Carnes v. Parker

• Decision Date: 14 January 1991
• Docket Number: No. 89-7075,89-7075
• Citation: 922 F.2d 1506
• Parties: Jean CARNES, Plaintiff-Appellee, v. Ron PARKER, in his individual capacity, as Administrator of Choctaw Memorial Hospital, and as an agent and employee of Baptist Health Care Corporation; Baptist Health Care Corporation; Clay Pinson; and Walter Hufnagle, Defendants-Appellants, and A.L. Fountain; Alvin King; Noel Pence; Howard Turner, individually and in their official capacity as members of the Board of Trustees of the Choctaw County-City of Hugo Hospital Authority, their servants, agents, representatives, successors and assigns, Defendants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1506

922 F.2d 1506

6 Indiv.Empl.Rts.Cas. 179

Jean CARNES, Plaintiff-Appellee, v. Ron PARKER, in his individual capacity, as Administrator of

Choctaw Memorial Hospital, and as an agent and employee of

Baptist Health Care Corporation; Baptist Health Care

Corporation; Clay Pinson; and Walter Hufnagle, Defendants-Appellants,

and

A.L. Fountain; Alvin King; Noel Pence; Howard Turner,

individually and in their official capacity as members of

the Board of Trustees of the Choctaw County-City of Hugo

Hospital Authority, their servants, agents, representatives,

successors and assigns, Defendants.

No. 89-7075.

United States Court of Appeals, Tenth Circuit.

Jan. 14, 1991.

Frank H. McCarthy (Mike Barkley, with him on the briefs), Barkley, Rodolf, Silva, McCarthy & Rodolf, Tulsa, Okl., for defendants-appellants.

David L. Graven, Russell & Payne, Oklahoma City, Okl., for plaintiff-appellee.

Before MOORE, TACHA and BRORBY, Circuit Judges.

TACHA, Circuit Judge.

Defendants-appellants Ron Parker, Baptist Health Care Corporation (Baptist Health), Clay Pinson, and Walter Hufnagle appeal a jury verdict in favor of plaintiff-appellee Jean Carnes in an action she brought under 42 U.S.C. Sec. 1983. On appeal, the defendants argue the district court erred by: (1) overruling the defendants' motion for a directed verdict because Carnes does not have a property right in her continued employment under Oklahoma law, (2) overruling defendants Hufnagle and Pinson's motion for a directed verdict because there is no evidence of their involvement in the decision to terminate Carnes, and (3) refusing to instruct the jury not to award compensatory damages if Carnes would have been discharged had an adequate termination hearing been provided. The defendants also move to certify to the Oklahoma Supreme Court the question whether Oklahoma law recognizes a property interest in continued employment under the facts of this case. We exercise jurisdiction under 28 U.S.C. Sec. 1291, reverse the district court's denial of the defendants' motion for a directed verdict, and remand with instructions to the district court to enter a judgment consistent with this opinion. We dismiss as moot the motion for certification.

The Choctaw Memorial Hospital (Hospital) is a public county hospital. All Hospital employees are considered employees of Baptist Health. Baptist Health contracted with the Choctaw County/City of Hugo Hospital Authority (City/County Authority), a public trust established under Oklahoma law, to provide the Hospital with hospital management services. Carnes was employed as a "permanent" radiology technician by Baptist Health at the Hospital.

On March 11, 1986, Carnes had an argument with Marcia Rosenthal. Rosenthal was Carnes' immediate supervisor and director of the radiology department at the Hospital. Following the argument, Carnes left work despite Rosenthal's request for her to stay.

That evening Rosenthal contacted Carnes and suggested they meet to settle the dispute. Carnes refused to speak with her. The next day Carnes did not show up for two scheduled procedures in her department. She met with the administrator of the Hospital, Ron Parker, who is also Rosenthal's supervisor. Parker promised to try to settle the dispute. He discussed the conflict with Rosenthal. Rosenthal told Parker she did not feel comfortable working with Carnes and no longer trusted her to fulfill her job responsibilities. Based on this discussion, Parker terminated Carnes for insubordination and failure to appear for work on March 12 as her work schedule required.

After her termination, Carnes wrote a letter to the board of trustees and met with two board members, Walter Hufnagle and Clay Pinson. She later met with the entire board. Following the board meeting, Carnes discussed her dismissal with Parker and Rosenthal together. Rosenthal explained to Carnes she did not feel comfortable working with her and suggested Carnes take another position in the radiology department. Carnes refused.

Grievance and discipline procedures are governed by the personnel manual the Hospital provides its employees. According to this manual, insubordination is cause for immediate discharge. The manual further states that "[r]efusal to complete assigned schedule or walking off the job without approval of [an] immediate supervisor" may be punished by immediate discharge without warning after the first offense. An employee may also be discharged immediately for refusing to obey the orders of supervisory personnel, deliberately destroying or damaging hospital property, willfully falsifying an application for employment or other information requested by the hospital, and failing to report to work for two successive scheduled days without the approval of an immediate supervisor. The manual notes "[t]he Administration, Department Heads and supervisors may carry out disciplinary action towards an employee for just cause."

The Hospital's personnel manual also establishes a formal, post-termination grievance procedure that allows an employee to investigate and contest any problem or grievance. The manual describes the purpose of the grievance procedure as follows:

FAIR TREATMENT POLICY:

The intent of the Fair Treatment Policy is to provide a means by which employees may take seemingly unfair work-related problems to the attention of various levels of management needed to resolve such problems.

Your supervisor, Department Head, or the Administrator is available to discuss work-related problems with you, including any questions you may have regarding interpretation of hospital policy. Most situations may be clarified by talking with your immediate supervisor. However, in the event you deem it necessary, the following formal procedure is available to you if a problem or grievance arises. There will be no discrimination or reprisal against any employee, past or present, because he or she has utilized the Fair Treatment Policy.

The procedure outlined in the manual provides three or four levels of review of an employee grievance, depending on the supervisory hierarchy within a particular department:

I. FIRST STEP: Supervisor

In order to minimize the possibility of misunderstanding, it is necessary to have an informal discussion of your grievance with your immediate supervisor within five working days after its occurence. The supervisor will investigate and evaluate the grievance and advise you of his or her determination within three working days of the initial discussion.

II. SECOND STEP: Department Head

If your grievance is not resolved to your satisfaction by your supervisor, you may appeal the matter in writing to your Department Head within five working days of your supervisor's decision. The Department Head will render a decision within three working days after receiving the appeal stating the pertinent facts revealed by his investigation and the reasons for his conclusion.

III. THIRD STEP: Administration

If your department's chain of command includes the Assistant Administrator, proceed with Step III-A; otherwise, proceed with Step III-B. ¹

A. If your grievance is still not resolved to your satisfaction after your Department Head renders his conclusion, the matter may be appealed to the Assistant Administrator within five working days after the Department Head's decision. A meeting will be arranged with you, your supervisor and your Department Head within three days of receipt of the matter to review objectively the circumstances of the grievance. The Assistant Administrator will render a decision in writing within five working days after the meeting stating the pertinent facts revealed by his investigation and the resons [sic] for his conclusion.

B. If the grievance is not resolved to your satisfaction by Step III-A, the matter may be appealed in writing to the Administrator within five working days of the Assistant Administrator's decision. The Administrator will cause the matter to be thoroughly investigated by any persons he deems necessary. He will render his decision stating the pertinent facts revealed by his investigation, and the reasons for his conclusion.

In addition to this grievance procedure, the manual states "[i]f the employee feels that he is still unfairly treated, he may request a meeting of the Personnel Committee of the Board of Trustees."

The defendants contend Baker's termination of Carnes does not constitute state action as required by the Constitution and section 1983. We disagree. In deciding whether conduct of a private entity constitutes state action, we examine the structure of the entity and its relation to the government. Burton v. Wilmington Parking Auth., 365 U.S. 715, 722-23, 81 S.Ct. 856, 860-61, 6 L.Ed.2d 45 (1961). We held in Milo v. Cushing Mun. Hosp., 861 F.2d 1194 (10th Cir.1988), that conduct by a private entity that has contracted with a public trust to provide day-to-day hospital services for a public city hospital constitutes state action. Id. at 1195-97.

The relationship between the government and the private actor in the present case is indistinguishable from the relationship between the government and private actor in Milo. Here, Baptist Health--a private entity--has contracted with the County/City Authority--a public trust--to provide hospital management services for the Hospital--a public county hospital. Because the relationship between the government and Baptist Health is virtually identical to that in Milo, we hold the termination of Carnes by Parker in his capacity as a supervisory employee of Baptist Health constitutes state action.

Carnes contends the Hospital violated her constitutionally protected property interest in continued employment by terminating her without providing proper procedural safeguards. The procedural safeguards she claims were due and were not provided include: (1) a hearing before an impartial tribunal; (2) a meaningful opportunity to be heard in her own defense, to present evidence, and to...