Davis v. West Community Hosp.

• Decision Date: 07 April 1986
• Docket Number: No. 84-5008,84-5008
• Citation: 786 F.2d 677
• Parties: 40 Fair Empl.Prac.Cas. 800, 39 Empl. Prac. Dec. P 36,002 Dr. Emsley A. DAVIS, Plaintiff-Appellant, v. WEST COMMUNITY HOSPITAL, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 677

786 F.2d 677

40 Fair Empl.Prac.Cas. 800,

39 Empl. Prac. Dec. P 36,002

Dr. Emsley A. DAVIS, Plaintiff-Appellant, v. WEST COMMUNITY HOSPITAL, Defendant-Appellee.

No. 84-5008.

United States Court of Appeals Fifth Circuit.

April 7, 1986.

LaNelle L. McNamara, McNamara & McNamara, Waco, Tex., for plaintiff-appellant.

W.V. Dunnam, Jr., Dunnam, Dunnam, Horner & Meyer, Waco, Tex., for defendant-appellee.

Appeal from the United States District Court for the Western District of Texas.

Before GEE, RUBIN and DAVIS, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Dr. Emsley A. Davis, a black physician, had his staff privileges terminated at West Community Hospital (West). This precipitated a suit by Davis against West and others ¹ in which Davis initially sought recovery under 42 U.S.C. Sec. 1981 and Texas tort law. Dr. Davis amended his suit approximately two months before trial and added a claim under Title VII of the Civil Rights Act. Because of the recent filing of the Title VII claim, it was severed and the remaining issues proceeded to trial before a jury. The district court entered a judgment on the jury verdict rendered in favor of Davis following that jury trial and that judgment was appealed to this court. Our decision on that appeal (Davis I ), is reported at 755 F.2d 455 (1985). Following the jury trial, a bench trial was held on plaintiff's Title VII claim against West. The court dismissed that claim on jurisdictional grounds and alternatively on grounds that West had a legitimate, nondiscriminatory reason to terminate Davis' staff privileges. Davis appeals that adverse decision on his Title VII claim. We conclude that the district court erred in deciding it had no jurisdiction over the Title VII claim but we affirm the district court's judgment on the merits.

I.

Dr. Davis, a general surgeon, was granted staff privileges at West in July 1978. In 1981, Dr. Davis' staff privileges were summarily suspended on grounds that his performance as a surgeon at the hospital was inadequate and substandard. This suspension was based on the alleged improper treatment of eighteen named patients. Four days after the suspension, Dr. Davis' staff privileges were reinstated but proceedings were commenced under the hospital's by-laws to permanently terminate those privileges. At the request of West, a team of surgeons selected by the Texas Medical Association (TMA) reviewed the eighteen patient records which formed the basis for Davis' earlier suspension. Dr. Davis complained about the quality of the performance of two white surgeons on the West staff and the TMA team also reviewed selected records of the other surgeons on the staff at West. Following this review, the TMA team gave Dr. Davis a negative evaluation; they criticized him for: 1) performing surgery on patients who were poor surgical risks; 2) failing to obtain adequate physical examinations to evaluate whether surgery should be performed; 3) exercising poor judgment in deciding to perform surgery; and 4) performing an excessive number of multiple surgeries on patients who were unable to endure prolonged operations. The evaluations of the other surgeons' performance drew no significant criticism.

A hearing before a panel appointed by the West board was held in which Dr. Davis' treatment of the eighteen patients in question was the subject of detailed testimony. Two other surgeons on the West staff, Drs. Shirey and Manax, testified why they considered Dr. Davis' treatment of each of the eighteen patients substandard. Dr. Davis gave his explanation for his treatment and called as a witness Dr. Tabb, who generally supported Dr. Davis' testimony. In January 1982, two months after this hearing, West's board permanently suspended Dr. Davis' staff privileges at the hospital.

The medical testimony elicited before the board's hearing panel was introduced in the district court and constituted a major part of the medical testimony adduced in the district court. Dr. Davis testified at the bench trial and adduced other evidence designed to show that his performance as a surgeon at West was not substandard but rather met or exceeded expected medical standards. Davis also offered statistical evidence through the testimony of Dr. Martin Shapiro which was designed to show that Dr. Davis' performance was as good or better than the white surgeons who enjoyed staff privileges at West.

The district court dismissed Davis' Title VII suit first on grounds that the court lacked jurisdiction because the defendant did not employ the requisite number of employees required under Title VII. Alternatively, the court dismissed the case on the merits, holding that although plaintiff had established a prima facie case of disparate treatment, the employer carried its burden of establishing a legitimate basis for termination of Davis' staff privileges and the plaintiff failed to establish that the reason given by the employer for the termination was pretextual.

Appellant argues that the district court erred by: (1) dismissing the case on jurisdictional grounds; (2) failing to give preclusive effect to certain findings of the jury in Davis I; (3) using an incorrect standard to determine that West rebutted appellant's prima facie case; (4) holding that appellant failed to prove intentional discrimination; and (5) failing to allow amendment of the complaint to add additional defendants.

II.

A.

We disagree with the determination of the district court that it had no jurisdiction in this case. The district court found that jurisdiction had not been established because Davis failed to prove that West had fifteen or more employees each working day in each of twenty or more calendar weeks in the current or preceding calendar year. 42 U.S.C. Sec. 2000e(b). We have reviewed the hospital records of the eighteen surgical patients of Dr. Davis referred to above. From our examination of patient John Higgins' medical file, we identified fifteen individuals employed as nurses at West between June 28, 1980 and July 25, 1980. The medical file of patient Johnnie Ruzicka reflects that these same nurses were employed at West between January 1, 1981 and February 1, 1981. In the absence of contrary evidence, it is reasonable to infer that these fifteen nurses were employed continuously during the five month period between July 1980 and January 1981. It is also reasonable to infer from this evidence that technicians, orderlies and other support personnel were in the employ of West during the requisite period. Because the record reveals that West employed more than the number of employees required by the act, the district court's conclusion that it lacked subject matter jurisdiction is erroneous.

B.

In Davis I the jury found that defendants Manax, Shirey, Kelly and Neely violated Davis' right to equal protection of the law through acts motivated by racial considerations. ² Appellant contends that West was precluded by the earlier judgment from relitigating the issue of discrimination in this Title VII action.

The district court has broad discretion to determine whether offensive use of collateral estoppel is appropriate. Nations v. Sun Oil Co., 705 F.2d 742, 744 (5th Cir.), cert. denied, 464 U.S. 893, 104 S.Ct. 239, 78 L.Ed.2d 229 (1983). Offensive collateral estoppel should be invoked to preclude litigation of an issue only if the party against whom collateral estoppel is urged has had a full and fair opportunity to litigate the identical issue in the earlier case. Rufenacht v. Iowa Beef Processors, Inc., 656 F.2d 198, 202-03 (5th Cir.1981), cert. denied, 455 U.S. 921, 102 S.Ct. 1279, 71 L.Ed.2d 462 (1982).

The ultimate issue in this Title VII case is whether West terminated appellant's surgical privileges because he is black. Harvey Kelly was the only member of the six-member board who was found by the jury to have discriminated against Davis because of his race. Neither the board as a whole nor the remaining five board members have had an opportunity to litigate the question of whether they were motivated by race in discharging Davis.

Davis' equal protection claims against Manax, Shirey, Kelly and Neely in Davis I included complaints of discrimination not necessarily related to the termination of his staff privileges. For example, Davis offered evidence at trial concerning racial slurs made by Shirey and anonymous letters sent to his patients accusing him of being a "butcher." The jury did not disclose whether its finding of discrimination against these individuals was related to Davis' discharge or in some other connection; consequently, the district court may have considered it uncertain that the issue decided by the jury was identical to the issue presented in the Title VII case. The failure of the jury to award damages to Davis on the equal protection violation supports the view that the discrimination the jury found in Davis I was unrelated to his termination.

The fact that the trial of this Title VII action was completed before Davis urged the application of collateral estoppel also mitigates against application of the doctrine. "Collateral estoppel ... has the dual purpose of protecting litigants from the burden of relitigating an identical issue with the same party or his privy and of promoting judicial economy by preventing needless litigation." Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326, 99 S.Ct. 645, 649, 58 L.Ed.2d 552 (1979). Appellant first urged the district court to apply collateral estoppel in this case in a post-trial motion filed after the Title VII case had been tried and after the district court ruled against Davis. Use of collateral estoppel at this stage of the proceedings would not have furthered one of the important underlying purposes of this doctrine: promotion of judicial economy. Under these circumstances, we conclude that the district court did not abuse its discretion in declining to apply offensive collateral estoppel.

On a related issue, appellant...