410
O'Connor, J., dissenting
In Jackson, we held that a private utility's termination of service to a customer is not subject to due process challenge, even though the termination was made pursuant to a state law. In doing so, we made clear that the question turns on whether the challenged conduct results from private choice: "Respondent's exercise of the choice allowed by state law where the initiative comes from it and not from the State, does not make its action in doing so 'state action' for purposes of the Fourteenth Amendment." 419 U. S., at 357 (footnote omitted). The rule applies even where the private entity makes its decision in an environment heavily regulated by the government. Rendell-Baker, supra, involved a private school for troubled students who were transferred there by authority of a state law, and for whose education the State paid the school. Public funds comprised 90% to 99% of the school budget. The school fired petitioners, and a state grievance board reviewed that personnel action. Despite the school's pervasive ties to the State, we held that the discharge decisions were not subject to constitutional challenge because those actions "were not compelled or even influenced by any state regulation." Id., at 841. We noted that "in contrast to the extensive regulation of the school generally, the various regulators showed relatively little interest in the school's personnel matters." Ibid. Likewise, in Blum v. Yaretsky, supra, we held that the decisions of a regulated hospital to discharge its patients were not subject to constitutional challenge. Although various Medicaid regulations and benefit adjustment procedures may have encouraged the hospital's decisions to discharge its patients early, we held that the State was not "responsible for those actions" because such actions "ultimately turn on medical judgments made by private parties according to professional standards that are not established by the State." Id., at 1005, 1008. See also San Francisco Arts & Athletics, Inc. v. United States Olympic Comm., 483 U. S. 522, 547 (1987) ("There is no evidence that the Federal Government coerced
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