Ezekial v. Winkley

• Decision Date: 09 December 1977
• Citation: 142 Cal.Rptr. 418,572 P.2d 32,20 Cal.3d 267
• Parties: , 572 P.2d 32 Gerald A. EZEKIAL, Jr., Plaintiff and Appellant, v. John WINKLEY et al., Defendants and Respondents. L.A. 30729.
• Court: California Supreme Court

Page 418

142 Cal.Rptr. 418

20 Cal.3d 267, 572 P.2d 32

Gerald A. EZEKIAL, Jr., Plaintiff and Appellant, v. John WINKLEY et al., Defendants and Respondents.

L.A. 30729.

Supreme Court of California.

Dec. 9, 1977.

Mink & Alpert and Michael S. Mink, Encino, for plaintiff and appellant.

Thelen, Marrin, Johnson & Bridges, James W. Baldwin, Los Angeles, and Curtis A. Cole, Fresno, for defendants and respondents.

Musick, Peeler & Garrett and Joseph A. Saunders, Los Angeles, as amici curiae on behalf of defendants and respondents.

RICHARDSON, Justice.

In this case we consider whether a surgical resident in a private teaching hospital must be accorded notice of charges and an opportunity to respond, pursuant to the "common law right of fair procedure" (Pinsker v. Pacific Coast Society of Orthodontists (1974) 12 Cal.3d 541, 555, 116 Cal.Rptr. 245, 526 P.2d 253 (Pinsker II)), prior to dismissal from the residency program. We conclude that "fair procedure" principles are applicable to the facts pleaded herein. We therefore reverse the judgment of dismissal and remand with directions to overrule the demurrer to the first and second causes of action of the third amended complaint.

In part, the third amended complaint alleges the following: Plaintiff is a physician licensed to practice in California. Defendants Kaiser Foundation Health Plan, a nonprofit corporation, and Southern California Permanente Medical Group (Group), a partnership, operate Kaiser Foundation Hospital (Kaiser), a nonprofit corporation, in Los Angeles. Defendant Winkley is Kaiser's chief of surgery and a partner in Group, and defendant Rieder is Kaiser's administrator. In 1972, Winkley sought out plaintiff, who was then engaged in a general medical practice in San Diego, and invited him to join the surgical residency program at Kaiser, orally promising him that he would be employed for the three remaining years necessary to complete his residency. Plaintiff had previously completed his first year of surgical residency in a San Diego hospital. Plaintiff also examined Kaiser's brochures which described a surgical residency at Kaiser as a four-year program. In reliance on these representations, plaintiff accepted the offer of residency, closed his San Diego practice, sold his home, and moved with his family to Los Angeles.

According to further allegations of the complaint, plaintiff, in the status of a second-year resident, began work at Kaiser on December 4, 1972, under the terms of a letter agreement which covered his first year at Kaiser. On the first anniversary of his employment, he was orally rehired for one additional year, which terminated December 3, 1974. However, in January 1974, Winkley advised plaintiff that he would not be permitted to remain in the Kaiser surgical residency program after June 30, 1974. No reasons were given to plaintiff, either then or subsequently, for Kaiser's decision to dismiss him. No notice of charges was given, and plaintiff was afforded neither a hearing nor opportunity to respond prior to termination. Dismissal from Kaiser will, as a practical matter and because of Kaiser's close relationship with other teaching hospitals, prevent plaintiff's acceptance in any other surgical residency program. Successful completion of an approved surgical residency is a prerequisite to attainment of the status of a "board certified general surgeon," without which plaintiff cannot practice a surgical specialty in any accredited California hospital.

After the filing of plaintiff's verified complaint for damages and injunctive relief, the trial court issued a temporary restraining order prohibiting plaintiff's discharge pending resolution of his request for a preliminary injunction. The trial court conducted an adversary hearing and then dissolved the restraining order and denied any injunctive relief. Kaiser thereupon dismissed plaintiff. Subsequently, defendants' demurrer to plaintiff's third amended complaint (the complaint) was sustained without leave to amend, and plaintiff appeals from the subsequent judgment of dismissal.

Plaintiff contends that the circumstances of his dismissal do not comport with common law rights of "fair procedure," the origins of which can be traced to our opinion in James v. Marinship Corp. (1944) 25 Cal.2d 721, 731, 155 P.2d 329. In Marinship, we held that a labor union, because of its ability to exclude all nonmembers from employment in a particular trade, assumed legal responsibilities beyond those which were applicable to other private organizations such as social clubs. We concluded that the union's possession of this power entitled applicants for membership, under the common law, to judicial protection against arbitrary exclusion on the basis of race. (Ibid.) Since Marinship, California courts, in a variety of circumstances, have recognized the effect which exclusion from membership in a private organization exerts upon a person's right to pursue a particular profession or calling. Thus, subsequent California decisions have not only expanded judicial review of labor union membership policies (e. g., Directors Guild of America, Inc. v. Superior Court (1966) 64 Cal.2d 42, 44, 48 Cal.Rptr. 710, 409 P.2d 934; Thorman v. Intl. Alliance etc. Employees (1958) 49 Cal.2d 629, 634, 320 P.2d 494, overruled on other grounds, Consolidated Theatres, Inc. v. Theatrical Stage Employees Union (1968) 69 Cal.2d 713, 721, fn. 8, 73 Cal.Rptr. 213, 447 P.2d 325), but also have applied the Marinship principle to the admission practices of professional societies, membership in which is a practical prerequisite to pursuit of a medical or dental specialty (Pinsker v. Pacific Coast Soc. of Orthodontists (1969) 1 Cal.3d 160, 166, 81 Cal.Rptr. 623, 460 P.2d 495 (Pinsker I); Kronen v. Pacific Coast Society of Orthodontists (1965) 237 Cal.App.2d 289, 305, 46 Cal.Rptr. 808, cert. den. (1966) 384 U.S. 905, 86 S.Ct. 1340, 16 L.Ed.2d 358), and to access by practicing physicians to staff privileges in private hospitals (Ascherman v. Saint Francis Memorial Hospital (1975) 45 Cal.App.3d 507, 511-512, 119 Cal.Rptr. 507 (Ascherman II); Ascherman v. San Francisco Medical Society (1974) 39 Cal.App.3d 623, 631, 114 Cal.Rptr. 681 (Ascherman I); see Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465, 468, 131 Cal.Rptr. 90, 551 P.2d 410).

Exclusion from such groups has been deemed "arbitrary" when it is substantively unreasonable, internally irregular, or, as indicated in Pinsker II, supra, procedurally unfair. In Pinsker II, we explained that the common law right to a "fair procedure" includes "adequate notice of the 'charges' . . . and a reasonable opportunity to respond." (12 Cal.3d at p. 555, 116 Cal.Rptr. at p. 255, 526 P.2d at p. 263.)

The underlying rationale of the Marinship-Pinsker line of cases is that certain private entities possess substantial power either to thwart an individual's pursuit of a lawful trade or profession, or to control the terms and conditions under which it is practiced. (See generally Tobriner & Grodin, The Individual and the Public Service Enterprise in the New Industrial State (1967) 55 Cal.L.Rev. 1247, 1255.) Thus, in Marinship, Directors Guild, and Thorman, all supra, a labor union's arbitrary policies of exclusion had important effects on the employment opportunities of persons already qualified and employed in a craft or trade. In Kronen, and in the Ascherman and Pinsker cases, all supra, private organizations, by controlling access to vital professional privileges and certifications, had a similar practical ability to foreclose from practice one who had already obtained a professional license. We have said that the right to practice a lawful trade or profession is sufficiently "fundamental" to require substantial protection against arbitrary administrative interference, either by government (see, e. g., Bixby v. Pierno (1971) 4 Cal.3d 130, 143, 93 Cal.Rptr. 234, 481 P.2d 242; Yakov v. Board of Medical Examiners (1968) 68 Cal.2d 67, 75, 64 Cal.Rptr. 785, 435 P.2d 553) or by a private entity (see Anton v. San Antonio Community Hospital (1977) 19 Cal.3d 802, at p. 823, 140 Cal.Rptr. 442, at p. 453, 567 P.2d 1162 at p. 1173).

The Marinship-Pinsker principles, invoked primarily against arbitrary exclusions from membership in private associations, have been rather narrowly applied to situations with substantial economic ramifications. Prior to Marinship, however, it was established that one may not be expelled from membership in a private association without charges, notice and hearing. This common law protection against arbitrary expulsion, judicially declared, is of broader application and has been extended not only to labor unions (e. g., Cason v. Glass Bottle Blowers Assn. (1951) 37 Cal.2d 134, 143-144, 231 P.2d 6; Otto v. Tailors' P. & B. Union (1888) 75 Cal. 308, 314-315, 17 P. 217; Ellis v. American Federation of Labor (1941) 48 Cal.App.2d 440, 443-444, 120 P.2d 79) and professional and trade organizations (e. g., Smith v. Kern County Medical Assn. (1942) 19 Cal.2d 263, 265, 120 P.2d 874; Cunningham v. Burbank Bd. of Realtors (1968) 262 Cal.App.2d 211, 214, 68 Cal.Rptr. 653; Swital v. Real Estate Commissioner (1953) 116 Cal.App.2d 677, 679, 254 P.2d 587), but to mutual benefit societies (e. g., Taboada v. Sociedad Espanola etc. (1923) 191 Cal. 187, 191, 215 P. 673; Von Arx v. San Francisco G. Verein (1896) 113 Cal. 377, 379-380, 45 P. 685) and other fraternal and social groups (e. g., Supreme Lodge, etc. v. L.A. Lodge No. 386 (1917) 177 Cal. 132, 136, 169 P. 1040). The underlying theme of these decisions, variously stated, is that membership in an association, with its associated privileges, once attained, is a valuable interest which cannot be arbitrarily withdrawn. Thus, they comport with the broader principle that one on whom an important benefit or privilege has already been conferred may enjoy legal protections not available to an initial applicant for the same...