Brief Fact Summary. A restaurant owner who refused to serve the Appellant, Burton (Appellant), food based on his race was held by the Supreme Court of the United States (Supreme Court) to be a state actor because he leased his restaurant space from the state. The building was designed for public use and service and the building had state symbols.
Synopsis of Rule of Law. It has always been clear that since the [Civil Rights Cases], private conduct abridging individual rights does no violence to equal protection unless to some significant extent, the state in any of its manifestations has been found to be involved in it. The inquiry must be whether there is a sufficiently close nexus between the state and the alleged action of the regulated entity so that the action of the latter may be fairly treated as that of the state itself.
Issue. Whether the restaurant owner is a state actor?
Held. Yes. Judgment of the Delaware Supreme Court reversed and remanded for further proceedings. The Appellee was created to provide adequate parking facilities for the convenience of the public. Its first project was the erecting of a parking facility. The Appellee was advised by experts that the anticipated revenue from the parking of cars and proceeds from that sale of bonds would not be sufficient to finance the construction and costs of the facility. To secure additional capital, the Appellee entered into long-term leases. Since the restaurant owner here was a lessee of Appellee, his actions constituted that of the state. Therefore, exclusion of the Appellant was discriminatory state action.
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