Unpublished Disposition, 940 F.2d 1537 (9th Cir. 1991)

MEMORANDUM^* 

Sacramento Municipal Utility District (SMUD) and the United States Nuclear Regulatory Commission (NRC) appeal the district court's order denying their motion to dismiss a civil rights action filed against SMUD under 42 U.S.C. § 1983. In that action, appellee William Uphoff, on behalf of a class of employees of SMUD, challenged that utility's policy requiring random drug and alcohol testing of employees of the defueled Rancho Seco Nuclear Power Plant. Uphoff claimed that by requiring such testing the utility acted under color of state law and violated employees' rights under the fourth amendment. The NRC intervened, seeking to defend its regulations, pursuant to which the SMUD policy was instituted. The NRC and SMUD then moved to dismiss the district court action, arguing that it was in effect an attempt to mount a constitutional challenge to the regulations themselves. The defendants contended that under the Hobbs Act, 28 U.S.C. § 2342(4), such a suit could be maintained only by challenging a final order of the NRC in the court of appeals, within 60 days of the effective date of that order. They also argued that because the policy was implemented pursuant to federal regulations, it could not constitute state action for purposes of section 1983.

The district court denied the motion, rejecting both arguments. It certified its ruling for interlocutory appeal under 28 U.S.C. § 1292(b), and the NRC and SMUD appeal pursuant to that certification.

The basis for the government's argument that the district court does not have jurisdiction over this challenge to SMUD's drug testing policy is its assertion that this policy is mandated by NRC regulations. It argues that the challenged actions of SMUD were in direct response to NRC mandates, and any challenge to those actions in effect constitutes a challenge to the regulations, over which the district court would not have jurisdiction. We need not reach that contention at this stage of this case. Here, the district court correctly concluded that the challenge to SMUD's application of NRC regulations does not necessarily constitute a challenge to final agency action subject to the exclusive jurisdictional provisions of the Hobbs Act. The NRC has not yet decided whether the drug testing regulations will apply in their entirety to SMUD's plant, which is no longer operational. Pending its final decision, the NRC has extended to SMUD "enforcement discretion" mandating that it test only those employees who have unescorted access to certain critical portions of the plant. At this point, the record is not sufficiently developed for us to determine whether SMUD is currently testing only those employees the NRC is requiring it to test, or, in the exercise of its discretion, is testing other employees as well. At least to the extent that the plaintiffs challenge a policy that goes beyond what the NRC specifically requires, they are challenging a policy of SMUD itself. Such a challenge is appropriately brought in the district court under 42 U.S.C. § 1983.

The district court also correctly rejected the defendants' contention that SMUD cannot be held liable under section 1983 because its drug testing policy was mandated by federal regulations and therefore does not represent an official policy of the municipality. We assume, arguendo, that the defendants are correct that to prevail in their section 1983 claim the plaintiffs must show that the municipality violated their constitutional rights pursuant to its own policies. See Monell v. Department of Social Services of New York City, 436 U.S. 658 (1978). On the record before us, however, we cannot determine as a matter of law that such is not the case. The plaintiffs have submitted copies of the SMUD policy, which, on its face, purports to be a policy of SMUD, not the federal government. At this point, there is no basis for overturning the district court's ruling that the complaint should not be dismissed for failure to state a claim for which relief is available under section 1983.

We therefore AFFIRM the district court's ruling in order that the case may proceed without further delay.