Flagg Brothers, Inc. v. Brooks

Supreme Court of the United States
(1978)

ELI5:

Rule of Law:

The action of a private party is not considered state action for Fourteenth Amendment purposes merely because the state has enacted a law that permits, but does not compel, the private action. For a private entity's conduct to qualify as a 'public function' constituting state action, it must involve the exercise of a power traditionally and exclusively reserved to the state.

Facts:

Shirley Brooks and her family were evicted from their apartment in Mount Vernon, New York.
A city marshal arranged for Flagg Brothers, Inc., a private warehouse company, to store Brooks' possessions.
Brooks was informed of the moving and storage costs and instructed the movers to proceed.
A dispute arose between Brooks and Flagg Brothers over the validity of the storage charges.
Flagg Brothers sent Brooks a letter threatening to sell her furniture to satisfy the debt, as permitted by New York Uniform Commercial Code § 7-210.
Gloria Jones, another resident, had her goods stored and was threatened with a sale by Flagg Brothers under similar circumstances following her eviction.

Procedural Posture:

Shirley Brooks filed a class-action lawsuit in the U.S. District Court for the Southern District of New York against Flagg Brothers, Inc.
Gloria Jones subsequently joined the action as a plaintiff.
The District Court dismissed the complaint for failure to state a claim, finding the warehouseman's conduct did not constitute state action.
The plaintiffs (appellees) appealed to the U.S. Court of Appeals for the Second Circuit.
A divided panel of the Second Circuit reversed the District Court, holding that the state's delegation of power to the warehouseman constituted sufficient state action.
The U.S. Supreme Court granted certiorari.

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Issue:

Does a warehouseman's proposed sale of goods to enforce a lien, as permitted by a state's Uniform Commercial Code, constitute 'state action' attributable to the state for purposes of the Fourteenth Amendment's Due Process Clause?

Opinions:

Majority - Mr. Justice Rehnquist

No. A warehouseman's sale of goods under New York Uniform Commercial Code § 7-210 is not state action because it does not involve a function traditionally and exclusively reserved to the state, nor does the state compel the action. The court distinguished this case from prior creditor-remedy cases like Sniadach and Fuentes by highlighting the 'total absence of overt official involvement,' as no public official participates in the sale. The Court reasoned that for a private party's conduct to be considered a 'public function,' it must be a power traditionally 'exclusively reserved to the State,' such as conducting elections or governing a company town. The resolution of private commercial disputes is not such an exclusive function, as numerous private remedies and arrangements have historically existed. Furthermore, the state's mere acquiescence or authorization of a private act through a statute, without compelling it, does not convert private action into state action.

Dissenting - Mr. Justice Marshall

Yes. The warehouseman's sale constitutes state action. The majority demonstrates a 'callous indifference' to the financial realities of the poor, as the alternative legal remedies it suggests, like replevin, are practically unavailable due to the high cost of posting a bond. The dissent argues that the majority improperly ignores history in its 'traditionally exclusive' function analysis. Citing New York's own highest court, it contends that the execution of a lien by forced sale has, in fact, traditionally been the function of the Sheriff, a state actor.

Dissenting - Mr. Justice Stevens

Yes. The warehouseman's proposed sale, authorized by state statute, is state action and should be subject to due process scrutiny. This holding is inconsistent with the Sniadach line of cases, where state statutes authorizing creditor remedies were reviewed. The dissent argues that the key element is not 'overt official involvement,' which was merely ministerial in those prior cases, but the state's delegation of its power to resolve disputes and transfer property rights. The state statute specifically authorizes the warehouseman to perform a state function: the nonconsensual, binding resolution of a property dispute. By focusing on whether the state 'compels' the action or whether the function is 'exclusive,' the majority creates a rationale that would allow a state to authorize outrageous private self-help remedies without any possibility of federal constitutional challenge.

Analysis:

This decision significantly narrowed the 'public function' doctrine for determining state action by adding the stringent requirement that the function must be 'exclusively' reserved to the state. By doing so, the Court distinguished a line of creditor's rights cases and insulated many state-authorized, self-help remedies under the Uniform Commercial Code from Fourteenth Amendment due process challenges. The ruling makes it substantially more difficult to hold private actors liable for constitutional violations, even when their authority to act stems directly from a state statute. The key distinction post-Flagg Brothers is the presence or absence of overt participation by a state official, however ministerial.

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