Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

تمرين 11

FACTS The Tennessee Secondary School Athletic Association (Association) is a not-for-profit membership corporation organized to regulate interscholastic sport among the public and private high schools in Tennessee. No school is forced to join, but since there is no other authority regulating interscholastic athletics, it enjoys the memberships of almost all the state's public high schools (some 290 of them or 84 percent of the Association's voting membership), far outnumbering the fifty-five private schools that belong.
The Association's rulemaking arm is its legislative council, while its board of control tends to administration. The voting membership of each of these nine-person committees is limited under the Association's bylaws to high school principals, assistant principals, and superintendents elected by the member schools, and the public school administrators who so serve typically attend meetings during regular school hours. Although the Association's staff members are not paid by the state, they are eligible to join the state's public retirement system for its employees. Member schools pay dues to the Association, though the bulk of its revenue is gate receipts at member teams' football and basketball tournaments. The constitution, bylaws, and rules of the Association set standards of school membership and the eligibility of students to play in interscholastic games. In 1997, a regulatory enforcement proceeding was brought against Brentwood Academy, a private parochial high school member of the Association. The Association's board of control found that Brentwood violated a rule prohibiting ''undue influence'' in recruiting athletes, when it wrote to incoming students and their parents about spring football practice. The Association placed Brentwood's athletic program on probation for four years, declared its football and boys' basketball teams ineligible to compete in playoffs for two years, and imposed a $3,000 fine.
Brentwood sued the Association and its executive director claiming that enforcement of the Rule was state action and a violation of the First and Fourteenth Amendments. The district court entered summary judgment for Brentwood and enjoined the Association from enforcing the Rule. The U.S. Court of Appeals for the Sixth Circuit reversed, saying that the district court was mistaken in seeing a symbiotic relationship between the state and the Association. It emphasized that the Association was neither engaging in a traditional and exclusive public function nor responding to state compulsion. The U.S. Supreme Court granted certiorari to resolve the conflict.
DECISION The judgment of the Court of Appeals for the Sixth Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion
OPINION Souter, J. Thus, we say that state action may be found if, though only if, there is such a ''close nexus between the State and the challenged action'' that seemingly private behavior ''may be fairly treated as that of the State itself.'' [Citation.]
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Our cases have identified a host of facts that can bear on the fairness of such an attribution. We have, for example, held that a challenged activity may be state action when it results from the State's exercise of ''coercive power,'' [citation], when the State provides ''significant encouragement, either overt or covert,'' [citation], or when a private actor operates as a ''willful participant in joint activity with the State or its agents,'' [citation]. We have treated a nominally private entity as a state actor when it is controlled by an ''agency of the State,'' [citation], when it has been delegated a public function by the State, [citations], when it is ''entwined with governmental policies'' or when government is ''entwined in [its] management or control,'' [citation].
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*** [T]he ''necessarily fact-bound inquiry,'' [citation], leads to the conclusion of state action here. The nominally private character of the Association is overborne by the pervasive entwinement of public institutions and public officials in its composition and workings, and there is no substantial reason to claim unfairness in applying constitutional standards to it.
The Association is not an organization of natural persons acting on their own, but of schools, and of public schools to the extent of 84% of the total. Under the Association's bylaws, each member school is represented by its principal or a faculty member, who has a vote in selecting members of the governing legislative council and board of control from eligible principals, assistant principals and superintendents.
Although the findings and prior opinions in this case include no express conclusion of law that public school officials act within the scope of their duties when they represent their institutions, no other view would be rational, ***. Interscholastic athletics obviously play an integral part in the public education of Tennessee, where nearly every public high school spends money on competitions among schools. Since a pickup system of interscholastic games would not do, these public teams need some mechanism to produce rules and regulate competition. The mechanism is an organization overwhelmingly composed of public school officials who select representatives (all of them public officials at the time in question here), who in turn adopt and enforce the rules that make the system work. Thus, by giving these jobs to the Association, the 290 public schools of Tennessee belonging to it can sensibly be seen as exercising their own authority to meet their own responsibilities. *** In sum, to the extent of 84% of its membership, the Association is an organization of public schools represented by their officials acting in their official capacity to provide an integral element of secondary public schooling. There would be no recognizable Association, legal or tangible, without the public school officials, who do not merely control but overwhelmingly perform all but the purely ministerial acts by which the Association exists and functions in practical terms. ***
To complement the entwinement of public school officials with the Association from the bottom up, the State of Tennessee has provided for entwinement from top down. State Board members are assigned ex officio to serve as members of the board of control and legislative council, and the Association's ministerial employees are treated as state employees to the extent of being eligible for membership in the state retirement system.
INTERPRETATION If an association involves the pervasive entwinement of state school officials in its structure, the association's regulatory activity will be treated as state action.
CRITICAL THINKING QUESTION Should the actions of private parties be immune from federal constitutional limitations? Explain.