Court Opinion

ID: 3195510
Source: CourtListenerOpinion
Date Created: 2016-04-19 17:00:59.910312+00
Date Added: 2024-06-11T13:15:04.344746
License: Public Domain

FILED
                                                                    United States Court of Appeals
                                      PUBLISH                               Tenth Circuit

                      UNITED STATES COURT OF APPEALS                        April 19, 2016

                                                                         Elisabeth A. Shumaker
                             FOR THE TENTH CIRCUIT                           Clerk of Court
                         _________________________________

WASATCH EQUALITY, a Utah nonprofit
corporation; RICK ALDEN, an individual;
DREW HICKEN, an individual; BJORN
LEINES, an individual; RICHARD
VARGA, an individual,

      Plaintiffs - Appellants,

v.                                                         No. 14-4152

ALTA SKI LIFTS COMPANY, a Utah
corporation, d/b/a Alta Ski Area; UNITED
STATES FOREST SERVICE, an agency
of the United States Department of
Agriculture; DAVID WHITTEKIEND, in
his official capacity as Forest Service
Supervisor in the Wasatch-Cache National
Forest,

      Defendants - Appellees.
                      _________________________________

                     Appeal from the United States District Court
                               for the District of Utah
                            (D.C. No. 2:14-CV-00026-DB)
                       _________________________________

Jonathan R. Schofield, Parr Brown Gee & Loveless, Salt Lake City, Utah (Rachel L.
Wertheimer, and Michael S. Anderson, Parr Brown Gee & Loveless, Salt Lake City,
Utah, with him on the briefs), for Wasatch Equality, Rick Alden, Drew Hicken, Bjorn
Leines, Richard Varga, Plaintiffs-Appellants.

Frederick R. Thaler, Ray Quinney & Nebeker, P.C., Salt Lake City, Utah (Robert O. Rice
and Calvin R. Winder, Ray Quinney & Nebeker, P.C., Salt Lake City, Utah, with him on
the briefs), for Alta Ski Lifts Company, Defendant-Appellee.
Jared C. Bennett, Assistant United States Attorney, Salt Lake City, Utah (John W. Huber,
United States Attorney, Carlie Christensen, Assistant United States Attorney, Salt Lake
City, Utah, with him on the briefs), for United States Forest Service; David Whittekiend,
Defendants-Appellees.
                        _________________________________

Before HARTZ, PHILLIPS, and MORITZ, Circuit Judges.
                  _________________________________

MORITZ, Circuit Judge.
                    _________________________________

      Wasatch Equality and four snowboarders (collectively, Wasatch) brought suit

challenging a snowboard ban at Alta Ski Area in Utah. In its complaint, Wasatch

alleged the ban unconstitutionally discriminates against snowboarders and denies

them equal protection of the law in violation of the Fifth and Fourteenth

Amendments to the United States Constitution.

      Recognizing that private action won’t sustain a civil rights complaint, Wasatch

further alleged the ban constitutes “state action” because Alta operates its ski resort

on federal land via a permit issued by the United States Forest Service—a permit that

requires the Forest Service to annually review and approve Alta’s site management

plan. The district court disagreed, and dismissed this case for failure to identify a

state action. Because we agree Wasatch hasn’t plausibly established that the

snowboard ban constitutes state action, we affirm.

                                     BACKGROUND

      Alta Ski Lifts Company is a privately owned Utah corporation that operates

Alta Ski Area in the Wasatch-Cache National Forest near Salt Lake City. Alta Ski

Area covers 2130 acres and about 1800 of those acres are located on Forest Service

                                            2
land. Alta is one of 120 ski areas nationwide that operates on federal land via a Forest

Service Ski Area Term Special Use Permit. Under the terms of its permit, Alta pays

the Forest Service a usage fee each year, calculated as a percentage of Alta’s lift-

ticket sales and ski-school operations. For 2009-2012, the usage fee ranged from

$304,396 to $473,792. All told, Alta’s usage fee accounts for less than 0.1% of the

Forest Service’s annual budget.

      Under the terms of the permit, the Forest Service reviews and approves Alta’s

winter site operation plan each year. This site plan includes a hill management

section detailing Alta’s management decisions regarding its ski runs. In relevant part,

the hill management section grants Alta the right to exclude any skiing device from

its ski runs that it deems causes risk to the user of the device or other skiers, causes

undue damage to the quality of the snow, or is inconsistent with Alta’s business

management decisions. Under the authority of this section, Alta bans snowboarding

from its ski runs and markets itself as a skier-only mountain. It is one of three ski

resorts in the country that bans snowboarding, and the only one of the three operating

on federal land.

      Plaintiff Wasatch Equality is a Utah nonprofit corporation “formed for the

purpose of, among other things, promoting equality and harmony among skiers and

snowboarders, as well as promoting equal access and fair use of public lands by the

public, regardless of whether snowboarding or skiing.” Joint App. 14-15. Plaintiffs

Bjorn Leines—a professional snowboarder—and Rick Alden, Drew Hicken, and

Richard Varga—Utah residents—are all snowboarders who use neighboring resorts

                                            3
and who wish to snowboard at Alta. Wasatch brought suit challenging Alta’s

snowboard ban as violating the Equal Protection Clause of the Fourteenth

Amendment as applied to the federal government through the Fifth Amendment’s

Due Process Clause.

       According to Wasatch’s complaint, skiers and snowboarders have harbored

animosity and hostility towards each other since the snowboard’s introduction.

Wasatch further posits that Alta’s snowboarding ban resulted from Alta’s animus

towards snowboarders as a group and the ban isn’t supported by a rational basis. In

support, Wasatch points to Alta’s website and trail maps—both of which prominently

state that “Alta is a skiers’ mountain” and that “snowboarding is not allowed”—and

to signs in Alta’s ticket windows that declare in large, bold letters, “NO

SNOWBOARDS.” Joint App. 22-23. Wasatch’s complaint also quoted Gus Gilman,

Director of Alta Ski Patrol, as saying that Alta maintains its snowboard ban because

Alta “sort of [has] a customer base of people who prefer to ski where there’s no

snowboarding.” Id. at 24. And the complaint quoted Chic Morton, Alta’s General

Manager, as saying “anyone who uses the words rip, tear, or shred will never be

welcome at Alta,” and that “as long as [he was] alive snowboarders will never be

allowed at Alta.” Id. at 25.1

       1
        Wasatch’s complaint further alleged that Alta serves as a conduit for its
customers’ animus towards snowboarders. For example, the complaint alleged that
Alta skiers verbally assaulted Wasatch members on multiple occasions. The
complaint also quotes statements made by Alta skiers recorded in videos in which
they called snowboarders profane names and declared that snowboarders need to
“stay the hell off this mountain” and “get their own mountain.” Joint App. 27.
                                           4
      Based on the Forest Service’s annual approval of Alta’s winter site operation

plan and its receipt of an annual usage fee, the complaint attributed the snowboard

ban to the Forest Service. Because Alta has no rational basis for the ban, Wasatch

argued, the ban violates its equal protection rights. Wasatch thus sought a declaration

that Alta’s snowboard ban is unconstitutional and requested an injunction preventing

Alta from enforcing its anti-snowboard policy.

      Alta and the Forest Service separately moved to dismiss the case under Federal

Rule of Civil Procedure 12(b)(6) for failure to state a claim. In pertinent part, Alta

and the Forest Service argued the Equal Protection Clause didn’t apply to Wasatch’s

claims because the snowboard ban isn’t state action.

      In granting Alta’s and the Forest Service’s motions to dismiss, the district

court found that the Forest Service did nothing to influence Alta’s decision to ban

snowboards and the Forest Service’s receipt of a usage fee each year didn’t

sufficiently involve the government to otherwise attribute the ban to the government.

Wasatch appeals, arguing the district court erred by failing to accept as true the

allegations in the complaint and grant all reasonable inferences in favor of Wasatch,

which led to the court’s erroneous conclusion that no state action exists.

      For the reasons discussed below, we agree Wasatch’s complaint hasn’t

plausibly established state action, and we affirm the dismissal of this action.2

      2
         Because we conclude Wasatch’s Fourteenth Amendment claim fails in the
absence of state action, we decline to address its challenges to the district court’s
alternative basis for dismissal—that Alta has a rational basis for the snowboard ban
and that the Property Clause barred review of Wasatch’s Equal Protection claim.
                                            5
                                       DISCUSSION

       We “review de novo the grant of a Rule 12(b)(6) motion to dismiss for failure

to state a claim,” Gee v. Pacheco, 627 F.3d 1178, 1183 (10th Cir. 2010), and uphold

the district court’s dismissal if the complaint doesn’t “contain sufficient factual

matter, accepted as true, to ‘state a claim to relief that is plausible on its face,’”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550

U.S. 544, 570 (2007)). Although “the sufficiency of a complaint must rest on its

contents alone[,] [t]here are exceptions to this restriction on what the court can

consider, but they are quite limited: (1) documents that the complaint incorporates by

reference; (2) documents referred to in the complaint if the documents are central to

the plaintiff’s claim and the parties do not dispute the documents’ authenticity; and

(3) matters of which a court may take judicial notice.” Gee, 627 F.3d at 1186

(citations and internal quotation marks omitted).

       In reviewing the complaint, we “accept all facts pleaded by the non-moving

party as true and grant all reasonable inferences from the pleadings in favor of the

same,” Colony Ins. Co. v. Burke, 698 F.3d 1222, 1228 (10th Cir. 2012) (citation

omitted), but we don’t accept the nonmoving party’s legal conclusions as true. Iqbal,

556 U.S. at 678. “Threadbare recitals of the elements of a cause of action, supported

by mere conclusory statements, do not suffice.” Id.

       Applying these principles here leads us to ask whether Wasatch’s complaint

sufficiently pleaded facts that, if accepted as true, plausibly entitle it to relief under

the Equal Protection Clause of the Fourteenth Amendment. That clause provides that

                                             6
no state shall “deny to any person within its jurisdiction the equal protection of the

laws.” U.S. Const. amend. XIV, § 1.3 “That language establishes an ‘essential

dichotomy’ between governmental action, which is subject to scrutiny under the

Fourteenth Amendment, and private conduct, which ‘however discriminatory or

wrongful,’ is not subject to the Fourteenth Amendment’s prohibitions.” Gallagher v.

Neil Young Freedom Concert, 49 F.3d 1442, 1446 (10th Cir. 1995) (quoting Jackson

v. Metro. Edison Co., 419 U.S. 345, 349 (1974)).

       We evaluate whether challenged conduct constitutes state action using a

flexible approach. See id. at 1447. For example, in some instances this court has

applied a symbiotic-relationship test, asking “whether the state has ‘so far insinuated

itself into a position of interdependence’ with the private party that there is a

‘symbiotic relationship’ between them.” Id. (first quoting Burton v. Wilmington

Parking Auth., 365 U.S. 715, 725 (1961); and then quoting Moose Lodge No. 107 v.

Irvis, 407 U.S. 163, 175 (1972)). In others, this court has applied a nexus test, asking

“whether there is a sufficiently close nexus between the State and the challenged

action of the regulated entity so that the action of the latter may be fairly treated as

that of the State itself.” Id. (quoting Jackson, 419 U.S. at 351). In still other

instances, this court has applied a joint-action test, asking whether the “private party

       3
        Although the Fourteenth Amendment guarantees equal protection under state
laws, the Supreme Court has interpreted the Due Process Clause of the Fifth
Amendment to impose an identical requirement on the federal government. See
Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 217-18 (1995). As a federal
agency, the Forest Service is thus subject to the requirements of the Equal Protection
Clause as applied to the federal government through the Fifth Amendment’s Due
Process Clause. See id.
                                             7
is ‘a willful participant in joint activity with the State or its agents.’” Id. (quoting

Adickes v. S.H. Kress & Co., 398 U.S. 144, 152 (1970)). And finally, this court has

applied a public-function test, asking whether the private entity exercises “powers

traditionally exclusively reserved to the State.” Id. (quoting Jackson, 419 U.S. at

352). Regardless of the label, however, the underlying question for each test is

whether “‘the conduct allegedly causing the deprivation of a federal right’ must be

‘fairly attributable to the State.’” Id. (quoting Lugar v. Edmondson Oil Co., 457 U.S.

922, 937 (1982)).

       In an effort to establish state action, Wasatch’s complaint pleaded the

following facts: (1) the Forest Service owns 85% (1802.7 acres) of the land

comprising Alta’s ski area; (2) Alta operates under a Forest Service Ski Area Term

Special Use Permit; (3) the Forest Service annually reviews and approves Alta’s

winter site operation plan, under which Alta retains the right to exclude devices from

its ski runs; (4) the Forest Service approves Alta’s use of the land including signage,

ski routes, avalanche control, and general safety; (5) the Forest Service receives a fee

from Alta each year based on a percentage of revenues from lift-ticket sales and ski-

school operations; (6) Alta’s trail map includes both Alta and Forest Service logos

and says snowboarding is not allowed; and (7) Alta’s general manager publicly stated

Alta prohibits snowboards because, among other reasons, “the Forest Service says

it’s OK.” Joint App. 30.4

       4
        Wasatch’s complaint also asserts that snowboarders are “not welcome” by
the Forest Service and the Forest Service “approv[es] and enforce[s] . . . Alta’s anti-
                                             8
       In its opening brief, Wasatch characterizes the relationship between Alta and

the Forest Service as “complicated and entangled,” and it asserts that it has pleaded

facts sufficient to “establish state action under any applicable test.” Aplt. Br. 22, 27.

However, Wasatch devotes considerable discussion to the symbiotic-relationship test.

To establish state action under that test, Wasatch’s complaint must plausibly establish

that the Forest Service “‘has so far insinuated itself into a position of

interdependence’ with [Alta] that ‘it must be recognized as a joint participant in the

challenged activity.’” Gallagher, 49 F.3d at 1451 (quoting Burton, 365 U.S. at 725).

Wasatch asserts this relationship exists here, and relies heavily on the Supreme

Court’s holding in Burton and this court’s holding in Milo v. Cushing Municipal

Hospital, 861 F.2d 1194 (10th Cir. 1988), for support.

       In Burton, a restaurant leased commercial space in a parking facility owned by

the state parking authority and refused service to patrons based on their race. 365

U.S. at 720. A state statute created the parking authority to provide adequate parking

facilities in view of a parking crisis, and the Court found the parking authority

couldn’t have constructed the parking structure at issue but for the lease because

anticipated bond proceeds and parking revenues would be insufficient to cover the

cost of construction. Id. at 717-19. Because the restaurant was thus an “indispensable

snowboarder policy.” Joint App. 11-12. But we won’t give any weight to these
“‘naked assertion[s]’ devoid of ‘further factual enhancement.’” See Iqbal, 556 U.S. at
678 (alteration in original) (quoting Twombly, 550 U.S. at 557). Similarly, we don’t
accept as true for purposes of a Rule 12(b)(6) motion the complaint’s legal
conclusions that the Forest Service discriminates against snowboarders and the Forest
Service “has entered into a ‘joint enterprise’ and ‘symbiotic relationship’ with Alta.”
Joint App. 11, 21; see Iqbal, 556 U.S. at 678.
                                            9
part” of the parking authority achieving its purpose, and because “the peculiar

relationship of the restaurant to the parking facility in which it is located confers on

each an incidental variety of mutual benefits,” the Court attributed the restaurant’s

actions to the state. Id. at 723-24.

       Similarly, in Milo a city “substantially participated in the funding, creation,

and financial structure of [a] hospital” and then leased the hospital to a public trust

created under state law. 861 F.2d at 1195-96. The public trust in turn entered into an

operating agreement with a private corporation to manage the hospital, including the

handling of medical staff privilege and discipline matters. Id. at 1195. After the

hospital summarily suspended two physicians, the physicians brought suit against the

hospital and the private corporation asserting First and Fourteenth Amendment

violations. Id. Relying on Burton, this court concluded the hospital was a public

institution because “merely contracting [with the private entity] for day-to-day

management” didn’t insulate the state actors from liability, and thus the management

actions constituted state action for purposes of a 42 U.S.C. § 1983 claim. Id. at 1196-

97.

       Wasatch asserts the facts asserted in its complaint regarding the relationship

between Alta and the Forest Service are akin to the facts established in Burton and

Milo. Namely, Wasatch argues that “not only does the discrimination under long-

term lease of public property result in a significant amount of revenue for both Alta

and the Government, Defendants openly market that discrimination in an attempt to

increase revenue.” Aplt. Br. 29. Wasatch further argues that the Forest Service

                                           10
“depends on Alta to operate the resort on National Forest land for the public, as set

forth by the Government’s special-use permitting scheme,” and that without Alta’s

existence, “the Government would be forced to either assume or abandon the

operations or enter into an identical arrangement for another entity like Alta to

assume operations.” Aplt. Br. 30.

      But the facts alleged here are far different than those asserted in Burton or

Milo. Unlike the restaurant in Burton, Alta Ski Area is not “indispensable” to the

Forest Service’s purpose. The Forest Service, by virtue of the Alta permit, does

receive approximately $400,000 each year in fees, but this amounts to only 0.1% of

its annual budget.5 Indeed, Alta is only one of more than 120 ski resorts that operate

under a similar permit. See S. Rep. No. 112-55, at 2 (2011). Thus, the existence, or

non-existence, of one of these approximately 120 ski resorts isn’t indispensable to the

Forest Service’s purpose.

      Nor does Wasatch allege in its complaint that the Forest Service participated in

the funding, creation, and financial structure of the ski area and then simply

contracted the management responsibilities to a private corporation, as the public

trust did in Milo. See 861 F.2d at 1196-97. Rather, the facts of the complaint suggest

      5
        Wasatch takes issue with the district court relying on this figure (0.1% of the
total budget) because it wasn’t in the complaint. But the district court may rely on
“matters of which a court may take judicial notice.” Gee, 627 F.3d at 1186. The
complaint disclosed the annual fees paid by Alta, and by simply taking judicial notice
of publicly available budget information, the district court reasonably determined the
percentage of the Forest Service’s total budget that the permit fees comprise. See
Joint App. 404-05 (citing Pub. L. No. 112-10, §§ 1741-1747, which provides the
Forest Service budget for the fiscal year 2012). We find no error in the district court
taking judicial notice of this figure.
                                           11
the Forest Service merely leases federal land to Alta. The complaint thus fails to

establish state action under the symbiotic-relationship test.

      Wasatch also argues the snowboard ban meets the nexus test for state action.

Under that test, Wasatch’s complaint must plausibly “demonstrate that ‘there is 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 (emphasis added) (quoting Jackson, 419 U.S. at 351).

      Even after granting all reasonable inferences in Wasatch’s favor, the complaint

at best establishes that the Forest Service knows about the snowboard ban (through,

e.g., Alta’s signage and trail maps) and continues to approve its permit each year

notwithstanding the ban. Wasatch nonetheless argues this is enough involvement by

the Forest Service to constitute state action, because the snowboard ban “exists only

because the Government either approves or ignores it when reviewing and approving

each annual Plan, which must be prepared in consultation with the Government to

become part of the Permit.” Aplt. Br. 32.

      But the complaint doesn’t plausibly establish that the Forest Service “approves

or ignores” the ban itself as Wasatch seems to now argue, see Aplt. Br. 32, but rather

at best indicates that the Forest Service annually approves a winter site operation plan

that, in part, authorizes Alta “to exclude any type of skiing device that [it] deem[s]

creates an unnecessary risk to other skiers and/or the user of the device, or any device

[it] deem[s] causes undue damages to the quality of the snow, or is not consistent

with [its] business management decisions,” Joint App. 95. At most, the Forest

                                            12
Service approves Alta’s plan with knowledge that Alta excludes snowboards under

this provision, but the Forest Service doesn’t make Alta’s permit contingent upon a

snowboard ban or otherwise encourage a snowboard ban.

       And as Alta points out, general awareness of the ban is not sufficient to

establish state action. The Supreme Court has explained that “a State normally can be

held responsible for a private decision 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 State.” Blum v. Yaretsky, 457 U.S. 991, 1004

(1982). And “[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. at 1004-05. (emphasis added). Here, the

pleaded facts simply don’t demonstrate the Forest Service in any way encouraged the

snowboard ban or assisted in enforcing the ban. The complaint thus fails to establish

state action under the nexus test.

       Wasatch also asserts its complaint pleaded facts sufficient to show joint action

between Alta and the Forest Service. To satisfy the joint-action test, Wasatch’s

complaint must plausibly establish that Alta is a “willful participant in joint action

with the [Forest Service] or its agents.” Gallagher, 49 F.3d at 1453 (quoting Dennis

v. Sparks, 449 U.S. 24, 27 (1980)). For this inquiry, the focus “is not on long-term

interdependence between the [Forest Service] and [Alta]” but instead on whether the

Forest Service and Alta “have acted in concert in effecting a particular deprivation of

constitutional rights.” Id. But as with the nexus test, “the mere acquiescence of [the

                                            13
Forest Service] in the actions of [Alta] is not sufficient.” Id. (emphasis added). And

as discussed, Wasatch’s complaint at best establishes the Forest Service knows of the

ban and acquiesces in its continued application, and notably doesn’t establish that the

Forest Service and Alta “act[] in concert in effecting” the snowboard ban. See id. The

complaint thus fails to plausibly establish joint action between the Forest Service and

Alta.

        Finally, Wasatch argues its complaint plausibly establishes state action under

the public-function test. To satisfy that test, Wasatch’s complaint must plausibly

establish that the Forest Service delegated to Alta “a function ‘traditionally

exclusively reserved to the State.’” Gallagher, 49 F.3d at 1456 (quoting Jackson, 419

U.S. at 352). We have cautioned that this test is difficult to satisfy because a function

is rarely deemed exclusively reserved to the state. Id.

        Nonetheless, Wasatch argues the facts of its complaint plausibly satisfy this

difficult test, because “[f]ew public functions are as traditionally and exclusively

performed by the Government as management of National Forest property.” Aplt. Br.

34. Wasatch again misses the point. While managing National Forest property may

be a traditional government function, operating a ski resort—including deciding

whether to permit or allow certain devices—isn’t a power “traditionally associated

with sovereignty.” Jackson, 419 U.S. at 353. The complaint thus fails to establish

state action under the public-function test.

        Even if we grant all reasonable inferences in Wasatch’s favor, the pleaded

facts at best establish that each year the Forest Service—with knowledge of the

                                           14
snowboard ban—reviews and approves Alta’s site plan and receives from Alta a

usage fee. This isn’t enough to establish state action for purposes of the Fourteenth

Amendment. See Blum, 457 U.S. at 1004-05. Because Wasatch’s complaint doesn’t

plausibly establish state action, we affirm the district court’s Rule 12(b)(6) dismissal.

And because this conclusion controls all issues on appeal, we decline to address

Wasatch’s challenges to the district court’s alternative rulings.

      Affirmed.

                                           15