Shelley v. Kraemer (1948): Are Covenants Merely Private Agreements?

 

 

 Street level view of the Shelley House in St. Louis, Missouri, USA. (photo by Francis Nancy Wikimedia Commons)


Or is the body of law we call "the law of covenants and equitable servitudes," and enforcement of that body of law, state action under the Fourteenth Amendment ("No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws")?

 

Suppose that A, B and other owners of land in a neighborhood agree, on behalf of themselves, their heirs, successors, and assigns, that no lot in the neighborhood could be owned or occupied by anyone "not of the Caucasian race."  This covenant was duly recorded in the real property records office.

Subsequently, one of the Lots in the area is sold to  Shelley, an African-American who wishes to live on the property. Nothing in the deed to Shelley mentioned the racially restrictive covenant and Shelley did not agree to be bound by it.

 Will a racially restrictive covenant such as this one run with the land. Shelley purchased a home subject to a racially restrictive covenant. Neighboring landowners sued to enforce the covenant to restrain the Shelleys "from taking possession" of their own property.

Does this covenant run with the land under state law? [The Missouri Supreme Court held that the covenant did indeed run with the land and was thus enforceable against Shelley]. If so, does enforcement of this covenant against  Shelley violate his right to racial equality under the Equal Protection Clause of the 14th Amendment? Is this covenant merely a private agreement enforceable against Shelley who purchased with record notice? Or is there sufficient state action to trigger the Equal Protection Clause of the Fourteenth Amendment? 

Make sure you understand this issue. If this were a zoning law mandating segregated neighborhoods, there would clearly be state action. But the racial restriction is contained in a private agreement, not in a zoning law enacted by government.


Some key passages from Shelley:

• "[T]he principle has become firmly embedded in our constitutional law that the action inhibited by... the Fourteenth Amendment is only such action as may fairly be said to be that of the States. That Amendment erects no shield against merely private conduct, however discriminatory or wrongful." (p. 1143)
• "It has been recognized that the action of state courts in enforcing a substantive common-law rule formulated by those courts, may result in the denial of rights guaranteed by the Fourteenth Amendment." (p. 1144) [RFD: For example, the tort of intentional infliction of emotional distress applied against very offensive political speech--Phelps (Westboro Baptist Church) case]
  
• "We have no doubt that there has been state action in these cases in the full and complete sense of the phrase. The undisputed facts disclose that petitioners were willing purchasers of properties upon which they desired to establish homes. The owners of the properties were willing sellers....It is clear that but for the active intervention of the state courts, supported by the full panoply of state power, petitioners would have been free to occupy the properties in question without restraint." (p. 1144-1145)
  
• "The enforcement of the restrictive agreements by the state courts in these cases was directed pursuant to the common-law policy of the States as formulated by those courts in earlier decisions." (p. 1145)
  

So, let me ask you this question: What gives A and B (the original covenanting parties) the power to enforce their agreement against C, D, E, F & G, subsequent purchasers of the affected tract who take with notice but who otherwise do not agree to be bound by promises made by A and B?

Is the law of covenants and equitable servitudes really a kind of common law zoning scheme pursuant to which government delegates rulemaking authority to the original covenanting parties but then applies those rules to future owners of the relevant parcels? If so, is this not state action?

Notice that the state action in Shelley involved more than mere enforcement. Here is a way to think about the Court's holding:

State action equals the sum of (1) judicial enforcement plus (2) common law rules allowing covenants to run with the land against remote landowners.

 Suppose homes in an exclusive single-family neighborhood are subject to a covenant that forbids guns from being kept in any home within the development. May this covenant be enforced against Joey Spano, a remote purchaser of a home in this subdivision, who has a collection of handguns and rifles that he keeps in a gun safe in his den? Or suppose Spano open carries whenever he is outside his home. His neighbors see his gun when he is mowing his lawn and seek to enforce the no gun covenant against Spano. State action triggering the Second Amendment?

Or suppose another covenant prohibits "any pro life signs" from being displayed on lawns of homes in the subdivision. If a neighbor seeks to enforce this covenant against a remote purchaser who wishes to display a pro-life poster, does the Free Speech Clause of the First Amendment apply?

Some commentators read Shelley as a special state action rule for racially restrictive covenants. But whether there is state action cannot depend on which constitutional right the covenant restricts. Can it?

Suppose Denicola comes over to my home pursuant to an invitation to come for dinner. He arrives wearing a New York Yankees baseball cap. I ask him to remove the cap and put it in his car parked outside my house. He refuses, so I ask him to leave. He says not until after dinner and a glass of wine. I call the Lincoln Police and they arrest him for trespassing. Does Denicola's arrest for trespassing violate his rights under the Free Speech Clause of the First Amendment? Is this anti-Yankee viewpoint discrimination attributable to the city of Lincoln and the LPD? As a private individual, I am certainly restricting Denicola's speech in my home based upon his pro-Yankee viewpoint. But is there state action under the Free Speech Clause on the facts of this case?