National Ass'n for Advancement of Colored People v. Medical Center, Inc.

• Citation: 657 F.2d 1322
• Decision Date: 20 July 1981
• Docket Number: No. 80-1893,80-1893
• Parties: NATIONAL ASSOCIATION FOR the ADVANCEMENT OF COLORED PEOPLE, 107 East Ninth Street, Wilmington, Delaware, Puerto Rican Civil Rights League, Inc., 1030 West Third Street, Wilmington, Delaware, Older Americans Coalition, 1300 North Broom Street, Wilmington, Delaware, Brandywine Trinity United Methodist Church, Twenty-Second and Market Streets, Wilmington, Delaware, on behalf of their members and others similarly situated, Appellants, v. The MEDICAL CENTER, INC., David Matthews, U. S. Secretary of Health, Education, and Welfare, Amos Burke, Director of the Bureau of Comprehensive Health Planning, William C. Gordon, Director of the Health Planning Council, Inc., The Wilmington Medical Center, Inc. and Crawford H. Grenwalt, as Chairman of the Board of Trustees, and Joseph A. Dallas, as Chairman of the Board of Directors.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 1322

657 F.2d 1322

69 A.L.R.Fed. 539

NATIONAL ASSOCIATION FOR the ADVANCEMENT OF COLORED PEOPLE,

107 East Ninth Street, Wilmington, Delaware, Puerto Rican

Civil Rights League, Inc., 1030 West Third Street,

Wilmington, Delaware, Older Americans Coalition, 1300 North

Broom Street, Wilmington, Delaware, Brandywine Trinity

United Methodist Church, Twenty-Second and Market Streets,

Wilmington, Delaware, on behalf of their members and others

similarly situated, Appellants, v. The MEDICAL CENTER, INC., David Matthews, U. S. Secretary of

Health, Education, and Welfare, Amos Burke, Director of the

Bureau of Comprehensive Health Planning, William C. Gordon,

Director of the Health Planning Council, Inc., The

Wilmington Medical Center, Inc. and Crawford H. Grenwalt, as

Chairman of the Board of Trustees, and Joseph A. Dallas, as

Chairman of the Board of Directors.

No. 80-1893.

United States Court of Appeals,

Third Circuit.

Argued November 3, 1980.

Opinion Filed June 29, 1981.

As Amended July 20, 1981.

Marilyn G. Rose (argued), Sanford Newman, Center for Law and Social Policy,

Washington, D. C., Douglas Shachtman, Jeffrey S. Goddess, City Sol., City of Wilmington, Wilmington, Del., for appellants; Thomas I. Atkins, Gen. Counsel, James I. Meyerson, N.A.A.C.P., New York City, of counsel

William J. Wade (argued), Rodney M. Layton, Richards, Layton & Finger, Wilmington, Del., for Wilmington Medical Center, Inc.

Drew S. Days, III, Asst. Atty. Gen., Jessica Dunsay Silver, Irving Gornstein, Dept. of Justice, Washington, D. C., for United States as amicus curiae.

Before GIBBONS and WEIS, Circuit Judges, and BECHTLE, ^* District Judge.

Reargued In Banc May 11, 1981.

Before ALDISERT, ADAMS, GIBBONS, HUNTER, WEIS, GARTH, HIGGINBOTHAM and SLOVITER, Circuit Judges.

OPINION OF THE COURT

WEIS, Circuit Judge.

The Wilmington Medical Center has been embroiled in litigation for the past five years because of its proposal to construct a new building in the suburbs and renovate one of its buildings in downtown Wilmington, Delaware. In this latest appeal, we hold that disparate impacts of a neutral policy may be adequate to establish discrimination under Title VI of the Civil Rights Act of 1964. Assuming, without deciding, that the plaintiffs presented a prima facie case, we conclude that the Medical Center produced adequate evidence to justify its relocation and reorganization plan. Accordingly, we will affirm the action of the district court in refusing to enjoin implementation of the proposal.

Alleging unlawful discrimination, the plaintiff organizations, representing minority, handicapped, and elderly persons, sought an injunction against the relocation and reorganization of the Medical Center. After we held that the plaintiffs had private rights of action under Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d et seq. (1976), and § 504 of the Rehabilitation Act of 1975, 29 U.S.C. § 794 (Supp. II 1978), see NAACP v. The Medical Center, Inc., 599 F.2d 1247 (3d Cir. 1979), the district court brought the matter to trial. The City of Wilmington was added as a party plaintiff, and the complaint was amended to include allegations that the Age Discrimination Act, 42 U.S.C. §§ 6101-6107 (1976 & Supp. II 1978) had been violated. In addition, plaintiffs charged the defendant with intentional discrimination as well as conduct that had a disparate impact on the classes represented by the plaintiffs.

Following a bench trial lasting more than a month, the district court filed a comprehensive and detailed opinion, concluding that the plaintiffs had failed to prove discrimination under any of the three statutes. Judgment was accordingly entered for the defendant. NAACP v. Wilmington Medical Center, Inc., 491 F.Supp. 290 (D.Del.1980). ¹ The plaintiffs' appeal was heard initially by a panel and then, because of the nature of the issues, was reheard by the court in banc.

The Wilmington Medical Center (WMC) was organized in 1965 by the merger of three non-profit hospitals, General, Memorial, and Delaware, in different areas of Wilmington. WMC furnishes general medical and surgical services, as well as secondary and tertiary hospital care. It provides 1,104 of the 1,471 non-profit, acute general hospital beds in New Castle County. Other institutions in the county include St. Francis Hospital, which has approximately 290 beds, and Riverside Osteopathic Hospital, with a capacity of 100. The concentration of hospital beds in Wilmington proper is higher than is desirable under national standards, while at the same time the southwestern part of the county surrounding Newark, Delaware, is quite underserved.

WMC is the only hospital in the county with a teaching program approved by the American Medical Association. Medical students and residents are important to WMC's delivery of health care to the community. Without their assistance, current levels of care could not be maintained.

Because its physical structures are aging and are not in compliance with Delaware's licensing law, WMC has encountered serious problems. Recruitment for its residency program has been hindered by the fragmenting of its plants, as well as by a lack of conference space and adequate research facilities. The surgical residency program has been placed on probation by its accrediting body and WMC itself is also in danger of losing its certification by the Joint Commission on Accreditation of Hospitals. On two recent occasions, only "probational" accreditation was granted. Loss of accreditation could result in denial of Medicare and Medicaid reimbursements, a situation which would be disastrous to WMC financially, since it relies on these funds for more than one third of its total budget.

WMC has other monetary problems. It provides the largest amount of free care in the county approximately $8,000,000 annually. Because Medicare and Medicaid do not reimburse it for any portion of fees attributable to subsidization of free care, WMC must depend upon its endowment and the fees assessed upon paying patients and private insurers.

The population shift to the southwestern suburbs and the possibility that another health care institution might be established in that area present another threat to WMC. If it should lose the patronage of people there, most of whom pay for services or are privately insured, the subsidization of a higher percentage of unreimbursed care would become an even more serious drain on its financial resources.

Recognizing the need for remedial action, the WMC Board canvassed the options open to it. After studying about 50 plans for relocation and consolidation, it decided upon Plan Omega. Essentially, this proposal would close the General and Memorial facilities, renovate the Delaware one, and reduce the number of downtown beds to 250. In addition, a new facility of 780 beds would be built in the suburban area 9.35 miles southwest of the Delaware plant. A division of services between the two locations was part of the arrangement. ²

After the district court ordered a departmental review, HEW found discriminatory effects in the plan. To ensure that Omega would comply with Title VI and the Rehabilitation Act, WMC contracted to make a number of modifications. Because no public transportation to the southwest site is available, WMC agreed to provide shuttle bus service between the Delaware and Southwest divisions for the convenience of patients, visitors, and employees. In addition, WMC committed itself to renovate the Delaware plant, devise inpatient service plans for the two branches to prevent racial identifiability at either location, and operate the two facilities on a unitary basis.

Upon acceptance of these conditions, HEW withdrew its objections to Omega. ³

Plaintiffs, however, continued their opposition, contending in the district court that the relocation would subject members of the class to inferior health care and disproportionate travel burdens. Moreover, it was alleged that there has been a misallocation of services between the two divisions

The district court analyzed the case under alternate theories of intentional discrimination and unintended discriminatory effects. The court first determined that there was no evidence of discriminatory purpose. It then applied a disparate effect standard, but concluded after a lengthy review of the evidence that plaintiffs had failed to present a prima facie case.

Rather than ending the inquiry at that point, the court assumed arguendo that a showing of disparate impact had been made. The record was then scrutinized to determine if the defendant had successfully rebutted the plaintiffs' contentions. The court concluded that even if disparate impact had been shown, WMC had demonstrated it had bona fide needs that could not be satisfied by any less discriminatory plan. Finally, the court determined that plaintiffs did not prove that a feasible alternative to Omega was available.

Consideration of the alleged disparate impact was divided into several general categories access, quality of care, linguistic discrimination, and racial identifiability. Initially, the court found that Plan Omega would bring about vast improvements in the quality of care for all patients, including the classes represented by the plaintiffs. The detrimental effects to minorities and the elderly were determined to be minor and insignificant. With respect to the handicapped, plaintiffs failed to show any adverse impact.

The first issue considered was the plaintiffs' contention that they will lack access to the Southwest facility and, consequently, will suffer a diminution in health care. The court found that WMC would meet its obligation under the HEW agreement to provide adequate shuttle bus and ambulance service. Furthermore, the court concluded that the increased travel time would generally not deter patients from seeking treatment for serious illness at the Southwest division.

A possible exception was a group of...