Ninth Circuit Affirms Limits on Private and Municipal Liability for First Amendment Violations

The U.S. Ninth Circuit Court of Appeals affirmed that it takes more than some joint action with the government for a private entity to become a state actor subject to suit under the Civil Rights Act of 1871 (42 U.S.C. § 1983, “Section 1983”). Likewise, “the government does not, without more, become vicariously liable for the discretionary decisions of its lessee.”

Section 1983 creates civil liability for deprivation of an individual’s constitutional rights against any person acting “under color of state law.” Unlike government officers, private entities typically do not exercise state police powers and are not clothed with the authority of law.

In 1961, however, in Burton v. Wilmington Parking Authority, the United States Supreme Court developed a series of tests to identify when nominally private persons may be considered state actors. Courts use these tests to assess the liability of private entities under Section 1983. For example, courts may consider whether an organization is performing a public function, or whether a governmental entity, such as a city, is so entangled in private conduct as to necessitate the private entity’s compliance with the federal Constitution (the strictures of which only apply to government action). This latter concern for entanglement is the “joint action test.”

Last week, in Pasadena Republican Club v. Western Justice Center, the Ninth Circuit affirmed that joint action requires more than a contractual relationship between a private actor and a government agency. The case involved the Western Justice Center, a private nonprofit organization, which had agreed to rent meeting space in its building to the Pasadena Republican Club. Upon learning that the speaker for the Club’s scheduled event led a politically active organization that advanced positions on same-sex marriage and other social issues antithetical to the Center’s values, the Center canceled the rental agreement. Alleging viewpoint discrimination and other violations of the Club’s First Amendment rights, the Club filed a section 1983 action against the Center and the City of Pasadena, from which the Center leased its property. The Center moved to dismiss the action, and the City moved for summary judgment.

Upholding the Center’s motion to dismiss, the Ninth Circuit found that the Center’s lease agreement with the City failed to transform a private entity into a state actor. The court distinguished this case from the situation in Rawson v. Recovery Innovations, Inc., in which the court found that a private nonprofit hospital was a state actor potentially liable for due process violations under Section 1983. The “symbiotic relationship” necessary for joint action under Burton, present in Rawson, was absent here.

Specifically, the court found (1) the City and Center managed their operations independently (as the Center was a self-sustaining organization); (2) the City did not profit financially from the Center’s alleged discrimination and (3) the City did not participate in the Center’s cancellation of the Club’s speaking event. To be sure, the City derived some benefit from the relationship — as the lease required the Center to furnish the community with nonprofit legal services and other resources — but any exchange of mutual benefit fell short of the substantial interdependence required for state action.

Finally, in upholding the City’s motion for summary judgment, the court found that the Club’s alleged harm was not caused by City policy or practice, or by any City official with final policy-making authority, the prerequisites for municipal liability under Section 1983. Contrary to the Club’s claims, the City did not delegate policy-making authority over political speaking events in the City to the Center. The lease simply conveyed a possessory interest in the underlying property, which space the Center could rent at its discretion. Absent more, the government does not become vicariously liable for the discretionary decisions of its lessee.

Cities should be wary of entanglements with private entities creating liability. However, absent more, a lease agreement with a nonprofit advancing a civic mission creates no exception to the rule that municipal liability is limited to official action and state action is limited to state actors.

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