Dorsey v. Stuyvesant Town Corp.

This appeal, involving two actions upon a consolidated record, raises the important question of whether a corporation organised under the Bedevelopment Companies Law has the privilege, admittedly possessed by an ordinary private landlord, to exclude Negroes from .consideration as tenants. Appellants deny that respondents Stuyvesant Town Corporation and Metropolitan Life Insurance Company have such a privilege. They contend that these respondents are subject to the restraints of the equal protection clauses of the State and Federal Constitutions and that in their selection of tenants they cannot lawfully discriminate against Negroes, a policy which has been adhered to in renting apartments in the Stuyvesant Town development in New York City. Since the constitutional provisions referred to impose restraints on State action only, and not on

The two actions involved in this appeal were brought simultaneously. In the Dorsey suit, plaintiffs are Negro veterans who have applied for apartments. In the Polier suit, plaintiff is a taxpayer. In both actions plaintiffs seek to enjoin Stuyvesant and Metropolitan from denying any of their accommodations and facilities in Stuyvesant Town to any person because of that person’s race or color. In the Polier action, plaintiff seeks, in addition, to enjoin the City of New York from granting tax exemption to, and further performing a contract with, Stuyvesant and Metropolitan unless they cease discriminating against Negroes. Defendants’ motions for judgment on the pleadings were granted below and judgments of dismissal unanimously affirmed by the Appellate Division, First Department. Since appellant Polier’s status as a taxpayer does not support an action to challenge as unconstitutional the acts of respondent companies and officials (Bull v. Stichman, 273 App. Div. 311 , affd. 298 N. Y. 516 ), his appeal does not present the constitutional question essential to our jurisdiction (Civ. Prac. Act, § 588, subd. 1, cl. [a]) and must be dismissed. Subsequent references to appellants will indicate plaintiffs in the Dorsey suit, and to respondents will indicate Stuyvesant and Metropolitan.

Stuyvesant Town was built pursuant to a contract between the City of New York, Metropolitan and its wholly owned subsidiary Stuyvesant. The latter was organized by the former in 1943 as a redevelopment company under the Redevelopment Companies Law. Stuyvesant is a private corporation, all of its stock and debentures being owned and all of its working capital having been provided by Metropolitan. The entire cost of acquisition of the land in the project area and of the construction project has been advanced by Metropolitan. It represents an investment of not less than $90,000,000 of private funds held by Metropolitan for the benefit of its more than thirty-three million policyholders.

The project has been constructed in accordance with a plan approved by the city planning commission and the board of estimate of the City of New York, and the contract above

The problems posed by this appeal require an understanding of the constitutional and statutory provisions applicable to housing in the State of New York. For that reason we proceed to set them forth in some detail. In 1938, the housing article of the State Constitution was adopted by the Constitutional Convention and approved by vote of the People. It is article XVIII, and in section 1 thereof it is provided that: “ Subject to the provisions of this article, the legislature may provide in such manner, by such means and upon such terms and conditions as it may prescribe for low rent housing for persons of low income as defined by law, or for the clearance, replanning, reconstruction and rehabilitation of substandard and insanitary areas, or for both such purposes, and for recreational and other facilities incidental or appurtenant thereto. ’ ’ The two purposes are distinct and different, and Stuyvesant Town involves the clearance and rehabilitation of a substandard and insanitary area and not low rent housing for persons of low income (Matter of Murray v. La Guardia, 291 N. Y. 320 , 331-332). It may fairly be said that the whole housing article is instinct with the theory, consistent with its two purposes, that low rent housing for persons of low income is to be a function of government and the rehabilitation of substandard areas is to be the function of private enterprise aided by government. Section 2 provides that: “ For and in aid of such purposes * * * the legislature may: make or contract to make or authorize to be made or contracted capital or periodic subsidies by the state to any city, town, village, or public corporation, payable only with moneys appropriated therefor from the general fund of the state; authorize any city, town or village to make or contract to make such subsidies to any public corporation, payable only with moneys locally appropriated therefor from the general or other fund available for current expenses of such municipality; authorize the contracting of indebtedness for the purpose of providing moneys out of which it may make or contract to make or authorize to be made or contracted loans by the state to any city, town, village or public corporation; authorize any city, town or village to make or contract to make loans to any public corporation;

‘ ‘ As used in this article, the term ‘ public corporation ’ shall mean any corporate governmental agency (except a county or municipal corporation) organized pursuant to law to accomplish any or all of the purposes specified in this article.”

It will be noted that in specifying the powers of the. Legislature, section 2 of article XVIII makes a distinction between a public corporation — which is defined to mean any corporate governmental agency organized for any of the specified purposes — and a corporation regulated by law as to rents, profits, dividends and disposition of its property or franchises and engaged in providing housing facilities. For instance, the Legislature is empowered to make State subsidies to public corporations, but only loans to corporations regulated as above described, and to authorize municipalities to guarantee principal and interest of obligations incurred by public corporations but not other corporations. Stuyvesant is not a public corporation but is a corporation regulated by law. Sections 3 to 7, inclusive, make provision for the creation of State debt for capital and periodic subsidies, impose certain limitations thereon, set up restrictions on the powers of cities, towns and villages to contract indebtedness in aid of the above-mentioned two purposes, impose liability on cities, towns and villages for State loans made to certain

Thereafter the Legislature enacted the Redevelopment Companies Law (L. 1942, ch. 845, as amd. by L. 1943, ch. 234 and L. 194?, ch. 840; McKinney’s Unconsol. Laws, §§ 3401-3426). In approving the amendment the Governor stated, in part: ‘ ‘ The law permits and encourages the entrance into the housing field of life insurance companies. Since the enactment of the original law, there have been no projects. The amendments made by this bill are designed to attract private investment funds into the housing field.”

Section 2 of the Redevelopment Companies Law provides as follows: “ * * * It is hereby declared that in certain areas of municipalities located within this state there exist substandard conditions and insanitary housing conditions owing to obsolescence, deterioration and dilapidation of buildings, or excessive land coverage, lack of planning, of public facilities, of sufficient light, air and space, and improper design and arrangement of living quarters; that there is not in such areas a sufficient supply of adequate, safe and sanitary dwelling accommodations properly planned and related to public facilities; that modern stand

Section 4 provides that a redevelopment company may be created by three or more persons filing a certificate which, among other specified information, shall contain:

“ 13. A declaration that the redevelopment company has been organized to serve a public purpose and that it shall be and remain subject to the supervision and control of the supervising agency except as provided in this act, so long as this act remains applicable to any project of the redevelopment company; that all real and personal property acquired by it and all structures erected by it, shall be deemed to be acquired or created for the promotion of the purposes of this act.

“ 14. A declaration that, after providing for all expenses, taxes and assessments, there shall be paid annually out of the earnings of the redevelopment company for interest, amortization, depreciation and dividends, a sum equal to but not exceeding six per centum of the total actual final cost of the project as defined by subdivision two of section thirteen of this act ”.

Sections 6 and 7 provide that the provisions of the Business Corporations Law, General Corporation Law and Stock Corporation Law shall apply to redevelopment corporations, except where such provisions are in conflict with the provisions of the Redevelopment Companies- Law, and that each such corporation shall have and may exercise such of the powers conferred by the General Corporation Law as shall be necessary in conducting its business and consistent with the provisions of the Redevelopment Companies Law. Limitations are imposed upon redevelopment companies in connection with various aspects of their businesses. Section 8 provides for a limited return on investment by stipulating that there shall be paid annually out of the earnings of the redevelopment company, after providing for all expenses, taxes and assessments a sum for interest, amortization, depreciation and dividends, equal to but not exceeding 6% of the total actual final cost of the project, which obligation shall ,be cumulative. 'Any-cash surplus in excess of the amount so provided shall, upon dissolution of the company, be paid into the general fund of the municipality. Section 13 provides that a redevelopment company shall not have power to acquire any

Section 15 sets up a procedure for the submission and approval of a plan of a proposed project which requires the prior approval of the supervising agency and the local planning commission. Thereafter a contract shall be proposed which, prior to its execution, must be approved by the local legislative body. It is provided that the contract shall regulate the rents to be charged and may contain other provisions for the financing, construction, operation and supervision of the project.

The statute provides that a municipality may take property by condemnation for a redevelopment company provided the latter shall pay all sums expended in connection with such acquisition, and it authorizes the municipality to convey such land to the company (§ 20). It also authorizes any local legislative body to convey to such company land in any street which is duly closed or discontinued pursuant to the plan, upon payment therefor or upon exchange for other lands (§ 20).

Section 24 provides that after the termination of tax exemption, in any manner, a redevelopment company may dissolve and

Finally, section 26 provides as follows:

“ The local legislative body of any municipality in which a project of such company is or is to be located may by contract agree with any redevelopment company to exempt from local and municipal taxes, other than assessments for local improvements, all or part of the value of the property included in such project which represents an increase over the assessed valuation of the real property, both land and improvements, acquired for the project at the time of its acquisition by the redevelopment company which originally undertook the project and for such definite period of years as such contract may provide. The tax exemption shall not operate for a period of more than twenty-five years, commencing in each instance from the date on which the benefits of such exemption first become available and effective.

“ A redevelopment company which has been granted and has received tax exemption pursuant to this section may at any time elect to pay to the municipality the total of all accrued taxes for which exemption was granted and received, together with interest at the rate of five per centum per annum. Upon such payment the tax exemption of the project shall thereupon cease and terminate.”

The Legislature deliberately and intentionally refrained from imposing any restriction upon á redevelopment company in its choice of tenants. The law contains none. Attempts, repeatedly made in the Legislature since the law was enacted, to alter the policy of the statute in this respect have failed.^! (See, e.g., 1948 Sess., Assem. Int. 127, Pr. No. 127; Assem. Int. 217, Pr. No. 217; Assem. Int. 1270, Pr. 1294; 1947 Sess., Assem. Int. 35, Pr. No. 35; Assem. Int. 72, Pr. No. 72. jl On the other hand, the Public Housing Law (§ 223), which is applicable to State-constructed, low cost housing projects, expressly prohibits discrimination. There is no claim that the Legislature refused by amendment to make similar provision in the Redevelopment Companies Law because it thought the statute already barred discrimination, and it is undisputed, therefore, that the legislative intent is clear to leave private enterprise free to select tenants of its own choice.

In 1943, respondent Stuyvesant was formed by Metropolitan pursuant to the statute. A contract with the city was approved by the board of estimate "of the City of New York in June, 1943. The contract embodied a plan for the rehabilitation of a substandard area comprising eighteen city blocks in the borough of Manhattan by the erection of thirty-five apartment houses capable of accommodating about twenty-five thousand people. Under the contract the City of New York agreed to condemn and bring under one good title the entire area. Stuyvesant agreed to acquire the area, demolish the old buildings and construct new ones, all without expense to the city. Metropolitan agreed to advance the necessary funds to Stuyvesant, guaranteed performance by the latter, and, with Stuyvesant, assumed all risks of the venture. The city granted tax exemption for twenty-five years only to the extent of the enhanced value to be created by the project. Stuyvesant agreed to convey to the city

- The contract regulates rents at rates intended to yield the statutory limited return, prohibits mortgaging and sale of the project, gives the city certain auditing privileges, and requires payment to the city upon the dissolution of Stuyvesant of any earned cash surplus after payment of all indebtedness. Upon the termination in any way of tax exemption, Stuyvesant may dissolve and convey its property to Metropolitan, and the statute and' contract become inapplicable- to the project.

In formulating an answer to the questions’ propounded at the beginning of this opinion we first consider whether there is anything in the Constitution of the State of New York which can be said to impose any broader or different restriction than is contained in the equal protection clauses of the Fourteenth Amendment of the Federal Constitution. Our conclusion is that the problem is precisely the same under the State Constitution as it is under the Federal Constitution.

Section 11 of article I of the State Constitution reads as follows :1 ‘ No person shall be denied the equal protection of the laws of this state or any subdivision thereof. No person shall, because of race, color, creed or religion, be subjected to any discrimination in his civil rights by any other person or by any firm, corporation, or institution, or by the state or any agency or subdivision of the state.”

The first sentence, which is obviously an equal protection clause, is no more broad in coverage than its Federal prototype, which reads: “ No State shall * * * deny to any person within its jurisdiction the equal protection of the laws.” (U. S. (Const., 14th Amendt., § 1.) This conclusion follows from the plain meaning of plain words. It is strongly reinforced, however, by the fact that the chairman of the Bill of Rights Committee of the New York State Constitutional Convention of 1938, at which convention the section in question was approved, stated at the convention that the first sentence of section 11 “in effect embodies in our Constitution the provisions of the Federal Constitution which are already. binding upon our State and its agencies ” (2 Rev. Record of N. Y. State Constitutional Convention, 1938, -p. 1065). It is significant that in previous New York cases arising under the equal protection clauses of the

The second sentence of section 11 is a civil rights clause and, although applicable to private persons and private corporations, protects only against “ discrimination in * * * civil rights ”. Obviously such rights are those elsewhere declared. Again this conclusion is strongly supported by the statement of the chairman of the Bill of Bights Committee made at the convention to the effect that the provision in question was not self-executing and that it was implicit that it required legislative implementation to be effective (2 Bev. Becord of N. Y. State Constitutional Convention, 1938, p. 1144). Furthermore, it was stated at the convention that the civil rights protected by'the clause in question were those already denominated as such in the Constitution itself, in the Civil Bights Law or in other statutes (4 Rev. Record of N. Y. State Constitutional Convention, 1938, pp. 2626-2627). At the 1.938 Constitutional Convention attempts to provide explicitly against discrimination in housing in the housing and civil rights articles of the Constitution proved unsuccessful (see, e.g., N. Y. State Constitutional Convention, Pr. Nos. 10, 18, 49, 203, 380, 625, 691). No statute in New York recognizes the opportunity to acquire interests in real property as a civil right, although there are in existence today nearly twenty anti-bias laws covering many fields of activity. The conclusion that the opportunity to acquire such interests in New York is not a civil right is reinforced by the fact that bills introduced in the State Legislature in 1947 and 1948 to amend the Civil Bights Law in order to declare the ‘ ‘ opportunity to purchase and to lease real property without discrimination * * * to be a civil right ”, failed of passage (see e.g., 1947 Sess., Assem. Int. 34, Pr. No. 34; 1948 Sess., Assem. Int. 128, Pr. No. 128; Assem. Int. 715, Pr. No. 720; and Assem. Int. 1177, Pr. No. 1197; see, also, Pratt v. La Guardia, 182 Misc. 462 , affd. 268 App. Div. 973 , appeal dismissed 294 N. Y. 842 ).

Our decision then must rest on the co-ordinate commands expressed in the equal protection clauses of the Federal and State Constitutions. For many years it has been unquestioned

In an early decision of the Supreme Court under the Fourteenth Amendment ,we find the statement that 1 ‘ a State acts by its legislative, its executive, or its judicial authorities. It can act in no other way.” (Ex Parte Virginia, 100 U. S. 339 , 347.) In that case the court held the official conduct of a State judge subject to the mandate although he had .acted on his own impulse and without authority from the law of the State. Subsequent cases have made it clear that the prohibited action of a State may be exerted through private individuals and corporations. Thus discrimination by private individuals offends the equal protection clause if they act under constraint of State law (Nixon v. Herndon, 273 U. S. 536 ; Buchanan v. Warley, 245 U. S. 60 , supra; Truax v. Raich, 239 U. S. 33 ).

In a more recent series of cases the Federal courts have held private groups subject to the constitutional restraints when they perform functions of a governmental character in matters of great public interest (Smith v. Allwright, 321 U. S. 649 ; Nixon v. Condon, 286 U. S. 73 ; Rice v. Elmore, 165 F. 2d 387 , certiorari denied 333 U. S. 875 ; Kerr v. Enoch Pratt Free Lib., 149 F. 2d 212 . But compare Mason v. Hitchcock, 108 F. 2d 134 ). Speaking of the executive committee of the Democratic Party in the State of Texas,'Mr. Justice Cardozo said: “ They are not acting in matters of merely private concern like the directors or agents of business corporations. They are acting in matters of high public interest, matters intimately connected with the capacity of- government to exercise its functions ”, (Nixon v. Condon, supra,t.at p. 88.) "The result is unchanged, though the-

In a final group of cases the State has lent its power in support of the actions of private individuals or corporations, and in so doing has clothed the private act with the character of State action (Shelley v. Kraemer, supra; Marsh v. Alabama, 326 U. S. 501 ). In the latter case an Alabama conviction for trespass in disseminating religious literature on the privately owned streets of a company town offended the due process clause of the Fourteenth Amendment. The language of the court indicates that if the right had been asserted in a different context the owner’s action itself would have been condemned. Thus (326 U. S., at pp. 505-506): “ We do not agree that the corporation’s property interests settle the question. The State urges in effect that the corporation’s right to control the inhabitants of Chickasaw is coextensive with the right of a homeowner to regulate the conduct of his guests. We cannot accept that contention. Ownership does not always mean absolute dominion. The more an owner, for his advantage, opens up his property for use by the public in general, the more do his rights become circumscribed by the statutory and constitutional rights of those who use it.”

Appellants here rely upon those cases in urging that we must characterize as governmental action the rental policy of Metropolitan and Stuyvesant. They point to the acknowledged contribution made by government to the project — principally the tax exemption amounting to many millions of dollars, and aggregation of the land through use of the city’s power of eminent domain and through exchange of bordering tracts for city streets which had been closed. Moreover, we are urged to consider the size of the .project as in reality forming a large community within the city.

All of the previous decisions, and others cited, might be distinguished in that they disclose the exertion of governmental power directly to aid in discrimination or other deprivation of

However, to rest our decision solely upon conceptual distinction would be to ignore the character of the Constitution which we construe and of the decisions through which the Supreme Court of the United States has preserved its nature as a living-instrument of government. The language quoted above from Marsh v. Alabama (supra) has a different ring from the earlier words of Ex Parte Virginia (supra). The evolution of our society has disclosed State action where doubtless it would not have been found in an earlier day. Institutions created to meet the social and industrial necessities of our times do not respond readily to the simple test enunciated in Ex Parte Virginia (e.g., Marsh v. Alabama, supra). Those considerations might suggest the desirability of holding that the test can be satisfied, and State action discerned, in any case where the State has tolerated discrimination respecting a matter of high public importance. Invocation of the Constitution then might depend upon a balance of the two values asserted — here the privilege of Metropolitan and Stuyvesant as against the right of appellants to equality of treatment.

Such a development in constitutional law would clash with a fundamental policy inherent in the Fourteenth Amendment and the decision of the Civil Rights Cases ( 109 U. S. 3 , supra). Both arc instinct with the idea that the rights defined in the amendment are to be protected by the States against the actions of private individuals. That high responsibility of the States, implicit in our Federal, system, indicates that the political processes must furnish the appropriate means for extension of those rights in areas wherein they have not been heretofore asserted. The unquestioned válue of that system suggests the limits to the expanding concept of State action, which has hitherto been found

The State of New York has consciously and deliberately refrained from imposing any requirement of nondiscrimination upon respondents as a condition to the granting of aid in the rehabilitation of substandard areas. Furthermore, it has deliberately refrained from declaring by legislation that the opportunity to purchase and lease real property without discrimination is a civil right. To say that the aid accorded respondents is nevertheless subject to these requirements, on the ground that helpful co-operation between the State and the respondents transforms the activities of the latter into State action, comes perilously close to asserting that any State assistance to an organization which discriminates necessarily violates the Fourteenth Amendment. Tax exemption and power of eminent domain are freely given to many organizations which necessarily limit their benefits to. a restricted group. It has not yet been held that the recipients are subject to the restraints of the Fourteenth Amendment.

The increasing and fruitful participation of government, both State and Federal, in the industrial and economic life of the nation — by subsidy and control analogous to that found in this case — suggests the grave and delicate problem in defining the scope of the constitutional inhibitions which would be posed if we were to characterize the rental policy of respondents as governmental action. To cite only a few examples: the merchant marine, air carriers and farmers all receive substantial economic aid from our Federal Government and are subject to varying degrees of control in the public interest. Yet it has never been suggested that those and similar groups are subject to the restraints upon governmental action embodied in the Fifth Amendment similar to the restrictions of the Fourteenth upon the States. We do not read the language in Steele v. Louisville & Nashville R. R. Co. ( 323 U. S. 192 , supra) as implying such a suggestion. Such restraints as have been imposed upon their freedom of action are derived from statute or common law, and we feel that those sources of control are the most appropriate.

The judgment in Dorsey v. Stuyvesant Town Corp. should be affirmed, with costs, and the appeal in Polier v. O’Dwyer should be dismissed, with costs.

(dissenting). Undenied and undeniable is the fundamental proposition that “ Distinctions between citizens solely because of their ancestry are by their very nature odious to a free people whose institutions are founded upon the doctrine of equality ”. (Hirabayashi v. United States, 320 U. S. 81 , 100.) The average citizen, aware of that truth but unschooled in legal niceties, will, I venture, find the decision which the court now makes extremely perplexing. While the Stuyvesant Town hous- • ing project was in blueprint and under construction, the public understood, and rightly, that it was an undertaking on which the State and the City of New York had bestowed the blessings and benefits of governmental powers. Now that the development is a reality, the public is told in effect that, because the Metropolitan Life Insurance Company (hereafter referred to as Metropolitan) and Stuyvesant Town Corporation (hereafter called Stuyvesant) are private companies, they are not subject to the equal protection clause, and may, if they choose, discriminate against Negroes in selecting tenants. That conclusion strikes me as totally at odds with common upderstanding and not less so with the facts and circumstances disclosed by the record.

In the City of New York as well as in other communities of this State, there are blighted areas whose rehabilitation has been the concern of public bodies for many years. Bent upon “ the clearance, replanning, reconstruction and rehabilitation ” of such areas, the People in 1938 adopted a new constitutional provision dealing with housing (N. Y. Const., art. XVIII). In aid of those purposes, the Legislature enacted the Redevelopment Companies Law (L, 1942, ch. 845, as

The co-operative activities set forth in the statute demonstrate that the state and city governments were to have a deep interest in, and a close connection with, these redevelopment enterprises. Not only did it fix their maximum rents and profits but it laid down careful limitations with respect to their financing and mortgaging, the selling or disposing of the property and the altering of the structures (§§ 15, 23). To the city governments, the statute gave authority to approve any plan for a proposed development, and power to include, by contract, provisions for the “ operation and supervision of the project ” (§15). In addition, the City was enabled to use certain of its governmental powers to aid the work. It was empowered to condemn property by eminent domain in order to assemble the area to be rehabilitated, and then to convey the property to the redevelopment companies at cost (§ 20); to close off and transfer public streets; and to grant tax exemption on the improvements for a twenty-five-year period (§ 26). In sum, the companies and the enterprises were to be governmentally aided and effectuated, as well as supervised and regulated, in numerous ways. In 1943, Metropolitan caused Stuyvesant to be formed pui’suant to the statute. There followed negotiations, between the City on the one side and Stuyvesant and Metropolitan on the other, which culminated in a contract embodying a plan for the rehabilitation of a substandard area comprising eighteen city blocks in Manhattan, running north from East 14th Street to East 20th Street, and running east from First Avenue to the East River Drive or Avenue C. The plan and the proposed contract received the requisite approval from the State Superintendent of

Condemnation of the land and its transfer to Stuyvesant, along with public streets, was accomplished in 1945, and construction of Stuyvesant Town began in that same year. The Town is now virtually completed, at a cost of over $90,000,000. It occupies eighteen city blocks and, with its thirty-five buildings, houses a population of about twenty-five thousand people. Streets in* the area are “ private ” and signs at all entrances give the public notice of that fact.

Almost from the beginning, the question of exclusion of Negroes from the community was debated. While the project was under consideration by the Board of Estimate, Stuyvesant and Metropolitan insisted that they be given free choice in the selection of tenants and indicated that they planned to bar Negroes. Despite opposition to the contract on that ground, its execution was authorized. (ZA local law was thereafter passed by the city forbidding raciM discrimination in tax-exempt developments, but it expressly excepted from its coverage any project “ hitherto agreed upon or contracted for ” (N. Y. C. Administrative Code, § J41-1.2) — an exception which could relate only to Stuyvesant TownJ

Though I digress for a moment, it is my opinion that there are present in the foregoing recital many factors which spell out governmental participation in illegal discrimination. Especially in the two items last mentioned, namely, the city contract sanctioning the very discrimination complained of and the city legislation actually ratifying that discriminatory conduct, do I find most clearly that “ state action ” which the Federal Constitution interdicts.

It is, of course, against the total background that we weigh appellants’ claim that the admitted discrimination violates the

The Fourteenth Amendment of the Federal Constitution, insofar as relevant, provides that “ No State shall * * * deny to any person within its jurisdiction the equal protection of the laws.” The Amendment, it is true, does not operate against purely private conduct (Civil Rights Cases, 109 U. S. 3 ), but it does prohibit discrimination even by private persons or agencies if such action can “ fairly be said ” to be that of the State. (See Shelley v. Kraemer, 334 U. S. 1 , 13.) The concept of “ state action ” has enjoyed a career of aggressive expansion during the sixty-six years since the Civil Rights Cases were decided. ( 109 U. S. 3 .) It is no longer confined, if ever it was, merely to those affirmations of state authority which take the form of legislative enactments. It “ refers to exertions of state power in all forms ” (Shelley v. Kraemer, 334 U. S. 1 , 20, supra), and has “ the effect * * * of protecting the rights of individuals and minorities from many abuses of governmental power which were not contemplated at the time ” of the Amendment’s adoption. (Rice v. Elmore, 165 F. 2d 387 , 392, certiorari denied 333 U. S. 875 .)

As long as there is present the basic element, an exertion of governmental power in some form, as long as there is present something “ more ” than purely private conduct (see Shelley v. Kraemer, 334 U. S. 1 , 13, supra), the momentum of the principle carries it into areas once thought to be untouched by its direction.

For example, a private individual who practices discrimination under the constraint of state power violates the equal pro

As the majority opinion recognizes (p. 534), the Fourteenth Amendment is no longer satisfied by a mechanical finding that the discriminatory conduct was not perpetrated by legislative, judicial or executive officials of the State. The concept of “ state ” action has been vitalized and expanded; the definition

The fact that the constitutional right is invaded in the exercise of “ private ” property interests is no more decisive than that the owner himself is “ private ”. In Marsh v. Alabama ( 326 U. S. 501 , supra), for instance, a Jehovah’s Witness was convicted of trespass, in spite of her claim of constitutional right, for refusing to leave the streets of a company town completely owned by a private corporation. Relying upon its “ private ” proprietary rights, the owner urged that the Fourteenth Amendment was inapplicable to it, but the Supreme Court declared (pp. 505-506): “ We do not agree that the corporation’s property interests settle the question. The State urges in effect that the corporation’s right to control the inhabitants of Chickasaw is coextensive with the right of 'a homeowner to regulate the conduct of his guests. We cannot accept that contention. Ownership does not always mean absolute dominion. The more an ownei*, for his advantage, opens up his property for use by the public in general, the more do his rights become circumscribed by the statutory and constitutional rights of those who use.it.”

A kindred philosophy outlaws the enforcement of privately drawn restrictive covenants aimed at nonwhite ownership of property. (See Shelley v. Kraemer, 334 U. S. 1 , supra.) It also runs through the numerous decisions which deny to the State and its subdivision, a city, the power to avoid their constitutional responsibilities by leasing or assigning to private persons important projects or functions in which discrimination is practiced. (See, e.g., Lawrence v. Hancock, 76 F. Supp. 1004 ; Kern v. City Commissioners of City of Newton, 151 Kan. 565 ; Culver v. City of Warren, 83 N.

¡Respondents’ main defense to the charge of constitutional violation is that they, rather than the City, are behind the discrimination, and that they, as private corporations, are not answerable for it. Their premise is faulty. Stuyvesant is in no sense an ordinary private landlord. Its title bespeaks its character. With buildings covering many city blocks, housing a population of twenty-five thousand persons, Stuyvesant is a “ Town ” in more than name. Its very being depended upon constitutional amendment, statutory enactment and city contract. The exercise of a number of governmental functions was absolutely prerequisite to its existence. As a geographic entity, Stuyvesant Town was created by the City’s exercise of its eminent domain and street-closing powers and by its act of transferring such condemned land and public property to respondents. As an economic enterprise, Stuyvesant Town was made possible by the acquisition of this land at its cost to the City — not augmented by reason of any increase in value through assembly of the entire tract under single ownership — and by the City’s grant of tax exemption. As a going community, Stuyvesant Town functions subject to supervision by governmental agencies. Upon dissolution, its surplus assets revert to the public. All in all, the resemblance between Stuyvesant Town and the company town of Marsh v. Alabama ( 326 U. S. 501 , supra) is strong, the analogy between this case and that one, clear.

To. intimate that this is just another instance of a government subsidy^ the case. To claim that the construction and operation of a project such as Stuyvesant is a matter of but private concern is to disregard the obvious. Unmistakable are the signs .that this undertaking was a governmentally conceived, governmentally aided and governmentally regulated project in urban redevelopment.

That there is “ state action ” here is supported and established, however, by more than the constitutional, and statutory provisions which made the development possible, by more than the city and state participation and aid that brought Stuyvesant Town into being, [in addition, there is the exceed-' ingly significant fact that the City’s Board of Estimate approved and authorized the contract for the construction and operation of Stuyvesant Town after having been apprised by city representatives and company officials that Negroes would be excluded from the development./ Beyond that, the City Council deliberately excepted Stuyvesant from the coverage of the law, subsequently enacted, which barred discrimination in tax-exempt projects. In a most literal sense, in a most direct way, here was “ action,” and — if such a showing were necessary (but see, contra, Steele v. Louisville & Nashville R. R. Co., 323 U. S. 192 , supra) — ’action, “consciously exerted,” by the State “in aid of” the discrimination being practiced (opinion, p. 535). To suggest that the Constitution’s command does not apply because such action was not exerted “ directly ” in aid of the discrimination (opinion, p. 533), is to overlook the nature of the case. We cannot close our eyes to what led to the end

If the City had zoned the site of Stuyvesant Town and closed it to Negroes, no one would doubt that the equal protection clause had been violated. (See Buchanan v. Warley, 245 U. S. 60 , supra.) If the City, instead of doing that, had built a similar development and leased it to private operators for occupancy by white tenants only, the discrimination would have been condemned with equal vigor. Here, instead of a zoning ordinance or a city lease, there is a city-approved and city-executed contract, providing for a housing project from which it was realized Negroes would be barred, and a city law ratifying that discrimination. No one claims or even suggests that the City adopted an alternative strategem to effect discrimination, but it may not be gainsaid that the development plan, the contract and the local law brought about precisely the same situation as if the City had zoned or leased a “ white ” development. We draw distinctions too fine and too subtle when we say that the several cases are different or that they merit different consideration.

It is my conclusion, then, that the Fourteenth Amendment proscribes discrimination in Stuyvesant Town. And, since the equal protection clause of the Constitution of New York State (art. I, § 11) is at least as broad in coverage as its Federal counterpart, it is likewise my conclusion that the State Constitution also condemns it.

It is vehemently urged that to hold that Stuyvesant must discontinue its discriminatory practices would be to deprive respondents of an advantage implicit in their bargain with the City. The flaw in that argument is that the unseen protocol being relied upon was lawless from the start and may not be given effect. The argument overlooks that the constitutional rights of American citizens are involved and that such rights may not be used as pawns in driving bargains; respondents may not, by making a contract and bargain, succeed in avoiding the restraints imposed by Federal and State Constitutions upon their rights and powers. As Mr. Justice Holmes observed,

As an enterprise in urban redevelopment, Stuyvesant Town is a far cry from a privately built and privately run apartment house. More, its peculiar features yield to those eligible as tenants tremendous advantages in modern housing and at rentals far below those charged in purely private developments. As citizens and residents of the City, Negroes as well as white people have contributed to the development. Those -who have paid and will continue to pay should share in the benefits to be derived. . Stuyvesant Town in its role as chosen instrument for this public purpose may not escape the obligations that accompany the privileges accorded to it.

It is impossible to balance the essence of democracy against fireproof buildings and well-kept lawns, and, fortunately, the Constitutions, Federal and State, forbid our putting the former into the judicial scales just as they forbade the city officials from putting it upon the bargaining table. The mandate that there be equal protection of the laws, designed as a basic safeguard for all, binds us and respondents as well to put an end to this discrimination.

I would reverse in the Dorsey action.

In Dorsey v. Stuyvesant Town Corp.; Lewis, Conway and Dye, JJ., concur with Bromley, J.; Fuld, J., dissents in opinion in which Loughran, Ch. J., and Desmond, J., concur.

Judgment affirmed.

In Polier v. O’Dwyer; Loughran, Ch. J., Lewis, Conway, Desmond, Dye and Fuld, JJ., concur.

Appeal dismissed.