365 U.S. 715 (1961), 164, Burton v. Wilmington Parking Authority

Docket Nº:No. 164
Citation:365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45
Party Name:Burton v. Wilmington Parking Authority
Case Date:April 17, 1961
Court:United States Supreme Court
 
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Page 715

365 U.S. 715 (1961)

81 S.Ct. 856, 6 L.Ed.2d 45

Burton

v.

Wilmington Parking Authority

No. 164

United States Supreme Court

April 17, 1961

Argued February 21, 23, 1961

APPEAL FROM THE SUPREME COURT OF DELAWARE

Syllabus

A restaurant located in a publicly owned and operated automobile parking building refused to serve appellant food or drink solely because he was a Negro. The building had been built with public funds for public purposes, and it was owned and operated by an agency of the State of Delaware, from which the private operator of the restaurant leased its premises. Claiming that refusal to serve him abridged his rights under the Equal Protection Clause of the Fourteenth Amendment, appellant sued in a state court for declaratory and injunctive relief against the restaurant and the state agency. The Supreme Court of Delaware held that he was not entitled to relief, on the ground that the restaurant's action was not state action within the meaning of the Fourteenth Amendment and that the restaurant was not required by a Delaware statute to serve all persons entering its place of business. An appeal was taken to this Court on the ground that the state statute had been construed unconstitutionally.

Held:

1. The appeal is dismissed, since the judgment did not depend for its ultimate support upon a determination of the constitutional validity of the state statute; but, treating the papers whereon the appeal was taken as a petition for writ of certiorari, certiorari is granted, since the case presents an important constitutional question under the Fourteenth Amendment. Pp. 717, 721.

2. In view of all the circumstances of this case, including the facts that the restaurant was physically and financially an integral part of a public building, built and maintained with public funds, devoted to a public parking service, and owned and operated by an agency of the State for public purposes, the State was a joint participant in the operation of the restaurant, and its refusal to serve appellant violated the Equal Protection Clause of the Fourteenth Amendment. Pp. 721-726.

3. When a State leases public property in the manner and for the purpose shown to have been the case here, the proscriptions of

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the Fourteenth Amendment must be complied with by the lessee as certainly as though they were binding covenants written into the agreement itself. P. 726.

___ Del. ___,157 A.2d 894, reversed.

CLARK, J., lead opinion

MR. JUSTICE CLARK delivered the opinion of the Court.

In this action for declaratory and injunctive relief, it is admitted that the Eagle Coffee Shoppe, Inc., a restaurant located within an off-street automobile parking building in Wilmington, Delaware, has refused to serve appellant food or drink solely because he is a Negro. The parking building is owned and operated by the Wilmington Parking Authority, an agency of the State of Delaware, and the restaurant is the Authority's lessee. Appellant claims that such refusal abridges his rights under the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution. The Supreme Court of Delaware has held that Eagle was acting in "a purely private capacity" under its lease; that its action was not that of the Authority, and was not, therefore, state action within the contemplation of the prohibitions contained in that Amendment. It also held that, under 24 Del.Code

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§ 1501,1 Eagle was a restaurant, not an inn, and that, as such, [81 S.Ct. 858] it "is not required [under Delaware law] to serve any and all persons entering its place of business." ___ Del. ___, 157 A.2d 894, 902. On appeal here from the judgment as having been based upon a statute construed unconstitutionally, we postponed consideration of the question of jurisdiction under 28 U.S.C. § 1257(2), to the hearing on the merits. 364 U.S. 810. We agree with the respondents that the appeal should be dismissed, and accordingly the motion to dismiss is granted. However, since the action of Eagle in excluding appellant raises an important constitutional question, the papers whereon the appeal was taken are treated as a petition for a writ of certiorari, 28 U.S.C. § 2103, and the writ is granted. 28 U.S.C. § 1257(3). On the merits, we have concluded that the exclusion of appellant under the circumstances shown to be present here was discriminatory state action in violation of the [81 S.Ct. 857] Equal Protection Clause of the Fourteenth Amendment.

The Authority was created by the City of Wilmington pursuant to 22 Del.Code, §§ 501-515. It is "a public body corporate and politic, exercising public powers of the State as an agency thereof." § 504. Its statutory purpose is to provide adequate parking facilities for the convenience of the public, and thereby relieve the "parking crisis, which threatens the welfare of the community. . . ." § 501(7), (8) and (9). To this end, the

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Authority is granted wide powers including that of constructing or acquiring by lease, purchase or condemnation, lands and facilities, and that of leasing

portions of any of its garage buildings or structures for commercial uses by the lessee where, in the opinion of the Authority, such leasing is necessary and feasible for the financing and operation of such facilities.

§ 504(a). The Act provides that the rates and charges for its facilities must be reasonable, and are to be determined exclusively by the Authority

for the purposes of providing for the payment of the expenses of the Authority, the construction, improvement, repair, maintenance, and operation of its facilities and properties, the payment of the principal of and interest on its obligations, and to fulfill the terms and provisions of any agreements made with the purchasers or holders of any such obligations or with the city.

§ 504(b)(8). The Authority has no power to pledge the credit of the State of Delaware, but may issue its own revenue bonds, which are tax exempt. Any and all property owned or used by the Authority is likewise exempt from state taxation.

The first project undertaken by the Authority was the erection of a parking facility on Ninth Street in downtown Wilmington. The tract consisted of four parcels, all of which were acquired by negotiated purchases from private owners. Three were paid for in cash, borrowed from Equitable Security Trust Company, and the fourth, purchased from Diamond Ice and Coal Company, was paid for

partly in Revenue Bonds of the Authority and partly in cash ($934,000) donated by the City of Wilmington, pursuant to 22 Del.C. c. 5. . . . Subsequently, the City of Wilmington gave the Authority $1,822,827.69, which sum the Authority applied to the redemption of the Revenue Bonds delivered to Diamond Ice & Coal Co. and to the repayment of the Equitable Security Trust Company loan.

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Before it began actual construction of the facility, the Authority was advised by its retained experts that the anticipated revenue from the parking of cars and proceeds from sale of its bonds would not be sufficient to finance the construction costs of the facility. Moreover, the bonds were not expected to be marketable if payable solely out of parking revenues. To secure additional capital needed for its "debt-service" requirements, and thereby to make bond financing practicable, the Authority decided it was necessary to enter long-term leases with responsible [81 S.Ct. 859] tenants for commercial use of some of the space available in the projected "garage building." The public was invited to bid for these leases.

In April, 1957, such a private lease, for 20 years and renewable for another 10 years, was made with Eagle Coffee Shoppe, Inc., for use as a "restaurant, dining room, banquet hall, cocktail lounge and bar, and for no other use and purpose." The multi-level space of the building which was let to Eagle, although

within the exterior walls of the structure, has no marked public entrance leading from the parking portion of the facility into the restaurant proper . . . , [whose main entrance] is located on Ninth Street.

157 A.2d at 899. In its lease, the Authority covenanted to complete construction expeditiously, including completion of "the decorative finishing of the leased premises and utilities therefor, without cost to Lessee," including necessary utility connections, toilets, hung acoustical tile and plaster ceilings; vinyl asbestos, ceramic tile and concrete floors; connecting stairs and wrought iron railings; and wood-floored show windows. Eagle spent some $220,000 to make the space suitable for its operation and, to the extent such improvements were so attached to realty as to become part thereof, Eagle to the same extent enjoys the Authority's tax exemption.

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The Authority further agreed to furnish heat for Eagle's premises, gas service for the boiler room, and to make, at its own expense, all necessary structural repairs, all repairs to exterior surfaces except store fronts and any repairs caused by lessee's own act or neglect. The Authority retained the right to place any directional signs on the exterior to the let space which would not interfere with or obscure Eagle's display signs. Agreeing to pay an annual rental of $28,700, Eagle covenanted to

occupy and use the leased premises in accordance with all applicable laws, statutes, ordinances and rules and regulations of any federal, state or municipal authority.

Its lease, however, contains no requirement that its restaurant services be made available to the general public on a nondiscriminatory basis, in spite of the fact that the Authority has power to adopt rules and regulations respecting the use of its facilities except any as would impair the security of its bondholders. § 511.

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