Roberts v. Louisiana Downs, Inc.

• Decision Date: 24 September 1984
• Docket Number: No. 83-4529,83-4529
• Citation: 742 F.2d 221
• Parties: Herbert H. ROBERTS, Plaintiff-Appellant, v. LOUISIANA DOWNS, INC. and Vincent J. Bartimo, Individually and in his official capacity as President of Louisiana Downs, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 221

742 F.2d 221

Herbert H. ROBERTS, Plaintiff-Appellant, v. LOUISIANA DOWNS, INC. and Vincent J. Bartimo, Individually and in his official capacity as President of Louisiana Downs, Defendants-Appellees.

No. 83-4529.

United States Court of Appeals Fifth Circuit.

Sept. 24, 1984.

George M. Strickler, Jr., Ann Woolhandler, Michael G. Collins, New Orleans, La., Henry C. Walker, Shreveport, La., for plaintiff-appellant.

Lunn, Irion, Switzer, Johnson & Salley, Charles W. Salley, James B. Gardner, Roy S. Payne, Shreveport, La., for defendants-appellees.

Appeal from the United States District Court for the Western District of Louisiana.

Before CLARK, Chief Judge, JOLLY and DAVIS, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Herbert Roberts appeals from a trial court judgment dismissing his action under 42 U.S.C. Sec. 1983. We reverse.

I.

Herbert Roberts is a trainer of thoroughbred racehorses by profession. Prior to the events which gave rise to this case, Roberts was employed by Paradise Farms, of Longview, Texas, and regularly raced their horses at Louisiana Downs Racetrack in Bossier Parish, Louisiana. During that time Roberts had stalling privileges at the track, which meant that he was alloted some of the limited amount of stall space available on the grounds of the racetrack.

In August 1980, Roberts and a number of other individuals became disturbed that the management of Louisiana Downs allowed horses to race using a particular type of shoe. Roberts was one of a group of owners and trainers who later signed a petition requesting an investigation of this practice. In March 1981, Roberts was notified that the track was denying him stalling and racing privileges for the coming season. Roberts' racing privileges were later restored, but he was discharged by Paradise Farms as a result of his loss of stalling privileges. Roberts contacted the Louisiana Racing Commission concerning this matter, but was informed that the Commission did not review denials of stall space, as opposed to denials of racing privileges.

Roberts then brought this action for damages and injunctive relief against the racetrack under 42 U.S.C. Sec. 1983, alleging that the track's action was in response to his signing the petition, and violated his right of free speech secured by the first and fourteenth amendments. In August 1983, the district court granted summary judgment for the racetrack on the ground that the "state action" required by Sec. 1983 was not present. In this appeal, Roberts urges that the district court erred in its decision.

II.

In determining whether a grant of summary judgment was appropriate, we apply the familiar principle that the evidence and any inferences to be drawn from it must be viewed in the light most favorable to the party opposing the motion, to determine whether there is a genuine issue as to any material fact and whether the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Coulter v. Texaco, Inc., 714 F.2d 467, 468 (5th Cir.1983). In this case, we cannot agree with the district court's finding that no material issue of fact exists as to the presence of state action.

The two basic requirements for conduct to be actionable under Sec. 1983 ¹ are: (a) a deprivation of a right secured by the Constitution or federal law, (b) occurring under color of state law. Flagg Brothers, Inc. v. Brooks, 436 U.S. 149, 155, 98 S.Ct. 1729, 1733, 56 L.Ed.2d 185 (1978).

The Supreme Court has recognized a number of different types of situations in which the "under color of state law" or "state action" requirement is met. ² For example, in Burton v. Wilmington Parking Authority, 365 U.S. 715, 722, 81 S.Ct. 856, 860, 6 L.Ed.2d 45 (1961), the Court held that when the state was so heavily involved in an activity with a private party that it was in essence a joint participant, this "symbiotic relationship" was sufficient to make the actions of the private party attributable to the state. State action may also be present when powers "traditionally the exclusive prerogative of the state" are delegated to a private party. Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974). The required connection is present when the state has compelled an action or "provided such significant encouragement, either overt or covert, that the choice must in law be deemed to be that of the state." Blum v. Yaretsky, 457 U.S. at 991, 102 S.Ct. at 2778, 73 L.Ed.2d at 537; Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970).

The application of the tests for state action is not mechanical, however. State action may manifest itself in a wide variety of forms, some of which do not fit neatly in any category. In essence, for a nominally private individual's conduct to meet the state action requirement, there must be a sufficiently close connection between the state and the challenged conduct for the actor to be treated as an agent of the state, or the conduct to be attributed to the state. Blum v. Yaretzky, 457 U.S. 991, 1004, 102 S.Ct. 2777, 2786, 73 L.Ed.2d 534 (1982); Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 937, 102 S.Ct. 2744, 2754, 73 L.Ed.2d 482 (1982). This essentially factual determination is made by "sifting facts and weighing circumstances case by case" to determine if there is a sufficient nexus between the state and the particular aspect of the private individual's conduct which is complained of. Sims v. Jefferson Downs, Inc., 611 F.2d 609, 611 (5th Cir.1980), citing Burton v. Wilmington Parking Authority, 365 U.S. at 722, 81 S.Ct. at 860, 6 L.Ed.2d at 45. The inquiry in this case, then, is whether state regulation and control of horseracing was so intimately involved with the decision to deny Roberts stall space that this action should be attributed to the state.

Horseracing in Louisiana is the subject of extensive state regulation. Racetracks in the state are privately owned, but the racing itself and many aspects of track management are governed by detailed regulations issued by the Louisiana State Racing Commission. The Racing Commission maintains a continuous presence at each track through racing stewards, officials who oversee the administration and enforcement of commission rules and policies. Stewards are paid by the management of each track, but they are an arm of the racing commission and are answerable directly to the commission. Stewards may override the management of the track in matters pertaining to racing. ³

A number of other racing officials are also provided for by state statute or by Commission rule, including one who is designated the "racing secretary." ⁴ The Racing Commission rules specify that the other racing officials "shall serve only as long as approved by the Commission, and shall be under the supervision of the stewards." Louisiana State Racing Commission, Rules of Racing 11-6:4(4.2) (1978) (hereafter cited as "Rules of Racing"). Louisiana statutes also provide that stewards shall "have general supervision over all personnel directly connected with racing ..." La.Rev.Stat.Ann. Sec. 4:172 (West 1973).

Allocation of stall space figures directly in this regulatory scheme in two places. The stewards of each track are required by Racing Commission rules to review applications for stall space and inform the management of the track of any undesirable persons applying. ⁵ One of the duties which the racing secretary is specifically directed to perform by the rules of racing is "assigning stall applicants such stabling as he may deem proper after consultation with the stewards ..." Rules of Racing 11-6:6(6.2)(D).

At Louisiana Downs, stalling decisions were in practice made by a "stalling committee" composed of the racing secretary, the chief of security, and three other individuals. No means of appeal from decisions regarding stall space is provided by statute or Racing Commission regulation. It is uncontested that the stalling committee made the decision to deny Roberts stall space, and that Bennett Parke, the racing secretary at Louisiana Downs, participated in that decision.

IV.

Louisiana Downs has earnestly argued that decisions regarding stalls are decisions made by the private management of Louisiana Downs, a private corporation, and have nothing to do with the state. They argue, and quite correctly, that the fact that a private actor is in a heavily regulated industry, such as horseracing, does not of itself suffice to make its actions under color of state law. Jackson v. Metropolitan Edison Co., 419 U.S. at 351, 95 S.Ct. at 453. They also argue, again correctly, that the receipt of the substantial revenues by the state from the operation of the horseracing industry does not suffice to create a symbiotic relationship of the sort which makes a private individual's conduct under color of state law. Fulton v. Hecht, 545 F.2d 540, 543 (5th Cir.1977). While these contentions are correct, they do not adequately address the peculiar circumstances of this case, in particular the participation of the racing secretary in the decision.

As the Supreme Court noted in Jackson v. Metropolitan Edison, "differences in circumstances beget differences in law." 419 U.S. at 358, 95 S.Ct. at 457, 42 L.Ed.2d at 488. Neither party has pointed to a case, nor has research uncovered any, precisely analogous to the present one, a not unexpected result in this factually oriented area. Two complementary elements in this case inform our decision. First, the particularly intrusive nature of Louisiana's regulation of horseracing, and second, the participation of the racing secretary, an official having functions directly under the control of both state officials and track management, in the decision to deny stalling.

The facts and holding of Jackson v. Metropolitan Edison Co. are not applicable to the case at hand. In Jackson, the utility's challenged termination policy was submitted to the Public Utility Commission as part...