Private Security Contractor Kept in Federal Civil Rights Lawsuit Despite Being a Private Party

One of the largest Private Security Contractor agencies recently lost a Rule 12(b)(6) Motion to Dismiss in U.S. District Court in Chicago because by preventing a panhandler from plying his trade at Daley Plaza, the contractor agency unconstitutionally regulated the panhandler’s speech.

U.S. District Judge Rebecca R. Pallmeyer ruled that the security officers, by allegedly banning the plaintiff while he was making only non-threatening overtures, became “state actors” regulating speech in a public forum. Although Judge Pallmeyer made no finding that the security officers made any of the actual statements or actions, the plaintiff’s allegations were detailed enough for her to deny the contractor agency’s Motion to Dismiss.

Judge Pallmeyer rejected the contractor agency’s argument that it cannot be held liable for an alleged constitutional violation because it is a private entity. Although not common, a private party does become a “state actor” when it performs a function that is “traditionally exclusively reserved to the state.” Judge Pallmeyer held that the regulation of speech in a public forum constitutes a public function.

Despite this ruling, Judge Pallmeyer dismissed claims against two other entities. The municipal corporation that manages the plaza contracted with a private property management company, and the property manager then contracted with the Private Security Contractor Agency. Because the municipal corporation and the property manager had no alleged involvement with the security officers’ actions in regulating speech, the claims against them were dismissed. The case is a warning to Private Security Contractors, Private Detectives, and any contractor agency that will or could perform a function that is traditionally exclusively reserved to the state. Private entities that regulate speech in a public place will always be considered to be state actors as long as there is no security threat.

The case is Kim Pindak v. Thomas J. Dart, et al., No. 10 C 6237.