Legal Sidebari

Are Public Charter Schools State Actors?
Fourth Circuit Says “Yes”
May 5, 2023
On June 14, 2022, the U.S. Court of Appeals for the Fourth Circuit (Fourth Circuit) held in Peltier v.
Charter Day Schools that a public charter school’s dress code policy discriminated against female
students on the basis of sex. The court reached this conclusion by finding that public charters are state
actors and therefore bound by the Constitution. Charter Day Schools (CDS) has petitioned the U.S.
Supreme Court to review the Fourth Circuit’s opinion.
Public charter schools have grown in popularity over the past decade. Public charters are schools that
operate within the bounds of a contract (or charter) with a state or local government. Because public
charters operate through this separate agreement rather than under the rules and regulations of a school
district, they typically have more flexibility to determine curricula and school policies, much like
traditional private schools. Despite this additional flexibility, public charters are publicly funded entities
that are subject to the performance standards outlined in their charters. This convergence of public and
private features has led to confusion as to whether public charters are required to provide students with
the same legal protections as a traditional public school or whether they may operate independently of
federal and constitutional mandates. Students in traditional public schools are protected by the
Constitution because traditional public schools are state actors, entities that perform their functions under
and with the appearance of state authority. In contrast, traditional private schools operate with relative
independence from the state. If public charters are state actors, they must provide students with the same
level of protection as traditional public schools.
This Legal Sidebar first provides an overview of the state action doctrine under the Fourteenth
Amendment. It then examines the Fourth Circuit’s state action analysis in Peltier. The Sidebar concludes
by discussing potential implications of the case’s pending appeal before the Supreme Court. While Peltier
also raises Title IX issues, this Sidebar does not address that topic.
Legal Context: The State Action Doctrine
The Fourteenth Amendment of the Constitution provides that “no State shall . . . deny to any person
within its jurisdiction the equal protection of the laws.” The text of the amendment limits its protection to
state action: individuals may only claim a violation of the Fourteenth Amendment for conduct by a
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governmental entity. Such a violation can occur both when a government actor directly discriminates and
when the government coerces or encourages discrimination by private actors.
Courts have found it difficult to discern whether an entity is a state actor. The Supreme Court has held
that to determine whether a nongovernmental entity is a state actor, a court must weigh all relevant
circumstances in the relationship between the private actor and the state. “No one fact can function as a
necessary condition” in making this determination, and no one fact is sufficient to prove state action on its
own. Of particular interest is whether the state has delegated a traditionally exclusive state function to the
private entity. For example, the Supreme Court has held that a public defender is not a state actor because,
although funded by a state, she provides the same services that any lawyer provides to her client; the
lawyer represents the client’s interests without state interference, and the provision of legal service is not
a traditionally exclusive state function. As noted above, courts also consider whether the state “coerced or
encouraged” the action. Such coercion might occur, for example, if a state were to order that members of
a private club comply with the club’s racially discriminatory practices, but not if the state does nothing to
require adherence to the otherwise voluntary discriminatory rule. A court will consider these tests
alongside the specific facts of a case to determine whether state action is present, but there is no clear
formula to make this determination.
Public schools are recognized as state actors for purposes of Fourteenth Amendment liability. Private
schools, on the other hand, are not necessarily state actors for these purposes because they typically do
not provide public education. The difference between education and public education is an important one
for this analysis: the Supreme Court has held that states traditionally provide public education, which only
includes nonsectarian, general education. Any education outside of these boundaries is no longer a
traditionally exclusive state function. This principle is illustrated by Rendell-Baker v. Kohn, where the
Court held that a private school that specialized in serving “students who have experienced difficulty
completing public high schools [and] many [of whom] have drug, alcohol, or behavioral problems, or
other special needs” was not a state actor in a claim brought by a former employee, even though it was
funded and regulated by the state. The Court reasoned that the school was more like a contractor than a
state actor because it specialized in the education of students with specific “special needs” rather than
public education for all students. It also held that the school’s reliance on government funding was not
enough to show that the government encouraged or coerced the school to act in any particular way toward
the employee. Because the state did not delegate a traditionally exclusive state function to the private
school, and because the state did not have any significant control over the school’s employment decisions,
the Court concluded that the school was not a state actor.
The Peltier Case
At issue in Peltier is a dress code policy at a public charter school, CDS, in Brunswick County, North
Carolina. The policy requires female students to wear “skirts, jumpers, or skorts” in an effort to teach
students the “traditional” concept of chivalry, emphasizing that “girls are ‘fragile vessels’ deserving
‘gentle’ treatment by boys.” Parents of female CDS students sued the school under 42 U.S.C. § 1983
(Section 1983) on the grounds that the dress code discriminated against female students and reinforced
gender stereotypes in violation of the Equal Protection Clause and Title IX, alongside separate state law
claims. CDS argued that it is not liable as a state actor because it only contracts with, and operates
separately from, the state.
In an en banc opinion authored by Senior Judge Keenan, the Fourth Circuit rejected CDS’s argument and
found that CDS is a state actor that can be subject to suit for violations of the Fourteenth Amendment
Equal Protection Clause. In reaching this conclusion, the majority acknowledged the fact-specific nature
of the state-actor analysis and weighed each characteristic of the charter school to determine whether
actions taken by the school could be “fairly attributable” to the state. The court considered the following
factors:

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• CDS is a general educational program open to all students in the Brunswick County
School District;
• CDS receives 95% of its funding from government sources;
• CDS is overseen by the North Carolina State Board of Education;
• Public charter schools are defined in the North Carolina Code as “public schools”;
• CDS’s charter is granted and revocable by the state;
• CDS’s charter requires compliance with North Carolina’s state constitution and the
federal Constitution; and
• CDS’s “day-to-day” operations are run by Roger Bacon Academy, Inc. (RBA), a
privately owned corporation.
Taken as a whole, the majority found these factors indicated that North Carolina delegated its duty to
provide public education to state residents to CDS, thereby making CDS a state actor. The majority
emphasized the state code’s classification of public charters as public schools, stating that this made the
state’s intent to delegate public education clear. The court also held that the policy implications of finding
that CDS was not a state actor were untenable and could not have been North Carolina’s intent when
adopting its public charter school programs. The court reasoned that if it were to hold that CDS was not a
state actor, “North Carolina could outsource its educational obligation to charter school operators, and
later ignore blatant, unconstitutional discrimination committed by those schools.” The court did not find
RBA’s involvement in CDS’s day-to-day operations determinative, because RBA’s management of day-
to-day operations did not involve the public-education functions delegated to CDS, which remained
accountable to the North Carolina Board of Education and held to the same academic standards as the
state’s traditional public schools. Moreover, the court held that CDS’s contract with RBA to run day-to-
day operations did not constitute “intertwinement” such that RBA and CDS were the same entity, nor did
the contract impact CDS’s responsibility to the state for providing public education. As a result, the
majority found that CDS is a state actor subject to the Equal Protection Clause and that the dress code
violated both the Equal Protection Clause and Title IX.
In the first of two dissents, Judge Quattlebaum stated that the majority opinion did not properly apply
Rendell-Baker’s state actor analysis, as it did not require the action at issue be “compelled” by the state.
Judge Quattlebaum argued that finding state action in CDS’s adoption of a dress code without evidence of
state encouragement or compulsion eschews Supreme Court precedent, splits with other circuits, and
opens charter schools up to liability that will hinder their ability to provide “innovative educational
choices.” He also asserted that the majority opinion wrongly found that CDS participates in a traditionally
exclusive state activity. Judge Quattlebaum instead characterized the school’s role as providing an
alternative to traditional public schools, rather than providing an option within the public school system.
Finally, Judge Quattlebaum dismissed the majority’s concern that refusing to find CDS to be a state actor
would allow the school to violate students’ equal protection rights, arguing that the existence of civil
rights laws makes constitutional protections unnecessary for students.
The second dissent, authored by Judge Wilkinson, went further and said that charter schools should not be
subject to “undue federal influence,” including the Fourteenth Amendment, because to do so would
promote a “monolithic” education system without any meaningful choice for parents.
Judge Wynn wrote a separate concurrence to reject the second dissent. In it, he argued that Judge
Wilkinson’s fear that the majority opinion promotes “social homogenization” is unfounded and “borders
on offensive”: “The premise underlying this argument,” according to Judge Wynn, “is that state schools
must be allowed to experiment with unconstitutional discrimination to honor ‘consumer’ demand and
achieve said ‘educational progress.’”

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In addition to her majority opinion, Senior Judge Keenan wrote a concurrence to underscore her
disagreement with the view that CDS’s dress code requirement is harmless. Citing expert testimony in the
case and “common sense,” Judge Keenan rejected CDS’s argument that the dress code has any
pedagogical value beyond teaching female students that they are not equal to their male counterparts.
Considerations for Congress
Peltier appears to be a significant case, regardless of whether the Supreme Court hears it, because of its
potential impact on the liability of public charter schools. Specifically, this case presents questions as to
the liability of public charters under both the Equal Protection Clause and Section 1983, which provides a
cause of action when state action violates rights established under the Constitution and federal law. CDS
argues that Peltier creates a circuit split between the First, Third, and Ninth Circuit Courts of Appeals,
which have applied a “substantial encouragement” or “coercion” test to assess whether charter schools are
state actors, and the Fourth Circuit, which has applied a more holistic balancing test. The parties disagree
as to whether a circuit split exists, but if it does, federal courts might treat similar lawsuits differently
depending on a circuit’s controlling law. If the Supreme Court hears the case, its decision could help
impose consistency as to whether public charters are state actors.
If the Supreme Court does not take up Peltier, there will likely be ongoing debate about whether to treat
public charters as state actors. Some argue that holding public charter schools to the same level of liability
as traditional public schools would impede their ability to provide innovative educational approaches.
Opponents also worry that the Fourth Circuit’s opinion marks the beginning of a wave of liability for all
private entities providing public services. On the other hand, those in support of the decision in Peltier
argue that the decision is limited in scope to the state of North Carolina because the analysis largely relies
on the state’s statutory classification of public charter schools as “public schools” and because CDS’s
charter binds it to the federal Constitution separate from the state action analysis.
If the Supreme Court does not review Peltier, or if it does and Congress disagrees with the Court’s
decision, Congress may address whether public charters should be subject to requirements like those
under the Fourteenth Amendment and other federal civil rights laws. State and local governments
primarily control public K–12. However, this state control does not preclude all federal influence. For
example, there are federally funded programs that support public charter schools through discretionary
grants, which create an avenue for federal oversight. Congress may be able to exert control over charter
schools or the state agencies that authorize and regulate charter schools through these discretionary
grants. For example, Congress could pass legislation creating rights equivalent to the Fourteenth
Amendment and a cause of action, separate from Section 1983, applicable to public charters that receive
discretionary grants. Conversely, Congress could further insulate public charters from liability by
exempting them from other statutory requirements, such as Title IX. If Congress does nothing, the
potential liability of public charters will likely depend on the Court’s decision whether to hear Peltier and
the outcome of the case if it does.

Author Information

Madeline W. Donley

Legislative Attorney

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