John Heineke v. Santa Clara University, 965 F.3d 1009

Background

John Heineke, a tenured economics professor at private Santa Clara University (SCU), was accused by a former student (Jane Doe) of sexual harassment; a third‑party investigator concluded the harassment was more likely than not.
SCU suspended and ultimately terminated Heineke after internal appeals, including review by the provost, president, and a Faculty Judicial Board that upheld termination.
Heineke sued SCU and Doe in federal court asserting § 1983 claims (Fourteenth Amendment due process and equal protection) and various state‑law claims (tort and contract).
The operative § 1983 theory alleged SCU acted as a state actor because it received substantial federal and state funding conditioned on compliance with anti‑discrimination laws (e.g., Title IX), making SCU an enforcement arm of the government.
The district court dismissed the § 1983 claims for lack of state action, declined supplemental jurisdiction over state claims, and dismissed without prejudice; Heineke appealed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether SCU’s investigation/termination is "state action" under § 1983	SCU became a state actor because federal/state funding conditioned on anti‑discrimination compliance coerced SCU into enforcing those laws	Compliance with funding conditions and generally applicable civil‑rights laws does not transform a private university into a state actor; no governmental participation in this specific case	Held: Not state action; allegations (receipt of funds + compliance) are insufficient to plead state action, so § 1983 claims dismissed
Whether conditioning funding on compliance with Title IX or state anti‑discrimination laws converts routine private conduct into state action	Funding conditions and threat of de‑funding coerced SCU and made it a partner of government enforcement	Mere receipt of government funds and compliance with generally applicable laws, even under penalty of funding loss, does not convert private conduct into state action	Held: Funding conditions alone are insufficient; accepting the argument would convert virtually every regulated private actor into a state actor, which courts reject
Whether dismissal at the motion‑to‑dismiss stage was appropriate	Allegations should survive to develop facts showing coercion or joint action	Complaint failed to allege facts sufficient to show coercion or government participation; dismissal as a matter of law appropriate	Held: Dismissal proper; pleading accepted as true but legal theory cannot be sustained on alleged facts

Key Cases Cited

Sutton v. Providence St. Joseph Med. Ctr., 192 F.3d 826 (9th Cir. 1999) (private conduct presumed not state action; regulation or funding conditions alone insufficient)
Rendell‑Baker v. Kohn, 457 U.S. 830 (U.S. 1982) (receipt of government funds does not necessarily make private school a state actor)
Blum v. Yaretsky, 457 U.S. 991 (U.S. 1982) (state coercion/significant encouragement required to attribute private action to state)
Jackson v. Metropolitan Edison Co., 419 U.S. 345 (U.S. 1974) (general regulation does not convert private conduct into state action)
Kitchens v. Bowen, 825 F.2d 1337 (9th Cir. 1987) (funding‑condition arguments insufficient to show federal/state action in personnel decisions)
Doe v. Univ. of Denver, 952 F.3d 1182 (10th Cir. 2020) (private university’s Title IX compliance does not alone establish state action)
Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40 (U.S. 1999) (§ 1983 requires deprivation of federal right under color of state law)
Caviness v. Horizon Cmty. Learning Ctr., Inc., 590 F.3d 806 (9th Cir. 2010) (standard of review for motions to dismiss/state‑action analysis)
Kirtley v. Rainey, 326 F.3d 1088 (9th Cir. 2003) (state acceptance of benefits from private conduct can be relevant but requires close nexus)
Logan v. Bennington College Corp., 72 F.3d 1017 (2d Cir. 1995) (state urging formulation of policy does not make private college a state actor absent involvement in the particular case)