a look at the united states court of appeals for the...

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:


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


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.


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.


30. Id. at 97 (quoting Butz v. Economou, 438 U.S. 478, 513 (1978)).


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).


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.


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).


49. Id.


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).


56. Id. at 99.

57. Id.

58. Id.


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.


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).


66. Id.; 4 Pa. Consol. Stat. § 1204.


68. Id.


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.


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.


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


78. Id. at 104.

79. Id.

80. Id.

81. Id.

82. 4 Pa. Consol. Stat. § 1201(d).

83. Id. at § 1201(f)(1).


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


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).


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.


99. Id. at 407-08.

100. Id. at 407.

101. Id. at 407-08.


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.


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)).


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.


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


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.


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.


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


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.


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.

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