Brief Fact Summary. Eagle Coffee Shop and the Wilmington Parking Authority (Appellee) entered into a lease agreement in 1957 whereby the Eagle Coffee Shop would lease space in a parking structure owned by the Appellee. In August 1958, Burton (Appellant) parked in the structure, attempted to eat at the Eagle Coffee Shop, was denied service, and sued both the coffee shop, and Appellant parking structure owner in a Delaware Trial Court claiming he was denied service solely on the basis of his race.
Synopsis of Rule of Law. When a public entity leases public property to a private entity, the private entity as a result of its dealings with the public entity is no longer considered to be performing wholly private action, and is therefore required to comply with all of the guarantees of the Fourteenth Amendment
The Court found that the profits earned by discrimination not only contribute to, but also are indispensable elements in, the financial success of a governmental agency.View Full Point of Law
Issue. When a state entity leases public property to a private party, is that private party, here Eagle Coffee Shop, required to comply with the Fourteenth Amendment guarantee of Equal Protection through their contractual agreement with the public entity?
Held. Yes. 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, guaranteeing Equal Protection, must be complied with by the lessee as certainly as though they were binding covenants written into the agreement itself. The state has insinuated interdependence with Eagle so it must be recognized as a joint participant in the challenged activity, which for that reason cannot be considered to be purely private as to fall without the scope of the Fourteenth Amendment. By its inaction, Appellee, and through it the state has not only made itself a party to the refusal of a service, but has elected to place its power, property and prestige behind the admitted discrimination. Furthermore, the benefits mutually conferred, together with the obvious fact that the restaurant is operated as a integral part of a public building devoted to a public parking service, indicates the degree of state participa
tion and involvement in discriminatory action for which the Fourteenth Amendment was designed to prevent.
Discussion. The holding of this case goes a long way in defining the parameters of state action in regards to its analysis under the Fourteenth Amendment. This holding builds on the holding in Pennsylvania v. Board of City Trusts in that there no longer needs to be control as was found in Pennsylvania, but a interdependent contractual relationship between a public and private entity can also give rise to the action of the private entity being considered a state action, falling under the scope of the Fourteenth Amendment. In conclusion this case shows how the appearance of state action can be as significant as actual state action when it comes to an analysis under the Fourteenth Amendment.