Stanturf v. Sipes

• Decision Date: 11 August 1964
• Docket Number: No. 17578.,17578.
• Citation: 335 F.2d 224
• Parties: Floyd T. STANTURF, Appellant, v. Donald SIPES et al., Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

335 F.2d 224 (1964)

Floyd T. STANTURF, Appellant, v. Donald SIPES et al., Appellees.

No. 17578.

United States Court of Appeals Eighth Circuit.

August 11, 1964.

John G. Crichton, North Kansas City, Mo., made argument for appellant and filed typewritten brief with Ben W. Morse, North Kansas City, Mo.

David R. Odegard, of Houts, James, Hogsett & McCanse, Kansas City, Mo., made argument for appellee and filed printed brief with J. D. James, Kansas City, Mo.

Before VOGEL, MATTHES and RIDGE, Circuit Judges.

MATTHES, Circuit Judge.

In this non-diversity case plaintiff has appealed in forma pauperis from the order of the United States District Court dismissing his cause of action for lack of jurisdiction.

Plaintiff instituted this suit seeking recovery of $350,000 actual and punitive damages for the alleged refusal of defendants to admit plaintiff to the Wright Memorial Hospital (Hospital) either as a paying or a charity patient. Named as defendants in plaintiff's complaint are Donald Sipes, as Administrator of Hospital (an unincorporated organization located in Trenton, Missouri); a number of other persons in their individual and representative capacities; Trenton Trust Company, Inc.; and Hospital. All defendants are alleged to have some connection with the control and management of Hospital. Plaintiff and all defendants are citizens of the State of Missouri.

Although the complaint is vague, seemingly plaintiff seeks to invoke the jurisdiction of the federal court under the Fourteenth Amendment and under § 291 et seq., Title 42 U.S.C.A. designated as the "Hospital Survey and Construction Act" — more commonly known as the Hill-Burton Act. Thus, even though plaintiff does not refer to 28 U.S.C.A. § 1331, his theory must be that his cause of action as alleged in the complaint "arises under the Constitution, laws, or treaties of the United States," and the matter in controversy — as he does allege — exceeds the sum of $10,000.

While there was no allegation in the complaint that Hospital was built with Hill-Burton funds, defendants conceded below that Hospital received $290,000 from the federal government under the Hill-Burton Act for use in construction of Hospital. Defendants filed a Motion to Dismiss, enumerating various reasons why the complaint "fails to state a claim upon which relief can be granted." However, the central issue became whether the acceptance of funds under the Hill-Burton Act by Hospital's trustee for expansion of facilities so changed the private, charitable nature of the trust and made of it a governmental agency so as to confer jurisdiction in this case upon the federal courts. The district court sustained defendants' Motion to Dismiss, holding that Hospital is a private institution, that the Fourteenth Amendment does not deal with controversies between private entities, and that therefore no federal question exists upon which jurisdiction can be based.¹ Stanturf v. Sipes, W.D.Mo., 224 F.Supp. 883 (1963).

Assuming the factual allegations in the complaint to be true — as we must for the purpose of determining jurisdiction, the following evidentiary setting serves as the background for this controversy. On February 27, 1962, plaintiff sought admission to Hospital as a charity patient for treatment of frozen feet and legs. Although Hospital refused him admittance on a charity basis, plaintiff still sought admission for the next four days — finally tendering the $25.00 admittance fee. Again he was refused admittance even though allegedly "others acting for and in his behalf" offered to underwrite and guarantee payment of any and all medical expenses incident to his admission. On March 4, 1962, he was admitted to another hospital where subsequently it became necessary to amputate both of his legs six inches below the knees. Plaintiff alleged that defendants "were negligent and careless in that they failed to provide proper supervision of said hospital for which they were paid and that they failed willfully and negligently to abide by the terms of the agreement made with the United States Government."

On appeal, plaintiff maintains that the crucial question is whether Hospital — by participating in the Hill-Burton program — is sufficiently imbued with "state action" to bring it "within the Fifth and Fourteenth Amendment prohibitions against discrimination and involved a federal question, thus giving the federal court jurisdiction under the Hill-Burton Act * * *, 42 U.S.C.A. § 291e(f) * * *." In so contending, plaintiff relies almost exclusively upon Simkins v. Moses H. Cone Memorial Hospital, 4 Cir., 323 F.2d 959 (1963), cert. denied, 376 U. S. 938, 84 S.Ct. 793, 11 L.Ed.2d 659 (1964), a 3-2 en banc decision reversing a district court holding which was referred to extensively by Judge Duncan in support of his dismissal of the case before us. In Simkins, the Fourth Circuit held that the hospitals in that case were sufficiently imbued with "state action" to bring them within the Fifth and Fourteenth Amendment prohibitions against racial discrimination because of their participation in the Hill-Burton program. Defendants here do not agree with the holding in Simkins, asserting upon the authority of Wood v. Hogan, W.D.Va., 215 F.Supp. 53 (1963), Khoury v. Community Memorial Hospital, Inc., 203 Va. 236, 123 S.E.2d 533 (1962), and other cases, that Simkins is a complete break with precedent. Cf. also, Eaton v. Board of Managers of James Walker Mem. Hosp., 4 Cir., 261 F.2d 521 (1958), cert. denied, 359 U.S. 984, 79 S.Ct. 941, 3 L.Ed. 2d 934 (1959); Eaton v. Grubbs, E.D. N.C., 216 F.Supp. 465 (1963).

Regardless of the merits of the Simkins decision, in our view, it is not dispositive of the issue before us. It is not without distinction that Simkins involved an action by Negro physicians, dentists, and patients suing on behalf of themselves and other Negro citizens for declaratory and injunctive relief against defendant hospitals and their administrators and directors based upon discrimination because of race. Additionally, the very constitutionality of the "separate-but-equal" portions of 42 U.S.C.A. § 291e(f), and a regulation promulgated pursuant thereto, 42 C.F.R. § 53.112, 21 Fed.Reg. 9841 (December 12, 1956), was drawn into question. On that basis, the United States (Department of Justice) was allowed to intervene, and joined the plaintiffs in their successful attack on the constitutionality of the Congressional Act and associated regulation. Here, we are confronted with an action for damages; no attack is made upon the constitutionality of any portion of the Hill-Burton Act; and plaintiff — a white man — asserts no claim based upon discrimination due to race. In our view, the factual circumstances of the two cases are sufficiently different, the allegations in the complaint significantly distinguishable so as to require us to discount the persuasiveness and applicability of Simkins here. However, for purposes of this opinion only, we shall assume — without deciding — that Simkins is decisive on the question whether Hospital's participation in the Hill-Burton program sufficiently imbued it with "state action" to bring it within the Fourteenth Amendment prohibition against discrimination.

Thus, assuming arguendo that the district court below incorrectly concluded that Hospital was a private institution outside the controls of the Fourteenth Amendment, we must still determine whether the court's ultimate conclusion that no federal question exists is a valid one, and therefore whether we should affirm the order dismissing the cause of action.

It is, of course, fundamental that federal courts are vested with original jurisdiction of all civil actions wherein the matter in controversy exceeds the sum or value of $10,000 and arises under the Constitution, laws, or treaties of the United States. 28 U.S.C.A. § 1331. In Gully v. First National Bank, 299 U.S. 109, 112-113, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936), the Supreme Court, speaking through Mr. Justice Cardozo, stated:

"How and when a case arises `under the Constitution or laws of the United States\' has been much considered in the books. Some tests are well established. To bring a case within the statute, a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff\'s cause of action. (Citing cases). The right or immunity must be such that it will be supported if the Constitution or laws of the United States are given one construction or effect, and defeated if they receive another. (Citing cases). A genuine and present controversy, not merely a possible or conjectural one, must exist with reference thereto (Citing cases), and the controversy must be disclosed upon the face of the complaint, unaided by the answer or by the petition for removal. (Citing cases). Indeed, the complaint itself will not avail as a basis of jurisdiction in so far as it goes beyond a statement of the plaintiff\'s cause of action and anticipates or replies to a probable defense. (Citing cases)."

And later, in Bell v. Hood, 327 U.S. 678, 681-683, 66 S.Ct. 773, 775, 776, 90 L.Ed. 939 (1946), the Supreme Court announced:

"Before deciding that there is no jurisdiction, the district court must look to the way the complaint is drawn to see if it is drawn so as to claim a right to recover under the Constitution and laws of the United States. * * * Though the mere failure to set out the federal or Constitutional claims as specifically as petitioners have done would not always be conclusive against the party bringing the suit, where the complaint, as here, is so drawn as to seek recovery directly under the Constitution or laws of the United States, the federal court, but for two possible exceptions later noted, must entertain the suit. * * * The reason for this is that the court must assume jurisdiction to decide whether the allegations state a cause of action on which the court can grant relief as

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