From Lugar v. Edmunson Oil

42 USC 1983 is used when a court is faced with “fraud on the court” or fraud extrinsic to the proceeding, or not between the parties.  Fraud on the court is where there are :  bribes, suppressed transcripts, no transcripts, court reporter told not to set up, case fixing, changed transcripts, ex parte conversations, cases sealed without notice, mortion or hearing on the matter, etc.

42 USC is “deprivation of rights under color of authority.”  This means the court’s authority is fake or an illusion and is not real.  It is typically used in cases of false imprisonment or where the prisoner is beat up by police.  The police have real power to ask a suspect to go and do something and to hold or detain them, they do not have any real power to beat up a person in custody.  Those actions are taken under “color of authority.”

From the case:

Similarly, it is clear that in a § 1983 action brought against a state official, the statutory requirement of action “under color of state law” and the “state action” requirement of the Fourteenth Amendment are identical. The Court’s conclusion in United States v.Classic, 313 U. S. 299, 326 (1941), that “[m]isuse of power, possessed by virtue of state law and made possible only because the wrongdoer is clothed with the authority of state law, is action taken `under color of’ state law,” was founded on the rule announced in Ex parte Virginia, 100 U. S. 339, 346-347 (1880), that the actions of a state officer who exceeds the limits of his authority constitute state action for purposes of the Fourteenth Amendment.^[13]

930*930 The decision of the Court of Appeals rests on a misreading of Flagg Brothers. In that case the Court distinguished two elements of a § 1983 action:

“[Plaintiffs] are first bound to show that they have been deprived of a right `secured by the Constitution and the laws’ of the United States. They must secondly show that Flagg Brothers deprived them of this right acting `under color of any statute’ of the State of New York. It is clear that these two elements denote two separate areas of inquiry. Adickes v. S. H. Kress & Co., 398 U. S. 144, 150 (1970).” 436 U. S., at 155-156.

Plaintiffs’ case foundered on the first requirement. Because a due process violation was alleged and because the Due Process Clause protects individuals only from governmental and not from private action, plaintiffs had to demonstrate that the sale of their goods was accomplished by state action. The Court concluded that the sale, although authorized by state law, did not amount to state action under the Fourteenth Amendment, and therefore set aside the Court of Appeals’ contrary judgment.

There was no reason in Flagg Brothers to address the question whether there was action under color of state law. The Court expressly eschewed deciding whether that requirement was satisfied by private action authorized by state law. Id., at 156. Although the state-action and under-color-of-state-law requirements are “separate areas of inquiry,” Flagg Brothers did not hold nor suggest that state action, if present, might not satisfy the § 1983 requirement of conduct under color of state law. Nevertheless, the Court of Appeals relied on Flagg Brothers to conclude in this case that state action under the Fourteenth Amendment is not necessarily action under color of state law for purposes of § 1983. We do not agree.

The two-part approach to a § 1983 cause of action, referred to in Flagg Brothers, was derived from Adickes v. 931*931 S. H. Kress & Co., 398 U. S. 144, 150 (1970). Adickes was a § 1983 action brought against a private party, based on a claim of racial discrimination in violation of the Equal Protection Clause of the Fourteenth Amendment. Although stating that the § 1983 plaintiff must show both that he has been deprived “of a right secured by the `Constitution and laws’ of the United States” and that the defendant acted “under color of any statute . . . of any State,” ibid., we held that the private party’s joint participation with a state official in a conspiracy to discriminate would constitute both “state action essential to show a direct violation of petitioner’s Fourteenth Amendment equal protection rights” and action ” `under color’ of law for purposes of the statute.” Id., at 152.^[14] In 932*932 support of our conclusion that a private party held to have violated the Fourteenth Amendment “can be liable under § 1983,” ibid., we cited that part of United States v. Price, 383 U. S., at 794, n. 7, in which we had concluded that state action and action under color of state law are the same (quoted supra, at 928). Adickes provides no support for the Court of Appeals’ novel construction of § 1983.^[15]

457 US 922 Lugar v. Edmonson Oil

This was a  case where a judge allowed property to be liened and impounded prior to judgment.  In this case, the plaintiffs argued they believed that assets of the defendant would be sold and liquidated prior to judgment and they asked the court to seize the assets on the Defendant’s own property, and the court obliged (rubber stamp)

Th US Supreme Cout found this “color of law” state action to be a deprivation of rights under “color of authority”.