Judicial Notice of Internet Evidence — Website Information as to Origins of, and Private v. Public Ownership of, Corporation to Determine Status as State Actor under § 1983 — When Is a Corporation a State Actor? — Factors

Guo v. Independent Chinese Ctr., Inc., 2015 U.S. Dist. LEXIS 108294 (S.D.N.Y. Aug. 13, 2015):

In this action, Plaintiff pro se, Zhi Guo, asserts civil rights claims under 42 U.S.C. § 1983 and a pendent state law claim against Independent Chinese Pen Center, Inc. ("ICPC"), National Endowment for Democracy ("NED"), and individuals associated with each organization. On July 23, 2014, the Court granted the NED Defendants' motion to dismiss the claims against them. Now, ICPC, Xiaobo Liu, Guangzhao Zheng, Tienchi Martin Liao, Jie Yu, and Yu Zhang (the "ICPC Defendants") move to dismiss the complaint under Federal Rules of Civil Procedure 12(b)(1), 12(b)(3), and 12(b)(6). For the reasons stated below, the motion is GRANTED.


2   The following facts--which the Court laid out in the July 23, 2014 Order--are taken from the complaint and accepted as true for the purposes of this motion. See ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007).

Plaintiff is a Chinese political dissident, political theorist, and writer. Compl. ¶ 6, ECF No. 1. NED is a not-for-profit corporation that "was created in 1983 to strengthen democratic values and institutions around the world through nongovernmental efforts." 22 C.F.R. § 67.1(a). ICPC is "a not-for-profit corporation," Compl. ¶ 7, which advocates for a free and democratic China. See id. ¶¶ 39-43. At relevant times, Xiaobo Liu, Guangzhao Zheng, Tienchi Martin Liao, Jie Yu, and Yu Zhang have served as ICPC officers and on the board of directors. See id. ¶¶ 8-12.

NED receives substantial funding and oversight from the federal government. See id. ¶¶ 17-25. Since ICPC first started fundraising in 2004, it has received "nearly exclusive funding annually from NED, under NED personnel's close supervision and monitoring, so as to fulfill NED's stated purposes." Id. ¶ 27.

Plaintiff became a member of ICPC in 2003. Id. ¶ 38. "On . . . October 1, 2005, ICPC released its FY 2004 annual financial report." Id. ¶ 45. "Plaintiff questioned [*3]  that then ICPC Secretary Maiping Chen . . . , who was also a member of the ICPC board of directors and ICPC secretary, might have misappropriated . . . $2,000 [of NED funds] under the category of officer salaries to improperly reimburse his travel expenses to a conference back in 2003." Id. Despite the irregularities, Plaintiff was told that "the appropriation of NED funds at issue was in compliance with NED regulations." Id. ¶ 53. On August 16, 2006, twelve ICPC members submitted a petition requesting that the board of directors terminate Plaintiff's membership for "his questioning into the appropriateness of the appropriation of NED funds." Id. ¶ 57. Plaintiff was issued several warnings and instructed to apologize to Chen. Id. ¶ 58-67. But Plaintiff did not do so; instead, he insisted that he be given an opportunity to be heard. Id. On September 3, 2007, Plaintiff's ICPC membership was terminated. Id. ¶ 68.

On August 30, 2010, Plaintiff commenced this suit, alleging four causes of action: (1) deprivation of liberty without due process, (2) deprivation of property without due process, (3) First Amendment retaliation, and (4) conversion. See Compl ¶¶ 82-115. Nearly three years later, the Court dismissed [*4]  the claims against the NED Defendants on the ground that Plaintiff failed to establish that NED is a state actor.3 July 23, 2014 Order 5, ECF No. 51. The ICPC Defendants now move to dismiss the complaint, also arguing, inter alia, that ICPC did not engage in state action. See Mot. to Dismiss, ECF No. 62; Def. Mem. 6-7, ECF No. 63.

3   Notably, the Court acknowledged that "[a]lthough it appears that [ICPC is not a state actor], the NED Defendants lack standing to present defenses to claims on behalf of other defendants." July 23, 2014 Order 5. For this reason, the Court held that "the claims against the ICPC and its officials shall not yet be dismissed." Id.


II. Constitutional Claims

Three of the four claims Plaintiff asserts against the [*6]  ICPC Defendants involve constitutional violations. See Compl. ¶¶ 1, 82-112. "With the exception of the Thirteenth Amendment prohibition against slavery, the United States Constitution regulates only government action, not that of private parties." Phillips v. Sage Colleges, 83 F. App'x 340, 341 (2d Cir. 2003). "Thus, to state a claim under 42 U.S.C. § 1983 for a violation of constitutional rights under the First Amendment . . . [and] the Due Process Clause . . . [the plaintiff] must allege that he was injured by a state actor or by a private party acting under color of state law." Id.

In his complaint, Plaintiff States that "ICPC is and was a domestic not-for-profit corporation registered in New York." Compl. ¶ 26. And, in his opposition papers, Plaintiff describes ICPC as "a Chinese dissident writers group," "a not-for-profit legal person," and "an organization that receives . . . congressional appropriation by NED." Pl. Mem. 4, ECF No. 70.

"[T]here are a host of factors that can bear on the fairness of an attribution of a challenged action to the [s]tate." Cooper v. U.S. Postal Serv., 577 F.3d 479, 491 (2d Cir. 2009) (internal quotation marks and citation omitted). Nonetheless,-three prime tests have emerged:

   For the purposes of [S]ection 1983, the actions of a nominally private entity are attributable to the state . . . (1) when the entity acts pursuant to the coercive power of the state or is [*7]  controlled by the state ("the compulsion test"); (2) when the state provides significant encouragement to the entity, the entity is a willful participant in joint activity with the state, or the entity's functions are entwined with state policies ("the joint action test" or "close nexus test"); or (3) when the entity has been delegated a public function by the state ("the public function test").

Fabrikant v. French, 691 F.3d 193, 207 (2d Cir. 2012) (internal quotation marks, citation, and brackets omitted). The main question under each test is "whether the private entity's challenged actions are 'fairly attributable' to the state." Id. (quoting Rendell-Baker v. Kohn, 457 U.S. 830, 838 (1982)). Courts must "begin 'by identifying the specific conduct of which the plaintiff complains,' rather than the general characteristics of the entity." Id. (quoting Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 51 (1999)).

Under each test, Plaintiff has failed to establish that the ICPC Defendants are state actors. Plaintiff claims that the ICPC Defendants: (1) wrongfully terminated and expelled Plaintiff for "questioning into the appropriateness of the appropriation of NED funds"; (2) "made stigmatizing or defamatory charges against Plaintiff in connection with the expulsion"; (3) "deleted Plaintiff's articles from ICPC online forum without notifying Plaintiff [*8]  or maintaining a backup copy"; and (4) "made adverse membership decisions that violated Plaintiff's right to free speech." Compl. ¶¶ 57, 87, 100, 106, 112. Plaintiff does not, however, show how these activities are "fairly attributable" to the state. To the contrary, based on Plaintiff's submissions, ICPC and its officials appear to have been "acting [exclusively] in a private capacity," and not "exercising powers traditionally exclusively reserved to the [s]tate." Fabrikant, 691 F.3d at 208 (internal quotation marks and citation omitted).

In addition, to the extent ICPC is a "corporation," Compl. ¶ 26, the Second Circuit has held that a corporation will be deemed a government entity for the purposes of the state action requirement only if three criteria are met: "(1) the government created the corporate entity by special law, (2) the government created the entity to further governmental objectives, and (3) the government retains 'permanent authority to appoint a majority of the directors of the corporation.' Hack v. President & Fellows of Yale Coll., 237 F.3d 81, 83-84 (2d Cir. 2000) (citing Lebron v. Nat'l R. R. Passenger Corp., 513 U.S. 374 (1995)). Plaintiff has met none of these prerequisites. He neither alleges that the government created ICPC, nor that it retains "permanent authority to appoint a majority of [ICPC's] directors." Id. at 84. Indeed, [*9]  ICPC "is a nongovernmental, nonprofit[,] and nonpartisan organization."4 Pl. Aff. 6 n.4, ECF No. 68 (emphasis added) (quoting About ICPC, Independent Chinese PEN Center (June 2, 2011), http://www.chinesepen.org/english/about-icpc).5

4   A group of independent Chinese writers founded ICPC in 2001. Pl. Aff. 5, ECF No. 68; see also ICPC Origin and Development, Independent Chinese PEN Center (July 25, 2011), http://www.chinesepen.org/english/icpc-origin-and-development#more-229. Shortly thereafter, ICPC was approved as a chapter of the International PEN organization, a worldwide association of writers. Pl. Aff. 5; see also Who We Are, PEN International (2014), http://www.pen-intemational.org/who-we-are/ .

5   "The Court generally has the discretion to take judicial notice of internet material." Boarding Sch. Review, LLC v. Delta Career Educ. Corp., No. 11 Civ. 8921, 2013 WL 6670584, at *1 n.1 (S.D.N.Y. Mar. 29, 2013), reconsideration denied, No. 11 Civ. 8921, 2013 WL 6670586, at *1 (S.D.N.Y. Oct. 16, 2013).

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