Selected Case Readings
8
Selected Case Readings
Chapter outline
Introduction
The following cases have been properly labeled “benchmark” precedents in the world of private security. Use them as reference points and as catalysts for further discussion. The cases emphasize the legal nuances of private sector justice, and, even more compellingly, they tell the story of privatization and its apparent invincibility. Since Burdeau v. McDowell, the kingpin of private security cases, decided in 1921, the courts at both the state and federal levels have consistently ruled on this well-settled area of law. While activists on many fronts wish constitutional extension to private sector operations, the reticence of jurists, even in the age of judicial activism, is quite remarkable. To be sure, the courts have been dependable and even more predictable. That sort of uniformity is rare and a reflection of how high the stakes are in the law of private security.
Aetna Casualty & Surety Company V. Pendleton Detectives of Mississippi, Inc.
182 F.3d 376 (5th Cir. 1999)
Before Garwood, Duhe, and Benavides, circuit judges.
Opinion:
John M. Duhe, Jr., circuit judge:
Aetna Casualty & Surety Company (“Aetna”) sued Pendleton Detectives of Mississippi, Inc. (“Pendleton”) for recovery of the amount of claims it paid for losses to its insured, The Merchants Company, Inc. (“Merchants”), resulting from Pendleton’s negligence or breach of contract. The jury awarded Aetna $174,000 in damages. Subsequently, the district court granted Pendleton’s Motion for Judgment as a Matter of Law and entered judgment for Pendleton. Aetna appeals arguing the district court erred, because Aetna presented sufficient evidence to sustain the jury’s verdict. We agree, and reverse the district court’s judgment and reinstate the jury’s verdict.
Background
In August 1993, Pendleton contracted with Merchants to provide security for Merchants’ Jackson, Mississippi distribution warehouse facility. Merchants quickly determined that it was unsatisfied with Pendleton’s service. Merchants complained that the gate was left open at times, guards arrived at work intoxicated, made personal phone calls, and entertained members of the opposite sex while on duty. In early 1995, Merchants determined through its inventories an unusually high amount of loss from its warehouse. Merchants suspected nightshift employee theft was responsible for the increased losses. Merchants fired its nightshift manager and notified Pendleton, but the problem only grew worse. After Merchants notified Pendleton again of the problem, it hired a private investigator posing as an employee to investigate the problem. The private investigator concluded employee theft was responsible for the losses. Additionally, several nightshift employees, while taking lie detector tests administered by a hired expert, admitted stealing large amounts of food from the warehouse. After receiving Merchants’ complaints, Robert H. Pendleton, chairman of the board of Pendleton, sent Merchants a memo acknowledging that the guards’ performance was below what was expected.
On January 31, 1996, Merchants submitted a claim of $430,266.68 for losses resulting from theft at its Jackson, Mississippi warehouse. After settling the claim, Aetna sued to recover the amount as Merchants’ legal subrogee and contractual assignee. Although the jury awarded $174,000 in damages to Aetna, the district court granted Pendleton’s Motion for Judgment as a Matter of Law and entered a judgment for Pendleton on May 8, 1998. Merchants appeals.
Discussion
We review the district court’s grant of a motion for judgment as a matter of law de novo, applying the same standard it used. See Hill v. International Paper Co., 121 F.3d 168, 170 (5th Cir. 1997). A court may grant a judgment as a matter of law if after a party has been fully heard by the jury on an issue, “there is no legally sufficient evidentiary basis for a reasonable jury to have found for that party with respect to that issue.” Fed. R. Civ. P. 50; Conkling v. Turner, 18 F.3d 1285, 1300 (5th Cir. 1994). A court should view the entire record in the light most favorable to the nonmovant, drawing all factual inferences in favor of the nonmoving party, and “leaving credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts to the jury.” Conkling, 18 F.3d at 1300 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986)).
The district court based its ruling on Merchants’ failure to introduce conclusive evidence that the thefts occurred while Pendleton guards were on duty. Although Pendleton’s security expert, Robert Vause, testified that it was more likely than not that the theft occurred because of Pendleton’s substandard service, the district court disregarded his testimony because his belief was based on the lax security environment created by Pendleton employees at Merchants’ warehouse.
Merchants contends that it presented sufficient evidence to support the jury’s verdict, while Pendleton asserts that Merchants did not prove its employees proximately caused Merchants’ losses. Specifically, Pendleton argues Merchants failed to present direct evidence that Pendleton guards were on duty when the thefts occurred. While admitting that its security services were substandard, Pendleton contends that Merchants’ restrictions on its security service caused the losses rather than Pendleton’s substandard services.
To prove negligence, “a plaintiff must prove by a preponderance of the evidence each element of negligence: duty, breach of duty, proximate causation, and injury.” Lovett v. Bradford, 676 So. 2d 893, 896 (Miss. 1996). Circumstantial evidence is sufficient to prove proximate cause under Mississippi law. See K-Mart, Corp. v. Hardy, 735 So. 2d 975, 1999 Miss. LEXIS 102, 1999 WL 145306, at *5 (Miss. 1999). “Negligence may be established by circumstantial evidence in the absence of testimony by eyewitnesses provided the circumstances are such as to take the case out of the realm of conjecture and place it within the field of legitimate inference.” Id. (quoting Downs v. Choo, 656 So. 2d 84, 90 (Miss. 1995)); see Davis v. Flippen, 260 So. 2d 847, 848 (Miss. 1972). (“when the case turns on circumstantial evidence it should rarely be taken from the jury.”)
Merchants presented the following evidence of Pendleton’s negligent security practices: (1) guards slept on the job; (2) guards watched T.V. on the job; (3) guards drank on the job; (4) guards entertained guests of the opposite sex on the job; (5) guards left the gate to the warehouse open;(6) Pendleton’s admission of failing to perform sufficient background checks on its guards; (7) the private investigator’s conclusion that nightshift employees were responsible for the losses; (8) several of Merchants’ nightshift employees’ confessions to stealing large amounts of food;(9) Pendleton’s contractual obligation to provide security from 4 P.M. to 8 A.M. and 24 hours a day on weekends; (10) Merchants’ repeated reports of suspected employee theft to Pendleton; (11) the report of a person wearing a Pendleton baseball cap selling Merchants’ products from the trunk of his car; and (12) Merchants’ security expert’s testimony that it was more probable than not that Pendleton’s lax security practices caused the losses. Merchants argues the above evidence is sufficient to support the jury’s verdict.
Pendleton argues that Merchants’ restrictions on its security service caused the losses, and that, because of the limited nature of the security service Merchants requested, the loss would have occurred even had Pendleton performed its duties perfectly. Pendleton contends the following restrictions placed upon its service by Merchants prevented it from deterring the losses: (1) Pendleton was not allowed to go inside Merchants’ warehouse; (2) Pendleton was not allowed to inspect the inside of trucks or employee vehicles leaving the facility; (3) Pendleton did not provide 24 hour a day protection 7 days a week; and (4) the Pendleton security officer’s view of the employee parking lot was obstructed for a short period of time every hour while he conducted rounds of the premises.
At trial, Pendleton theorized that Merchant’s former night shipping manager was involved in a large-scale scheme to steal food by colluding with truck drivers to falsify shipping documents and send sealed trucks full of food to nonexistent locations. Pendleton contended that because its guards lacked the authority to search sealed trucks as they left the gates of Merchants’ facility, it was unable to prevent the losses Merchants suffered. However, Pendleton did not offer evidence that Merchants accused its truck drivers of stealing or that it ever suspected or investigated any occurrences of falsified shipping documents. Moreover, Merchants’ evidence established that the substantial losses from theft continued long after Merchants fired the night shipping manager.
Merchants’ evidence at trial sufficiently supports the jury’s inference of causation between Pendleton’s lax security practices and the losses Merchants suffered. The Security Instructions developed by Pendleton exclusively for Merchants expressly stated that the mission of Pendleton’s post was “to maintain security of the property and prevent fires, theft, etc. during all hours.” The Security Instructions required that Merchants’ employees enter the facility only through a gate located next to the guard house and that Pendleton guards be stationed at the guard house during their entire shift except during the brief period of their rounds. These instructions also authorized Pendleton’s guards to stop Merchants’ employees and inspect any packages or bundles they were carrying, and mandated that Pendleton guards keep a “close check on the employee parking area to deter outsiders, or other employees, from tampering with or damaging employee vehicles.” (emphasis added). Additionally, while the guards’ view of the employee parking lot was obstructed for a short period of time every hour during the rounds of the premises, the guards were to perform these rounds randomly rather than at a set time of day and were supposed to lock the gate while away, requiring employees to wait until the guard’s return to exit the facility, thereby reducing the likelihood of employee theft during this brief absence.
The period of loss claimed by Merchants extended from October 1994 to December 1995. During this period Merchants employed up to 90 nightshift employees, and Pendleton was required to conduct nearly 1,000 shifts of security services. The jury’s award of $174,000 to Aetna, an amount substantially smaller than the $430,266.68 Aetna demanded, evidences the jury’s implicit conclusion that Pendleton caused at least some of Merchants’ losses. The jury obviously concluded that while the night shipping manager Merchants fired in July 1995 caused some of the losses, Pendleton’s substandard security practices also caused $174,000 of the losses Merchants suffered.
Based on the above evidence, a reasonable juror could not only have concluded that Pendleton’s poor security practices allowed Merchants’ nightshift employees to steal with impunity, but that in fact Pendleton’s security officers were also involved in the theft from Merchants themselves. For the above reasons, we reverse the district court’s decision and reinstate the jury’s verdict.
REVERSED AND JURY VERDICT REINSTATED
Arthur Letourneau et al. V. The Department of Registration and Education et al.
212 Ill. App. 3d 717; 571 N.E.2d 783 (1991)
Justice White delivered the opinion of the court. Cerda, P. J., and Rizzi, J., concur.
Defendants appeal from a judgment entered by the circuit court of Cook County that reversed the revocation of plaintiffs’ licenses to practice. We affirm the judgment of the circuit court.
Defendants are the Department of Registration and Education (the Department), now known as the Department of Professional Regulation; Gary L. Clayton (the Director), who was Director of Registration and Education at the pertinent times; the Illinois Private Detective, Private Alarm, and Private Security Board (the Board); and the Board’s chairman, and five other members.
One plaintiff is Arthur Letourneau, to whom the record sometimes refers as Arthur LeTourneau. The other plaintiffs are the detective division, the security division, and the alarm division of Investigations International (the company). Of the four licenses and certificates revoked, two licenses (as a private detective and a private security contractor) were issued in Letourneau’s name, and two certificates (as a private detective agency and as a private security contractor agency) were issued to Letourneauin the names of the company’s detective division and security division, respectively. For convenience when referring collectively in this opinion to plaintiffs’ licenses and certificates, the general term “licenses” is used.
A certificate as a private alarm contractor agency, issued in the name of the company’s alarm division, and a license as a private alarm contractor, issued in Letourneau’s name, were neither revoked nor involved in the disciplinary proceedings, but as licensees the holders thereof have joined as plaintiffs.
The central issue is whether revocation of plaintiffs’ licenses was contrary to the manifest weight of the evidence, unsupported by substantial evidence, or arbitrary and unreasonable.
I. Statutory Background and Procedural History
Under the Private Detective, Private Alarm, and Private Security Act of 1983 (Ill. Rev. Stat. 1985, ch. 111, par. 2651 et seq.) (the Act or the present Act), a licensee is subject to disciplinary sanctions for enumerated violations. (Ill. Rev. Stat. 1985, ch. 111, par. 2672(a).) A range of sanctions, including license revocation, is provided. Ill. Rev. Stat. 1985, ch. 111, par. 2675. In this cause, the department filed formal charges seeking disciplinary action against Letourneau and the company as respondents. The charges named Letourneau and the company’s detective and security divisions as holders of the licenses in question. The charges alleged three substantive acts or omissions, said to constitute violations of the Act or of its precursor statute (the 1933 Act) (Ill. Rev. Stat. 1983, ch. 111, par. 2601 et seq.) (repealed eff. Jan. 5, 1984)1 and therefore to constitute grounds for license revocation or suspension under section 22 of the Act (Ill. Rev. Stat. 1985, ch. 111, par. 2672). The alleged violations were:
Under the version of the Act applicable to this cause, it was a continuing requirement for agency certification such as here that the agencies each have a full-time Illinois-licensed private detective or private security contractor in charge and that each such person reside in Illinois. (Ill. Rev. Stat. 1985, ch. 111, pars. 2664(d), (f).) “Residency” meant having established an actual domicile in Illinois for at least one year. (Ill. Rev. Stat. 1985, ch. 111, par. 2652(m).) The 1933 Act contained similar requirements for detective agencies. (Ill. Rev. Stat. 1983, ch. 111, pars. 2601, 2621.) The present Act has now been amended to repeal the requirement that a licensee in charge reside in Illinois. See Pub. Act 85—981, art. III, § 5, eff. Jan. 1, 1988 (amending Ill. Rev. Stat. 1985, ch. 111, pars. 2664(d) through (f)).
During several sessions between January and July 1986, a hearing officer received testimony from 11 witnesses and admitted 75 exhibits into evidence. Attending from time to time and sometimes participating in the proceedings were several members of the board. On January 22, 1987, the board made and submitted its written findings of fact, conclusions of law, and recommendation that the licenses at issue be revoked. See Ill. Rev. Stat. 1985, ch. 111, par. 2674(d).
The board’s factual findings were that:
Letourneau had been a Florida resident since at least 1980 and, while holding the licenses at issue, had falsely reported to the Department since 1980 that he was an Illinois resident.
Letourneau and the company had practiced as a detective and detective agency from October 1977 to October 13, 1983, and from January 4, 1984, to January 7, 1985, without a license and without registering employees.
Letourneau and the company had since at least 1980 allowed Ernest Rizzo to practice as a detective without a license or supervision.
Letourneau and the company had practiced as a security contractor and security contractor agency from January 4, 1984, to January 7, 1985, without registering employees.
The board’s legal conclusion was that Letourneau had violated the sections of the present Act and of the 1933 Act that he and the company were charged with violating.
Letourneau filed a motion for rehearing, but the director denied it. Adopting the board’s findings of fact, conclusions of law, and recommendation, he then ordered that licenses at issue be revoked.
On April 28, 1987, Letourneau filed his complaint for administrative review in the circuit court of Cook County, seeking to have the director’s revocation orders vacated. After briefing and argument, the court entered an order on August 10, 1988, reversing the department’s revocation decision.
The trial judge stated that he was reversing the revocation orders because the findings of fact were without substantial foundation in the evidence. Specifically, the judge found that there was no evidence to support the director’s finding that Letourneau had been a Florida resident since 1980 and that there was evidence that Letourneau had been an Illinois resident at the times in question. The judge also found that there was no evidence to support the director’s finding that Letourneau had allowed Rizzo to practice as an unlicensed private detective and that the department’s evidence in general was not strong enough to support the result of revocation. At a hearing on defendants’ motion for reconsideration, the judge again stated that there was insufficient evidence to support the director’s findings of fact and conclusions of law. Accordingly, he denied the motion for reconsideration, and this appeal followed. This opinion will refer to matters of evidence as required for discussion of the issues.
II. Analysis
A. Standard for Reviewing Findings of Fact
In reviewing the factual determinations made by the director, this court is limited to ascertaining whether his decision accorded with the manifest weight of the evidence and was supported by substantial evidence. Massa v. Department of Registration & Education (1987), 116 Ill. 2d 376, 385, 507 N.E.2d 814, 818; Bruce v. Department of Registration & Education (1963), 26 Ill. 2d 612, 622, 187 N.E.2d 711, 717; Irving’s Pharmacy v. Department of Registration & Education (1979), 75 Ill. App. 3d 652, 658, 394 N.E.2d 627, 632.
The findings and conclusions of an administrative agency regarding questions of fact are to be considered prima facie true and correct. (Ill. Rev. Stat. 1989, ch. 110, par. 3-110; Murdy v. Edgar (1984), 103 Ill. 2d 384, 391, 469 N.E.2d 1085, 1088.) However, this does not mean that a court should automatically approve an agency decision merely because the agency heard witnesses and made findings. Viera v. Illinois Racing Board (1978), 65 Ill. App. 3d 94, 99, 382 N.E.2d 462, 466.
B. Letourneau’s Residency
Defendants appear to regard Letourneau’s residency as being relevant for two reasons, either of which might support disciplinary action.
First, as the sole individual to whom the company’s agency licenses were issued, Letourneau (or some person employed by him) was required to be in charge of agency operations as a full-time, individually licensed Illinois resident, and failure to comply would violate the law. (See Ill. Rev. Stat. 1985, ch. 111, pars. 2664(d), (f); Ill. Rev. Stat. 1983, ch. 111, par. 2621.) Letourneau employed no such person; the question is whether Letourneau himself met the requirement. Second, Letourneau was required to avoid fraud or material deception in connection with licensure and to report his correct address and practice location to the department (Ill. Rev. Stat. 1985, ch. 111, pars. 2671(a), 2672(a)(1); Ill. Rev. Stat. 1983, ch. 111, pars. 2616, 2628(a)); according to defendants, failure to report a Florida residence would violate the law. However, though the department’s briefs discuss such residency questions at length, its formal charges never clearly specified violation of either of these residency-related requirements. The only formal charge that even arguably might be read as pertaining to one or both of them was the charge that Rizzo had unlawfully practiced as a detective for the company.
Despite any deficiencies in the formal charges, one of the director’s findings of fact was that Letourneau had been a Florida resident who falsely reported Illinois residency—thereby presumably violating the requirements that he report his correct address and avoid fraud or material deception (see Ill. Rev. Stat. 1985, ch. 111, pars. 2671(a), 2672(a)(1)). And one of the director’s conclusions of law was that Letourneau had permitted his license to be used by an unlicensed person in order to operate without Letourneau’s supervision or control (see Ill. Rev. Stat. 1985, ch. 111, par. 2672(a)(15))—which comes close to saying that Letourneau violated the requirement that he keep a full-time, Illinois-licensed individual who resides in Illinois in charge of his agencies (see Ill. Rev. Stat. 1985, ch. 111, pars. 2664(d), (f)).
The implication of defendants’ treatment of the residency question is that Letourneau’s nonresidency, failure to report a correct address, failure to keep a full-time licensed resident in charge, and facilitation of Rizzo’s unlicensed practice are actually all of a piece in common sense, and all unlawful under one statutory section or another. For the additional reason that plaintiffs make no issue of any incongruity in formal charges, findings of fact, and conclusions of law, Letourneau’s alleged nonresidency is treated in this opinion as if it had been duly framed as a violation from the outset.
Defendants point to testimony by Letourneau’s business partner and two alleged former employees (who testified under grants of immunity) that they never saw Letourneau in Illinois during the period in question. Defendants also point to evidence that departmental investigators were never able to find Letourneau at his Illinois addresses, that the company maintained a Florida office, and that Florida had issued detective licenses to an Arthur Letourneau. From this, defendants argue that they were entitled to use their expertise regarding normal conduct of a licensee in order to infer that Letourneau was not an Illinois resident.
Though Ernest Rizzo (whom, according to the formal charges, Letourneau had helped to engage in unlicensed practice) testified that he had known Letourneau for 20 years and that Letourneau was an Illinois resident, defendants argue that they were entitled to judge Rizzo’s credibility adversely because of his failure to explain adequately a number of past actions and statements suggestive of unlicensed practice. In addition, defendants point to the testimony of one witness, a longtime Letourneau acquaintance, that he had dined with Letourneau in Florida in 1983 and that Letourneau, in the witness’ words, had then “indicated” that he was a Florida resident.
Documentary evidence in the form of mail and utility bills shows Illinois addresses for Letourneau, but defendants argue that the addresses were actually Rizzo’s. As a fact from which an adverse inference can be drawn, defendants point to Letourneau’s refusal to answer questions at the administrative hearing on grounds of potential self-incrimination after the Department’s counsel had referred to the possibility of criminal charges. Accordingly, defendants contend that the finding of Letourneau’s nonresidency in Illinois was not against the manifest weight of the evidence.
In reply, besides referring to evidence already noted, plaintiffs point to other evidence that Letourneau was an Illinois resident. The department’s investigator testified that he saw a license on the wall at an address previously stated by Letourneau to be his own. The department’s investigators testified that mailboxes bearing Letourneau’s name and containing mail addressed to him existed at addresses given by Letourneau. Responses in Letourneau’s name were received by the department, after it had sent mail to Letourneau at his Illinois address, though defendants contend that the responses either did not bear Letourneau’s personal signature at all or bore discrepant personal signatures. Letourneau also appeared before Illinois notaries public. In the circuit court, the trial judge referred to the need for “facts established by evidence,…evidence that is understood in law as being evidence.” He continued:
This is not a case which turns on the weight of the evidence or the credibility of the witnesses, quite frankly.
This is a case which must be reversed I believe because the findings are without substantial foundation in the evidence. A case by the state cannot be made from inferences, from presumptions, or from suspicions, or from indirect evidence. They have to be made by evidence that’s credible, and sufficiently strong to warrant the result that is reached. There is no strong evidence here to support the result of revocation of Letourneau’s license.
After referring to the department’s grant of immunity to its witnesses, the trial judge remarked:
The only basis for the conclusion that Mr. Letourneau resides in Florida is that one witness had dinner with Mr. Letourneau once in Florida in 1983 I believe, and yet the charge is that he lived there since 1980. That same witness said I hadn’t seen him around, and I had dinner with him in ‘83. The fact that that witness had not seen Letourneau in Illinois does not mean that Letourneau resided in Florida during all of that hiatus.
The trial judge acknowledged the evidence of Florida detective licenses in the name of an Arthur Letourneau but stated:
I am not sure that this Mr. Letourneau is the only Arthur Leto[ur]neau in the USA, and there was no attempt to demonstrate the Arthur Letourneau in Florida is the Arthur Letourneau that we are talking about here in Illinois.
So there clearly is no evidence to support the finding…that Letourneau has lived in Florida since 1980.
The judge then referred to evidence that Letourneau had received mail in his Illinois mailbox, was paying utility bills in Illinois, had registered his automobile in Illinois, and had responded to department notices mailed to Illinois. The judge also cited Rizzo’s testimony that Letourneau lived in Illinois:
Clearly the department is free to ignore Mr. Rizzo’s testimony, but I find it incredible that they would ignore that testimony and accept testimony from someone who said he had dinner with Mr. Letourneau in Florida and give greater weight to the latter while giving no weight to the former.
Defendants were entitled to draw reasonable inferences from the evidence. (Raymond Concrete Pile Co. v. Industrial Comm’n (1967), 37 Ill. 2d 512, 517, 229 N.E.2d 673, 676.) In an administrative proceeding, defendants could also, in conjunction with other evidence, draw an inference adverse to Letourneau from his refusal to testify on grounds of potential self-incrimination. (Giampa v. Illinois Civil Service Comm’n (1980), 89 Ill. App. 3d 606, 613-14, 411 N.E.2d 1110, 1116.) If the issue is merely one of conflicting testimony and a witness’ credibility, the administrative agency’s determination should be sustained. (Keen v. Police Board (1979), 73 Ill. App. 3d 65, 70-71, 391 N.E.2d 190, 195.) An administrative agency may properly base its decision on circumstantial evidence. Ritenour v. Police Board (1977), 53 Ill. App. 3d 877, 882-83, 369 N.E.2d 135, 139.
In finding “no” evidence of Letourneau’s nonresidency, the trial judge overlooked testimony that, in what may have been admissions against interest (see Cox v. Daley (1981), 93 Ill. App. 3d 593, 596-97, 417 N.E.2d 745, 748), Letourneau had said in about 1979 that he planned to move to Florida and had “indicated” in 1983 that he was now a Florida resident. In any event, the department presented what it contends was circumstantial evidence of Letourneau’s Florida residency: the Florida licenses, inability to find him in Illinois, accumulation of several weeks’ worth of mail in a mailbox, identity between Letourneau’s claimed Illinois addresses and Rizzo’s addresses, irregularities in Letourneau’s purported signature on answers to mail sent to him at Illinois addresses, and the adverse inference from Letourneau’s refusal to testify on the question of his residency.
Although the trial judge erred in concluding that there was no evidence that Letourneau had lived in Florida since 1980, the question remains whether the evidence offered by the department sufficiently supported the director’s decision so that the decision can be said not to have been against the manifest weight of the evidence.
Defendants have not cited and we have not found any requirement that one must be a Florida resident in order to be licensed as a detective in that state, so the mere fact of Florida licensure would carry relatively little weight even if plaintiff were shown to have been the Florida licensee.
The Act did not expressly require the person in charge of a private detective agency always to remain within Illinois; all it required was that the person in charge be a resident of this State and be a “full-time Illinois licensed private detective.” (See Ill. Rev. Stat. 1985, ch. 111, par. 2664(d).) Assuming that Letourneau did spend some time in Florida, such a fact is not substantial evidence that he thereby gave up Illinois residency, that while he was in Florida his Illinois agency operations actively continued without him, or that he was thereby prevented from being as much a “full-time Illinois licensed” individual as any other licensee who took vacations or went on trips out of state. The fact that departmental investigators failed to find Letourneau but found his mail in the mailbox is evidence that he was absent; it falls short of being substantial evidence that he was nonresident.
Assuming that any connection between Rizzo and Letourneau was lawful, a coincidence between Letourneau’s Illinois addresses and Rizzo’s is of little probative value. Any relationship between Letourneau and Rizzo in the nature of business association, friendship, or employment (unless of a type prohibited by the Act) is substantial evidence neither of Letourneau’s nonresidency nor of his facilitation of unlicensed practice by Rizzo.
Letourneau would ordinarily have had a right to appoint someone his agent for signing documents; thus, purported irregularities in his signature are not substantial evidence of nonresidency. Because Letourneau’s refusal to testify can lead to an adverse inference only in conjunction with other evidence (Giampa, 89 Ill. App. 3d 606, 411 N.E.2d 1110), the lack of other substantial evidence impairs the probative value of his refusal. And, given the other evidentiary shortcomings, a naked assertion of departmental expertise in judging licensees’ conduct amounts to ipse dixit.
If the department had produced substantial evidence on the residency issue and it were simply a matter of weighing that evidence against Letourneau’s or of judging the credibility of witnesses, the presumption of correctness in the director’s findings would prevail over mere disagreements by plaintiffs or even by this court. However, as did the circuit court, we believe that no substantial evidence supported the director’s finding of Letourneau’s Florida residency and false statements of Illinois residency.
Still, the matter does not end here. The parties agree that the most serious charge against Letourneau was that he permitted the use of his agency certificates by Rizzo in order for Rizzo to engage in unlicensed practice. Thus, we must address the sufficiency of the director’s findings on that issue.
C. Rizzo’s Activities
Defendants point to considerable evidence as proving that Letourneau permitted Rizzo to use Letourneau’s licenses and thus to operate without being licensed himself.
Repeated coincidences were demonstrated between Rizzo’s address and those of Letourneau and the company. Letourneau, accompanied by Rizzo, had once attempted to obtain an agency certificate in the name of Ernest D. Rizzo, Ltd. In addition, Rizzo had contacted the department in behalf of Letourneau to discuss an agency name change and what kind of work Rizzo (whose license had been revoked) could now permissibly do for the company. Insurance procured by Letourneau was carried in Rizzo’s name until corrected after departmental rejection. Checks payable to Rizzo had been deposited to the company’s account. Rizzo signed purchase papers as owner of cars purchased by the company.
Raymond Rocke, testifying under a grant of immunity, said he had performed security work for the company under Rizzo as “boss.” Though Rizzo testified that the witness was working without authority and was discharged by Letourneau, the testimony was impeached by Letourneau’s certification to the department that the witness had been an employee after the “discharge.” Rizzo also attempted to explain such matters as his deposition testimony that he was employed by the company, a magazine account of investigations he supposedly was conducting as a company subcontractor without being licensed, and a telephone directory advertisement for the company that carried Rizzo’s name. Defendants argue that the credibility of Rizzo’s explanations was simply judged adversely.
In addition, Letourneau refused to answer questions about Ed Rossi, whom he had listed as an employee and whose name the department contended was an alias for Rizzo. Rizzo matched the age and physical description of Rossi, and his social security number was a slightly transposed version of Rossi’s. Rizzo acknowledged having used the name Ed Ross.
But plaintiffs respond that no witness, not even Rocke, testified to personal knowledge that since 1980 Rizzo had actually engaged in activities legally constituting practice as a private detective. One witness testified to Rizzo’s having told him that Rizzo planned to be an employee but not a principal of a company to be formed by Letourneau. Rizzo himself denied having practiced as a detective in Illinois since 1978 or 1979.
Defendants contend that, despite Rizzo’s denial of practicing as a detective, he admitted that he had investigated Rocke, ascertained the address and business of another person, conducted electronic sweeps to discover surveillance devices, and conducted “investigations for pay” on cases for Letourneau’s attorney. However, these contentions by defendants lack force, because none of the described activity, unless it is part of a paid investigation, legally constituted practice as a private detective—except possibly, of course, for the very conduct of “investigations for pay.” (See Ill. Rev. Stat. 1985, ch. 111, par. 2652(h).) As for the latter conduct, the most to which Rizzo’s testimony admitted was serving a subpoena and checking for wiretaps at the attorney’s request, apparently for pay in both cases. Neither serving a subpoena nor checking for a wiretap, even for pay, was itself necessarily practice as a private detective; it would only have been so if part of a paid investigation made to obtain information regarding several subjects specified by statute. (See Ill. Rev. Stat. 1985, ch. 111, par. 2652(h).) There was no testimony that Rizzo’s admitted activity was part of any such statutorily specified investigation, much less that it was performed by use of Letourneau’s licenses.
The director was entitled to judge the credibility of witnesses and to draw inferences from the evidence. However, the evidence offered to prove Rizzo’s unlicensed practice did not constitute the substantial evidence required by law on what was admittedly the most serious charge against Letourneau. Thus, the circuit court correctly rejected the director’s finding that Letourneau had permitted Rizzo to practice without a license by using Letourneau’s licenses.
D. Other Disputed Factual Points
Defendants extensively discuss their contention that the director’s findings regarding practice on inactive licenses and regarding nonregistration of employees should not have been reversed by the circuit court. Plaintiffs reply at length. Yet, the circuit court never “reversed” the Director’s findings on these issues.
The circuit court’s order as drafted by plaintiffs’ counsel did read that “the Court, having found no evidence to support the findings entered by the Department, orders that the Decision of the Department revoking the licenses of Arthur Letourneau be and is hereby reversed.” (Emphasis added.) However, the transcript reveals that the court focused entirely on the lack of substantial evidence for the findings on residency and on allowing Rizzo’s unlicensed practice. Because of that lack, the court declared that “the decision by the department therefore is arbitrary and constitutes an abuse of the department’s discretion. For all of these reasons the decision is reversed.”
It is evident that the circuit court based reversal on the residency and Rizzo issues and on no other. We need not consider the director’s findings and conclusions on other issues if his reversible findings on the residency and Rizzo issues were so central as to render his revocation decision an abuse of discretion.
E. License Revocation
An agency’s exercise of discretion may be set aside if it was arbitrary or unreasonable or clearly violated the rule of law. (Commonwealth Edison Co. v. Illinois Commerce Comm’n (1988), 180 Ill. App. 3d 899, 907, 536 N.E.2d 724, 729.) The courts will not reweigh the evidence but will determine whether the final administrative decision just and reasonable in light of the evidence presented. Davern v. Civil Service Comm’n (1970), 47 Ill. 2d 469, 471, 269 N.E.2d 713, 714; Sircher v. Police Board (1978), 65 Ill. App. 3d 19, 20-21, 382 N.E.2d 325, 327.
The applicable rule, as phrased by many authorities, is that courts may not interfere with an administrative agency’s discretionary authority unless it is exercised arbitrarily or capriciously or unless the administrative decision is against the manifest weight of the evidence. (E.g., Massa v. Department of Registration & Education (1987), 116 Ill. 2d 376, 388, 507 N.E.2d 814, 819; Murdy v. Edgar (1984), 103 Ill. 2d 384, 391, 469 N.E.2d 1085, 1088; People ex rel. Stephens v. Collins (1966), 35 Ill. 2d 499, 501, 221 N.E.2d 254, 255.) In terms of that formulation of the rule, it has been said that, when determining whether an administrative decision is contrary to the manifest weight of the evidence, a court should consider the severity of the sanction imposed. Cartwright v. Illinois Civil Service Comm’n (1980), 80 Ill. App. 3d 787, 793, 400 N.E.2d 581, 586; Kelsey-Hayes Co. v. Howlett (1978), 64 Ill. App. 3d 14, 17, 380 N.E.2d 999, 1002. Contra Epstein v. Civil Service Comm’n (1977), 47 Ill. App. 3d 81, 84, 361 N.E.2d 782, 785.
An alternative formulation of the rule is that, when judging whether an agency sanction is arbitrary or unreasonable, manifest weight of the evidence is not the applicable standard of review, because the reasonableness of the sanction, not the correctness of the agency’s findings or reasoning, is the issue. E.g., Brown v. Civil Service Comm’n (1985), 133 Ill. App. 3d 35, 39, 478 N.E.2d 541, 544.
In any event, however, courts will not hesitate to grant relief from an adverse agency decision if that decision is not supported in the record by sufficient evidence. (Basketfield v. Police Board (1974), 56 Ill. 2d 351, 359, 307 N.E.2d 371, 375; Feliciano v. Illinois Racing Board (1982), 110 Ill. App. 3d 997, 1003, 443 N.E.2d 261, 266.) Thus, a court may reverse an order for imposing an unwarranted sanction. See Feliciano, 110 Ill. App. 3d at 1005, 443 N.E.2d at 267; Cartwright, 80 Ill. App. 3d at 793-94, 400 N.E.2d at 586.
On the questions of Letourneau’s residency and Rizzo’s activities, which clearly were the most important to the department and the director, the director’s findings were unsupported by substantial evidence. We believe that the director’s decision to revoke plaintiffs’ licenses, based as it was primarily on such unsupported findings, represented an arbitrary and unwarranted sanction.
Accordingly, we affirm the judgment of the circuit court, which reversed the director’s revocation of plaintiffs’ licenses.
AFFIRMED.CERDA, P. J., AND RIZZI, J., CONCUR.
Stephanie P. Austin V. Paramount Parks, Inc.
195 F.3d 715 (4th Cir. 1999)
Before WIDENER and TRAXLER, Circuit Judges, and BUTZNER, Senior Circuit Judge.
Judge Traxler wrote the opinion, in which Judge Widener and Senior Judge Butzner joined.
Paramount Parks, Inc. (“Paramount”) operates an amusement park in Hanover County, Virginia known as “Paramount’s Kings Dominion” (“Kings Dominion” or “the park”). While visiting Kings Dominion in May 1994, Stephanie P. Austin (“Austin”) was positively identified by two of Kings Dominion’s employees as a woman who had passed a bad check at the park less than one week earlier. After questioning Austin for several hours, a special police officer of the Kings Dominion Park Police Department caused a warrant to be issued for Austin’s arrest on a charge of grand larceny. The same officer thereafter caused a second warrant to be issued, this time for Austin’s arrest on charges of forgery and uttering a forged writing. The Commonwealth’s Attorney’s Office, with the assistance of the arresting officer, actively prepared the case against Austin over the next nine months. The charges were dismissed before trial, however, once the Commonwealth’s Attorney’s Office realized that one of the employees who had identified Austin as having passed the bad check in question had later identified another park guest in connection with the same offense.
Austin subsequently brought this civil action against Paramount, asserting a variety of claims arising from her arrests and prosecution on the preceding charges. At trial, the jury returned general verdicts for Austin on her claim under 42 U.S.C.A. § 1983 (West Supp. 1998) and on several claims under Virginia law, and awarded her compensatory and punitive damages. The district court ultimately entered judgment in favor of Austin, denied Paramount’s motion for judgment as a matter of law, and awarded Austin attorney’s fees and expenses under 42 U.S.C.A. § 1988 (West Supp. 1998) upon finding her to be a prevailing party on the § 1983 claim. This appeal followed.
We conclude that Paramount was entitled to judgment as a matter of law on Austin’s § 1983 claim because Austin failed to establish that any deprivation of her federal rights was caused by an official policy or custom of Paramount. We further conclude that Virginia law compels judgment as a matter of law in favor of Paramount on Austin’s state-law claims because Virginia law shields a private employer from liability when a special police officer takes an action in compliance with a public duty to enforce the law. Accordingly, we reverse the denial of Paramount’s motion for judgment as a matter of law, vacate the judgment in favor of Austin, vacate the award of attorney’s fees and expenses, and remand with instructions that judgment as a matter of law be entered in favor of Paramount.
I.
The Loss Prevention Department at Kings Dominion (“Loss Prevention”) is responsible for providing safety to park guests and employees, preserving park assets, and enforcing Virginia law and park rules and regulations. The security operations group of Loss Prevention consists of special police officers associated with the Kings Dominion Park Police Department, and seasonal uniformed security officers. Unlike the uniformed security officers, the special police officers are sworn conservators of the peace who are authorized to carry firearms, make arrests, and perform the same functions that law enforcement officers in the Commonwealth of Virginia perform. The special police officers derive this authority from an appointment order issued annually, on Paramount’s application, by the judges of the Circuit Court of Hanover County under Va. Code Ann. § 19.2-13 (Michie Supp. 1999).
The Sheriff of Hanover County had supervisory authority over the special police officers of the Park Police Department that was expressly acknowledged in both the Circuit Court’s appointment order and the Park Police Department’s Policy and Procedure Manual (“Manual”) in force at the time of the events in question. Specifically, the appointment order provided that the special police officers “work only under the control and direction of the Sheriff of Hanover County.” This directive was reiterated in the Manual, which provided that the Park Police Department “has direct affiliation with the Hanover County Sheriff’s Department and is under the direction of the Sheriff of Hanover County.” The Manual further provided: The Chain of Command and authority for all Kings Dominion Park Police shall be as follows involving official law enforcement:
b. Lieutenant of Kings Dominion Park Police
c. Kings Dominion Park Police Sergeant
d. Kings Dominion Park Police Corporal
Although the Park Police Department fell under Loss Prevention in the organizational structure at Kings Dominion, the testimony at trial established that the special police officers performed their law enforcement duties without interference from park management. Chancellor L. Hester (“Hester”), who served as Manager of Loss Prevention at the time of the events in question, provided uncontradicted testimony that his role in matters of law enforcement was limited to ensuring that guests suspected of committing crimes at the park were treated courteously and professionally. As to decisions pertaining to law enforcement, however, Hester testified that he “let the police officers do the work,” knowing that those officers received assistance and direction from the Hanover County Sheriff’s Department and the Commonwealth’s Attorney’s Office. The annual training that the special police officers received reflected this division. Hester provided instruction on interpersonal skills, while the Sheriff’s Department and the Commonwealth’s Attorney’s Office taught law enforcement classes on such topics as the laws of arrest, the conducting of interviews, self-defense, and searches and seizures.
The principal events giving rise to the present litigation occurred at Kings Dominion on May 15, 1994, when a guest arrived at the park’s Season Pass office and submitted a check for $360 under the name of “Donita Morgan.” Japata Taylor (“Taylor”), a park cashier, accepted the check and proceeded to retrieve $360 worth of Kings Dominion currency, known as “Scooby dollars,” which guests use to purchase merchandise for sale within the park. Meanwhile, a guest at the next window submitted a check under the name of “Catherine May” to Joshua Stone (“Stone”), another park cashier. Because the Season Pass office did not have enough Scooby dollars to cash the two checks, Taylor and Stone contacted their supervisor, Deborah Samuel (“Samuel”). Samuel then had a chance to observe “Donita Morgan” and “Catherine May” after obtaining a sufficient amount of Scooby dollars from the park’s Cash Control office.
Several days later, Loss Prevention learned that both the “Donita Morgan” check accepted by Taylor and the “Catherine May” check accepted by Stone were fraudulent. In fact, numerous fraudulent checks under these and other names had been passed at Kings Dominion during the May 14-15 weekend. Loss Prevention suspected that a group of individuals were operating an illegal check-cashing scheme at the park using fraudulent identification cards and fraudulent checks, and provided the park’s cashiers with a memorandum listing various names under which bad checks had already been passed, including “Catherine May.” The cashiers were directed to immediately inform Loss Prevention should a guest submit a check under a listed name.
Sergeant Cindy Gatewood (“Gatewood”) of the Park Police Department supervised the investigation into the apparent check-cashing scheme. On the morning of Saturday, May 21, 1994, six days after Taylor and Stone had accepted the “Donita Morgan” check and the “Catherine May” check, respectively, Gatewood obtained verbal descriptions of the suspects from Samuel, Taylor, and Stone. According to Gatewood’s testimony at trial, Samuel described “Donita Morgan” as a “middle-aged black woman with twisted hair.” Taylor described the suspect as “a black female, five foot five, five foot six, average build, twisted hair braids, sunglasses.” After obtaining verbal statements, Gatewood asked each of the three employees to prepare written statements. In her written statement, Taylor described “Donita Morgan” as a woman who had braided hair and wore Chanel sunglasses. Samuel, in her written statement, described her as “a middle-aged black woman with glasses, long twisted braids, and a lot of children.”
Austin, an African American woman who at the time was a twenty-three-year-old student at the University of Maryland, was among the more than 20,000 guests of Kings Dominion on Saturday, May 21. That evening, Taylor saw Austin in the park and identified her as the “Donita Morgan” suspect from the previous weekend. Taylor alerted Loss Prevention accordingly. Officer Michael Drummer (“Drummer”) of the Park Police Department subsequently approached Austin and escorted her to the Loss Prevention office. After being contacted at home and apprised of the situation, Gatewood arranged for Investigator Robert Schwartz (“Schwartz”) of the Hanover County Sheriff’s Department to meet her at the Loss Prevention office. In the interim, Samuel went to the Loss Prevention office and, like Taylor, identified Austin as the “Donita Morgan” suspect from the previous weekend.
After arriving at the Loss Prevention office, Schwartz advised Austin of her Miranda rights. He and Gatewood then informed Austin that two employees had positively identified her as having passed a fraudulent “Donita Morgan” check at the Season Pass office on May 15, 1994, and questioned Austin for several hours as to her whereabouts on that date. According to Gatewood’s testimony at trial, Austin stated that she was at a banquet at the University of Maryland on May 15, 1994, but Austin refused to provide any information which would allow that statement to be verified. Consistent with his role as Manager of Loss Prevention, Hester occasionally appeared for several minutes to observe the questioning. Hester testified at trial that his purpose in doing so “was to make sure that our folks were handling their duties properly, that the police were in the process of moving this situation forward, and that the people involved in it were being handled professionally and properly.”
Based primarily upon the accounts of Taylor and Samuel, whom Gatewood described at trial as “more than a hundred percent sure that Miss Austin was the one who had written a check to them,” Gatewood decided to arrest Austin. Before doing so, however, Gatewood contacted Seward M. McGhee (“McGhee”) of the Commonwealth’s Attorney’s Office, who advised Gatewood that Austin could be charged only with grand larceny until the bank had processed and returned the bad “Donita Morgan” check at issue. Schwartz thereafter transported Austin to the Hanover County Magistrate’s office, where Gatewood caused a warrant to be issued for Austin’s arrest on a charge of grand larceny in violation of Va. Code Ann. § 18.2-95 (Michie Supp. 1999).
On the following day, Sunday, May 22, 1994, a significant development occurred with respect to the investigation into the check cashing scheme at Kings Dominion. Specifically, a guest named Annette Williams arrived at the Season Pass office and submitted a check under the name of “Catherine May.” The park cashier who accepted the check recognized “Catherine May” from the memorandum distributed in connection with the scheme and immediately contacted Loss Prevention. Simultaneously, a guest named Tonya Williams submitted a check at the Season Pass office under the name of “Demetry Gordon.”
Gatewood subsequently arrived at the Season Pass office in response to the cashier’s call. When Gatewood asked Annette Williams to come to the Loss Prevention office, Tonya Williams became visibly agitated. Gatewood described the situation at trial in the following manner: “a friend of [Annette Williams] got very verbal and upset and said she didn’t understand why I was taking her friend away, so I invited her to come to the office with me.” During this encounter, Samuel saw Tonya Williams, an African-American woman who had braided hair, and identified her as the woman who had submitted the “Donita Morgan” check to Taylor one week earlier.
Gatewood subsequently brought Annette Williams and Tonya Williams to the Loss Prevention office for questioning. During the questioning, the women maintained their respective false identities as Catherine May and Demetry Gordon. Later that day, after Annette Williams and Tonya Williams had left the park, Gatewood discovered their actual identities when a guest named Gladys Ann Williams was brought to the Loss Prevention office after submitting a fraudulent check at the Season Pass office under the name of “Michelle Lockhart.” In a detailed confession, Gladys Ann Williams confirmed the existence of a check-cashing scheme, provided the names and aliases of the other participants in the scheme, and provided information concerning the source from whom they had obtained fraudulent identification cards and fraudulent checks.
That evening, Samuel alerted Hester at Loss Prevention that she had recognized Tonya Williams as the woman who had submitted the “Donita Morgan” check to Taylor on May 15, 1994. Hester’s unrefuted testimony indicates that he personally informed Gatewood of this development later that evening. Samuel’s observation, along with written statements filed by other park employees, led Gatewood and Hester to conclude that Tonya Williams was one of several women who had passed bad checks at the park under the name of “Donita Morgan.” When asked at trial whether she specifically informed McGhee that Samuel had identified Tonya Williams as “Donita Morgan,” Gatewood responded that “I’m not sure if I told him those exact words, but he was advised that there was more than one Donita Morgan.” Ultimately, Gatewood testified, McGhee advised her that “there’s more than one person, you have your witnesses, and we’re going to go forward with the case, if there’s a scheme, and bust the scheme.”
Gatewood thereafter caused a warrant to be issued for Austin’s arrest on charges of forgery and uttering a forged writing in violation of Va. Code Ann. § 18.2-172 (Michie 1996). According to Gatewood’s uncontradicted testimony at trial, she did so only after consulting McGhee once the “Donita Morgan” checks from May 15, 1994, had been processed by the bank and returned to Kings Dominion. Specifically, Gatewood testified that McGhee “told me when the checks came in, I was to give him a call. I did, and he advised me to go get the warrants.” Gatewood subsequently informed Hester that she spoke to McGhee and that she intended to bring additional charges against Austin. In this regard, Hester testified at trial that Gatewood “indicated to me somewhere in that period of time, I don’t remember the exact date or anything, that [McGhee] and she had had a conversation, and the charges were being amended, yes, sir, I was aware of that.” Gatewood did not serve Austin with the second arrest warrant until July 14, 1994, when Austin returned to the Hanover County Magistrate’s Office for a preliminary hearing on the charge of grand larceny. Austin was not further detained and was allowed to remain out on her original bond.
In January 1995, a Hanover County general district court conducted a preliminary hearing on the charges pending against Austin. Based primarily upon Gatewood’s testimony, the court found probable cause to certify the charges for trial. In so doing, the court indicated that it would have dismissed the charges had Austin presented any evidence supporting her alibi: “if I would have had any evidence at all that there was a banquet on May the 15th and if, in fact, [Austin] could have come in here and presented that [she] attended a banquet on May the 15th, then there would be no question in my mind.” Although a Hanover County grand jury subsequently indicted Austin on the charges, the matter did not proceed to trial. Rather, in April 1995, McGhee had the charges dismissed. McGhee did so apparently upon learning that Samuel, only one day after identifying Austin as having passed the “Donita Morgan” check to Taylor on May 15, 1994, identified Tonya Williams in connection with the same offense.
II.
Austin initiated the present litigation by filing a civil action in Maryland state court, naming Paramount as the only defendant. Following Paramount’s removal of the action to the district court, Austin filed an eight-count second amended complaint, counts one through five of which contained claims arising under Virginia law for false arrest, false imprisonment, malicious prosecution, assault and battery, and negligence, respectively. Counts six through eight, on the other hand, contained claims arising under federal law. With respect to her § 1983 claim asserted in count six, Austin alleged primarily that she suffered a deprivation of her federal constitutional rights as a result of Paramount’s policy of causing individuals suspected of passing bad checks at Kings Dominion to be detained, arrested, and prosecuted, even without probable cause, to deter other park guests from engaging in such conduct. Austin also alleged that Paramount failed to exercise due care in the hiring, retention, training, and supervision of employees who participated in the investigation, detention, and arrest of individuals suspected of passing bad checks at Kings Dominion, and that such failure manifested a conscious disregard for Austin’s rights. These latter allegations essentially reiterated the allegations supporting Austin’s state-law negligence claim asserted in count five.
B.
Paramount next maintains that it was entitled to judgment as a matter of law on Austin’s § 1983 claim either because Paramount was not a state actor or because Austin failed to establish that an official policy or custom of Paramount caused a deprivation of her federal rights. We review de novo a district court’s denial of a Rule 50(b) motion for judgment as a matter of law, viewing the evidence in the light most favorable to the prevailing party and drawing all reasonable inferences in her favor. See Konkel v. Bob Evans Farms Inc., 165 F.3d 275, 279 (4th Cir.), cert. denied, 145 L. Ed. 2d 155, 1999 U.S. LEXIS 5882, 120 S. Ct. 184 (U.S. 1999).
Section 1983 provides in relevant part as follows:
Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State…subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.
42 U.S.C.A. § 1983. To prevail against Paramount on her § 1983 claim, Austin had the burden to establish that she was “deprived of a right secured by the Constitution or laws of the United States, and that the alleged deprivation was committed under color of state law.” American Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 119 S. Ct. 977, 985, 143 L. Ed. 2d 130 (1999). Paramount does not dispute that Austin’s rights under the Fourth and Fourteenth Amendments were violated when Gatewood effected the July 14, 1994 arrest without probable cause. However, Paramount does dispute that it was a state actor for purposes of § 1983 merely because it employed Gatewood as a special police officer.
The question of whether Paramount was a state actor is a thorny one, but one which we need not decide here because Austin’s clear failure to show that an official policy or custom of Paramount was the moving force behind Austin’s July 14, 1994 arrest negates the necessity of addressing the issue. For purposes of our review we will assume, without holding, that Paramount was a state actor and proceed to consider Paramount’s challenge to Austin’s assertion that Paramount had an official policy or custom justifying the imposition of liability under § 1983.
Our analysis begins with general principles of municipal liability. In Monell v. Department of Soc. Servs., 436 U.S. 658, 56 L. Ed. 2d 611, 98 S. Ct. 2018 (1978), the Supreme Court held that municipalities and other local governmental bodies constitute “persons” within the meaning of § 1983, see id. at 688-89. The Court, however, has consistently refused to impose § 1983 liability upon a municipality under a theory of respondeat superior. See Board of the County Comm’rs v. Brown, 520 U.S. 397, 403, 137 L. Ed. 2d 626, 117 S. Ct. 1382 (1997). Rather, under Monell and its progeny, a municipality is subject to § 1983 liability only when “it causes such a deprivation through an official policy or custom.” Carter v. Morris, 164 F.3d 215, 218 (4th Cir. 1999) (emphasis added). We have determined that “municipal policy may be found in written ordinances and regulations, in certain affirmative decisions of individual policy-making officials, or in certain omissions on the part of policy-making officials that manifest deliberate indifference to the rights of citizens.” Id. (internal citations omitted). Municipal custom, on the other hand, may arise when a particular practice “is so persistent and widespread and so permanent and well settled as to constitute a custom or usage with the force of law.” Id. (internal quotation marks omitted).
We have recognized, as has the Second Circuit, that the principles of § 1983 municipal liability articulated in Monell and its progeny apply equally to a private corporation that employs special police officers. Specifically, a private corporation is not liable under § 1983 for torts committed by special police officers when such liability is predicated solely upon a theory of respondeat superior. See Powell v. Shopco Laurel Co., 678 F.2d 504 (4th Cir. 1982); Rojas v. Alexander’s Dep’t Store, Inc., 924 F.2d 406 (2d Cir. 1990); see also Sanders v. Sears, Roebuck & Co