The opinion of the court was delivered by: MUIR
This action, which alleges that Plaintiff, a physician, was denied his right to a hearing by Defendant Lock Haven Hospital on charges that he engaged in unethical conduct, was first filed in the form of a Petition for Declaratory Judgment in the state court. On June 26, 1973, Defendant removed the action to this Court. Plaintiff then filed a motion to remand, alleging that the principal grounds for relief arose under state, not federal law. The motion to remand was denied by this Court on the ground that Plaintiff had stated a cause of action under 42 U.S.C. § 1983 and that, therefore, federal jurisdiction was present. The Court assumed jurisdiction over the Plaintiff's state law claim under principles of pendant jurisdiction. Following denial of the Defendant's motion to dismiss, a trial was conducted before this Court without a jury. At trial, the complaint was dismissed as to Defendant David W. Thomas for failure to state a claim, leaving Lock Haven Hospital as the sole defendant.
Plaintiff Edward Hoberman is a licensed physician and surgeon with full medical and surgical privileges on the staff of the Defendant Lock Haven Hospital (hereinafter referred to as "Hospital"). Defendant Hospital is a non-profit Pennsylvania corporation approved by the Commonwealth of Pennsylvania to operate a general hospital in Lock Haven, Clinton County, Pennsylvania.
On July 6, 1971, David W. Thomas, M.D., a member of the Hospital medical staff, presented to Robert Beckley, M.D., Chief of the Medical Staff, formal charges of unethical practices and misconduct against Dr. Hoberman. The charges included solicitation of patients for surgery, coercion and harassment of doctors who do not refer all of their cases to Dr. Hoberman, uncontrolled emotional outbursts throughout the Hospital, and the equivalent of a fee-splitting arrangement with other members of the hospital staff. On or about July 7, 1971, Dr. Beckley gave a copy of the Thomas letter to Plaintiff and advised Plaintiff that the matter would be discussed by the medical staff executive committee in about two weeks. Dr. Beckley informed Plaintiff that he could answer the charges in writing if he wished or he could attend the medical staff executive committee meeting and have legal counsel there to advise him but that counsel could not participate in the meeting. Within a week after receiving the Thomas letter accusing the Plaintiff, Dr. Beckley received another letter, this one from Dr. "Y" accusing a Dr. "X", a fourth doctor, of certain professional misconduct. Dr. "X" was likewise notified of his right to respond and to be present at the medical staff executive committee meeting, where those charges would be considered.
Dr. Beckley took precautions in an attempt to reduce the possibility that the charges against the doctors would be publicized. Despite these precautions, the approximately 28 members of the hospital medical staff were aware that Dr. Thomas had brought charges of unethical conduct against Dr. Hoberman, even though the exact substance of those charges may not have been known. In addition, many people in the community of Lock Haven outside of the Hospital were aware of the charges because Dr. Hoberman himself showed the Thomas letter to various friends, civic leaders, and members of the community.
On July 28, 1971, the executive committee of the hospital medical staff met in closed session to investigate and discuss the two letters accusing Plaintiff and Dr. "X" of misconduct. He was given an opportunity to appear at the meeting and to answer the charges against him. Plaintiff was given no opportunity to confront and cross-examine witnesses giving evidence against him. Although he did appear, Plaintiff refused to comment upon, admit, or deny, the charges made by Dr. Thomas, despite requests from persons at the meeting that he do so.
After considering the charges against both Plaintiff and Dr. "X", and their failure to deny or refute those charges, the executive committee concluded that the doctors had been guilty of professional misconduct. The Committee decided that while it had no authority to take disciplinary action under the by-laws governing the medical staff, some warning should be issued. Therefore, a memorandum to the medical staff was drafted providing in part:
"The Executive Committee of the Medical Staff acting in response to charges by two of the members of the Staff, submits the following:
"(2) Hospital rules now prescribe no penalties therefor. Recommendations to the staff for additions to rules and regulations to correct this deficiency will be submitted separately."
The memorandum was signed by each member of the executive committee and was circulated to the members of the medical staff with a copy of the "Principles of Medical Ethics" attached thereto.
Dr. Thomas, who had brought the charges against the Plaintiff, presented evidence to the executive committee in the absence of the Plaintiff, sat as a member of the executive committee, and participated in both the discussions and the finding against Dr. Hoberman. Richard Clover, M.D., presented evidence against Dr. Hoberman to the executive committee in the absence of the Plaintiff and participated in the discussions and finding of the executive committee.
The by-laws of the hospital medical staff in effect at the time of the July 28, 1971 executive committee meeting did not provide any mechanism for punishment of staff members found to have engaged in professional misconduct. However, Article VII, § 2, sub-§ 2 of the by-laws provided that the executive committee of the staff, sitting as the credentials committee, had the duty to "investigate any breach of ethics that may be reported" and "review all information available regarding the competence of staff members and as a result of such review, to make recommendations for the granting of privileges, reappointments, and the assignment of members to various divisions and departments . . . ." Where the credentials committee recommends reduction of privileges or does not recommend reappointment. Article III, § 5 of the by-laws, while not setting out any specific procedural requirements in connection therewith, prescribes that the ...