State action as private agreement

Regarding my comments about racial discrimination, a Mr. Richard Feder, of Fort Lee, New Jersey, writes

OK, so, at what point does a collective agreement become state action? Is it some sort of ration of members of the collective / members of the affected population? For instance, in California, is the Democratic party a state actor? Particularly in the coastal counties?

I think it could be. In Smith v. Allwright, 321 U.S. 649 (1944), the Supreme Court struck down the “white primary” as unconstitutional. A primary election, in theory, is private, not state action, because it’s just a political party choosing its nominee, not choosing a government official. So the Democratic party in Texas declared that only whites could vote in the primary, and the Texas Supreme Court held that this was private action, and not state action, and therefore not subject to the Fourteenth and Fifteenth Amendments. The U.S. Supreme Court declared that

When primaries become a part of the machinery for choosing officials, state and national, as they have here, the same tests to determine the character of discrimination or abridgement should be applied to the primary as are applied to the general election. If the state requires a certain electoral procedure, prescribes a general election ballot made up of party nominees so chosen and limits the choice of the electorate in general elections for state offices, practically speaking, to those whose names appear on such a ballot, it endorses, adopts and enforces the discrimination against Negroes, practiced by a party entrusted by Texas law with the determination of the qualifications of participants in the primary. This is state action within the meaning of the Fifteenth Amendment.

Id. at 664.

This case—like the company town case, Marsh v. Alabama, 326 U.S. 501 (1946)—correctly see that at some point, a collective private agreement is so wide that it becomes state action. After all, in the social compact theory of our Constitution, government is just a collective agreement between the citizens.