Wolf v. Richmond County Hosp. Authority

• Decision Date: 04 October 1984
• Docket Number: No. 84-1024,84-1024
• Citation: 745 F.2d 904
• Parties: Alan W. WOLF and Gail S. Wolf, Appellees, v. RICHMOND COUNTY HOSPITAL AUTHORITY, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 904

745 F.2d 904

53 USLW 2211

Alan W. WOLF and Gail S. Wolf, Appellees, v. RICHMOND COUNTY HOSPITAL AUTHORITY, Appellant.

No. 84-1024.

United States Court of Appeals Fourth Circuit.

Argued Aug. 9, 1984.

Decided Oct. 4, 1984.

Wyck A. Knox, Jr., Augusta, Ga. (Ted H. Clarkson, Knox & Zacks, P.C.; Augusta, Ga., David A. Brown, Henderson, Salley, Lynn, Farmer, Brown & Tucker, Aiken, S.C., on brief), for appellant.

Daryl G. Hawkins, Columbia, S.C. (A. Camden Lewis, Austin & Lewis, Columbia, S.C., on brief), for appellees.

Before RUSSELL, HALL and CHAPMAN, Circuit Judges.

CHAPMAN, Circuit Judge:

The issue in this appeal is whether a Georgia hospital's contacts with the State of South Carolina are sufficient to constitute "doing business" for purposes of obtaining personal jurisdiction under the South Carolina long-arm statute. We find that the hospital's contacts are not purposeful, systematic or significant enough to warrant the exercise of jurisdiction in light of due process guarantees and this court's standard that the contacts with the forum state be "fairly extensive" when the cause of action arises outside that state. We, therefore, reverse the decision of the district court and grant defendant's motion to dismiss.

I

This is a diversity jurisdiction case in which Alan and Gail Wolf allege that their infant son was injured as a result of actions taken by agents of University Hospital, a public hospital located in the City of Augusta and in Richmond County, Georgia. The hospital is owned and operated by the defendant, Richmond County Hospital Authority (Hospital Authority), a public authority created under the Georgia Hospital Authorities Law. The Hospital Authority originally instituted suit in the Civil Court of Richmond County against the Wolfs for nonpayment of a bill incurred at University Hospital. The Wolfs answered and counterclaimed with allegations of medical malpractice. Georgia residents at the time of the alleged malpractice and at the time of the commencement and answer to the suit in the county civil court, the Wolfs moved to Aiken County, South Carolina before filing the present action. Aiken County and Richmond County are separated by the Savannah River, the boundary between South Carolina and Georgia. The defendant moved to dismiss this action pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. Three affidavits were submitted to the district court, two from officials of the South Carolina Department of Health and Environmental Control (DHEC) and one from the Executive Director of the Richmond County Hospital Authority. Based on these affidavits and on facts stated at a hearing, the district court denied the motion to dismiss. The court made the following seven findings of fact:

1. The South Carolina Department of Health and Environmental Control (DHEC) has authorized Augusta Hospital to receive payment from the State of South Carolina for residents of Aiken County, South Carolina, seeking certain maternity and neonatal services at University Hospital.

2. University Hospital received payments from Aiken County Council as reimbursement for treatment of residents of Aiken County who are indigent.

3. Although Richmond County Hospital Authority has no hospital or medical facility located in South Carolina, the University Hospital does receive medicaid/medicare reimbursements for qualified South Carolina residents treated at University Hospital.

4. University Hospital is listed in the yellow pages of the telephone directory for North Augusta, South Carolina, a city located in Aiken County, South Carolina.

5. University Hospital is under contract to provide laundry services to the Edgefield County Hospital in South Carolina.

6. University Hospital derives a substantial amount of revenue from treatment of South Carolina residents; defendant admitted in oral argument that approximately one-fifth ( 1/5) of University Hospital's income is obtained from South Carolina residents.

7. University Hospital is a member of the East Central Georgia Health Services Agency, Inc. This agency was created to coordinate health care needs in its district, which district includes Aiken County, South Carolina. This is the only such district in South Carolina that crosses state lines. While this agency does not directly have jurisdiction over patient admission, the effect of University Hospital's membership in the agency is to require South Carolina residents in Aiken County as a practical matter to receive secondary and tertiary ¹ level care from University Hospital. This is because the agency has jurisdiction over capital expenditures and construction, as well as issuing certificates of need. The purpose of the agency is to avoid duplication of expensive facilities. Since University Hospital is well equipped with such advanced medical facilities and Aiken County Hospital is also within the Agency's district, Aiken Community Hospital does not receive the advanced equipment. The Agency's efforts to avoid duplication therefore require Aiken County residents to seek secondary and tertiary level care from the University Hospital in Augusta, Georgia, since it is the closest and most convenient facility of its kind.

II

The Hospital Authority makes two arguments. First, it contends that the district court's finding of fact that South Carolina residents in Aiken County are "required" to seek health care from University Hospital is clearly erroneous. Second, defendant argues that, on the basis of the district court's first six findings of fact and other facts in the record, plaintiffs have not established "fairly extensive" contacts of University Hospital with the State of South Carolina required for the exercise of personal jurisdiction.

The Hospital Authority contends that there is no evidence in the record to support the district court's finding of fact number seven. In this finding the court considered the relationship of the East Central Georgia Health Services Agency, Inc. to the provision of health care in the Richmond County, Georgia and Aiken County, South Carolina area and concluded that "the effect of University Hospital's membership in the [health services] agency is to require South Carolina residents in Aiken County as a practical matter to receive secondary and tertiary level care from University Hospital." In its final finding of fact the court also stated that "[t]he Agency's efforts to avoid duplication therefore require Aiken County residents to seek secondary and tertiary level care from the University Hospital in Augusta, Georgia, since it is the closest and most convenient facility of its kind." Plaintiffs argue that this finding is supported by one of the affidavits and by a factual allegation in their complaint which, they contend, must be accepted as true for purposes of a motion to dismiss.

Examining first the affidavits presented to the district court, we find that defendant submitted an affidavit in which the affiant specifically stated that "South Carolina residents are under no compulsion or requirement to seek secondary and tertiary level care from University Hospital." ² This affidavit also provided that "University Hospital has no obligation to admit a patient who is a resident of South Carolina."

While conceding that Aiken County residents are under no "compulsion" to seek health care from University Hospital, plaintiff argues that finding of fact number seven is supported by paragraph four of an affidavit prepared by the director of DHEC's Division of Certification of Need of the Bureau of Health Facilities and Services Development. This paragraph provides:

Aiken County is included within the East Central Georgia Health Service Area which is the only HSA that crosses state lines in South Carolina. Under the Certificate of Need program, the review and approval of capital expenditures and expansion of hospital services for the sole hospital located in Aiken County, the Aiken Community Hospital, would take into consideration facilities and services available at Augusta hospitals, including University Hospital, and the utilization of such services by Aiken County residents. Any unnecessary duplications would be avoided. Likewise, approval for the development and expansion of services in Augusta hospitals would be based in part upon the utilization of those hospitals by Aiken County residents.

In analyzing the affidavits, we do not find that Aiken County residents are "required" to seek care in Georgia. The affidavits suggest that certain medical facilities are available at University Hospital that are not available at the hospital located in Aiken County and that the purpose of the health systems agency is to avoid duplication of facilities and services in an area. This planning function, however, does not extend to controlling patient admissions or assigning a certain person to a certain hospital. Plaintiff seeks to support the district court's conclusion that "as a practical matter" Aiken County residents are "required" to seek care at University Hospital by pointing out that the hospital is a thirty-minute drive from Aiken whereas the other two cities in South Carolina with equivalent facilities are over an hour or two and one-half hours away from Aiken. This fact, however, does not establish that Aiken residents are "required" to seek care at the hospital. People and their physicians choose hospitals for a variety of reasons. Proximity is merely one of those reasons. We find that use of the term "require," which has the connotation of certain persons being compelled to go to certain hospitals, is not supported by the affidavits.

Plaintiffs also argue that the finding is supported by their complaint in which they allege that the citizens of North Augusta and Aiken, South Carolina are "forced to rely upon the University Hospital to provide them secondary and tertiary level care" by the operation of the East Central Georgia Health...