Conner v. Salina Regional Health Ctr, Inc
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
| BRIAN E. CONNER, M.D., Plaintiff – Appellant, v. SALINA REGIONAL HEALTH CENTER, INC., Defendant – Appellee. | No. 00-3348 D.C. No. 99-CV-2451-GTV(D. Kansas) |
ORDER AND JUDGMENT(*)
_______________________________________
Before SEYMOUR and PORFILIO, Circuit
Judges, STAGG, District Judge.(2)
__________________________________________
Brian E. Conner, M.D. (“Conner”) applied for reappointment to the medical
staff of Salina Regional Health Center (“SRHC”). The privately-owned hospital
referred the matter to its peer review panel, which recommended denial of the
application. SRHC affirmed the panel and this lawsuit followed. Finding that
SRHC’s decision to deny Conner’s application could not be fairly attributable to
the state of Kansas, the district court granted a Rule 12(b)(6) motion to
dismiss. As a result, Conner’s federal and supplemental state law claims were
dismissed. Conner appeals these dismissals. For the reasons set forth below, we
AFFIRM the district court’s dismissal of Conner’s claims.
I. BACKGROUND
SRHC is a privately-owned Kansas corporation. Prior to 1997, Conner served as
an opthamologist on SHRC’s medical staff. As required by SRHC by-laws, Conner
submitted an application for reappointment to SRHC’s medical staff. However, on
February 3, 1997, SRHC notified Conner that his application for reappointment to
the medical staff was denied.
After exhausting all administrative remedies, Conner filed this action
alleging violations of his rights to due process and free speech under 42 U.S.C.
? 1983.(1) In his complaint, Conner asserted that as health
care providers are heavily regulated under Kansas law, they can be liable under
section 1983. See Kan. Admin. Reg. ? 28-34-6a and Kan. Stat. ?
65-4921-4930. Conner further contended that section 65-4929(b)(2) of the Kansas Statutes designates health care
providers, such as SRHC, as “state officers” and as such SRHC could be attacked
under section 1983. Conner’s due process claim rested on his assertion that he
was deprived of protected property interests without due process of law.
According to Conner, this deprivation was specifically manifested in an October
1995 administrative suspension which prevented him from performing certain
medical procedures, and ultimately the denial of his application for
reappointment to SRHC’s medical staff. Conner’s freedom of speech claim was
based on his argument that his suspension and application denial were meted out
in retaliation for complaints he had made in relation to the quality of patient
care at SRHC. In lieu of an answer, SRHC moved to dismiss for failure to state a
claim upon which relief can be granted. See Fed.R.Civ.P. 12(b)(6). SRHC
asserted that it was a privately-owned hospital corporation and, therefore,
could not act under color of state law.
In a Memorandum and Order granting SRHC’s motion, the district court found
that the language of section 65-4929(b) was written to protect qualified health
care providers against antitrust liability and noted that there were different
analyses to determine the existence of the state action immunity doctrine for
protection from antitrust liability as compared with the analysis to establish
state action for purposes of section 1983. As a result, the court found that
section 65-4929(b) did not “in and of itself establish that such health care
providers act under color of law for purposes of section 1983.” The court
explained that “the issue is whether a private health care provider’s actions
are fairly attributable to the State” and that under traditional section 1983
analyses, SRHC’s “decision in denying reappointment of plaintiff to its medical
staff was not an action fairly attributable to the State.” On appeal, Conner
contends that the district court misinterpreted section 65-4929(b) and erred in
determining that under no set of facts could he prove that SRHC’s denial of his
application constituted state action.
- . DISCUSSION
We review the granting of a Rule 12(b)(6) motion to dismiss de novo,
applying the same standard as the district court. See Ramirez v. Dept.
of Corrections, State of Colorado, 222 F.3d 1238, 1240 (10th Cir. 2000). The
purpose of a motion to dismiss is to test the sufficiency of the complaint, and
the court must “accept all allegations of the complaint as true and must
construe them in the light most favorable to the plaintiff.” Coosewoon v.
Meridian Oil Co., 25 F.3d 920, 924 (10th Cir. 1994). The court accepts as
true all well-pleaded facts, as distinguished from conclusory allegations,(3) and reads all reasonable inferences in favor of
the plaintiff. See Witt v. Roadway Express, 136 F.3d 1424, 1428
(10th Cir. 1998). We will uphold dismissal “only when it appears that the
plaintiff can prove no set of facts in support of the claims that would entitle
him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99
(1957).
In order to state a claim under section 1983, two allegations are required.
First, Conner must “allege that some person has deprived him of a federal right.
Second, he must allege that the person who has deprived him of that right acted
under color of state or territorial law.” Gomez v. Toledo, 446 U.S. 635,
640, 100 S. Ct. 1920, 1923 (1980) (internal citation omitted). As Conner has
raised due process and free speech claims in his complaint, he has
unquestionably alleged deprivation of his federal rights. The primary issue,
therefore, is whether these alleged deprivations were accomplished under color
of state law.
In determining if SRHC acted under color of state law, the ultimate issue is
whether its actions were “fairly attributable” to the state. Lugar v.
Edmondson Oil Co., 457 U.S. 922, 937, 102 S. Ct. 2744, 2753 (1982). In
Lugar, the Supreme Court adopted a two-part approach to determine the
question of fair attribution. First, the deprivation of the right must be caused
“by the exercise of some right or privilege created by the State or by a rule of
conduct imposed by the State or by a person for whom the State is responsible.”
Id. Second, the depriving party must “fairly be said to be a state
actor.” Id. A party can be “fairly said to be a state actor” if he is a
state official, if “he has acted together with or has obtained significant aid
from state officials,” or if “his conduct is otherwise chargeable to the State.”
Id. Conner’s appeal primarily flows from his interpretation of
section 65-4929 of the Kansas Statutes. Section 65-4929 is a part of the Kansas
Risk Management Act (“KRMA”) which was enacted as a part of comprehensive
medical malpractice legislation in 1986. See Anglemyer v. Hamilton
County Hospital, 58 F.3d 533, 540 (10th Cir. 1995). In an effort to “protect
the public’s general health,” the KRMA requires “[i]mplementation of risk
management plans and reporting systems . . . and peer review.” Kan. Stat. ?
65-4929(a). Under section 65-4929(b), health care providers required to perform
these duties are considered “state officials engaged in a discretionary function
and all immunity of the state shall be extended to such health care providers .
. . , including that from the federal and state antitrust laws.” Conner argues
that such language transforms SRHC, a private hospital, into a state actor.
A federal court should apply the rules of statutory interpretation and
construction applied by the highest court of that state. Citizens for
Responsible Gov’t State Political Action Comm. v. Davidson, 236 F.3d 1174,
1191 (10th Cir. 2000); Comm’r v. Estate of Bosch, 387 U.S. 456, 465, 87
S. Ct. 1776, 1782 (1967) (“[The District Court] may be said to be, in effect,
sitting as a state court”). The Supreme Court of Kansas has held that “[i]n
interpreting a statute, we must give effect to its plain and unambiguous
language, without determining what, in our view, the law should be.” George
v. Capital South Mortgage Invs., Inc., 961 P.2d 32, 43 (Kan. 1998). However,
courts are not permitted to consider isolated parts of an act but must construe
all parts together because literal interpretation of one section, alone, could
conceivably contravene the purpose of the legislation. See Kansas
Comm’n. on Civil Rights v. R.G. Howard, 544 P.2d 791, 794 (Kan. 1975).
When read in its entirety, section 65-4929, by itself, cannot be read to
subject health care providers to section 1983 liability. Although Conner
correctly points out that health care providers that perform the duties set out
under the KRMA are considered state officials, no mention is made of the
potential for section 1983 liability. Rather, immediately following this
language, section 65-4929(b) clearly and unambiguously provides that “all
immunity of the state shall be extended to such health care providers . . . ,
including that from the federal and state antitrust laws.”
While such language explicitly manifests the Kansas legislature’s intention
to shield health care providers from antitrust liability, it is not necessarily
instructive of a desire within the legislature to create new liabilities. In
fact, the Supreme Court has stated, “[a]lthough by no means identical, analysis
of the existence of state action justifying immunity from antitrust liability is
somewhat similar to the state action inquiry conducted pursuant to ? 1983 and
the Fourteenth Amendment.” Nat’l Collegiate Athletic Ass’n v. Tarkanian,
488 U.S. 179, 195 n. 14, 109 S. Ct. 454 n. 14 (1988). We have also recognized
that there is a distinction between the state action immunity doctrine for
purposes of federal antitrust laws and the requirement that a private party act
“under color” of law for purposes of section 1983 claims. See
Tarabishi v. McAlester Reg’l Hosp., 951 F.2d 1558, 1565 n. 6 (10th Cir.
1991) (holding that the determination that a public hospital was liable under
section 1983 was not dispositive of the issue of whether the hospital was
entitled to antitrust immunity) (comparing Ezpeleta v. Sisters of Mercy
Health Corp., 800 F.2d 119, 122 (7thCir. 1986), implicitly overruled on
other grounds by Patrick v. Burget, 486 U.S. 94, 99-101, 108 S. Ct. 1658
(1988)). In order to establish state action immunity, the challenged restraint
must be clearly articulated as state policy and the policy must be actively
supervised by the state itself. See Patrick, 486 U.S. at 100, 108
S. Ct. at 1663. By contrast, the test for state action under section 1983
requires that the infringement of federal rights be fairly attributable to the
state. See Lugar, 457 U.S. at 937, 102 S. Ct. at 2753. As such,
the language of section 65-4929(b) is not indicative of the statute’s ability to
attach section 1983 liability to health care providers.
To the contrary, section 65-4929(c) provides that “[n]othing in this section
shall be construed to require health care providers or review, executive or
impaired provider committees to be subject to or comply with any other law
relating to or regulating state agencies, officers or employees.” Such language
suggests that the legislature did not intend to subject health care providers to
the same responsibilities and liabilities of state officials. Accordingly,
measuring section 65-4929(b)’s silence in relation to state action liability
against the statute’s stated intent to establish state action immunity while
establishing no further duties, we find that mere application of the term “state
official” to health care providers that undertake risk management and peer
review is not determinative of a section 1983 claim.
Conner also argues that the regulatory scheme implemented by the KRMA
mandated the risk management and peer review process utilized by SRHC in denying
Conner’s reapplication. Specifically, Conner contends that through the KRMA, the
state influences and in fact delegates the duties of risk management and peer
review to health care providers.
The Supreme Court has noted that “[w]hat is fairly attributable is a matter
of normative judgment, and the criteria lack rigid simplicity.” Brentwood
Acad. v. Tennessee Secondary Sch. Athletic Ass’n, 531 U.S. 288, 295, 121
S.Ct. 924, 930 (2001). As a result, we have recognized that we must take a
fairly flexible approach in determining if state action exists. See
Gallagher v. Neil Young Freedom Concert., 49 F.3d 1442, 1447 (10th Cir.
1995). In fact, the Supreme Court has developed, and we have utilized, a variety
of approaches to assist in determining if state action exists. See
id. (discussing the close nexus, symbiotic relationship, joint action,
and public function tests). While these tests illustrate that fair attribution
can be present absent direct government involvement, the hallmark remains fair
attribution. Accordingly, every successful section 1983 claim against a
nominally private entity must allege state involvement so pervasive that the
challenged action can be said to be fairly attributable to the state, whether
that involvement is effectuated through state coercion, state influence, state
reliance, or delegation of state power. See Blum v. Yaretsky, 457
U.S. 991, 1004, 102 S.Ct. 2777, 2786 (1982).
Such involvement is not present by virtue of the state regulatory scheme in
question. While the KRMA sets out fairly extensive regulations in relation to
risk management programs and reporting requirements, it does not develop a
system for health care providers to implement with respect to their peer review
functions. Specifically, Section 65-4922 of the KRMA provides guidelines that
medical care facilities must establish risk management programs and submit to
the department of health and environment their risk management plan for
approval. Section 65-4923 of the KRMA establishes requirements for reporting
acts by health care providers that fall below the applicable standard of care or
may be grounds for disciplinary action. However, at no point does the KRMA
mandate or even suggest peer review procedures for medical care facilities to
implement. Rather, section 65-4929(a) merely states “peer review pursuant to
K.S.A. 65-4915 and amendments thereto effectuate this policy [for providing and
regulating certain aspects of health care delivery in order to protect the
public’s general health].” Section 65-4915 provides, inter alia, “‘[p]eer
review’ means any of the following functions: . . . (D) evaluate the
qualifications, competence and performance of the providers of health care or to
act upon matters relating to the discipline of any individual provider of health
care . . . .” Although this language illustrates that peer review is important
to the underlying policy of the KRMA, nowhere does the Act indicate state
involvement in the process used by health care providers.
Kansas Administrative Regulations section 28-34-6a also includes provisions
relating to medical staff admission. Section 28-34-6a provides in pertinent
part:
Each hospital shall maintain an organized medical staff. Admission to the
staff and clinical privileges associated with membership shall be granted by the
governing authority through a mechanism which evaluates each member’s
qualifications to engage in that member’s area of clinical practice.
In relation to the necessary qualifications for admission to the staff,
section 28-34-6a provides various factors including “certification, fellowship,
membership on a specialty board or society, or the completion of a general
practice residency.” However, the section clearly provides that membership
decisions cannot be made solely on one of these factors. Such provisions are
hardly coercive.
Even if these provisions were not so limited, we have previously recognized
that “government funding and regulation of an ostensibly private organization,
in the absence of other factors, is insufficient to establish government
action.” Gilmore v. Salt Lake Cmty. Action Program, 710 F.2d 632, 635
(10th Cir. 1983). In fact, under circumstances similar to the case at bar where
a private entity has been pervasively regulated by the state, state action will
not be found “absent evidence of state influence, involvement, or control over
the personnel decisions which are subject to challenge.” McDonald v. Eastern
Wyoming Mental Health Center, 941 F.2d 1115, 1118 (10th Cir. 1991).
Therefore, it is clear that these regulations alone do not suffice to support a
finding of state action.
Ultimately, we agree with the district court’s determination that Conner’s
action should not survive a Rule 12(b)(6) motion for dismissal because the power
to revoke staff privileges and make other personnel decisions have not
traditionally been held by the state. In this context, we find the Fifth
Circuit’s holding in Wong v. Stripling, 881 F.2d 200 (5th Cir.
1989), persuasive. In Wong, the plaintiff, a member of the medical staff
of the defendant private hospital, had his medical privileges revoked. On
appeal, the doctor argued that his dismissal constituted state action due to
comprehensive regulation of revocation, restriction, or suspension of staff
privileges in Mississippi hospitals. The Fifth Circuit disagreed and held that
“private hospitals had at common law a right to revoke the staff privileges of
physicians for good cause.” Id. at 202. The Fifth Circuit further
concluded that the legislation in question “simply authorizes action which is
already legal, and requires only that the hospital comply with its own bylaws in
making staffing decisions.” Id.
Similar to the defendant hospital in Wong, SRHC’s power to deny
reappointment of staff privileges existed before the Kansas regulatory scheme
was promulgated. Additionally, neither section 65-4929 nor section 28-34-6a
impose upon medical facilities any further requirements than those contained
within their own bylaws. In fact, as noted above, section 28-34-6a specifically
provides:
After considering medical staff recommendations, the governing body shall
affirm, deny or modify each recommendation for appointment to the medical staff
and the granting of clinical privileges to any practitioner. Formal application
for membership and for granting of clinical privileges shall follow established
procedures set forth in the bylaws, rules and regulations of the medical staff.
Therefore, the power to affirm, deny or modify an appointment or
reappointment lies squarely on the governing body of the medical facility.
Consequently, the denial of Conner’s application for reappointment cannot be
fairly attributable to the state.
AFFIRMED.
Entered for the Court
Tom Stagg
District Judge
FOOTNOTES
Click footnote number to return to
corresponding location in the text.
*.This order and judgment is not binding precedent,
except under the doctrines of law of the case, res judicata, and collateral
estoppel. The court generally disfavors the citation of orders and judgments;
nevertheless, an order and judgment may be cited under the terms and conditions
of 10th Cir. R. 36.3.
2.The Honorable Tom Stagg, United States District Judge
for the Western District of Louisiana, sitting by designation.
1.In his complaint, Conner also asserted breach of
contract and tortious interference as theories for recovery. Below, the district
court declined the opportunity to exercise supplemental jurisdiction over these
claims after dismissing all federal law claims. As we are affirming the district
court’s dismissal of all federal claims, it is unnecessary to revisit the state
law issues.
2.Section 65-4929(b) provides:
Health care providers and review, executive or impaired provider committees
performing their duties under K.S.A. 65-4922, K.S.A. 65-4923 and K.S.A. 65-4924
and peer review pursuant to K.S.A. 65-4915 and amendments thereto for the
purposes expressed in subsection (a) and 65-4915 and amendments thereto shall be
considered to be state officers engaged in a discretionary function and all
immunity of the state shall be extended to such health care providers and
committees, including that from the federal and state antitrust laws.
3.See Maher v. Durango Metals, Inc., 144
F.3d 1302, 1304 (10th Cir. 1998).