Theory
Shelley v. Kraemer
334 U.S. 1 (1948).
Question
If a court enforces a private agreement, is that considered state action that would say the state violated the Due Process Clause of the 14th Amendment?
Rule
If a judicial power acts to enforce a private agreement, they are acting with the authority of the state. If that action would thus violate a Constitutional provision, the action is unconstitutional.
Holding
The state acted here. The action was unconstitutional. Thus, the previous rulings are reversed and remanded.
Facts
A neighborhood signed a restrictive covenant which prevented black individuals from occupying property within the neighborhood. Note that these were private contracts and not ordinances imposed by the state or city.
Analysis
Private individuals have the ability to discriminate whereas the state does not have that ability (the Constitution targets state action, not private action). However, where the state takes a more active role in that private discrimination, then those actions may be unconstitutional.
Presently, the judicial system, as a branch of the state, enforced a discriminatory restrictive covenant. Thus, the state (through the judiciary) took an active approach of enforcing those discriminatory restrictions. Thus, the restrictions can exist, but cannot be enforced by the Court. Ultimately, the result is that the covenants don’t work because state action was present.
Additional Notes
The interesting outcome of this case is that any agreement that requires court action is subject to constitutional scrutiny. In other words, there is no point in having a doctrine that removes state action, because everything would be considered state action. For this reason, Shelley is one of the hardest to justify because the consequence is that there is no such thing as a private contract (assuming all contracts require judicial enforcement if there is a breach).
Burton v. Wilmington Parking Authority, 365 U.S. 715 (1961).
In Burton, a private business operated within the property of the government. Although privately owned and operated, the private actor was so entangled with the state (entanglement) because of the location. As such, the court determined that there was state action.
Exceptions
Moose Lodge No. 107 v. Irvis
407 U.S. 163 (1972).
Irvis won at the lower court and Moose Lodge No. 107 appealed.
Question
When the state authorizes the use of liquor licenses, is that considered state action?
Rule
If the action is neutral, then there is no state action. However, state action can occur if they issue a ruling. If that ruling is discriminatory, then there can be an injunction against that ruling.
Holding
State authorization of the liquor license was not state action. Reversed and remanded.
Facts
Moose Lodge is a social club that only allowed white individuals to be members and prevented those members from bringing guests who were people of color. Irvis, being turned away, sued the club. The reasoning provided was that the club obtained liquor licenses from the state. Thus, although a private club, the club was authorized by state action.
Analysis
Majority
Essentially, a state cannot regulate the discriminatory decisions of individuals and private entities. Here, the lodge was built on private land and was funded with private funds. No state funding went into this organization. The only tie to the state is through the state liquor license. However, because the state does not discriminate against who gets the licenses, there is no state action. The only way there is state action is if the club engages in discriminatory practices which are enforced by the liquor club.
Dissent
The dissent agrees with the majority except for a fact that was excluded. That is, the city already maxed out the liquor licenses. Thus, by not being allowed to deliver any other liquor licenses, they were acting with discrimination against minority groups who may seek a license.
Additional Notes
Moose Lodge is different from Burton because Moose Lodge is nearly entirely privately owned. The only “entanglement” between the private party and the state would be through the liquor license. In other words, Moose Lodge is not entangled while Burton was.
The first exception to the state action doctrine is “sufficient entanglement.” In other words, the baseline is that private entities are free from state action unless the private entity is entangled with the state.
The second exception to the state action doctrine is “public function.” If there is discrimination in a private entity that serves a public function, then that practice is unconstitutional. A prime example of this principle in practice are state primaries in preparation for an election. The primary is actually a private entity. Because of their essential role in public functions (elections), any discrimination is unconstitutional.
Disclaimer
The content contained in this article may contain inaccuracies and is not intended to reflect the opinions, views, beliefs, or practices of any academic professor or publication. Instead, this content is a reflection on the author’s understanding of the law and legal practices.
