P.R.B.A. Corp. v. HMS Host Toll Roads, Inc. , 808 F.3d 221 ( 2015 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 15-1538
_____________
P.R.B.A. CORP., t/a Bare Exposure,
Appellant
v.
HMS HOST TOLL ROADS, INC.;
THE SOUTH JERSEY TRANSPORTATION
AUTHORITY;
THE NEW JERSEY TURNPIKE AUTHORITY;
JOHN DOES #1-15
_____________
On Appeal from the United States District Court
for the District of New Jersey
District Court No. 1-12-cv-07914
District Judge: The Honorable Renee M. Bumb
______________
Argued October 6, 2015
Before: FUENTES, SMITH, and NYGAARD,
Circuit Judges
(Opinion Filed: December 10, 2015)
F. Michael Daily, Jr. [ARGUED]
216 Haddon Avenue
Suite 106
Westmont, NJ 08108
Counsel for Appellant
Catherine A. Bledsoe [ARGUED]
Gordon Feinblatt
233 East Redwood Street
Baltimore, MD 21202
Counsel for Appellees
________________
OPINION
________________
SMITH, Circuit Judge.
This case requires us to determine whether a
private company that operates service plazas on New
Jersey highways acted “under color of any statute,
ordinance, regulation, custom, or usage, of any State,” 42
2
U.S.C. § 1983, when it removed brochures belonging to a
“gentleman’s club” from the common areas of its service
plazas. We hold that it did not. The absence of any
direct involvement by the state authorities either in the
decision to remove the brochures or in the general, day-
to-day operations of the service plazas compels this
conclusion. Accordingly, we will affirm the District
Court’s grant of summary judgment.
I.
P.R.B.A. Corporation (t/a “Bare Exposure”) is a
New Jersey corporation that operates a “gentleman’s
club” in Atlantic City, New Jersey, billing itself as
“Atlantic City’s Only All Nude Entertainment.” HMS
Host Toll Roads, also a private corporation, leases
service plazas located along the Garden State Parkway
and the Atlantic City Expressway from the South Jersey
Transportation Authority and the New Jersey Turnpike
Authority (together referred to as the “Authorities”).
Host operates restaurants, gift shops, and convenience
stores in the service plazas it leases from the Authorities.
The leases also state that Host must pay the Authorities
the higher of either a percentage of its gross sales or a
fixed rental payment each month. The parties agree,
however, that the Authorities are not involved in any of
Host’s day-to-day operations or overall management of
the service plazas. Under the leases, the Authorities’
only direct responsibility is to perform long-term
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maintenance to parking areas, exteriors of the buildings,
and building lobbies.
In 2003, Host entered into a contract with CTM
Media Group, Inc. which permitted CTM to install and
service CTM-owned brochure display racks in the
lobbies of the service plazas. CTM pays Host the greater
of a minimum monthly payment or 40% of the gross
revenue generated by the brochure racks. The contract
also provides that Host “must approve all brochures or
publications of any kind” prior to placement in the racks.
The Authorities were not a party to this contract.
In 2012, Kevin Diamond, a Host employee,
discovered a Bare Exposure brochure in one of the CTM
display racks located in a Host service plaza. Diamond
sent a copy of the brochure to Greg Dion, Host’s General
Manager of New Jersey Motorway Operations. Dion
contacted CTM and instructed its representative to
remove all Bare Exposure brochures from Host’s service
plazas. The parties agree that Mr. Dion’s decision to
have the brochures removed was his and his alone; he did
not consult with or receive any direction from the
Authorities. Nor did he review or consider any
provisions of the New Jersey Administrative Code prior
to making his decision. Instead, he believed that he was
exercising Host’s right under the CTM Agreement to
approve all brochures placed in the racks.
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There is also no evidence that the Authorities ever
directed Host employees to take any actions regarding
the placement of brochures in the plazas. Further, the
leases between Host and the Authorities are silent with
respect to the placement of brochures and other
marketing materials in the lobbies of the service plazas.
That said, Bare Exposure contends that the Authorities
placed several government signs and photographs in
service plaza lobbies. These include photos of the
current Governor of New Jersey, a photo of the late
Senator Farley in the common area of one plaza, and a
government information booth in the common area of
another. It is undisputed, however, that no representative
of the Authorities ever instructed Host to remove a
brochure or advertisement from the lobby of a service
plaza along the Garden State Parkway or Atlantic City
Expressway.
II.
After learning of the brochures’ removal, Bare
Exposure filed suit under 42 U.S.C. § 1983 alleging that
Host’s actions violated Bare Exposure’s First and
Fourteenth Amendment rights. This case comes to us on
a timely appeal from the District Court’s February 6,
2015, order granting Host’s motion for summary
judgment. This Court has jurisdiction under 28 U.S.C.
§ 1291 to review the District Court’s ruling on Bare
Exposure’s § 1983 claim. Lassiter v. City of Phila., 716
F.3d 53, 55 n.1 (3d Cir. 2013).
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It is well established that we employ a plenary
standard in reviewing orders entered on motions for
summary judgment, applying the same standard as the
district court. Pa. Coal Ass’n v. Babbitt, 63 F.3d 231,
236 (3d Cir. 1995). In considering an order entered on a
motion for summary judgment, “we view the underlying
facts and all reasonable inferences therefrom in the light
most favorable to the party opposing the motion.” Id.III.
While Bare Exposure’s appellate brief attempted to
present two arguments as to why it believed this Court
should find state action, at oral argument counsel
clarified that Bare Exposure was actually limiting its
appeal to a single argument. Specifically, counsel argued
only that Host is a state actor under the entwinement
test.1 We confine our analysis accordingly.2
1
Indeed, had Bare Exposure not conceded this point, the
Court would have similarly limited the scope of review
because Bare Exposure explicitly confined itself to this
argument when opposing Host’s motion for summary
judgment in the District Court. Pl.’s Br. in Opp. to S.J. at
1. See Shell Petroleum, Inc. v. United States, 182 F.3d
212, 218 (3d Cir. 1999) (“[A litigant] must unequivocally
put its position before the trial court at a point and in a
manner that permits the court to consider its merits.”);
Liberles v. Cook Cnty., 709 F.2d 1122, 1126 (7th Cir.
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We next turn to the merits of Bare Exposure’s state
action argument. The touchstone for our analysis of all
state action claims is Brentwood v. Tennessee Secondary
School Athletic Association, 531 U.S. 288 (2001). In
Brentwood, the Supreme Court held that “state action
may be found if, though only if, there is such a close
nexus between the State and the challenged action that
seemingly private behavior may be fairly treated as that
1983) (“It is a well-settled rule that a party opposing a
summary judgment motion must inform the trial judge of
the reasons, legal or factual, why summary judgment
should not be entered. If it does not do so, and loses the
motion, it cannot raise such reasons on appeal.”).
2
We also note that Bare Exposure’s initial attempt to rely
on the Supreme Court’s decision in Burton v. Wilmington
Parking Authority, 365 U.S. 715 (1961), which has been
credited with creating the symbiotic relationship test, is
of no merit even if this argument were not waived. As
this Court clarified in Crissman v. Dover Downs Entm’t
Inc., “while Burton remains good law, it was crafted for
the unique set of facts presented, and we will not expand
its reach beyond facts that replicate [it].” 289 F.3d 231,
242-44, (3d Cir. 2002) (en banc). This case does not
present such facts. Bare Exposure does not claim that
Host’s removal of the brochures was necessary for the
continued financial viability of either the Authorities or
Host—one finding (among many others) necessary to
replicate the factual scenario present in Burton.
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of the State itself.” Id. at 295; see also Rendell-Baker v.
Kohn, 457 U.S. 830, 838 (1982) (“The ultimate issue in
determining whether a person is subject to suit under
§ 1983 is the same question posed in cases arising under
the Fourteenth Amendment: is the alleged infringement
of federal rights fairly attributable to the State?”)
(emphasis added).
The Brentwood Court also gave additional
structure to several tests that lower courts had previously
been using to determine whether a private party satisfied
the “close nexus” requirement necessary to be considered
a state actor. One of these tests is called the
“entwinement test,” which asks whether “[t]he nominally
private character of the Association is overborne by the
pervasive entwinement of public institutions and public
officials in its composition and workings, and [thus] there
is no substantial reason to claim unfairness in applying
constitutional standards to it.” Brentwood, 531 U.S. at
298.
The Supreme Court also applied this test in
Brentwood when it held that a non-profit athletic
association which regulated interscholastic sports among
Tennessee public and private high schools was a state
actor. In so doing, the Court focused on the top-to-
bottom intermingling of association leaders and public
school officials: “[t]here would be no recognizable
Association, legal or tangible, without the public school
officials, who do not merely control but overwhelmingly
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perform all but the purely ministerial acts by which the
Association exists and functions in practical terms.” Id.
at 300. Indeed, “[o]nly the 16% minority of private
school memberships prevents this entwinement of the
Association and the public school system from being
total and their identities totally indistinguishable.” Id.This case thus shows that the entwinement test focuses
on the overlap or merger of public and private entities as
a result of their shared leadership or other attributes that
make it hard to separate their public functions from their
private ones.
Two additional cases help further flesh out the
contours of this test. First, in Gannett Satellite
Information Network, Inc. v. Berger, this Court
concluded that the concessionaires that leased property in
the Newark Airport and decided not to distribute certain
newspapers were simply “private entities pursuing
private ends” because there was no “explicit
governmental involvement” in the decisions of the
concessionaires and thus their conduct “may not fairly be
attributed to the Port Authority.” 894 F.2d 61, 67 (3d
Cir. 1990). The Gannett Court also went on to note that,
“[a]bsent any explicit governmental involvement in the
distribution decisions of these private newsstands, the
actions taken by the concessionaires in this case may not
fairly be attributed to the Port Authority.” Id. at 67(emphasis added). Gannett thus makes clear that our
analysis should also focus on evidence of explicit
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involvement of the governmental authority in the specific
action the plaintiffs challenge. In Gannett, it was the
decision not to sell certain newspapers. Here, it was the
removal of Bare Exposure’s brochures.
Second, in Marie v. American Red Cross, the Sixth
Circuit further elaborated on the high bar necessary for a
finding of impermissible entwinement. 771 F.3d 344(6th Cir. 2014). In this case, even the close working
relationship between several state agencies and the Red
Cross was not sufficient to constitute entwinement. The
Sixth Circuit reiterated that “mere cooperation simply
does not rise to the level of merger required for a finding
of state action.” Id. at 364. Instead, there must be
“pervasive entwinement of public institutions and public
officials in [the private entity’s] composition and
workings [such that] there is no substantial reason to
claim unfairness in applying constitutional standards to
it.” Id. (emphasis added).
All these cases show that we must carefully
analyze the entire record to determine whether the
Authorities were so pervasively entwined in the structure
and management of Host that Host should fairly be
treated as a government entity under the Constitution.
The record in this case does not suggest any
pervasive entwinement. There was no personnel overlap
between the Authorities and Host, and no specific
involvement of the Authorities in Host’s decision to
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remove the brochures. Bare Exposure’s strongest
argument is the presence of a provision in the service
plaza leases that requires Host, in certain situations, to
pay a varying percentage of its gross sales income to the
Authorities instead of a fixed amount. There is no
indication, however, that this profit sharing led to any
actual involvement of either entity in the management or
control of the other. Thus, without more, this financial
remuneration for the leasehold fails to provide any
indication of the “pervasive entwinement” required under
Brentwood.
We also hold that the presence of government
signs and images of state officials in the service plazas—
without more—does not constitute entwinement. Even
assuming that the Authorities required Host to place
these signs and images in the common areas, this fact still
does not suggest actual entwinement, let alone “pervasive
entwinement” as required by Brentwood. Without any
showing of the involvement of the Authorities in the
operations of Host, this can at best be viewed as an
additional requirement placed on Host as a condition of
its continued leasing of the service plazas. This type of
detailed control or regulation, however, is not a form of
entwinement. See Crissman v. Dover Downs Entm’t Inc.,
289 F.3d 231, 243 (3d Cir. 2002) (en banc) (“[T]he Court
has repeatedly opined that regulation—even detailed
regulation, as we have here—does not equate to state
action.”).
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The same can be said of Bare Exposure’s
allegation that the Authorities’ signs and photographs
create the perception that the service plazas are run by
the state. Even assuming this to be true, the mere
perception of governmental control is insufficient for
finding state action under the entwinement test. See S. F.
Arts & Athletics, Inc. v. U. S. Olympic Comm., 483 U.S.
522, 546 n.27 (1987) (noting that, “absent the additional
element of governmental control,” the mere
representation of the United States in the Olympics by
the USOC is not sufficient for a finding of state action).
IV.
For the reasons above, we conclude that the
District Court appropriately granted summary judgment
in favor of Host. Accordingly, we will AFFIRM.
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