Avallone v. Wilmington Medical Center, Inc.

• Decision Date: 30 December 1982
• Docket Number: Civ. A. No. 80-459.
• Citation: 553 F. Supp. 931
• Parties: Nancy AVALLONE, Plaintiff, v. WILMINGTON MEDICAL CENTER, INC., Defendant.
• Court: U.S. District Court — District of Delaware

553 F. Supp. 931

Nancy AVALLONE, Plaintiff, v. WILMINGTON MEDICAL CENTER, INC., Defendant.

Civ. A. No. 80-459.

United States District Court, D. Delaware.

December 30, 1982.

William Thurston Barrett, Dover, Del., and Michael K. Simon, Philadelphia, Pa., of counsel, for plaintiff.

William J. Wade of Richards, Layton & Finger, Wilmington, Del., and Allen J. Gross and Michael J. Ossip of Morgan, Lewis & Bockius, Philadelphia, Pa., of counsel, for defendant.

MEMORANDUM OPINION

LATCHUM, Chief Judge.

Plaintiff, Nancy Avallone, originally filed this action against the Wilmington Medical Center, Inc. ("WMC"), her former employer, in the Superior Court of the State of Delaware in and for New Castle County on August 28, 1980. (Docket Item "D.I." 1.) The defendant thereafter removed that action to this Court on September 23, 1980, pursuant to 28 U.S.C. § 1441(b) because Counts VII and VIII were founded on alleged claims arising under the United States Constitution, namely a denial of plaintiff's rights under the First, Fifth and Fourteenth Amendments to the United States Constitution. (D.I. 1, ¶¶ 28 & 29.) The other counts of the complaint asserted six pendent state claims as follows: Count I — breach of contract; Count II — wrongful retaliatory discharge in violation of public policy;¹ Count III — libel and slander; Count IV — defamation; Count V — intentional and/or negligent infliction of severe emotional distress; and Count VI — invasion of privacy. (D.I. 1.)

The defendant has moved to dismiss, pursuant to F.R.Civ.P. 41(b) and Local Rule 5.2, for failure to prosecute,² or in the alternative, for summary judgment under F.R. Civ.P. 56 on all remaining counts. (D.I. 39.)

I. Plaintiff's Contentions.

The plaintiff was employed as a Registered Nurse by WMC from 1967 until 1971 when she was promoted to Head Nurse. (D.I. 9, ¶ 1.) She continued to work in that capacity until she resigned by letters dated July 11 and 20, 1978 (D.I. 9, ¶ 4, Ex. 3 & 4). According to plaintiff, WMC in the spring of 1978 instructed its employees, including the plaintiff, to use a new method of feeding patients called "drip tube feeding," which partially replaced the "syringe" method already in use. Plaintiff claimed that the new method required more time and greater supervision than the older method and she so warned the WMC of these drawbacks and the inherent dangers involved with drip feeding (D.I. 1, ¶¶ 10-17). Plaintiff contends that, as a reaction to her warnings, WMC through other of its employees, advised plaintiff to stop "making waves" and was given "a false negative job performance evaluation which suggested that plaintiff did not follow hospital policy and was an ineffective administrator." (Id. ¶ 18.) Plaintiff further alleges that the performance evaluation and its contents were disseminated by WMC to other unknown parties. (Id.). In addition, she contends that two of WMC's employees "threatened plaintiff with disciplinary action if she contested the negative `evaluation' and if she failed to `resign' from her head nurse position" (id., ¶ 19), and that she was in fact forced to resign, effective August 30, 1978. (Id. ¶ 20.)

II. Counts VII and VIII — Constitutional Claims.

As previously noted the complaint contains two counts alleging constitutional violations. In Count VII, plaintiff contends that WMC forced her resignation, solely in retaliation for her speech advising her superiors of the dangerous use of drip-tube feeding, in violation of her rights of freedom of speech guaranteed by the First and Fourteenth Amendments. (D.I. 1, ¶ 28.) In Count VIII, plaintiff alleges that by singling her out for dismissal and by dismissing her arbitrarily without a hearing, WMC denied her equal protection of law and due process of law in violation of the Fourteenth Amendment. (Id. ¶ 29.)³ WMC seeks summary judgment on these two counts on the ground that WMC is a private, non-profit corporation whose conduct is not within the reach of the Fourteenth Amendment.

Without question the Fourteenth Amendment applies only to actions that may fairly be said to be those of the "States" and not to actions of private individuals or entities. Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974); Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Shelley v. Kraemer, 334 U.S. 1, 13, 68 S.Ct. 836, 842, 92 L.Ed. 1161 (1948); Civil Rights Cases, 109 U.S. 3, 3 S.Ct. 18, 27 L.Ed. 835 (1883).

Thus, it is necessary to carefully examine the undisputed facts to determine whether the WMC's alleged negative evaluation and constructive discharge of plaintiff can be said to have been state actions. The undisputed facts show that WMC has never received any financial assistance from local, state or federal governments. (D.I. 41, ¶ 2.) Although WMC is reimbursed for cost of care provided to patients eligible for medicare and medicaid programs, WMC does not receive any other kinds of government funds, including construction funds under the Hill-Burton Act, 42 U.S.C. § 291 et seq. (Id. ¶¶ 3, 4 & 5.)

The receipt of medicare and medicaid funds is insufficient to convert WMC's private actions into conduct actionable under the Fourteenth Amendment. See Blum v. Yaretsky, ___ U.S. ___, 102 S.Ct. 2777, 73 L.Ed.2d 534 (1982). In Blum, the Court held that a private nursing home's conduct was not state action despite the home's dependence upon funding by the State of New York. Similarly, in a companion case, Rendell-Baker v. Kohn, ___ U.S. ___, 102 S.Ct. 2764, 73 L.Ed.2d 418 (1982), the Supreme Court rejected the argument that the conduct of a private school which derived virtually all of its income from state funding was state action. The receipt of state funds, according to the Supreme Court, did not make the acts of the private nursing home or private school acts of the States.

The school, like the nursing homes, is not fundamentally different from any private corporations whose business depends primarily on contracts to build roads, bridges, dams, ships, or submarines for the government. Acts of such private contractors do not become acts of the government by reason of their significant or even total engagement in performing public contracts.

___ U.S. at ___, 102 S.Ct. at 2770. Thus, WMC's receipt of medicare and medicaid funds does not render its conduct state action.

Furthermore, the fact that WMC is licensed by the State and is subject to state health regulations is likewise insufficient as a matter of law to render WMC's conduct towards plaintiff's state action. In Blum, supra, the Supreme Court held that:

"the mere fact that a business is subject to state regulation does not by itself convert its action to that of the State for purposes of the Fourteenth Amendment." ... The complaining party must also show that "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." ... The purpose of this requirement is to show that constitutional standards are invoked only when it can be said that the State is responsible for the specific conduct of which the plaintiff complains ....

___ U.S. at ___, 102 S.Ct. at 2785 (emphasis in original) (quoting Jackson v. Metropolitan Edison Co., 419 U.S. 345, 350, 351, 95 S.Ct. 449, 433, 42 L.Ed.2d 477 (1974)). The Court went on to hold that "a State can normally be held responsible for a private decision only when it has exercised coercive power or has provided such significant encouragement, either overt or covert, that the choice must in law be deemed to be that of the State." Id.

The undisputed facts before the Court indicate that the State played no part in WMC's conduct of which plaintiff complains. The operations of WMC are directed by a Board of Directors, none of whom are appointed or chosen by a governmental official or body. (D.I. 41, ¶ 6.)⁴

Moreover, other than general business and health regulations applicable to all employers, there is no showing of state involvement in the promulgation or administration of WMC's personnel policies, including those challenged by plaintiff here. (D.I. 40, ¶¶ 3 & 4.) Under this factual showing, it is clear that the State was not responsible in any way for WMC's private decisions with respect to plaintiff's employment. There is no evidence that the State inspired or encouraged, either overtly or covertly, WMC's specific conduct of which plaintiff complains.

In addition, plaintiff's contention that WMC performs a public function is erroneous as a matter of law. As the Court stated in Blum, supra, "we are also unable to conclude that the nursing homes perform a function that has been `traditionally the exclusive prerogative of the State.'" ___ U.S. at ___, 102 S.Ct. at 2790. The Supreme Court went on to note that the decisions made in the day-to-day administration of a nursing home are not "the kind of decisions traditionally and exclusively made by the sovereign for and on behalf of the public. Indeed, respondents make no such claim, nor could they." Id. Thus, plaintiff's assertion that WMC's conduct is state action is contrary to both the facts and the controlling precedent.

In fact, on several occasions, this Court has previously recognized WMC's status as a private nonprofit hospital. In Antinoro v. Wilmington Medical Center, Inc., Civil Action No. 74-162 (D.Del.1975) (D.I. 42, Ex.), Judge Stapleton rejected an effort by the plaintiff, a former nurse at WMC, to convert WMC's conduct into state action.⁵ In a thorough decision, the Court held that WMC's receipt of government funds, its tax exempt status, the fact that WMC is licensed by the State and subject to regulation therewith, and the fact that WMC treated, at that time, approximately 85% of all people in New Castle County were insufficient to cause WMC's actions to rise to the level of state action. The Court stated:

It would render the

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