Allow me to congratulate Deborah Goonan on her fine article, “USSC rules in favor of property rights — how will this affect HOAs?”, 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 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:
- From the State’s exercise of “coercive power,”
- when the State provides “significant encouragement, either overt or covert,”
- when a private actor operates as a “willful participant in joint activity with the State or its agents
- when it is controlled by an “agency of the State,”
- when it has been delegated a public function by the State
- when it is “entwined with governmental policies,” or
- 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.
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. 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.
 “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.
 “Are HOA state actors created by statutory use of shall/may?,” George K. Staropoli, HOA Constitutional Government (April 2019).
 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.