Private Parties and the Public Function Test in section 1983: Cruz-Arce v. MAS

Introduction

The case of Chiany Cruz-Arce v. Management Administration Services Corporation (MAS) provides a pivotal examination of the public function test under 42 U.S.C. § 1983. Decided by the United States Court of Appeals for the First Circuit on December 6, 2021, this case delves into the complexities of holding private entities accountable for actions traditionally reserved to the state. The plaintiff, Chiany Cruz-Arce, sought to hold MAS liable as a state actor, alleging that their actions in administering low-income housing constituted an exclusive state function.

Key issues in this case include the applicability of the public function test in determining state action, the sufficiency of the plaintiff's allegations under section 1983, and the broader implications for private entities contracted by state agencies.

Summary of the Judgment

The plaintiff filed a complaint alleging that MAS, a private corporation contracted by the Puerto Rico Public Housing Administration (PRPHA), engaged in activities typically reserved for the state. Specifically, MAS's placement of the plaintiff's apartment on a police list purportedly for monitoring illegal activities led to a forced raid, resulting in severe emotional distress for the plaintiff and her minor child.

MAS moved to dismiss the complaint, arguing that it was not acting under "color of state law," a requisite for section 1983 liability. The district court granted the motion, finding that the plaintiff failed to sufficiently allege that MAS was performing an exclusive public function.

On appeal, the First Circuit affirmed the district court's decision, holding that the plaintiff did not provide enough factual support to establish that MAS's activities were exclusive to the state, thereby failing the public function test under section 1983.

Analysis

Precedents Cited

The court extensively referenced several precedents to evaluate whether MAS could be deemed a state actor:

Santiago v. Puerto Rico, 655 F.3d 61 (1st Cir. 2011): Established that Puerto Rico is functionally equivalent to a state for the purposes of section 1983.
UNITED STATES v. PRICE, 383 U.S. 787 (1966): Clarified that section 1983's state action requirement aligns with the Fourteenth Amendment's state action doctrine.
Burton v. Wilmington Parking Auth., 365 U.S. 715 (1961): Emphasized the fact-intensive nature of determining state action.
PERKINS v. LONDONDERRY BASKETBALL CLUB, 196 F.3d 13 (1st Cir. 1999): Illustrated the function test's role in preventing the delegation of exclusive sovereign responsibilities to private entities.

These precedents collectively underscore the stringent standards required to classify a private entity as a state actor under section 1983.

Legal Reasoning

The court's analysis hinged on the public function test, one of the three primary doctrines for establishing state action in section 1983 claims. The plaintiff relied solely on this test, arguing that MAS was administering low-income housing, a function traditionally and exclusively reserved to the state.

However, the court concluded that:

The administration of low-income housing is not exclusively reserved to the state, as private entities have long been involved in providing such services.
The plaintiff failed to provide specific facts demonstrating that MAS was performing an exclusive public function or that its actions were historically reserved solely to the state.
The statutory framework governing the PRPHA does not mandate that low-income housing be exclusively administered by state entities.

Consequently, MAS was not deemed a state actor, and the plaintiff's section 1983 claims were dismissed.

Impact

This judgment has significant implications for future section 1983 litigation involving private entities contracted by state agencies:

Clarification of the Public Function Test: Reinforces the necessity for plaintiffs to provide concrete evidence that a private entity is performing functions traditionally exclusive to the state.
Boundary of State Action: Establishes a clearer boundary between permissible private sector involvement in public services and actions that could trigger state action liability.
Precedent for Similar Cases: Sets a precedent that mere close association with state functions does not automatically result in state action, unless exclusivity and traditional state prerogatives are demonstrably involved.

Overall, the decision emphasizes the courts' reluctance to extend state action liability to private entities without a substantial and factual basis demonstrating their exclusive public role.

Complex Concepts Simplified

Public Function Test

The public function test is a legal doctrine used to determine whether a private entity is effectively acting as a state actor by performing functions that are traditionally and exclusively reserved to the government. If a private party is found to be executing such exclusive state functions, it may be subject to liability under section 1983 for violating constitutional rights.

section 1983

42 U.S.C. § 1983 allows individuals to sue in federal court when someone acting under "color of state law" violates their constitutional or federal rights. However, to succeed, plaintiffs must demonstrate that the defendant was performing a state function or was otherwise acting as a state actor.

State Compulsion and Nexus/Joint Action Tests

Beyond the public function test, there are two other primary tests to establish state action:

State Compulsion Test: Determines if the government coerced or significantly encouraged the private party's actions.
Nexus/Joint Action Test: Assesses whether the private entity and the state are so intertwined that they are effectively acting as a single entity.

In Cruz-Arce v. MAS, these alternative tests were not explored as the plaintiff did not assert them in her complaint.

Conclusion

The Chiany Cruz-Arce v. MAS decision underscores the rigorous standards plaintiffs must meet to invoke section 1983 against private entities. By affirming that MAS did not perform an exclusive public function, the court highlighted the importance of detailed factual allegations in establishing state action. This judgment serves as a critical reminder that mere contractual relationships with the state do not suffice for state action liability unless there is clear evidence of performing traditionally exclusive state functions.

Moving forward, parties seeking to hold private entities accountable under section 1983 must meticulously demonstrate how those entities are entrenched in exclusive state functions, thereby meeting the high threshold set by the courts.