Newsom v. Vanderbilt University

• Citation: 453 F. Supp. 401
• Decision Date: 01 June 1978
• Docket Number: No. 75-126-NA-CV.,75-126-NA-CV.
• Parties: Callie Mae NEWSOM, on her own behalf and on behalf of all others similarly situated v. VANDERBILT UNIVERSITY, Mary Jane Livingston Gunter, Director of Health Care Survey Construction, Tennessee Department of Public Health, Eugene W. Fowinkle, M.D., Commissioner of the Tennessee Department of Public Health and Joseph Califano, Secretary of Health, Education and Welfare.
• Court: U.S. District Court — Middle District of Tennessee

453 F. Supp. 401

Callie Mae NEWSOM, on her own behalf and on behalf of all others similarly situated v. VANDERBILT UNIVERSITY, Mary Jane Livingston Gunter, Director of Health Care Survey Construction, Tennessee Department of Public Health, Eugene W. Fowinkle, M.D., Commissioner of the Tennessee Department of Public Health and Joseph Califano, Secretary of Health, Education and Welfare.

No. 75-126-NA-CV.

United States District Court, M. D. Tennessee, Nashville Division.

June 1, 1978.

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Gordon Bonnyman, Legal Services of Nashville, Nashville, Tenn., Andreas Schneider, National Health Law Program, Washington, D. C., Joseph J. Levin, Jr., Pamela S. Horowitz, Southern Poverty Law Center, Montgomery, Ala., for plaintiffs.

C. Hayes Cooney, Asst. Atty. Gen., State of Tenn., Nashville, Tenn., for Gunter & Fowinkle.

Hal D. Hardin, U. S. Atty., Nashville, Tenn., Carol C. Conrad, Senior Atty., Public Health Division, HEW, Rockville, Md., for Califano.

MEMORANDUM

MORTON, Chief Judge.

I. INTRODUCTION

This action was filed on April 14, 1975, by plaintiff Callie Mae Newsom under Titles VI and XVI of the Public Health Service Act. Title VI, 42 U.S.C. §§ 291-291o-1, (officially the Hospital Survey and Construction Act of 1964) is commonly and widely known as the Hill-Burton Act. Title XVI, 42 U.S.C. §§ 300o-300t, is a portion of the National Health Planning and Resources Development Act of 1974, 42 U.S.C. §§ 300k, et seq. Because Title XVI in large part reenacts the original Hill-Burton Act (as amended, most significantly in 1964 and 1970), the parties and the court have tended to use the terms "the Act" and "the Hill-Burton Act" in reference to either or both Titles. This practice will be continued in this memorandum except where it is deemed necessary or helpful to do otherwise.

The Hill-Burton Act, one of the earliest forays of the federal government into the health care field,¹ was enacted in 1946 for the purpose of assisting the states (a) in the development of programs for the construction of "facilities for furnishing adequate hospitals, clinic, and similar services to all their people; and (b) to construct public and other nonprofit hospitals in accordance with such programs."² Federal money in the form of both grants and loans has been made available under the Act pursuant to plans drawn and administered by state health agencies with federal approval and supervision.

It is stipulated that (a) Vanderbilt University Hospital received seven federal grants totalling $3,181,009.63 pursuant to the Hill-Burton Act for construction projects initiated between 1957 and 1971; (b) the receipt of these grants vested the hospital with an obligation to provide "a reasonable volume of uncompensated services to persons unable to pay therefor" pursuant to the provisions of section 291c(e)(2) of the Act and regulations promulgated thereunder;³ and (c) in each of the seven applications Vanderbilt gave written assurances that it would provide such services. The manner and extent of Vanderbilt's fulfillment of this obligation and the extent to which the federal and state agencies have monitored and enforced Vanderbilt's compliance are the central issues of this case.

Plaintiff Newsom is an indigent person who contends that defendant Vanderbilt University's hospital has failed to provide a reasonable volume of services to persons unable to pay therefor in violation of its contractual, statutory and regulatory duties under the Act. She contends in the alternative that even if such services have been provided, the hospital's procedures for the distribution of such care violate procedural due process under the fifth and fourteenth amendments. She further contends that the state and federal defendants responsible for enforcement of the Act have failed to fulfill that responsibility, and she attacks certain of the federal defendant's regulations as being inconsistent with the Act and the Constitution. Plaintiff also invokes 42 U.S.C. § 1983, asserting that defendants have acted under color of state law to deprive her of rights, privileges or immunities secured to her by the Act and the Constitution. Declaratory, injunctive and mandamus relief are sought on her own behalf and on behalf of a plaintiff class.

Defendants initially argued that plaintiff had failed to exhaust administrative remedies, but this issue is no longer viable. A complaint was filed with the Secretary of Health, Education and Welfare (HEW) on February 4, 1977, alleging Vanderbilt University Hospital's failure to comply with its obligation to provide free care pursuant to section 291c(e)(2) of the Act. On August 4, 1977, the complaint was dismissed by the Secretary with a finding that the hospital was in "substantial compliance." This action thereby became ripe for judicial determination pursuant to 42 U.S.C. § 300p-2(c), which provides:

The Secretary shall investigate and ascertain, on a periodic basis, with respect to each entity which is receiving financial assistance under this subchapter or which has received financial assistance under subchapter IV of this chapter or this subchapter, the extent of compliance by such entity with the assurances required to be made at the time such assistance was received. If the Secretary finds that such an entity has failed to comply with any such assurance, the Secretary shall take the action authorized by subsection (b) of this section or take any other action authorized by law (including an action for specific performance brought by the Attorney General upon request of the Secretary) which will effect compliance by the entity with such assurances. An appropriate action to effectuate compliance with any such assurance may be brought by a person other than the Secretary only if a complaint has been filed by such person with the Secretary and the Secretary has dismissed such complaint or the Attorney General has not brought a civil action for compliance with such assurance within 6 months after the date on which the complaint was filed with the Secretary.

(Emphasis added.)

In addition to the above section, jurisdictional bases for this action include 28 U.S.C. § 1331, conferring federal question jurisdiction over plaintiff's claims under 42 U.S.C. § 1983, and 28 U.S.C. § 1361, the mandamus statute.

The court entered a temporary restraining order on the day the action was filed, restraining defendant university and its collection agent from prosecuting a collection action against plaintiff in the state courts. The collection agency subsequently was dismissed as a party defendant upon the stipulation of the parties that in all matters relevant to this action the firm had acted solely as agent of the defendant university. The case was certified pursuant to Rule 23(c) of the Federal Rules of Civil Procedure as a class action to be maintained by plaintiff on behalf of all others similarly situated. The case was tried to the court without a jury on September 8, 1977.

II. EFFECT OF ADMINISTRATIVE FINDING AS TO COMPLIANCE

The issue of Vanderbilt Hospital's compliance with its free service obligation raises a number of subsidiary issues concerning the definition of compliance, but first the court must address a preliminary question of administrative law. Because the Secretary of HEW determined, pursuant to his "investigation" of the administrative complaint filed on plaintiff's behalf, that the hospital was in substantial compliance with its free care obligation, the court must ascertain the effect, if any, of the administrative finding on the present action. This is essentially a matter of interpreting section 300p-2(c), quoted supra, and is apparently a question of first impression (except by analogy to similar provisions in other statutory contexts).

The National Health Planning and Resources Development Act of 1974, of which section 300p-2(c) is a part, was enacted "to amend the Public Health Service Act to assure the development of a national health policy and of effective State health regulatory programs and area health planning programs, and other purposes . .." S.Rep.No.93-1285, 93d Cong., 2d Sess., reprinted in 1974 U.S.Code Cong. & Admin. News, p. 7842 hereinafter Senate Report. The Act "replaces the State areawide planning components of five programs, conducted under the Public Health Service Act," just one of which is the Hill-Burton program. 120 Cong.Rec. 37240 (1974) (remarks of Sen. Javits). Thus it is not surprising that the legislative history, while extensive, is not narrowly focused and contains no specific discussion of section 300p-2(c).⁴ The court has, therefore, relied on other indicators of congressional intent in reaching the conclusion that the "appropriate action to effectuate compliance" prescribed in section 300p-2(c) is a trial de novo rather than merely a judicial review of the Secretary's determination. Thus the court is certainly not bound by the Secretary's finding, nor is the court limited by the "clearly erroneous" and "substantial evidence" standards in its scrutiny of his decision. This does not mean, however, that the administrative action is totally without significance. It is, of course, important regardless of its merits as a procedural prerequisite to the present action, and it is to be considered on its merits as part of the evidentiary record before the court. (A certified copy of the Secretary's decision was submitted by defendants as Trial Exhibit 14.)

The above conclusion was reached by comparing the language of section 300p-2(c) with similar provisions of Title VII of the Civil Rights Act of 1964, specifically 42 U.S.C. § 2000e-5(b) and (f)(1); by consulting the judicial interpretations of these older provisions; by contrasting section 300p-2(c) with another section of the National Health Planning and Resources Development Act of 1974, 42 U.S.C. § 300s; and, of course, by examining section 300p-2(c) on its face.

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