Fourth Circuit Says Public Charter Schools Are State Actors, Supreme Court Declines to Weigh In

Fourth Circuit Says Public Charter Schools Are State Actors, Supreme Court Declines to Weigh In

Legal Sidebari

Fourth Circuit Says Public Charter Schools
Are State Actors, Supreme Court Declines to
Weigh In
Updated July 19, 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. The U.S. Supreme Court denied Charter Day Schools’
(CDS) petition 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 Supreme Court’s decision not to review the decision. While
Peltier also raises Title IX issues, this Sidebar does not address that topic.
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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
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 was a dress code policy at a public charter school, CDS, in Brunswick County, North
Carolina. The policy required 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 was not liable as a state actor because it only contracts with, and operates
separately from, the state.

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In an en banc opinion authored by Senior Judge Keenan, the Fourth Circuit rejected CDS’s argument and
found that CDS was 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:
• 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 in this context. The
majority emphasized the state code’s classification of public charters as public schools, stating that this
designation 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 was 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 was a state actor subject to the Equal Protection
Clause and that the dress code violated both the Equal Protection Clause and Title IX.
In addition to her majority opinion, Senior Judge Keenan wrote a concurrence to underscore her
disagreement with the view that CDS’s dress code has any pedagogical value beyond teaching female
students that they are not equal to their male counterparts.
In the first of two dissents, 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.” 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: “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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Considerations for Congress
On June 26, 2023, the Supreme Court denied CDS’s petition for a writ of certiorari. Even without a
Supreme Court decision, Peltier appears to be a significant case because of its potential impact on the
liability of public charter schools. Specifically, this case highlights 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 argued 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 applied a more holistic balancing test. While the denial of certiorari indicates that the
Supreme Court disagrees with this assessment at present, a circuit split may develop as more cases like
Peltier arise.
In the wake of the Supreme Court’s decision not to 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, the Solicitor General
and others in agreement with the Fourth Circuit’s decision in Peltier distinguish it as impacting only 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
regardless of state action.
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 education. 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 whether courts throughout the country apply the reasoning of Peltier to
other public charter schools.

Author Information

Madeline W. Donley

Legislative Attorney

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of

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