Schlein v. Milford Hospital, Inc.

• Decision Date: 25 August 1977
• Docket Number: 1410,D,Nos. 1263,s. 1263
• Citation: 561 F.2d 427
• Parties: Allen P. SCHLEIN, M.D., Plaintiff-Appellant, v. The MILFORD HOSPITAL, INC., Defendant-Appellee. ockets 77-7021 and 77-7051.
• Court: U.S. Court of Appeals — Second Circuit

Page 427

561 F.2d 427

Allen P. SCHLEIN, M.D., Plaintiff-Appellant, v. The MILFORD HOSPITAL, INC., Defendant-Appellee.

Nos. 1263, 1410, Dockets 77-7021 and 77-7051.

United States Court of Appeals,

Second Circuit.

Argued June 1, 1977.

Decided Aug. 25, 1977.

William K. Bennett, Milford, Conn. (Bennett, Kapusta & Coughlin, John J. Coughlin, Milford, Conn., of counsel), for plaintiff-appellant.

Stephen E. Ronai (Gitlitz, Ronai & Berchem, Marsha B. Moses, Milford, Conn., of counsel) and Wiggin & Dana, New Haven, Conn., Jeremy G. Zimmerman, New Haven, Conn., of counsel, for defendant-appellee.

Before KAUFMAN, Chief Judge, MANSFIELD and ANDERSON, Circuit Judges.

PER CURIAM:

Dr. Allen P. Schlein brought this action in the District of Connecticut under 42 U.S.C. § 1983, claiming that defendant, The Milford Hospital, Inc., ("Hospital"), had rejected his application for staff privileges arbitrarily and capriciously, failing to provide him with procedural due process guaranteed by the Fourteenth Amendment. Judge Newman found sufficient state action to satisfy the jurisdictional requirements of § 1983, 383 F.Supp. 1263, but granted summary judgment in favor of the Hospital, holding that it had not acted arbitrarily but had provided Dr. Schlein with adequate procedural safeguards, 423 F.Supp. 541. We affirm the district court's dismissal of the complaint, but on the ground that the court lacked jurisdiction over the subject matter for the reason that the Hospital's denial of staff privileges did not amount to "state action" within the meaning of 42 U.S.C. § 1983 and its jurisdictional counterpart, 28 U.S.C. § 1343.

Dr. Schlein is an orthopedic physician licensed to practice medicine by the State of Connecticut. He holds staff privileges at three Bridgeport hospitals and has offices in Bridgeport and Milford. On June 7, 1973, he applied for staff privileges at defendant Hospital. His application was considered by the Hospital's Credentials and Executive Committees and by its full Medical Staff, and was denied on December 7, 1973. Ad Hoc and Appellate Review pursuant to the by-laws of the Hospital did not change the decision. Schlein commenced this action on July 5, 1974, seeking injunctive and monetary relief.

In support of his claim of federal jurisdiction under 28 U.S.C. § 1343, ¹ which requires a finding of "state action," plaintiff established that the Hospital is the only short-term state-licensed hospital in Milford, Connecticut, which is seven miles from Bridgeport and New Haven. It is a private, non-profit corporation regulated by the State of Connecticut Department of Health. ² It is managed by a Board of Directors of 23 private citizens, including the current Mayor of Milford, is tax exempt under federal and local laws, and has been empowered by Connecticut to annex contiguous land for expansion. ³ It has received $646,000 in federal Hill-Burton ⁴ funds to finance new construction.

While these facts show some state involvement in the activities of the Hospital, the existence of "state action" depends on "whether there is a sufficiently close nexus between the State and the challenged action of the regulated entity so that the action of the latter may be fairly treated as that of the State itself." Jackson v. Metropolitan Edison Co., 419 U.S. 345, 351, 95 S.Ct. 449, 453, 42 L.Ed.2d 477 (1974). As we said in Powe v. Miles, 407 F.2d 73, 81 (2d Cir. 1968), "the state must be involved not simply with some activity of the institution alleged to have inflicted injury upon a plaintiff but with the activity that caused the injury."

"The mere fact that (the State) regulates the facilities and standards of care of private hospitals does not per se make the acts of the hospital in discharging (here rejecting) physicians the acts of the state. 'Such a blanket rule . . . would overlook the essential point that . . . the state action, not the private action, must be the subject of the complaint." Barrett v. United Hospital, 376 F.Supp. 791, 803 (S.D.N.Y.) aff'd mem., 506 F.2d 1395 (2d Cir. 1974), quoting Mulvihill v. Butterfield Memorial Hospital, 329 F.Supp. 1020 (S.D.N.Y.1971).

In Barrett, we affirmed the district court's holding that a private New York hospital, regulated and granted by the State substantially the same rights and authority as the hospital in the present case, could not be sued under § 1983 when it refused to grant staff privileges to a state-licensed physician. In accord, Ward v. St. Anthony Hospital, 476 F.2d 671 (10th Cir. 1973); Slavacoff v. Harrisburg Polyclinic Hospital, 375 F.Supp. 999 (M.D.Pa.1974). ⁵

The principles approved by us in Barrett apply with equal force here. The State of Connecticut has not been shown to have played any part in the formulation or implementation of the procedures and standards utilized by the Medical Staff and Board of Directors of the Hospital in reaching their decision to reject Dr. Schlein's application for staff privileges. Nor has the State played any role in the making of the decision itself. The by-laws of the Hospital provide that the Medical Staff will be appointed by the Board of Directors upon the recommendation of the existing Medical Staff, which is required to abide by the Hospital by-laws, rules, and regulations, modeled after those of the Joint Commission on Accreditation of Hospitals of the American Hospital Association.

Although the State licenses both private hospitals and physicians, it has not required all licensed hospitals to adopt any particular standards or procedures for the granting of staff privileges. Nor do state officials contribute material facts or information to the decisionmaking process or play any other role in the decision. In short, the State "has not put its own weight on the side of" the procedures or standards complained of by Dr. Schlein. Jackson, supra, 419 U.S. at 357, 95 S.Ct. at 456. We therefore conclude that there is no nexus between the particular activities challenged by the plaintiff and the State's involvement with the Hospital.

Although the activities of the Hospital are clearly "affected with a public interest," the functions performed by it have not been "traditionally associated with sovereignty," Jackson, supra, 419 U.S. at 353, 95 S.Ct. 449, and have long been relegated to the private domain, rather than treated as "traditionally the exclusive prerogative of the State" Id. Thus, its activities are not "so clearly governmental in nature" as to amount to a "public function." Barrett v. United Hospital, supra; Powe v. Mills, supra; Grafton v. Brooklyn Law School, 478 F.2d 1137 (2d Cir. 1974).

Even assuming, as the district court did, that the Hospital occupies a...