[p184] MR. JUSTICE BRENNAN, with whom MR. JUSTICE MARSHALL joins, dissenting.
When Moose Lodge obtained its liquor license, the State of Pennsylvania became an active participant in the operation of the Lodge bar. Liquor licensing laws [p185] are only incidentally revenue measures; they are primarily pervasive regulatory schemes under which the State dictates and continually supervises virtually every detail of the operation of the licensee's business. Very few, if any, other licensed businesses experience such complete state involvement. Yet the Court holds that such involvement does not constitute "state action" making the Lodge's refusal to serve a guest liquor solely because of his race a violation of the Fourteenth Amendment. The vital flaw in the Court's reasoning is its complete disregard of the fundamental value underlying the "state action" concept. That value is discussed in my separate opinion in Adickes v. Kress & Co., 398 U.S. 144, 190-191 (1970):
"The state-action doctrine reflects the profound judgment that denials of equal treatment, and particularly denials on account of race or color, are singularly grave when government has or shares responsibility for them. Government is the social organ to which all in our society look for the promotion of liberty, justice, fair and equal treatment, and the setting of worthy norms and goals for social conduct. Therefore something is uniquely amiss in a society where the government, the authoritative oracle of community values, involves itself in racial discrimination. Accordingly,... the [p186] cases that have come before us [in which] this Court has condemned significant state involvement in racial discrimination, however subtle and indirect it may have been and whatever form it may have taken[,]... represent vigilant fidelity to the constitutional principle that no State shall in any significant way lend its authority to the sordid business of racial discrimination.
Plainly, the State of Pennsylvania's liquor regulations intertwine the State with the operation of the Lodge bar in a "significant way [and] lend [the State's] authority to the sordid business of racial discrimination." The opinion of the late Circuit Judge Freedman, for the three-judge District Court, most pervasively demonstrates the "state action" present in this case:
"We believe the decisive factor is the uniqueness and the all-pervasiveness of the regulation by the Commonwealth of Pennsylvania of the dispensing of liquor under licenses granted by the state. The regulation inherent in the grant of a state liquor license is so different in nature and extent from the ordinary licenses issued by the state that it is different in quality.
"It had always been held in Pennsylvania, even prior to the Eighteenth Amendment, that the exercise of the power to grant licenses for the sale of intoxicating liquor was an exercise of the highest governmental power, one in which the state had the fullest freedom inhering in the police power of the sovereign. With the Eighteenth Amendment which went into effect in 1919 the right to deal intoxicating liquor was extinguished. The era of Prohibition ended with the adoption in 1933 of the Twenty-first Amendment, which has left with each state the absolute power to prohibit the sale, [p187] possession or use of intoxicating liquor, and in general to deal otherwise with it as it sees fit.
"Pennsylvania has exercised this power with the fullest measure of state authority. Under the Pennsylvania plan the state monopolizes the sale of liquor through its so-called state stores, operated by the state. Resale of liquor is permitted by hotels, restaurants and private clubs, which must obtain licenses from the Liquor Control Board, authorizing them 'to purchase liquor from a Pennsylvania Liquor Store [at a discount] and keep on the premises such liquor and, subject to the provisions of this Act and the regulations made thereunder to sell the same and also malt or brewed beverages to guests, patrons or members for consumption on the hotel, restaurant or club premises.'
"The issuance or refusal of a license to a club is in the discretion of the Liquor Control Board. In order to secure one of the limited number of licenses which are available in each municipality an applicant must comply with extensive requirements, which in general are applicable to commercial and club licenses equally. The applicant must make such physical alterations in his premises as the Board may require and, if a club, must file a list of the names and addresses of its members and employees, together with such other information as the Board may require. He must conform his overall financial arrangements to the statute's exacting requirements and keep extensive records. He may not permit 'persons of ill repute' to frequent his premises nor allow thereon at any time any 'lewd, immoral or improper entertainment.' He must grant the Board and its agents the right to inspect the licensed premises at any time when patrons, guests or members are present. It is only on compliance [p188] with these and numerous other requirements and if the Board is satisfied that the applicant is 'a person of good repute' and that the license will not be 'detrimental to the welfare, health, peace and morals of the inhabitants of the neighborhood,' that the license may issue.
"Once a license has been issued the licensee must comply with many detailed requirements or risk its suspension or revocation. He must in any event have it renewed periodically. Liquor licenses have been employed in Pennsylvania to regulate a wide variety of moral conduct, such as the presence and activities of homosexuals, performance by a topless dancer, lewd dancing, swearing, being noisy or disorderly. So board is the state's power that the courts of Pennsylvania have upheld its restriction of freedom of expression of a licensee on the ground that in doing so it merely exercises its plenary power to attach conditions to the privilege of dispensing liquor which a licensee holds at the sufferance of the state.
"These are but some of the many reported illustrations of the use which the state has made of its unrestricted power to regulate and even to deny the right to sell, transport or possess intoxicating liquor. It would be difficult to find a more pervasive interaction of state authority with personal conduct. The holder of a liquor license from the Commonwealth of Pennsylvania therefore is not like other licensees who conduct their enterprises at arms-length from the state, even though they may have been required to comply with certain conditions, such as zoning or building requirements, in order to obtain or continue to enjoy the license which authorizes them to engage in their business. The state's concern in such cases is minimal and [p189] once the conditions it has exacted are met the customary operations of the enterprise are free from further encroachment. Here by contrast beyond the act of licensing is the continuing and pervasive regulation of the licensees by the state to an unparalleled extent. The unique power which the state enjoys in this area, which has put it in the business of operating state liquor stores and in the role of licensing clubs, has been exercised in a manner which reaches intimately and deeply into the operation of the licensees.
"In addition to this, the regulations of the Liquor Control Board adopted pursuant to the statute affirmatively require that 'every club licensee shall adhere to all the provisions of its constitution and by-laws.' As applied to the present case this regulation requires the local Lodge to adhere to the constitution of the Supreme Lodge and thus to exclude non-Caucasians from membership in its licensed club. The state therefore has been far from neutral. It has declared that the local Lodge must adhere to the discriminatory provision under penalty of loss of its license. It would be difficult in any event too consider the state neutral in an area which is so permeated with state regulation and control, but any vestige of neutrality disappears when the state's regulation specifically exacts compliance by the licensee with an approved provision for discrimination, especially where the exaction holds the threat of loss of the license.
"However it may deal with its licensees in exercising its great and untrammeled power over liquor traffic, the state may not discriminate against others or disregard the operation of the Equal Protection Clause of the Fourteenth Amendment as it affects personal rights. Here the state has used its great [p190] power to license the liquor traffic in a manner which has no relation to the traffic in liquor itself but instead permits it to be exploited in the pursuit of a discriminatory practice." 318 F. Supp. 1246, 1248-1250 (MD Pa. 1970).
This is thus a case requiring application of the principle that until today has governed our determinations of the existence of "state action": "Our prior decisions leave no doubt that the mere existence of efforts by the State, through legislation or otherwise, to authorize, encourage, or otherwise support racial discrimination in a particular facet of life constitutes illegal state involvement in those pertinent private acts of discrimination that subsequently occur." Adickes v. Kress & Co., 398 U.S., at 202 (separate opinion of BRENNAN, J.). See, e.g., Peterson v. City of Greenville, 373 U.S. 244 (1963); Burton v. Wilmington Parking Authority, 365 U.S. 715 (1961); Evans v. Newton, 382 U.S. 296 (1966); Hunter v. Erickson, 393 U.S. 385 (1969); Lombard v. Louisiana, 373 U.S. 267 (1963); Reitman v. Mulkey, 387 U.S. 369 (1967); Robinson v. Florida, 378 U.S. 153 (1964); McCabe v. Atchison, T. & S.F. R. Co., 235 U.S. 151 (1914).
I therefore dissent and would affirm the final decree entered by the District Court.