I’ve finally released a draft of an article I’ve been working on for some time. I encourage, nay beseech you to download it and take a look! In this post, I’ll sketch out the problem, with a bit of background, and my solution. The fuller argument, obviously, is in the article. Here, I hope to use the description of my paper to show the kind of shift in thinking that we expect law students to make in the first year. A goal in law school is to move students from asking whether some bit of law is “right” to thinking more deeply about which institutions get to decide whether it’s right, whether there should be rules governing that decision, and how other institutions should treat the answers. Let’s turn to the problem at hand.

State Action

When you throw someone out of your home for saying something offensive to you, we say that’s your right. When the government throws someone out of a public park for saying something that offends it, we say that it’s violated the speaker’s rights. Why the difference?

In the case of the park, courts say there is “state action,” meaning that the state, the government, has produced the bad consequences. Nearly every prohibition in the Constitution and its amendments applies only to government, not to private citizens. That’s why you generally can’t complain to a court that your neighbor or your (private) boss has violated your “free speech rights.”

Seems easy enough: if some state agent stops me from speaking, takes my property, or treats me differently on account of my race, I can cite the First, Fifth, or Fourteenth Amendments to the Constitution as reasons for a court not to allow it. But if it’s a private citizen who fires me, refuses to invite me over, or divorces me on account of my race, religion, or activism, then the Constitution provides no help. At best, there might be statutes or other types of law to which I could turn. The Civil Rights Act of 1964, for example, prohibits racial discrimination in private hiring. The Constitution, however, does not.

Hard Cases

As is often the case in law, hard cases have destroyed this quaint understanding of state action. Such cases can lead us into nihilism, just accepting that the law on the books provides no real answers in any case in which we’d actually need to consult it, but they can also provide a deeper, richer understanding of what the underlying problem really is.

Take one hard case, perhaps the most famous of hard cases. In Shelley v. Kraemer, the Supreme Court was confronted with the perfect end-run around the Equal Protection Clause. Having struck down racist zoning laws in Buchanan v. Warley, property owners in many areas of the country were left to create their own, private racist zoning schemes. Using a device called a covenant (really just a contract relating to land that, if certain conditions are met, binds not only the parties but those who later purchase the parties’ lands), private landowners agreed with one another to bar African Americans from white neighborhoods. The state of Missouri upheld such a covenant. There was, therefore, no state law and, at the time, no federal law barring such an agreement. The effect was racially segregated zoning, with private actors using the market rather than the voting booth to enforce their racist preferences.

In another case, a private political group (the Jaybird Democrats) in Texas held a private poll to determine which white candidate would run in the actually primary. Unopposed by other whites, this candidate would be assured victory and non-whites practically excluded from holding office. And in yet another hard case, one corporation owned an entire town: streets, shops, buildings, sewage system and all. It, as a private citizen, refused permission to a Jehovah’s Witness to preach on a street corner.

In each of these cases, the Supreme Court found there was state action and that the Constitution applied to prohibit the private actors from discriminating. The reasoning for these decisions is a bit mysterious, and that is the problem with the doctrine. In Shelley the Court pointed to the fact that a state court enforced the covenant, and this enforcement was clearly state action. The obvious problem with that ground is that every legal dispute between private parties concerning private agreements may ultimately be resolved by and enforced by a public court. A private contract is not subject to, say, the First Amendment simply because the contract is the subject of a lawsuit.

In other cases, the Court has pointed to the “public functions,” like operation of a private town, performed by a private party as setting the party apart from most private actors, and using that to justify constitutional regulation. But the line between public functions and things private parties sometimes do is, to put it mildly, an uncertain one.

The Heart of the Problem

Let’s start over. It’s worth it, because understanding these cases actually helps us to see more clearly our legal system as a whole. It’s their very oddity that makes the state action cases such ideal objects for study. Scientists look for phenomena that break the known rules in order to understand the real rules better. That’s what we need to do here.

The first thing to note is that there is a distinction between laws that govern primary behavior, those that provide sanctions for actions, and those that provide rules for recognizing and making laws. H.L.A. Hart called these primary and secondary rules, respectively. This isn’t a very difficult concept: just think of the distinction between a law that prohibits murder and a law that says Congress can’t abridge the freedom of speech. The latter is a law regulating the making of law, a type of Constitutional Law.

The difficult state action cases arise because there’s a problem with the way we usually apply these secondary rules. Normally, the privately made rules of private actors are governed by what I call private Constitutional Law, which includes the ordinary law of contracts — how contracts are made, when they go too far, how they’re interpreted, and so on. And publicly made primary rules, like murder laws and laws creating liability for negligently caused injuries, are governed by public Constitutional Law, which includes, among other sources, the U.S. and state constitutions.

Here’s the thing: each body of Constitutional Law is tuned to govern a particular type of institution. Private Constitutional Law, including the law of contracts, is primarily concerned with ensuring truly voluntary transactions. Public Constitutional Law focuses on the problem of legislators, agents of the public, making law that will bind all the rest of us whether we like it or not. We need protection from public laws that ban speech, because lawmakers may impose this on us without our consent and to serve their own ends. We usually do not need protection (at least, as aggressive protections) from private contracts restricting speech, because the parties to the contract can refuse to consent to such terms. This paper, my earlier paper on the public/private theory of legal systems, and my earlier blog post on the structure of legal systems explain in greater detail how these two bodies of Constitutional Law differ.

The Two-Step State Action Solution

Let’s look at why Shelley, the case of private racist covenants, is so difficult. Formally, we have private actors engaging in private contracting. The private Constitutional Law established by the state’s law of contracts sees no problem with the voluntariness of these contracts. (There’s a wrinkle here that I explore a bit in the paper.) But, of course, the problem in Shelley is not with a single such covenant. It’s the fact that there were a great many of them, so many that there was a virtually uniform rule in lots of neighborhoods that non-whites could not live in the same areas as whites. Private constitutional law is not adequate to deal with this problem. Here, acting in concert, private landowners created a virtual law that imposed obligations on others. They acted as a legislature to create a racist zoning scheme.

In state action cases like Shelley, there appears what I call in the paper a “state action problem.” Private action that amounts to compulsory, public legislation creates a state action problem. (It’s not the only way, but a consequence of my theory is that this is a sufficient condition for finding a state action problem.) When private individuals make law for others, it becomes relevant whether they have acted adequately on those others’ behalf, just as it is for public legislatures. The consent among the contracting parties is a poor proxy for the overall public impact of the law. I say these sorts of laws raise state action “problems” because simple application of ordinary private Constitutional Law would poorly govern the private lawmakers. It’s the wrong set of rules given the lawmaking behavior of the private entities.

But, for a court, identifying a state action problem is only the first step. Other legal institutions may well solve the state action problem — by, for example, legislatively or judicially amending state contract law to provide specific constraints, perhaps even borrowing bits of public Constitutional Law. In the regulation of Homeowner Associations, state courts typically review rules passed by private boards, which look very much like the laws of legislatures, for “reasonableness,” rather than for the far more deferential “unconscionability” of ordinary contract law. This, to at least some extent obviates the need for a federal court to solve the state action problem itself.

So when should a court take it upon itself to solve a state action problem, through the rather blunt technique of pretending the private actor is a state actor and applying the Constitution? I argue that it should do so only when (a) there’s a state action problem that (b) other institutions, like legislatures and state courts, are peculiarly disabled from solving. And when does condition (b) occur? Among other times, when the private actors are using private law to impose disadvantages on “discrete and insular minorities,” groups that are relatively powerless to attract the protection of those other institutions that could solve the problem.

If you’re interested in seeing how this theory explains the apparently erratic state action doctrine and why the presence of racial discrimination seems so determinative, read my paper!