Introduction
The United States was established on the principle of balancing government authority with individual rights, highlighting a fundamental tension between public power and private freedoms Throughout history, private markets have played a crucial role in shaping the economy and society, emphasizing the importance of individual choice and entrepreneurship.
The evolution of state constitutional law has been a focal point of discussion among legal scholars, as highlighted in various symposiums such as the "Symposium on State Constitutional Law" and the "Revolution in State Constitution Law." Notable contributions include Ronald K.L Collins' foreword on the new judicial federalism and William J Brennan, Jr.'s examination of state constitutions in safeguarding individual rights Additionally, Alexander Wohl's case study on the Massachusetts Declaration of Rights illustrates the revitalization of traditional liberties through state constitutional frameworks.
5 THE STATE COURTS IN AMERICAN LAW: THE THIRD CENTURY (B Schwartz ed., 1976)
The title comes from California Supreme Court Justice Stanley Mosk.
The public sector is significantly impacted by the perception that privately organized communities can operate more efficiently and enjoyably than those managed by public entities.
From the late nineteenth century's progressive communities to early twentieth-century suburban developments, urban planning experiments have historically represented a small fraction of cities Homeowner associations have long been a part of this landscape, both in the U.S and internationally In the past three decades, amid rising crime concerns and the contrasting trends of urban decay and gentrification, there has been a notable shift among Americans towards the security and lifestyle benefits provided by private communities and living associations.
These communities have been classified variously over the years as "new towns,"' 2 "new communities,"' 3 'edge cities,"" "condominium
6 EVAN MCKENZIE, PRIVATOPIA: HOMEOWNER ASSOCIATIONS AND THE RISE OF RESIDENTIAL PRIVATE GOVERNMENT 7 (1994) See also Uriel Reichman, Residential Private Governments: An Introductory Survey, 43 U CHI L REV 253, 262-63 (1976).
7 This idea finds significant support in the Progressive movement and efforts to remove politics from the management of cities See RICHARD HOFSTADTER, THE PROGRESSIVE MOVEMENT, 1900-
1915 (1963); ROBERT H WIEBE, BUSINESSMEN AND REFORM: A STUDY OF THE PROGRESSIVE
Real estate developers play a crucial role in the governance of private residential communities, as highlighted by Marc A Weiss and John W Watts in their analysis of community builders and associations Their work emphasizes the significance of these developers in shaping the structure and management of residential governance, underscoring the complexities involved in private community administration.
MENTAL SYSTEM? 95, 97 (Advisory Commission on Intergovernmental Relations ed., 1989)
9 Weiss & Watts, supra note 8, at 97
11 Timothy Egan, Many Seek Security in Private Communities, N.Y TIMES, Sept 3, 1995, at Al; Nelson, supra note 3, at 97-102 See also Robert B Reich, Secession of the Successful,
The "New Urbanism" movement focuses on attracting affluent homeowners back to revitalized inner-city neighborhoods These areas are designed to provide planned, pleasant, and diverse communities where housing, jobs, and daily necessities are conveniently within walking distance and accessible via mass transit This approach aims to create a sense of community and enhance urban living experiences.
1995, at B10; Paved Paradise, NEWSWEEK, May 15, 1995, at 42.
12 See, e.g., 'NEW TOWNS' WHY - AND FOR WHOM? (Harvey S Perloff & Neil C Sandberg eds., 1973); Albert A Foer, Democracy in the New Towns: The Limits of Private Government, 36
13 See generally Foer, supra note 12.
In "Edge City: Life on the New Frontier," Joel Garreau explores various forms of modern communities, including planned communities, common interest developments (CIDs), and gated communities Despite their differing legal structures and purposes, these communities exhibit several common characteristics that define their unique social environments.
These associations deliver a comprehensive living experience, emphasizing the benefits of private ownership They enhance residents' emotional, psychological, social, and financial well-being by improving property values, ensuring long-term security, and fostering aesthetically pleasing environments with well-maintained open spaces.
Local associations play a crucial role in ensuring that essential community services, including sewage management, garbage collection, plumbing, and road maintenance, are effectively provided for residents By establishing clear guidelines for the use of shared resources, these organizations foster a sense of security and cooperation within the community.
15 Brian L Weakland, Condominium Associations: Living Under the Due Process Shadow,
17 See Carol J Barton & Stephen E Silverman, The Political Life of Mandatory Homeowners
Residential community associations function as private governance structures within the intergovernmental system, playing a significant role in local governance These associations have emerged as a response to the increasing desire for controlled living environments, often referred to as "walled cities." Their influence on spatial practices highlights the intersection of private and public interests in urban development.
18 RESIDENTIALCOMMUNITY A&OCIATIONS: PRIVATE GOVERNMENTS IN THE INTERGOVERN- MENTAL SYSTEM? 9 (Advisory Commission on Intergovernmental Relations ed., 1989) [hereinafter RESIDENTIAL COMMUNITY ASSOCIATIONS].
19 Stefan Fatsis, 'Cohousing'Mixes 60's Ideals, 90's Realities, WALL ST J., Feb 16, 1996, at B8.
22 See A Dan Tarlock, Residential Community Associations and Land Use Controls, in RESIDENTIAL COMMUNITY ASSOCIATIONS: PRIVATE GOVERNMENTS IN THE INTERGOVERNMENTAL SYSTEM? 75 (Advisory Commission on Intergovernmental Relations ed., 1989)
23 See Nelson, supra note 3, at 47; Weiss & Watts, supra note 8, at 96-97 (citing the example of the Levittown developments of the late 1940s as not only mass-produced affordable housing, but
Young families find attractive investment opportunities in well-planned communities that prioritize construction and long-term maintenance This focus on creating complete neighborhoods enhances the overall living experience, making such investments appealing.
24 Weiss & Watts, supra note 8, at 95.
The association offers vital services to its members, including garbage collection and security, functioning as a platform for individual unit owners to collaborate Additionally, it operates as a quasi-governmental entity, enhancing community cohesion and support.
Liability in the Development and Administration of Condominium and Home Owners Associations,
12 WAKE FOREST L REv 915, 917-18 (1976) These qualities are not necessarily restricted to private communities One landmark work observed in detail an individual anonymous town, culling
Valparaiso University Law Review highlights that deed restrictions in residential areas create a sense of conformity that residents often find reassuring These legal mechanisms not only enforce specific guidelines on what can be displayed or included in homes but also adapt to ensure compliance over the long term.
The significant rise of planned and protected communities can largely be attributed to the controls and barriers they provide, addressing the increasing feelings of vulnerability and insecurity among residents As one commentator observed, these associations resemble the "walled cities of the medieval world," designed to shield inhabitants from external threats.
In recent years, millions of Americans have embraced the lifestyle offered by private community associations, with recent reports indicating that around 28 million people—over 10% of the U.S population—now reside in such communities, including condominiums and cooperatives This figure is projected to double within the next decade Additionally, a study from 1992 highlighted approximately 150,000 homeowner associations managing about 32 million residents, suggesting that by the next century, these common interest developments may become the predominant form of home ownership in many metropolitan areas Research into the lifestyles of residents in these communities reveals a strong desire for specific qualities related to work habits, family life, civic engagement, education, and social interactions, echoing the findings of Robert S Lynd and Helen Merrell Lynd in their classic study, "Middletown."
26 Hyatt & Rhoads, supra note 25, at 918-19.
27 Weiss & Watts, supra note 8, at 95.
28 See Egan, supra note 11, at Al; Reich, supra note 11, at 16.
29 Judd, supra note 17, at 160 One observer has criticized these developments as
A Framework for Analysis
It seems appropriate, when examining a creature of the modem state such as private communities, to scrutinize precisely what we mean by the term
"community." One authoritative source includes in its definition the following:
"a body of individuals organized into a unit or manifesting usually with awareness some unifying trait" and "the people living in a particular place or region and usually linked by common interest."
In examining the nature of these communities, it is evident that key terms like "interaction" and "association" are essential to their definition.
The concept of "shared experience" is vital for human development, emphasizing the importance of interaction in both work and living environments Traditionally, residential gatherings have fostered "free-flowing networks of human relationships centered in home and family." Historically, societies have worked towards de-institutionalizing disabled individuals, countering arguments for their special consideration and minimizing state intervention In the case of Welsh v Goswick, a California appellate court avoided addressing the constitutional question of whether a nursing home for six elderly residents violated a covenant for single-family use However, a concurring opinion highlighted that the covenant infringed upon the residents' right to privacy under the California Constitution.
68 See, e.g., Francis A Allen, Remembering Shelley v Kraemer: Of Public and Private
Worlds, 67 WASH U L.Q 709, 710-12 (1989); Lino A Graglia, State Action: Constitutional
Phoenix, 67 WASH U L.Q 777, 787 (1989); Clyde W Summers, Commentary, 67 WASH U L.Q 799 (1989); Mark V Tushnet, Shelley v Kraemer and 7heories of Equality, 33 N.Y.L ScH.
The concept of community as a model for civil society is deeply rooted in Puritan thought, highlighting its unique appeal to Americans This idea is further explored in Reich's work, which emphasizes the significance of community in shaping societal values.
In the New World, the Puritans aimed to establish a holy commonwealth, as highlighted by John Winthrop's vision of "a city upon a hill," which attracted global attention Dissenters viewed their communities as part of a larger experiment, leading to political statements through the formation of new settlements This resulted in towns functioning as independent entities, fostering a decentralized governance structure Prominent dissenter Thomas Hooker founded Cambridge, Massachusetts, advocating for a commonwealth based on "the free consent of the people," challenging the arbitrary governance of the colony's leaders.
70 Judd, supra note 17, at 145. unhindered association, voluntary interchange, and the strength of public marketplaces and gathering points that bring communities together to talk, barter, and trade.'
The United States has a strong commitment to the principle that public debate should be open and unrestricted, with streets and public spaces serving as vital areas for assembly and discussion Justice Owen Roberts emphasized that these spaces are traditionally held in trust for public use However, the rise of private communities poses challenges to this commitment, as their rules can infringe upon the rights of those living outside these communities who have not consented to such restrictions Additionally, the prevalence of private spaces contributes to the diminishing of traditional public areas that facilitate uninhibited exchange and social interaction, leading to a society that increasingly values privacy over shared public experiences.
The shift from conventional city designs and communal gathering spaces has drawn attention and criticism from various stakeholders, including lawyers, policymakers, city designers, and architects These critics express concerns about the implications of this movement on urban planning and community engagement.
In the case of Park Redlands Covenant Control Comm v Simon, the California Court of Appeal ruled against a homeowners' association's occupancy restrictions, citing the state action doctrine due to state agents' involvement in enforcing these limitations Similarly, in Franklin v Spadafora, the court examined related issues of occupancy and restrictions within homeowners' associations, underscoring the legal complexities surrounding such regulations.
1244 (Mass 1983) (upholding on non-constitutional grounds a condominium bylaw restricting the number of units a single individual could own).
75 See Ellickson, supra note 38, at 1526-30.
Elizabeth Moule and Stefanos Polyzoides highlight concerns about the emergence of "privatopias," where privatism dominates community life, prioritizing contract law, property rights, and values This trend risks fostering homogeneity and exclusivity, undermining the foundation of a diverse social organization.
77 See, e.g., STREETS, CRITICAL PERSPECTIVES ON PUBLIC SPACE 5-6 (Zeynep Celik & DianeFavro eds., 1994); Jerry Adler, Bye Bye Suburban Dream, NEWSWEEK, May 15, 1995, at 40.
522 VALPARAISO UNIVERSITY LAW REVIEW [Vol 30 aesthetic and the practical:
Our streets, designed primarily for cars, diminish public interaction, leading to increasingly isolated private spaces behind garages and walls This results in a lack of identity in public areas, which feel anonymous, while private spaces become overly self-focused Consequently, our communities are divided into stark categories of private versus public, creating a sense of ownership that isolates individuals from one another.
The privatization of our world increasingly affects daily interpersonal communications, driven by the information age and the widespread use of technology More individuals are now engaging from the privacy of their computer terminals, whether in offices or homes, often hidden within the confines of private communities.
The conflict between public and private power is central to "state action analysis" and significantly impacts various legal areas, including contract law A key principle here is the third-party beneficiary, which allows non-parties, such as city governments, to benefit from contractual agreements and gain protection for their interests This principle is particularly relevant for private residential communities, especially regarding disputes over beachfront access between coastal landowners and the public, who have historically enjoyed recreational access to these areas.
78 PETER CALTHORPE, THE NEXT AMERICAN METRoPous 23 (1993) Another commentator offered the following description of the development of private communities:
In the suburbs of Los Angeles, the landscape reveals a vision of the urban future, characterized by extensive gated communities linked by a network of freeways and interchanges This interconnected environment features fortress-like buildings, enclosed malls, and sports stadiums, creating a maze-like experience for residents as they navigate through these barriers.
In "Why Go Anywhere?" published in Scientific American in September 1995, Robert Cervero explores the concept of self-contained towns designed to minimize the reliance on vehicles, a trend facilitated by advancements in telecommunications Additionally, Don Lee highlights the increasing presence of female lawyers in Orange County, emphasizing the evolving dynamics within the legal profession.
Time By Telecommuting, L.A TiMES, Dec 29, 1995, at Dl; Timothy L O'Brien, The Home War:
The rise of online banking has caused concern among bankers about the potential replacement of traditional bank branches by personal computers, as highlighted in an article from the Wall Street Journal on October 25, 1995 Additionally, the growing trend of internet shopping is discussed in a December 20, 1995, article, emphasizing that while there is a vast array of products available online, consumers are often hesitant to make purchases.
80 BLACK'S LAw DICTIONARY 1480 (6th ed 1990) See United States v Capps, 348 U.S
296 (1955); United States v United Serv Auto Assoc., 431 F.2d 735 (5th Cir 1970); Town of Moriah v Cole-Layer-Trumble Co., 606 N.Y.S.2d 822 (N.Y App Div 1994); Town of Islip v.
The legal cases S Zara & Sons Contracting and Town of Babylon v Lizza Industries highlight important issues related to the Takings Clause, easements, and public trust property These legal questions underscore the complex relationship between private property rights and the interests of the public As communities increasingly privatize, it becomes essential to reevaluate the fundamental concepts of urban and community structures and their connections to individual citizens.
Cities and Citizens
The unique federalist structure of the United States creates a dynamic tension between national power, state authority, city jurisdiction, and individual rights City residents navigate the complexities of these overlapping governmental layers, leading to ongoing debates about how local autonomy and the emergence of private associations or governments help them adapt This discussion includes various perspectives, such as the concept of "private contract."
Constitutional and statutory law serves to safeguard individual citizens' rights against local government overreach while simultaneously empowering cities to address the needs of local residents This legal framework not only limits municipal power but also enables communities to uphold their values and offers individuals greater control over their lives.
A general theory of increased local autonomy and political participation in local government, framed in terms -of the benefits to the individual citizen,"
The Takings Clause of the Fifth Amendment asserts that individuals cannot be deprived of life, liberty, or property without due process, and it mandates that private property cannot be taken for public use without providing just compensation This legal principle is illustrated in cases such as Bell v Town of Wells, emphasizing the protection of property rights under the Constitution.
168 (Me 1989) (holding that publicly mandated easement for fishing, fowling, and navigation did not include public recreational use and was a regulatory taking).
82 See Gerald E Frug, The City as a Legal Concept, 93 HARV L REV 1059, 1062-67
Professor Briffault references the Supreme Court case Village of Belle Terre v Boraas, 416 U.S 1 (1974), to illustrate the concept that local government functions as an extension of the home, prioritizing family protection over individual oppression, thereby reinforcing the idea of local governance as a defender of familial rights.
84 See GERALD E FRUG, LOCAL GOVERNMENT LAw 538 (2d ed 1994).
Professor Frug emphasizes the significance of Hannah Arendt's notion of "public freedom," which refers to the capacity for active participation in fundamental societal decisions that impact individuals' lives, highlighting its essential role in fostering vibrant local communities.
The foundation of local private communities is rooted in the democratic principles of ancient Greek city-states, emphasizing that effective local governance relies on informed and engaged citizens within small communities These private communities serve as alternatives to traditional city structures, fostering shared responsibilities, decentralized authority, and a collective commitment to the common good By enabling households in a defined area to enforce rules, provide public goods like open spaces, and achieve shared objectives, these associations function similarly to cities while addressing contemporary societal challenges.
Alexis de Tocqueville's insights remain relevant in discussions about American government and community structure, particularly in the context of private communities and associations His seminal work, "Democracy in America," emphasizes the principle of association, highlighting its unique and effective application in the United States Tocqueville noted that the power of association in America has been successfully utilized across various objectives, including the unification of electoral bodies.
"constitut[ing] a separate nation in the midst of the nation, a government within the Government."'
There is no agreement that local cohesion or participation effectively transforms local governments into ideal systems, nor is there clear evidence linking government size with increased public involvement Critics argue that the concept of common-unit developments as small-scale laboratories may not lead to the anticipated benefits.
86 See Briffault, supra note 23, at 395.
87 See Frg, supra note 82, at 1069 See also Briffault, supra note 23, at 396 (discussing other political science and economic theories on the relation of size to political participation).
88 See Ellickson, supra note 38, at 1519-20.
90 1 ALEXIS DE TOCQUEVILLE, DEMOCRACY IN AMERICA (Reeve Translation 1900) For an example of the use of this powerful work, see Nelson, supra note 3, at 47.
92 Id at 192-93 See also Robert D Putnam, Bowling Alone, 6 J DEMOCRACY 65 (1995), in which the author suggests that community involvement helps strengthen democracy by encouraging people to talk to one another.
Cities can be shaped by the voluntary associations of their citizens, highlighting the importance of democracy and civil participation However, the original structure of a homeowners association may often be established by a developer without any input from future residents, leading to a distortion of social reality.
To understand the individual decisions made within a community, it is essential to investigate the motivations for its establishment and the social bonds that connect its members, such as shared values or convenience This raises a critical question: what truly defines a community as private? Specifically, what enables individuals to distance themselves from the wider local or national society, especially when such separation could impact the rights of those outside their community?
Public and Private
The "Public" Argument
The Advisory Commission on Intergovernmental Relations (ACIR) highlights that Residential Community Associations (RCAs) operate both within and outside governmental systems, acting as quasi-governmental entities that perform public functions RCAs regulate property use, maintain common areas, and provide essential services like utility management, road maintenance, and refuse collection, often resembling municipal governments These associations, functioning as 'mini-governments,' finance their operations through assessments akin to taxes, with authority vested in a board of directors similar to a municipal governing body Their governing documents, such as articles of incorporation and bylaws, mirror public laws, granting boards the power to impose fines and restrict access to common facilities, thereby impacting individual property rights.
99 Tarlock, supra note 22, at 75 There is a long history of private associations as governments within a government." See MCKENZIE, supra note 6, at 123 (citing the writings of Thomas Hobbes and others).
101 RESIDENTIAL COMMUNITY ASSOCIATIONS, supra note 18, at 13
103 Hyatt & Rhoads, supra note 25, at 918 (citations omitted).
106 Hyatt & Rhoads, supra note 25, at 919.
Local governments play a dual role as partners and beneficiaries of Residential Community Associations (RCAs), as they have a vested interest in ensuring these associations remain financially stable and well-managed This stability prevents the potential dissolution of RCAs, which could result in the transfer of their responsibilities to local city governments Consequently, this interconnected relationship has prompted some to argue that homeowners' associations function as privately owned and operated entities.
"shadow governments" that "can rigidly control immense residential areas." 09
Under this perspective, nearly any action initiated by the community can be seen as governmental or state action Additionally, some have characterized the connection between the association and local government as one of interdependence.
"transforms its basic nature from private to public ""' °
Community associations are often likened to private governments due to their resemblance to corporate structures Scholars supporting this view have proposed a checklist to assess whether these associations function as private governments, thus necessitating constitutional protections for individuals within them One model identifies five key elements that suggest an association may be a private government: (1) a clear allocation of principal functions, (2) a symbolic system for ratifying collective decisions, (3) an established command structure, (4) a system of rewards and punishments, and (5) a framework for enforcing rules and regulations.
Private residential associations embody key characteristics through their governing documents, the election process for board members, and the enforcement of Covenants, Conditions, and Restrictions (CC&Rs) These elements ensure the effective implementation of common rules within the community.
As additional support for the proposition that associations act as private governments, it has been noted that the board of directors:
[E]xhibit, to a significant extent, certain fundamental political
Residential associations exert quasi-governmental power through political pressure and influence on local governments, often formalized by "interlocal agreements" that establish cooperative relationships between the associations and local authorities.
108 See RESIDENTIAL COMMUNITY ASSOCIATIONS, supra note 18, at 5
The Supreme Court case Trenton v New Jersey (1923) established that a municipal corporation is a political subdivision of the state Additionally, discussions surrounding the quasi-governmental nature of condominiums highlight their unique role within municipal structures, as noted by MCKENZIE and Weakland.
Private governments wield significant power over both members and non-members, influencing critical aspects of individual and societal interests They establish and enforce rules that govern member behavior, often featuring structured systems of legislation, adjudication, and enforcement, alongside basic electoral and federal frameworks Their organizational structures can range from authoritarian to populist in nature.
Historical studies of early literature from proponents of common interest developments and homeowners associations reveal that these pioneers recognized they were establishing residential private governments This evidence supports the perspective that associations function as private governing entities.
The Private Approach
Homeowner associations (HOAs) are often viewed as public entities due to their governmental features; however, many experts argue that they are fundamentally private organizations These associations operate on the principles of private initiative, funding, property ownership, and legal frameworks As mandatory entities within common interest developments, HOAs can be seen as private governments that require government support and regulation to thrive effectively.
RCAs are private entities regulated by real estate contract law, distinguishing them from public organizations that must adhere to specific conduct rules This perspective emphasizes the principles of private contracts and property law, highlighting the landowners' authority over their property.
The Middle Approach
Residential associations exhibit both public and private characteristics While many advocate for the classification of homeowners organizations as private entities rather than public municipalities, they acknowledge various aspects that highlight their public nature.
118 Barton & Silverman, supra note 17, at 31 The authors caution against using these associations to carry out traditional public functions Id
Residential community associations exhibit a unique blend of public and private governance, as they control territory, provide security and facilities, and influence the physical transformation of homes and resident behavior Their property assessments resemble taxes, and the boards of directors possess governmental qualities This complexity has led theorists to categorize these associations as having an "intermediate" status, existing between fully public and private entities.
Residential community associations (RCAs) exhibit traits of both private and public entities, suggesting that a "balancing test" could serve as an effective method for legal adjudication in this context Despite their differences, there are notable similarities between residential associations and municipal governments.
"these similarities are not, in themselves, sufficient to constitute state action," but rather depend on the presence of a number of different factors 124
An "intermediate" perspective can differentiate between intra-community and inter-community effects While it can be argued that the legal mechanisms binding homeowners to necessary regulations are rooted in private law, this does not apply to outsiders who may need to engage with community members or representatives.
122 Id Professor Ellickson quotes Professor Frank Michelman's one sentence suggestion to help calculate whether a community is public or private:
Governments are characterized by their recognized legal authority to exert coercion over a defined territory and its members, independent of property ownership This authority is exercised through regulation, taxation, and condemnation, and is determined by majoritarian and representative processes, distinguishing it from non-governmental powers and organizations.
Id at 1521-22 (quoting Frank I Michelman, States' Rights and States' Role: Permutations of
In "Sovereignty" as discussed in National League of Cities v Usery, Ellickson acknowledges that while his interpretation is not definitive, it highlights various "public" characteristics of private organizations He concludes that the key distinction between public and private organizations lies in the presence of involuntary members in public organizations, contrasting with the entirely voluntary membership found in private organizations.
In "The Balancing Test," Patrick M McFadden explores how judges can prioritize competing interests over formal rules in legal decisions, advocating for a judgment that favors the side with greater significance The article examines the application of the balancing test across various legal contexts, offering examples from multiple states to illustrate its broad usage.
530 VALPARAISO UNIVERSITY LAW REVIEW [Vol 30
Several commentators propose a multi-tiered review process that acknowledges the complexities of categorizing associations as purely private or public One theory advocates for applying different standards based on whether the challenge originates from a resident or a non-resident Other suggestions include evaluating the reasonableness of actions, the degree of state involvement, whether the association has exceeded its state-granted powers, or if it has assumed additional governmental roles Ultimately, the determination of state action appears to hinge on factual circumstances, leading to case-specific conclusions that significantly impact legal analysis at both federal and state levels.
The Legal Precedent
Residential associations and their CC&Rs often function as alternatives to local government, taking on roles typically associated with municipal authorities This raises the important question of whether the policies enacted by these associations and the actions of their boards can be classified as "state action."
When examining the implications of state action in relation to policies and actions, it is crucial to understand how different constitutional standards can affect a party's legal claims This article provides an overview of federal precedents, focusing on relevant analogies such as company towns and shopping centers Additionally, it explores how various states have interpreted their constitutions regarding the issue of state action, highlighting the diverse approaches taken across the nation.
In the early 1980s, significant developments occurred in federal and state courts regarding state action determinations, marked by key rulings from the Supreme Court that shaped the legal landscape of this area of law.
126 See Weakland, supra note 15, at 329-31; Ellickson, supra note 38, at 1520-23; Kennedy, supra note 35, at 789-93.
The author argues that associations should be regarded as state actors when dealing with claims from non-members, provided that the circumstances justify this classification For claims made by members, a "reasonableness" test should be applied, given that prior consent to the relevant rules or restrictions was obtained.
Recent federal constitutional interpretation has seen minimal change, while state courts are increasingly broadening the interpretation of their constitutions compared to federal provisions Section V of this article highlights recent state decisions that reflect these developments The ongoing debate centers around the "company town" analysis and its modern counterpart, the shopping center, raising questions about the public/private distinction This divided perspective within the Court underscores the challenges faced by all courts in interpreting these rulings and applying state constitutional provisions effectively.
The Federal Constitutional Analysis
The Symbiotic Relationship Test
The symbiotic relationship test predated the analysis of Lugar The Supreme Court identified a symbiotic relationship between a private party and the state in the 1961 decision in Burton v Wilmington Parking Authority 3 6
In Burton v Wilmington Parking Authority, the Court determined that a restaurant situated in a publicly owned parking facility was considered a state actor This classification arose from the fact that the restaurant's lease of the property amounted to state involvement, particularly when it refused service to a black patron.
135 See, e.g., Brock v Watergate Mobile Home Park Assoc., 502 So 2d 1380, 1381 (Fla.
1984) See also Rosenberry, supra note 39, at 11-25; Lino S Graglia, State Action: Constitutional
Phoenix, 67 WASH U L.Q 777 (1989) (critiquing the state action doctrine and "judicial activism").
The relationship between the state and private entities is crucial for the successful operation of self-sustaining projects, as it provides mutual benefits beyond mere regulation The involvement of private parties must extend beyond basic state oversight to ensure a cohesive and effective partnership.
Determining whether a residential association qualifies as a state actor hinges on the specific circumstances of each case, regardless of the prevailing analysis—be it purely private, purely public, or intermediate Generally, under the symbiotic relationship analysis, the onus is on the association to demonstrate its non-state actor status This could involve showing that the state was not involved in the association's formation or that its actions, location, or regulations do not infringe upon the constitutional rights of non-residents For instance, the association must justify its authority over a public street in relation to an individual's free speech rights when attempting to picket Interdependence occurs when a private entity makes an unconstitutional decision and relies on the state to enforce it, potentially leading to a balancing test in the evaluation.
138 See, e.g., Rendell Baker v Kohn, 457 U.S 830 (1982); Blum v Yartesky, 457 U.S 991 (1982); Jackson v Metropolitan Edison Co., 419 U.S 345 (1974).
139 Tulsa Professional Collection Serv Inc v Pope, 485 U.S 478 (1988) See Kennedy, supra note 35 at 787.
140 The balancing test, which has been applied in a variety of legal areas, has attracted both supporters and critics See, e.g., Vincent Luizzi, Balancing of Interests in Courts, 20 JURIMETrICS
Some legal scholars argue that a balancing approach simplifies disputes by reducing them to a single variable, making it easier for courts to reach decisions However, others warn that this method may be misleadingly simplistic Professor McFadden contends that applying a utilitarian calculus in legal cases can be just as complex as traditional legal analysis, suggesting that the perceived simplicity of balancing may obscure the challenges involved in its application.
A significant appeal of the balancing test is that it allows for more ease and flexibility in reaching a just result See, e.g., Louis Henkin, Infallibility Under Law: Constitutional Balancing,
Professor Henkin emphasizes that balancing in legal contexts reflects moderation and reasonableness, allowing for nuanced judgment and sensitivity to varying degrees However, critics argue that this flexibility could jeopardize essential liberties Justice Hugo Black has also weighed in on this debate, highlighting the potential risks associated with such a flexible approach.
Constitutional adjudication using the balancing method involves the Court determining the most acceptable governmental policy for a specific case This process requires the Court to present the facts in a manner that highlights the considerations influencing the final decision.
El Paso v Simmons, 379 U.S 497, 533 (1965) (Black, J., dissenting) See also Barenblatt v.United States, 360 U.S 109, 140-144 (1959) (Black, I., dissenting).
The Public Function or Company Town Test
The public function or "functional equivalent of a municipality" theory serves as a test for determining the existence of state action, first articulated in the landmark post-World War II case Marsh v Alabama This case explored the concept of state action within the framework of a "company town," highlighting the intersection of private property rights and public functions.
In the Marsh case, the Supreme Court ruled that residents of Chickasaw, Alabama, entirely owned by Gulf Shipbuilding Corporation, are entitled to the protections of the Bill of Rights, ensuring that their liberties cannot be denied as citizens of a state.
A Jehovah's Witness challenged a town's ban on distributing religious literature, leading the Court to determine that the town exhibited characteristics typical of any American town, thus constituting state action The Court emphasized that the town's "business block" functions as a community shopping center, accessible to both residents and visitors.
The fact that the property rights of the location where the deprivation of liberty occurred are owned by private entities, rather than the public, does not provide adequate justification for the State to allow a corporation to control a community of citizens in a manner that limits their fundamental freedoms Furthermore, enforcing such restrictions through state legislation raises significant concerns about individual liberties.
The Court did not explicitly endorse the direct correlation between private government and corporation, choosing instead a more graduated approach:
Ownership does not equate to complete control; as property owners allow public access for their benefit, their rights are increasingly limited by the legal rights of users Justice Frankfurter emphasized that state law governs property relations, but it cannot dictate civil liberties issues that emerge in a community setting.
141 See Rosenberry, supra note 39, at 20-25
534 VALPARAISO UNIVERSITY LAW REVIEW [Vol 30 relations "1 49 a Pullman: A Model Company Town
The idea of company towns serves as a valuable framework for analyzing modern private communities Originating in New England's textile manufacturing areas, the first company towns appeared soon after the War of 1812.
In towns owned by large corporations, citizens earned their livelihoods working in local factories, where the manufacturing interests thrived by fostering a skilled and satisfied workforce through a strong commitment to employee welfare and comfort.
Pullman, established near Chicago in 1881, exemplifies both the successes and potential pitfalls of urban industrial development While not the first of its kind, the Pullman Company flourished by addressing the needs and concerns of workers, unlike previous failed experimental towns rooted in communitarianism and socialism Founded on practical principles of industry, sobriety, and economy, Pullman emerged as a solution to the widespread discontent surrounding industrialization and urbanization, similar to contemporary private communities.
"the disorderly and unstable culture of the Chicagos of the world, " "' which
150 LISTON EDGINOTON LEYENDECKER, PALACE CAR PRINCE - A BIOGRAPHY OF GEORGE
151 Id at 171; DANIELJ BOORSTIN, THE AMERICANS: THE DEMOCRATIC EXPERIENCE, 281- 91(1973)
152 STANLEY BUDER, PULLMAN- AN EXPERIMENT IN INDUSTRIAL ORDER AND COMMUNITY
PLANNING 53 (1967) See also LEYENDECKER, supra note 150, at 168
Ebenezer Howard's groundbreaking 1898 book, originally titled *To-morrow: A Peaceful Path to Real Reform* and later reissued as *Garden Cities of To-morrow*, stands as one of the earliest and most influential works in the field of town planning This seminal text laid the foundation for the concept of garden cities, promoting a harmonious balance between urban living and nature.
In the 1965 edition of "Of To-Morrow" edited by F.J Osborn, early towns such as New Harmony, Indiana, and Brook Farm in West Roxbury, Massachusetts, are highlighted as communal living experiments These communities aimed to promote well-being of mind, spirit, and body through rational thought and honest labor However, they ultimately faced financial difficulties that led to their collapse.
ENCYCLOPEDIA BRITANNICA 549 (15th ed 1985); 8 THE NEW ENCYCLOPEDIA BRITANNICA 637 (15th ed 1985) See also 'NEW TOWNS' WHY - AND FOR WHOM? supra note 12.
155 Id at 209. bred hope and anticipation within the troubled, urban public.
Pullman was unique compared to Chicago and other towns, as it was located outside the city limits and was privately owned by the Pullman Company Managed by a designated employee known as the town agent, Pullman garnered significant attention, with one journalist famously dubbing it "the Eighth Wonder of the World."
The residents of Pullman enjoyed amenities that were often inaccessible to the working class in Chicago, including reliable public services like gas, water, indoor plumbing, sewage, and regular garbage removal While these benefits made Pullman seem like an appealing refuge compared to the harsh realities of Chicago, it was fundamentally a business venture George Pullman, a savvy entrepreneur, recognized the importance of employee morale and understood that neglecting the poor working and living conditions of his workers was not a sustainable business strategy He envisioned Pullman as a place where investments could transform utilitarian spaces into artistic and beautiful environments.
The community-focused strategy adopted by the business has faced significant criticism, with the main concern being that these towns resemble a paternalistic model, ultimately diminishing the autonomy of their residents.
The ongoing debate surrounding modern private communities often references the "Pullman Idea," which reflects George Pullman's comprehensive approach to employee welfare that extended beyond mere profit motives This cooperative environment thrived due to the absence of dissent, largely attributed to Pullman's absolute authority, allowing the community to function effectively without traditional governance.
160 Id at 184 See BOORSTIN, supra note 151, at 282.
The concept of Pullman has been described as "un-American," reflecting economist Richard Ely's critique of its benevolent yet authoritarian approach, which prioritizes the happiness of the populace while catering to the preferences of those in power.
162 See Foer, supra note 12, at 393 (noting that if a developer is too paternalistic, it will pose a danger in the construction and development of healthy private communities).
536 VALPARAISO UNIVERSITY LAW REVIEW [Vol 30
The State Constitutional Analysis
California: Fact-Based Private Interest Balancing
The California Supreme Court's decision in Pruneyard primarily addressed whether the California Constitution safeguards speech and petitioning rights at shopping centers A crucial preliminary question was whether the ruling in Lloyd v Tanner established federally protected property rights that would prevent the court from determining that the California Constitution provides broader speech rights on private property than the federal Constitution.
California state court decisions indicated that broader interpretations of the California Constitution were limited by the federal Supremacy Clause Specifically, the case of Lloyd established that the due process clause of the United States Constitution safeguards the property rights of shopping center owners However, in the Pruneyard case, the California Supreme Court determined that property rights could be subject to state regulation.
Rather, in language that offers support to state courts looking to balance property rights with individual or public rights, the Court stated:
Property rights must be balanced with the public interest, particularly in relation to zoning laws and environmental needs While the constitutional guarantees of private property ownership are significant, historical cases demonstrate that these rights can be limited for the greater good For instance, a California ruling established that a private charitable organization's refusal to accept membership applications based on gender violated state law Similarly, a Delaware court determined that there is no constitutional right to conduct anti-abortion demonstrations on the property of health organizations These precedents highlight the necessity of prioritizing public concerns over individual property rights.
785 P.2d 911 (Alaska Ct App 1990) (holding no right under state or federal constitution to protest in private health facility parking lot).
192 See New Jersey Coalition Against War v J.M.B Realty Corp., 650 A.2d 757 (N.J 1994) (describing several different state constitutional interpretations).
California courts have consistently aligned with the ruling in Lloyd Corp v Tanner, as highlighted in Pruneyard Shopping Center v Robins, which examines the evolving legal landscape in California It is well-established that individual rights under constitutional provisions are subordinate to societal rights, indicating that societal interests can justify limitations on personal behavior and property use.
Where the interest of the individual conflicts with the interest of society, such individual interest is subordinated to the general welfare '"96
The Pruneyard court then applied this analysis to the facts, concluding that
Protecting free speech and the right to petition aligns with safeguarding public health, safety, the environment, aesthetics, property values, and other societal objectives that justify reasonable limitations on private property rights Since the Pruneyard decision, numerous states have adopted similar measures as California to enhance these protections.
Washington: A Path of State Constitutional Narrowing 543 3 Ohio: The Federal Standard Revisited
In Alderwood Assocociates v Washington Environmental Council," 9 a plurality of the Washington Supreme Court favorably compared the Washington Constitution's speech provision' with the California provision at issue in
The article references several significant legal cases, including Bock v Westminster Mall Co (1991), Batchelder v Allied Stores Int'l Inc (1983), and State v Schmid (1980) Other notable cases mentioned are State v Dameron (1993), State v Cargill (1990), Commonwealth v Tate (1981), and Alderwood Assoc v Washington Envtd Council (1981) These cases collectively highlight important judicial decisions across various states, contributing to the understanding of legal precedents in American law.
The Washington Constitution guarantees the right to free speech, allowing individuals to speak, write, and publish freely while holding them accountable for any misuse of that right (WASH CONST art I, § 7) Additionally, Washington includes a provision on eminent domain that elaborates on the principles outlined in the Fifth Amendment.
Private property cannot be taken for private use, except for necessary access and specific agricultural or sanitary purposes Just compensation must be provided before any property is taken or damaged for public or private use, with payments made to the owner or deposited in court Corporations, other than municipal ones, must also provide full monetary compensation before appropriating any right-of-way The determination of whether the intended use of property is genuinely public is a judicial matter, independent of legislative claims Additionally, the state may take private property for land reclamation and settlement purposes.
544 VALPARAISO UNIVERSITY LAW REVIEW [Vol 30
The Washington State Constitution's speech and initiative provisions differ from the Fourteenth Amendment's requirement for "state action," as determined by a New Jersey court in the Pruneyard case Consequently, the act of environmentalists gathering signatures for a petition at a shopping mall is recognized as a protected activity.
The court observed that the state constitutions do not explicitly reference "state action," allowing for case-by-case assessments of harm to speech and property interests The Washington court clarified that not all speech and initiative activities are protected, as blanket protection would undermine private autonomy and property rights, similar to how the Fourteenth Amendment's "state action" requirement limits free speech Consequently, the Washington court implemented a distinct balancing test, differing from the analysis typically applied under the Fourteenth Amendment.
Eight years later, however, in Southcenter Joint Venture v National
The Washington Supreme Court ruled that a political organization cannot solicit contributions or sell literature in privately owned shopping centers under the state's free speech provision The court clarified that while the free speech provision protects individual actions by the state, it does not extend to actions taken by private individuals, emphasizing that this limitation is inherently understood within the Washington Constitution.
The court explained that the Committee was:
[N]otjust asking us to cast a more expansive interpretation of the state constitutional provision; in reality, it is asking us to declare that our public use.
201 State v Schmid, 423 A.2d 615 (N.J 1980) See discussion infra notes 221-32 and accompanying text.
203 Alderwood Assoc v Washington Envtl Council, 635 P.2d 108, 116 (Wash 1981).
The Washington court referenced federal precedent to evaluate the interplay between private property usage, the characteristics of speech activities, and the feasibility of reasonable speech regulation.
The state constitution establishes a novel free speech right that empowers private individuals to defend themselves against state actions while also allowing them to assert their rights against other private individuals.
The court refused to adopt a "balancing test" to weigh the free speech interest of the two parties, stating that to do so would be legislating, not adjudicating.'
The Southcenter court dismissed the petitioner's claim that the state constitution's free speech provision extends to shopping malls based on the "public function" doctrine established in Marsh Instead, the court relied solely on the U.S Supreme Court's ruling in Lloyd to differentiate shopping malls from company towns.
The Washington Supreme Court's reasoning in Southcenter has influenced several states, while others less open to "new federalism" have relied on different justifications for safeguarding private property rights Some courts assert that their state constitutional provisions align closely with the corresponding federal clauses.
208 Id at 1286 The Court further stated:
The absence of a reference to the State as the actor limited by the state free speech provision suggests that the framers of our state constitution aimed to establish a new right This interpretation raises concerns, as it may conflict with the foundational principles upon which the entire constitution is built.
209 Southcenter Joint Venture v National Democratic Policy Comm., 780 P.2d 1282, 1288-89
In a 1989 ruling, the court reaffirmed its stance by aligning with the Alderwood decision, noting that five justices, including one concurring judge and four dissenters, concurred that the state constitution's free speech provision necessitated state action.
Several significant legal cases have shaped the interpretation of various laws across states, including Wilhoite v Melvin Simon and Assoc in Indiana, Iowa v Lacey in Iowa, and Woodland v Michigan Citizens Lobby in Michigan Notable decisions such as Shad Alliance v Smith Haven Mall in New York and Eastwood Mall v Slanco in Ohio further illustrate the complexities of legal precedents Additionally, the plurality opinion in Western Pa Socialist Workers 1982 Campaign v Connecticut Gen Life Ins Co in Pennsylvania and the rulings in Town of Barrington v Blake in Rhode Island and Charleston Joint Venture v McPherson highlight diverse judicial interpretations.
In Bock v Westminster Mall Co., the Colorado Supreme Court emphasized the state's commitment to a broader freedom of speech compared to the federal Constitution The court asserted that when government entities or public funds support private interests that simultaneously limit free speech and dissent, such actions could be deemed unconstitutional Notably, the court determined that it was not necessary to establish "state action" as defined by federal standards in this case.
3 Ohio: The Federal Standard Revisited Within the Ohio Constitution
In Ohio, a state appellate court's ruling was later overturned by the Ohio Supreme Court in the case of Ferner v Toledo-Lucas County Convention and Visitors Bureau, Inc A city council candidate contested a regulation that barred him from gathering signatures for his nominating petition at the Seagate Convention Centre Although the candidate acknowledged he lacked a First Amendment right to solicit signatures in a private venue, he based his challenge on the provisions of the Ohio Constitution.
New Jersey: A Broad and Consistent State
New Jersey has consistently upheld a broad interpretation of constitutional protections for individuals protesting on private property, distinguishing itself from other states This approach is exemplified in the case of New Jersey v [case details], where the state's commitment to safeguarding protest rights is evident.
In the case of Schmid, the court addressed the trespassing conviction of Mr Schmid for distributing political literature without authorization at Princeton University Schmid argued that he was not required to seek permission from university officials, asserting that his actions were protected under both the New Jersey Constitution and the federal Constitution While the court began with a standard First Amendment analysis, it ultimately refrained from making a definitive ruling due to ambiguities in federal case law.
In the Femer case, the court addressed the "takings" issue, concluding that there was no regulatory taking since the economic impact was deemed speculative The government did not intend to physically occupy the appellant's land but aimed to restrict the appellant from entirely prohibiting political speech.
220 Eastwood Mall, Inc v Slanco, 626 N.E.2d 59, 65 n.8 (Ohio 1994) (Wright, J., dissenting).
In the case discussed, the court sought to resolve the conflict between public and private rights by referencing the state constitution, rather than focusing on the presence of "state action." This approach was supported by the precedent set in Pruneyard.
The court noted New Jersey's history of interpreting this section of its constitution expansively, stating that the relevant constitutional language is
"more sweeping in scope than the language of the First Amendment "'
Citing both federal and state precedents, the Schmid court "balance[d] within a constitutional framework legitimate interest in private property with individual freedoms of speech and assembly "2 It concluded:
To determine the rights of speech and assembly on privately-owned property, several key factors must be considered These include the primary use and nature of the property, the extent to which the public is invited to use it, and the purpose of the expressive activities conducted on the property in relation to both its private and public functions.
The New Jersey court determined that Schmid experienced a violation of his constitutional rights to speech and assembly, leading to the conclusion that his trespass conviction should be overturned.
The New Jersey Supreme Court has reinforced its dedication to a broad interpretation of freedom of expression as outlined in the state constitution, as demonstrated in the case of New Jersey Coalition Against War in the Middle East v.
JMB Realty Corp ,' the court applied the test developed in Schmid to hold that private shopping malls must allow free speech, specifically "leafletting and
224 Id at 628 The relevant portions of the state constitution state:
Every individual has the right to express, write, and publish their thoughts on any topic while being accountable for any misuse of this freedom Legislation cannot limit the freedom of speech or press Additionally, citizens have the right to gather peacefully, discuss matters for the collective benefit, communicate their views to their elected officials, and seek remedies for their complaints.
In the case of 229 650 A.2d 757 (N.J 1994), the court emphasized the importance of political and societal free speech, recognizing the significant role of associated speech in supporting or opposing various causes, candidates, and parties The court noted the unique nature of private property that closely resembles public property, leading to its decision Additionally, the ruling was informed by the Schmid test and a careful balancing of expressive rights against private property rights.
A review of state court decisions reveals diverse legal analyses used to establish the boundaries and rights distinguishing public and private matters among citizens This reflects the federalist system's intention, where varying state constitutional provisions aim to protect and balance the public and private rights of individuals.
Conclusion
Our nation has a rich history of safeguarding individual rights while promoting private contracts and associations for the benefit of all involved Recognizing the historic tension between these two concepts is crucial, as it ensures that both traditions are protected when they intersect.
State courts, however, are not necessarily finding it easy going as they work to interpret and apply these doctrines The federal holdings in this area
The court recognized the increasing significance of shopping malls in society, noting a substantial decline in downtown business districts across major cities over the past two decades This decline has been attributed to the migration of residents to suburban areas and the rise of shopping centers in those regions Ultimately, the court emphasized that privately owned shopping centers have become the primary public trading spaces for much of metropolitan America.
In the case of Mathews v Bay Head Improvement Association, 471 A.2d 355 (N.J 1984), the New Jersey Supreme Court ruled that a nonprofit association controlling access to a municipal beachfront was violating legal standards This case may have significant implications for private communities, as it involves important legal analysis related to access and control within such entities.
The court ruled that a corporation managing shoreline areas, by restricting access to local residents only, violated the public trust doctrine, which aims to enhance public access to these spaces It emphasized that while private land ownership differs from municipal governance, the public's right to access shorelines remains paramount, with case outcomes varying based on specific circumstances This decision highlights the ongoing conflict between private interests and public policy regarding shoreline use.