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AGO 1966 No. 88 - June 20, 1966
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John J. O'Connell | 1957-1968 | Attorney General of Washington


MUNICIPAL CORPORATIONS ‑- REAL PROPERTY ‑- LEASE TO PRIVATE CLUB ‑- DISCRIMINATION BY LESSEE ON BASIS OF RACE ‑- POSSIBLE VIOLATION OF EQUAL PROTECTION CLAUSE OF FEDERAL CONSTITUTION.

Where a municipal corporation leases its grounds and buildings to a private club which discriminates in its choice of members on the basis of race, the courts have indicated that the question of whether or not there is a violation of the equal protection clause of the 14th Amendment to the United States Constitution will depend upon all of the facts and circumstances of a particular case.

                                                              - - - - - - - - - - - - -

                                                                   June 20, 1966

Honorable Wes C. Uhlman
State Representative
2315 North 40th
Seattle, Washington

                                                                                                                Cite as:  AGO 65-66 No. 88

Dear Sir:

            By letter previously acknowledged you requested an opinion of this office on the following general question of law:

            "Where a municipal corporation leases its grounds and building to a private club and that club discriminates on the basis of race in its choice of members, does this amount to 'state action' violative of the Fourteenth Amendment's equal protection clause?"

            You have not related this question to, or identified it with, any particular existing case or situation.  Accordingly, under existing court decisions which will be discussed herein, the only answer we can give to your question is that there may or may not be a violation of the Fourteenth Amendment in the case of racial discrimination by a lessee of a municipal corporation depending on all of the facts and circumstances involved in a specific case.

                                                                     ANALYSIS

            The Fourteenth Amendment to the Constitution of the United States says:

             [[Orig. Op. Page 2]]

            ". . . No state shall . . . deny to any person within its jurisdiction the equal protection of the laws."

            Action by municipal corporations and other agencies of a state is considered state action for purposes of the Fourteenth Amendment.  Pennsylvania v. Board of Dir. of City Trusts of the City of Philadelphia, 353 U.S. 230 (1957).  Discrimination on the basis of race is a denial of equal protection of the laws in violation of the Fourteenth Amendment if it is done by a state or its agencies.  See,Brown v. Board of Education, 347 U.S. 483 (1954).  Racial discrimination by private individuals or groups does not violate the Fourteenth Amendment.  Civil Rights Cases, 109 U.S. 3 (1883).  These principles are well-settled.  The difficult problems involve situations containing elements of both state and private action.  You have posed one such situation.

            When a municipal corporation leases its property, it is engaged in state action‑-every action of a municipal corporation is state action as that term is used in the Fourteenth Amendment.  But under your question it is the lessee which is discriminating on the basis of race.  Is thisstate action because it takes place on property leased from the state's municipal corporation?  No one has attempted to formulate a rule of law which will answer this question in all the myriad contexts in which it may arise.  The cases do not attempt to so much as furnish guide lines; they confine themselves to rulings on the facts before the court.

            One reason for the absence of a rule is the great variety of types of property which may be leased.  The property may be surplus and idle or it may have an established public use.  The property may lease only on a long-term basis (a site for an industrial plant) or it may lease for a day at a time (a municipal auditorium).  The lessee may intend to use the property to serve large numbers of the public (a restaurant in a municipal airport terminal) or he may intend to use the space himself (a warehouse).

            Another reason for the absence of a rule is the great variety of relationships in addition to the landlord-tenant relationship which a state agency may have with the organization which discriminates.  The state agency may furnish financial assistance to the private organization, or give it special privileges, or delegate duties to it, or simply be in a position of interdependence with it on a particular project.  The lease is rarely the only relationship between the parties.  Since (as  [[Orig. Op. Page 3]] will be seen) the courts look to the total relationship between the state agency and the private organization, it is often impossible to isolate the lease factor and weigh its persuasiveness in determining whether the private organization is subject to the requirements of the Fourteenth Amendment.

            Finally, in real life, there are always additional facts which give coloration and character to the landlord-tenant relationship.  The lease may have been granted indiscriminately to the highest bidder, or it may have been made with knowledge that a racially discriminating organization will be the tenant.  The rental may be adequate or nominal.  The lease may have been made to avoid a desegregation order, or it may have been made for financial reasons.  The lease may contain covenants giving the state agency considerable control over the use to which the property is put, or the manner of use may be left up to the lessee.  The lease may be a vital part of a public project, or it may be an isolated transaction.  Knowledge of such circumstances is essential to a determination of whether the lessee is bound by the Fourteenth Amendment.  Again, these circumstances occur in such variety as to preclude generalization.

            The approach which we have described is illustrated in Burton v. Wilmington Parking Authority, 365 U.S. 715 (1961), the principal legal authority in the field of your question.  Because the holding is limited to the facts of the case, it is necessary to set them out fully.

            Burton was denied service, because he was a Negro, by the Eagle Coffee Shoppe, a restaurant located on leased space in an off-street parking building built and operated by the Wilmington Parking Authority, an agency of the State of Delaware.  The Delaware courts denied his plea for declaratory and injunctive relief against Eagle and the Parking Authority, and the United States Supreme Court reversed.  The court stated the facts showing the relationship between the restaurant and the parking authority as follows (365 U.S. at 722-725):

            ". . . the Delaware Supreme Court seems to have placed controlling emphasis on its conclusion, as to the accuracy of which there is doubt, that only some 15% of the total cost of the facility was 'advanced' from public funds; that the cost of the entire facility  [[Orig. Op. Page 4]] was allocated three‑fifths to the space for commercial leasing and two-fifths to parking space; that anticipated revenue from parking was only some 30.5% of the total income, the balance of which was expected to be earned by the leasing; that the Authority had no original intent to place a restaurant in the building, it being only a happenstance resulting from the bidding; that Eagle expended considerable moneys on furnishings; that the restaurant's main and marked public entrance is on Ninth Street without any public entrance direct from the parking area; and that 'the only connection Eagle has with the public facility . . . is the furnishing of the sum of $28,700 annually in the form of rent which is used by the Authority to defray a portion of the operating expense of an otherwise unprofitable enterprise.'         Del.      ,       , 157 A.2d 894, 901.  While these factual considerations are indeed validly accountable aspects of the enterprise upon which the State has embarked, we cannot say that they lead inescapably to the conclusion that state action is not present.  Their persuasiveness is diminished when evaluated in the context of other factors which must be acknowledged.

            "The land and building were publicly owned.  As an entity, the building was dedicated to 'public uses' in performance of the Authority's 'essential governmental functions.'  22 Del. Code [[Del. C.]], §§ 501, 514.  The costs of land acquisition, construction, and maintenance are defrayed entirely from donations by the City of Wilmington, from loans and revenue bonds and from the proceeds of rentals and parking services out of which the loans and bonds were payable.  Assuming that the distinction would be significant, cf. Derrington v. Plummer, 240 F.2d 922, 925, the commercially leased areas were not surplus state property, but constituted a physically and financially integral and, indeed, indispensable part of the State's plan to operate its project as a self-sustaining unit.  Upkeep and maintenance of the building, including necessary repairs, were responsibilities of the Authority and were payable out of public funds.

             [[Orig. Op. Page 5]]

            It cannot be doubted that the peculiar relationship of the restaurant to the parking facility in which it is located confers on each an incidental variety of mutual benefits.  Guests of the restaurant are afforded a convenient place to park their automobiles, even if they cannot enter the restaurant directly from the parking area.  Similarly, its convenience for diners may well provide additional demand for the Authority's parking facilities.  Should any improvements effected in the leasehold by Eagle become part of the realty, there is no possibility of increased taxes being passed on to it since the fee is held by a tax-exempt government agency.  Neither can it be ignored, especially in view of Eagle's affirmative allegation that for it to serve Negroes would injure its business, that profits earned by discrimination not only contribute to, but also are indispensable elements in, the financial success of a governmental agency.

            "Addition of all these activities, obligation and responsibilities of the Authority, the benefits mutually conferred, together with the obvious fact that the restaurant is operated as an integral part of a public building devoted to a public parking service, indicates that degree of state participation and involvement in discriminatory action which it was the design of the Fourteenth Amendment to condemn. . . . By its inaction, the Authority, and through it the State, has not only made itself a party to the refusal of service, but has elected to place its power, property and prestige behind the admitted discrimination.  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, which, on that account, cannot be considered to have been so 'purely private' as to fall without the scope of the Fourteenth Amendment."

            The court then carefully limited its holding to the facts of the case:

             [[Orig. Op. Page 6]]

            "Because readily applicable formulae may not be fashioned, the 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.  Owing to the very 'largeness' of government, a multitude of relationships might appear to some to fall within the Amendment's embrace, but that, it must be remembered, can be determined only in the framework of the peculiar facts or circumstances present.  Therefore respondents' prophecy of nigh universal application of a constitutional precept so peculiarly dependent for its invocation upon appropriate facts fails to take into account 'Differences in circumstances [which] beget appropriate differences in law,'Whitney v. Tax Comm'n, 309 U.S. 530, 542.  Specifically defining the limits of our inquiry, what we hold today is that when a State leases public property in the manner and for the purpose shown to have been the case here, the proscriptions of the Fourteenth Amendment must be complied with by the lessee as certainly as though they were binding covenants written into the agreement itself."  (365 U.S. at 725-726.) (Emphasis supplied.)

            TheBurton approach of sifting facts and weighing circumstances to determine whether conduct which is formally private is so entwined with governmental policies or so impregnated with a governmental character as to become subject to the constitutional limitations on state action continues to be the approach used by the United States Supreme Court today.  See,Evans v. Newton, 382 U.S. 296 (1966).

            While the court has not refined the test, a shorthand expression has come into use to describe it.  TheBurton test is said to be whether the state has becomeinvolved to a significant extent in the activity where the racial discrimination has occurred.  Peterson v. Greenville, 373 U.S. 244 at 247 (1963); Lombard v. Louisiana, 373 U.S. 267 at 274 (1963) (concurring opinion of Justice Douglas); Swain v. Alabama, 380 U.S. 202 at 235-236, note 2 (1965) (dissenting opinion of Justice Goldberg).

            Before getting to the lower court cases, one other United State Supreme Court case should be noted.  On May 24, 1954, one week after its decision in Brown v. Board of Education, 347 U.S.  [[Orig. Op. Page 7]] 483, doing away with the separate‑but-equal doctrine, the court decidedMuir v. Louisville Park Theatrical Association, 347 U.S. 971.  The entireper curiam decision is as follows (347 U.S. at 971):

            "The petitions for writs of certiorari are granted.  The judgments are vacated and the cases are remanded for consideration in the light of[Brown v. Board of Education], and conditions that now prevail."

            The United States Court of Appeals for the Sixth Circuit had affirmed the district court decision with aper curiam opinion almost as brief.  Muir v. Louisville Park Theatrical Ass'n, 202 F.2d 275 (6th Cir. 1953).  The district court decision is reported under the name of Sweeney v. City of Louisville, 102 F.Supp. 525 (W.D. Ky. 1951).  The district court held that Negroes were entitled to "separate‑but-equal" city-owned golf and fishing facilities, but were not entitled to attend summer opera performances by the theatrical association in a city-owned park amphitheatre which the association leased for about a month each summer.  The designation of parties on appeal indicates that the amphitheatre question was the main concern on appeal, but the Supreme Court's reference to Brown v. Board of Education indicates that it may have been concerned with the separate‑but-equal aspects of the case.  Theper curiam opinions of the appeal courts leave the basis for their decisions in doubt.  Although the case was remanded, no further decisions are reported.

            There are many additional cases in the general area of your inquiry.  Space does not permit extensive analysis of each, but we think that a succinct annotation of them would serve two purposes:  to show the full basis for the generalizations we have already made, and to show why we have not attempted on our own to formulate a rule through inductive reasoning.  As you will see, the cases do not fall into a recognizable pattern.

            We have attempted to cite every case where use of state property was a factor in determining whether racial discrimination by a private group was state action for purposes of the Fourteenth Amendment.  We have not limited the list to leasing cases, but have included cases based on conveyances of the fee with control retained, and cases of simple permissive use.  The significant-involvement test applies without regard to  [[Orig. Op. Page 8]] the technicalities of real property law.  Also, we have not deemed it material whether the suit is against the private organization to force it to integrate, or against the state agency to force it to protect minority citizens when it allows private groups to use its land.  The test for state action seems to be the same in each instance.

            Finally it is well to keep in mind that there are many state‑action cases very like those annotated, but which do not involve use of real property.  See, for example,Simkins v. Moses H. Cone Municipal Hospital, 323 F.2d 959 (4th Cir., 1963), cert. den. 376 U.S. 938 (1964) (nonprofit hospital constructed partially with federal funds under Hill-Burton program); andDorsey v. Stuyvesant Town Corp., 299 N.Y. 512, 87 N.E. 2d 541 (1949), cert. den. 339 U.S. 981 (1950) (redevelopment company, aided by tax exemptions and use of city's power of eminent domain, engaging in an urban renewal project on a plan approved by the city).

            In the following annotation, we have organized the cases by date, starting with the most recent, in three categories:  United States Circuit Court cases, United States District Court cases, and state cases.  To alert the reader to changes in doctrine and emphasis in the law during the time period concerned, cases decided beforeBurton v. Wilmington Parking Authority, supra (1961), are preceded by an asterisk and cases decided before Brown v. Board of Education, supra (1954), are preceded by two asterisks.1/

                        I.

                        UNITED STATES COURT OF APPEALS CASES

            Hammond v. University of Tampa, 344 F.2d 951 (5th Cir., 1965):

            ". . . Although the University of Tampa is not a state or city institution in the usual sense, its establishment was largely made possible by the use of a surplus city building and the use of other city land leased for the University purposes. . . ." (p. 951.)

             [[Orig. Op. Page 9]]

            State action was found; the university was bound by the Fourteenth Amendment the same as if it were a state agency.

            Wimbish v. Pinellas County, Florida, 342 F.2d 804 (5th Cir. 1965):

            The county leased undeveloped land to a private corporation.  The lease provided that the land was to be used only for a golf course.  Plans for all improvements had to be submitted to the county for approval.  Golf fees were subject to approval by the county, and the corporation was required to maintain a daily membership rate (green fee) so that use of the golf course would not be confined to corporation members.  The corporation was held to be subject to the Fourteenth Amendment.

            Smith v. Holiday Inns of America, Inc., 336 F.2d 630 (6th Cir., 1964):

            In pursuance of an urban redevelopment project adjacent to the state capitol of Tennessee, the Nashville Housing Authority, a state agency, sold land to Holiday Inns.  The conveyance contained extensive covenants, including ones providing that the site was to be used only for a motel, which the purchaser was bound to build, and that no improvement could be made or altered without written approval of the grantor.  The motel was part of a preconceived official design for use of the property around the capitol site.  The motel was held to be bound by the Fourteenth Amendment.

            City of New Orleans v. Adams, 321 F.2d 493 (5th Cir., 1963):

            AffirmedAdams v. City of New Orleans, 208 F.Supp. 427 E.D. La. (1962), where the operator of a restaurant in the terminal of a city airport was held to be bound by the Fourteenth Amendment.  The facts are summarized below in part II, where the district court cases are noted.

            Hampton v. City of Jacksonville, 304 F.2d 320 (5th Cir., 1962), cert. den.Ghioto v. Hampton, 371 U.S. 911 (1962):

            After a court had ordered the city to integrate its golf course, the property was sold with a reversionary provision "designed for the purpose of insuring the citizens of Jacksonville of having golfing facilities."  (304 F.2d at 321.)  The purchaser of the golf course was held to be bound by the Fourteenth Amendment.

            *Tonkins v. City of Greensboro, 276 F.2d 890 (4th Cir., 1960):

             [[Orig. Op. Page 10]]

            The court affirmed a judgment denying an injunction against the sale, with no strings attached, of the city swimming pool to a private corporation, although the sale was made to avoid the necessity of integrating the pool, and an organizer of the purchasing corporation was a member of the city parks and recreation commission and was active in opposing integration.  The court held that the purchasing corporation would not be subject to the Fourteenth Amendment.

            *Aaron v. Cooper, 261 F.2d 97 (8th Cir. 1958):

            The court affirmed a judgment enjoining the board of directors of the Little Rock School District from carrying out a scheme to perpetuate segregation which included turning the Little Rock schools over to a private corporation.

            *Eaton v. Bd. of Managers of James Walker Mem. Hospital, 261 F.2d 521 (4th Cir. 1958), cert. den. 359 U.S. 984 (1959):

            A hospital operated by a nonprofit corporation was held not to be subject to the Fourteenth Amendment.  The hospital building has been built with privately donated funds on land which has been given to the corporation in 1901, by the city of Wilmington and county of New Hanover, North Carolina "to hold in trust for the use of the hospital so long as it should be maintained as such for the benefit of the City and County, with reverter to the City and County in case of its disuse or abandonment."  (261 F.2d at 523) The city and county had previously operated a hospital on the site.  Hospital income from rendering contract services to the city and county amounted to 4 1/2% of its entire income.

            *City of Greensboro v. Simkins, 246 F.2d 425 (4th Cir. 1957):

            Affirmed finding of state action in Simkins v. City of Greensboro, 149 F.Supp. 562 (M.D. N.C. 1957), summarized below in part II.  A golf course was involved.

            *Derrington v. Plummer, 240 F.2d 922 (5th Cir. 1956), cert. den. 353 U.S. 924 (1957):

            Harris county (Houston) Texas was enjoined from renewing an existing lease, or entering into another lease, of restaurant space in the basement of the county courthouse, without specific assurance that all races would be given equal treatment.  The basis for the court's decision was that the restaurant space was not surplus property, but had been planned, equipped and furnished by the county with public funds for the benefit of all persons using the newly constructed courthouse.

             [[Orig. Op. Page 11]]

            *Dept. of Conservation & Development v. Tate, 231 F.2d 615 (4th Cir. 1956), cert. den. 352 U.S. 838 (1956):

            Negro citizens of Virginia sued to enjoin racial discrimination in a state park.  The district court granted the requested relief and also put the following language in the decree:

            ". . . 'that if said Park or any part thereof is leased, the lease must not, directly or indirectly operate so as to discriminate against the members of any race.' . . ." (231 F.2d at 616.)

            The court of appeals held that it was proper for the decree to contain the provision protecting the plaintiffs in case of a lease.

            **Kerr v. Enoch Pratt Free Public Library, 149 F.2d 212 (4th Cir. 1945), cert. den. 326 U.S. 721 (1945):

            A training school for librarians operated by the Enoch Pratt Free Library, a private corporation, was held to be subject to the Fourteenth Amendment.  Pratt had erected and furnished a library and had given it to the city of Baltimore to serve all its people, on condition that management be not in the city but in a self-perpetuating board of trustees, and on further condition that the city create a perpetual annuity for maintenance of the library.  A special act of the Maryland legislature incorporated the board of trustees and gave Baltimore the power to enter into the desired arrangement.  The trustees were required to make an annual report to the city.  Library employees were paid by the city and participated in its retirement system.  The city's total contribution to the operation of the library in 1944 was $858,246.90.  Disbursements from city appropriations were made directly by the city on vouchers submitted to it by the trustees for payment.

                        II.

                        UNITED STATES DISTRICT COURT CASES

            D. D. B. Realty Corp. v. Merrill, 232 F.Supp. 629 (D. Vt. 1964):

            This unusual case was brought by the owner of a ski lodge at Stowe, Vermont, against the Mt. Mansfield Company, Inc., which operated ski lifts.  The Mt. Mansfield Company gave  [[Orig. Op. Page 12]] reduced rates to persons who stayed at lodges which were members of a promotional association.  The plaintiff, which was not a member of the association, claimed that it was entitled to equal treatment because the Mt. Mansfield Company operated on land leased from the state and therefore could not discriminate.  The court found that only 23% of the Mt. Mansfield Company's land was leased from the state, but that this land "is the very heart of the Mt. Mansfield operations."  (232 F.Supp. at 636).  The court held that the Mt. Mansfield Company was bound by the Fourteenth Amendment, but that its discrimination was on a reasonable basis, and therefore was not unlawful.2/

             Farmer v. Moses, 232 F.Supp. 154 (S.D. N.Y. 1964):

            The New York World's Fair Association, a membership corporation, was held to be bound by the Fourteenth Amendment.  It operated on property leased from the city of New York, which was part of Flushing Meadow Park, a city facility.  No rental was paid, but the city was entitled to a share of net revenue after the close of the Fair.  The city spent $24 million improving the area, and the state and federal governments built roads to it on an accelerated basis.  By special act of the New York legislature, the Fair's private policemen were made "peace officers."  Another statute made traffic laws applicable to streets and ways on the fairgrounds.  The court held that the Fair corporation could not prohibit the plaintiffs from reasonable picketing and distribution of handbills (freedom of speech and assembly).3/

             Smith v. City of Birmingham, 226 F.Supp. 838 (N.D. Ala. 1963):

            A motel was built on property leased from the city next to the terminal of the city airport.  The motel corporation was given certain tax exemptions.  The city had title to all improvements on the land.  The court held that because of the "many reservations contained in the lease and the mutual interests to be served by the lease arrangement" (226 F.Supp. at 841), the motel operation was subject to the Fourteenth Amendment.

             [[Orig. Op. Page 13]]

            Wood v. Hogan, 215 F.Supp. 53 (W.D. Va. 1963):

            The Hospital Authority of the City of Lynchburg (Virginia) operated a hospital which had been built in part with funds contributed by the federal government and the city.  After this suit had been brought to enjoin racial discrimination in the institution, the hospital authority was dissolved and the hospital was transferred intact to a new nonprofit charitable corporation.  The board of directors of the new corporation was identical to the board of directors of the former hospital authority.  The only difference was that the board was now self-perpetuating instead of being appointed by the city.  The court held that the new corporation was not bound by the Fourteenth Amendment.  (The court also said that the segregation practiced by the hospital was justified because of its beneficial effect on the patients' health.  215 F.Supp. at 55-56.)

            Guillory v. Administrators of the Tulane University of Louisiana, 212 F.Supp. 674 (E.D. La. 1962):

            Tulane University was held not to be bound by the Fourteenth Amendment, although (1) the University of Louisiana (an existing state institution) was merged into Tulane (a newly created nonprofit corporation with a large private endowment) by special legislation and a constitutional amendment in the 1880's, (2) the governor of Louisiana, the state superintendent of education and the mayor of New Orleans wereex officio members of the 17-member board of directors, (3) Tulane was granted special tax exemptions, and (4) the property of the University of Louisiana which had been given to Tulane will revert to the state if not used for university purposes.

            Cobb v. Montgomery Library Board, 207 F.Supp. 880 (M.D. Ala. 1962):

            The city of Montgomery gave a private association control of the city museum in exchange for services and financial support.  The museum was in a public building and was open to the public on certain days of the week.  The court held that the private association was subject to the Fourteenth Amendment in its operation of the museum.

             [[Orig. Op. Page 14]]

            Adams v. City New Orleans, 208 F.Supp. 427 (E.D. La. 1962), aff'd 321 F.2d 493 (5th Cir. 1963):

            The court held that a privately operated restaurant in leased space in a city airport terminal was subject to the requirements of the Fourteenth Amendment.  The lease gave the restaurant corporation the exclusive right to operate restaurant concessions in the terminal and provided for rental based on a percentage of gross receipts, with a guaranteed minimum.  The lease also gave the city power to control prices and to require discharge of any employee of the restaurant who was deemed undesirable by the city aviation board.

            United States v. City of Montgomery, 201 F.Supp. 590 (M.D. Ala. 1962):

            A business corporation operating a restaurant in the city airport terminal on the basis of an exclusive contract with the city was held to be subject to the Fourteenth Amendment.  The court found that the restaurant was an integral part of the public airport facility.

            Brooks v. City of Tallahassee, 202 F.Supp. 56 (N.D. Fla. 1961):

            A restaurant operated by a business corporation on leased space in a city airport terminal was held to be subject to the requirements of the Fourteenth Amendment.

            *Anderson v. Moses, 185 F.Supp. 727 (S.D. N.Y. 1960):

            The Tavern-on-the‑Green, a restaurant operated in New York's Central Park by a business corporation under license from the city, was held to be subject to the Fourteenth Amendment.  Under the terms of the license the city had the power to regulate the conduct of the tavern concession in "meticulous detail."  185 F.Supp. at 732.4/

             *Coke v. City of Atlanta, 184 F.Supp. 579 (N.D. Ga. 1960):

            A restaurant operated by a business corporation in leased space in a city airport terminal was held to be subject to the Fourteenth Amendment.  The restaurant was an integral part of the terminal building, as planned and built by the city.

             [[Orig. Op. Page 15]]

            *Jones v. Marva Theatres, Inc., 180 F.Supp. 49 (D. Md. 1960):

            A motion picture theatre operator who leased the "Opera House," a part of the city hall building, from the city of Frederick, Maryland, was held bound by the Fourteenth Amendment.  A common entrance served the city hall and the opera house.  The court was influenced by the fact that the lease recited, among the facilities rented, "box office," "colored box office," "men's toilet," "colored men's toilets," "ladies' toilet," and "colored women's toilet."  (180 F.Supp. at 50.)

            *Mitchell v. Boys Club of Metropolitan Police, D.C., 157 F.Supp. 101 (D. D.C. 1957):

            The Boys Club, a nonprofit corporation, was held to be not bound by the Fifth Amendment.5/   Three of the club's seven clubhouses were on property owned by the District of Columbia.  Two of the clubhouses were in abandoned buildings ‑ a schoolhouse and a fire house ‑ and the third was in the two-room subbasement of a police station.  The District furnished heat and light in the subbasement only.  No rent was paid, but the Club had improved the clubhouses at considerable expense.  In addition, the District furnished rent-free office space in the municipal center for the administrative office of the club.  Nine uniformed policemen were assigned to special duty with the Club to, among other things, solicit new members.

            *City of Greensboro v. Simkins, 149 F.Supp. 562 (M.D. N.C. 1957), aff'd 246 F.2d 425 (4th Cir. 1957):

            A golf course owned by the city was leased to a private club.  The club was held to be bound by the Fourteenth Amendment because in actual practice it operated the golf course as a public course, open to all Caucasians.  The original lease had been made to avoid a demand that the facility be integrated, and the city had retained control, illustrated  [[Orig. Op. Page 16]] by the fact that it moved to sell the course soon after the lawsuit was begun.

            **Easterly v. Dempster, 112 F.Supp. 214 (E.D. Tenn. 1953):

            The court held that the city of Knoxville had denied no rights of the Negro plaintiffs by leasing its golf course to a private operator.  The court found that the lease had been made for purely financial reasons.  The golf course had been operated by the city at a loss, but it was leased for a substantial rental.  The city had been contemplating leasing the golf course for financial reasons before Negroes asked to use it.

            **Nash v. Air Terminal Services, 85 F.Supp. 545 (E.D. Va. 1949):

            The Negro plaintiff was held to be entitled to "separate‑but-equal" service by a lessee of the federal government who operated restaurant facilities at Washington National Airport.  The federal government, which operated the airport, had required the lessee to segregate his facilities.  The court held that the plaintiff was entitled to sue for damages on the theory that the restaurant accommodations for Negroes were not equal to those for Caucasians.  The lessee was held to be bound by the Fifth Amendment in the same manner as the federal government is.6/

             **Norris v. Mayor and City Council of Baltimore, 78 F.Supp. 451 (D. Md. 1948):

            The court held that a school operated by a Maryland nonprofit corporation was not subject to the requirements of the Fourteenth Amendment.  The school used two buildings.  One belonged to the city and was leased to the corporation for $500 a year, although its rental value was $11,000 to $12,000 per year.  The other building belonged to the corporation, although the state of Maryland had contributed $175,000 of its original $500,000 cost.  The city and the state each made contributions to the school, which together constituted 23% of its budget.  In return for the annual contributions, each Baltimore city councilman and each member of the Maryland senate was entitled to appoint one student to the school, tuition-free.

             [[Orig. Op. Page 17]]

            Lawrence v. Hancock, 76 F.Supp. 1004 (S.D. W.Va. 1948):

            Money was raised by the city of Montgomery, West Virginia, to build a swimming pool.  Actual construction of the pool was delayed five years "due to hesitancy on the part of city officials to take a stand for or against its use by Negroes."  (76 F.Supp. at 1005.) When the pool was finally completed, it was leased for the summer to a private corporation formed for the purpose of taking over the operation of the pool.  Consideration for the lease was one dollar.  The lessee was given authority to enforce rules governing the operation of the pool and it refused to admit Negroes.  The lessee was held to be bound by the Fourteenth Amendment.

                        III.

                        STATE CASES

            Statom v. Board of Com'rs of Prince George's County, 233 Md. 57, 195 A.2d 41 (1963):

            The Prince George's County Boys' Club, a nonprofit corporation, was held to be subject to the Fourteenth Amendment.  The county let the executive director of the boys' club use an office in a county building without rent.  The athletic activities of the club were carried out on school property and city park property, with permission of the public officials who had charge of the property.  Public officials sanctioned and approved solicitation of membership by the club on school grounds.

            Brown v. City of Richmond, 204 Va. 471, 132 S.E. 2d 495 (1963):

            Lessees of a city-owned baseball park and auditorium were ordered to cease segregating their facilities.  The decision, however, was based less on their status as lessees than on the fact that a Virginia statute required segregation of races (state action).  (The statute was held unconstitutional in this case.)

            **Culver v. City of Warren, 84 Ohio App. 373, 83 N.E. 2d 82 (1948):

            The city built a swimming pool and operated it for one season.  Problems arose concerning use of the pool by Negroes.  The next season, the pool was leased to a nonprofit corporation organized for the purpose of operating the pool.  Rental was  [[Orig. Op. Page 18]] nominal, and the city was responsible for maintaining the pool.  The corporation was held to be bound by the Fourteenth Amendment.

            **Kern v. City Com'rs of City of Newton, 151 Kan. 565, 100 P.2d 709 (1940):

            The city leased its swimming pool to a private individual.  The lease required the lessee to keep the pool open on certain hours.  The lease also went into great detail on how the lessee was to operate the pool and related services.  Rental appeared to be adequate.  The lessee was held to be bound by the Fourteenth Amendment in his operation of the pool.

                                   

            From this survey, it is apparent that all sorts of different circumstances surround leases of land by a state agency to a private organization.  Whether the lessee is bound by the Fourteenth Amendment depends on an evaluation of all the circumstances.  Thus it cannot be said that in every case a private organization which leases land from a state agency is bound by the Fourteenth Amendment; nor can it be said that the organization is not bound.  As the United States Supreme Court said inEvans v. Newton, 382 U.S. 296 (1966), supra, at 299-300:

            ". . . 'Only by sifting facts and weighing circumstances'(Burton v. Wilmington Parking Authority. . .) can we determine whether the reach of the Fourteenth Amendment extends to a particular case. . . ."

            We trust the foregoing will be of assistance to you.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

MORTON M. TYTLER
Assistant Attorney General

                                                         ***   FOOTNOTES   ***

1/The cases decided before Brown were brought for the purpose of either integrating a unique facility, or requiring the state agency to provide separate‑but-equal facilities for Negroes.

2/While this case is not concerned with racial discrimination, it is sufficiently like the other cases covered to be worth noting.

3/While this case is not directly concerned with racial discrimination, it is sufficiently like the other cases covered to be worth noting.

4/This case did not involve racial discrimination.  See footnote 2.

5/The due process clause of the Fifth Amendment prevents the United States from discriminating on the basis of race.  The fifth Amendment, like the Fourteenth Amendment, is directed at government action only.  Thus the test for federal action under the Fifth Amendment is comparable to the test for state action under the Fourteenth Amendment.

6/See footnote 5.

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