Moore v. Williamsburg Regional Hospital

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

BLAKE H. MOORE, MD, FACS, 

Individually and as the Personal

Representative of the Estate of

Angela Lynn Moore; KINGSTREE

SURGICAL ASSOCIATES, LLC,

Plaintiffs-Appellants,

v.

WILLIAMSBURG REGIONAL HOSPITAL;

JOHN HALES; BRETON JUBERG, MD;

EVELYN ANSA, MD; JOEL

BONAPARTE, MD; BERNADETTE

BONAPARTE, MD; KENNETH

JOHNSON, MD; STEVE COREY,

DPM; MICHELLE COREY-  No. 07-1966

BUTTERWORTH, DPM; KEVIN

SPRINGLE, MD; GILBERTAS RIMKUS,

MD, Jointly and Severally,

Defendants-Appellees,

and

RAYMOND ALLEN, MD; BASHIR

OBEIDOU, MD; MARION RIGGS,

Jointly and Severally,

Defendants,

PROVIDENCE HOSPITAL,

Party in Interest.



2 MOORE v. WILLIAMSBURG REGIONAL HOSPITAL

Appeal from the United States District Court

for the District of South Carolina, at Florence.

Terry L. Wooten, District Judge.

(4:05-cv-02940-TLW)

Argued: December 3, 2008

Decided: March 12, 2009

Before WILKINSON, DUNCAN, and AGEE,

Circuit Judges.

Affirmed by published opinion. Judge Wilkinson wrote the

opinion, in which Judge Duncan and Judge Agee joined.

COUNSEL

ARGUED: Charles William Hinnant, Jr., MEDICOLEGAL

CONSULTANTS, L.L.C., Anderson, South Carolina, for

Appellants. Travis Dayhuff, NELSON, MULLINS, RILEY &

SCARBOROUGH, L.L.P., Columbia, South Carolina, for

Appellees. ON BRIEF: Stuart M. Andrews, Jr., NELSON,

MULLINS, RILEY & SCARBOROUGH, L.L.P., Columbia,

South Carolina, for Appellees Williamsburg Regional Hospi-

tal and John Hales; Marian Williams Scalise, Lydia L. Magee,

RICHARDSON, PLOWDEN & ROBINSON, Myrtle Beach,

South Carolina, for Appellees Breton Juberg, MD, Evelyn

Ansa, MD, Joel Bonaparte, MD, Bernadette Bonaparte, MD,

Kenneth Johnson, MD, Steve Corey, DPM, Michelle Corey-

Butterworth, DPM, Kevin Springle, MD, and Gilbertas Rim-

kus, MD.

MOORE v. WILLIAMSBURG REGIONAL HOSPITAL 3

OPINION

WILKINSON, Circuit Judge:

In this case, a physician brings multiple state law and fed-

eral due process claims against a hospital and its officials for

suspending his staff privileges based on allegations that he

had sexually abused his adopted daughter. While the scope of

immunity under the Health Care Quality Improvement Act,

42 U.S.C. § 11101 et seq., certainly has limits, we think the

immunity attaches to defendants under the circumstances

here, and plaintiff’s state law claims fail in any event. We also

reject plaintiff’s claims that the hospital’s suspension of his

privileges violates the Due Process Clause, both because the

decision to suspend plaintiff’s privileges was not state action

and because the procedures afforded plaintiff satisfied the

Fourteenth Amendment. For these reasons, we affirm the dis-

trict court’s grant of summary judgment to defendants.

I.

Plaintiff is a general surgeon who treats both children and

adults in the course of his practice. He formerly held privi-

leges at Williamsburg Regional Hospital ("WRH") in Kings-

tree, South Carolina. WRH serves a population of fewer than

40,000 people and was previously the Williamsburg County

Memorial Hospital. Since October 2001, it has operated as a

private non-profit corporation, but the state continues to be

involved: the Governor approves the Board of Directors and

the state and county provide funding. While practicing at

WRH, plaintiff raised numerous complaints about patient care

at the hospital, including fatal mistakes in medication dosages

and the mishandling of human tissue specimens. He alleges

that WRH officers threatened him for voicing these com-

plaints and took the following actions in retaliation.

At some point after the alleged threats, South Carolina

Department of Social Services ("DSS") took plaintiff’s three

4 MOORE v. WILLIAMSBURG REGIONAL HOSPITAL

adopted children into emergency protective custody because

of allegations that plaintiff’s wife had physically abused the

children. DSS filed a complaint against plaintiff and his wife

in Family Court and placed the children in foster care. While

in foster care, plaintiff’s adopted daughter told her therapist

that she had been sexually abused by plaintiff and his wife. In

2003, two DSS units each investigated the sexual abuse alle-

gations, but found the evidence to be inconclusive and

declined to investigate further. Then, in 2004, Clarendon

County DSS conducted a third investigation and, after finding

by a preponderance of evidence that plaintiff and his wife had

sexually abused the child, filed a Family Court complaint

seeking to terminate plaintiff’s and his wife’s parental rights

and place them on the Central Registry of Child Abuse and

Neglect.

Soon after DSS filed the complaint, defendant Dr. Breton

C. Juberg, the WRH Chief of Staff and Chairman of the Med-

ical Executive Committee ("MEC"), became aware of the

DSS sexual abuse allegations against plaintiff. He informed

defendant John C. Hales, Jr., the Chief Executive Officer of

WRH, of the allegations, and Hales obtained a copy of the

complaint and other documents from the clerk of the Family

Court. The complaint detailed statements the child made to

her DSS caseworker, therapist, foster parents, and forensic

interviewer about the sexual abuse, and also recounted the

prior physical abuse case that had resulted in a finding of

Abuse and Neglect against plaintiff and his wife. After

reviewing these documents, Hales and Juberg agreed to sum-

marily suspend plaintiff’s hospital privileges until the DSS

sexual abuse allegations were resolved.

In a letter dated September 13, 2004, Juberg notified plain-

tiff that his privileges were summarily suspended pursuant to

the hospital’s Medical Staff Bylaws provisions for corrective

action. Juberg explained that "[b]ased upon serious allega-

tions of sexual misconduct of a minor child . . . the Medical

Staff and [WRH] believe that the best interest of patient care

MOORE v. WILLIAMSBURG REGIONAL HOSPITAL 5

and welfare is served by an immediate summary suspension

of your clinical staff privileges." Juberg also notified plaintiff

that the MEC would review his summary suspension that eve-

ning and invited him to present his case, although he would

not be allowed to vote on the matter.

At the meeting, the MEC considered several documents

from plaintiff’s DSS file including the sexual abuse com-

plaint, the DSS probable cause finding, the child’s forensic

interview report, progress notes from her therapy sessions,

drawings by the child, and a Family Court order which

included information about the prior physical abuse case.

Plaintiff attended the meeting and presented argument, but the

MEC ultimately voted to continue his suspension.

Two days later, Hales sent a letter to plaintiff confirming

that the MEC had voted to continue his suspension and

informing plaintiff of his right to have the decision reviewed

in a hearing with representation by counsel pursuant to Article

VIII of the hospital’s bylaws. The next day, WRH submitted

a report to the National Practitioner Data Bank ("NPDB"), as

it believed was required by 42 U.S.C. § 11133,1 stating that

plaintiff’s clinical privileges had been summarily suspended

indefinitely because of "serious allegations of sexual miscon-

duct of a minor child."

Plaintiff requested a review hearing which was held on

November 22, 2004. Prior to the hearing, WRH provided

plaintiff a list of witnesses expected to testify and a list of

Hearing Panel members who were not his economic competi-

tors. To accommodate plaintiff’s objection, WRH removed

1

"Each health care entity which—(A) takes a professional review action

that adversely affects the clinical privileges of a physician for a period lon-

ger than 30 days . . . shall report to the Board of Medical Examiners." 42

U.S.C. § 11133. However, as the NPDB Guidebook emphasizes, a suspen-

sion is not reportable when it is due to "administrative reasons not related

to professional competence or professional conduct." See NPDB Guide-

book, at E-21 (September 2001).

6 MOORE v. WILLIAMSBURG REGIONAL HOSPITAL

one doctor from the panel who had previously treated plain-

tiff’s children. Plaintiff’s counsel was then notified of the

final panel composition by letter and given an opportunity to

object, but plaintiff did not object before the hearing.

At the hearing, Juberg and plaintiff’s counsel presented

argument. Both sides called witnesses, cross-examined wit-

nesses, and presented documents for the panel to consider.

Plaintiff and his wife testified that they did not sexually abuse

their daughter and presented evidence including the result of

a neuropsychiatric test indicating that plaintiff failed to meet

the diagnostic criteria for pedophilia, a prior DSS notice that

a sexual abuse investigation was unfounded, and a forensic

examination that did not prove sexual abuse. But, during the

two additional months the hearing was held open, plaintiff

was not able to come forward with evidence the panel consid-

ered adequate to dispel its concerns. Ultimately, the panel

issued a report upholding the MEC’s decision to continue

plaintiff’s summary suspension.

Plaintiff appealed the panel’s decision to WRH’s Board of

Directors at a full-blown hearing on April 11, 2005. A week

later, after receiving additional evidence, the four board mem-

bers present voted unanimously to uphold the suspension.

This marked the end of the review process.

A few months later, on July 7, 2005, DSS filed a motion

for voluntary nonsuit with prejudice in the sexual abuse case

against plaintiff on the grounds that it would not be in the

child’s best interests to continue the case. DSS argued that it

would be traumatic for the child to testify and the suit would

not benefit the child because plaintiff’s parental rights had

already been terminated pursuant to an agreement of the par-

ties in the physical abuse case. The Family Court entered an

order granting DSS’s motion for nonsuit on July 11, 2005.

A month later, plaintiff sent a letter to WRH requesting that

his clinical privileges be immediately reinstated because DSS

MOORE v. WILLIAMSBURG REGIONAL HOSPITAL 7

had dismissed the sexual abuse suit and no one had ever filed

criminal charges against him. WRH did not reinstate plaintiff,

however, because he would not authorize the hospital where

he had been practicing during his suspension to provide the

necessary credentialing information that WRH needed to rein-

state him in accordance with the bylaws. Plaintiff had also

requested that WRH void its NPDB report and asserts that he

has not been able to accept employment with other health care

providers because of the report.

On October 14, 2005, plaintiff filed this suit. He claims that

WRH, Hales, Juberg, and other WRH staff members are liable

in damages because WRH’s suspension of his privileges vio-

lated various state laws and 42 U.S.C. § 1983. After discov-

ery, defendants filed a motion for summary judgment on all

claims and plaintiff filed a cross-motion for summary judg-

ment on his § 1983 claims. The district court granted defen-

dants’ motion on all counts. The court held that defendants

were entitled to immunity from plaintiff’s state law claims

under the Health Care Quality Improvement Act, 42 U.S.C.

§ 11101 et seq., and that plaintiff’s § 1983 claims failed on

the merits and because WRH was not a state actor. Plaintiff

appeals, and we review the district court’s grant of summary

judgment de novo. See Holland v. Washington Homes, Inc.,

487 F.3d 208, 213 (4th Cir. 2007).

II.

Plaintiff alleges that defendants are liable for intentional

infliction of emotional distress, tortious interference with

existing and prospective contractual relationships, defama-

tion, breach of contract, promissory estoppel, unfair trade

practices, and civil conspiracy. The district court held that

defendants were entitled to immunity from all these state law

damages claims pursuant to the Health Care Quality Improve-

ment Act ("HCQIA"), 42 U.S.C. § 11101 et seq.

8 MOORE v. WILLIAMSBURG REGIONAL HOSPITAL

A.

The HCQIA provides immunity from damages to partici-

pants in a "professional review action" if the action meets cer-

tain standards and follows certain procedures. 42 U.S.C.

§ 11111(a)(1). HCQIA provides this immunity as "incentive

and protection for physicians engaging in effective profes-

sional peer review." Id. at § 11101(5). Congress believed that

effective peer review, including mandatory reporting to a

nationwide database, could alleviate the national problem of

"[t]he increasing occurrence of medical malpractice" by "res-

trict[ing] the ability of incompetent physicians to move from

State to State without disclosure or discovery of the physi-

cian’s previous damaging or incompetent performance." Id. at

§ 11101; see also Freilich v. Upper Chesapeake Health, Inc.,

313 F.3d 205, 211-12 (4th Cir. 2002) (discussing the purpose

of HCQIA). However, HCQIA does not provide unqualified

immunity to all peer review decisions. In order to ensure that

such review is effective and not abused, HCQIA only pro-

vides immunity to "professional review actions" based on a

physician’s "competence or professional conduct," 42 U.S.C.

§ 11151(9), and it mandates specific standards and procedures

that must be followed, id. at § 11112(a).

The issue here is whether WRH’s action constitutes a "pro-

fessional review action" within the meaning of HCQIA and

therefore falls within the scope of HCQIA immunity at all.2

2

Section 11151(9) of HCQIA defines "professional review action" as

"an action or recommendation of a professional review body . . . which is

based on the competence or professional conduct of an individual physi-

cian (which conduct affects or could affect adversely the health or welfare

of a patient or patients), and which affects (or may affect) adversely the

clinical privileges . . . of the physician." 42 U.S.C. § 11151(9). It provides

further that "an action is not considered to be based on the competence or

professional conduct of a physician if the action is primarily based on—"

(A) a physician’s association with a professional society, (B) a physician’s

fees or advertising, (C) a physician’s participation in certain types of

health plans, (D) a physician’s association with a private group practice,

"or (E) any other matter that does not relate to the competence or profes-

sional conduct of a physician." Id.

MOORE v. WILLIAMSBURG REGIONAL HOSPITAL 9

Plaintiff argues that WRH’s suspension of his privileges is not

a "professional review action" because it was not based on his

"competence or professional conduct." He argues that allega-

tions of sexual abuse outside of the professional context are

not related to his competence or his professional conduct as

a doctor. He urges a stark dividing line between private and

professional conduct and contends that "[n]on-medical allega-

tions" cannot be the basis for professional review actions

because they are only proper when medical expertise is neces-

sary to the determination.

Even though many "professional review actions" are based

on (1) medical conduct at a health care facility that (2)

occurred at some point in the past, see e.g., Gaboldoni v.

Washington County Hosp. Ass’n, 250 F.3d 255, 258 (4th Cir.

2001); Imperial v. Suburban Hosp. Ass’n, 37 F.3d 1026, 1029

(4th Cir. 1994), we think plaintiff’s argument that only such

conduct is covered goes too far. First, when describing allow-

able bases for a professional review action, the statute begins

with the critical term "competence." 42 U.S.C. § 11151(9). A

physician’s competence can be implicated by conduct outside

a health care facility if there is a clear nexus between that con-

duct and the ability to render patient care. Second, the statute

says "professional conduct" rather than "conduct in the course

of medical practice" or "conduct that occurs in the hospital."

Tellingly, therefore, Congress chose to use language that was

somewhat broader than the more specific formulations plain-

tiff suggests. Moreover, the statutory definition includes a

parenthetical defining "professional conduct" to include "con-

duct [which] affects or could affect adversely the health or

welfare of a patient or patients." 42 U.S.C. § 11151(9)

(emphasis added). This parenthetical clearly implies that the

term "professional conduct" is not limited to past medical

conduct that has already affected patient welfare. Instead,

HCQIA immunity allows hospitals to take prophylactic mea-

sures that need not involve proof of improper conduct beyond

a reasonable doubt so long as statutory procedures designed

to protect the reputation and livelihood of the physician have

10 MOORE v. WILLIAMSBURG REGIONAL HOSPITAL

been observed. In short, nothing in the statute requires peer

review committees to wait until medical disaster strikes.

Contrary to plaintiff’s position then, HCQIA immunity may

protect review actions based on conduct that has occurred out-

side of the hospital, but could realistically occur or affect

treatment in the hospital. At some point, a peer review com-

mittee could surely conclude that it was only a matter of time

before erratic or destructive behavior outside the medical set-

ting began to manifest itself in patient care. If plaintiff’s view

were accepted, however, peer review committees would never

under any circumstances be permitted to conclude that even

the most advanced cases of alcohol addiction, illegal sub-

stance abuse, incipient dementia, or, as here, sexual miscon-

duct toward children on the part of someone with a pediatric

practice could affect professional "competence." 42 U.S.C.

§ 11151(9). Nor does the immunity depend, as plaintiff sug-

gested at argument, upon whether the peer review decision

required the application of medical expertise. The line

between strictly medical and non-medical expertise would be

a difficult one to draw (must the medical expertise relate to

the physician’s conduct or condition, the nature of the physi-

cian’s practice, or the connection between the two?). Clearly

the "competence" of a physician may be affected by arguably

non-medical difficulties which are manifested outside the hos-

pital: a hopelessly alcoholic physician or one adjudged to be

mentally incompetent could only by happenstance render

competent patient care. Most importantly, the statute did not

adopt plaintiff’s proposed "medical expertise" standard.

Adopting a strict line between professional and private con-

duct, or one based on the need for medical expertise, would

improperly restrict the scope of HCQIA immunity and

thereby involve the courts unduly in matters of hospital gov-

ernance. Congress struck a careful balance between protecting

physicians who are subject to professional review actions and

providing immunity that encourages peer review and protects

patients. Plaintiff’s view of the statute compromises the latter

goal.

MOORE v. WILLIAMSBURG REGIONAL HOSPITAL 11

At the other end, the hospital defendants urge us to adopt

a broad interpretation of "professional review action" that

encompasses almost any action based on conduct that might,

in the peer review body’s opinion, one day affect patient care.

Defendants argue that because the whole purpose of HCQIA

was to encourage peer review, Congress meant to provide an

expansive grant of immunity.

The breadth of defendants’ argument ignores the limiting

language of the statute. It can be argued, of course, that

almost any form of private misconduct may have some con-

ceivable impact on a physician’s performance, but no fair

reading of the statute (with its emphasis upon competence and

professional conduct) would indicate Congress intended to go

nearly so far. Human beings are not smooth and rounded peb-

bles, but often contradictory in their habits and traits. A sur-

geon whose personal life might not bear close scrutiny may

nonetheless save lives with his talents in the operating room.

Giving peer review bodies the discretion to suspend staff

privileges and report physicians for largely private defalca-

tions is thus to arm those reviewers with a club that Congress

did not provide. Defendants’ view poses the risk that driving

infractions, messy divorces or custody battles, tax or financial

difficulties only tenuously or speculatively related to medical

competence might fall within the purview of peer review. But

this view is untenable. In no sense did Congress mean to

encourage fishing expeditions into private behavior. A "pro-

fessional review action" requires that the record reflect a clear

nexus between the basis for an "action" or "recommendation"

and a physician’s medical practice. 42 U.S.C. § 11151(9). For

the statute, notwithstanding its generous protections for peer

review, imposes limits on the definition of "professional

review action." The statute uses the word "professional" — a

term that connotes the opposite of "personal"—and further

emphasizes that there are limits on "professional review

actions" by explicitly listing bases for actions which are out-

side of the definition, see 42 U.S.C. § 11151(9)(A)-(E),

12 MOORE v. WILLIAMSBURG REGIONAL HOSPITAL

including "any other matter that does not relate to the compe-

tence or professional conduct of a physician." Id. at

§ 11151(9)(E). Defendants’ all-encompassing interpretation

of the immunity would, like plaintiff’s narrow restriction of

it, upset the balance Congress struck.

B.

Both sides therefore advance interpretations that are too

rigid—they treat this as an all-or-nothing matter. But we

decline to adopt the absolute rule of either side in resolving

the matter before us. In this case, there exists a clear nexus

between the alleged sexual misconduct and plaintiff’s medical

practice. We do not infer such a nexus from the representa-

tions of the parties, for the record itself demonstrates a con-

nection between the basis for plaintiff’s suspension and his

medical practice such that the hospital legitimately feared for

patient well-being. While it would serve the interest of no one

to lay bare all the details and disputes surrounding the conduct

at issue, the record indicates that WRH suspended plaintiff

out of a concern that he might sexually abuse child patients

in the course of his practice. As the district court noted, "[t]he

office of the clerk of the Family Court had provided Mr.

Hales, Chief Executive Officer of the Hospital, with docu-

ments regarding the alleged sexual abuse." JA 649. The MEC

reviewed materials from DSS evidencing sexual abuse,

including the DSS investigation report concluding that there

was a preponderance of evidence that plaintiff and his wife

had sexually abused the child, drawings by the child, and

statements made by the child to her therapist, forensic inter-

viewer, and DSS caseworker. JA 905-52. The Hearing Com-

mittee Report stated that plaintiff’s privileges were suspended

based on DSS’s sexual abuse allegations, the prior Family

Court finding of child abuse and neglect, and "the fact that

[plaintiff] has the ability to take care of minor children within

the hospital." JA 880. The Hearing Panel emphasized the "in-

timate relationship between physician and patient" and its

concern for patient safety. JA 881.

MOORE v. WILLIAMSBURG REGIONAL HOSPITAL 13

Juberg, Hales, and members of the Medical Executive

Committee each testified that they were concerned that plain-

tiff was a threat to patients, most notably children, at the hos-

pital. Even a member of the MEC who did not think

plaintiff’s suspension was warranted stated that the suspen-

sion was not unreasonable because people "were genuinely

concerned about the safety and welfare of the children in the

community." JA 432. According to Juberg, the hospital con-

sidered limiting plaintiff’s privileges to adult patients and pro-

hibiting him from treating children, but ultimately didn’t

adopt this solution because it believed that "with his history

of violating hospital policy, and because [WRH is] such a

small institution and had really no way of policing or monitor-

ing his goings on," simply limiting plaintiff’s privileges

"would still not protect the patients at the hospital." JA 707.

He emphasized that "[w]e couldn’t be sure that he would not

have contact with children." Id. The same conclusion was

reflected in Hales’ comment that "[m]y main concern was for

children." JA 720. A member of the Board of Directors

declared that the "Board felt that upholding the suspension

was the only reasonable and prudent option we had to ensure

the safety of the patients at the Hospital." JA 838. And at oral

argument, plaintiff’s counsel confirmed a crucial point: that

plaintiff treated children at the hospital.

Certainly the hospital could have considered the relation-

ship between the sexual abuse allegations and plaintiff’s pedi-

atric practice with more particularity, but there is ample

evidence that those involved in plaintiff’s peer review action

recognized the potential for plaintiff to harm patients. The

hospital feared that child abuse could occur on its watch and

therefore was steering between two forms of potential civil

liability: liability for child sexual abuse and liability for sus-

pending a physician.

To be sure, there will be close cases surrounding the scope

of HCQIA immunity. But that should hardly be surprising.

The statutory test that a professional review action must be

14 MOORE v. WILLIAMSBURG REGIONAL HOSPITAL

"based on the competence or professional conduct of an indi-

vidual physician (which conduct affects or could affect

adversely the health or welfare of a patient or patients)," 42

U.S.C. § 11151(9), presupposes a certain number of close

calls. That is the case when any general standard is applied to

the particular. But the entire purpose of an immunity provi-

sion is to afford some discretionary latitude to decisionmakers

to make close calls unhaunted by the specter of civil liability.

See Elder v. Holloway, 510 U.S. 510, 514 (1994) ("The cen-

tral purpose of affording public officials qualified immunity

from suit is to protect them ‘from undue interference with

their duties and from potentially disabling threats of liabil-

ity.’").

It may not help therefore to posit future close hypothetical

cases in the abstract, for matters come before decisionmakers

in a far more concrete and factually variegated form. No sin-

gle peer review proceeding precisely replicates another.

Moreover, peer reviewers will not as a practical matter be pre-

occupied with whether something arose in a medical or non-

medical setting, but whether it is of a sufficient dimension to

plainly affect a doctor’s "competence" to practice medicine.

In other words, it would prove problematic to chop the statu-

tory standard into judicially fashioned boxes or categories.

Rather, we should let the statutory test of "competence" stand

simpliciter. In this case, the hospital conducted lengthy pro-

ceedings and saw the matter through three levels of review in

what was manifestly an effort to determine plaintiff’s "com-

petence" to practice medicine. Whether or not we would have

made the same decision ourselves is not the point. Any statu-

tory standard inescapably involves some difficult exercises in

judgment and to deny decisionmakers the right to exercise

judgment in close cases is to defeat the purpose of immunity.

There are of course distinct limits on the scope of HCQIA

immunity, but where as here the record reflects a clear nexus

between the basis for plaintiff’s suspension (evidence of child

sexual abuse) and his medical practice (involving children)

MOORE v. WILLIAMSBURG REGIONAL HOSPITAL 15

such that the hospital legitimately feared that plaintiff might

harm child patients, it can be said that the review action was

based on plaintiff’s "competence" to treat children. 42 U.S.C.

§ 11151(9). And conversely, it cannot be said that the review

action was based on a "matter that does not relate to the com-

petence or professional conduct of a physician." Id. at

§ 11151(9)(E). The hospital’s action therefore falls within the

scope of HCQIA immunity.

C.

Having concluded that WRH’s action is a "professional

review action," we turn to the remaining requirements for

HCQIA immunity. There is a statutory presumption that a

professional review action meets the requirements for immu-

nity unless the presumption is rebutted by a preponderance of

the evidence. 42 U.S.C. § 11112(a).

Under § 11112(a)(1), the review action must be taken "in

the reasonable belief that the action was in the furtherance of

quality health care." There is ample evidence that WRH took

the professional review action to protect child patients from

sexual abuse.

Under § 11112(a)(2), the review action must be taken "after

a reasonable effort to obtain the facts of the matter." The hos-

pital engaged in a three-tier review of the initial summary sus-

pension (the Medical Executive Committee, the Hearing

Panel, and the Board of Directors). At every level, the mem-

bers reviewed the evidence collected by DSS, heard wit-

nesses, and gave plaintiff an opportunity to present evidence

and cross-examine adverse witnesses. In fact, the Hearing

Panel held open the record for two months so that plaintiff

could present additional evidence, and it ultimately produced

a 114-page transcript, 70 pages of exhibits, and a detailed

report including findings of fact based on the specific evi-

dence considered. The Board even met twice so that plaintiff

could present additional evidence.

16 MOORE v. WILLIAMSBURG REGIONAL HOSPITAL

Under § 11112(a)(3), the hospital must provide plaintiff

"adequate notice and hearing procedures" that are further

specified in § 11112(b). WRH satisfied these requirements.

Plaintiff contends that WRH did not provide an adequate

hearing because members of the Hearing Panel had previously

participated in the MEC vote. We reject this argument

because it is not based on the statutory requirement, which

was satisfied, that the Hearing Panel consist of "individuals

who are appointed by the entity and are not in direct eco-

nomic competition with the physician involved."

§ 11112(b)(3)(A)(iii). Moreover, plaintiff waived any right to

object in this appeal because he did not object to the final

composition of the Hearing Panel when it was convened.

Plaintiff had previously objected to the initial composition of

the Hearing Panel, had been notified of the final panel compo-

sition prior to the hearing, and knew firsthand who had partic-

ipated in the MEC meeting which he had attended. Although

he claims to have objected to the Hearing Panel composition

at the Board of Director’s review of his suspension, he had

already waived any right to object by that point.

Under § 11112(a)(4), the review action must be taken "in

the reasonable belief that the action was warranted by the

facts known." There is evidence that defendants considered

the facts and concluded that a suspension was necessary to

protect patients due to plaintiff’s pediatric practice and the

difficulties of limiting his practice to adults. Plaintiff asserts

that WRH should have proceeded by administrative suspen-

sion and not filed a detrimental report to the NPDB. However,

plaintiff does not point to any requirement in HCQIA that a

hospital must proceed in such a fashion. Absent such a

requirement, where the action is reasonably warranted by the

facts and otherwise meets HCQIA standards, it is valid.

Administrative suspension simply represents another option

for corrective action.

In sum, plaintiff has not met his burden of showing that the

requirements in § 11112(a)(1)-(4) were not met. Therefore

MOORE v. WILLIAMSBURG REGIONAL HOSPITAL 17

HCQIA immunity applies and insulates defendants from

plaintiff’s state law damages claims.

III.

We also note as an alternative basis for affirming the judg-

ment that plaintiff’s state law claims would fail in any event.

First, plaintiff claims that the hospital’s conduct constitutes

intentional infliction of emotional distress. This claim fails

because the hospital’s actions were hardly "so ‘extreme and

outrageous’ so as to exceed ‘all possible bounds of decency’"

as required to state a claim for IIED. See Hansson v. Scalise

Builders of S.C., 650 S.E.2d 68, 70 (S.C. 2007) (quoting Ford

v. Hutson, 276 S.E.2d 776, 778 (S.C. 1981)). An attempt by

the hospital to protect its minor patients, even if ultimately

misguided, surely does not "exceed all possible bounds of

decency."

Second, plaintiff claims that the hospital’s peer review

action amounts to tortious interference with plaintiff’s exist-

ing and prospective contracts with the hospital, patients, and

managed care plans. These claims fail because, even if plain-

tiff established the other elements of the torts, plaintiff has not

presented evidence sufficient to establish that defendants’

actions were without justification or were for an improper

purpose. See Camp v. Springs Mortgage Corp., 426 S.E.2d

304, 305 (S.C. 1993) ("absence of justification" is an element

of tortious interference with existing contracts); Crandall

Corp. v. Navistar Int’l Transp. Corp., 395 S.E.2d 179, 180

(S.C. 1990) ("improper purpose" or "improper methods" is an

element of tortious interference with prospective contracts);

see also Restatement (Second) Torts § 767 cmt.f (whether

interference promotes a "public interest" is a factor to deter-

mine whether interference is improper). The action taken here

was not without justification nor is the protection of hospital

patients an improper purpose. The fact that the hospital also

observed HCQIA’s safeguards of procedural fairness blunts

18 MOORE v. WILLIAMSBURG REGIONAL HOSPITAL

plaintiff’s claim that any interference with possible contrac-

tual relationships was somehow tortious.

Third, plaintiff claims that defendants are liable for defa-

mation. He argues that they knowingly filed a false report

with the NPDB because they filed the report under the head-

ing of "sexual misconduct" even though the hospital’s action

was based on mere allegations. Plaintiff is correct that the

"basis for action" was listed as "Sexual Misconduct (D1)," but

he fails to mention that this label came from the NPDB list of

Basis for Action Codes and was used by the hospital to con-

form to NPDB formatting requirements. He also takes the

phrase out of context. The report provides:

Description of Act(s) or Omission(s) or Other Rea-

sons for Action Taken: SERIOUS ALLEGATIONS

OF SEXUAL MISCONDUCT OF A MINOR

CHILD.

Basis for Action: SEXUAL MISCONDUCT (D1)

When read in full, the report accurately states what happened:

that the hospital suspended plaintiff’s privileges due to serious

allegations of sexual misconduct. The label "sexual miscon-

duct" is not false; it is simply the most relevant general report-

ing category provided by the NPDB. Furthermore, we doubt

South Carolina law would deny these defendants a defense of

privilege when they could reasonably have believed that they

were required by federal law to report plaintiff’s suspension.

See 42 U.S.C. § 11133 (health care entity is required to report

"a professional review action that adversely affects the clini-

cal privileges of a physician for a period longer than 30

days"); see also 42 U.S.C. § 11137(c) (providing immunity

for HCQIA mandated reports made "without knowledge of

the falsity of the information contained in the report").

Fourth, plaintiff claims that WRH is liable for violating the

hospital bylaws under the theory of breach of contract. Plain-

MOORE v. WILLIAMSBURG REGIONAL HOSPITAL 19

tiff, however, points us to no South Carolina decision indicat-

ing that hospital bylaws create such a contractual relationship.

In any event, plaintiff’s claimed violation of Article VIII,

§ 4(a) of the bylaws (that members of the Hearing Panel had

already voted on his suspension as members of the MEC) fails

because, as discussed, plaintiff waived any rights to contest

the composition of the Hearing Panel when he failed to object

at the time the Panel was convened. See Pruitt v. South Caro-

lina Medical Malpractice Liability Joint Underwriting Ass’n,

540 S.E.2d 843, 845 (S.C. 2001) (waiver can be implied by

party’s conduct).

Plaintiff also alleges that WRH breached Article VII, § 2 of

the bylaws by suspending him when it was not immediately

necessary. Section 2 gives the Chairman of the MEC authority

to summarily suspend privileges "whenever action must be

taken immediately in the best interest of patient care." This

claim fails because, given what Juberg knew at the time of his

decision and the difficulties of simply limiting plaintiff’s

practice to adults, it was reasonable for him to believe that he

needed to suspend plaintiff’s medical privileges to protect

patients. For much the same reasons, plaintiff’s claim that

defendants are liable for these breaches under the theory of

promissory estoppel also fails.

Fifth, plaintiff claims that WRH’s "negligent sham peer

review" violates the South Carolina Unfair Trade Practices

Act’s prohibition on "[u]nfair methods of competition and

unfair or deceptive acts or practices in the conduct of any

trade or commerce." S.C. Code § 39-5-20(a). This claim fails

for several reasons. First, plaintiff has not shown that the peer

review was either "an unfair method of competition" or a "de-

ceptive act or practice." The claim also fails because WRH’s

peer review action was not taken "in the conduct of any trade

or commerce" as defined by S.C. Code § 39-5-10(b) since it

did not occur in the conduct of "advertising, offering for sale,

sale or distribution of any services and any property . . . and

any other . . . thing of value." Instead, the peer review action

20 MOORE v. WILLIAMSBURG REGIONAL HOSPITAL

was an internal hospital review taken to protect patients. See

Foggie v. CSX Transportation, Inc., 431 S.E.2d 587, 591

(S.C. 1993) (holding that refusal to reinstall railroad crossing

due to concern about crossing accidents was not the "conduct

of trade or commerce").

Sixth, plaintiff claims that defendants are liable for civil

conspiracy. This claim fails because a civil conspiracy must

involve two or more legal entities, Lawson v. South Carolina

Dep’t of Corr., 532 S.E.2d 259, 261 (S.C. 2000), but defen-

dants are one legal entity when engaging in peer review. See

Oksanen v. Page Mem’l Hosp., 945 F.2d 696, 702-03 (4th Cir.

1991) (en banc) (staff members act as agents of the hospital

during peer review). Plaintiff has also failed to show how the

formal peer review process was "conspiratorial" in any real

sense of the word, and plaintiff’s allegations that Hales and

Juberg were acting independently of the hospital for their own

economic interests is on this record little more than specula-

tion.

IV.

Plaintiff also alleges that WRH is liable for damages under

42 U.S.C. § 1983 for depriving him of his medical practice in

violation of the Due Process Clause of the Fourteenth Amend-

ment. HCQIA does not provide immunity from damages for

claims made under the Civil Rights Acts. See 42 U.S.C.

§ 11111(a)(1). This claim nonetheless fails for two reasons:

(1) plaintiff failed to state a § 1983 claim because WRH’s

action was not state action,3 and (2) plaintiff’s substantive and

procedural due process claims falter on the merits.

3

The same analysis applies to whether an action was taken "under color

of state law" as required by § 1983 and whether the action was state

action. See Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 935 (1982).

MOORE v. WILLIAMSBURG REGIONAL HOSPITAL 21

A.

Plaintiff claims that WRH’s suspension of his privileges is

state action because the hospital’s Board of Directors is nomi-

nated by the county delegates to the state legislature and rati-

fied by the Governor; two county representatives are ex-

officio members of the Board; the hospital receives state and

county funds; and the hospital receives funds through Medic-

aid and the South Carolina State Plan under Title XIX of the

Social Security Act as a public hospital. These facts do not

make WRH’s suspension of plaintiff’s staff privileges state

action.

WRH is currently incorporated as a private non-profit cor-

poration under S.C. Code § 33-31-101 et seq. Previously, the

hospital was Williamsburg County Memorial Hospital and

was organized as a tax exempt Regional Health Services Dis-

trict under S.C. Code § 44-7-2010 et seq. It became a private

hospital on October 1, 2001, when the assets of Williamsburg

County Memorial Hospital Public Service District were trans-

ferred to defendant corporation WRH in accordance with

South Carolina law.4 See S.C. Code § 4-9-82. This does not

end our inquiry, however.

4

For this reason, plaintiff’s arguments based on statements made prior

to October 2001 and those premised on the notion that WRH is a Regional

Health Services District are without merit. Plaintiff argues that the reincor-

poration does not change the status of the District under S.C. Code § 44-

7-2130 which provides: "The reincorporation under Article 16, Chapter 7,

Title 44 of the 1976 Code of any public hospital corporation that hereto-

fore has been designated as the agency of a county . . . in no way impairs

or invalidates this designation and the reincorporated public hospital cor-

poration shall continue as such just as if it had not been so reincor-

porated." This argument fails because the provision only applies when a

District is reincorporated as a "public hospital corporation," see id. at § 44-

7-2150, and because it only applies to determine whether a District contin-

ues to receive special tax revenues from the local government. Id. at § 44-

7-2130.

22 MOORE v. WILLIAMSBURG REGIONAL HOSPITAL

Under Modaber v. Culpeper Mem’l Hosp., Inc., 674 F.2d

1023 (4th Cir. 1982), a private entity’s action can constitute

state action if "‘there is a sufficiently close nexus between the

State and the challenged action of the regulated entity that the

action of the latter may fairly be treated as that of the State

itself,’" but "state involvement without state responsibility

cannot establish this nexus." Id. at 1025 (quoting Jackson v.

Metropolitan Edison Co., 419 U.S. 345, 351, 358 (1974)).

The state is deemed responsible for the private entity’s action

"if the private party acts (1) in an exclusively state capacity,

(2) for the state’s direct benefit, or (3) at the state’s specific

behest." Id. Applying this framework in Modaber, we held

that the hospital’s receipt of federal Hill-Burton Act funds, its

acceptance of Medicare and Medicaid patients, and its obliga-

tion to report privileging decisions to the state were not

enough to make the state responsible for the hospital’s privi-

leging decision under Jackson. Id. at 1027.

In this case, most of plaintiff’s arguments relate to WRH’s

receipt of government funds through various state and federal

programs and therefore do not make WRH’s suspension of

plaintiff state action under Modaber. As noted previously,

"the mere fact that the hospitals implement a governmental

program does not establish the nexus which Jackson

requires." Id. at 1026.

Plaintiff contends, however, that this case is distinguishable

from Modaber because government funding is not the only

factor that establishes a nexus between WRH’s action and the

state. Here, in addition, the Board of Directors is nominated

by the county delegates to the state legislature and approved

by the Governor, and two government officials (the county

supervisor and a county representative) serve as ex-officio

members of the Board.

These additional facts, however, do not make the state

responsible for WRH’s privileging decisions. The Governor’s

involvement with the Board ends after he approves the mem-

MOORE v. WILLIAMSBURG REGIONAL HOSPITAL 23

bers, and plaintiff has not presented any evidence that the

Governor has used his authority to influence privileging deci-

sions. The county representatives may attend the board meet-

ings, but they do not have voting rights and were not present

for the consideration of plaintiff’s suspension. In fact, the

members of the Board who voted were three local bankers

and a school principal. Therefore, it cannot be said that the

Governor or the county representatives were responsible for

WRH’s decision to uphold plaintiff’s suspension. As in

Freilich, "the State plays no role whatsoever in the actual

decision as to whether or not to terminate or reappoint any

particular physician." 313 F.3d at 214 n.3; see also Watts-

Means v. Prince George’s Family Crisis Ctr., 7 F.3d 40, 43

(4th Cir. 1993) (rejecting argument that county representative

on board constituted state action because representative only

had one vote and therefore could not determine the board’s

decision). Therefore, WRH’s suspension of plaintiff’s privi-

leges is not state action.

B.

Plaintiff’s substantive and procedural due process claims

also fail on the merits. Plaintiff claims that WRH violated his

substantive due process rights when it suspended his privi-

leges based on "unproven allegations" and therefore is liable

for damages resulting from, among other things, his lost prac-

tice, loss of reputation and dignity, loss of contracts, and emo-

tional distress. Given the sheer number of tort-like claims

plaintiff raises, it is easy to see through his attempt to make

an end run around HCQIA immunity by turning § 1983 and

the Due Process Clause into the "font of tort law" that the

Supreme Court has consistently rejected. See Paul v. Davis,

424 U.S. 693, 701 (1976); Waybright v. Frederick County,

528 F.3d 199, 204 (4th Cir. 2008) (collecting cases). More-

over, WRH did not just suspend plaintiff on "unproven allega-

tions." WRH engaged in a multi-stage review of evidence

including reports from the child’s therapist and social worker.

Therefore, plaintiff cannot meet the high standard of proving

24 MOORE v. WILLIAMSBURG REGIONAL HOSPITAL

that WRH’s peer review process was "so ‘arbitrary’ and

‘egregious’ that it ‘shocks the conscience,’" and is "unjustifi-

able by any government interest." Waybright, 528 F.3d at 205

(quoting County of Sacramento v. Lewis, 523 U.S. 833, 845-

49 (1998)).

Plaintiff also alleges that WRH did not provide him ade-

quate procedures when it deprived him of his property right

in his medical practice. Plaintiff’s claim fails because the pro-

cedures WRH afforded him exceed the constitutional thresh-

old established by Mathews v. Eldridge, 424 U.S. 319 (1976).

Plaintiff was notified of the allegations against him, given

ample opportunity to present evidence, allowed to call and

cross-examine witnesses, and was represented by counsel

throughout. There was no procedural due process violation.

V.

The loss of clinical privileges is no small matter for a phy-

sician, but we do not believe the hospital treated it as such.

The proceedings here were lengthy and the procedures were

fair. Peer review can be a thankless and time-consuming task

for those involved, but also one that is necessary to uphold the

profession’s ultimate obligations not only to its members but

to the patients that it serves. To put the parties in this case

through further litigation runs the risk of working an injustice

of its own, not simply on the individuals involved but on pro-

spective peer reviewers who would henceforth avoid such ser-

vice at all costs. Such a development would, of course, defeat

the entire purpose of the Health Care Quality Improvement

Act.

For the foregoing reasons, the judgment of the district court

is

AFFIRMED.