Cornelius v. Benevolent Protective Order of Elks

• Decision Date: 02 August 1974
• Docket Number: Civ. No. 15150.
• Citation: 382 F. Supp. 1182
• Court: U.S. District Court — District of Connecticut
• Parties: Louis CORNELIUS, Jr., and all others similarly situated, Plaintiff, v. The BENEVOLENT PROTECTIVE ORDER OF the ELKS et al., Defendants.

382 F. Supp. 1182

Louis CORNELIUS, Jr., and all others similarly situated, Plaintiff, v. The BENEVOLENT PROTECTIVE ORDER OF the ELKS et al., Defendants.

Civ. No. 15150.

United States District Court, D. Connecticut.

August 2, 1974.

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Igor I. Sikorsky, Jr., Hartford, Conn., for plaintiff.

Robert K. Killian, Atty. Gen., Richard K. Greenberg, John M. Dunham, Ralph G. Murphy, Asst. Attys. Gen., Hartford, Conn., James F. Brennan, Jr., Thomas B. Wilson, New London, Conn., Raymond J. Cannon, Richard M. Sheridan, Asst. Attys. Gen., Hartford, Conn., Frederick Bernays Wiener, Washington, D. C., for defendants.

Before SMITH, Circuit Judge, and BLUMENFELD and NEWMAN, District Judges.

MEMORANDUM OF DECISION

BLUMENFELD, District Judge:

On June 10, 1971, Henry O'Reilly, a member of Groton Lodge No. 2163 of the Benevolent Protective Order of the Elks (B.P.O.E.), filed an application for membership in the Groton Lodge on behalf of Louis Cornelius, Jr. Normally, such a solicitation of fraternal friendship would not give rise to a federal question, but the defendant Groton Elks have admitted that this particular application was not even considered because Cornelius did not meet the Elks' constitutional requirement that all members be white.¹

Cornelius then brought suit against the Groton Elks, against the national B.P.O.E., against the Loyal Order of the Moose and against officials of the State of Connecticut. Alleging to represent all black men who would be eligible for membership in the Elks and Moose but for these organizations'² constitutional provisions prohibiting membership by black persons, Cornelius sought to enjoin the State's exemption of these organizations from the State's Business Corporation Tax,³ to order the defendant State officials to collect back taxes not paid by virtue of that tax exemption, to enjoin the Elks and Moose from discriminating against black applicants and to collect from the clubs $11 million in compensatory and punitive damages. This relief was sought on two theories: That the Fourteenth Amendment prohibits Connecticut from granting the tax exemption to the Elks and Moose, and that 42 U.S.C. § 1981 prohibits the Elks and Moose from denying membership on the basis of an applicant's race. Defendants have moved to dismiss the complaint for failure to state a claim.

At the heart of this case is a conflict between two profound claims of right. Plaintiff contends that he has a right to be evaluated in his application for membership as a person and not as a black person. Perceiving that Cornelius is attempting to storm the citadel, the Elks and Moose stand antler to antler in asserting a constitutional right to discriminate on the basis of race with regard to their membership decisions. Plaintiff further argues not only that the State must stop assisting the defendant organizations so long as they persist in excluding blacks from membership, but also that the Elks and Moose must disgorge aid received from the State in the past. As a result, Cornelius asks this court to redistribute $11 million from the offending organizations to the class of black men he claims to represent and an indeterminate amount in tax benefits from the Elks and Moose to the State Treasury.

We freely acknowledge the moral force of plaintiff's first argument; racial prejudice, reprehensible enough when exhibited by an individual, is all the more evil in institutional form. The notion of reparative redistribution also has its moral claims, cf., Bittker, The Case for Black Reparations, at 8-29 (1973), although they would be stronger if asserted against an institution which was more central to the plight of the black population than the Elks and Moose. But while it is true that "the scope of legal duty has expanded in obedience to the urge of morals," Justice Cardozo, The Paradoxes of Legal Science at 46 (1928), "the law does not compel active benevolence between man and man. It is left to one's conscience whether he shall be the good Samaritan or not." Ames, Law and Morals, 22 Harv.L.Rev. 97, 112 (1908). We sit in legal, not moral judgment. Cf. Shoshone Indians v. United States, 324 U.S. 335, 355, 65 S.Ct. 690, 89 L.Ed. 985 (1945) (Justice Jackson, concurring). The problem before us is the extent to which these moral claims translate into legal rights.

A. Tax Exemption

We have concluded that the tax exemption claim lodged by plaintiff is not one upon which relief may be granted and must be dismissed. We hasten to add that dismissal is not premised on a failure to state a cause of action against the State defendants. On the facts as alleged in the complaint, there is presented a close and complex question whether plaintiff's constitutional right to the equal protection of the laws has been infringed by the challenged tax exemption. However, changes in the facts of the case which have occurred subsequent to the filing of the complaint have rendered moot plaintiff's claim for an injunction against the continuation of the tax exemption, and well-established principles of equity do not permit the granting of the injunctive relief which is the only conceivable remedy for whatever constitutional wrong may have inhered in the past granting of that tax exemption.

Nonetheless, a short discussion of the merits of the case will be useful. This will serve to clarify the reasons why we have concluded that the relief sought cannot be granted and will provide needed guidance to the parties. The application of constitutional law to taxation and tax exemptions is a recent development,⁴ and one which has been criticized by the commentators as being unprincipled. Cf., Bittker and Kaufman, `Constitutionalizing' the Internal Revenue Code: Taxes and Civil Rights, 82 Yale L.J. 51 (1972).

This is not a conventional "state action" case, in which the discrimination practiced by the ostensibly private entity is alleged to be "state action," the question is whether private conduct which is in some manner assisted by the actions of the state is "state action" for the purposes of the Fourteenth Amendment, and the remedy sought is the termination of the entity's discrimination. See, e. g., Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961). The discrimination practiced by the Elks and the Moose is not alleged to be "state action," nor are the clubs themselves alleged to be agents of the state chargeable with the state's duty to refrain from racial discrimination. Insofar as his tax exemption challenge is concerned, the plaintiff does not seek to stop the discrimination of the private clubs. The plaintiff is asserting rights against the state, not against the Elks and the Moose. The plaintiff is suing state officials to stop them from administering a state statute in a way that he contends denies him, as a black person,⁵ the equal protection of the laws by assisting discriminatory private conduct. The plaintiff seeks only to stop the granting of the tax exemption and to have collected the taxes which would have been collected from the Elks and the Moose but for the exemption. Thus the challenged action is clearly governmental, or "state action": That state aid, embodied in state legislation authorizing tax exemption, is "state action" is a proposition to which all can subscribe. Jackson v. Statler Foundation, 496 F.2d 623, 636, (2d Cir. 1974) (Friendly, J., dissenting from denial of en banc consideration).

The real question here is not whether the tax exemption is state action but rather whether it is "unconstitutional state action," because the tax exemption leads to "significant state involvement in private discriminations." Reitman v. Mulkey, 387 U.S. 369, 375, 87 S.Ct. 1627, 1631, 18 L.Ed.2d 830 (1967). The question whether state legislation serves to "encourage and significantly involve the State in private racial discrimination contrary to the Fourteenth Amendment" was recognized in Reitman as defying resolution by "an infallible test" and requiring instead a process of "`sifting facts and weighing circumstances' on a case-by-case basis." 387 U.S. at 376, 378, 87 S.Ct. at 1632, 1633. More recently, the Supreme Court has stated in the context of a state program to lend textbooks to students at both public and private schools irrespective of the schools' racial policies:

The Constitution does not permit the State to aid discrimination even when there is no precise causal relationship between state financial aid to a private school and the continued well-being of that school. A State may not grant the type of tangible financial aid here involved if that aid has a significant tendency to facilitate, reinforce, and support private discrimination. "Decisions on the constitutionality of state involvement in private discrimination do not turn on whether the state aid adds up to 51 per cent or adds up to only 49 per cent of the support of the segregated institution." Poindexter v. Louisiana Financial Assistance Comm'n, 275 F. Supp. 833, 854 (E.D.La.1967).

Norwood v. Harrison, 413 U.S. 455, 466, 93 S.Ct. 2804, 2811, 37 L.Ed.2d 723 (1973).⁶

Different factors may bear upon analysis of (1) whether an aggrieved person has demonstrated that some form of state assistance has led to significant state involvement in and "encouragement" of the private discrimination engaged in by the state-assisted entity, and therefore that the assistance must stop, as opposed to (2) whether an aggrieved person has demonstrated that the entity is so entwined with the state as to have become a state agent and therefore that the discriminatory activity itself must stop. The latter issue requires consideration of all of the variables that bear on the traditional inquiry into the existence of "state action." But the former "encouragement" issue — the one presented by the plaintiff's challenge to the defendant state officials' application of § 12-214(2) of...