Opinion
Hearing Granted April 22, 1971.
Opinion on pages 452 to 461 omitted
HEARING GRANTED
[93 Cal.Rptr. 78]Flint & MacKay, Philip M. Battaglia, and Stephen F. Harbison, Los Angeles, for plaintiffs and appellants.
Parker, Milliken, Kohlmeier, Clark & O'Hara, John F. O'Hara and Everett F. Meiners, Los Angeles, for defendants and respondents.
FORD, Presiding Justice.
Pursuant to stipulation, two appeals have been consolidated. One appeal is by the plaintiffs from an order denying a preliminary injunction and the other appeal is from a judgment of dismissal of the action (Code Civ.Proc. § 581d) rendered after the defendants' general demurrer to each cause of action of the complaint had been sustained with leave to amend but the plaintiffs had elected not to file an amended complaint.
The first cause of action was that of Fred Chumley against Santa Anita Consolidated, Inc., a corporation, and Los Angeles Turf Club, Inc., a corporation. Therein there were allegations as follows: 1. The Hearst Corporation (Hearst), through its Los Angeles Herald-Examiner Division, was engaged in the publishing, operating and circulating of a daily and Sunday newspaper known as the Los Angeles Herald-Examiner (Herald-Examiner). 2. Plaintiff Chumley was an independent contractor engaged in distributing, circulating and selling the Herald-Examiner, copies of which he purchased from Hearst and resold to the public. 3. Defendant Santa Anita Consolidated, Inc. (Santa Anita) owned certain real property and a horse racing track located in the City of Arcadia, which was commonly known as Santa Anita Park. 4. Defendant Los Angeles Turf Club, Inc. (Turf Club), all of the capital stock of which was owned by defendant Santa Anita, operated Santa Anita Park as lessee of defendant Santa Anita. 5. 'Santa Anita Park is and at all times mentioned herein was a horse racing facility duly licensed by the State of California, consisting of horse racing tracks, public grandstands, stables and related areas within an enclosure, and vehicle parking lots and pedestrian walkways located outside the enclosure and on Park premises. Defendants invite the public to visit the Park to view and wager on horse races and large numbers of people come to the Park when horse racing events take place. The public is provided free access to the grounds outside the enclosure but a fee is charged members of the public who wish to park vehicles on the premises during certain hours of racing days and admission fee is charged to enter the race track facility located within the enclosure. Horse racing activities are carried on at the Park under and by virtue of permission granted by the California Horse Racing Board, an administrative agency of the State of California.' 6. 'On December 28, 1968, plaintiff Chumley and other venders of the Herald-Examiner entered upon the premises of the Park shortly before the commencement of horse racing activities with the intention and for the purpose of circulation [sic], distributing and selling Herald-Examiner newspapers to the public. On said date, horse racing activities were conducted at the Park by the defendants herein. Plaintiff Chumley and said other venders did not seek admission to or attempt to circulate, distribute or sell said newspapers in areas of the Park within the enclosure devoted to horse racing activities. Said plaintiff and the other Herald-Examiner venders attempted to circulate, distribute and sell said newspapers in an area of the Park used by the public for pedestrian traffic outside the aforesaid enclosure. Said area by custom and usage is and has been used for the circulation, [93 Cal.Rptr. 79]distribution and sale of newspapers and horse racing literature to members of the public visiting the Park. On said December 28, 1968 other newspapers were being circulated, distributed and sold in this area by other venders.' 7. On that date the defendants refused to permit plaintiff Chumley and other Herald-Examiner venders to sell their newspapers in any area of the Park and, through their agents and employees, 'did unlawfully and without just cause eject and forcibly remove said plaintiff and said other venders from the Park against their will and without their consent.' 8. On December 31, 1968, plaintiff Chumley and other venders of the Herald-Examiner were again refused permission by the defendants to sell their papers at any place on the Park premises, were again ejected and forcibly removed from the Park and were informed by the defendants that distribution, circulation and sale of Herald-Examiner newspapers would not be permitted under any conditions at any place on the Park premises.
The second cause of action was that of Hearst against the defendants and contained allegations essentially the same as those set forth in the first cause of action with respect to the prevention of the sale of the Herald-Examiner on the Park premises. Each cause of action contained further allegations appropriate to the injunctive relief and the recovery of monetary loss sought by the plaintiffs. The third and fourth causes of action related to the matter of the recovery of punitive damages.
In their opening brief the plaintiffs state: 'The thrust of each of the four causes of action of the Complaint is an unlawful abridgment by Defendants of Plaintiffs' rights to distribute newspapers in a public place, which rights are protected under the First and Fourteenth Amendments of the United States Constitution and under Article 1, Section 9 of the California Constitution.' The plaintiffs further state: 'Thus, the determinative issue in these appeals is whether the trial court was correct in finding as a matter of law that the facts alleged in the Complaint, as supplemented by matters of judicial notice, failed to indicate sufficient 'state action' so as to invoke the protection of the Fourteenth Amendment.'
In Smith v. California, 361 U.S. 147, 149-150, 80 S.Ct. 215, 4 L.Ed.2d 205, 209, the Supreme Court stated: 'Almost 30 years ago, Chief Justice Hughes declared for this Court: 'It is no longer open to doubt that the liberty of the press and of speech is within the liberty safeguarded by the due process clause of the Fourteenth Amendment from invasion by state action. It was found impossible to conclude that this essential personal liberty of the citizen was left unprotected by the general guaranty of fundamental rights of person and property * * *.' Near v. State of Minnesota ex rel. Olson, 283 U.S. 697, 707, 51 S.Ct. 625, 628, 75 L.Ed. 1357. It is too familiar for citation that such has been the doctrine of this Court, in respect of these freedoms, ever since. And it also requires no elaboration that the free publication and dissemination of books and other forms of the printed word furnish very familiar applications of these constitutionally protected freedoms. It is of course no matter that the dissemination takes place under commercial auspices. See Joseph Burstyn, Inc. v. Wilson, 343 U.S. 495, 72 S.Ct. 777, 96 L.Ed. 1098; Grosjean v. American Press Co., 297 U.S. 233, 56 S.Ct. 444, 80 L.Ed. 660. Certainly a retail book seller plays a most significant role in the process of the distribution of books.'
To borrow the words of Judge Friendly, the question thus presented 'demands analysis of the elusive concept of 'state action." (Powe v. Miles (2d Cir. 1968) 407 F.2d 73, 74.) In short, the primary problem is whether the grievance as to which complaint is made resulted solely from private action or instead resulted at least in part from state action which was sufficiently involved to bring the matter within the proscription of the Fourteenth Amendment. (See Mulkey v. Reitman, 64 Cal.2d 529, 536, 50 Cal.Rptr. 881, 413 P.2d 835.) It was stated in Burton v. Wilmington Parking Authority, 365 U.S. 715, 722, 81 S.Ct. 856, 860, 6 L.Ed.2d 45, 50: 'Only [93 Cal.Rptr. 80]by sifting facts and weighing circumstances can the nonobvious involvement of the State in private conduct be attributed its true significance.'
The core of the plaintiffs' argument as to state involvement in the present case is expressed as follows: 'The relation between the Defendants herein and the State of California is established in the Business and Professions Code and the Administrative Code of the State of California, which must be considered as parts of the Complaint by virtue of the Evidence Code provisions with regard to judicial notice * * *. By virtue of these statutory provisions and regulations, the State of California grants to the Defendants herein a virtual monopoly on horse racing activities in this State for a given number of days each year. During that period of time, not only do the Defendants act as a Statecreated monopoly, but they act according to a detailed set of proscriptions and prescriptions laid down by the State in its statutes and regulations. Nearly every facet of Defendants' conduct of horse racing meetings is controlled and regulated by the California Horse Racing Board, and even the structure of the Defendants' corporate existence and finances is controlled by these statutes and regulations. The State could well have included in these detailed statutes and regulations an affirmative requirement that licensees such as Defendants herein not infringe on the constitutional rights of third persons, just as the Court in Burton [Burton v. Wilmington Parking Authority, supra] suggested that the State could have done so in a lease to a so-called private party. [p] Also as in Burton, the State here has a significant financial involvement. In 1967 the State of California realized a total of $12,745,771.00 from pari-mutuel taxes alone from the activities of the Defendants * * *. As pointed out in Plaintiffs' Statement and Memorandum, this figure is especially relevant in light of the net income figure of $563,999.00 for the same period. In other words, the State realizes over twenty times what the Defendants themselves realize from their horse racing activities.'
The plaintiffs' reliance on Burton is unwarranted in view of the significant difference in the nature of the factual circumstances present in Burton. Therein declaratory and injunctive relief was sought by Mr. Burton who had been refused the service of food or drink by a restaurant solely because he was a Negro. The restaurant was located in a parking building owned and operated by the Wilmington Parking Authority, an agency of the State of Delaware, and the restaurant was the Authority's lessee. The Supreme Court held that the exclusion of Mr. Burton constituted discriminatory state action in violation of the Equal Protection Clause of the Fourteenth Amendment. In the course of its reasoning the Supreme Court stated (365 U.S. at pages 723-726, 81 S.Ct. at pages 861-862, 6 L.Ed.2d at pages 51-53): 'The land and building were publicly owned. As an entity, the building was dedicated to 'public uses' in performance of the Authority's 'essential governmental functions.' 22 Del. Code, §§ 501, 514. The costs of land acquisition, construction, and maintenance are defrayed entirely from donations by the City of Wilmington, from loans and revenue bonds and from the proceeds of rentals and parking services out of which the loans and bonds were payable. * * * [p] Addition of all these activities, obligations and responsibilities of the Authority, the benefits mutually conferred, together with the obvious fact that the restaurant is operated as an integral part of a public building devoted to a public parking service, indicates that degree of state participation and involvement in discriminatory action which it was the design of the Fourteenth Amendment to condemn. * * * As the Chancellor pointed out, in its lease with Eagle [the restaurant] the Authority could have affirmatively required Eagle to discharge the responsibilities under the Fourteenth Amendment imposed upon the private enterprise as a consequence of state participation. * * * By its inaction, [93 Cal.Rptr. 81]the Authority, and through it the State, has not only made itself a party to the refusal of service, but has elected to place its power, property and prestige behind the admitted discrimination. The State has so far insinuated itself into a position of interdependence with Eagle that it must be recognized as a joint participant in the challenged activity, which, on that account, cannot be considered to have been so 'purely private' as to fall without the scope of the Fourteenth Amendment. * * * [p] * * * Owing to the very 'largeness' of government, a multitude of relationships might appear to some to fall within the Amendment's embrace, but that, it must be remembered, can be determined only in the framework of the peculiar facts or circumstances present. Therefore respondents' prophecy of nigh universal application of a constitutional precept so peculiarly dependent for its invocation upon appropriate facts fails to take into account 'Differences in circumstances [which] beget appropriate differences in law,' Whitney v. State Tax Comm., 309 U.S. 530, 542, 60 S.Ct. 635, 640, 84 L.Ed. 909, 915. Specifically defining the limits of our inquiry what we hold today is that when a State leases public property in the manner and for the purpose shown to have been the case here, the proscriptions of the Fourteenth Amendment must be complied with by the lessee as certainly as though they were binding covenants written into the agreement itself.'
In the case presently before this court the complaint alleges that the property involved is privately owned and operated, although the horse racing facility is licensed by the State of California and is subject to regulation by the California Horse Racing Board, an administrative agency of the State of California. The part of the property upon which newspapers are vended is traversed by those members of the public who enter Santa Anita Park to obtain admission to the enclosed portion of the premises for the purpose of viewing the races and participating in related activity. The vending of newspapers is not an integral part of the operation of the enterprise. The complaint and the rules of the California Horse Racing Board which are subject to judicial notice fail to disclose that the matter of the grant or denial of permission to sell newspapers of the nature of the Herald-Examiner on race track premises is one over which the State exercises or has a duty to exercise control. There is an absence of allegations sufficient to show state involvement in the challenged conduct of the defendants.
The determination that the complaint fails to state a cause of action is not inconsistent with the reasoning of the recent cases of In re Cox, 3 Cal.3d 205, 90 Cal.Rptr. 24, 474 P.2d 992, and Diamond v. Bland, 3 Cal.3d 653, 91 Cal.Rptr. 501, 477 P.2d 733, each of which involved a shopping center.
In the Cox case the Supreme Court stated (3 Cal.3d page 216, 90 Cal.Rptr. page 31, 474 P.2d page 999) that 'a business generally open to the public may not arbitrarily exclude a would-be customer from its premises' and (page 217, 90 Cal.Rptr. page 32, 474 P.2d page 1000) 'that the shopping center has generally opened the premises to the public and invited it to treat the center as the modern analogue of the town center.' The Supreme Court further stated (page 218, 90 Cal.Rptr. page 32, 474 P.2d page 1000): 'In undertaking to provide the necessities and amenities of life, the shopping center performs an important public function. In some areas the public must rely upon the shopping center as its sole source of food, clothing and other commodities. If a shopping center arbitrarily denies individuals the right to purchase essentials, these people may have no practicable alternative source of supply. Our modern society has become so interdependent and interrelated that those who perform a significant public function may not erect barriers of arbitrary discrimination in the marketplace.' In the case presently before this court, the plaintiffs did not sue as customers, potential or actual, and the use made of the premises by the defendants was not of such an extensive [93 Cal.Rptr. 82]nature that the exclusion of plaintiffs' newspaper sales of which complaint is made can reasonably be classified as 'arbitrary discrimination in the marketplace.'
The question presented in Diamond v. Bland, supra, 3 Cal.3d 653, page 655, 91 Cal.Rptr. 501, page 502, 477 P.2d 733, page 734, was expressed by the Supreme Court as follows: 'May the owners of a privately owned shopping center deny all use of their premises to persons who desire on those premises, to engage in First Amendment activities unrelated to the business of the [privately owned shopping] center?' The center was described as consisting of a large parking lot and a totally covered, air-conditioned shopping complex or mall which contained three major department stores and 72 single businesses. All of the stores had an unobstructed frontage on the covered 'common aisleway.' The mall area was surrounded by a sidewalk, 6 to 8 feet in width, which was adjacent to the parking lot. No purchases were required as a condition of entry to the premises.
In the course of reaching the conclusion in Diamond v. Bland 'that prevailing authority compels our rejection of the proposition that owners of a shopping center may impose blanket and total prohibition on the exercise of First Amendment activities on shopping center property,' the Supreme Court stated (3 Cal.3d at pages 657-658, 91 Cal.Rptr. at page 503, 477 P.2d at page 735): 'We start from the premise that peaceful and orderly solicitation of signatures, discussion of issues, and distribution of information are First Amendment protected activities which may not be prohibited broadly and absolutely on public streets, parks, and similar public places traditionally associated with the exercise of First Amendment rights. [Citations.] We must decide whether the Inland Center, because of its private ownership, may insulate itself from such protected activities.' The Supreme Court further stated (3 Cal.3d at page 660, 91 Cal.Rptr. at page 505, 477 P.2d at page 737): 'The implication is clear from Logan [Amalgamated Food Employees Union Local 590 v. Logan Valley Plaza, 391 U.S. 308, 88 S.Ct. 1601, 20 L.Ed.2d 603] that modern-day shopping centers, serving as the business districts for the surrounding residential communities, have important public functions, and their owners may not rely on their private ownership to justify blanket prohibitions on First Amendment activities that could lawfully be conducted on public property. Indeed, in many instances the contemporary shopping center serves as the analogue of the traditional town square.'
It would be unreasonable to conclude that the reasoning of Cox and of Diamond was intended to embrace the acts of every owner of private premises to which the public is invited, irrespective of the nature of the particular use and the consequent extent of the invitation. In the present case the invitation was extended to those members of the public who desired to pay the price of admission to view the horse racing and related activities. The fact that the word 'Park' was employed in the name of the enterprise did not broaden either the nature of the invitation or the use to which the premises were put. Such premises served neither as a business district for the surrounding residential communities nor 'as the analogue of the traditional town square.' The defendants' premises did not have the attributes of use akin to those of public property which existed in Cox and Diamond. To the extent that the defendants discriminated against the plaintiffs in refusing them permission to sell their newspapers to the race track patrons on the premises while other newspapers were permitted to be sold, the plaintiffs may not obtain the relief which they seek in the absence of state involvement. The complaint failed to disclose the requisite state involvement and, as has been explained hereinabove, the trial court properly sustained the general demurrer addressed to each cause of action alleged in the complaint.
[93 Cal.Rptr. 83]The determination just expressed is not affected by the argument that by declining to afford judicial relief to the plaintiffs in this case, the State of California has become directly involved in the defendants' conduct. The only judicial action taken has been to declare properly the applicable law. Neither the court below nor this court has acted to enforce affirmatively private conduct on the part of the defendants which imposes restrictions on the constitutional rights of the plaintiffs. Such judicial action does not constitute constitutionally proscribed state action. (Cf. Evans v. Abney, 396 U.S. 435, 90 S.Ct. 628, 24 L.Ed.2d 634.)
In Kauper, Civil Liberties and the Constitution (1962), the author expresses an interesting view at pages 151-152: 'It is clear, however, that since judicial action is state action, all judicial enforcement of private contractual and property rights is potentially subject to attack under the Equal Protection and Due Process clauses of the Fourteenth Amendment and that the really critical question is whether a court in protecting one man's interests is thereby subjecting another person to an unconstitutional impairment of his rights or liberties. Any party complaining that judicial enforcement of private right is unconstitutional must establish that this enforcement impairs his enjoyment of a tangible and concrete right, interest, or liberty recognized at law, whether on the basis of contract, common law, statute, or Constitution. Secondly, even if there is some impairment or damage, it must be shown that this impairment results from an improper choice by the state judiciary in the recognition and interpretation of private rights. The ultimate decision then turns really on a weighing of the merits of the problem. It seems to me that in the end it should not be the form of remedy, the way in which the question arises before courts, or even whither an independent right exists that should control but rather the meritorious quality of the judicial action in choosing between competing interests and freedoms. The owner of property has constitutional rights, too. Just as a legislative enactment defining rights and duties as between private persons is subject to review to determine whether it establishes an unreasonable classification or unreasonably interferes with a fundamental right, so a judicial decision interpreting, defining, and enforcing property or contractual tights is subject to review for the purpose of determining whether the court has acted with due and reasonable regard for constitutionally recognized values in striking the balance.'
Since the judgment of dismissal of the action must be affirmed, the appeal from the order denying a preliminary injunction is moot.
In announcing its determination as to the application for a preliminary injunction the trial court stated: 'The application for a preliminary injunction will be denied. The Court will find that there is not significant State Action here sufficient to bring it within the Fourteenth Amendment, and further, that we have in a sense a private property where the owners of that property have a right to exclude persons who are carrying on a commercial activity or intend to carry on a commercial activity there, and the Court also feels that in this case balancing the equities, there would be much more danger to loss to Santa Anita than there would be to the Hearst corporation in this case if the preliminary injunction were granted.'
The appeal from the order denying a preliminary injunction is dismissed. The judgment is affirmed.
SCHWEITZER and ALLPORT, JJ., concur.
In plaintiffs' brief it is stated that while the trial court did not specify the portions of the declarations before it which indicated 'equities' in favor of the defendants which could outweigh the interests of the plaintiffs, presumably the court was relying on the statement of a vice president of the defendant corporations that he believed that if issues of the Herald-Examiner were to be sold at the Park, striking unions of the newspaper would picket at the Park and that it was probable that the employees at the Park would refuse to cross such picket line, thereby causing the Park to shut down.