Willis v. University Health Services, Inc.

• Decision Date: 22 June 1993
• Docket Number: No. 92-8763,92-8763
• Citation: 993 F.2d 837
• Parties: 62 Empl. Prac. Dec. P 42,427, 85 Ed. Law Rep. 620 Carol H. WILLIS, Plaintiff-Appellant, v. UNIVERSITY HEALTH SERVICES, INC., dba University Hospital, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 837

993 F.2d 837

62 Empl. Prac. Dec. P 42,427, 85 Ed. Law Rep. 620

Carol H. WILLIS, Plaintiff-Appellant, v. UNIVERSITY HEALTH SERVICES, INC., dba University Hospital,

et al., Defendants-Appellees.

No. 92-8763.

United States Court of Appeals, Eleventh Circuit.

June 22, 1993.

Mary M. Brockington, Warner R. Wilson, Anne W. Lewis, Wilson Strickland & Benson, Atlanta, GA, for plaintiff-appellant.

Raymond Gordon Chadwick, Jr., Robert Perry Sentell, III, Knox & Zacks, Augusta, GA, for defendants-appellees.

Appeal from the United States District Court for the Southern District of Georgia.

Before KRAVITCH and HATCHETT, Circuit Judges, ATKINS ^*, Senior District Judge.

HATCHETT, Circuit Judge:

In this appeal from the district court's entry of summary judgment for the appellee, we affirm the district court's ruling that a hospital's firing of the appellant did not constitute state action for 42 U.S.C. § 1983 purposes.

FACTS

University Health Services, Inc. (UHS), the appellee, is a private, nonprofit corporation that operates University Hospital pursuant to a lease agreement with the Richmond County Hospital Authority (RCHA), a public hospital authority. UHS employed Carol Willis, the appellant, as a registered nurse at University Hospital in Augusta, Georgia, from December, 1987, until January 2, 1990. During 1989 and January, 1990, Willis also taught private childbirth education classes to prospective parents in Augusta, Georgia. In October, 1990, the Augusta Chronicle published a letter Willis wrote to the editor, expressing her opinions on obstetrical practices. ¹ On January 2, 1990, after reading the article, UHS officials fired Willis because of "loss of confidence due to poor judgment." ² University Hospital officials mailed a copy of UHS's grievance policy to Willis, and afforded her a full UHS grievance procedure hearing on August 17, 1990. After the five-hour hearing, the grievance committee upheld Willis's termination.

UHS operates University Hospital pursuant to a lease agreement with the RCHA. RCHA is a public hospital authority "created ... by resolution of the Board of Commissioners of Richmond County, pursuant to the Hospital Authorities Act...." Richmond County Hosp. Authority v. Richmond County, 255 Ga. 183, 336 S.E.2d 562, 563 (1985). Accordingly, RCHA's acts would be state acts for purposes of section 1983 liability. See Wofford v. Glynn Brunswick Memorial Hosp., 864 F.2d 117, 118 (11th Cir.1989) (finding that the hospital was a public hospital authority created under O.C.G.A. §§ 31-7-1 et seq., and thus, its actions constituted state action under section 1983).

Willis contends that UHS and RCHA are so intertwined as to implicate state action. UHS contends, however, that UHS and RCHA have only a generalized relationship which is insufficient to establish state action. Both parties rely heavily upon the lease Willis highlights the following facts to show an intertwining relationship between UHS and RCHA: (1) UHS is a corporation created for the purpose of assuming the duties of RCHA; (2) RCHA leased its facilities to UHS for forty years for only one dollar; (3) UHS may bring and defend lawsuits either in its own name or in the name or on behalf of RCHA; (4) UHS may enforce indigent care contracts in the name of RCHA; (5) RCHA must, upon request from UHS, exercise its power of eminent domain to acquire property for the purpose of providing for Richmond County's health care needs; (6) RCHA has four members who serve on the UHS board of trustees; (7) UHS must provide RCHA with facilities and support staff services; (8) UHS and RCHA share the same address, telephone number, and physical office; (9) RCHA appoints the UHS trustees and the medical staff board member from UHS' nominations; (10) UHS and RCHA share the same attorneys and accountants and report the accountants' annual audit to each other; (11) UHS must comply with the Georgia Open Records Act; and (12) UHS has a public purpose and exists to serve the public.

agreement and urge this court to concentrate on the lease agreement.

On the other hand, UHS highlights the following facts to establish that UHS and RCHA are distinct entities: (1) UHS assumed control of the hospital so that it could be competitive outside of Richmond County; (2) University Health, Inc. is the parent corporation for UHS and other services; (3) UHS has entered a joint venture with a local hospital to develop other care facilities; (4) UHS has broad discretion to diminish, curtail, or cease services to promote the public health needs of the community; (5) UHS is authorized to "augment, improve or increase any existing services or add any service or shift current or new services to another facility"; (6) UHS has authority to determine whether acquisition, construction, or improvement of hospital facilities is necessary; (7) UHS has sole authority to repair or replace any of its assets; (8) UHS may obtain insurance policies payable solely to UHS; (9) UHS has the authority to enforce rules and regulations regarding safety and care; and (10) UHS controls the daily operations and management of the hospital.

PROCEDURAL HISTORY

On December 28, 1990, Willis filed this lawsuit in the United States District Court for the Southern District of Georgia, pursuant to 42 U.S.C. § 1983, claiming that UHS's relationship with RCHA implicated state action. In her complaint, Willis alleged: (1) UHS's actions infringed upon her right of free speech as guaranteed under the First and Fourteenth Amendments; and (2) UHS's actions deprived her of a property interest protected under the Fourteenth Amendment. UHS moved for summary judgment contending that: (1) its decision to fire Willis was not state action under 42 U.S.C. § 1983; (2) its termination of Willis did not deprive her of rights secured under the Constitution or laws of the United States; and (3) its employment of Willis provided only a privilege and not a property right entitled to protection under the Due Process Clause of the Fourteenth Amendment.

The district court granted summary judgment for UHS, finding that no state action existed to support Willis's claim under 42 U.S.C. § 1983, 804 F.Supp. 1557 (1992).

ISSUES

To determine whether the district court erred in granting summary judgment, we must decide whether UHS's termination of Willis involved state action.

STANDARD OF REVIEW

On appeal, a grant of summary judgment is subject to de novo review. MacKenzie v. City of Rockledge, 920 F.2d 1554, 1558 (11th Cir.1991). We review the evidence and all factual inferences in the light most favorable to the nonmoving party to determine whether any genuine issue of material fact exists and whether the moving party is entitled to judgment as a matter of law. MacKenzie, 920 F.2d at 1558.

DISCUSSION

To obtain relief under 42 U.S.C. § 1983, Willis must show (1) that the appellees deprived her of a right secured under the Constitution or federal law and (2) that the deprivation occurred under color of state law. Sims v. Jefferson Downs Racing Assoc., Inc., 778 F.2d 1068, 1076 (5th Cir.1985) (citations omitted). "[A] private hospital is subject to the provisions of 42 U.S.C. § 1983 and the Fourteenth Amendment only if its activities are significantly affected with state involvement." Greco v. Orange Memorial Hospital Corp., 513 F.2d 873, 877 (5th Cir.), cert. denied, 423 U.S. 1000, 96 S.Ct. 433, 46 L.Ed.2d 376 (1975). Previously, this circuit set forth the three primary tests the Supreme Court has used to determine whether state action exists: (1) the public function test; (2) the state compulsion test; and (3) the nexus/joint action test. National Broadcasting Co., Inc. v. Communications Workers of America, AFL-CIO, 860 F.2d 1022, 1026 (11th Cir.1988). ³ The public function test limits state action to instances where private actors are performing functions "traditionally the exclusive prerogative of the state." NBC, 860 F.2d at 1026 (citations omitted). The state compulsion test limits state action to instances where the government "has coerced or at least significantly encouraged the action alleged to violate the Constitution." NBC, 860 F.2d at 1026 (citations omitted). The nexus/joint action test applies where "the state has so far insinuated itself into a position of interdependence with the [private party] that it was a joint participant in the enterprise." NBC, 860 F.2d at 1026-27 (citations omitted). We must determine on a case-by-case basis whether sufficient state action is present from a non-state actor (defendant) to sustain a section 1983 claim. Bailey v. McCann, 550 F.2d 1016, 1018 (5th Cir.1977).

Willis contends that she satisfies each of the three primary tests. After reviewing the record, however, we conclude that Willis fails to satisfy the first two tests. UHS did not exercise powers traditionally reserved exclusively to the state, nor did RCHA coerce or encourage UHS to fire Willis. Hence, we only address whether Willis has shown that UHS and RCHA are so intertwined in a "symbiotic relationship" that they satisfy the nexus/joint action test, thereby demonstrating the existence of state action.

Both parties cite persuasive authority from other circuits to support their contentions. ⁴ Although each "intertwining" case must be decided on its unique facts, our own former Fifth Circuit has adequately addressed the issue we face in Greco on similar facts, and we are persuaded to follow it. ⁵

In Greco, a physician brought a 42 U.S.C. § 1983 action against the Orange Memorial Hospital Corporation, a private hospital corporation that operated a hospital in a publicly owned building leased from Orange county, alleging...