vol. 14:1
court merely listed a series of safeguards, such as the right to counsel,
the right to challenge evidence, and the right to appeal.142
However,
as Butz described, these factors are not exclusive and each individual
factor must be weighed in its context to illustrate its overall effect on
the proceedings.143
The Keystone decision, however, failed to weigh
individual factors and merely concluded that, because some safe-
guards existed, the proceedings had sufficient safeguards to permit
absolute immunity. Thus, the Court of Appeals for the Third Circuit
was premature in its conclusion that there were sufficient procedural
safeguards to warrant absolute immunity.
As Judge Fisher correctly stated, the majority failed to establish
whether the function of the Board Members is normally one that is
undertaken by a judge, i.e., that the role of Board Members is judicial
in nature. The Gaming Board’s proceedings were not adversarial in
nature and did not resolve disputes between the parties. In fact, the
Gaming Board’s only function is to issue a gaming license, a function
that is fundamentally different from any undertaken by a judge. Fur-
thermore, as Judge Fisher stated, this process is no different from a
government agency awarding contracts after a bidding process; and
like a bidding process, the Gaming Board made its decision based on
criteria that generally serves the best interest of the Commonwealth.144
The Court of Appeals for the Third Circuit’s failure to address this
fundamental question is largely based on the shortcomings of the Butz
decision. The Butz Court did not clarify the importance of the first
part of the Stump test: whether the function is normally undertaken by
a judge.145
It focused only on the second part of Stump: whether the
proceedings were initiated in a judicial capacity.146
Because of this,
the subsequent trend of cases, such as Cleavinger and Keystone, not
surprisingly, followed in the footsteps of Butz. These subsequent de-
cisions are heavily one-sided, focusing primarily on the procedural
safeguards and failing to address whether the function was directly
comparable to one undertaken by a judge. Furthermore, the Butz
of precedent; [5] the adversary nature of the process; and [6] the correctability of
error on appeal.” Cleavinger, 474 U.S. at 202.
142. Keystone, 631 F.3d at 97-101.
143. Butz, 438 U.S. at 512-13.
144. Keystone, 631 F.3d at 104 (Fisher, J., concurring in part and dissenting in
part).
145. Butz, 438 U.S. at 513-14.
146. Id. at 512-14.
2011 Keystone Redevelopment Partners, LLC v. Decker 163
Court’s failure to clarify the importance of looking at functions on an
ad-hoc basis allowed all subsequent courts to make premature conclu-
sions based on the bright line test established in Cleavinger.
CONCLUSION
The impact of Keystone applying quasi-judicial immunity to that of
the Gaming Board, and consequently upholding this trend of the wa-
tered down functional comparability test, is that any private business
regulated by state agency boards are at risk of lack of remedy when
subjected to unconstitutional discrimination. State agencies display a
broad spectrum of power in regulating and licensing private interests
and occupations. Oftentimes, as displayed in Keystone, state agencies
execute harmful discretionary decisions in the name of overly ambig-
uous legislative objectives. Such decisions result in a violation of
businesses’ due process rights during agency hearings. If the flawed
rule of law executed by the Court of Appeals for the Third Circuit
continues to be upheld, the rights of private business owners to object
to discretionary decisions of state agency boards are seriously at risk.
In conclusion, in substitution for the bright line test established in
Cleavinger, courts should re-establish the original functional compa-
rability test in Butz. In doing this, it is necessary to clarify that this is
not a bright line test and the individual prongs must be met on an ad-
hoc basis. It is also necessary to fully implement the third prong of
the test, whether the function is analogous to one undertaken by a
judge. Thus, any suit alleging a violation of a business’s due process
rights under section 1983 can only be silenced when all prongs of the
proposed test are met and the agency board suitably merits absolute
immunity.