Shelley v. Kraemer Through the Lens of Property

Abstract:     
In Shelley v. Kraemer (1948), the Supreme Court ruled that judicial action to enforce racially restrictive covenants (RRCs) was "state action" and hence impermissible. Nevertheless, the case continues to puzzle readers about why these ostensibly private agreements might be considered governmental, rather than simply a kind of private lawmaking, as in contracts. This article looks to the history of RRCs, as well as to modern scholarship on the differences between contract and property, to argue that Shelley's state action problem falls into place when one looks at RRCs specifically as property.

Since covenants running with the land, unlike contracts, may bind owners who never specifically agree to them, courts have traditionally imposed limits on these covenants to assure that the covenants are known to future purchasers and have continuing value. Many RRCs were very weak in meeting the traditional requirements, particularly the RRCs created by neighbor agreements in urban areas. State court enforcement of these technically weak covenants - as, for example, the covenants at stake in Shelley itself - suggested that in enforcing RRCs, judges were relaxing covenant rules in order to perpetrate racial exclusion. But a more systematic "state action" nexus derived from the property-law ability of RRCs to govern persons who never agreed to them. Property-law constraints on these non-consensual obligations required that a court that enforced such covenants had to assume that the restrictions would have continuing value for a substantial class of homeowners, and that assumption rested on widespread norms or customs of racial disparagement. But enforcement of a custom is itself state action. Modern property scholarship has focused on some of the reasons why: informal norms may be as strong as or even stronger than the formal law.

While the specific property-law aspects of RRCs were underplayed in the case law, there were glimpses of the traditional property concerns throughout the several decades of their legal existence. With closer attention, those property concerns could have made Shelley into a more structured, and hence more usable, doctrine of state action.

Number of Pages in PDF File: 48

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