Greco v. Orange Memorial Hospital Corp.

• Decision Date: 29 May 1975
• Docket Number: No. 74-2102,74-2102
• Citation: 513 F.2d 873
• Parties: John C. GRECO, Plaintiff-Appellant, v. ORANGE MEMORIAL HOSPITAL CORPORATION et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 873

513 F.2d 873

John C. GRECO, Plaintiff-Appellant, v. ORANGE MEMORIAL HOSPITAL CORPORATION et al., Defendants-Appellees.

No. 74-2102.

United States Court of Appeals, Fifth Circuit.

May 29, 1975.

James R. Weddington, Austin, Tex., for plaintiff-appellant.

John D. Rienstra, Beaumont, Tex., L. W. Anderson, Dallas, Tex., Thomas B. Weatherly, Frank C. Gibbs, Houston, Tex., Richard N. Evans, Beaumont, Tex., Bill Sexton, Orange, Tex., Cleve Bachman, Lipscomb Norvell, Jr., Beaumont, Tex., Frank W. Hustmyre, Orange, Tex., for defendants-appellees.

Don Burgess, Jim Sharon Bearden, Orange, Tex., for County Commissioner.

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

Before GEWIN, BELL and CLARK, Circuit Judges.

GEWIN, Circuit Judge:

The plaintiff-appellant, Dr. John C. Greco, a licensed physician authorized to practice obstetrics and gynecology, joined the staff of the Orange Memorial Hospital in 1960. In early 1973 after the United States Supreme Court invalidated the Texas criminal abortion statute, the appellant began to perform elective abortions. Eight elective abortions were performed by Dr. Greco in Orange Memorial Hospital before the hospital's board of directors adopted a motion of the medical staff to prevent further use of the hospital's facilities for the performance of non-therapeutic abortions. Following the institution of this policy six of Dr. Greco's patients who desired non-therapeutic abortions were denied admission to the hospital.

Facts stipulated by the parties indicate that surgical procedures technically indistinguishable from elective abortions are performed in Orange Memorial Hospital and that the hospital's facilities are adequate to accommodate patients seeking elective abortions. Dr. Greco filed suit against the Orange Memorial Hospital Corporation, its board of directors and medical staff, and the Commissioners Court of Orange County, seeking declaratory and injunctive relief, as well as damages, for their allegedly unconstitutional policy. Prior to trial the district court ordered the damage claim severed and held in abeyance pending resolution of the other issues presented. The court found the board of directors ultimately responsible for hospital policy and dismissed the medical staff from the case. Subsequent to the presentation of Dr. Greco's evidence the court dismissed the remaining defendants holding that absent a showing of "state action" the court was without the subject matter jurisdiction required by 42 U.S.C. § 1983 and the Fourteenth Amendment to hear the case. ¹ We agree with the district court in all respects and affirm. The opinion of the district court is reported in 374 F.Supp. 227 (E.D.Tex.1974).

Dr. Greco raises two questions on appeal: (1) whether the district court erroneously decided that the actions of the hospital staff and the board of directors did not constitute "state action", or "action under color of law"; (2) whether the district court erroneously dismissed the cause of action against the medical staff. The appellees present a cross specification of error contending that the district court erroneously found that Dr. Greco had standing to bring the suit.

Addressing first the question of standing, we find that in the circumstances Dr. Greco had standing to litigate on behalf of his patients who were allegedly deprived of constitutional rights by the Orange Memorial Hospital's restrictive abortion policy, and on his own behalf because of his individual economic and liberty interest. Dr. Greco's personal stake in this litigation is primarily his right to practice medicine free from the imposition of arbitrary restraints, and the physician's interest in the context of this case is inextricably bound up with the right to privacy of the patients seeking an abortion. The existence of such a personal interest in the controversy is assurance enough of the adversarial character of the litigation necessary to sharply focus the issues for this court. ² See Nyberg v. City of Virginia, 495 F.2d 1342, 1344 (8th Cir. 1974); Shaw v. Hospital Authority of Cobb County, 507 F.2d 625 (5th Cir. 1975); Roe v. Wade, 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973); YWCA v. Kugler, 342 F.Supp. 1048, 1055 (D.N.J.1972). See generally, Standing To Assert Constitutional Jus Tertii, 88 Harv.L.Rev. 423 (1974).

The difficult questions on this appeal are those presented by Dr. Greco. He asserts essentially that Orange Memorial Hospital and Orange County are engaged in a symbiotic relationship, that Orange County has delegated its authority to the hospital corporation, and that the hospital is performing a public function, all of which indicate that the hospital should be subject to constitutional restrictions. Dr. Greco takes specific issue with the district court's construction of Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972) and Doe v. Bellin Memorial Hospital, 479 F.2d 756 (7th Cir. 1973) to the effect that he must show that Orange County is involved in the very activity challenged in order to prove "state action." He argues that the evidence shows the state to be a joint participant in the operation of the private entity and that the state is perforce involved in the challenged activity.

In order to provide the proper perspective for addressing these questions we must delve more deeply into the factual background of the Orange Memorial Hospital and, once ascertained, perceive the facts of this case in the context of the legal morass of the ever evolving state action doctrine.

The history of the hospital's creation was stipulated by the parties. In 1954 land on which the hospital is located was donated to Orange County by private individuals. In the same year county voters authorized the issuance of $1,762,000.00 in hospital bonds. The local money was combined with a Hill-Burton grant of $1,250,000.00 in order to erect the original hospital building. In later years more land was donated to the county by private individuals and the county commissioners, without the explicit approval of the voters, issued approximately $670,000.00 worth of hospital time warrants so that additions could be made to the original building. The county owns both the land and the building which houses the Orange Memorial Hospital. Orange County citizens pay eight and one-half cents of every tax dollar to retire the bonds and time warrants.

In 1957 Orange Memorial Hospital, under the auspices of the non-profit hospital corporation, opened its doors to the public. Daily operating expenses are assumed by the hospital corporation and paid with funds generated by the hospital's services. To-date income from patients has been sufficient to defray all expenses. The corporation leases the land and hospital building from the county for one dollar per year and is exempt from all taxation, state, local, and federal. The term of the lease between the county and the hospital corporation is for a period of 5 years, and the lease may be renewed for 5 year terms indefinitely. Under the provisions of the lease the hospital corporation agreed to the following: (1) to operate the hospital as a non-profit institution and to furnish to the general public medical and surgical care subject to such terms and regulations as the lessee may prescribe; (2) to carry out the assurances required of the lessor in order to obtain federal funds and to relinquish possession of the hospital in the event it fails to adequately comply; ³ (3) to have all equipment and supplies inventoried, in a manner approved by lessor, and to dispose of worthless, damaged, or worn out equipment only with the prior approval of the Commissioners Court; (4) to be responsible for the expense of the day to day operation and maintenance of the hospital; (5) to make additions to the hospital with the written consent of lessor and at its own expense; (6) to keep all appropriate insurance in effect; (7) to submit an annual audit to lessor and to furnish any information which lessor feels is necessary to inform the people of Orange County about the operation and financial condition of the institution; (8) to accept indigent patients certified by the lessor subject to the prior obligation to receive emergency cases. The lessee is given an option to purchase the hospital during the term of the lease and an unlimited option to renew the lease for additional 5 year periods as indicated earlier. The lessor reserves the right through its County Health Office to advise the lessee that an indigent is being kept in the hospital for a longer period of time than necessary, and that the lessor shall no longer be liable for expenses. The lessor-county specifically indicates in the lease that the lessee "has undertaken to relieve lessor of the responsibility and expense of operating a hospital."

The lessee-Orange Memorial Hospital Corporation was chartered as a non-profit, tax exempt, private corporation for the purpose of supporting charitable and educational undertakings including the operation and maintenance of the hospital, and the general promotion of the health of the community. The corporation consists of life and advisory members. Life membership is obtained by contributing.$1000.00 to the corporation. Any citizen and qualified voter of Orange County who owns taxable property may become an advisory member by attending the annual meetings of the corporation. The direction and management of the affairs of the corporation is vested in the board of directors composed of 9 persons. Five members of the board must be life members and four members are elected from the advisory group. The by-laws of the corporation do not precisely define the relationship between the board of directors and the medical staff but do indicate that the board is the ultimate authority in determining hospital policy. The board is authorized to receive and consider recommendations of the medical staff. ⁴

The...