Weakness of State Action Argument in Civil Rights Act Nude Entertainment Case is Laid Bare and Exposed

PRBA Corp. v. HMS Host Toll Roads, Inc., 808 F.3d 221 (3d Cir. 2015).  Plaintiff, which does business as Bare Exposure, operates a “gentleman’s club” in Atlantic City.  The club advertises itself as “Atlantic City’s Only All Nude Entertainment.”  Defendant (“Host”) leases service plazas along major New Jersey highways, such as the New Jersey Turnpike and Atlantic City Expressway, from New Jersey state Highway Authorities.  The Authorities, however, have no involvement in Host’s operation of the service plazas, where Host operates restaurants, gift shops, and convenience stores.

Host contracted with a third party, CTM Media Group, to permit CTM to install brochure display racks in the service plazas.  The contract provided that Host “must approve all brochures or publications of any kinds” that are placed in the racks.  The Highway Authorities had no role in that contract.

A Host employee found a Bare Exposure brochure in one of the brochure racks.  After receiving a copy of that brochure, Host’s General Manager ordered that all Bare Exposure brochures be removed from brochure racks at Host service plazas.  It was undisputed that the General Manager made that decision without involvement by the Highway Authorities and without consulting the New Jersey Administrative Code.  Instead, the General Manager acted pursuant to Host’s contract with CTM.

Bare Exposure sued Host and the Highway Authorities under the Civil Rights Act, 42 U.S.C. §1983.  Host moved for summary judgment, which was granted.  Bare Exposure appealed, but the Third Circuit, speaking through Judge Smith, applied plenary review and affirmed.

The only issue was whether Host was a state actor, since only a state actor can have Civil Rights Act liability.  Judge Smith found that Host was not a state actor, applying the “entwinement test” on which Bare Exposure relied.  That test, derived from Brentwood v. Tennessee Secondary School Athletic Ass’n, 531 U.S. 288 (2001), and other cases, which Judge Smith discussed, “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.”

For Bare Exposure to prevail, it had to show that the Highway Authorities were “so pervasively intertwined in the structure and management of Host that Host should fairly be treated as a governmental entity under the Constitution.”  That, Judge Smith ruled, Bare Exposure had not done.  “There was no personnel overlap between the Authorities and Host, and no specific involvement of the Authorities in Host’s decision to remove the brochures.”  Though there were government signs and pictures of State officials in the service plazas, that did not constitute entwinement.  “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.”  That was merely a form of government regulation, and even detailed regulation has been held not to amount to state action.

In short, Bare Exposure was denuded of its only argument.