In Lugar v. Edmondson Oil Co., Inc., the U.S. Supreme Court held that a private party's joint participation with state officials in the seizure of disputed property is sufficient to characterize that party as a "state actor" for purposes of the Fourteenth Amendment, which prohibits states from depriving any person of life, liberty or property without due process of law. The case involved an oil company (Edmondson) obtaining prejudgment attachment - essentially seizing assets before judgment - against another businessperson (Lugar). This was done under Virginia law and with assistance from local sheriff’s department personnel who physically seized the assets. The court ruled 8-1 in favor of Lugar, concluding that because Edmondson had invoked state authority to seize Lugar's property without notice or hearing, it could be sued for deprivation of constitutional rights just like public entities can be.

In the dissenting opinion for Lugar v. Edmondson Oil Co., Inc., Justice Powell argued that the majority's decision expanded the scope of state action too broadly, potentially implicating private parties in constitutional violations even when their actions were not truly governmental. He contended that a private party's mere invocation of state procedures does not constitute "state action" unless it is combined with something more, such as significant involvement by state officials or misuse of some delegated power. In this case, he believed that Edmondson Oil Company’s use of Virginia’s prejudgment attachment statute did not meet these criteria and therefore should not be considered “state action.” Furthermore, he expressed concern about potential negative consequences on commercial transactions if every use of a routine legal procedure could expose businesses to federal civil rights liability.