Charitable Tax Exemptions As State Action (Jackson v. Statler Foundation)

St. John's Law Review Volume 49, Winter 1975, Number 2 Article 8 Charitable Tax Exemptions As State Action (Jackson v. Statler Foundation) Kate Monica Walsh Follow this and additional works at: https://scholarship.law.stjohns.edu/lawreview Recommended Citation Walsh, Kate Monica (1975) "Charitable Tax Exemptions As State Action ( Jackson v. Statler Foundation)," St. John's Law Review: Vol. 49 : No. 2 , Article 8. Available at: https://scholarship.law.stjohns.edu/lawreview/vol49/iss2/8 This Note is brought to you for free and open access by the Journals at St. John's Law Scholarship Repository. It has been accepted for inclusion in St. John's Law Review by an authorized editor of St. John's Law Scholarship Repository. For more information, please contact . CONSTITUTIONAL LAW CHARITABLE TAX EXEMPTIONS AS STATE ACTION Jackson v. Statler Foundation A party seeking vindication of his civil rights may maintain a civil action for damages pursuant to 42 U.S.C. § 1983.1 In asserting a section 1983 claim, however, the plaintiff must show that his constitutional rights have been abridged by a person acting "under color of" state law or custom; in effect, he must satisfy the state action 2 requirement of the fourteenth amendment. The doctrine of "state action" as a prerequisite to the application 3 of federal civil rights laws originated with the Civil Rights Cases. There, the Supreme Court instructed that invasion of a person's rights by an individual is merely a "private wrong," not within the purview of the fourteenth amendment. 4 However, as the state action doctrine has evolved in our jurisprudence, particularly in the field of racial discrimination,5 its parameters have been broadened to include much activity at least "private" in appearance. Thus, for example, a finding 142 U.S.C. § 1983 (1970) provides: Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. The Supreme Court, in United States v. Classic, 313 U.S. 299 (1941), set down the following often cited definition which has been utilized in connection with the state action doctrine: Misuse of power, possessed by virtue of state law and made possible only because the wrongdoer is clothed with the authority of state law, is action taken "under color of" state law. id. at 326. 2 "In cases under § 1983, 'under color' of law has consistently been treated as the same thing as the 'state action' required under the Fourteenth Amendment." United States v. Price, 383 U.S. 787, 794 n.7 (1966). See also Adickes v. S.H. Kress & Co., 398 U.S. 144, 163 (1970), wherein the Court stated: Mhe legislative history of § I of the 1871 Act, (the Ku Klux Klan Act] the lineal ancestor of § 1983 ...indicates that the provision in question here was intended to encompass only conduct supported by state action. 3 109 U.S. 3 (1883). In these five cases, the first and second sections of the Civil Rights Act of 1875 were declared unconstitutional because they afforded a cause of action against private individuals under the fourteenth amendment. 4 rd. at 17. 5 "Almost all applications of the Fourteenth Amendment to private conduct based upon a finding of 'state action' have involved an attack upon 'private' racial discrimination." Bright v. Isenbarger, 314 F. Supp. 1382, 1392 (N.D. Ind. 1970) (mem.), aff'd, 445 F.2d 412 (7th Cir. 1971). See Burke and Reber, State Action, Congressional Power and Creditors' Rights: An Essay on the Fourteenth Amendment, 46 S. CAL. L. Rav. 1003; 1035-36 (1973). ST. JOHN'S LAW REVIEW [Vol. 49:283 of state action may be appropriate when the "private" offender is engaged in a joint activity with the state.6 State action has also been found where the state was perceived as compelling,7 authorizing, or encouraging8 private discrimination, either directly or indirectly. Fur6 This concept of joint action was fully explored in Burton v. Wilmington Parking Auth., 365 U.S. 715 (1961), wherein the Court found a sufficient nexus between the racially discriminatory activity and the state government. In Burton, the appellant was denied service, solely on the basis of race, in the Eagle Coffee Shoppe, Inc., a private restaurant located on premises leased from the Parking Authority, an agency of the state. The Court was of the opinion that "[o]nly by sifting facts and weighing circumstances can the nonobvious involvement of the State in private conduct be attributed its true significance." Id. at 722. The Court accordingly recognized that the restaurant was in a publicly owned building devoted to "public uses," that public funds were spent for necessary repairs, that many mutual benefits were enjoyed by the Parking Authority and restaurant, and that any improvements in the leasehold made by the lessee would be tax exempt as the fee was held by a government agency. The Court concluded: "The State has so far insinuated itself into a position of interdependence with Eagle that it must be recognized as a joint participant in the challenged activity .... " Id. at 725. Burton thus established the "symbiotic relationship" test for use in the search for state action. However, the majority was careful to restrict its holding to the particular facts at bar: "Mhe conclusions drawn from the facts and circumstances of this record are by no means declared as universal truths on the basis of which every state leasing agreement is to be tested." Id. This cautious approach had been criticized as affording no guidelines for settling similar disputes. In Burton the Court selected a highly particularistic approach. This increases the burden of explanation, because easy generalities will not suffice -difficulties will be presented in later cases in which the state action problem is conceptually the same but the underlying social problem is different. Instead of meeting this burden, the Court, by emphasizing all the facts, appears to have done its best to decide a case without creating a precedent. Lewis, Burton v. Wilmington Parking Authority-A Case Without Precedent, 61 CoLuM. L. REv. 1458, 1466 (1961). It is submitted that such a factual emphasis is indicative of the Court's reluctance to further expand the state action doctrine. 7 The compulsion cases have generally dealt with specific state statutes fostering racial discrimination. See, e.g., Peterson v. City of Greenville, 373 US. 244 (1963) (city ordinance required segregation by race in restaurants); Turner v. Memphis, 369 U.S. 350 (1962) (per curiam) (state statute provided for segregation in restaurants). Cf. Robinson v. Florida, 378 U.S. 153 (1964) (nonsegregated restaurants burdened under State Board (...truncated)