U.S. v. Baylor University Medical Center, 83-1398

• Decision Date: 15 July 1983
• Docket Number: No. 83-1398,83-1398
• Parties: 12 Ed. Law Rep. 270 UNITED STATES of America, Plaintiff-Appellee, v. BAYLOR UNIVERSITY MEDICAL CENTER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 38

711 F.2d 38

12 Ed. Law Rep. 270

UNITED STATES of America, Plaintiff-Appellee, v. BAYLOR UNIVERSITY MEDICAL CENTER, Defendant-Appellant.

No. 83-1398.

United States Court of Appeals Fifth Circuit.

July 15, 1983.

Smith, Smith & Florsheim, Robert W. Smith, Bowen L. Florsheim, Dallas, Tex., for defendant-appellant.

Cheryl B. Wattley, Asst. U.S. Atty., Dallas, Tex., Mark Gross, Atty., William Bradford Reynolds, Walter W. Barnett, Appellate Section, Civ. Rights Div., U.S. Dept. of Justice, Washington, D.C., for plaintiff-appellee.

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

Before GEE, POLITZ, and JOHNSON, Circuit Judges.

PER CURIAM:

In May 1980, the United States Department of Health & Human Services (HHS) received a single complaint alleging that Baylor University Medical Center (Baylor Medical Center) had refused to permit a deaf patient to use an interpreter to aid in understanding her pre and post-operative discussions with the medical staff at Baylor Medical Center. On May 26, 1980, HHS informed Baylor Medical Center that it intended to investigate the complaint since Baylor Medical Center was allegedly a recipient of "federal financial assistance," and, hence, was obligated to comply with section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794. Baylor Medical Center refused to allow HHS to investigate its operations alleging that it was not a recipient of federal financial assistance, and that even if it was, HHS' right to investigate was limited to the specific federally funded programs that were the basis of a particular complaint. Following discovery, it was undisputed that the only federal funds received by Baylor Medical Center were reimbursement payments for services rendered to Medicare and Medicaid beneficiaries. The district court, --- F.Supp. ----, held that Baylor Medical Center's receipt of Medicare and Medicaid funds constituted federal financial assistance and ordered Baylor Medical Center immediately to allow HHS to investigate its operations. Baylor Medical Center's failure to allow HHS to investigate would result in loss of all Medicaid and Medicare funds under the district court's order. The district court refused to grant Baylor Medical Center's motion for a stay pending appeal and, consequently, Baylor Medical Center has moved this Court for a stay pending appeal. We stay the district court's order pending appeal.

Four factors must be considered by this Court in determining whether to stay the district court's order under Fed.R.App.P. 8. These are (1) whether the movant has made a showing of likelihood of success on the merits, (2) whether the movant has made a showing of irreparable injury if the stay is not granted, (3) whether the granting of the stay would substantially harm the other parties, and (4) whether the granting of the stay would serve the public interest. See Coastal States Gas Corp. v. Department of Energy, 609 F.2d 736, 737 (5th Cir.1979); Fortune v. Molpus, 431 F.2d 799, 804 (5th Cir.1970); and Belcher v. Birmingham Trust National Bank, 395 F.2d 685 (5th Cir.1968). However, this Court has refused to apply these factors in a rigid, mechanical fashion. Indeed, in Ruiz v. Estelle, 650 F.2d 555 (5th Cir.1981), this Court held that the movant "need only present a substantial case on the merits when a serious legal question is involved and show that the balance of equities weighs heavily in favor of granting the stay." Id. at 565.

We have little difficulty concluding that a serious legal question is involved in this case. Whether Medicare and Medicaid payments constitute federal financial assistance within the meaning of the Rehabilitation Act is a serious legal question that could have a broad impact upon federal/state relations. Many private institutions, like Baylor Medical Center, receive Medicare and Medicaid funds but do not receive any other form of federal funding. A court, certainly this Court, would want to make a detailed and in depth examination of this serious legal issue before opening the doors of private institutions to the probing tools of an HHS investigation. Although several cases have been cited that touch on this issue, we have been cited to no definitive ruling that would guide us in this case. See NAACP v. Wilmington Medical Center,...