Opinion ID: 6316805
Heading Depth: 3
Heading Rank: 1

Heading: Legal Standards for the Nexus Test

Text: Under the nexus test, a plaintiff must demonstrate “‘a sufficiently close nexus’ between the government and the challenged conduct such that the conduct ‘may be fairly treated as that of the State itself.’” Gallagher, 49 F.3d at 1448 (quoting Jackson v. Metro. Edison Co., 419 U.S. 345, 351 (1974)). In other words, the City is responsible for the Resort’s private decisions “only when it has exercised coercive power or has provided such significant encouragement, either overt or covert, that the choice must in law be deemed to be that of the [City].” Id. (quoting Blum v. Yaretsky, 457 U.S. 991, 1004 (1982)). “The test insures that the state will be held liable for constitutional violations only if it is responsible for the specific conduct of which the plaintiff complains.” Id. (citation omitted). In Gallagher, we reviewed a number of general principles regarding the nexus test derived from Supreme Court cases. Id. at 1448. For instance, we noted that “the existence of governmental regulations, standing alone, does not provide the required nexus.” Id. (citing Blum, 457 U.S. at 1004; Jackson, 419 U.S. at 350). We also noted that “the fact that a private entity contracts with the government or receives governmental funds or other kinds of governmental assistance does not automatically transform the conduct of that entity into state action.” Id. (citing Rendell-Baker v. Kohn, 457 U.S. 830, 840–42 (1982); S.F. Arts & Athletics, Inc. v. U.S. Olympic 11 Appellate Case: 20-1162 Document: 010110565027 Date Filed: 08/23/2021 Page: 12 Comm., 483 U.S. 522, 544 (1987)). Likewise, we explained that the “[m]ere approval of or acquiescence in the initiatives of a private party is not sufficient to justify holding the State responsible for those initiatives under the terms of the Fourteenth Amendment.” Id. (alteration in original) (quoting Rendell-Baker, 457 U.S. at 1004– 05); see also Am. Mfrs. Mut. Ins. v. Sullivan, 526 U.S. 40, 54 (1999) (“[P]ermission of a private choice cannot support a finding of state action.”). Similarly, we observed that a state’s subsidizing the operating costs of a private facility or having broad involvement in the administrative side of a private process is also insufficient to satisfy the test. Id.; see also Blum, 457 U.S. at 1011; Am. Mfrs. Mut. Ins., 526 U.S. at 54; S.F. Arts & Athletics, 483 U.S. at 544 (“The Government may subsidize private entities without assuming constitutional responsibility for their actions.”). In short, the following factors do not alone satisfy the nexus test: (1) state regulation of private functions, Blum, 457 U.S. at 1004; (2) state contracts with private entities, id.; (3) receipt of state funds or other types of assistance, RendellBaker, 457 U.S. at 840–42; (4) state approval of private decisions, Am. Mfrs. Mut. Ins., 526 U.S. at 54; (5) state subsidization of private costs, Blum, 457 U.S. at 1011; (6) private use of certain state procedures, Am. Mfrs. Mut. Ins., 526 U.S. at 54, and (7) broad involvement of state officials in the administration of private processes, id.; Blum, 457 U.S. at 1010. Though VDARE argues that “significant encouragement” short of coercion can sometimes satisfy the test, Appellant’s Opening Br. at 15–16, the dispositive question is always “whether the State has exercised coercive power or has provided such significant encouragement, either overt or covert, that the choice 12 Appellate Case: 20-1162 Document: 010110565027 Date Filed: 08/23/2021 Page: 13 must in law be deemed to be that of the State.” Am. Mfrs. Mut. Ins., 526 U.S. at 52 (emphases added) (citations and internal quotation marks omitted).