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Max Planck Encyclopedia of Comparative Constitutional Law [MPECCoL]

State Action Doctrine

United States [us]

Stephan Jaggi

Subject(s):
US constitutional history — Constitutional interpretation — Bills of rights — Individual rights — State sovereignty and states' rights

Published under the direction of the Max Planck Foundation for International Peace and the Rule of Law.
General Editors: Rainer Grote, Frauke Lachenmann, Rüdiger Wolfrum.

A.  Definition

1.  The state action doctrine of the Supreme Court of the United States (‘Court’) formulates a seemingly simple principle: the US Constitution in general, and its individual rights in particular, apply only to state action, not to private action. State action, as a matter of principle, is all government action, ie action by the executive, legislature, and judiciary at the state and federal level; private action is all non-government action. The principle’s practical result is that, regardless of how strongly an activity protected as a recognized individual right has been interfered with, if the interference occurred through state action, the Constitution applies with full force; if it occurred through private action, the Constitution does not apply at all (Quint 267, 274). An exception is the 13th Amendment, abolishing slavery and involuntary servitude, which also applies to private conduct (Gardbaum 388; Chemerinsky (2009) 550). The state action doctrine has two main purposes: first, it shall protect individual liberties by ensuring that private action is not subject to constitutional limitations; second, it shall promote federalism and separation of powers by limiting the federal judiciary’s control over states (Tribe (1988) 1691).

2.  The doctrine’s seeming simplicity gives way to problems when individual rights infringements occur in private relationships, for example, when a private political party excludes African Americans from its primaries, a private restaurant refuses to serve African American customers, or a private shopping mall prohibits the distribution of anti-war handbills inside the mall. Since the actors in these cases are private, the state action doctrine prevents the application of individual rights. Still, the Court thinks that some of these cases present such serious interferences with individual-rights-protected activities that individual rights shall apply nonetheless. To account for such cases, the Court has developed exceptions to the state action doctrine according to which private actors, under certain circumstances, must be treated like state actors and private action like state action.

3.  The exceptions are commonly grouped into two categories: ‘public function’ and ‘entanglement’ exceptions (Chemerinsky (2009) 552; Quint 267 et seq). Under the ‘public function’ exception, a private actor must be considered a state actor if it ‘performs the customary functions of government’ (Lloyd Corp Ltd v Tanner (1972) 562 (US)) or, more narrowly, if it performs a function that is ‘traditionally, exclusively reserved to the [s]tate’ (Barrows v Jackson (1953) 252 (US)). Examples include a private political party that determines the qualifications of eligible voters in its primary elections (Smith v Allwright (1944) 660 (US); Terry v Adams (1953) 481, 482 (US)), a private company that operates a town (Marsh v Alabama (1946) 508 (US)), or a private landowner who uses his land to operate a public park (Evans v Newton (1966) 302 (US)). Under the ‘entanglement’ exception, private action must be considered state action if the state ‘has so far insinuated itself into a position of interdependence’ with the private actor that ‘it must be recognized as a joint participant in the challenged activity’ (Burton v Wilmington Parking Authority (1961) 725 (US)) or, more generally, if the government has authorized, encouraged, or facilitated the private actor’s conduct (Chemerinsky (2009) 552). Examples include a state agency that is so strongly involved with the operation of a private restaurant (the agency owns the public building in which the restaurant is located, is responsible for the building’s maintenance, and receives rent from the restaurant, among others), that the private restaurant’s discrimination against African Americans must be considered state action (Burton v Wilmington Parking Authority (1961) 724, 725 (US)); a state that lends books to students of a racially segregated private school (Norwood v Harrison (1973) 466 (US)); or a court that enforces a private, racially restrictive covenant against a private party (Shelley v Kraemer (1948) 19 (US)) (racial discrimination).

B.  Evolution

1.  Foundation: the Civil Rights Cases

4.  The Court first articulated the state action doctrine in the Civil Rights Cases (1883) (Chemerinsky (2009) 548). Confronted with the federal Civil Rights Act of 1875, which granted everyone equal access to ‘inns, public conveyances …, theaters, and other places of public amusement’ regardless of race (Civil Rights Cases (1883) 9 (US)), the Court had to decide whether Congress had the authority to enact such a law (ibid. 10). Section 5 of the Fourteenth Amendment provides that Congress has the power to enforce, by appropriate legislation, the provisions of the Fourteenth Amendment, and the question was whether the Civil Rights Act 1875 was ‘appropriate’ legislation to enforce the individual rights granted by the Fourteenth Amendment’s section 1. From Section 1’s text, which states that ‘[n]o state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any [s]tate deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws’, the Court concluded that ‘[i]t is [s]tate action of a particular character that is prohibited. Individual invasion of individual rights is not the subject matter of the amendment’ (ibid. 11). The Court further concluded that Section 5 of the Fourteenth Amendment does not authorize Congress ‘to legislate upon subjects which are within the domain of [s]tate legislation’ but only ‘to provide modes of relief against … [s]tate action’ (ibid. 11). Since the relevant provisions of the Civil Rights Act 1875 directly regulated individuals within the states without referring to any state acts, the Court held these provisions not authorized by Section 5 of the Fourteenth Amendment (ibid. 18, 19).

2.  Exceptions

5.  The Court developed the ‘public function’ and ‘entanglement’ exceptions in cases in which private actors interfered with other private actors’ activities that would be protected by individual rights against state actors. The elaboration of criteria for both exceptions is characterized by twists and turns, and a good deal of inconsistency, as the following examples show.

(a)  Public Function Exception

6.  The first set of cases that developed the public function exception were the so-called White Primary Cases. After the Court, in Herndon v Nixon (1927) (US), had declared a Texas law prohibiting African Americans to vote in state Democratic Party primaries unconstitutional, the Texas legislature reacted by adopting a new statute authorizing every political party’s state executive committee to determine who shall be qualified to vote in the party’s primaries (Nixon v Condon (1932) 81, 82 (US)). Based on this new law, the Democratic Party of Texas, through its executive committee, decided that only white people were eligible to vote in its primaries (ibid. 82). Despite the fact that the Democratic Party, including its executive committee, were private actors, the Court considered the committee’s racially discriminatory decision state action because the committee, in making it, had exercised an authority given to it by the law. Exercising this authority made the committee ‘to that extent the [organ] of the State itself’ (ibid. 88). In response to this holding, the Democratic Party of Texas adopted another resolution excluding African Americans from its primaries, this time, however, not through its committee but through its convention. In Grovey v Townsend (1935) (US), the Court held that the party convention was no state actor and its decision no state action (Grovey v Townsend (1935) 49 (US)). Despite the fact that state law comprehensively regulated the party’s primaries and provided the basis for the convention’s authority to determine the eligibility to vote in these primaries (ibid. 52), the Court found no state action because party members bore the expenses for the primaries and the party convention was recognized as the (private) party’s organ for the formulation of policies (ibid. 50). It took the Court nine years to change its mind and hold that the party convention, too, was a state actor and its exclusion of African Americans from party primaries state action (Smith v Allwright (1944) (US)). This time the Court argued that the comprehensive state regulation of party primaries ‘makes the party which is required to follow these legislative directions an agency of the state in so far as it determines the participants in a primary election’ (Smith v Allwright (1944) 663 (US)). The next attempt to exclude African Americans from the vote in Texas was undertaken by a purely private, completely unregulated organization, the so-called Jaybirds. The Jaybirds held internal elections, under exclusion of African-Americans, in order to determine whom they would endorse in Democratic Party primaries. As it turned out, the Jaybirds-endorsed candidates always won the party primaries and the ensuing general elections (Terry v Adams (1953) 463 (US)). In Terry v Adams (1953) (US) the fact that the Jaybirds’ elections were completely unregulated was no longer relevant for the Court’s decision. Instead, the Court found unconstitutional state action in the state’s permitting the Jaybirds to hold racially discriminatory private elections in a way that ‘in effect’ deprived African Americans of the vote in general elections (ibid. 466, 469).

7.  Another example for the development of the public function exception are the so-called Shopping-Mall Cases. In the first of these cases, Marsh v Alabama (1946) (US), a private company-owned town had used state trespass laws to prevent Marsh, a Jehovah’s Witness, from distributing religious literature on a sidewalk in front of the town’s ‘business block’, a large building with shops in it. Despite the fact that the Court, in later decisions, would refer to Marsh as the paradigmatic public function case, the Marsh Court did not simply consider the private town a state actor because it did ‘not function differently from any other town’ (Marsh v Alabama (1946) 508 (US)). The Court went beyond that and explained that the enforcement of state trespass laws against Marsh was unconstitutional because Marsh’s right to freedom of speech and religion outweighed the company’s right to property (freedom of expression; freedom of conscience and religion or belief). The Court argued, ‘[t]he more an owner, for his advantage, opens up his property for use by the public in general, the more do his rights become circumscribed by the statutory and constitutional rights of those who use it’ (ibid. 506). The Court’s Marsh decision was therefore more based on balancing competing individual rights than on treating a private actor like a state actor. In the next decision, Food Employees Union v Logan Valley Plaza, Inc (1968) (US), the private owner of a shopping mall had used state trespass laws to prevent union members from picketing a supermarket inside the mall for its anti-union policy. The Court, again, presented a mix of balancing competing individual rights and applying the public function exception. Examining the constitutionality of the enforcement of state trespass laws by balancing the shopping mall owner’s right to protection of property with the pickets’ freedom of speech (Food Employees Union v Logan Valley Plaza, Inc (1968) 309, 321, 322, 325 (US)), the Court argued that ‘under some circumstances, property that is privately owned may, at least for First Amendment purposes, be treated as though it were publicly held’ (ibid. 316) and that it is because of the ‘striking’ similarities between the business block in Marsh and the shopping mall in Logan (ibid. 317) that the pickets’ speech rights outweigh the shopping mall’s property rights, at least when the speech’s content is directly related to the shopping mall’s purpose (ibid. 319, 320, 326). In Lloyd Corp. Ltd v Tanner (1972) (US), the speech was not directly related to the shopping mall’s purpose. People had entered the private mall to distribute handbills opposing the Vietnam War and were being asked to leave based on state trespass law. Referring to Marsh and reducing it to its public-function arguments, the Court argued that Marsh ‘simply held that where private interests were substituting for and performing the customary functions of government, First Amendment freedoms could not be denied’ (Lloyd Corp Ltd v Tanner (1972) 562 (US), emphasis added). After concluding that the shopping mall in Lloyd was not ‘performing the customary functions of government’ like the company town in Marsh and that Logan was limited to speech that was directly related to the shopping mall’s purpose, the Court held that the mall in Lloyd was no state actor and thus not bound by the First Amendment (ibid. 564). Four years later, in Hudgens v NLRB (1976) (US), the Court abandoned Logan, now completely focusing on public function criteria. Even though the facts in Hudgens and Logan were practically identical (union picketing in a private shopping mall while the picketing was directly related to a shop in the mall), the Hudgens Court focused on the argument that the company town in Marsh had been subject to the First Amendment because it ‘did not function differently from any other town’ (Hudgens v NLRB (1976) 514 (US)). Since, according to the Court, the private shopping mall in Hudgens was clearly not ‘the functional equivalent of a municipality’, it was no state actor and the First Amendment did not apply (ibid. 520, 521).

(b)  Entanglement Exception

8.  The Court developed the entanglement exception in a wide variety of cases, one set of which deals with race-based discrimination by private restaurant owners. In Burton v Wilmington Parking Authority (1961) (US), the Court had to decide whether a city’s parking authority could be held responsible for the race-based discrimination by a private restaurant to which the city had rented space in the city’s parking house. The Court asked whether the city was so involved, or ‘entangled’, with the restaurant that it must be held responsible for the restaurant’s discrimination (Burton v Wilmington Parking Authority (1961) 722 (US)). The Court acknowledged the vagueness of this standard, stating that there was no precise formula that could be applied to find state responsibility and that ‘[o]nly by sifting facts and weighing circumstances can the nonobvious involvement of the State in private conduct be attributed its true significance’ (ibid. 722). Since the land on which the parking house stood as well as the parking house in which the restaurant was located were publicly owned, the building was dedicated to public use, and the costs for its construction and maintenance were borne by the city, the Court concluded that the state was so ‘insinuated’ with the private restaurant that the state must be held responsible for the restaurant’s discrimination (ibid. 723, 724). In Lombard v Louisiana (1963) (US), African-American students had engaged in a so-called sit-in demonstration by refusing to leave a private store’s lunch counter after being asked to do so by the store’s owner on racist grounds. The students were convicted by a state court for violating state trespass laws (Lombard v Louisiana (1963) 269 (US)). Instead of examining the conviction’s constitutionality, the Court referred to a previous public announcement by state officials that sit-in demonstrations would not be tolerated and interpreted it as prohibiting private restaurants to seat white and African-American customers together. The Court concluded that this prohibition had ‘coerced’ the store owner to expel the African-American students so that the owner’s discriminatory action must be considered state action (ibid. 273). In Moose Lodge v Irvis (1972) (US), where a private club holding a state-issued liquor license had refused to serve the African-American guest of a white club member, the Court argued that the state was not sufficiently involved in the discrimination because ‘while [the restaurant in Burton] was a public restaurant in a public building, Moose Lodge is a private social club in a private building’ (Moose Lodge v Irvis (1972) 175 (US)). The Court argued that the state’s regulation of the sale of liquor did not encourage the discrimination in any way (ibid. 173, 176, 177).

9.  Another set of cases deals with government subsidies and their ability to establish entanglement sufficient to find state action. In Norwood v Harrison (1973) (US), the Court held that the state’s lending of books to students of a racially segregated private school was sufficiently ‘facilitating, reinforcing, and supporting’ the private discrimination to consider it state action (Norwood v Harrison (1973) 466 (US)). The Court changed its mind in Rendell-Baker v Kohn (1982) (US)), where a private school for students with special needs, extensively regulated and comprehensively publicly financed, had fired a vocational counsellor because she had disagreed with school policies (Rendell-Baker v Kohn (1982) 833, 834 (US)). The Court held that neither extensive regulation and comprehensive public financing, nor the fact that the school performed a public educational function were enough to find a sufficiently close nexus between the school and the state to apply the Due Process Clause. The Court argued that a state can only be held responsible for private decisions when it has exercised ‘coercive power’ or has provided ‘significant encouragement’ for such decisions (ibid. 840). Even performing a public function no longer sufficed to find state action. The Court now required a function that has been ‘traditionally the exclusive prerogative of the State’ (ibid. 842, emphasis in the original). The Court confirmed these principles in American Manufacturers v Sullivan (1999) (US), where a state law had given private insurance companies the right to withhold payments for the treatment of work-related injuries the reasonableness or necessity of which was disputed pending an independent review (American Manufacturers v Sullivan (1999) 45 (US)). Despite the fact that the state law had been specifically amended to create the insurers’ right (ibid. 53) and the entire process was heavily regulated, the Court stated that the decision to withhold payments was purely private because the new state law had neither ‘coerced’ nor ‘significantly encouraged’ it (ibid. 52). The state law, according to the Court, might ‘just as easily be seen as state inaction, or more accurately, a legislative decision to not interfere in a dispute between an insurer and an employee over whether a particular treatment is reasonable and necessary’ (ibid. 53).

10.  Finally, another set of entanglement cases deals with the judicial enforcement of private race-based discrimination. In Shelley v Kraemer (1948) (US), the Court held that a state court’s enforcement of a private racially restrictive covenant in which private owners of real property had obliged themselves to not sell their property to African Americans was state action in violation of the Fourteenth Amendment’s Equal Protection Clause, because the enforcement’s ‘effect’ was to deprive an African American buyer of their right to acquire property (Shelley v Kraemer (1948) 20 (US)). In Barrows v Jackson (1953) (US), the Court confirmed this view by considering state action a state court’s enforcement of a similar private restrictive covenant by imposing damages upon the private party who had violated the covenant by permitting ‘non Caucasians’ to move in and occupy the premises (Barrows v Jackson (1953) 252 (US)). Similarly, in New York Times v Sullivan Case (US) (1964), the Court did not hesitate to find state action in a state court’s enforcement of state common libel law against the New York Times on behalf of Sullivan, a private actor (New York Times v Sullivan (1964) 265, 268 (US)). The Court came to a different conclusion in Evans v Abney (1970) (US), where a state court had enforced a racially discriminatory private will according to which land that had been willed to a city for the operation of a public park ‘for whites only’ needed to be returned to the testator’s heirs after it had turned out that public parks could no longer be operated on a racially segregated basis. The Court held on to considering the state court’s decision state action, but did no longer hold it responsible for the race-based discrimination engaged in by the private testator. Instead, the Court argued that the state court did not act with discriminatory intent and that the racial discrimination was ‘solely the product of the testator’s own full-blown social philosophy’ (Evans v Abney (1970) 445 (US)). The Court distinguished Shelley by arguing that the state court’s enforcement of the racially discriminatory will ‘eliminated all discrimination against [n]egroes in the park by eliminating the park itself’ (ibid. 445).

C.  Comparative Description

11.  Other countries usually discuss the problems addressed by the US state action doctrine under the term ‘horizontalism’ of individual rights (for an overview, Gardbaum, 388; see also Jackson and Tushnet; and Tushnet (2003)) (see also horizontal application). Horizontalism deals with two questions: first, if, and under what conditions, to apply individual rights in private relationships; and second, how to solve the conflict between competing individual rights and other constitutional principles that apply in private relationships. Often, authors differentiate between direct and indirect horizontalism, even though it is not always clear what exactly these terms stand for.

12.  Direct horizontalism usually means that individual rights apply in private relationships without the need for any state action at all. For example, when private actor A discriminates against private actor B on the basis of race, B may sue A directly based on a constitutional right to non-discrimination (equality). Ireland practices direct horizontalism in this sense with respect to individual rights, such as the freedom of association, the freedom from gender discrimination, the right to earn a livelihood, or the fetus’ right to life (see Meskell v Coras Iompair Eireann (1973) (Ir); Murtagh Props v Cleary (1972) (Ir); Parsons v Kavanagh (1990) (Ir); Attorney General v Open Door Counselling (1988) (Ir); see also Butler 20 et seq; Gardbaum 396, 397). Another example is South Africa, whose Final Constitution of 1996 states in Section 8(2) that natural and juristic persons are bound by a provision of the Bill of Rights ‘if, and to the extent to which, it is applicable, taking into account the nature of the right and the nature of any duty imposed by the right’; Section 9(4) of the same Constitution prohibits private actors to unfairly discriminate against others on grounds such as race, gender, or pregnancy (Constitution of the Republic of South Africa: 16 December 1996 (as Amended to 1 February 2013)). Direct horizontalism solves conflicts between private actors’ competing individual rights and other constitutional principles, such as federalism, separation of powers, or public safety, through balancing (for Ireland, see, for example Attorney General (1988) (Ir); for South Africa, see, for example, Certification (1996), para. 55 (S Afr)).

13.  Indirect horizontalism usually stands for systems in which individual rights apply to private relationships not immediately in the sense just described, but indirectly in that they apply through other law that immediately regulates the relationship between private actors.

14.  Under one version of indirect horizontalism, this other law must be interpreted ‘in the light of’ individual rights so that, as a matter of practice, individual rights may lead to direct claims between private actors and may be invoked in private litigation. Germany is an example for such indirect horizontalism with possible direct effects in private relationships (see Drittwirkung). In the Lüth Case (Ger) decision of the Federal Constitutional Court of Germany (Bundesverfassungsgericht) (‘BVerfG’) (Lüth 1 Bvr 400/51 (1958) (Ger)), for example, the BVerfG argued that individual rights are elements of an ‘objective order of values’ that applies in all areas of the law so that all law, including private law, must comply with it (Lüth 1 Bvr 400/51 (1958), para. 27 (Ger)). All law must be interpreted and applied in the light of it, and a judge’s failure to properly do so may be invoked in court, including the BVerfG (Lüth 1 Bvr 400/51 (1958), para. 30 (Ger)). In the specific case, this meant that a state court was prohibited from interpreting tort law as preventing the private actor, Lüth, from calling for a boycott of the movie of another private actor, Harlan, because the court’s decision didn’t sufficiently take Lüth’s individual right to freedom of expression into account (Lüth 1 Bvr 400/51 (1958), paras 50 et seq (Ger)). After balancing Lüth’s right to freedom of expression with Harlan’s right to freely exercise his profession (freedom of occupation or profession), the BVerfG concluded that Lüth’s right outweighed Harlan’s (ibid.). The BVerfG further developed this principle of indirect horizontalism in Blinkfüer 1 Bvr 619/63 (1969) (Ger), where it decided that the application of individual rights to law regulating private relationships does not only protect private actors against a court interfering with their individual rights, but may, moreover, establish a direct claim of one private actor against another, which a court must enforce (Blinkfüer 1 Bvr 619/63 (1969), paras 29, 30). Applying the right to freedom of the press, again through German tort law, to the private relationship between Blinkfüer, a small publisher, and Springer, one of Germany’s biggest publishing houses, the BVerfG recognized Blinkfüer’s direct claim against Springer to force Springer to refrain from pushing dealers to stop selling Blinkfüer’s products (ibid. para. 29). The conflict between Blinkfüer’s right to freedom of the press and Springer’s right to freedom of expression was, again, resolved through balancing. Blinkfüer is an example for how indirect horizontalism may lead to direct claims in private relationships, which is why some authors rightly emphasize the direct effects of both direct and indirect horizontalism (Alexy (1994) 490, 491; Quint 275 et seq; Barak, 262).

15.  A different kind of indirect horizontalism is exemplified by Canada. In RWDSU v Dolphin Delivery (1986) (Can), the Supreme Court of Canada (Cour suprême du Canada) decided that, even though individual rights granted by the Canadian Charter of Rights and Freedoms (‘Charter’) can be invoked in litigation between private parties as long as the litigation is based on statutory law, they cannot be invoked in litigation between private parties based on common law (RWDSU v Dolphin Delivery (1986), para. 39 (Can)). Still, the Canadian Supreme Court insisted that common law must comply with individual rights (ibid. para. 25) and that ‘the judiciary ought to apply and develop the principles of the common law in a manner consistent with the fundamental values enshrined in the Constitution’ (ibid. para. 39). As a result, in Canada, individual rights may have an (indirect) impact on common-law-based litigation between private parties, but they may not be (directly) invoked in such litigation as causes of action or defences (ibid. para. 39). Yet, in more recent cases, the Canadian Supreme Court did decide that private parties in private litigation based on common law may argue that ‘the common law is inconsistent with Charter values’, but not that it ‘violates a Charter right’ (Hill v Church of Scientology of Toronto (1995), para. 95 (Can); M. (A.) v Ryan (1997) (Can)). Competing Charter values and common law values are weighed against each other (see, eg, Hill v Church of Scientology of Toronto (1995), para. 97 (Can)). It is thus unclear whether the situations in Canada and Germany are still different (Kumm and Ferreres Comella, 285; for a different view, Gardbaum 404).

D.  Critical Assessment

16.  The US Supreme Court’s application of the state action doctrine has been widely criticized. One author called it ‘a conceptual disaster area’ (Black 95); other authors consider the doctrine unnecessary, either because a state may ‘deny’ equal protection of the laws through state inaction, ie by doing nothing in the face of private discrimination (Chemerinsky (1985) 522), or because Art. VI Section 2’s Supremacy Clause subjects every law to the Constitution, including its individual rights (Gardbaum 414, 415, 418), or because all law is state action and must as such comply with individual rights (Sunstein 159, 160). The Court itself admitted that its applications of the public-function and entanglement exceptions ‘have not been a model of consistency’ (see Edmondson v Leesville Concrete Co (1991) 632). Some of the inconsistencies are, indeed, striking. In the shopping-mall cases, for example, there is no principled explanation for why a private shopping mall is a state actor when it is surrounded by a private town that is just like ‘any other town’ (see Marsh v Alabama (1946) (US)), but also when it is not part of such a town but merely includes a shop that is being picketed by union members protesting the shop’s policy (Logan). It is similarly unclear why it is no state actor when the speech’s content is not related to the mall (see Lloyd Corp Ltd v Tanner (1972) (US)), and, finally, can never be a state actor because shopping malls are not the functional equivalent of towns (see Hudgens v NLRB (1976) (US); for further examples, see Phillips).

17.  Despite the criticism, the Court continues to apply the state action doctrine, including its exceptions, for mainly two reasons: protection of individual freedom and federalism. The Court argues that the state action doctrine (1) ‘preserves an area of individual freedom by limiting the reach of federal law and federal judicial power’ (Lugar v Edmondson Oil (1982) 936 (US)), and (2) requires ‘the [federal] courts to respect the limits of their own power as directed against state governments’ (ibid.).

18.  Yet, preserving areas that are free from individual rights does not mean that these areas are free from individual right infringements. To the extent that the Constitution does not apply to private relationships, states and private actors are free to interfere with people’s individual rights, unless limited by other federal or state law. The result may be less rather than more individual freedom, because what is protected is only the freedom of the infringer, not the freedom of the infringement’s victim (Chemerinsky (1985), 536, 537; Müller and Christensen 150). Moreover, that individual rights do not apply to private relationships does not mean that federal legislation cannot reach these relationships. The state action doctrine only limits the reach of the federal judiciary. The purpose of the federal Constitution, including its individual rights, however, is to protect individual liberties and federalism by making sure that all legislatures stay within constitutional limits. It also seems that the Court-developed exceptions to the state action doctrine achieve the contrary of protecting individual freedom. Whenever, due to one of the exceptions, a private actor is considered state actor, that actor is fully bound by individual rights without enjoying any individual rights protection itself (Glennon and Novak 231). Even direct horizontalism acknowledges that all private parties involved, including the infringer, are carriers of individual rights that must be taken into account. Finally, it is hard to deny that, according to the Supremacy Clause, all law, including all state law and all so-called ‘background rules’—common law rules of property, contract, and tort—must comply with the federal Constitution (see also Tushnet (2008) 162, 163, 171; Seidman and Tushnet 181). Guaranteeing this compliance is no infringement of federalism or the separation of powers but the very purpose of judicial review (for what this may mean with respect to social welfare rights, see Tushnet (2003); and Tushnet (2004)).

19.  Still, the key to eliminating the state action doctrine’s inconsistencies is not to abandon the doctrine but to apply it more consequently. The Court gave the necessary directions in the Civil Rights Cases, still the relevant precedent: (1) identify the relevant state action, (2) examine its constitutionality. Sunstein rightly states that all law applied in private relationships is state action, so that the remaining step is to examine this law’s constitutionality, as applied in the specific case. Whenever law regulates the relationship between two private actors, it necessarily affects the individual rights of both (Glennon and Novak 230). For example, a state trespass law protects the right to property of the property owner while limiting the trespasser’s right to liberty; a law permitting anti-war hand-billing in a shopping mall protects the demonstrators’ right to speech while limiting the shopping mall owner’s right to property; a court order enforcing racially restrictive private covenants promotes the freedom of contract at the expense of the rights to non-discrimination and property. In order to regulate private relationships in compliance with the Constitution, legislatures as well as enforcement agencies must strike the right balance between competing individual rights and other constitutional principles. It is the judiciary’s task to ensure that the struck balances remain within the framework of the Constitution (Glennon and Novak, 230, 231), a substantive problem that all liberal constitutional orders must solve (see Kumm and Ferreres Comella 276 et seq).

20.  Despite some authors’ attempts to explain the scepticism towards balancing in US constitutional law with a historical attachment to state sovereignty, a more categorical approach to individual rights analysis (Kumm and Ferres Comella 272 et seq, 276 et seq), and America’s uneasy commitment to the regulatory state (Seidman and Tushnet 181), we already find balancing in many of the Court’s state action decisions, yet it is frequently pushed into the background by elaborations on what turns private actors into a state actors (Henkin 487 et seq; Glennon and Novak 222 et seq, 232 et seq; Phillips 736 et seq; Van Alstyne and Karst 12 et seq; Williams 382 et seq). For example, in Marsh the Court determined the constitutionality of enforcing state trespass laws against Marsh by weighing Marsh’s right to freedom of speech and religion against the company’s right to property (Marsh v Alabama (1946) 506, 509 (US)). The other shopping-mall cases appear inconsistent when viewed from the perspective of what turns a private shopping mall into a state actor. They become much more consistent, however, when viewed as attempts by the Court to determine the constitutionality of the enforcement of trespass laws by meaningfully weighing the shopping mall owner’s right to protection of property against the demonstrators’ right to freedom of speech (see, for example, Food Employees Union v Logan Valley Plaza, Inc (1968) 309, 315 (US)). Viewed from this perspective, it seems reasonable to weigh freedom of speech stronger in Logan, where the pickets’ speech was directly related to a specific shop inside the mall and would have been much less effective outside the mall and far removed from the relevant shop (ibid. 322 et seq), than in Lloyd, where the anti-war hand-billing could just as effectively have taken place on a sidewalk right outside the mall (Lloyd Corp Ltd v Tanner (1972) 566 (US)). Justice White, concurring, gives a similar explanation for the Court’s decision in Hudgens (Hudgens v NLRB (1976) 525 (US)), while the Court focuses on the inconsistent explanation that the shopping mall in Hudgens is not the functional equivalent of the company town in Marsh (ibid. 516 et seq). Further examples are Shelley, where the Court examines the constitutionality of a court’s enforcement of a private agreement (Shelley v Kraemer (1948) 18 (US)) by weighing the Shelleys’ right to obtain property on a non-discriminatory basis against Kraemer’s right to freedom of contract and protection of property (ibid. 20 et seq; see also Tushnet (1988); Henkin); Sullivan, where the Court weighs the New York Times’ freedom of speech and the press against Sullivan’s right to protection of his reputation (New York Times v Sullivan (1964) 269 et seq (US)); and Abney, where the Court, at least in an afterthought, weighs the right to non-discrimination against the freedom of testation (Evans v Abney (1970) 447 (US)).

21.  The problem with the Court’s application of the state action doctrine is that, even though the Court recognizes the need to weigh and evaluate circumstances on a case-by-case basis in order to reach convincing results, it often does not acknowledge that weighing is necessary to determine, not the state action itself, but the obvious state action’s constitutionality. When the Court in Burton writes that ‘[o]nly by sifting facts and weighing circumstances can the nonobvious involvement of the [s]tate in private conduct be attributed its true significance’ (Burton v Wilmington Parking Authority (1961) 722 (US)), it overlooks that the state’s involvement in the private restaurant owner’s expulsion of the African American customer—namely the state’s trespass law enforced by the state’s police and courts—is more than obvious. What can only be determined by sifting facts and weighing circumstances is whether, in the specific case, the law’s enforcement is constitutional in light of the fact that it protects the restaurant owner’s rights to property and contract at the expense of the African American customer’s right to non-discrimination.

22.  As a matter of doctrine, the Court has not yet formulated that it is the individual rights’ character as principles—ie as orders to optimize competing individual rights under the factual and legal circumstances of the particular case—that necessitates the balancing of competing individual rights and other constitutional principles (Dworkin 38 et seq; Alexy (1994) 78 et seq, 100 et seq, 491; Alexy (1992) 149; for an overview and recent critical analysis, see Jackson and Tushnet). The optimization is achieved by balancing competing principles with each other in order to optimally realize all involved constitutional principles and determine who has the right to do what in a particular case (Dworkin 43; Alexy (1994) 78 et seq; Alexy (1992) 149 et seq). Despite the Court’s more categorical approach to individual rights analysis as reflected in its emphasis on determining a right’s scope and an interference with it as opposed to an interference’s justification (Kumm and Ferreres Comella 276), the case analysis shows that what the Court actually engages in is balancing (Kumm and Ferreres Comella 276, 278, 286). It is legal scholarship’s task to point this out and to provide for doctrinal structures within which this balancing is done in a manner that is as principled as possible.

23.  The experience in countries that practice horizontalism shows that balancing within the framework of the proportionality test is much more principled, predictable, and non-discretionary than the Court’s ‘sifting facts and weighing circumstances’ in order to find state action in private action (Dworkin 48 et seq, 53 et seq; Williams 390; Alexy (1994) 100 et seq; Alexy (1992) 149; for critical analysis see Jackson and Tushnet). Balancing, moreover, violates neither federalism nor the separation of powers because the judiciary does not replace the legislature (federal or state), but only ensures that the legislature’s solutions remain within the outer limits set by the Constitution (Pieroth, Schlink, Kingreen, and Poscher, para. 99; Alexy (1994) 492).

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