Superficially, then, it would appear that Harp Advertising
addresses itself specifically to a category of cases within which
the case at bar falls. However, there is one important difference
between this case and Harp Advertising. There, a plaintiff
wishing to express his desired content and challenge the
provisions of the zoning and sign codes perceived to be
unconstitutional need only reduce the size of his billboard. But
here, there is nothing IOL can do to become the first-in-time
applicant for its domain names. If IOL wishes to speak, it must
express itself differently.
Now, granted, speaking differently may not be such a great
burden in this case, and if IOL were truly bent on having NSI's
obscenity policy declared unconstitutional, it need only attempt
to register an obscene domain name for which there have been no
prior applicants, a task that is easy enough, given the virtually
infinite supply of characters at its disposal.*fn7 But it is
sufficient to revisit the limited fund hypothetical discussed
above and alter it from a case of racial discrimination to a case
of impermissible viewpoint discrimination to see the category of
cases into which this one truly falls. In such a case, a
plaintiff cannot easily find a way to vindicate his rights.
The true distinction between Harp Advertising and this case,
then, is that while in Harp Advertising the obstacle to suit
involves a mere matter of failing to conform one's proposed
conduct to the parameters of an established regulatory scheme,
the obstacle to suit here and in the limited fund hypothetical is
one that, by its very terms, serves to limit the pool of
would-be-litigants and consequently insulates a potential
wrongdoer from suit. In short, we are confronted here with a
situation that fits much more neatly into the rubric established
by the Court in the equal protection context of Northeastern
Fl. than into the standing doctrine as envisioned by the Seventh
Circuit in the superficially-similar First Amendment context of
Moreover, as has already been noted above, the Supreme Court
has allowed standing to seek nominal damages without proof of
injury as long as the litigant can establish that his rights have
been violated. Further, the underlying reason behind that line of
cases is "the importance to organized society that . . . rights
be scrupulously observed." See Carey, 435 U.S. at 266, 98 S.Ct.
1042. Given this ambition, it would be absurd if courts could
not, in identical circumstances, adjudicate claims for
declaratory relief, and indeed, the Supreme Court in Carey and
the Second Circuit in Irish Lesbian and Gay Org. both
entertained claims for declaratory relief despite a lack of
evidence to show that the constitutional violations in question
caused the respective parties any injury. The conclusion,
therefore, is that IOL has standing to sue for declaratory
At the present time, however, IOL cannot bring such a suit.
Other parties currently possess the contested domain names.
Furthermore, other registrars currently exist and operate without
anything like NSI's obscenity policy. Each of
these factors, taken by itself, constitutes an independent ground
for concluding that IOL's claim for declaratory relief is now
A claim becomes moot "when interim relief or events have
eradicated the effects of the defendant's act or omission, and
there is no reasonable expectation that the alleged violation
will recur," Irish Lesbian and Gay Organization v. Giuliani,
143 F.3d 638, 647 (2d. Cir. 1998) (citations omitted), or "when
it becomes impossible for the courts, through the exercise of
their remedial powers, to do anything to redress the injury."
Alexander v. Yale University, 631 F.2d 178, 183 (2d Cir. 1980).
While it is true that NSI continues to maintain its allegedly
unconstitutional obscenity policy, at the present time, the
continued existence of that policy has no discernible effect on
anyone seeking to register domain names containing the obscene
words NSI rejects. They can simply register the contested names
with other registrar sites.
Nor is this a case that falls into the limited exception to the
mootness doctrine that applies only to "exceptional situations,"
Muhammad v. City of New York Dept. of Corrections,
126 F.3d 119, 123 (2d Cir. 1997) (citation omitted), and covers those
controversies that are "capable of repetition, yet evading
review." Id. (citation omitted). Unless a class action is
involved, the "capable of repetition, yet evading review"
exception will not be applied unless "(1) the challenged action
was in its duration too short to be fully litigated prior to its
cessation or expiration, and (2) there [i]s a reasonable
expectation that the same complaining party would be subjected to
the same action again." Id.
Neither of these circumstances obtain here. The likelihood that
the Internet domain name registration process will revert to its
state prior to the introduction of multiple registrars or that
all currently operating registrars will choose to adopt NSI's
obscenity policy is nothing short of infinitesimal. This, in
conjunction with the fact that IOL's desired domain names have
already been registered to other parties, would make declaratory
relief absolutely ineffectual in this case — which is another way
of saying that IOL's declaratory relief claim has been rendered
moot, but not that IOL lacks standing to bring that claim.
To summarize, IOL has standing to sue for nominal damages and,
therefore, has standing in this action. Its standing to sue for
compensatory damages is uncertain, as is its standing to sue for
injunctive relief, which has not been decided here because IOL
has withdrawn its injunctive relief claim. Finally, IOL has
standing to sue for declaratory relief, but its claim for
declaratory relief is moot at the present time.
a. IOL's § 1983 Claims
Plaintiff's claims are framed as a suit under
42 U.S.C. § 1983,*fn9 and "§ 1983, enacted pursuant to the authority of
Congress to enforce the Fourteenth Amendment, prohibits
interference with federal rights under color of state law."
Rendell-Baker v. Kohn, 457 U.S. 830, 838, 102 S.Ct. 2764, 2769,
73 L.Ed.2d 418 (1982). In suits brought under § 1983, "`under
color' of law has consistently been treated as the same thing as
the `state action' required under the Fourteenth Amendment."
Id., 102 S.Ct. at 2769-70.
To support its assertion that NSI is a state actor, IOL relies
on a bevy of claimed connections between NSI and the NSF, a
federal agency. But, as a threshold matter, § 1983 requires
action by the state, not by the federal government. See District
of Columbia v. Carter, 409 U.S. 418, 424-25, 93 S.Ct. 602, 606,
34 L.Ed.2d 613 (1973), rehearing denied, 410 U.S. 959, 93 S.Ct.
1411, 35 L.Ed.2d 694 (1973). The proposition that federal actors
do not act under color of state law is a well-established one.
See Bordeaux v. Lynch, 958 F. Supp. 77, 84 (N.D.N.Y. 1997);
Robinson v. Overseas Military Sales Corp., 827 F. Supp. 915, 925
(E.D.N.Y. 1993), aff'd, 21 F.3d 502 (2d Cir. 1994); John's
Insulation, Inc. v. Siska Const. Co., Inc., 774 F. Supp. 156, 161
(S.D.N.Y. 1991); Morpurgo v. Board of Higher Educ. in the City
of New York, 423 F. Supp. 704, 713 n. 18 (S.D.N.Y. 1976);
Soldevila v. Secretary of Agriculture, 512 F.2d 427, 429 (1st
John's Insulation is particularly instructive here because
the plaintiff there, like IOL here, relied on a government
contract between a private defendant and a U.S. agency, the Army
in that case, in order to assert state action under § 1983.
John's Insulation, 774 F. Supp. at 158. The Court dismissed the
plaintiff's claim because "[a]ctions of the federal government or
its officers are exempt from the proscriptions of § 1983." Id.
But IOL, at best, can claim that NSI is a federal actor, and so
it is left without a foothold in § 1983. Summary judgment is,
therefore, granted with respect to IOL's § 1983 claims, and the
inquiry as to all of IOL's federal claims would end here but for
IOL's proposed amendment of its complaint to include a Bivens
b. IOL's Proposed Bivens Claim
Bivens actions are typically analyzed under the same
methodology as § 1983 claims:
A Bivens action is a nonstatutory counterpart of a
suit brought pursuant to 42 U.S.C. § 1983, and
is aimed at federal rather than state officials. By
direct analogy to Section 1983, a Bivens action has
two principal elements: first, a claimant must show
he has been deprived of a right secured by the
Constitution and the laws of the United States;
second, he must show that in depriving him of that
right the defendant acted under color of federal law.
For this purpose, the statutory "under color of law"
requirement is equivalent to the constitutional
doctrine of state action. Lugar v. Edmondson Oil
Co., 457 U.S. 922, 929-30, 102 S.Ct. 2744, 2749-50,
73 L.Ed.2d 482 (1982). Thus, where there has been no
state action, a Bivens claim must fail at the outset.
Mahoney v. Nat'l. Org. for Women, 681 F. Supp. 129, 132 (D.Conn.
1987) (citations omitted); see also Bordeaux v. Lynch,
958 F. Supp. 77, 84 (N.D.N.Y. 1997) (dismissing plaintiff's § 1983
claims against federal Drug Enforcement Administration officers
and proceeding to analyze whether defendants acted under "color
of federal law" under Bivens). Because of the analogous state
action standards under Bivens and § 1983, we can proceed to
apply the same state action tests that we would have applied had
there been a colorable § 1983 claim.*fn10
There are four commonly-utilized state action tests:
Courts will find state action despite the presence of
a private party in four discernible situations.
First, state action exists given a "symbiotic
relationship" between the private actor and the
state. Second, the "nexus test" finds state action
when the state commands or encourages the private
discriminatory action. A third situation sufficient
to support a finding of state action occurs when a
private party carries on a traditional public
function. Finally, state action is present when the
involvement of governmental authority aggravates or
contributes to the unlawful conduct.
Air Line Pilots Ass'n v. Dep't of Aviation of the City of
Chicago, 45 F.3d 1144, 1149 (7th Cir. 1995) (citations omitted).
The four tests are not absolutely orthogonal to one another, but
among them, they thoroughly cover the relevant jurisprudential
territory. Since IOL tacitly invokes all four, the Court will go
systematically through each, one by one.
The "public function" test is more accurately described as an
"exclusive public function" test. See Rendell-Baker 457 U.S. at
842, 102 S.Ct. at 2772. It has been "limited strictly, and covers
only private actors performing functions `traditionally the
exclusive prerogative of the State.'" National Broad. Co., Inc.
v. Communications Workers of America, AFL-CIO, 860 F.2d 1022,
1026 (11th Cir. 1988) (citations omitted). The Supreme Court
stressed the limited nature of the public function test in
Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S.Ct. 449,
42 L.Ed.2d 477 (1974), where a customer tried to sue a utility
company for termination of her electrical service without prior
notice or hearing. Id. at 346-348, 95 S.Ct. at 451-452. The
company, private though it was, held a certificate of public
convenience issued by the Pennsylvania Utility Commission, which
empowered it to deliver electricity to a service area wherein the
plaintiff resided. Id. at 346, 95 S.Ct. at 451. The Court
[P]etitioner . . . urges that state action is present
because respondent provides an essential public
service required to be supplied on a reasonably
continuous basis by [a Pennsylvania state statute],
and hence performs a "public function." If we were
dealing with the exercise by [respondent] of some
power delegated to it by the State which is
traditionally associated with sovereignty, such as
eminent domain, our case would be quite a different
one. . . . Doctors, optometrists, lawyers,
[respondent], and Nebbia's upstate New York grocery
selling a quart of milk are all in regulated
businesses, providing arguably essential goods and
services, "affected with a public interest." We do
not believe that such a status converts their every
action, absent more, into that of the State.
Id. at 352-54, 95 S.Ct. at 454-55 (citations omitted).
In fact, the range of activities where private actors were
found to be performing traditional public functions is
prohibitively constricted, including operating a company town,
see Marsh v. Alabama, 326 U.S. 501, 66 S.Ct. 276, 90 L.Ed. 265
(1946), a municipal park, see Evans v. Newton, 382 U.S. 296, 86
S.Ct. 486, 15 L.Ed.2d 373 (1966) and an election, see Nixon v.
Condon, 286 U.S. 73, 52 S.Ct. 484, 76 L.Ed. 984 (1932); Terry
v. Adams, 345 U.S. 461, 73 S.Ct. 809, 97 L.Ed. 1152 (1953), as
well as providing medical treatment to injured prison inmates,
see West v. Atkins, 487 U.S. 42, 108 S.Ct. 2250, 101 L.Ed.2d 40
(1988). No traditional public function was found, however, in
cases that involved providing workers' compensation benefits or
medical treatment to injured workers, see American Mfrs. Mut.
Ins. Co. v. Sullivan, 526 U.S. 40, 119 S.Ct. 977, 143 L.Ed.2d
130 (1999), providing nursing home services to Medicaid patients,
see Blum v. Yaretsky, 457 U.S. 991, 102 S.Ct. 2777, 73 L.Ed.2d
534, running a private school, see Rendell-Baker, 457 U.S. 830,
102 S.Ct. 2764, or operating a utility company, as in Jackson
itself. As the Court has said: "The range
of government activities is broad and varied, and the fact that
government has engaged in a particular activity does not
necessarily mean that an individual entrepreneur or manager of
the same kind of undertaking suffers the same constitutional
inhibitions." Evans, 382 U.S. at 300, 86 S.Ct. at 489.
IOL contends that "[r]egistration of business names, assumed
names, and trademarks, and the granting of a property right are
functions that are traditionally the role of the States."*fn11
Pl.'s Opp. Mem. at 20. "NSI is a state actor acting under color
of state law because NSI performs a function that is a
traditional role of the State — registration of business names."
Id. IOL's contentions in this regard are unsupported by the
Although the U.S. Department of Defense was indeed an
instrumental agent in the Internet's origins, the Internet is, by
no stretch of the imagination, a traditional and exclusive public
function. For most of its history, its growth and development
have been nurtured by and realized through private action. See
American Civil Liberties Union v. Reno, 929 F. Supp. 824, 832
(E.D.Pa. 1996), aff'd, 521 U.S. 844, 117 S.Ct. 2329, 138
L.Ed.2d 874 (1997) ("no single entity — academic, corporate,
governmental, or non-profit — administers the Internet."); also
see Cyber Promotions, Inc. v. American Online, Inc., 948 F. Supp. 436
(E.D.Pa. 1996) ("[n]o single entity, including the State,
administers the Internet").
Moreover, registration of Internet domain names, the focal
point of this case, has never been a public function at all. As
the D.C. Circuit wrote recently,
Congress chose not to require NSF or any other agency
of the federal government to register domain names.
Simply because NSF might have been able to perform
the function does not transform this activity into a
government service or thing of value. A recent and
novel function such as domain name registration
hardly strikes us as a "quintessential" government
service, as registrants suppose. Indeed, it was not
the government but the Internet Assigned Numbers
Authority — headed by the late Dr. Postel at U.S.C. . .
. that originally maintained host computer name
Thomas v. Network Solutions, Inc., 176 F.3d 500, 511 (D.C.Cir.
1999), cert. denied, ___ U.S. ___, 120 S.Ct. 934, 145 L.Ed.2d
813 (2000). "[T]he mass scale registration of commercial domain
names has never, never been a Government function, ever." App.
Exs. Supp. Mot. Dismiss by Def. Network Solutions, Inc., Ex. J.
In light of the facts and the relevant case law, IOL's claim that
NSI's registration of domain names is an exclusive public
function cannot be maintained.
The "symbiotic relationship" test finds its origins in Burton
v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6
L.Ed.2d 45 (1961), where a private restauranteur leased space
from a state parking authority in a publicly owned building and
engaged in racial discrimination in his restaurant. On those
facts, the Court held that the state had so far insinuated itself
into a position of interdependence with the restaurant that it
had become a joint participant in the restauranteur's business
enterprise. Id., at 725, 81 S.Ct. at 861. However, the holding
of Burton was subsequently limited to cases involving leases of
public property, see Jackson, 419 U.S. at 358, 95 S.Ct. at 457,
and "[p]rivately owned enterprises providing services that the
State would not necessarily provide, even though they are
extensively regulated, do not fall within the ambit of Burton."
Blum, 457 U.S. at 1011, 102 S.Ct. at 2789. The Supreme Court
has also confined the Burton fact
pattern to cases where the State benefits financially from a
private entity's discriminatory conduct. Rendell-Baker, 457
U.S. at 843, 102 S.Ct. at 2772. NSI's relationship with the NSF
does not come close to satisfying these requirements.
The "close nexus" test requires that "the challenged action of
the regulated entity . . . may be fairly treated as that of the
State itself." Blum, 457 U.S., at 1004, 102 S.Ct. at 2786. The
State must have exercised such "coercive power" or have provided
"such significant encouragement, either overt or covert, that the
choice must in law be deemed to be that of the State." Id.
"Action taken by private entities with the mere approval or
acquiescence of the State is not state action." American Mfrs.,
526 U.S. at 52, 119 S.Ct. at 986. But the NSF did no more than
acquiesce — and very tacitly at that — in the NSI obscenity
policy challenged by IOL. Moreover, as soon as the domain name
registration field was opened to competition by the government,
multiple registrars with no obscenity policy entered the market
without a word of protest on the government's part. This state of
affairs amounts to a level of involvement that is easily
insufficient to meet the Supreme Court's formulation of the close
IOL attempts to close the gap by citing decisions holding NSI
to be a federal instrumentality immune from antitrust liability
under the Sherman Act. See Pl.'s Opp. Mem. at 14-15. IOL can
offer no authority to support its claim that these decisions,
some involving glaringly inapposite fact patterns, are in any way
related to the requirements of the close nexus test. Furthermore,
the Jackson Court has stated explicitly that monopoly status is
not dispositive on the close nexus issue:
It may well be that acts of a heavily regulated
utility with at least something of a governmentally
protected monopoly will more readily be found to be
`state' acts than will the acts of an entity lacking
these characteristics. But the inquiry must be
whether there is a sufficiently close nexus between
the State and the challenged action of the regulated
entity. . . .
Jackson, 419 U.S. at 350-51, 95 S.Ct. at 453. Here there is no
such nexus, and so the close nexus test remains unsatisfied.
Beyond knowing of its existence, the NSF had absolutely no
involvement with NSI's obscenity policy.
Finally, a court could find state action when government
involvement in some way contributes to or aggravates the private
entity's challenged action, as when a state regulation compels or
influences the private actor's alleged Constitutional violation.
See Rendell-Baker, 457 U.S. at 841, 102 S.Ct. at 2771. It is
not altogether apparent that this test is wholly independent from
the close nexus inquiry, and the Supreme Court has, at times,
treated the two as fungible. See Jackson, 419 U.S. at 351, 95
S.Ct. at 453. In any event, where, as here, the challenged action
is in no way undertaken at the behest of, under the influence of
or for the financial benefit of the State, state action will not
be found, even if an "extensive" and "detailed" substratum of
state regulation is in place. Rendell-Baker, 457 U.S. at
841-42, 102 S.Ct. at 2771-72.
Thus, IOL's complaint fails to assert a cognizable basis for
finding state action. NSI's obscenity policy is purely private
conduct in which the NSF and the relationship between the two
entities play no role. Summary judgment for defendants is granted
with respect to all of IOL's federal claims.
c. IOL's Claims Under the New York State Constitution
As for the Constitutional claims IOL makes under the New York
State Constitution, they are all too easily disposed of on
identical grounds. The New York Court of Appeals has
"consistently recognized and reaffirmed" that the State
Constitution "governs the rights of citizens with respect to
their governments and not
the rights of private individuals against private individuals."
SHAD Alliance v. Smith Haven Mall, 66 N.Y.2d 496, 502,
488 N.E.2d 1211, 1215, 498 N.Y.S.2d 99, 103 (1985); see also Hudgens
v. NLRB, 424 U.S. 507, 513, 96 S.Ct. 1029, 1033, 47 L.Ed.2d 196
(1976) see also People v. DiGuida, 152 Ill.2d 104, 178 Ill.Dec.
80, 604 N.E.2d 336, 341 (1992) ("The high court of New York,
urged to construe its State constitution's free speech provision
more broadly than the first amendment, found instead that both
have the same requirement of State action"). Therefore, inasmuch
as IOL cannot show state action for purposes of the U.S.
Constitution, summary judgment should be granted for NSI and the
NSF on IOL's claims arising under the New York State Constitution
IOL's Request for Further Discovery
IOL claims that summary judgment for defendants should not be
granted because it needs further discovery to know to what extent
NSF "provided, acquiesced, formulated, compelled, directed, or
supervised [the obscenity] policy, all of which NSF had the right
to do under the Cooperative Agreement." Pl.'s Opp. Mem. at 8.
However, as has been noted above, the relevant facts have been
conclusively established by the sworn statements of NSI's
vice-president, General Counsel for the NSF and the NSF's program
official responsible for oversight of the Cooperative Agreement
with NSI. In no way did the NSF either encourage or discourage
the policy's formulation and implementation. And IOL has offered
nothing in the way of facts to lead one to question these
affidavits. Moreover, the subsequent introduction of multiple
registrars, some without obscenity policies, confirms the NSF's
lack of involvement in NSI's rejection of IOL's domain names.
Summary judgment is not to be denied when a party fails to come
forward with even a shred of evidence that indicates that further
inquiry is appropriate. See Trebor Sportswear Co., Inc. v. The
Limited Stores, Inc., 865 F.2d 506, 512 (2d Cir. 1989). While
the nonmoving party has to have an opportunity to "discover
information that is essential to his opposition," id. at 511, a
court does not have to allow further discovery where there is no
indication that such discovery would yield anything fruitful.
See id. at 512.*fn12
IOL's Proposed Amendments
It remains only to be decided whether IOL should be allowed to
amend its complaint to add specific agents of NSI and the NSF in
support of IOL's proposed Bivens action,*fn13 the addition of
would also be among the desired amendments. These contemplated
amendments are futile insofar as, for reasons discussed above,
they fail to advance toward, much less leap over, the state
action hurdle that stands in IOL's way. Futility of a proposed
amendment is an adequate basis for denial of a motion to amend.
Azurite Corp. Ltd. v. Amster & Co., 52 F.3d 15 (2d Cir. 1995);
see also Health-Chem Corp. v. Baker, 915 F.2d 805, 810 (2d Cir.
1990) ("where . . . there is no merit in the proposed amendment,
leave to amend should be denied"); Ruffolo v. Oppenheimer &
Co., 987 F.2d 129 (2d Cir. 1993) (where it appears that granting
leave to amend is unlikely to be productive, it is not an abuse
of discretion to deny leave to amend). Accordingly, IOL's
Cross-Motion to Amend the Complaint is denied.
For the foregoing reasons, NSI and the NSF's motions for
summary judgment are granted. IOL's motion for leave to amend the
complaint is denied as futile.