Opinion ID: 1246465
Heading Depth: 1
Heading Rank: 5

Heading: Performance of a Traditionally Exclusively Governmental Function

Text: State action of Due Process Clause magnitude is also present where a private person is performing traditionally exclusively governmental functions. As with imprimatur state action, traditionally the exclusive prerogative of the State, state action is best understood through its application in specific cases. In Jackson, supra, pp 352-353, the Pennsylvania Public Utility Commission case, the United States Supreme Court held that the public utility did not exercise a state power which was traditionally exclusively a governmental function. If we were dealing with the exercise by Metropolitan of some power delegated to it by the State which is traditionally associated with sovereignty, such as eminent domain, our case would be quite a different one. But while the Pennsylvania statute imposes an obligation to furnish service on regulated utilities, it imposes no such obligation on the State. The Pennsylvania courts have rejected the contention that the furnishing of utility services is either a state function or a municipal duty.    Perhaps in recognition of the fact that the supplying of utility service is not traditionally the exclusive prerogative of the State, petitioner invites the expansion of the doctrine of this limited line of cases into a broad principle that all businesses `affected with the public interest' are state actors in all their actions. We decline the invitation. Since the provision of utility service is not a state governmental function, it cannot be either traditional or exclusive as required for state action under the Due Process Clause. In Flagg Bros, supra, pp 158-163, the bailor-warehouse sale case, the United States Supreme Court again held that there was no violation of the Due Process Clause because there was no state action. Specifically, the Supreme Court refused to hold that the private resolution of disputes was a traditionally exclusively governmental function. It noted that while many functions have been traditionally performed by governments, very few have been `exclusively reserved to the State'. While the Supreme Court recognized that Flagg Brothers acted pursuant to a state statute which detailed a course of action, the Court held that the statutory system of rights and remedies, recognizing the traditional place of private arrangements in ordering relationships in the commercial world, can hardly be said to have delegated to Flagg Brothers an exclusive prerogative of the sovereign. The Supreme Court obviously was not impressed with the argument that the rights were created by state statute, so it held that our sovereign-function cases do not support a finding of state action here. Here, the United States Supreme Court placed emphasis on the exclusive nature of the challenged action. Finally, in Blum, supra, p 1011, the nursing-home care case, the United States Supreme Court refused to find that the nursing homes performed functions which were traditionally and exclusively governmental functions. Respondents' argument in this regard is premised on their assertion that both the Medicaid statute and the New York Constitution make the State responsible for providing every Medicaid patient with nursing home services. The state constitutional provisions cited by respondents, however, do no more than authorize the legislature to provide funds for the care of the needy.    They do not mandate the provision of any particular care, much less long-term nursing care. Similarly, the Medicaid statute requires that the States provide funding for skilled nursing services as a condition to the receipt of federal monies.    It does not require that the States provide the services themselves. Therefore, to find state action based upon a private party exercising sovereign powers, the powers exercised must be both traditionally and exclusively the power of government. As noted in Flagg Bros, while many functions have been traditionally performed by governments, very few have been `exclusively reserved to the State'. Flagg Bros, supra, p 158. The challenged action must satisfy both requirements to constitute state action of Due Process Clause magnitude. 3. Interdependent Symbiotic Relationship Finally, the state action/private action nexus is formed where the state and the private entities have a mutually dependent or symbiotic relationship. The Supreme Court created this basis for finding state action in Burton v Wilmington Parking Authority, 365 US 715; 81 S Ct 856; 6 L Ed 2d 45 (1961). The Court has applied the test, but has not found that it was met in three other cases: Moose Lodge No 107 v Irvis, 407 US 163; 92 S Ct 1965; 32 L Ed 2d 627 (1972), Jackson, supra, and Blum, supra . In Burton, the state parking authority built a parking facility which included commercial shop space which private parties could rent from the parking authority. One of the parking authority's lessees ran a restaurant which served only white persons. After noting that the parking authority relied very heavily on the shop rental funds to pay for the facility and that the parking authority could have prohibited the discrimination by lease provision, the Supreme Court stated: By its inaction, the Authority, and through it the State, has not only made itself a party to the refusal of service, but has elected to place its power, property and prestige behind the admitted discrimination. The State has so far insinuated itself into a position of interdependence with Eagle [the restaurant] that it must be recognized as a joint participant in the challenged activity, which, on that account, cannot be considered to have been so `purely private' as to fall without the scope of the Fourteenth Amendment. Burton, supra, p 725. In the more than 20 years since Burton, the Supreme Court has not found another symbiotic relationship constituting state action. In Moose Lodge, supra, the Court discussed whether a symbiotic relationship existed where the state liquor commission gave a liquor license to a racially discriminatory club. It decided that there was no state action since there is nothing approaching the symbiotic relationship between lessor and lessee that was present in Burton. Moose Lodge, supra, p 175. The Supreme Court in Jackson, supra, also reviewed the symbiotic relationship test and applied it to the regulation of a public utility. As in Moose Lodge, the Court found absent in the instant case the symbiotic relationship presented in Burton. Jackson, supra, p 357. In Blum, supra, pp 1010-1011, the Court reviewed the nursing home case for any symbiotic relationship between the state and the nursing home. Finally, respondents advance the rather vague generalization that such a relationship exists between the State and the nursing homes it regulates that the State may be considered a joint participant in the homes' discharge and transfer of Medicaid patients.    Respondents argue that State subsidization of the operating and capital costs of the facilities, payment of the medical expenses of more than 90% of the patients in the facilities, and the licensing of the facilities by the State, taken together convert the action of the homes into `state' action. But accepting all of these assertions as true, we are nonetheless unable to agree that the State is responsible for the decisions challenged by respondents. As we have previously held, privately owned enterprises providing services that the State would not necessarily provide, even though they are extensively regulated, do not fall within the ambit of Burton. The symbiotic-relationship basis for attributing private action to the state is therefore the most limited of the three bases. The Supreme Court has not found it present in any recent case.