Regulation Alone Does Not Make a Private Utility a State Actor: Limits on Constitutional, Tax, and Privacy Claims

1. Introduction

This appeal concerns the limits of converting disputes with a privately owned utility into federal constitutional and statutory litigation. Michael Hickson, representing himself, sued PECO Energy Company and numerous corporate, nonprofit, and governmental defendants over events occurring between February and May 2022. He sought damages, injunctive relief, and declaratory relief.

The defendants included PECO and related private entities, nonprofit organizations, an investment fund, and an individual defendant; the Pennsylvania Public Utility Commission and state officials; and Philadelphia’s mayor and successor. The opinion refers to these parties collectively as the Private, Commonwealth, and City Defendants.

The principal questions were whether PECO’s regulation and monopoly status made it a state actor, whether claims against government defendants were timely, whether Hickson could privately enforce the tax and privacy provisions he invoked, and whether the District Court properly dismissed the action without further amendment. The Third Circuit concluded that none of Hickson’s appellate arguments presented a substantial question.

2. Procedural Background and Summary of the Decision

Hickson filed his complaint in June 2025. The defendants moved to dismiss in three groups. Their arguments included lack of state action, untimeliness, sovereign immunity, lack of personal involvement, and deficiencies in the asserted constitutional claims.

The District Court dismissed most federal claims with prejudice and declined supplemental jurisdiction over the state-law claims. It initially dismissed Count VI, concerning privacy rights and unauthorized use of personal information, without prejudice and allowed fourteen days to amend. Hickson instead sought reconsideration. His motion identified the federal privacy statutes on which he relied, allowing the District Court to conclude that those statutes could not support his claim against PECO. It therefore dismissed Count VI with prejudice as well.

The Third Circuit exercised appellate jurisdiction under 28 U.S.C. § 1291. Applying Third Circuit L.A.R. 27.4 and I.O.P. 10.6, it granted the Private Appellees’ motion for summary affirmance and affirmed the entire judgment.

3. Legal Analysis and Precedents Cited

A. Review Standards and the Treatment of Self-Represented Pleadings

Fowler v. UPMC Shadyside, 578 F.3d 203, 206 (3d Cir. 2009), supplied the standard of review for dismissal under Rule 12(b)(6): review is de novo. The appellate court independently assessed whether the complaint stated a legally sufficient claim rather than deferring to the District Court’s legal conclusions.

Higgins v. Beyer, 293 F.3d 683, 688 (3d Cir. 2002), required liberal construction of Hickson’s pro se pleadings. That principle informed the court’s consideration of his broadly worded constitutional, tax, and privacy allegations. Liberal construction, however, cannot supply a missing statutory cause of action, eliminate a limitations bar, or replace facts necessary to establish state action.

B. Regulation Does Not, Without More, Establish State Action

The constitutional portions of Counts I, II, and VII could proceed against these defendants only through § 1983. Under West v. Atkins, 487 U.S. 42, 49 (1988), that route required Hickson to allege that the challenged conduct occurred under color of state law.

Hickson argued that PECO’s status as a regulated, tariff-approved utility monopoly satisfied the requirement through a nexus or entwinement theory. The court rejected that argument under Jackson v. Metro. Edison Co., 419 U.S. 345, 358 (1974). That precedent establishes that extensive regulation of a privately owned utility does not, by itself, transform the utility into a state actor.

The decisive pleading deficiency was that Hickson alleged nothing more connecting the private defendants’ challenged conduct to the state. Regulation and tariff approval described the environment in which PECO operated; they did not adequately establish that its conduct was attributable to government.

This holding is limited. The court did not declare that a private utility can never engage in state action. It held that the particular allegations—relying on regulation, tariff approval, and monopoly status—were insufficient. Nor did the court decide whether the asserted utility conduct would violate the Constitution if state action had been established.

C. The Two-Year Limitations Period Independently Defeated the Governmental Claims

Under Kach v. Hose, 589 F.3d 626, 634 (3d Cir. 2009), § 1983 claims arising in Pennsylvania are subject to the two-year limitations period drawn from 42 Pa. Cons. Stat. § 5524(2). Hickson’s allegations concerned events between February and May 2022, but he did not sue until June 2025.

Wisniewski v. Fisher, 857 F.3d 152, 157 (3d Cir. 2017), supported dismissal because the limitations defect appeared on the face of the complaint. Although limitations ordinarily operates as a defense, a court need not await further proceedings when the pleaded dates themselves establish untimeliness and no sufficient basis for avoiding the bar is shown.

The Commonwealth and City Defendants had not themselves raised timeliness. The court nevertheless emphasized that the Private Defendants had raised it concerning the same 2022 events, giving Hickson notice and an extended opportunity to respond. This explanation matters: the disposition does not endorse rejecting claims on an unannounced limitations ground without a fair opportunity to address it.

Continuing violation, discovery, and concealment

Hickson attempted to characterize the Commonwealth Defendants’ alleged failure to regulate PECO as an ongoing violation. Relying on Cowell v. Palmer Twp., 263 F.3d 286, 293 (3d Cir. 2001), the court distinguished affirmative continuing acts from “continual ill effects from an original violation.” Continuing consequences of the 2022 events did not supply a new, timely constitutional violation.

Montanez v. Sec’y Pa. Dep’t of Corr., 773 F.3d 472, 480 (3d Cir. 2014), supplied the accrual principle: the claims arose when Hickson knew or should have known of his injury. On the allegations, that occurred no later than the events he described in 2022. His discovery-rule argument therefore did not postpone accrual.

The court also rejected his fraudulent-concealment theory as a basis for preserving claims against government defendants. That theory concerned when his claims against PECO arose; it did not establish a reason to toll the separate claims against the Commonwealth and City Defendants.

D. Personal Involvement and Municipal Responsibility Were Additional Defects

The court identified independent deficiencies in the governmental claims. Under Rode v. Dellarciprete, 845 F.2d 1195, 1207 (3d Cir. 1988), an individual defendant must have personal involvement in the alleged wrong. The complaint alleged no such involvement by any individual Commonwealth or City Defendant. Holding public office, without the necessary connection to the alleged conduct, did not suffice.

Kentucky v. Graham, 473 U.S. 159, 165–66 (1985), established that official-capacity claims against the mayors were, in substance, claims against the city. That characterization brought Monell v. Dep’t of Soc. Servs., 436 U.S. 658, 694 (1978), into play: municipal liability under § 1983 requires a constitutional injury caused by the municipality’s own policy or custom.

Hickson alleged only that the City Defendants “provided or approved public funding and support to PECO.” The court found no identified municipal policy or custom causing a constitutional violation. Thus, even apart from timeliness, the allegations did not establish either individual responsibility or a sufficient basis for municipal liability.

E. Sovereign-Immunity Authorities Did Not Cure Untimeliness

Hickson relied on Ex parte Young, 209 U.S. 123 (1908), and Hafer v. Melo, 502 U.S. 21 (1991). These authorities address different routes for suing state officials: prospective relief against officials for ongoing violations of federal law, and individual-capacity liability under § 1983.

The court did not undertake an extended immunity analysis because the Commonwealth claims were untimely. An argument showing that sovereign immunity does not necessarily bar a particular suit does not establish that the suit was filed within the governing limitations period. The opinion therefore should not be read as comprehensively deciding the availability of either route on different allegations.

F. Alleged Tax Violations Did Not Establish a Private Enforcement Claim

Counts III and V asserted violations of nonprofit tax-exempt status and obligations concerning unrelated business income. Even construing those claims liberally, the court found no identified private right of action allowing Hickson to enforce those requirements.

The court cited United States v. LaSalle Nat. Bank, 437 U.S. 298, 308 (1978), for the allocation of Internal Revenue Code enforcement to the Secretary of the Treasury and the Commissioner of Internal Revenue. That allocation supported the conclusion that an allegation of another entity’s tax noncompliance did not itself authorize Hickson’s federal lawsuit.

The distinction is between an asserted violation and a legally authorized private remedy. The opinion did not determine that the defendants had complied with all tax obligations, nor did it hold that every provision of the Internal Revenue Code lacks a private remedy. It rejected the particular enforcement claims Hickson asserted.

G. The Identified Privacy Statutes Could Not Support Count VI

Hickson’s reconsideration motion clarified that his privacy claim relied on the Privacy Act and the Gramm-Leach-Bliley Act. Each statute failed for a different reason.

• Privacy Act: Under 5 U.S.C. § 552a(a)(1) and (g)(1), the relevant statutory obligations and civil remedy concern federal agencies. PECO did not fall within that category.
• Gramm-Leach-Bliley Act: The statute provides no private right of action. The court cited Dunmire v. Morgan Stanley DW, Inc., 475 F.3d 956, 960 (8th Cir. 2007), for that proposition.

These were legal defects, not merely failures to provide more factual detail. The court did not need to decide whether the alleged information use occurred or whether PECO otherwise fell within the Gramm-Leach-Bliley Act’s regulatory coverage. Nor did it decide whether some unasserted privacy theory might be available under another law.

H. The State-Law Claims Did Not Remain in Federal Court

After dismissing the federal claims, the District Court declined supplemental jurisdiction over the contract component of Count I and the corporate-malfeasance claim in Count IV. It also noted that diversity jurisdiction was absent because Hickson and many defendants were Pennsylvania citizens.

Borough of W. Mifflin v. Lancaster, 45 F.3d 780, 788 (3d Cir. 1995), supplies the governing approach: when all federal claims disappear before trial, the court should ordinarily decline supplemental jurisdiction unless judicial economy, convenience, and fairness affirmatively justify retaining it. Hickson identified no such justification.

The appellate court reviewed that determination for abuse of discretion and found none. Importantly, declining supplemental jurisdiction is not a merits determination that the state-law claims are substantively invalid. Any effort to pursue them elsewhere would remain subject to applicable procedural requirements and defenses.

I. Reconsideration, Opportunity to Respond, and Futility

Max’s Seafood Café ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 673 (3d Cir. 1999), supplied the abuse-of-discretion standard for reviewing the denial of reconsideration. Hickson argued that the District Court violated due process by deciding the dismissal motions before he responded. The record showed that the court had extended his response deadline and ruled only after that deadline passed.

The court also relied on Stackhouse v. Mazurkiewicz, 951 F.2d 29, 30 (3d Cir. 1991). The District Court had not simply granted the motions as unopposed; it evaluated their merits. On reconsideration, it also reviewed Hickson’s late-filed responses and concluded that they did not justify relief. These circumstances defeated his procedural objection.

Finally, United States ex rel. Schumann v. AstraZeneca Pharm. LP, 769 F.3d 837, 849 (3d Cir. 2014), supported denying further amendment as futile. The court affirmed dismissal of the federal claims with prejudice because amendment would not cure the defects identified on this record. Its treatment of Count VI was particularly significant: the initial opportunity to amend was followed by clarification of the proposed statutory theories, which demonstrated why further amendment under those theories would not help.

4. The Court’s Reasoning in Context

The opinion’s central method was to separate distinct legal prerequisites rather than treat Hickson’s grievances as a single constitutional controversy. Each category of claim failed at its own threshold:

1. Constitutional claims against private entities: Government regulation did not establish governmental responsibility for the challenged conduct.
2. Constitutional claims against public defendants: The claims were late, with additional deficiencies concerning personal involvement and municipal policy.
3. Tax and privacy claims: The statutes invoked did not authorize the particular private suit or did not cover the defendant.
4. State-law claims: No sufficient basis remained for their adjudication in federal court.
5. Procedural objections: Hickson received an opportunity to respond, a merits determination, and consideration of his later submissions.

This approach also defines what the court did not decide. It did not adjudicate the underlying utility dispute on its merits, establish that any defendant committed tax misconduct, resolve the substantive Seventh Amendment theory, or comprehensively determine sovereign immunity. The City Defendants’ argument about the Seventh Amendment’s applicability to municipalities was presented below but was not the appellate court’s basis for affirmance.

5. Potential Impact

Because the decision is nonprecedential, its significance lies in illustrating established rules rather than creating binding circuit law.

• Utility litigation: Plaintiffs must plead facts connecting the challenged private conduct to the state; regulation, monopoly status, and tariff approval alone are insufficient.
• Civil-rights pleading: Naming regulators or elected officials does not replace allegations of personal involvement or a causative municipal policy.
• Limitations disputes: Continuing harm is not necessarily a continuing violation, and a concealment theory must actually support tolling the claims at issue.
• Statutory enforcement: A regulatory obligation does not automatically create a private lawsuit. Plaintiffs must identify both an applicable statute and an authorized remedy.
• Case management: Courts may resolve facial legal defects without further amendment when amendment would be futile, while still giving self-represented litigants meaningful procedural consideration.

Future cases remain fact-sensitive. More substantial allegations of governmental participation, different dates or tolling facts, or a statute providing an applicable private remedy could require a different analysis.

6. Complex Concepts Simplified

State action / acting under color of state law

A connection making challenged conduct legally attributable to government. Government supervision of a private business does not automatically establish that connection.

Private right of action

Legal authority for an individual to bring a lawsuit under a statute. A law can impose duties without allowing private individuals to enforce them in court.

Accrual and tolling

Accrual determines when the filing clock starts. Tolling can suspend or extend that clock when a recognized legal basis exists.

Continuing violation

Actionable conduct continuing into the limitations period, rather than merely lasting consequences of an earlier act.

Individual-capacity and official-capacity claims

An individual-capacity claim seeks to impose personal liability on an official. An official-capacity claim generally operates as a claim against the governmental entity represented.

Supplemental jurisdiction

A federal court’s authority to hear related state-law claims alongside federal claims. Retaining those claims is not automatic after the federal claims are dismissed.

Dismissal with prejudice and futility

Dismissal with prejudice prevents reassertion of the dismissed claim in an amended complaint in that action. Amendment is futile when proposed changes would not cure the legal deficiency.

Summary affirmance

An expedited appellate decision affirming the lower court because the appeal presents no substantial question. It is not summary judgment or a trial of disputed facts.

7. Conclusion

Michael Hickson v. PECO Energy Co reinforces several established limits on federal litigation: regulation alone does not make a private utility a state actor; civil-rights claims must be timely and connected to responsible defendants; and statutory obligations do not necessarily carry private enforcement rights.

The opinion creates no new binding precedent. Its broader value is its clear separation of constitutional attribution, timeliness, statutory remedies, and federal jurisdiction—and its demonstration that liberal treatment of pro se pleadings does not eliminate those requirements.