Wasatch Equality, et al v. Alta Ski Lifts, et al

Filing

[10360509] Affirmed; Terminated on the merits after oral hearing; Written, signed, published. Judges Hartz, Phillips and Moritz (author). Mandate to issue. [14-4152]

Appellate Case: 14-4152

Document: 01019605248

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PUBLISH

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FILED
United States Court of Appeals
Tenth Circuit

UNITED STATES COURT OF APPEALS

April 19, 2016

FOR THE TENTH CIRCUIT
_________________________________

Elisabeth A. Shumaker
Clerk of Court

WASATCH EQUALITY, a Utah nonprofit
corporation; RICK ALDEN, an individual;
DREW HICKEN, an individual; BJORN
LEINES, an individual; RICHARD
VARGA, an individual,
Plaintiffs - Appellants,
v.

No. 14-4152

ALTA SKI LIFTS COMPANY, a Utah
corporation, d/b/a Alta Ski Area; UNITED
STATES FOREST SERVICE, an agency
of the United States Department of
Agriculture; DAVID WHITTEKIEND, in
his official capacity as Forest Service
Supervisor in the Wasatch-Cache National
Forest,
Defendants - Appellees.
_________________________________
Appeal from the United States District Court
for the District of Utah
(D.C. No. 2:14-CV-00026-DB)
_________________________________
Jonathan R. Schofield, Parr Brown Gee & Loveless, Salt Lake City, Utah (Rachel L.
Wertheimer, and Michael S. Anderson, Parr Brown Gee & Loveless, Salt Lake City,
Utah, with him on the briefs), for Wasatch Equality, Rick Alden, Drew Hicken, Bjorn
Leines, Richard Varga, Plaintiffs-Appellants.
Frederick R. Thaler, Ray Quinney & Nebeker, P.C., Salt Lake City, Utah (Robert O. Rice
and Calvin R. Winder, Ray Quinney & Nebeker, P.C., Salt Lake City, Utah, with him on
the briefs), for Alta Ski Lifts Company, Defendant-Appellee.

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Jared C. Bennett, Assistant United States Attorney, Salt Lake City, Utah (John W. Huber,
United States Attorney, Carlie Christensen, Assistant United States Attorney, Salt Lake
City, Utah, with him on the briefs), for United States Forest Service; David Whittekiend,
Defendants-Appellees.
_________________________________
Before HARTZ, PHILLIPS, and MORITZ, Circuit Judges.
_________________________________
MORITZ, Circuit Judge.
_________________________________
Wasatch Equality and four snowboarders (collectively, Wasatch) brought suit
challenging a snowboard ban at Alta Ski Area in Utah. In its complaint, Wasatch
alleged the ban unconstitutionally discriminates against snowboarders and denies
them equal protection of the law in violation of the Fifth and Fourteenth
Amendments to the United States Constitution.
Recognizing that private action won’t sustain a civil rights complaint, Wasatch
further alleged the ban constitutes “state action” because Alta operates its ski resort
on federal land via a permit issued by the United States Forest Service—a permit that
requires the Forest Service to annually review and approve Alta’s site management
plan. The district court disagreed, and dismissed this case for failure to identify a
state action. Because we agree Wasatch hasn’t plausibly established that the
snowboard ban constitutes state action, we affirm.
BACKGROUND
Alta Ski Lifts Company is a privately owned Utah corporation that operates
Alta Ski Area in the Wasatch-Cache National Forest near Salt Lake City. Alta Ski
Area covers 2130 acres and about 1800 of those acres are located on Forest Service
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land. Alta is one of 120 ski areas nationwide that operates on federal land via a Forest
Service Ski Area Term Special Use Permit. Under the terms of its permit, Alta pays
the Forest Service a usage fee each year, calculated as a percentage of Alta’s liftticket sales and ski-school operations. For 2009-2012, the usage fee ranged from
$304,396 to $473,792. All told, Alta’s usage fee accounts for less than 0.1% of the
Forest Service’s annual budget.
Under the terms of the permit, the Forest Service reviews and approves Alta’s
winter site operation plan each year. This site plan includes a hill management
section detailing Alta’s management decisions regarding its ski runs. In relevant part,
the hill management section grants Alta the right to exclude any skiing device from
its ski runs that it deems causes risk to the user of the device or other skiers, causes
undue damage to the quality of the snow, or is inconsistent with Alta’s business
management decisions. Under the authority of this section, Alta bans snowboarding
from its ski runs and markets itself as a skier-only mountain. It is one of three ski
resorts in the country that bans snowboarding, and the only one of the three operating
on federal land.
Plaintiff Wasatch Equality is a Utah nonprofit corporation “formed for the
purpose of, among other things, promoting equality and harmony among skiers and
snowboarders, as well as promoting equal access and fair use of public lands by the
public, regardless of whether snowboarding or skiing.” Joint App. 14-15. Plaintiffs
Bjorn Leines—a professional snowboarder—and Rick Alden, Drew Hicken, and
Richard Varga—Utah residents—are all snowboarders who use neighboring resorts
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and who wish to snowboard at Alta. Wasatch brought suit challenging Alta’s
snowboard ban as violating the Equal Protection Clause of the Fourteenth
Amendment as applied to the federal government through the Fifth Amendment’s
Due Process Clause.
According to Wasatch’s complaint, skiers and snowboarders have harbored
animosity and hostility towards each other since the snowboard’s introduction.
Wasatch further posits that Alta’s snowboarding ban resulted from Alta’s animus
towards snowboarders as a group and the ban isn’t supported by a rational basis. In
support, Wasatch points to Alta’s website and trail maps—both of which prominently
state that “Alta is a skiers’ mountain” and that “snowboarding is not allowed”—and
to signs in Alta’s ticket windows that declare in large, bold letters, “NO
SNOWBOARDS.” Joint App. 22-23. Wasatch’s complaint also quoted Gus Gilman,
Director of Alta Ski Patrol, as saying that Alta maintains its snowboard ban because
Alta “sort of [has] a customer base of people who prefer to ski where there’s no
snowboarding.” Id. at 24. And the complaint quoted Chic Morton, Alta’s General
Manager, as saying “anyone who uses the words rip, tear, or shred will never be
welcome at Alta,” and that “as long as [he was] alive snowboarders will never be
allowed at Alta.” Id. at 25.1

1

Wasatch’s complaint further alleged that Alta serves as a conduit for its
customers’ animus towards snowboarders. For example, the complaint alleged that
Alta skiers verbally assaulted Wasatch members on multiple occasions. The
complaint also quotes statements made by Alta skiers recorded in videos in which
they called snowboarders profane names and declared that snowboarders need to
“stay the hell off this mountain” and “get their own mountain.” Joint App. 27.
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Based on the Forest Service’s annual approval of Alta’s winter site operation
plan and its receipt of an annual usage fee, the complaint attributed the snowboard
ban to the Forest Service. Because Alta has no rational basis for the ban, Wasatch
argued, the ban violates its equal protection rights. Wasatch thus sought a declaration
that Alta’s snowboard ban is unconstitutional and requested an injunction preventing
Alta from enforcing its anti-snowboard policy.
Alta and the Forest Service separately moved to dismiss the case under Federal
Rule of Civil Procedure 12(b)(6) for failure to state a claim. In pertinent part, Alta
and the Forest Service argued the Equal Protection Clause didn’t apply to Wasatch’s
claims because the snowboard ban isn’t state action.
In granting Alta’s and the Forest Service’s motions to dismiss, the district
court found that the Forest Service did nothing to influence Alta’s decision to ban
snowboards and the Forest Service’s receipt of a usage fee each year didn’t
sufficiently involve the government to otherwise attribute the ban to the government.
Wasatch appeals, arguing the district court erred by failing to accept as true the
allegations in the complaint and grant all reasonable inferences in favor of Wasatch,
which led to the court’s erroneous conclusion that no state action exists.
For the reasons discussed below, we agree Wasatch’s complaint hasn’t
plausibly established state action, and we affirm the dismissal of this action.2

2

Because we conclude Wasatch’s Fourteenth Amendment claim fails in the
absence of state action, we decline to address its challenges to the district court’s
alternative basis for dismissal—that Alta has a rational basis for the snowboard ban
and that the Property Clause barred review of Wasatch’s Equal Protection claim.
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DISCUSSION
We “review de novo the grant of a Rule 12(b)(6) motion to dismiss for failure
to state a claim,” Gee v. Pacheco, 627 F.3d 1178, 1183 (10th Cir. 2010), and uphold
the district court’s dismissal if the complaint doesn’t “contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face,’”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). Although “the sufficiency of a complaint must rest on its
contents alone[,] [t]here are exceptions to this restriction on what the court can
consider, but they are quite limited: (1) documents that the complaint incorporates by
reference; (2) documents referred to in the complaint if the documents are central to
the plaintiff’s claim and the parties do not dispute the documents’ authenticity; and
(3) matters of which a court may take judicial notice.” Gee, 627 F.3d at 1186
(citations and internal quotation marks omitted).
In reviewing the complaint, we “accept all facts pleaded by the non-moving
party as true and grant all reasonable inferences from the pleadings in favor of the
same,” Colony Ins. Co. v. Burke, 698 F.3d 1222, 1228 (10th Cir. 2012) (citation
omitted), but we don’t accept the nonmoving party’s legal conclusions as true. Iqbal,
556 U.S. at 678. “Threadbare recitals of the elements of a cause of action, supported
by mere conclusory statements, do not suffice.” Id.
Applying these principles here leads us to ask whether Wasatch’s complaint
sufficiently pleaded facts that, if accepted as true, plausibly entitle it to relief under
the Equal Protection Clause of the Fourteenth Amendment. That clause provides that
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no state shall “deny to any person within its jurisdiction the equal protection of the
laws.” U.S. Const. amend. XIV, § 1.3 “That language establishes an ‘essential
dichotomy’ between governmental action, which is subject to scrutiny under the
Fourteenth Amendment, and private conduct, which ‘however discriminatory or
wrongful,’ is not subject to the Fourteenth Amendment’s prohibitions.” Gallagher v.
Neil Young Freedom Concert, 49 F.3d 1442, 1446 (10th Cir. 1995) (quoting Jackson
v. Metro. Edison Co., 419 U.S. 345, 349 (1974)).
We evaluate whether challenged conduct constitutes state action using a
flexible approach. See id. at 1447. For example, in some instances this court has
applied a symbiotic-relationship test, asking “whether the state has ‘so far insinuated
itself into a position of interdependence’ with the private party that there is a
‘symbiotic relationship’ between them.” Id. (first quoting Burton v. Wilmington
Parking Auth., 365 U.S. 715, 725 (1961); and then quoting Moose Lodge No. 107 v.
Irvis, 407 U.S. 163, 175 (1972)). In others, this court has applied a nexus test, asking
“whether there is a sufficiently close nexus between the State and the challenged
action of the regulated entity so that the action of the latter may be fairly treated as
that of the State itself.” Id. (quoting Jackson, 419 U.S. at 351). In still other
instances, this court has applied a joint-action test, asking whether the “private party
3

Although the Fourteenth Amendment guarantees equal protection under state
laws, the Supreme Court has interpreted the Due Process Clause of the Fifth
Amendment to impose an identical requirement on the federal government. See
Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 217-18 (1995). As a federal
agency, the Forest Service is thus subject to the requirements of the Equal Protection
Clause as applied to the federal government through the Fifth Amendment’s Due
Process Clause. See id.
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is ‘a willful participant in joint activity with the State or its agents.’” Id. (quoting
Adickes v. S.H. Kress & Co., 398 U.S. 144, 152 (1970)). And finally, this court has
applied a public-function test, asking whether the private entity exercises “powers
traditionally exclusively reserved to the State.” Id. (quoting Jackson, 419 U.S. at
352). Regardless of the label, however, the underlying question for each test is
whether “‘the conduct allegedly causing the deprivation of a federal right’ must be
‘fairly attributable to the State.’” Id. (quoting Lugar v. Edmondson Oil Co., 457 U.S.
922, 937 (1982)).
In an effort to establish state action, Wasatch’s complaint pleaded the
following facts: (1) the Forest Service owns 85% (1802.7 acres) of the land
comprising Alta’s ski area; (2) Alta operates under a Forest Service Ski Area Term
Special Use Permit; (3) the Forest Service annually reviews and approves Alta’s
winter site operation plan, under which Alta retains the right to exclude devices from
its ski runs; (4) the Forest Service approves Alta’s use of the land including signage,
ski routes, avalanche control, and general safety; (5) the Forest Service receives a fee
from Alta each year based on a percentage of revenues from lift-ticket sales and skischool operations; (6) Alta’s trail map includes both Alta and Forest Service logos
and says snowboarding is not allowed; and (7) Alta’s general manager publicly stated
Alta prohibits snowboards because, among other reasons, “the Forest Service says
it’s OK.” Joint App. 30.4

4

Wasatch’s complaint also asserts that snowboarders are “not welcome” by
the Forest Service and the Forest Service “approv[es] and enforce[s] . . . Alta’s anti8

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In its opening brief, Wasatch characterizes the relationship between Alta and
the Forest Service as “complicated and entangled,” and it asserts that it has pleaded
facts sufficient to “establish state action under any applicable test.” Aplt. Br. 22, 27.
However, Wasatch devotes considerable discussion to the symbiotic-relationship test.
To establish state action under that test, Wasatch’s complaint must plausibly establish
that the Forest Service “‘has so far insinuated itself into a position of
interdependence’ with [Alta] that ‘it must be recognized as a joint participant in the
challenged activity.’” Gallagher, 49 F.3d at 1451 (quoting Burton, 365 U.S. at 725).
Wasatch asserts this relationship exists here, and relies heavily on the Supreme
Court’s holding in Burton and this court’s holding in Milo v. Cushing Municipal
Hospital, 861 F.2d 1194 (10th Cir. 1988), for support.
In Burton, a restaurant leased commercial space in a parking facility owned by
the state parking authority and refused service to patrons based on their race. 365
U.S. at 720. A state statute created the parking authority to provide adequate parking
facilities in view of a parking crisis, and the Court found the parking authority
couldn’t have constructed the parking structure at issue but for the lease because
anticipated bond proceeds and parking revenues would be insufficient to cover the
cost of construction. Id. at 717-19. Because the restaurant was thus an “indispensable
snowboarder policy.” Joint App. 11-12. But we won’t give any weight to these
“‘naked assertion[s]’ devoid of ‘further factual enhancement.’” See Iqbal, 556 U.S. at
678 (alteration in original) (quoting Twombly, 550 U.S. at 557). Similarly, we don’t
accept as true for purposes of a Rule 12(b)(6) motion the complaint’s legal
conclusions that the Forest Service discriminates against snowboarders and the Forest
Service “has entered into a ‘joint enterprise’ and ‘symbiotic relationship’ with Alta.”
Joint App. 11, 21; see Iqbal, 556 U.S. at 678.
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part” of the parking authority achieving its purpose, and because “the peculiar
relationship of the restaurant to the parking facility in which it is located confers on
each an incidental variety of mutual benefits,” the Court attributed the restaurant’s
actions to the state. Id. at 723-24.
Similarly, in Milo a city “substantially participated in the funding, creation,
and financial structure of [a] hospital” and then leased the hospital to a public trust
created under state law. 861 F.2d at 1195-96. The public trust in turn entered into an
operating agreement with a private corporation to manage the hospital, including the
handling of medical staff privilege and discipline matters. Id. at 1195. After the
hospital summarily suspended two physicians, the physicians brought suit against the
hospital and the private corporation asserting First and Fourteenth Amendment
violations. Id. Relying on Burton, this court concluded the hospital was a public
institution because “merely contracting [with the private entity] for day-to-day
management” didn’t insulate the state actors from liability, and thus the management
actions constituted state action for purposes of a 42 U.S.C. § 1983 claim. Id. at 119697.
Wasatch asserts the facts asserted in its complaint regarding the relationship
between Alta and the Forest Service are akin to the facts established in Burton and
Milo. Namely, Wasatch argues that “not only does the discrimination under longterm lease of public property result in a significant amount of revenue for both Alta
and the Government, Defendants openly market that discrimination in an attempt to
increase revenue.” Aplt. Br. 29. Wasatch further argues that the Forest Service
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“depends on Alta to operate the resort on National Forest land for the public, as set
forth by the Government’s special-use permitting scheme,” and that without Alta’s
existence, “the Government would be forced to either assume or abandon the
operations or enter into an identical arrangement for another entity like Alta to
assume operations.” Aplt. Br. 30.
But the facts alleged here are far different than those asserted in Burton or
Milo. Unlike the restaurant in Burton, Alta Ski Area is not “indispensable” to the
Forest Service’s purpose. The Forest Service, by virtue of the Alta permit, does
receive approximately $400,000 each year in fees, but this amounts to only 0.1% of
its annual budget.5 Indeed, Alta is only one of more than 120 ski resorts that operate
under a similar permit. See S. Rep. No. 112-55, at 2 (2011). Thus, the existence, or
non-existence, of one of these approximately 120 ski resorts isn’t indispensable to the
Forest Service’s purpose.
Nor does Wasatch allege in its complaint that the Forest Service participated in
the funding, creation, and financial structure of the ski area and then simply
contracted the management responsibilities to a private corporation, as the public
trust did in Milo. See 861 F.2d at 1196-97. Rather, the facts of the complaint suggest
5

Wasatch takes issue with the district court relying on this figure (0.1% of the
total budget) because it wasn’t in the complaint. But the district court may rely on
“matters of which a court may take judicial notice.” Gee, 627 F.3d at 1186. The
complaint disclosed the annual fees paid by Alta, and by simply taking judicial notice
of publicly available budget information, the district court reasonably determined the
percentage of the Forest Service’s total budget that the permit fees comprise. See
Joint App. 404-05 (citing Pub. L. No. 112-10, §§ 1741-1747, which provides the
Forest Service budget for the fiscal year 2012). We find no error in the district court
taking judicial notice of this figure.
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the Forest Service merely leases federal land to Alta. The complaint thus fails to
establish state action under the symbiotic-relationship test.
Wasatch also argues the snowboard ban meets the nexus test for state action.
Under that test, Wasatch’s complaint must plausibly “demonstrate that ‘there is a
sufficiently close nexus’ between the government and the challenged conduct such
that the conduct ‘may be fairly treated as that of the State itself.’” Gallagher, 49 F.3d
at 1448 (emphasis added) (quoting Jackson, 419 U.S. at 351).
Even after granting all reasonable inferences in Wasatch’s favor, the complaint
at best establishes that the Forest Service knows about the snowboard ban (through,
e.g., Alta’s signage and trail maps) and continues to approve its permit each year
notwithstanding the ban. Wasatch nonetheless argues this is enough involvement by
the Forest Service to constitute state action, because the snowboard ban “exists only
because the Government either approves or ignores it when reviewing and approving
each annual Plan, which must be prepared in consultation with the Government to
become part of the Permit.” Aplt. Br. 32.
But the complaint doesn’t plausibly establish that the Forest Service “approves
or ignores” the ban itself as Wasatch seems to now argue, see Aplt. Br. 32, but rather
at best indicates that the Forest Service annually approves a winter site operation plan
that, in part, authorizes Alta “to exclude any type of skiing device that [it] deem[s]
creates an unnecessary risk to other skiers and/or the user of the device, or any device
[it] deem[s] causes undue damages to the quality of the snow, or is not consistent
with [its] business management decisions,” Joint App. 95. At most, the Forest
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Service approves Alta’s plan with knowledge that Alta excludes snowboards under
this provision, but the Forest Service doesn’t make Alta’s permit contingent upon a
snowboard ban or otherwise encourage a snowboard ban.
And as Alta points out, general awareness of the ban is not sufficient to
establish state action. The Supreme Court has explained that “a State normally can be
held responsible for a private decision only when it has exercised coercive power or
has provided such significant encouragement, either overt or covert, that the choice
must in law be deemed to be that of the State.” Blum v. Yaretsky, 457 U.S. 991, 1004
(1982). And “[m]ere approval of or acquiescence in the initiatives of a private party
is not sufficient to justify holding the State responsible for those initiatives under the
terms of the Fourteenth Amendment.” Id. at 1004-05. (emphasis added). Here, the
pleaded facts simply don’t demonstrate the Forest Service in any way encouraged the
snowboard ban or assisted in enforcing the ban. The complaint thus fails to establish
state action under the nexus test.
Wasatch also asserts its complaint pleaded facts sufficient to show joint action
between Alta and the Forest Service. To satisfy the joint-action test, Wasatch’s
complaint must plausibly establish that Alta is a “willful participant in joint action
with the [Forest Service] or its agents.” Gallagher, 49 F.3d at 1453 (quoting Dennis
v. Sparks, 449 U.S. 24, 27 (1980)). For this inquiry, the focus “is not on long-term
interdependence between the [Forest Service] and [Alta]” but instead on whether the
Forest Service and Alta “have acted in concert in effecting a particular deprivation of
constitutional rights.” Id. But as with the nexus test, “the mere acquiescence of [the
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Forest Service] in the actions of [Alta] is not sufficient.” Id. (emphasis added). And
as discussed, Wasatch’s complaint at best establishes the Forest Service knows of the
ban and acquiesces in its continued application, and notably doesn’t establish that the
Forest Service and Alta “act[] in concert in effecting” the snowboard ban. See id. The
complaint thus fails to plausibly establish joint action between the Forest Service and
Alta.
Finally, Wasatch argues its complaint plausibly establishes state action under
the public-function test. To satisfy that test, Wasatch’s complaint must plausibly
establish that the Forest Service delegated to Alta “a function ‘traditionally
exclusively reserved to the State.’” Gallagher, 49 F.3d at 1456 (quoting Jackson, 419
U.S. at 352). We have cautioned that this test is difficult to satisfy because a function
is rarely deemed exclusively reserved to the state. Id.
Nonetheless, Wasatch argues the facts of its complaint plausibly satisfy this
difficult test, because “[f]ew public functions are as traditionally and exclusively
performed by the Government as management of National Forest property.” Aplt. Br.
34. Wasatch again misses the point. While managing National Forest property may
be a traditional government function, operating a ski resort—including deciding
whether to permit or allow certain devices—isn’t a power “traditionally associated
with sovereignty.” Jackson, 419 U.S. at 353. The complaint thus fails to establish
state action under the public-function test.
Even if we grant all reasonable inferences in Wasatch’s favor, the pleaded
facts at best establish that each year the Forest Service—with knowledge of the
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snowboard ban—reviews and approves Alta’s site plan and receives from Alta a
usage fee. This isn’t enough to establish state action for purposes of the Fourteenth
Amendment. See Blum, 457 U.S. at 1004-05. Because Wasatch’s complaint doesn’t
plausibly establish state action, we affirm the district court’s Rule 12(b)(6) dismissal.
And because this conclusion controls all issues on appeal, we decline to address
Wasatch’s challenges to the district court’s alternative rulings.
Affirmed.

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