Opinion ID: 3009962
Heading Depth: 2
Heading Rank: 1

Heading: Is Enterprise a State Actor?

Text: Although a private [party] may cause a deprivation of . . . a right, [it] may be subjected to liability under § 1983 only when [it] does so under color of law. Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 156, 98 S.Ct. 1729, 1733 (1978). The Supreme Court has clarified that [i]n cases under § 1983, 'under color' of law has consistently been treated as the same thing as the 'state action' required under the Fourteenth Amendment. United States v. Price, 383 U.S. 787, 794 n.7, 86 S.Ct. 1152, 1157 n.7 (1966) (quoted in Lugar v. Edmondson Oil Co., 457 U.S. 922, 928, 102 S.Ct. 2744, 2749 (1982) [hereinafter Lugar]), and Rendell-Baker v. Kohn, 457 U.S. 830, 838, 102 S.Ct. 2764, 2769-70 (1982). The state action principle is stated succinctly as follows: [A]t base, 'constitutional standards are invoked only when it can be said that the [government] is responsible for the specific conduct of which the plaintiff complains.' Edmonson v. Leesville Concrete Co., 500 U.S. 614, 632, 111 S.Ct. 2077, 2089 (1991) [hereinafter Edmonson] (O'Connor, J. dissenting) (quoting Blum v. Yaretsky, 457 U.S. 991, 1004, 102 S.Ct. 2777, 2785-86 (1982)) (alterations in original). Put differently, deciding whether there has been state action requires an inquiry into whether there is a sufficiently close nexus between the State and the challenged action of [Enterprise] so that the action of the latter may be fairly treated as that of the State itself. Blum v. Yaretsky, 457 U.S. at 1004, 102 S.Ct. at 2786 (internal citation omitted). The Supreme Court in varying circumstances appears to utilize three discrete tests to determine whether there has been state action. See Haavistola v. Community Fire Co. of Rising Sun, 6 F.3d 211, 215 (4th Cir. 1993). The first inquiry asks whether the private entity has exercised powers that are traditionally the exclusive prerogative of the state. Blum v. Yaretsky, 457 U.S. at 1004-05, 102 S.Ct. at 2786 (emphasis added) (internal citation omitted). Years ago, the Court applied this test somewhat liberally, holding, for example, that a town owned by a private company performs a public function and therefore is a state actor, see Marsh v. Alabama, 326 U.S. 501, 507, 66 S.Ct. 276, 279 (1946), and that a private organization conducting preprimary elections for the purpose of sending its candidates to the primary election, engaged in an exclusive public function. Terry v. Adams, 345 U.S. 461, 73 S.Ct. 809 (1953). See also Evans v. Newton, 382 U.S. 296, 86 S.Ct. 486 (1966) (public park could not be operated with racial restriction even when trustees had no connection to city government). However, the Court came increasingly to emphasize the exclusivity aspect of the test, and rarely found that plaintiffs had met that rigorous standard. Thus, in Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S.Ct. 449 (1974), the Court held that a private utility company, extensively regulated by the state, and apparently holding at least a partial monopoly in its territory, did not act under color of state law, in part because the state where the utility was engaged in business had rejected the contention that the furnishing of utility services is either a state function or a municipal duty. Id. at 353, 95 S.Ct. at 454. Similarly, in Rendell-Baker v. Kohn, the Court held that a private entity engaged in the education of maladjusted high school students did not perform an exclusively public function because [the state's] legislative policy choice [to fund the private school] in no way makes these services the exclusive province of the State. 457 U.S. at 842, 102 S.Ct. at 2772; see also Black v. Indiana Area Sch. Dist., 985 F.2d 707, 710-11 (3d Cir. 1993) (private contractor providing state school bus program at state expense not performing exclusive state function). In sum, the exclusive public function test rarely could be satisfied. The second discrete inquiry asks whether the private party has acted with the help of or in concert with state officials. McKeesport Hospital v. Accreditation Council for Graduate Medical Ed., 24 F.3d 519, 524 (3d Cir. 1994). Thus, in Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598 (1970), the Court held that a conspiracy between a private party and a state official to engage in unlawful discrimination constituted action 'under color' of law for purposes of the statute. Id. at 152, 90 S.Ct. at 1606. Similarly, in Lugar a private party's prejudgment attachment of another party's property, pursuant to a state statute, constituted state action under section 1983. Lugar, 457 U.S. at 941-42, 102 S.Ct. at 2756. Finally, the third scenario involves situations in which [t]he State has so far insinuated itself into a position of interdependence with . . . [the acting party] that it must be recognized as a joint participant in the challenged activity. Krynicky v. University of Pittsburgh, 742 F.2d 94, 98 (3d Cir. 1984) (quoting Burton v. Wilmington Parking Auth., 365 U.S. 715, 725, 81 S.Ct. 856, 862 (1961)), cert. denied, 471 U.S. 1015, 105 S.Ct. 2018 (1985) (alterations in original). Burton was a classic application of this symbiotic relationship test. There, the Court deemed a private restaurant's discriminatory act state action because the restaurant was located in a building owned by the Wilmington Parking Authority, an agency of the state. Because of the arrangement between the Parking Authority and the restaurant, under which the State of Delaware benefitted financially from its lessee's business, the Court held that Delaware could be responsible for the restaurant's discriminatory acts. Burton, 365 U.S. at 725, 81 S.Ct. at 862. Following the reasoning in Burton, we have held that actions taken by the University of Pittsburgh and Temple University constitute state action because the universities receive present financial support [and] the state has committed itself to future financial aid and sets an annual appropriation policy and tuition rate. Krynicky, 742 F.2d at 102.6 In Edmonson, the Supreme Court clarified the Lugar joint participation test and enunciated an approach that applies to this case. In cases such as this, courts must ask first whether the claimed constitutional deprivation resulted from the 6 . The Supreme Court, interpreting the symbiotic relationship test, has commented that while 'a multitude of relationships might appear to some to fall within the Amendment's embrace,' differences in facts beget differences in law, limiting the actual holding [of] Burton to lessees of public property. Jackson, 419 U.S. at 358, 95 S.Ct. at 457 (citation omitted). At least one court has held that this language limited the symbiotic relationship analysis. Haavistola, 6 F.3d at 215. We, however, have held that the Burton test remains a viable framework for assessing state actor status. See Krynicky v. University of Pittsburgh, 742 F.2d at 100-01; McKeesport Hospital ACGME, 24 F.3d at 526 n.1 (Becker, J., concurring in judgment). exercise of a right or privilege having its source in state authority; and second, whether the private party charged with the deprivation could be described in all fairness as a state actor. Edmonson, 500 U.S. at 620, 111 S.Ct. at 2082-83 (emphasis added) (internal citations omitted). In describing the second prong of the test, the Court explained as follows: Our precedents establish that, in determining whether a particular action or course of conduct is governmental in character, it is relevant to examine the following: the extent to which the actor relies on governmental assistance and benefits, see Tulsa Professional Collection Services, Inc. v. Pope, 485 U.S. 478, 108 S.Ct. 1340 (1988); Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856 (1961); whether the actor is performing a traditional governmental function, see Terry v. Adams, 345 U.S. 461, 73 S.Ct. 809 (1953); Marsh v. Alabama, 326 U.S. 501, 66 S.Ct. 276 (1946); cf. San Francisco Arts & Athletics, Inc. v. United States Olympic Committee, 483 U.S. 522, 544-45, 107 S.Ct. 2971, 2985-86 (1987); and whether the injury caused is aggravated in a unique way by the incidents of governmental authority, see Shelley v. Kraemer, 334 U.S. 1, 68 S.Ct. 836 (1948). Edmonson, 500 U.S. at 621-22, 111 S.Ct. at 2083.7 Edmonson itself involved the question of whether peremptory challenges removing jurors in civil cases constituted 7 . Edmonson inquires into whether the practice involved a traditional public function rather than an exclusive governmental function. While, as Justice O'Connor pointed out in her dissenting opinion, the majority might have altered the traditional public function test as a discrete test, the Edmonson majority can be read to say that in conducting the joint participation discrete test, whether the private actor performed a traditional public function is one factor to consider. But see