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SPENCER v. COMMUNITY HOSPITAL OF EVANSTON

United States District Court, Northern District of Illinois, E.D


April 22, 1975

WARREN F. SPENCER, M.D., PLAINTIFF,
v.
THE COMMUNITY HOSPITAL OF EVANSTON, DEFENDANT.

The opinion of the court was delivered by: Kirkland, District Judge.

  MEMORANDUM OPINION AND ORDER

This cause comes before the Court on defendant's motion to dismiss the complaint for failure to state a cause of action pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. In the alternative, defendant moves to stay these proceedings on grounds that a similar action is pending in state court.

This is an action for injunctive relief and for damages brought by a Black physician where jurisdiction is invoked pursuant to Title 28 U.S.C. § 1331, 1343 and 1651; Title 42 U.S.C. § 1981, 1983 and 1985; and the Thirteenth and Fourteenth Amendments to the Constitution of the United States. The defendant is an Illinois not-for-profit corporation which renders medical service primarily to the Black community of Evanston. Plaintiff claims that agents of defendant hospital have conspired with agents of predominately White Evanston General Hospital, to cause the smaller hospital, Community Hospital of Evanston, to be merged with or utilized by the Evanston General Hospital as an out-patient ambulatory care facility. Plaintiff's complaint alleges that in furtherance of that goal, "agents of defendant and agents of Evanston General Hospital have conspired to unlawfully remove plaintiff's staff privileges at the defendant hospital" because of plaintiff's opposition to this union.

Plaintiff further alleges that he, individually and on behalf of the Black community of Evanston, has opposed termination of defendant hospital's family practice and general medical programs which serve primarily the Black community of Evanston.

The issue before the Court is whether the allegations of the complaint state a cause of action under §§ 1981, 1983 and 1985 of Title 42 U.S.C.

To be entitled to relief under § 1983 plaintiff must show that defendant was acting "under color of" state law. The controlling consideration is whether there is sufficient relationship between the alleged private entity (defendant hospital) and the State to make the private entity a de facto public body, whose activities would constitute state action.

Three leading Supreme Court cases address the issue. In Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961) a restaurant which discriminated against Blacks leased its premises from an agency of the State of Delaware. The building housing the restaurant was publicly constructed, owned and maintained, and used for public purposes. The court held there was sufficient governmental involvement so as to render the private activities of the restaurant public insofar as due process was concerned. In Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972), the Supreme Court applied concepts narrowing Burton. The case involved a Negro guest of a member of a private club being refused service because of his race. Plaintiff sought to require the liquor board to revoke the club's license until the discriminatory practices were discontinued. The issue was whether the state's regulatory and licensing practice constituted sufficient state action to create a cause of action under § 1983. In holding the state's regulatory activities insufficient to constitute state action, the Court stated:

  Our holdings indicate that where the impetus for the
  discrimination is private, the State must have
  `significantly involved itself with invidious
  discriminations,' . . . in order for the
  discriminatory action to fall within the ambit of the
  constitutional prohibition. 407 U.S. at 173, 92 S.Ct.
  at 1971.

  In December, 1974 the Supreme Court decided Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed. 2d 477. In Jackson plaintiff claimed that termination of electric service to his home by a privately owned utility company constituted state action because of extensive state regulation. In rejecting that claim, the Court specified a more concise test as to state action:

  Here the action complained of was taken by a utility
  company which is privately owned and operated, but
  which in many particulars of its business is subject
  to extensive state regulation. The mere fact that a
  business is subject to state regulation does not by
  itself convert its action into that of the State for
  purposes of the Fourteenth Amendment. Moose Lodge No.
  107 v. Irvis, supra, [407 U.S.] at 176-177, 92
  S.Ct. [1965] at 1973 [32 L.Ed.2d 627]. Nor does the
  fact that the regulation is extensive and detailed,
  as in the case of most public utilities, do so.
  Public Utilities Comm'n v. Pollak, 343 U.S. 451, 462,
  72 S.Ct. 813, 820, 96 L.Ed. 1068 (1952). It may well
  be that acts of a heavily regulated utility with at
  least something of a governmentally protected
  monopoly will more readily be found to be `state'
  acts than will the acts of an entity lacking these
  characteristics. But the inquiry must be whether
  there is a sufficiently close nexus between the State
  and the challenged action of the regulated entity so
  that the action of the latter may be fairly treated
  as that of the State itself. Moose Lodge No. 107,
  supra, at 176, 92 S.Ct. [1965] at 1973, 419 U.S. at
  349, 95 S.Ct. at 453, 42 L.Ed.2d at 483-484 (Emphasis
  added).

The Court went on to say:

  Doctors, optometrists, lawyers, Metropolitan, and
  Nebbia's upstate New York grocery selling a quart of
  milk are all in regulated businesses, providing
  arguably essential goods and services, `affected with
  a public interest.' We do not believe that such a
  status converts their every action, absent more, into
  that of the State. 419 U.S. at 354, 95 S.Ct. at 455,
  42 L.Ed.2d at 485-486.

The Seventh Circuit has twice applied a substantially similar test. In Lucas v. Wisconsin Electric Power Co., 466 F.2d 638 (7th Cir. 1972), later reiterated in Doe v. Bellin Memorial Hospital, 479 F.2d 756 (7th Cir. 1973) the Court said:

  The `under color of' provision [of Title 42 U.S.C.A.
  Sec. 1983] encompasses only such private conduct as
  is supported by state action. That support may take
  various forms, but it is quite clear that a private
  person does not act under color of state law unless
  he derives some `aid, comfort, or incentive,' either
  real or apparent, from the state. Absent such
  affirmative support, the statute is inapplicable to
  private conduct.

  We believe that affirmative support must be
  significant, measured either by its contribution to
  the effectiveness of defendant's conduct, or perhaps
  by its defiance of conflicting national policy, to
  bring the statute into play. 466 F.2d at 654-656.
  (Emphasis Added).

Plaintiff alleges state action predicated upon (1) a favorable $1.00 per year land lease from the Metropolitan Sanitary District of Greater Chicago; (2) receipt of Hill-Burton Act funds in constructing the hospital; (3) operation of an alcohol abuse program pursuant to contract with the City of Evanston; and (4) receipt of funds from the state for care of indigent patients.

The fact that a hospital receives public funding or operates specified medical programs for the state does not of itself satisfy the requirement that the state's involvement with the challenged action of the hospital must be of such nature that action of the hospital can fairly be considered action of the state.

Plaintiff's complaint does not allege that the State of Illinois or any political subdivision thereof has in any way encouraged, aided, or supported the alleged merger, nor that the state has in any way encouraged or supported the removal of Dr. Spencer from staff privileges at the hospital. Neither has it been alleged that the removal of Dr. Spencer would in any way advance the interests of the state or any political subdivision or that such action was taken at their undisclosed request, or with their support or concurrence. In short, plaintff has not alleged state involvement in the hospital action which would permit the challenged action of the hospital to be imputed to the state, within the meaning of § 1983.

Plaintiff relies upon two Fourth Circuit cases: Simkins v. Moses H. Cone Memorial Hospital, 323 F.2d 959 (4th Cir. 1963), and Sams v. Ohio Valley General Hospital Assn., 413 F.2d 826 (4th Cir. 1969). In both Simkins and Sams, the court held that receipt of Hill-Burton funds required sufficient state action in compliance with the Act's provisions to hold certain actions of the hospital to be state action under § 1983. The Seventh Circuit, in the Doe opinion, supra, limited Simkins to its facts:

  Unlike the fact situation in Simkins v. Moses H. Cone
  Memorial Hospital, 323 F.2d 959 (4th Cir. 1963), on
  which plaintiffs place heavy reliance, this record
  does not reflect any governmental involvement in the
  very activity which is being challenged. We find no
  basis for concluding that by accepting Hill-Burton
  funds the hospital unwittingly surrendered the right
  it otherwise possessed to determine whether it would
  accept abortion patients. 479 F.2d at 761.

Plaintiff also relies on Holmes v. Silver Cross Hospital of Joliet, Illinois, 340 F. Supp. 125 (N.D.Ill. 1972). There Judge Will adopted the reasoning of Simkins. However, in an opinion filed March 31, 1975, Judge Will altered his position in Holmes thusly:

  In support of these incidents of state involvement,
  the plaintiffs have offered considerable material
  which arguably establishes that the defendant is
  subject to pervasive regulation, benefits
  substantially from governmental subsidies, and
  provides services which supplement the State's mental
  health system. Even accepting the existence of these
  criteria, in the face of emerging decisional law
  running contra to Holmes, and seriously eroding
  its precedential effect, we find that the plaintiffs
  have failed to establish jurisdiction over the
  defendants. Doyle v. Unicare Health Services, Inc.,
  No. 74 C 828 (Mar. 31, 1975).

Judge Will reviewed Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S. Ct. 449, 42 L.Ed.2d 477 (1974), Doe v. Bellin Memorial Hospital, 479 F.2d 756 (7th Cir. 1973), and authorities from other circuits and concluded:

  Applying the standard reflected by the aforementioned
  cases we do not find that the plaintiffs have alleged
  the requisite involvement by the state in the
  wrongful conduct at issue here. Regardless of the
  extent to which the defendants receive governmental
  support, or the degree of government regulation,
  unless the state activity or involvement related to
  the conduct which caused Mary Ann Hawken's death, the
  instant cause of action is not actionable under §
  1983. Since there is no allegation that the state,
  either through neglect or purposeful failure to
  properly regulate the defendant, sanctioned or gave
  tacit approval to the defendants' course of conduct,
  the defendants cannot be subject to federal
  jurisdiction. (Memorandum Opinion at 9.)

Plaintiff also cites Citta v. Delaware Valley Hospital, 313 F. Supp. 301 (E.D. Pa. 1970). More recent authority in that Circuit, however, casts doubt on the continuing validity of the Citta opinion. For example, in Hoberman v. Lock Haven Hospital, 377 F. Supp. 1178 (M.D. Pa. 1974) the court refused to find state action in a Section 1983 suit even though the defendant hospital received Hill-Burton funds, payments from medicare and medicaid programs, other grants or services from governmental units, and had to comply with rules and regulations promulgated by the state department of welfare. 377 F. Supp. at 1186-1188. See Ozlu v. Lock Haven Hospital, 369 F. Supp. 285, 287-288 (M.D.Pa. 1974) for holding to the same effect.

The cases relied upon by plaintiff are not in accord with the present weight of authority. As to specific state involvements, numerous cases have held that receiving Hill-Burton funds and being subject to state regulation do not convert an otherwise private hospital into one acting "under color of" State law. Ward v. St. Anthony Hosp., 476 F.2d 671 (10th Cir. 1973); Jackson v. Norton-Children's Hospitals, Inc., 487 F.2d 502 (6th Cir. 1973); Barrio v. McDonough District Hosp., 377 F. Supp. 317 (S.D.Ill. 1974); Mulvihill v. Julia L. Butterfield Memorial Hosp., 329 F. Supp. 1020 (S.D.N.Y. 1971); Barrett v. United Hosp., 376 F. Supp. 791 (S.D.N.Y. 1974); Slavkoff v. Harrisburg Polyclinic Hosp., 375 F. Supp. 999 (M.D.Pa. 1974); Shulman v. Washington Hosp. Center, 222 F. Supp. 59 (D.D.C. 1963).

Leasing of land by a hospital from a state agency is insufficient to convert a private hospital into one acting "under color of" state law. Akopiantz v. Bd. of County Com'rs., 65 N.M. 125, 333 P.2d 611 (1959).

Donation of land by the federal or state government to a hospital has likewise been held insufficient. Shulman v. Washington Hosp. Center, 222 F. Supp. at 60, 62 (1963); Monyek v. Parkway General Hosp., 273 So.2d 430 (Fla.Dist.Ct. of App., 1973).

Nor does a private hospital lose its character because it receives funds from the State for care of indigent patients or other governmental financial assistance. Shulman v. Washington Hosp. Center, 222 F. Supp. at 61, 62 (1963); Halberstadt v. Kissane, 31 A.D.2d 568, 294 N.Y.S.2d 841 (1968); West Coast Hospital Ass'n v. Hoare, 64 So.2d 293 (Fla. 1953); Hughes v. Good Samaritan Hospital, 289 Ky. 123, 158 S.W.2d 159 (1942); Van Campen v. Olean General Hospital, 210 App. Div. 204, 205 N.Y.S. 554 (1924), aff'd, 239 N.Y. 615, 147 N.E. 219. Mauer v. Highland Park Hosp. Foundation, 90 Ill. App.2d 409, 232 N.E.2d 776 (1967).

In sum, there is no allegation that the State, either through neglect or purposeful failure to properly regulate the defendant, sanctioned or gave tacit approval to defendant's conduct. Plaintiff's failure to show state activity related to the challenged conduct of defendant, results in the complaint not stating a cause of action under § 1983.

Sections 1981 and 1985 of Title 42 U.S.C. unlike § 1983, proscribe private conduct and, with one exception, do not require state action in order to state a cause of action under their provisions.

It is well settled that to state a cause of action under § 1985, it must be alleged that there was "some racial, or . . . class-based, invidiously discriminat[ed] animus," thereby seeking to deprive a plaintiff and/or others in his class, "of the equal enjoyment of rights secured by law to all."

The principles governing the application of Section 1985(3) were enunciated by the Supreme Court in Griffin v. Breckenridge, 403 U.S. 88, 101-02, 91 S. Ct. 1790, 1798, 29 L.Ed.2d 338 (1971):

  That the statute was meant to reach private action
  does not, however, mean that it was intended to apply
  to all tortious, conspiratorial interferences with
  the rights of others. For, though the supporters of
  the legislation insisted on coverage of private
  conspiracies, they were equally emphatic that they
  did not believe . . . `that Congress has a right to
  punish an assault and battery when committed by two
  or more persons within a State' . . . The
  constitutional shoals that would lie in the path

  of interpreting § 1985(3) as a general federal tort
  law can be avoided by giving full effect to the
  congressional purpose — by requiring, as an element
  of the cause of action, the kind of invidiously
  discriminatory motivation stressed by the sponsors of
  the limiting amendment. . . . The language requiring
  intent to deprive of equal protection, or equal
  privileges and immunities, means that there must be
  some racial, or perhaps otherwise class-based,
  invidiously discriminatory animus behind the
  conspirators action. The conspiracy in other words,
  must aim at a deprivation of the equal enjoyment of
  rights secured by the law to all. (Emphasis Added).

Other cases following Griffin have held Section 1985(3) only encompasses racially discriminatory action. E.g. Arnold v. Tiffany, 487 F.2d 216, 218 (9th Cir. 1973), cert. denied, 415 U.S. 984, 94 S. Ct. 1578, 39 L.Ed.2d 881 (1974); Ward v. St. Anthony Hosp., 476 F.2d 671, 676 (10th Cir. 1973); Jackson v. Norton-Children's Hospitals, Inc., 487 F.2d 502 (6th Cir. 1973); Barrio v. McDonough District Hosp., 377 F. Supp. 317, 320 (S. D.Ill., 1974); Furumoto v. Lyman, 362 F. Supp. 1267, 1286 (N.D.Calif. 1973).

The scope of Section 1985(3) has recently been explained by the Seventh Circuit in Dombrowski v. Dowling, 459 F.2d 190 (7th Cir. 1972). The Court stated:

  The breadth of the statute's coverage is yet to be
  determined, but three categories of protected rights
  have been plainly identified. Griffin gives express
  recognition to a black citizen's Thirteenth Amendment
  rights and to his federal right to travel interstate;
  the title of the statute expressly identifies the
  third category, namely, rights protected by the
  Fourteenth Amendment. We think the § 1983 cases make
  it clear that in this third category a `state
  involvement' requirement must survive Griffin. Id.
  at 195.

Dombrowski indicated that a cause of action under Section 1985(3) seeking to assert a Fourteenth Amendment right must allege state action. Under prevailing standards the defendant is a private hospital and not one sufficiently involved with the state or federal government to be considered as acting "under color of" state law.

The complaint also alleges, under Section 1985, violations of Thirteenth Amendment rights — which must, under Griffin, allege racial or otherwise class-based discriminatory action.

Similarly, under Section 1981, a cause of action may be founded only upon allegations of racially discriminatory conduct. Waters v. Wisconsin Steel Wks. of Internat'l Harvestor Co., 427 F.2d 476, 492 (7th Cir. 1970); Dombrowski v. Dowling, 459 F.2d 190, 199 n. 22 (7th Cir. 1972).

Plaintiff does not allege any invidious, racial or class-based discrimination. He does not allege that defendant hospital is depriving Black physicians of staff privileges or that defendant is depriving Blacks from hospitalization. Rather, plaintiff asserts that on behalf of the Black community of Evanston, he opposed an alleged merger between defendant and Evanston General Hospital, and because of his opposition to this merger "agents of defendant and agents of Evanston General Hospital have conspired to unlawfully remove plaintiff's staff privileges at the defendant hospital." (Complaint, ¶ 5.)

In essence, plaintiff alleges (1) an agreement between management of two hospitals to merge, with control of plaintiff's hospital to pass to the other hospital; (2) as a result of this merger, plaintiff's hospital will be converted to use as an out-patient medical facility; (3) plaintiff opposes this plan because in his view it will have an adverse affect upon the Black community of Evanston; (4) as a result of his opposition, plaintiff's staff privileges were removed as a result of agreement of agents of both hospitals.

This Court holds that these allegations of the complaint do not state a claim for which relief may be granted.

The plan of the two hospitals to merge is not alleged to be illegal. Conversion of use by the incoming management of plaintiff's hospital is not alleged to be illegal. The fact that conversion of use of Community Hospital will have an adverse effect upon the Black community is not alleged to be sufficient basis to make that action illegal. Finally, the allegation that plaintiff was illegally removed from his position because of his disagreement with controlling managers does not state a claim for constitutional redress.

While it is unfortunate that corporate managers sometimes choose to remove rather than deal with those who disagree, such action does not give rise to Constitutionally-predicated relief within the meaning of the Civil Rights Act. The Civil Rights Statutes were not intended to apply to all tortious, conspiratorial interferences with the rights of others. To be entitled to relief under Sections 1981 and 1985, defendant must be motivated by "some racial, or perhaps otherwise class-based, invidiously discriminatory animus." Griffin, supra, 403 U.S. at 102, 91 S.Ct. at 1798.

Sections 1981 and 1985 of the Civil Rights Act require that a plaintiff be deprived of his rights because he is Black. That is not what the complaint in this instance alleges.

Assuming other requirements of the law to be satisfied, an allegation that conversion of use of Community Hospital was done with a design to discriminate against Blacks, and that plaintiff was discharged because of his opposition thereto, would state a cause of action. An allegation that plaintiff was discharged because he is Black would also state a cause of action.

Had plaintiff alleged in his complaint, as opposed to a motion brief, that he was discharged so that a White man could be appointed in his stead, the complaint would state a cause of action. Allegations made during court appearances and in motion briefs do not remedy defective allegations of the complaint.

The complaint is dismissed for failure to state a cause of action under Sections 1981, 1983 and 1985 of the Civil Rights Act. Plaintiff is granted twenty days leave to file an amended complaint.

19750422

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