Stone v. University of Maryland Medical System Corp.

• Decision Date: 19 August 1988
• Docket Number: No. 87-3651,87-3651
• Citation: 855 F.2d 167
• Parties: 48 Ed. Law Rep. 1046 H. Harlan STONE, M.D., Plaintiff-Appellant, Frederick K. Toy, M.D.; Walter Pegoli, M.D., Intervenors, v. UNIVERSITY OF MARYLAND MEDICAL SYSTEM CORPORATION; Mary Humphries; John Dennis; Edward Brandt, Jr.; Susan Gillette; Morton I. Rapoport, Defendants-Appellees, The Baltimore Sun Company, Intervenor.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 167

855 F.2d 167

48 Ed. Law Rep. 1046

H. Harlan STONE, M.D., Plaintiff-Appellant Frederick K. Toy, M.D.; Walter Pegoli, M.D., Intervenors, v. UNIVERSITY OF MARYLAND MEDICAL SYSTEM CORPORATION; Mary Humphries; John Dennis; Edward Brandt, Jr. Susan Gillette; Morton I. Rapoport Defendants-Appellees The Baltimore Sun Company, Intervenor.

No. 87-3651.

United States Court of Appeals, Fourth Circuit.

Argued April 4, 1988.

Decided Aug. 19, 1988.

Norman Roy Grutman (Jewel H. Bjork, Grutman, Miller, Greenspoon & Hendler, Henry P. Monaghan, New York City, John Philip Miller, Kaplan, Heyman, Greenberg, Engelman & Belgrad, P.A., Baltimore, Md., on brief), for plaintiff-appellant.

Diana G. Motz (Shale D. Stiller, Frank, Bernstein, Conaway & Goldman, on brief), Ralph S. Tyler, Asst. Atty. Gen. (J. Joseph Curran, Jr., Atty. Gen., Michael A. Anselmi, William F. Howard, Lawrence White, Asst. Attys. Gen., Baltimore, Md., on brief), for defendants-appellees.

Mary R. Craig (Doyle & Langhoff, Baltimore, Md., on brief), for intervenor.

M. King Hill, Jr. (John R. Penhallegon, Connie E. Williams, Smith, Somerville & Case, Baltimore, Md., on brief), for intervenors.

Before PHILLIPS, ERVIN, and WILKINSON, Circuit Judges.

JAMES DICKSON PHILLIPS, Circuit Judge:

This is a 42 U.S.C. Sec. 1983 action brought by Dr. H. Harlan Stone against his former employers, the University of Maryland School of Medicine and the University of Maryland Medical System Corporation, a private corporation which operates the University of Maryland Hospital, as well as various officials of both entities. Stone alleged that the defendants violated his due process rights by forcing him to resign from his employment without a hearing "under duress, threats, intimidation and coercion." The district court granted summary judgment for the defendants, and Stone appeals. Because we conclude that as a matter of law on the summary judgment record, Stone's resignation was voluntary, we affirm on the ground that the state did not "deprive" him of any protected interests in his employment within the meaning of the due process clause.

I

Stone was hired by the University of Maryland School of Medicine (the Medical School) in January 1983 as a tenured full professor of surgery. ¹ In May 1984 he accepted an additional appointment as Chief of the Division of General Surgery and member of the medical staff at the University of Maryland Hospital (the Hospital); in that capacity, he was responsible for the supervision of a number of surgery residents. Under the terms of his employment contract with the Medical School, Stone could be discharged only for cause, after written notice of the charges against him and an opportunity for a hearing before the University's Board of Regents, but the President of the University could order a temporary suspension pending action by the Board of Regents. Under the Hospital's Bylaws, the Medical Executive Committee ² was authorized to suspend Stone's clinical privileges whenever it determined that such action was "in the best interest of patient care in the Hospital." He could be permanently dismissed from the medical staff, however, only after written notice of the charges against him and an opportunity for a hearing before the Medical Executive Committee, with a right of appeal to higher authorities within the Hospital.

The events leading up to Stone's resignation began in April 1986, when the families of four patients who had died under Stone's care filed medical malpractice actions against him and several surgery residents working under his supervision. The malpractice actions contained allegations of gross recklessness and incompetence in surgical care; in addition, they accused Stone of failing to exercise adequate supervision over surgical residents and of encouraging them to falsify medical records in order to cover up errors in patient care. The malpractice actions received considerable publicity in the local media.

The Hospital referred the malpractice cases, together with several other incidents involving patients under Stone's care, to its in-house Peer Review Committee (PRC). The PRC spent approximately one month reviewing the medical charts and records of the specific patients concerned. It concluded that while there was no evidence of actual incompetence or deliberate falsification of patient records in the cases investigated, there were "significant deficiencies" in Stone's supervision of residents and his maintenance of patient records. JA 122-23; 130.

Alarmed by these findings, Hospital officials decided to appoint a committee of outside medical experts to investigate the situation in the Department of Surgery. The three-member External Review Committee (ERC) was made up of respected physicians from the medical schools at Harvard, the University of Chicago, and the University of Texas. It was instructed not to focus on the individual malpractice cases, but instead to conduct a broad review of the quality of clinical care throughout the Department of Surgery.

On June 10, 1986, the ERC delivered an oral report to the Chancellor of the University, the Dean of the Medical School, the President of the Hospital, and several other officials of the medical staff. According to the uncontradicted testimony of those who were present at the meeting, the ERC was quite critical of Stone's supervision of surgery residents, noting that he sometimes left them "virtually unsupervised," that he did not permit them to question his orders, and that he followed a practice of "two-tiered" medical care in which patients who could afford to pay for medical care received higher quality treatment than those who could not. The experts emphasized that this two-tiered system was indefensible both legally and morally. Finally, and perhaps most importantly, the ERC concluded that Stone had made a series of "self-serving misrepresentations" to the ERC and to his superiors at the Hospital in order to cover up irregularities in the treatment of Theodore Kozowyj, one of the patients who had died under his care. ³ J.A. 29; 33; 39-41.

Stone's superiors were stunned by the revelation that a professor of surgery and Chief of the Division of General Surgery had misled both the ERC and the Hospital's own Medical Review Committee about the circumstances leading up to the death of a patient under his care. They determined that they could not, under the circumstances, allow Stone to remain on the Hospital's medical staff. Accordingly, on the morning of June 13, 1986, the Dean of the Medical School summoned Stone to his office, advised him of the nature of the ERC's allegations, and suggested that it would be best for both Stone and the University if he resigned immediately. Stone refused to do so, saying he needed time to think and to consult his attorney.

Several hours later, the Dean called Stone to ask if he had reached a decision. When Stone said he had not, the Dean ordered him to report to the Chancellor's office, where he was confronted by the Dean, the Chancellor, and the President of the Hospital, together with counsel for both the University and the Hospital. Stone did not bring an attorney with him; he claims he had tried to locate one since speaking to the Dean that morning, but had been unable to do so because of a lawyer's convention. What happened at this meeting is subject to some dispute. Stone's superiors have asserted that they told Stone that the ERC's charges against him were so serious that unless he resigned from the Hospital's medical staff immediately, they would have to ask the Medical Executive Committee, which was scheduled to meet later that afternoon, to institute proceedings for his dismissal from the staff and to suspend his clinical privileges pending the outcome of those proceedings. J.A. 29; 398-99. Stone has characterized the choice put to him a bit differently: he has asserted that he was told that if he did not resign immediately from the medical staff, the Medical Executive Committee would permanently "expel" him from it at its meeting that afternoon. In any event, it is clear that Stone's choice was not a pleasant one; revocation of clinical privileges, even temporarily, can have a devastating effect on a physician's professional reputation, make it difficult to obtain malpractice insurance, and severely jeopardize his prospects for future employment.

Stone asked for time to call his attorney and was permitted to leave the room to do so. He was gone approximately one half hour, during which his superiors assumed he was consulting his attorney. According to Stone, he spoke not with an attorney but with a long-time friend and fellow surgeon, who advised him to resign rather than face the possibility of expulsion from the medical staff, which he characterized as "professional suicide." Stone says the friend advised him to try to obtain assurances that his resignation would go on record as having been completely voluntary and that he would continue to receive his salary until he obtained other employment.

Stone returned to the Chancellor's office and told his superiors that he would resign immediately from his positions at both the Hospital and the Medical School on the following conditions: (1) that his resignations from both institutions would be "without prejudice"--that is, that they would not constitute an admission of any wrongdoing; (2) that his resignation from the Medical School would be delayed until July 1, 1987, unless he found other employment before that date; and (3) that he would continue to receive his Medical School salary until the effective date of his resignation from that institution. He did not ask for a hearing on the charges against him. Stone's superiors agreed to his terms and directed their attorneys to draw up appropriate letters of resignation. Stone read the letters carefully, demanded several changes, and then signed the revised versions. The President of the Hospital and the...