The validity of legal dicta in HOA court decisions

Too often I’ve come across the use of dicta by judges in highly controversial cases involving questions of HOAs a mini or quasi-government, as a state actor, and agreed to be bound and CC&Rs as a contract. Dicta are too often viewed by the average person to be a valid, legal precedent to be followed by the judge. Unfortunately, dicta are statements characterized by the lack of evidentiary support or authority and is essentially a side comment.

In short, “dictum” (singular of dicta) is “a comment by a judge in a decision or ruling which is not required to reach the decision . . . an opinion by a court on a question that is not essential to its decision it does not have the full force of a precedent.”[1] Unfortunately, it can be cited as to what a judge stated in his discussion, which can be the cause of a serious misunderstanding of its importance.

Take for instance the clarification of such a misunderstanding in Orchard Estate Homes[2] in which the homeowner plaintiffs mistook a statement by the trial court judge as law and used it as the basis for an appeal. The appellate court held, “we conclude Alliance [plaintiff] has incorrectly construed statements made in dicta in some authorities regarding the purpose of the statutory procedure.”  The misconstrued dicta read (emphasis added),

The purpose of [the statute] is to provide homeowners associations with the `ability to amend [their] governing documents when, because of voter apathy or other reasons, important amendments cannot be approved by the normal procedures authorized by the declaration.

However, the actual statute made no reference or a requirement to show voter apathy and consequently the plaintiff’s argument for a failure to show apathy was moot — not relevant.

* * *

With respect to the controversial issues mentioned above, I’ve found judges making dicta stating that HOAs are not state actors, CC&Rs are a contract or are interpreted as a contract, and “agreed to be bound,” all without any case history or statute in support of such a broad statement. There are implied assumptions in each of these cases that make these dicta subject to misleading legal statements: that the legal model of HOAs does not meet the US Supreme Court criteria for state actors/actions; satisfies legal scrutiny, that the CC&Rs are a valid contract according to contract law and not equitable servitudes doctrine; that the agreement to be bound is a bona fide and valid consent according to contract law. No law, statute, code or court opinion are cited to support these dicta.

With respect to HOAs not being mini-governments, however, it is obvious that the creation of the HOA is by means of nonprofit corporation law and not municipal corporation law, which would not make any court statement dicta – it is a fact and not an unsupported opinion. However, the fact that an entity was given explicit statutory identification as a nonprofit organization and not an agency of the state was overruled by SCOTUS[3] (US Supreme Court). It held that the actual operation and functioning of the entity determined its status as an agency and not as a nonprofit corporation. This reasoning has not been applied to HOAs as nonprofit or mini-governments.

(Mini or quasi-government status is meaningless as it implies a municipal government. It is more appropriate to classify the HOA as a state actor — an arm of the state.)

As Chief Justice Marshall wrote long ago, dicta are “less likely to be accurate statements of law,”[4] And that is the danger facing homeowners seeking justice in the courts. Plaintiff homeowners need to challenge such dicta that have been wrongfully treated as precedent.

* * * * *

Did you know: “HOAs currently engage in many activities that would be prohibited if they were viewed by the courts as the equivalent of local governments. . . . This often leads to people becoming angry at board meetings and claiming that their “rights” have been violated – rights that they wrongly believe they have in the [HOA]. (Prof. Evan McKenzie, Privatopia, 1994).

To learn more about your loss of these rights and freedoms see The HOA-Land Nation Within America.

References

[1] Dicta is Latin for “remark, “a comment by a judge in a decision or ruling which is not required to reach the decision, but may state a related legal principle as the judge understands it. While it may be cited in legal argument, it does not have the full force of a precedent (previous court decisions or interpretations) since the comment was not part of the legal basis for judgment. The standard counter argument is: “it is only dictum (or dicta).” (https://dictionary.law.com/Default.aspx?selected=514). Chief Justice Marshall provides an instrumental justification for the maxim that dicta need not be followed. Dicta are less carefully considered than holdings, and, therefore, less likely to be accurate statements of law.

[2] Orchard Estate Homes v. Orchard Homeowner Alliance, 32 Cal.App.5th 471 (2019).

[3] DOT v. Assn of American Railroads, 135 S.Ct. 1225 1233 (2015).

[4] Supra n. 2./span>

HOA representative government and consent of the governed

George Washington wrote in his Farewell Address (1796), the Constitution “is the offspring of our choice, uninfluenced and unawed, adopted upon full investigation and mature deliberation, completely free in its principles . . . .”  The Declaration of Independence asserted “that to secure these [inalienable] rights Governments are instituted among men, deriving their just powers from the consent of the governed.”

These two quotes contain the fundamental principles of representative democracy adopted by means of a social contract, the Constitution, which are freedom of choice, ”just powers,” and “consent of the governed.” By virtue of these fundamental principles of democracy, HOAs cannot be considered as democratic governments. Period!

In his article explaining the meaning of the Constitution,[1] Edwin Meese III explains that “consent is the means whereby arbitrary power is thwarted. The natural standard for judging if a government is legitimate [and hence just] is whether that government rests on the consent of the governed.” 

In order for HOA governments to be just, legitimate and compatible with the Constitution these fundamental principles must be honored and supported. HOA “constitutions,” those CC&Rs, are not compatible with the US Constitution.

Meese further addresses the differences between “consent of the governed” and “will of the majority” that is a pro-HOA mantra. “The ‘consent of the governed’ describes a situation where the people are self-governing in their communities . . . into which the government may intrude only with the people’s consent.”

He explains that the “Will of the majority” is a political mechanism for decisions to be made by the government. In other words, the BOD makes decisions on behalf of the members based on its view of the majority will or some survey of the members. In short, in a representative democracy, like that attempted by the HOA legal structure, not all of the members are in agreement with or consent to the decisions of the BOD. It raises the issue of ‘the tyranny of the majority’ when the minority is not given due respect nor the ability to freely and equally speak out on HOA governmental issues.

Meese contends that the Founding Fathers[2] understood this weak point in a democratic government and the need to “insure domestic tranquility.”[3]

[A] government [must rest] not only on the consent of the governed, but also on a structure of government wherein the views of the people and their civic associations can be expressed and translated into public law and public policy. . . . Through deliberation, debate, and compromise, a public consensus is formed about what constitutes the public good. It is this consensus on fundamental principles that knits individuals into a community of citizens.

The structure of HOA governance is not based on and contradicts fundamental American principles and traditional values.  Furthermore, the CC&R are not even based on contract law 101 with its requirements for freely entered into, full disclosure, and explicit agreement to be bound,  but on the real estate doctrine of equitable servitudes.

To learn more about your loss of these rights and freedoms see The HOA-Land Nation Within America.

 

References

[1] Edwin Meese III, “What the Constitution Means,” The Heritage Guide to the Constitution (2005). Meese was the US Attorney General under Ronald Reagan.

[2] See in general, The Federalist Papers, #51, James Madison who explained, “Justice is the end [goal] of government. It is the end of civil society.”

[3] Preamble to the Constitution.

CAI claims Factbook 2018 at home with Democracy in America.

I am quite impressed with CAI after looking over its latest Factbook of 2018.[1]  It is a voluminous document of some  297 pages in total that includes numerous copies of government generated reports and studies, as well as from secondary real estate attorney articles and papers.[2]  It is a lofty presentation designed, I believe, to give the distinct impression that CAI is indeed the all-knowing expert regarding HOAs: that CAI has all the answers!  It reminds me of a product of the Ministry for Public Enlightenment and Propaganda.[3]

In more concrete terms, CAI appears to be reacting to outspoken advocate criticisms by reaffirming and doubling-down on its support for HOA-Land. The Factbook contained some surprises of a material nature that I took note of and that I  will briefly address here.  Each of the following five CAI positions in the Factbook is an affirmation that HOA-Land represents a better community and society than found under the US Constitution; which is not recognized in the Factbook or given just lip service elsewhere!

Furthermore, I found the audacity of CAI to equate HOA contractual, private,  de facto governments with the 1832 America presented in Democracy in America to be very disturbing (see Finally below). It reflects a severe detachment from reality in a document purported to be factually based.

First, In Part 2,[4] CAI makes an effort to explain the 4 goals of the Factbook that starts with a lecture on “evidence-based management.”  It distinguishes anecdotal evidence as contrasted with science-based evidence in deciding the course of action, or “intervention” as stated in the document. It’s a dissertation on what makes a solid basis for analysis and conclusions.

However, it’s a slap at those people who just “tell stories” without proper vetting.  Of course, it is silent on and not related to the manner in which the Factbook  got its facts, and gives the impression: “not us but those guys, you know who.”  I took it as an attempt to defend their studies as unquestionably valid. Advocates can indeed make CAI twitch!

Second, Part 2[5] contains a surprising link to the Stabile book of 2000[6] that is a self-congratulatory  book, in my view, funded by CAI and ULI.  What are they thinking?  Here’s a quote from Stabile.[7]

[HOAs are] a consumer product sold by profit-seeking firm, a legal device, a corporation reliant on both coercive powers and voluntary cooperation, a democracy, and a lifestyle.

With this plan, TB50 [The Holmes Association Handbook] set out the plan that would be taken in forming the CAI.

It has a documentary style, but not a very flattering one to CAI as shown above,  if you reject its premise that HOAs are not a political government. A detailed analysis of the Stabile book can be found in my History paper.  Scroll down to “2000.”

Third, another lecture now on how HOAs function is addressed via a link to a CAI published 26-page book on sale for $15.00.[8]  A short, one-page excerpt is provided that reads right out of the CAI School of HOA Governance.[9]  Nothing new here. No mention of violations of the US constitution, bill of rights, due process or equitable servitudes, etc.  But then again, I forgot. Who am I?  I’m not even a lawyer. I’m David battling Goliath.  CAI has all the answers.

Fourth, another shocker for me.  A link is provided to the Susan Fletcher French article, Making Common Interest Communities Work: The Next Step.[10]   But what are they doing???  As stated above, the reference is not flattering to CAI since it is an obviously biased statement coming from a legal authority produced to guide judges in common law. And it’s a 2005 article and we would like to know what has happened over the past 14 years!  Here’s part of her conclusion:

I conclude that states should provide administrative support for community association governance with education, dispute resolution, and enforcement services. Common interest communities have become too important to leave to their own resources and the judicial system. There is much that states can do and there are several models of successful programs. They should take the next step.

I hope you all recall that French was the lead editor (Reporter) in the 2000 rewrite of the Restatement 3rd Equitable Servitudes.[11]  She is referenced in the Foreword:

Professor Susan French [Reporter (chief editor/contributor) for this Restatement] begins with the assumption . . . that we are willing to pay for private government because we believe it is more efficient than [public] government  . . . . Therefore this Restatement is enabling toward private government, so long as there is full disclosure.

Finally, to all my disbelief, CAI references  Alexis de Tocqueville’s 1835 Democracy in America, and equates  HOAs as a continuation of America’s striving

“For continuous improvement at all levels of society and government.” Alexis de Tocqueville reflected on the constant activity that characterized America in the 1830s for continuous improvement at all levels of society and government. Little has changed since that time. He would be right at home at a community association board meeting, at a CAI Chapter program or at a national CAI Conference or Law Seminar.”[12]

The implication is that HOAs are also striving for the same  improvements as de Tocqueville discusses in 1830s America.  Not so! Understand that Democracy is a 2-volume set of some 800 “fine print” pages encompassing a multitude of aspects and conditions about America in the early 1830s. It is replete with discussions of the Constitution, of the American values and principles of liberty and freedom, and of the workings of our democracy. Not a word about contractual private government!  It is unconscionable for CAI to make such an unfounded comparison that implies private HOAs are a natural development for the making of a better America.

CAI is silent and does not address Professor McKenzie’s comments in his seminal 1994 book, Privatopia,[13]

HOAs currently engage in many activities that would be prohibited if they were viewed by the courts as the equivalent of local governments.

The balance of power between the individual and the private government is reversed in HOAs. . . . The property rights of the developer, and later the board of directors, swallow up the rights of the people, and public government is left as a bystander.

 

In summary, CAI comes across as dogmatic – not recognizing or accepting any statements contrary to its beliefs — and suffering a cult-like blindness to reality. The Factbook is an act of desperation and an inability to defend its position in an open debate as I had proposed back in 2006.

In a brief phone call during which he’s quiet and almost courtly, he explains that Common Ground is CAI’s “house organ,” and that he’d be more comfortable with a debate or similar format where he could express himself at length, without the risk of being quoted out of context.[14]

 

References

[1] Community Association Fact Book, 2018, Parts 1 – 8 (July 4, 2019).

[2] Parts 4 -6 and 8 are indexes to details on each of the states and are not included in the total pages. There are also several links to other reports, articles, studies, etc. also not included in the total page count above.

[3] See in general The Avalon Project, Yale Law School.

[4] FB Narrative, page 7.

[5] Id.

[6] Donald R. Stabile, Community Associations: The Emergence and Acceptance of a Quiet Innovation in Housing, Amazon.com. A 256-page book priced at $95.00.

[7] See my Commentary, “A historical look at the purpose and intent of the HOA promoters,” HOA Constitutional Government (January 27, 2008).

[8] Supra n. 3, page 8.

[9] The foundation and principles of the School can be traced back to CAI’s Public Policies, The CAI Manifesto (its 2016 “white paper”), its numerous seminars and conferences, its Factbooks and surveys, its amicus briefs to the courts, and its advisories, letters, emails, newsletters, blogs etc. I have designated these foundations and principles collectively as the CAI School of HOA Governance.

[10] Susan Fletcher French, Urban Lawyer, Vol. 37, Summer 2005.

[11] the Restatement (Third) of Property: Servitudes, Susan F. French, Reporter, the American Law Institute  (2000).

[12] Supra n. 1, Part 2, section 4.

[13] Evan McKenzie, Privatopia: Homeowners Associations and the Rise of Residential Private Governments, Yale Univ. Press, 1994.

[14]The Lone Ranger has never stopped fighting for HOA truth and justice,” quoting CAI Common Ground Editor Christopher Durso, (Common Ground, May/June 2006).

HOA red lining by local governments? YES!

In general, red lining back in the 1950s was the selective restriction of providing real estate services to selected areas that were actually outlined in red on maps.  Real estate agents would not show certain neighborhoods to certain buyers. It has been illegal for years.

Today we can ask: Are state governments and local planning boards creating conditions that induce and promote HOA developments that place traditional residential home ownership at a practical disadvantage?  For example, among others, tax breaks on common areas while double-taxing property owners; in all intents, holding HOA boards harmless for  violations of state laws and governing documents while permitting HOA to “steal” your home for nonpayment of assessments.

Most harmful of all to homeowners is the failure to apply constitutional protections to these de facto – functioning in all reality — private governments. It appears that local governments are steering homebuyers to HOA-Land.  It’s a win-win for developers and local governments to the detriment of homeowner property rights.

Allow me to add an important resolution to this red lining.  Many moons ago in Lewisboro Township (part of Westchester County, NY) a ruling came down (not familiar with it) that required the township to allow middle income families to find a home in this upscale part of Westchester County. (Think of MS. Hillary’s home in Chappaquiddick, also part of upscale NY suburbs). Here, today, what’s stopping planning boards supported by state law to require such diversion and allow for traditional residential homes?  Nothing!

The national lobbying firm, CAI, loves to tout the increase in HOAs as an indication of desirability rather than reflecting in good part, a lack of alternative housing and free choice.[1]  It could be argued as a restriction of free speech and a form of coercion with respect to equal but separate housing.

In her latest post on IAC,[2]  outspoken homeowner rights advocate Deborah Goonan speaks of “No free market in U.S. home construction,” “Does the house we want exist?”, and “Where are the small detached homes buyers want?”  A must read for those who want the truth about the HOA legal scheme and state government protection of unamerican private governments.

For more info, see HOA-Land Nation Within America.

Notes

[1]The report details top reasons for the growth of community associations. Privatizing public functions. With many local municipalities facing fiscal challenges, communities often are developed with the stipulation that the builder create an association that will assume many responsibilities that traditionally belonged to local and state government (e.g., road maintenance, snow and trash removal, and storm water management. ”MORE AMERICANS ARE CHOOSING TO LIVE IN HOMEOWNERS ASSOCIATIONS AND CONDOMINIUM COMMUNITIES , CAI (August 1, 2019).

[2] Deborah Goonan, “Why can’t home buyers find the kind of homes they really want?”, IAC, (August 1, 2019).

Calif. holds HOA elections as protected free speech public elections

Speaking of HOA members and public voting rights, “Why Are HOA Members Allowed A Public Vote?”[1], let’s look at the reverse side and ask, Why aren’t HOA elections equivalent to public elections?  This is another example of how successful constitutional challenges can lead to and bring about broad HOA reform legislation.

Many of us are aware of the treatment of dissenting and opposing voices with respect to BOD actions and elections. There are the threats by rogue BODs of harm, and of  slanderous and libelous statements aimed to discredit and injure the dissenter’s reputation. And then, in true attack the attackers,  there are the lawsuits by the BOD claiming that the dissenter’s speech was harmful and injured the reputation of the HOA and/or BOD members.

Anti-SLAPP

These lawsuits are referred to as Strategic Lawsuits Against Public Participation – SLAPP —  whose purpose is to silence the dissenting homeowner(s) by arguing that the HOA/BOD was defamed.[2]  In the name of justice, or the appearance of justice, many states have adopted anti-SLAPP statutes to protect the dissenters; in our case here, the homeowners. The common criteria to file an anti-slapp suit includes (my emphasis):

A moving party may file a special motion to dismiss [the HOA suit] under [the state’s] antiSLAPP statutes “if an [HOA] action is filed in retaliation to the exercise of free speech [homeowner dissent].” In considering a special motion to dismiss, a district court must undertake a two-prong analysis. First, the court must determine whether the moving party [homeowner] has, by a preponderance of the evidence, established that the action [anti-slapp motion] is based upon a good faith communication in furtherance of the right to free speech in direct connection with an issue of public concern.

Furthermore, 1)  the statement must be made without knowledge of falsehood or truth with respect to a public concern, 2) the statement must be made in a place open to the public or in a public forum, and 3) “aimed at procuring any governmental or electoral action, result or outcome.” WOW! No chance in hell to bring an anti-Slapp suit against an HOA.

HOA elections are public

However, as expected, the anti-slapp statutes vary from state to state with Arizona adopting the very strict government election requirement while California has held, over several court cases, that (my emphasis):

California courts have repeatedly held in the context of anti-SLAPP litigation that board meetings of a homeowners association “serve[] a function similar to that of a governmental body. As [the California] Supreme Court has recognized, owners of planned development units “‘comprise a little democratic subsociety.”‘ … A homeowners’ association board is in effect ‘a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government.”[3]

The use of mail or internet – social media or websites open to the public —  have been held by the California courts to be “ a public forum.”   Nextdoor was held to be a public forum in spite of the fact it functions as a closed group, but its intent is clearly to be open to anyone.[4]

This is another important tool for homeowners and advocates to use in CA, and to lobby for the same return to justice anti-slapp laws in other states.

Notes

[1] George K. Staropoli, “Why are HOA members allowed a public vote?” HOA Constitutional Government (July 20, 2019).

[2] See in general, Colorado’s anti-Slapp statute, Colorado becomes 31st State.

[3] Quoted Appellant’s Opening Brief,  Kosor v. Olympia Companies, LLC, (Nev. SC NO.75669, Feb. 8, 2019). At this writing Kosor has not yet been accepted to be heard by the Nevada Supreme Court.

[4] Id, Part C, vii, printed page 33.  See Kronemyer v. Internet Movie Data Base, Inc., 59 Cal. Rptr. 3d 48 (2007).

Why are HOA members allowed a public vote?

Introduction

In these troubled times Americans are faced with controversial questions of citizenship,  constitutionality, who can vote, and “love America or leave it.”  These “troubles” trickle-down to the 23% segment of Americans living in the HOA-Land Nation[1] comprised of independent HOA principalities.[2]

Under these controversies the question of who is permitted to vote in public elections arises. It’s well known that eligible citizens of age, except the law breakers with a criminal record, are allowed to vote. There is no federal law against noncitizens from voting. However, no state has allowed noncitizens to vote.

Note:  The following presentation takes an expansionist view of the below issues.  It is educational and realistic IF state legislators, the media and the public in general are properly informed  of the state of affairs in HOA-Land.  As an activist advocate I am free to act.  Since HOA attorneys, end even judges often take such expansionist views, why not advocates?

Who is a citizen?

This basic and fundamental question has bounced around in minutia but I’m am singularly speaking in generalities for my purpose here. Anyone residing in a state is a citizen of the US and state if he was born in America, or if born outside America one of his parent was American or naturalized.  It has been long held doctrine that a citizen has duties and responsibilities under that citizenship.  Jennifer Self States the obligations of a citizen quite plainly:

“A citizen is ‘a person owing loyalty to and entitled by birth or naturalization to the protection of a state or union.’ Citizenship means ‘a productive, responsible, caring and contributing member of society.’ . . . “The importance of civic responsibility is paramount to the success of democracy and philanthropy. By engaging in civic responsibility, citizens ensure and uphold certain democratic values written in the United States Constitution and the Bill of Rights. Those values or duties include justice, freedom, equality, diversity, authority, privacy, due process, property, participation, truth, patriotism, human rights, rule of law, tolerance, mutual assistance, self-restraint and self-respect.[3]

A natural consequence of being a citizen is losing your citizenship – be expatriated —  which can be by outright renunciation, “I hereby renounce . . .”, become a citizen of another country and dual citizenship is not allowed by the current country, or by performing certain acts as defined by INA, § 349.  For our purposes here, clauses that seem appropriate to HOA-Land are: (1) naturalization in a foreign country, (2) oath of allegiance to a foreign country, (4) serving in a foreign government position, and (5) formal resolution.

Do HOA members qualify as bona fide US citizens?

The first loud and clear objection to the above is that HOAs are not a foreign country However, “foreign country” is commonly defined as “any state where one is not a citizen” and includes designations of country, nation or state.  I have argued that HOAs are principalities.[4]

[HOAs are] de facto governments or principalities — political bodies unto themselves with their own laws and sovereign law-making bodies, dependent on a greater political entity for support and protection, like the Principality of Monaco in France.   [HOAs are] allowed to operate and function outside the protections of the Fourteenth Amendment as if they were independent governments similar to a principality.

In 1994 Professor McKenzie wrote, “HOAs currently engage in many activities that would be prohibited if they were viewed by the courts as the equivalent of local governments.[5]  I followed this assertion with,

The policy makers have failed to understand that the HOA CC&Rs have crossed over the line between purely property restrictions to establishing unregulated and authoritarian private governments.  CC&Rs are a devise for de facto HOA governments to escape constitutional government.[6]

Failure to reaffirm US citizenship

It is quite clear that the creation of HOAs with their legal structure as private contractual agreements was and is intentional, and sucessionist.  An opportunity to reaffirm their US citizenship by amending their CC&Rs, and by sponsoring  state bills to require a reaffirmation of being subject to the Constitution, was presented in 2012.

Therefore, the members of the association, having not waived or surrendered their rights, freedoms, privileges and immunities as citizens of the United States under Section 1 of the Fourteenth Amendment, and as citizens of the state within which they reside, the CC&Rs or Declaration for any planned community, condominium association or homeowners association shall state that, or be amended to comply,

The association hereby waivers and surrenders any rights or claims it may have under law and herewith unconditionally and irrevocably agrees 1) to be bound by the US and State Constitutions, and laws of the State within which it is located, as if it were a subdivision of the state and a local public government entity, and 2) that constitutional law shall prevail as the supreme law of the land including over conflicting laws and legal doctrines of equitable servitudes.[7]

This opportunity has been met with complete apathy and silence.  The mindset and political sentiment of HOA members reveals a disregard for the Constitution and our democratic system of government.

Accepting the above that an HOA is a principality and a foreign country for the purposes of citizenship, then it follows that HOA members have lost their US citizenship as a result of an oath of allegiance to the HOA by means of the CC&Rs (clause (1) above) and by implied formal resolution (clause (5) above}.  Officers and directors are also subject to clause (4) above.

 

Having lost their US citizenship, HOA members are not entitled to vote in public elections as prohibited by state law as stated in paragraph 2 above.

Open discussion and distribution are invited.  Speak your mind.

 

References

[1] George K. Staropoli, The HOA-Land Nation Within America, StarMan Publishing, LLC (Amazon and Barnes & Noble online, 2019).

[2] George K. Staropoli, Establishing the New America of Independent HOA Principalities, StarMan Publishing, LLC (Amazon, 2008).

[3] Jennifer Self, “Civic Responsibility,” Learningtogive.org (July 11, 2019).

[4] Supra n.2.

[5] Evan McKenzie, Privatopia: Homeowners Associations and the Rise of Residential Private Governments, (Yale Univ. Press, 1994).

[6] George K. Staropoli,  CC&Rs are a devise for de facto HOA governments to escape constitutional government, HOA Constitutional Government (Jan. 18, 2015).

[7] George K. Staropoli, HOA member Declaration of US and State citizenship, HOA Constitutional Government (Nov. 2012).

Why aren’t HOAs held as state actors based on USSC criteria?


Allow me to congratulate Deborah Goonan on her fine article, “USSC rules in favor of property rights — how will this affect HOAs?”[1], on constitutionality as applied to HOA-Land.  I also congratulate her for venturing in into the long standing, highly controversial and muddied waters of state actor legal doctrine.

State actor doctrine is too deep and complex to be fully addressed in a blog. I have followed this is for over 15 years having read most of the cases cited by the USSC.  Consequently, I will state some views that I feel will help her subscribers/readers to better understand a broader picture of this doctrine.

First,  the 2 fairly recent USSC cases, Knick and Manhattan, mentioned in Deborah Goonan’s post well illustrate the loss of homeowner constitutional and fundamental rights resulting from the fact that HOAs are not subject to the Constitution as are all other governmental entities; and that state legislatures have refused to make it so.

Second, the rationale for the public policy lack of vigorous pursuit of state actor doctrine in the case of the well documented and pervasive conduct of HOA boards is a slippery-slope fear factor.  This fear is stated by the USSC in Manhattan as:

Consistent with the text of the Constitution, the state-action doctrine enforces a critical boundary between the government and the individual, and thereby protects a robust sphere of individual liberty. Expanding the state-action doctrine beyond its traditional boundaries would expand governmental control while restricting individual liberty and private enterprise. We decline to do so in this case.

And so, interfering and applying state action to HOAs appears to be avoided to protect your individual freedoms.  I’m somewhat confused. Are you?  Adopting this state policy with respect to HOAs is highly misguided!

Third, although Goonan quotes the USSC use of 3 requirements for state action, the Court did reference the 2001 Brentwood v. Tennessee Secondary School[2] opinion that contained a summary of the criteria the USSC set for determining state action.  Omitting the obvious “exercising exclusive government functions” that requires no further discussion I listed these state actor criteria:

    1. From the State’s exercise of “coercive power,”
    2. when the State provides “significant encouragement, either overt or covert,”
    3. when a private actor operates as a “willful participant in joint activity with the State or its agents
    4. when it is controlled by an “agency of the State,”
    5. when it has been delegated a public function by the State
    6. when it is “entwined with governmental policies,” or
    7. when government is “entwined in [its] management or control.”

In regard to the institutionalization of HOAs, or as I refer to it, HOA-Land, the above tests 1 – 3, and 5 -6 would provide clear and convincing evidence that the policies of state legislatures, as demonstrated by the enacted pro-HOA laws, have created HOAs as state actors who willingly undertake state actions

Fourth, As you can see, there is plenty of “ammunition” to argue that HOAs are state actors.  By the simple use of the word “may” in the statutes raises the highly controversial question of: Are HOAs state actors? “May” is commonly found as “the board may set the time of the annual meeting,” or “may charge . . . .”  The overlooked impact and consequence of this word is to legalize activities and actions that were all-to-fore not legal rights granted to the HOA.  They are now made a legal activity, if your BOD so chooses.[3]

That’s easily “supportive”, “cooperating,” “encouraging,” and “entwined” in both public policy – more taxes from high value properties – and in the “management and control” of the HOA as we see how state laws mimic the governing documents, thereby legalizing them.

Fifth, HOAs have been described as sui generis – one of a kind.[4]  Sui generis presents a view of HOAs as private government principalities supported by your state legislature and is used to justify special laws for a special organization, the HOA. Existing constitutional law is inadequate to support this model of local governance and so, in violation of US and state constitutions,  we see all those HOA/PUD/condo “Acts” in almost every state.  These Acts constitute a parallel supreme law of the land with sharp contrasts to the US Constitution.

 

Finally, state actor doctrine can be a very powerful tool in the hands of HOA reformers, but the public policy of a feared slippery-slope defense must be overcome. It can be overcome IF advocates make a strong case that this public policy as applied to HOA-Land is misguided; and the failure of the courts to apply state actor doctrine harms the people living in HOAs.

In the name of justice, a serious look into this doctrine with regard to HOAs must be undertaken by independent think tank political scientists under the auspices of a Congressional mandate. Like setting up and independent counsel to conduct the investigation into HOA-Land.

 

References

[1] “USSC rules in favor of property rights — how will this affect HOAs?”, Deborah Goonan,  IAC, July 15, 2019. Contains links to the 2 USSC cases.

[2] Brentwood Academy v. Tennessee Secondary School Athletic Ass’n, 531 U.S. 288 (2001). I have made frequent reference to Brentwood in my Commentaries in HOA Constitutional Government.

[3]Are HOA state actors created by statutory use of shall/may?,” George K. Staropoli, HOA Constitutional Government (April 2019).

[4] A non-inclusive list: Tyler P. Berding, “The failure of the HOA to protect against obsolescence”; Steven Seigel, attorney who analyzed Twin Rivers NJ decision, Wm & Mary Bill of Rights Jnl 1998.