Ward v. St. Anthony Hospital, 72-1611.

Citation476 F.2d 671
Decision Date04 April 1973
Docket NumberNo. 72-1611.,72-1611.
PartiesGene A. WARD, M. D., Plaintiff-Appellant, v. ST. ANTHONY HOSPITAL et al., Defendants-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)

Robert Temmer, Denver, Colo. (Charles F. Brega and Samuel J. Smith, Denver, Colo., on the brief), for plaintiff-appellant.

Richard T. Spriggs, Denver, Colo., for defendants-appellees.

Before HILL and HOLLOWAY, Circuit Judges, and TEMPLAR, District Judge.

HILL, Circuit Judge.

This is an appeal by plaintiff-appellant Ward from a decision in the District of Colorado dismissing his action against St. Anthony Hospital, a nonprofit hospital, and others for lack of jurisdiction.

Dr. Ward is a licensed physician who practiced medicine in Wheat Ridge, Colorado, until shortly after the institution of this action. In connection with his Wheat Ridge practice, Dr. Ward was a member of the medical staff of St. Anthony Hospital until May 10, 1971. On that date appellee Hospital, acting by and through its medical executive board and board of trustees, suspended Dr. Ward from its hospital staff.

Dr. Ward avers that his dismissal is unwarranted, arbitrary and in violation of the Hospital's "Constitution, By-Laws, Rules and Regulations." In particular, Dr. Ward declares that the Hospital failed to follow proper administrative procedures before ordering his suspension, in that the Hospital failed to advise him of the proposed suspension of staff privileges; failed to advise him of the reasons for the proposed action; failed to allow him to appear before either the Credentials or Executive Board; and failed to give him the opportunity to appeal his case to the Board of Trustees prior to suspension. These actions were all in violation of Article II, Section G, paragraph 3 of the Hospital's "Constitution, By-Laws, Rules and Regulations":

3. Change of status of a staff member from a classification of greater privilege and responsibility to one of lesser, or vice versa, may be initiated by any service or by the Executive Board itself. In all such cases the member himself shall be informed by the Secretary of the proposed action, and shall be acquainted with the reasons therefor. Each such member shall have ample opportunity to present his views on the proposed Change of Status to the Credentials Committee and/or the Executive Committee. In event of a disagreement between the member and the Executive Board, the member shall have the right to appeal to the Board of Trustees.

Realizing his first obstacle was to surmount the jurisdictional hurdle, Dr. Ward advanced several arguments supporting his right to sue in federal district court. He first asserted that receipt of Hill-Burton, Medicare and Medicaid funds by St. Anthony Hospital constituted sufficient state action to vest the federal district court with jurisdiction under the Civil Rights Act of 1871, 42 U.S.C. § 1983,1 and 28 U.S.C. § 1343(3).2 His second major allegation was that a conspiracy had been committed for the purpose of denying Dr. Ward his hospital staff privileges in violation of 42 U.S.C. § 19853 and 28 U.S.C. § 1343(1).4 The district court rejected these arguments and found that any federal funds given St. Anthony Hospital were insufficient to color the Hospital with state action under the United States Constitution or federal statutes. The lower court further held that § 1985 does not apply since there was no conspiracy to obstruct the due course of justice as prohibited by that section.

As the Supreme Court long ago held, invasion of civil rights by an individual is not the subject matter of the Fourteenth Amendment. Nor does the Equal Protection Clause prohibit violations of individual rights unless to some significant extent the state is found to have become involved in the violations. The Civil Rights Cases, 109 U.S. 3, 3 S. Ct. 18, 27 L.Ed. 835 (1883). Dr. Ward therefore must show state involvement in the Hospital's suspension of his staff privileges before federal law will apply. To overcome this hurdle, he alleges that federal funds received under Hill-Burton,5 Medicare, Medicaid, and Colorado-Wyoming Regional Medical programs color the hospital with enough state authority to constitute his dismissal as "state action." It is Dr. Ward's position that all state and federal aid given the Hospital carried with it stringent regulations; that by accepting these governmental funds with the attendant regulations the hospital was transformed into an arm of the state; and that the Hospital members and directors were agents of the state, therefore their dismissal of Dr. Ward was the state's dismissal of him.

Appellant's most persuasive argument is that acceptance of Hill-Burton funds causes the Hospital to act under color of state law. In 1964, the Hospital received two Hill-Burton grants totaling approximately $588,000. Acceptance of the funds, Dr. Ward argues, places the Hospital within the jurisdiction of 42 U.S.C. § 1983. Any other construction would allow states to deprive individuals of their civil rights by funneling funds through private institutions. Holmes v. Silver Cross Hospital, 340 F.Supp. 125 (N.D.Ill.1972). In support of this position, Dr. Ward relies on Simkins v. Moses H. Cone Memorial Hospital, 323 F.2d 959 (4th Cir. 1963), cert. denied, 376 U. S. 938, 84 S.Ct. 793, 11 L.Ed.2d 659 (1964). In that case the court found defendant hospital's participation in the Hill-Burton program sufficient to invoke federal jurisdiction. The court demanded the hospital to end racial discrimination in determining who might use the facilities.

Plaintiff's argument boils down to the fact that states must maintain a fair and just governance of hospitals accepting Hill-Burton funds. Sams v. Ohio Valley General Hospital Ass'n, 413 F.2d 826 (4th Cir. 1969); Citta v. Delaware Valley Hospital, 313 F.Supp. 301 (E.D. Pa.1970). It necessarily follows, appellant argues, that once a private hospital accepts these state funds its representatives are clothed with a mantle of state law. Bricker v. Sceva Speare Memorial Hospital, 339 F.Supp. 234 (D.N.H.1972).

As our court emphasized in Don v. Okmulgee Memorial Hospital, 443 F.2d 234, 235 (10th Cir. 1971), "While receipt of funds under the Hill-Burton Act may be significant in determining the existence of state action in acts alleged to have violated a person's constitutional rights, the Act itself creates no personal rights or causes of action as such, nor does it confer jurisdiction on federal courts of controversies involving civil or other personal rights." Stated another way, Dr. Ward cannot obtain jurisdiction merely by invoking the Hill-Burton Act; he must show that funds granted under the Act clothe the Hospital with sufficient state authority to constitute state action. From the cases Dr. Ward cites above, it is clear that determining what is state action is no easy matter. "Only by sifting and weighing circumstances can the non obvious involvement of the State in private conduct be attributed its true significance." Burton v. Wilmington Parking Authority, 365 U.S. 715, 722, 81 S.Ct. 856, 860, 6 L.Ed.2d 45 (1961).

Dr. Ward urges us to hold that private institutions receiving state or federal aid are acting under color of state law. Citta v. Delaware Valley Hospital, supra. There may be a point in the amount of governmental aid given private hospitals which renders the acts of its board members the acts of the state. We do not attempt to decide that question here. But in any event, we do not feel in the present case the Hospital has received governmental funding sufficient to invoke § 1983 jurisdiction. The Hospital was given approximately $588,000 in Hill-Burton funds between the years 1958 and 1971. During the same period total construction costs were approximately $11,500,000. The percentage of Hill-Burton funds to total construction cost was approximately five percent. Such a small percentage of the total costs is not sufficient to invoke federal jurisdiction. Otherwise, in our time of increasing federal aid to private institutions and businesses, the private sector would find itself constantly charged with state action in the performance of functions normally considered as private. Grossner v. Trustees of Columbia University, 287 F.Supp. 535 (S.D.N.Y.1968).

There is little doubt that under the Hill-Burton Act and state law, hospitals in Colorado are subject to intricate state regulation. This alone, however, is not sufficient to invoke federal jurisdiction. State action does not arise merely because private hospitals receive governmental aid; more is required than that. Our court previously held that the state must be involved in the activity causing the alleged injury before federal jurisdiction can be invoked. That is, the claimed involvement must be associated with the challenged activity. Browns v. Mitchell, 409 F.2d 593 (10th Cir. 1969). The fact that Colorado regulates "facilities and standards of care of private hospitals or offers them financial support does not make the acts of these hospitals in discharging physicians the acts of ...

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