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Receipt Of Federal And State Funds Conditioned On Compliance With Anti-Discrimination Laws Insufficient To Convert Private University To State Actor
John Heineke was a tenured economics professor at Santa Clara University, a private university located in Northern California. After a student filed a complaint of sexual harassment against Heineke, the University hired an outside investigator to conduct an investigation into the student’s allegations. The investigator determined that the evidence did not support the student’s claims. However, during the course of the investigation, the investigator learned of a prior complaint of sexual harassment made by a former student against Heineke. After investigating the prior complaint, the investigator concluded that Heineke “more likely than not” sexually harassed the former student.
The University determined that Heineke’s conduct violated the University’s harassment policy and terminated Heineke’s employment. Heineke appealed his termination to the University’s president, who upheld the termination. Heineke then appealed to the University’s Faculty Judicial Board, which, after holding a hearing on the matter, unanimously upheld Heineke’s termination.
Heineke filed a claim against the University pursuant to 42 U.S.C. Section 1983. To state a claim under 42 U.S.C. Section 1983, Heineke had to show that the University, acting under color of state law, deprived him of a right secured by the Constitution or laws of the United States. Heineke attempted to do so by alleging that the University violated his rights under the Fourteenth Amendment due process and equal protection clauses. Heineke also filed various state law claims, including wrongful discharge, intentional infliction of emotional distress, negligent infliction of emotional distress, breach of contract, breach of the covenant of good faith and fair dealing, and defamation.
The district court dismissed Heineke’s 42 U.S.C. Section 1983 claim because it concluded that the University, as a private school, was not a “state actor,” and consequently, its conduct was not subject to the Fourteenth Amendment. The district court also dismissed Heineke’s state law claims and permitted him to refile them in state court. Heineke appealed and the Ninth Circuit Court of Appeals reviewed the district court’s decision.
On appeal, Heineke argued that his claim under 42 U.S.C. Section 1983 should proceed because “(1) [the University] receives federal and state funds, (2) which are conditioned on compliance with federal and state anti-discrimination laws and regulations, including enacting an affirmative action plan and a sexual harassment policy, (3) such that [the University] may lose government funds should it fail to comply with the law.” Heineke asserted, therefore, that the University serves as a state actor on behalf of the federal government and the State of California in its enforcement of federal and state anti-discrimination laws, such as Title IX, on campus as a condition of the federal and state funds it accepts.
The Court disagreed with Heineke’s assertions, finding that receipt of government funds was insufficient to transform a private university into a state actor. The Court further noted that a private university’s compliance with “generally applicable laws” is also insufficient to transform private conduct into state action. Ultimately, the Court concluded “that receipt of federal and state funds conditioned on compliance with anti-discrimination laws is insufficient to convert private conduct into state action.”
Heineke v. Santa Clara University (9th Cir. 2020) 965 F.3d 1009.