Taylor v. Charter Medical Corp.

• Decision Date: 09 December 1998
• Docket Number: No. 97-10084,97-10084
• Citation: 162 F.3d 827
• Parties: David TAYLOR, Plaintiff-Appellant-Cross-Appellee, v. CHARTER MEDICAL CORPORATION, and Charter Provo School, Inc. d/b/a Provo Canyon School, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 827

162 F.3d 827

David TAYLOR, Plaintiff-Appellant-Cross-Appellee, v. CHARTER MEDICAL CORPORATION, and Charter Provo School, Inc. d/b/a Provo Canyon School, Defendants-Appellees.

No. 97-10084.

United States Court of Appeals, Fifth Circuit.

Dec. 9, 1998.

Frederick Henry Shiver, Daniel Wayne Shuman, Dallas, TX, for Plaintiff-Appellant.

Terriann Trostle, Houston, TX, Marcy Hogan Greer, Austin, TX, Walter A. Herring, Fulbright & Jaworski, Dallas, TX, for Defendants-Appellees.

Appeal from the United States District Court for the Northern District of Texas.

Before SMITH, DUHE and WIENER, Circuit Judges.

WIENER, Circuit Judge:

Plaintiff-Appellant David Taylor ("Taylor") appeals the district court's grant of partial summary judgment in favor of Defendant-Appellee Charter Provo School, Inc. d/b/a Provo Canyon School ("New Provo Canyon"), holding that New Provo Canyon is not a state actor for purposes of 42 U.S.C. § 1983. Concluding that the district court's holding is correct, we affirm.

I. FACTS AND PROCEEDINGS

This case involves claims arising from the psychiatric treatment Taylor received while a student/patient at New Provo Canyon, a wholly-owned subsidiary of Defendant-Appellee Charter Medical Corporation ("CMC") and a private, adolescent, residential hospital in Provo Canyon, Utah. Taylor was a minor when his mother voluntarily admitted him to New Provo Canyon where he was a residential patient from October 1990 to August 1991.

After attaining the age of majority, Taylor filed suit in state court in 1995 against New Provo Canyon and CMC, alleging various state law claims--fraud, medical negligence, false imprisonment, breach of fiduciary duty, and gross negligence--arising from his treatment at New Provo Canyon. After the defendants removed the case to district court on diversity grounds, Taylor amended his complaint to add specified § 1983 claims. ¹ New Provo Canyon then moved for partial summary judgment as to the § 1983 claims only, insisting that it was not "acting under color of state law" when it treated Taylor and Milonas was a class action suit brought against the Provo Canyon School ("Old Provo Canyon") in 1980. In Milonas, a district court in Utah found that Old Provo Canyon--an independent institution not then affiliated with New Provo Canyon or CMC in any way--was a state actor for the purposes of § 1983 and enjoined Old Provo Canyon from continuing specified practices. The Tenth Circuit affirmed. ³ In the instant litigation, which commenced after CMC formed New Provo Canyon to acquire the assets of Old Provo Canyon, Taylor asked the district court to take judicial notice of the state actor holdings in both the district and the appellate court decisions in Milonas to establish that New Provo Canyon is a state actor for purposes of the present suit. ⁴ The district court rejected Taylor's argument and granted New Provo Canyon's motion for partial summary judgment, dismissing Taylor's § 1983 claims only.

was thus not liable as a state actor under § 1983. Taylor countered that consideration of New Provo Canyon's position on the "state actor" issue is foreclosed by the Tenth Circuit case of Milonas v. Williams. ²

The parties tried the remaining state court claims to a jury, which found that New Provo Canyon was 25% at fault for the damages Taylor suffered. ⁵ After the court determined that New Provo Canyon was liable to Taylor in the amount $7,500, Taylor timely filed a notice of appeal.

II. ANALYSIS

A. Standard of Review

We review the district court's grant of summary judgment de novo ⁶ and its refusal to take judicial notice for abuse of discretion. ⁷

B. Judicial Notice

In his appellate brief, Taylor argues that, "as a matter of stare decisis, collateral estoppel, or judicial notice, the district court's decision in Milonas should inform the decision of the district court and the decision of this Court." Taylor's contentions are wholly without merit. We write primarily to address when, if ever, a court can take judicial notice of the factual findings of another court, and we turn to this issue first.

Taylor argues that the district court erred in not taking judicial notice of the Milonas courts' determination that Old Provo Canyon was a state actor. Rule 201 of the Federal Rules of Evidence provides that a court may take judicial notice of an "adjudicative fact" if the fact is "not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot be questioned." ⁸ Taylor asserts that the factual findings of the district court in Milonas--upheld on appeal--fall within this second category. We disagree.

We have not previously addressed this precise issue, but the Second, ⁹ Eighth, ¹⁰ and In General Electric Capital Corporation v. Lease Resolution Corporation, ¹⁵ the Seventh Circuit adopted a rule similar, but not identical, to that of the Second and Eleventh Circuits. The court in General Electric held that the district court had erred in taking judicial notice of a finding that a settlement in a prior, unrelated proceeding was "fair, reasonable, and adequate." The Seventh Circuit held that these findings did not qualify as facts "not subject to reasonable dispute." ¹⁶ The court did not, however, adopt a per se rule against taking judicial notice of an adjudicative fact in a court record, stating:

                Eleventh Circuits 11 have, holding that, even though a court may take judicial notice of a "document filed in another court ... to establish the fact of such litigation and related filings," 12 a court cannot take judicial notice of the factual findings of another court.  This is so because (1) such findings do not constitute facts "not subject to reasonable dispute" within the meaning of Rule 201; 13  and (2) "were [it] permissible for a court to take judicial notice of a fact merely because it had been found to be true in some other action, the doctrine of collateral estoppel would be superfluous." 14
                

We agree [with the Second and Eleventh Circuits] that courts generally cannot take notice of findings of fact from other proceedings for the truth asserted therein because these are disputable and usually are disputed. However, it is conceivable that a finding of fact may satisfy the indisputability requirement of Fed.R.Evid. 201(b). This requirement simply has not been satisfied in this case. ¹⁷

It is not necessary at this point for us to determine whether courts in this circuit are never permitted to take notice of the factual findings of another court or are permitted to do so on rare occasion, subject to the Rule 201's indisputability requirement, because the Milonas courts' state actor determination cannot clear the rule's "indisputability" hurdle. ¹⁸ That Old Provo Canyon was a state actor for the purposes of the Milonas suit (let alone for the purposes of the present suit) was certainly open to dispute and was, in fact, disputed by the parties. That determination simply was not the type of "self-evident truth[ ] that no reasonable person could question, [a] truism[ ] that approach[es] platitude[ ] or banalit[y]," as required to be eligible for judicial notice under Rule 201. ¹⁹

In addition, the Milonas courts' state actor determination is not an "adjudicative fact" within the meaning of Rule 201. Whether a private party is a state actor for the purposes of § 1983 is a mixed question of fact and law This result is wholly consistent with our precedent. In Colonial Leasing Co. of New England v. Logistics Control Group, ²² we addressed whether, in a creditor's subsequent suit against its debtor for fraudulent transfer of assets, the district court had improperly taken judicial notice of the existence of a prior judgment in favor of that creditor. ²³ In holding that the district court did not abuse its discretion, we stated that "[t]he district court could properly take judicial notice, under Rule 201(b), of the judgment for the limited purpose of taking as true the action of the Oregon court in entering judgment for [the creditor] against [the debtor] .... The judicial act itself was not a fact 'subject to reasonable dispute'...." ²⁴ This language suggests that a court cannot (at least as a general matter) take judicial notice of a judgment for other, broader purposes. We hold so expressly today.

                and is thus subject to our de novo review. 20  Rule 201 authorizes the court to take notice only of "adjudicative facts," not legal determinations. 21  Therefore, a court cannot take judicial notice of another court's legal determination that a party constituted a state actor for the purposes of § 1983:  That determination is neither an adjudicative fact within the meaning of Rule 201 nor beyond "reasonable dispute."
                

The sole relevant case Taylor cites in favor of his argument, Kinnett Dairies, Inc. v. J.C. Farrow, ²⁵ lends him no succor. In Kinnett, the plaintiff requested that the district court "take judicial notice of the record in [a separate, but related case] and asked the clerk to bring it into the courtroom particularly the discovery depositions...." ²⁶ The district court stated in its opinion that it had taken "judicial notice" of the subject material, but did not clarify of what exactly it had taken notice. On appeal, the defendant objected to the inclusion of the depositions and other evidence in the record. We rejected the defendant's argument, noting that the defendant (1) had not objected to the plaintiff's request for judicial notice in the district court and (2) had been granted the opportunity to submit its own evidence and to question those parties whose depositions were made part of the record. ²⁷ In his brief, Taylor argues that, in so holding in Kinnett, we went beyond simply permitting a district court to take judicial notice of facts found true by another court, actually allowing the district court to take ...