513 U.S. 374 (1995), 93-1525, Lebron v. National Railroad Passenger Corporation

Docket Nº:No. 93-1525
Citation:513 U.S. 374, 115 S.Ct. 961, 130 L.Ed.2d 902, 63 U.S.L.W. 4109
Party Name:LEBRON v. NATIONAL RAILROAD PASSENGER CORPORATION
Case Date:February 21, 1995
Court:United States Supreme Court
 
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Page 374

513 U.S. 374 (1995)

115 S.Ct. 961, 130 L.Ed.2d 902, 63 U.S.L.W. 4109

LEBRON

v.

NATIONAL RAILROAD PASSENGER CORPORATION

No. 93-1525

United States Supreme Court

February 21, 1995

Argued November 7, 1994

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Syllabus

Petitioner Lebron, who creates billboard displays that comment on public issues, filed suit claiming, inter alia, that respondent National Railroad Passenger Corporation (Amtrak) had violated his First Amendment rights by rejecting a display for an Amtrak billboard because of its political nature. The District Court ruled that Amtrak, because of its close ties to the Federal Government, was a Government actor for First Amendment purposes, and that its rejection of the display was unconstitutional. The Court of Appeals reversed, noting that Amtrak was, by the terms of the legislation that created it, not a Government entity, and concluding that the Government was not so involved with Amtrak that the latter's decisions could be considered federal action.

Held:

Where, as here, the Government creates a corporation by special law, for the furtherance of governmental objectives, and retains for itself permanent authority to appoint a majority of that corporation's directors, the corporation is part of the Government for purposes of the First Amendment. Pp. 378-400.

(a) It is proper for this Court to consider the argument that Amtrak is part of the Government, even though Lebron disavowed it in both lower courts and did not explicitly raise it until his brief on the merits here. It is not a new claim, but a new argument to support his First Amendment claim, see, e. g., Yee v. Escondido, 503 U.S. 519, 534-535; it was passed upon below, see, e. g., United States v. Williams, 504 U.S. 36, 41; and it was fairly embraced within both the question presented and the argument set forth in the petition. Pp. 378-383.

(b) Amtrak was created by the Rail Passenger Service Act of 1970 (RPSA) to avert the threatened extinction of passenger trains in the interest of "the public convenience and necessity." The legislation establishes detailed goals for Amtrak, sets forth its structure and powers, and assigns the appointment of a majority of its board of directors to the President. Pp. 383-386.

(c) There is a long history of corporations created and participated in by the United States for the achievement of governmental objectives. Like some other Government corporations, Amtrak's authorizing statute

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provides that it "will not be an agency or establishment of the United States Government," 84 Stat. 1330; see also 45 U.S.C. § 541. Pp. 386-391.

(d) Although § 541 is assuredly dispositive of Amtrak's governmental status for purposes of matters within Congress's control— e. g., whether it is subject to statutes like the Administrative Procedure Act—and can even suffice to deprive it of all those inherent governmental powers and immunities that Congress has the power to eliminate— e. g., sovereign immunity from suit—it is not for Congress to make the final determination of Amtrak's status as a Government entity for purposes of determining the constitutional rights of citizens affected by its actions. The Constitution constrains governmental action by whatever instruments or in whatever modes that action may be taken, Ex parte Virginia, 100 U.S. 339, 346-347, and under whatever congressional label, Cherry Cotton Mills, Inc. v. United States, 327 U.S. 536, 539. National Railroad Passenger Corporation v. Boston & Maine Corp., 503 U.S. 407, 410, and National Railroad Passenger Corporation v. Atchison, T. & S.F. R. Co., 470 U.S. 451, 470, distinguished. Pp. 392-394.

(e) Amtrak is an agency or instrumentality of the United States for the purpose of individual rights guaranteed against the Government by the Constitution. This conclusion accords with the public, judicial, and congressional understanding over the years that Government-created and -controlled corporations are part of the Government itself. See, e. g., Reconstruction Finance Corporation v. J. G. Menihan Corp., 312 U.S. 81, 83; Government Corporation Control Act, § 304(a), 59 Stat. 602. A contrary holding would allow government to evade its most solemn constitutional obligations by simply resorting to the corporate form, cf. Pennsylvania v. Board of Directors of City Trusts of Philadelphia, 353 U.S. 230, 231. Bank of United States v. Planters' Bank of Georgia, 9 Wheat. 904, 907, 908, and Regional Rail Reorganization Act Cases, 419 U.S. 102, 152, distinguished. Pp. 394-399.

12 F.3d 388, reversed and remanded.

Scalia, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Stevens, Kennedy, Souter, Thomas, Ginsburg, and Breyer, JJ., joined. O'Connor, J., filed a dissenting opinion, post, p. 400.

David D. Cole argued the cause for petitioner. With him on the briefs were R. Bruce Rich and Gloria C. Phares.

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Kevin T. Baine argued the cause for respondent. With him on the brief were Nicole K. Seligman, Stephen C. Rogers, and Louis R. Cohen.[*]

Justice Scalia delivered the opinion of the Court.

In this case we consider whether actions of the National Railroad Passenger Corporation, commonly known as Amtrak, are subject to the constraints of the Constitution.

I

Petitioner, Michael A. Lebron, creates billboard displays that involve commentary on public issues, and that seemingly propel him into litigation. See, e. g., Lebron v. Washington Metropolitan Area Transit Authority, 749 F.2d 893 (CADC 1984). In August 1991, he contacted Transportation Displays, Incorporated (TDI), which manages the leasing of the billboards in Amtrak's Pennsylvania Station in New York City, seeking to display an advertisement on a billboard of colossal proportions, known to New Yorkers (or at least to the more Damon Runyonesque among them) as "the Spectacular." The Spectacular is a curved, illuminated billboard, approximately 103 feet long and 10 feet high, which dominates the main entrance to Penn Station's waiting room and ticket area.

On November 30, 1992, Lebron signed a contract with TDI to display an advertisement on the Spectacular for two months beginning in January 1993. The contract provided that "[a]ll advertising copy is subject to approval of TDI and [Amtrak] as to character, text, illustration, design and operation." App. 671. Lebron declined to disclose the specific content of his advertisement throughout his negotiations

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with TDI, although he did explain to TDI that it was generally political. On December 2, he submitted to TDI (and TDI later forwarded to Amtrak) an advertisement described by the District Court as follows:

"The work is a photomontage, accompanied by considerable text. Taking off on a widely circulated Coors beer advertisement which proclaims Coors to be the 'Right Beer,' Lebron's piece is captioned 'Is it the Right's Beer Now?' It includes photographic images of convivial drinkers of Coors beer, juxtaposed with a Nicaraguan village scene in which peasants are menaced by a can of Coors that hurtles towards them, leaving behind a trail of fire, as if it were a missile. The accompanying text, appearing on either end of the montage, criticizes the Coors family for its support of right-wing causes, particularly the contras in Nicaragua. Again taking off on Coors' advertising which uses the slogan of 'Silver Bullet' for its beer cans, the text proclaims that Coors is 'The Silver Bullet that aims The Far Right's political agenda at the heart of America.' " 811 F.Supp. 993, 995 (SDNY 1993).

Amtrak's vice president disapproved the advertisement, invoking Amtrak's policy, inherited from its predecessor as landlord of Penn Station, the Pennsylvania Railroad Company, "that it will not allow political advertising on the [S]pectacular advertising sign." App. 285.

Lebron then filed suit against Amtrak and TDI, claiming, inter alia, that the refusal to place his advertisement on the Spectacular had violated his First and Fifth Amendment rights. After expedited discovery, the District Court ruled that Amtrak, because of its close ties to the Federal Government, was a Government actor, at least for First Amendment purposes, and that its rejection of Lebron's proposed advertisement as unsuitable for display in Penn Station had violated the First Amendment. The court granted Lebron an

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injunction and ordered Amtrak and TDI to display Lebron's advertisement on the Spectacular.

The United States Court of Appeals for the Second Circuit reversed. 12 F.3d 388 (1993). The panel's opinion first noted that Amtrak was, by the terms of the legislation that created it, not a Government entity, id., at 390; and then concluded that the Federal Government was not so involved with Amtrak that the latter's decisions could be considered federal action, id., at 391-392. Chief Judge Newman dissented. We granted certiorari. 511 U.S. 1105 (1994).

II

We have held once, Burton v. Wilmington Parking Authority, 365 U.S. 715 (1961), and said many times, that actions of private entities can sometimes be regarded as governmental action for constitutional purposes. See, e. g., San Francisco Arts & Athletics, Inc. v. United States Olympic Comm., 483 U.S. 522, 546 (1987); Blum v. Yaretsky, 457 U.S. 991, 1004 (1982); Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 172 (1972). It is fair to say that "our cases deciding when private action might be deemed that of the state have not been a model of consistency." Edmonson v. Leesville Concrete Co., 500 U.S. 614, 632 (1991) (O'Connor, J., dissenting). It may be unnecessary to traverse that difficult terrain in the present case, since Lebron's first argument is that Amtrak is not a private entity but...

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