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HODGE v. PAOLI MEM. HOSP.

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA


June 24, 1977

CLARE C. HODGE, M.D.
v.
PAOLI MEMORIAL HOSPITAL and FRANCIS J. FANFARA, M.D.; HERMAN P. PHILLIPS, M.D.; ROBERT A. INSALATA, M.D.; PETER N. HILLYER, M.D.; RICHARD H. GROSS, M.D.; RICHARD A. DUNSMORE, M.D.; JACK C. WHITE, M.D.; GEORGE R. WADE, M.D.; PAUL E. OBERKIRCHER, M.D.; R. A. ROGOWSKI, M.D.; JOHN S. WILLENS, M.D.; NICHOLAS BATTAFARANO, M.D.; ALLAN J. WALDER, D.D.S.; individually and acting as THE EXECUTIVE COMMITTEE OF THE STAFF OF PAOLI MEMORIAL HOSPITAL and VINCENT BELL; ROBERT BINNION; MRS. ARTHUR BONE; JOHN CHATLEY, JR.; RICHARD DeVIRGILIA; WILLIAM GRIM, SR.; GORDON B. HATTERSLEY, JR.; W. LESTER HIGGINS; EDWIN LAWRENCE; MRS. STOUFFER LENOX; WILLIAM LOWERY; JOSEPH PALMER; MRS. MERRITT PANITT; ALLAN PETERSON; JOSEPH PYLE, JR.; ALAN ROBERSON; STEVAN SIMICH; MRS. ASHTON B.F. SMITH; CLARENCE STAATS, JR.; G. STOCKTON STRAWBRIDGE; ALBERT ZINK, individually and acting as THE BOARD OF DIRECTORS OF PAOLI MEMORIAL HOSPITAL and E. THOMAS SEUTSCH, JR., M.D.; KENNETH L. BITMAN, M.D.; LILLIAN D. DUNSMORE, M.D.; RICHARD W. HARTMANN, JR., M.D.; NICHOLAS F. VIEK, M.D., individually and acting as THE CREDENTIALS COMMITTEE and WM. MICHAEL TOMLINSON, the ADMINISTRATOR OF PAOLI MEMORIAL HOSPITAL CLARE C. HODGE, M.D. v. PAOLI MEMORIAL HOSPITAL and VINCENT BELL; ROBERT BINNION; MRS. ARTHUR BONE; JOHN CHATLEY, JR.; RICHARD DeVIRGILIA; WILLIAM GRIM, SR.; GORDON B. HATTERSLEY, JR.; W. LESTER HIGGINS; EDWIN LAWRENCE; MRS. STOUFFER LENOX; WILLIAM LOWERY; JOSEPH PALMER; MRS. MERRITT PANITT; ALLAN PETERSON; JOSEPH PYLE, JR.; ALAN ROBERSON; STEVEN SIMICH; MRS. ASHTON B. F. SMITH; CLARENCE STAATS, JR.; G. STOCKTON STRAWBRIDGE; ALBERT ZINK, individually and acting as THE BOARD OF DIRECTORS OF PAOLI MEMORIAL HOSPITAL

The opinion of the court was delivered by: BECHTLE

MEMORANDUM AND ORDER

 BECHTLE, J.

 The issue presented in these cases is whether the receipt of federal funds under the Hill-Burton Act, 42 U.S.C. § 291 et seq.,1 by defendant Paoli Memorial Hospital ("Hospital"), converts the actions of its board of directors and staff in their non-retention of staff doctors into actions taken "under color of" state law, within the meaning of the Civil Rights Act of 1871, 42 U.S.C. § 1983.

 Plaintiff, a general surgeon, was on the medical staff of the Hospital until August 25, 1976, when he was advised by telephone that he would not be reappointed. On August 26, 1976, plaintiff received a written confirmation of the August 25 action in a letter from the executive director of the Hospital. That letter also notified plaintiff that, effective October 1, 1976, his lease in the Paoli Memorial Medical Office Building would be terminated and that he would be expected to vacate the premises. That same day, plaintiff brought a civil rights action (C.A. 76-2715) ("first action") under 42 U.S.C. § 1983 *fn2" alleging that the non-reappointment action taken by the Hospital, its board of directors and certain of its medical staff members violated his rights guaranteed by the Due Process Clause of the Fourteenth Amendment, and requesting temporary, preliminary and permanent injunctive relief, as well as money damages. The Honorable Donald W. Van Artsdalen, Emergency Judge, granted plaintiff's request for a temporary restraining order. On September 2, 1976, this Court held a hearing on plaintiff's request for a preliminary injunction, which request we denied the following day. *fn3" On September 30, 1976, plaintiff filed another civil rights action (C.A. 76-3064) ("second action") under 42 U.S.C. § 1983 *fn4" alleging that the August 26 prospective termination of his lease violated his rights guaranteed by the Due Process Clause of the Fourteenth Amendment. Again, he requested temporary, preliminary and permanent injunctive relief, as well as money damages. The trial on the request for a permanent injunction in the first action was held on October 13, 1976, at which time we also heard and denied plaintiff's requests for temporary and preliminary injunctive relief in the second action. We then consolidated the two actions for purposes of permanent injunctive relief. Counsel for the parties then agreed that the testimony taken at the September 2 preliminary injunction hearing, coupled with the record made at the Hospital's administrative hearing, constituted a sufficient record upon which this Court could render a final decision. *fn5"

 In order to maintain an action under 42 U.S.C. § 1983 *fn6" against a nominally "private" party, the plaintiff is required to establish that the defendant's allegedly unconstitutional conduct constituted action "under color of" state law. *fn7" This state action requirement may be satisfied if either of two conditions is met. *fn8" First, state action may be found where "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." Jackson v. Metropolitan Edison Co., 419 U.S. 345, 351, 42 L. Ed. 2d 477, 95 S. Ct. 449 (1974). Second, state action is present where the state and the defendant have entered into a symbiotic relationship, in which the state has "so far insinuated itself into a position of interdependence with [the defendant] that it must be recognized as a joint participant in the challenged activity . . . ." Burton v. Wilmington Parking Authority, 365 U.S. 715, 725, 6 L. Ed. 2d 45, 81 S. Ct. 856 (1961). *fn9"

 Plaintiff contends that defendants acted "under color of" state law due to the fact that the Hospital received approximately 1.1 million dollars under the Hill-Burton Act when the Hospital was originally constructed. *fn10" He relies upon a series of Fourth Circuit cases, Simkins v. Moses H. Cone Memorial Hospital, 323 F.2d 959 (4th Cir. 1963), cert. denied, 376 U.S. 938, 11 L. Ed. 2d 659, 84 S. Ct. 793 (1964); Sams v. Ohio Valley General Hospital Association, 413 F.2d 826 (4th Cir. 1969); Christhilf v. Annapolis Emergency Hospital Association, Inc., 496 F.2d 174 (4th Cir. 1974); Duffield v. Charleston Area Medical Center, Inc., 503 F.2d 512 (4th Cir. 1974); Doe v. Charleston Area Medical Center, Inc., 529 F.2d 638 (4th Cir. 1975), and an Eastern District of Pennsylvania case, Citta v. Delaware Valley Hospital, 313 F. Supp. 301 (E.D. Pa. 1970), in support of his contention. Essentially, those cases hold that the mere receipt of Hill-Burton funds carries with it the obligation to observe federal constitutional mandates such as the Due Process Clause of the Fourteenth Amendment. We decline to follow those cases for several reasons.

 First, all that plaintiff has shown is that the Hospital received Hill-Burton funds. No doubt, in connection with the acceptance of benefits under the Hill-Burton Act, the Hospital "agreed to abide by a variety of regulatory terms related both to its operations and to the use of the . . . funds." Doe v. Bellin Memorial Hospital, 479 F.2d 756, 761 (7th Cir. 1973) (Stevens, J.). However, this general governmental involvement is far different from the almost complete physical and financial interdependence that existed between the private restaurant owner and the state in Burton. See, e.g., Hollenbaugh v. Carnegie Free Library, 545 F.2d 382 (3d Cir. 1976). Second, since we do not believe that the receipt of Hill-Burton funds created a "symbiotic relationship" between the Hospital and the Commonwealth, it was necessary for plaintiff to establish that the Commonwealth participated in the challenged activity. See Jackson, supra. Plaintiff offered no evidence, however, that the Commonwealth in any way fostered or encouraged via statute, regulation or otherwise, the termination by defendants of his staff privileges and lease. Finally, the above-cited cases represent a distinct minority view. We choose not to follow that view but rather to follow the view held by the overwhelming majority of courts, that the mere receipt of Hill-Burton funds by a hospital does not convert all of its actions into actions taken "under color of" state law. See Greco v. Orange Memorial Hospital Corp., 513 F.2d 873 (5th Cir. 1975), cert. denied, 423 U.S. 1000, 46 L. Ed. 2d 376, 96 S. Ct. 433 (1976); Jackson v. Norton-Children's Hospitals, Inc., 487 F.2d 502 (6th Cir. 1973), cert. denied, 416 U.S. 1000, 40 L. Ed. 2d 776, 94 S. Ct. 2413 (1974); Doe v. Bellin Memorial Hospital, 479 F.2d 756 (7th Cir. 1973); Briscoe v. Bock, 540 F.2d 392 (8th Cir. 1976); Ascherman v. Presbyterian Hospital of Pacific Medical Center, Inc., 507 F.2d 1103 (9th Cir. 1974); Ward v. St. Anthony Hospital, 476 F.2d 671 (10th Cir. 1973); Holton v. Crozer-Chester Medical Center, 419 F. Supp. 334 (E.D.Pa. 1976); Acosta v. Tyrone Hospital, 410 F. Supp. 1275 (W.D.Pa. 1976); Slavcoff v. Harrisburg Polyclinic Hospital, 375 F. Supp. 999 (M.D.Pa. 1974); Ozlu v. Lock Haven Hospital, 369 F. Supp. 285 (M.D.Pa. 1974), aff'd mem., 511 F.2d 1395 (3d Cir. 1975). Accordingly, the complaints will be dismissed for failure to state a claim upon which relief can be granted.

 An appropriate Order will be entered.

 ORDER

 AND NOW, TO WIT, this 24th day of June, 1977, IT IS ORDERED that the above-cited actions are hereby dismissed for a failure to state a claim upon which relief can be granted.

 LOUIS C. BECHTLE, J.


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