Lease of City Property Did Not Subject Nonprofit to Liability Under 42 U.S.C. section 1983

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The Ninth Circuit held that a private nonprofit club that leased city property was not a state actor that could be held liable for constitutional claims under 42 U.S.C. § 1983. Pasadena Republican Club v. Western Justice Center, No. 20-55093 (9th Cir., Jan 21, 2021).

The City of Pasadena leased city-owned property to the Western Justice Center, a private nonprofit that provided law-related services and occasionally rented out its event space to community groups after hours. The terms of the lease required WJC to independently manage the property and pay for repairs, renovations, and maintenance.

In April 2017, the Pasadena Republican Club rented space from WJC for an evening speaking event. The afternoon before the event, WJC rescinded the rental agreement because WJC had recently learned of the speaker’s affiliation with an organization that promoted causes antithetical to WJC’s values. The Club filed suit against WJC, WJC’s executive director, and the City under 42 U.S.C. § 1983, which provides individuals a cause of action for government actions that infringe on their constitutional rights.

The court dismissed the Club’s argument that there was “joint action” or a “symbiotic relationship” between WJC and the City that created “state action” required to bring a claim under § 1983. The court distinguished this situation from other cases that found state action when a city leased property to a private entity. WJC and the City managed their operations independently of each other, and the City did not perform any City functions on the property. WJC and the City were also not “financially integrated” because the City did not financially support WJC’s operations; nor did it profit or receive revenue from WJC’s rental agreements. The fact that the City may have intangibly profited off WJC’s civic activities was also not a valid argument.

The court also dismissed the Club’s argument that WSJ’s executive director should be held liable for conspiring to deprive someone of their constitutional rights under § 1985(3). In order to have a claim under that section, at least one of the conspiring parties must be a state actor. Because the Club alleged that the executive director conspired only with members of the staff and executive committee of WJC, its claim was not actionable under § 1985(3).

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