Julapalli v. Boom

UNITED STATES DISTRICT COURT May 31, 2024

SOUTHERN DISTRICT OF TEXAS Nathan Ochsner, Clerk

HOUSTON DIVISION

VENODHAR R. JULAPALLI, §

§

Plaintiff. §

§

V. § CIVIL ACTION NO. 4:23-cv-02061

§

MARC L. BOOM, et al., §

§

Defendants. §

AMENDED MEMORANDUM AND RECOMMENDATION

Plaintiff Venodhar R. Julapalli, M.D. (“Julapalli”) alleges civil rights

violations stemming from his refusal to comply with a COVID-19 vaccination

policy affecting his clinical privileges to practice medicine at a hospital. Pending

before me is Defendants’ Rule 12(b)(6) Motion to Dismiss. Dkt. 18. Having

reviewed the briefing, the record, and the applicable law, I recommend the motion

be GRANTED.

BACKGROUND1

Julapalli is a board-certified gastroenterologist who had clinical privileges

to practice medicine as a medical staff member at Houston Methodist The

Woodlands Hospital2 from 2019 to 2021. On March 31, 2021, Houston Methodist

announced a policy requiring its employees to be vaccinated against COVID-19

1 These facts come from the live pleading, which is Julapalli’s First Amended Complaint

(“the Complaint”). Dkt. 21. Julapalli filed his First Amended Complaint after Defendants

filed their Motion to Dismiss. In their reply, Defendants ask that I apply their Motion to

Dismiss to the First Amended Complaint, contending that Julapalli’s new factual

allegations do not change the analysis. See Dkt. 20 at 4–10. Julapalli filed a sur-reply and

did not oppose Defendants’ request. As I stated at the March 20, 2024 status conference,

I will consider Julapalli’s First Amended Complaint in deciding Defendants’ Motion to

Dismiss.

2 “Houston Methodist The Woodlands Hospital” is one hospital within the Houston

Methodist system. I will refer to the Houston Methodist system as “Houston Methodist,”

and to “Houston Methodist The Woodlands Hospital” as “Methodist Woodlands.”

(“the Policy”). The Policy contained exemptions for medical and religious reasons.

Requested exemptions were subject to review by Houston Methodist. On April 26,

2021, Houston Methodist Executive Vice President and Chief Physician Executive

Robert A. Phillips (“Phillips”) notified medical staff members, including Julapalli,

that unvaccinated credentialed medical staff members who had not been approved

for an exemption “will be subject to automatic suspension of clinical privileges

effective June 7, 2021.” Dkt. 21 at 26.

On June 3, 2021, Julapalli requested a religious exemption. On June 4, 2021,

Houston Methodist denied the request. On June 9, 2021, Julapalli received notice

that his clinical privileges at Houston Methodist were suspended because he

“Fail[ed] to Receive the COVID-19 Vaccine or an Approved Exemption.” Id. at 33.

On May 18, 2022, Julapalli received notice that his “privileges had been

automatically relinquished effective July 22, 2021.” Id. at 38.

Julapalli filed the instant lawsuit on June 6, 2023 against Named

Individuals3; John Doe Individuals4; and Houston Methodist Entities5

(collectively, “Defendants”). Julapalli asserts the following claims against

Defendants pursuant to 42 U.S.C. § 1983: (1) violation of the Free Exercise Clause

of the First Amendment; (2) violation of the Equal Protection Clause of the

Fourteenth Amendment; (3) violation of the Substantive Due Process Clause of the

Fourteenth Amendment; (4) violation of the Procedural Due Process Clause of the

3 Named Individuals include the following executives and employees of Houston

Methodist and Methodist Woodlands: Marc Boom (“Boom”), Phillips, Dirk Sostman

(“Sostman”), Roberta Schwartz (“Schwartz”), Carole Hackett (“Hackett”), Susan Miller

(“Miller”), Krystle Riley (“Riley”), Lucas Duvall (“Duvall”), Marc R. Labbé (“Labbé”),

Jason Knight (“Knight”), and Debra Sukin (“Sukin”). Julapalli asserts claims against

Named Individuals in their official and individual capacities.

4 John Doe Individuals include six unspecified individuals employed by Houston

Methodist. Julapalli attempts to bring claims against John Doe Individuals in their official

and individual capacities.

5 Houston Methodist Entities include The Methodist Hospital d/b/a Houston Methodist

(“Houston Methodist”) and Methodist Health Centers d/b/a Houston Methodist The

Woodlands Hospital (“Methodist Woodlands”).

Fourteenth Amendment; and (5) violation of procedural due process under the

Health Care Quality Improvement Act (“HCQIA”), 42 U.S.C. §§ 11101–11152.

Additionally, Julapalli seeks a declaratory judgment that “Defendants performed

state action and acted under color of state law by implementing the Vaccine

Mandate.” Dkt. 21 at 44.

Defendants advance four arguments for dismissal: (1) Julapalli did not

satisfy the two-year statute of limitations for § 1983 claims; (2) Defendants did not

act under color of state law for purposes of § 1983 liability; (3) the HCQIA does not

provide a private cause of action; and (4) Julapalli’s declaratory relief claim is

redundant.

LEGAL STANDARDS

A. FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6)

A complaint may be dismissed if a plaintiff “fail[s] to state a claim upon

which relief can be granted.” FED. R. CIV. P. 12(b)(6). “To survive a Rule 12(b)(6)

motion to dismiss, the plaintiff must plead ‘enough facts to state a claim to relief

that is plausible on its face.’” In re Katrina Canal Breaches Litig., 495 F.3d 191,

205 (5th Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570

(2007)). “A claim has facial plausibility when the plaintiff pleads factual content

that allows the court to draw the reasonable inference that the defendant is liable

for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). I “accept

all well-pled facts as true, construing all reasonable inferences in the complaint in

the light most favorable to the plaintiff, [but] conclusory allegations, unwarranted

factual inferences, or legal conclusions are not accepted as true.” Hodge v.

Engleman, 90 F.4th 840, 843 (5th Cir. 2024) (quotation omitted). Thus, a claim

“is implausible on its face when ‘the well-pleaded facts do not permit the court to

infer more than the mere possibility of misconduct.’” Harold H. Huggins Realty,

Inc. v. FNC, Inc., 634 F.3d 787, 796 (5th Cir. 2011) (quoting Iqbal, 556 U.S. at 679).

B. LITIGANTS WITHOUT LAWYERS

A complaint filed by a litigant without a lawyer, “however inartfully pleaded,

must be held to less stringent standards than formal pleadings drafted by lawyers.”

Erickson v. Pardus, 551 U.S. 89, 94 (2007) (quotation omitted). “Liberal

construction is afforded to pro se litigants to serve as a shield, in line with the

‘congressional goal of assuring equality of consideration for all litigants.’”

Carmouche v. Hooper, 77 F.4th 362, 368 (5th Cir. 2023) (quoting Denton v.

Hernandez, 504 U.S. 25, 32 (1992)). Pro se litigants, however, must still comply

with the Federal Rules of Civil Procedure. See Carmouche, 77 F.4th at 367–68

(noting that pro se complaints must still comply with Rule 8’s notice pleading

requirements).

C. 42 U.S.C. § 1983

“Section 1983 provides a remedy against any person who, under color of

state law, deprives another of rights protected by the Constitution.” Collins v. City

of Harker Heights, 503 U.S. 115, 120 (1992) (quotation omitted). “To state a

section 1983 claim, a plaintiff must (1) allege a violation of a right secured by the

Constitution or laws of the United States and (2) demonstrate that the alleged

deprivation was committed by a person acting under color of state law.” Whitley v.

Hanna, 726 F.3d 631, 638 (5th Cir. 2013) (quotations omitted).

ANALYSIS

A. DEFENDANTS DID NOT ACT UNDER COLOR OF STATE LAW

I will assume, without deciding, that Julapalli’s § 1983 claims are not time-

barred. Even so, they should be dismissed because Julapalli has failed to

sufficiently allege that Defendants acted under color of state law for purposes of

§ 1983 liability.

“To state a claim under § 1983, a plaintiff must allege the violation of a right

secured by the Constitution and laws of the United States, and must show that the

alleged deprivation was committed by a person acting under color of state law.”

Cornish v. Corr. Servs. Corp., 402 F.3d 545, 549 (5th Cir. 2005) (quoting West v.

Atkins, 487 U.S. 42, 48 (1988)). “Restated, mere private conduct, no matter how

discriminatory or wrongful, is excluded from § 1983’s reach.” Cornish, 402 F.3d at

549 (cleaned up). For purposes of § 1983, a party is a state actor either “because he

is a state official, because he has acted together with or has obtained significant aid

from state officials, or because his conduct is otherwise chargeable to the State.”

Lugar v. Edmondson Oil Co., 457 U.S. 922, 937 (1982).

It is well established that “a private entity may qualify as a state actor when

it exercises ‘powers traditionally exclusively reserved to the State.’” Manhattan

Cmty. Access Corp. v. Halleck, 587 U.S. 802, 809 (2019) (quoting Jackson v.

Metro. Edison Co., 419 U.S. 345, 352 (1974)). “[T]o qualify as a traditional,

exclusive public function within the meaning of [the U.S. Supreme Court’s] state-

action precedents, the government must have traditionally and exclusively

performed the function.” Manhattan Cmty. Access, 587 U.S. at 809.

Julapalli asserts the actions taken against him by Defendants—all private

entities and their employees—are chargeable to the government. He argues

“Defendants’ instituting and enforcing their Vaccine Mandate on [him] is action

traditionally the exclusive province of the state and therefore redressable under

§ 1983.” Dkt. 20 at 27. He argues Defendants took on the traditional and exclusive

public function of “mandatory vaccination to promote the health of the public in

the face of an epidemic.” Id. at 28. But Julapalli incorrectly frames the issue.

“[W]hether a deprivation of a protected right is fairly attributable to the

State ‘begins by identifying the specific conduct of which the plaintiff complains.’”

Cornish, 402 F.3d at 550 (quoting Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S.

40, 51 (1999)). Defendants’ conduct in question here is the suspension of

Julapalli’s clinical privileges. In other words, Julapalli must allege that Defendants’

decision to suspend his clinical privileges is fairly attributable to the State. See

Cornish, 402 F.3d at 550 (“Therefore, at issue is whether [Defendants’] decisions

as an employer are fairly attributable to the State.”); see also George v. Pacific-

CSC Work Furlough, 91 F.3d 1227, 1230 (9th Cir. 1996) (“The relevant inquiry is

whether [Defendants’] role as an employer was state action.” (quotation

omitted)).6 Julapalli has not plausibly alleged facts indicating how Defendants’

decision to enforce the Policy by suspending his privileges is related to

governmental action. A private business may discipline its independent contractor

for non-compliance with its policies. That is the situation here. As such, Julapalli

has not alleged that Defendants acted under color of state law for purposes of

§ 1983 liability.

Further, even if I had considered whether Defendants took on the traditional

and exclusive governmental function of “mandatory vaccination to promote the

health of the public in the face of an epidemic,” Dkt. 20 at 28, that argument is

unconvincing. “A private business’s implementation of an employee vaccination

policy is not akin to any of ‘those limited activities—for example, running a city—

that have traditionally and exclusively been performed by the government.’”

Johnson v. Tyson Foods, Inc., 607 F. Supp. 3d 790, 800 (W.D. Tenn. 2022)

(quoting United States v. Miller, 982 F.3d 412, 423 (6th Cir. 2020)); see also

Finkbeiner v. Geisinger Clinic, 623 F. Supp. 3d 458, 467 (M.D. Pa. 2022) (“The

[State]’s duty to protect the health of the people and employ the most effective

methods of disease suppression is not exclusive.”). As Defendants point out,

“promotion of public health is not, nor has it ever been, the exclusive realm of the

State.” Dkt. 23 at 14. Houston Methodist’s vaccination policy does not even

approach the traditional and exclusive standard required to establish state action.

See Together Emps. v. Mass Gen. Brigham Inc., 32 F.4th 82, 87 (1st Cir. 2022)

(holding that hospital “is not a state actor and is not bound by the Free Exercise

Clause” in employees’ suit to stop application of mandatory COVID-19 vaccination

6 Julapalli and Defendants agree that Julapalli has never been an employee of Defendants.

Instead, Julapalli was an independent contractor who held privileges to practice medicine

at Methodist Woodlands. See Berel v. HCA Health Servs. of Tex., Inc., 881 S.W.2d 21, 23

(Tex. App.—Houston [1st Dist.] 1994, writ denied) (“A doctor who has been selected by

the patient is generally considered to be an independent contractor with regard to the

hospital at which the doctor has staff privileges.”). This fact has no bearing on whether

Defendants acted under color of state law.

policy); Curtis v. PeaceHealth, No. 3:23-cv-05741, 2024 WL 248719, at *6 (W.D.

Wash. Jan. 23, 2024) (plaintiffs failed to establish that healthcare facility’s

“enforcement of its Policy [to require its employees to be vaccinated against

COVID-19] was a public function” as required to make it a state actor”); McEntee

v. Beth Israel Lahey Health, Inc., No. 22-cv-11952, 2023 WL 4907617, at *4 (D.

Mass. Aug. 1, 2023) (holding that private healthcare facilities that terminated

employees for failure to comply with its mandatory COVID-19 vaccination policy

could not be considered state actors); Pa. Informed Consent Advocs. Inc. v. Univ.

of Pa. Health Sys., No. cv-21-4415, 2022 WL 2316648, at *2 (E.D. Pa. June 28,

2022) (“Although Plaintiff argues [the health system] became a state actor by

instituting its vaccine mandate, Plaintiff has not adequately pled any facts to

support that contention.”); Beckerich v. St. Elizabeth Med. Ctr., 563 F. Supp. 3d

633, 639 (E.D. Ky. 2021) (“Private hospitals . . . are generally not state actors for

purposes of constitutional questions.”).

Therefore, Julapalli’s § 1983 claims—(1) violation of the Free Exercise

Clause of the First Amendment; (2) violation of the Equal Protection Clause of the

Fourteenth Amendment; (3) violation of the Substantive Due Process Clause of the

Fourteenth Amendment; and (4) violation of the Procedural Due Process Clause of

the Fourteenth Amendment—should be dismissed.

B. THE HCQIA DOES NOT PROVIDE A PRIVATE CAUSE OF ACTION7

Julapalli asserts a claim under the HCQIA, which Congress passed due to its

concerns about “[t]he increasing occurrence of medical malpractice and the need

to improve the quality of medical care” and because “[t]here is a national need to

restrict the ability of incompetent physicians to move from State to State without

disclosure or discovery of the physician’s previous damaging or incompetent

performance.” 42 U.S.C. § 11101(1), (2). “Congress viewed peer review as an

7 Although Julapalli portrays his HCQIA claim as a § 1983 claim, the HCQIA has no

relation to § 1983. See Monroe v. AMI Hosps. of Tex., Inc., 877 F. Supp. 1022, 1028 (S.D.

Tex. 1994). Because I am required to construe Julapalli’s Complaint liberally, I will treat

his HCQIA claim as separate from his § 1983 claims.

important component of remedying these problems, but recognized that lawsuits

for money damages dampened the willingness of people to participate in peer

review.” Poliner v. Tex. Health Sys., 537 F.3d 368, 376 (5th Cir. 2008).

“Accordingly, Congress granted limited immunity from suits for money damages

to participants in professional peer review actions.” Id. (cleaned up).

But while the HCQIA provides immunity in certain situations, it does not

provide a private cause of action. See Zawislak v. Mem’l Hermann Health Sys.,

No. 4:21-cv-3098, 2022 WL 4359231, at *2 (S.D. Tex. July 25, 2022) (“[T]he

HCQIA . . . does not create a private cause of action.”); Carr v. United Reg’l Health

Care Sys., Inc., No. 06-cv-194, 2006 WL 2370670, at *3 (N.D. Tex. Aug. 16, 2006)

(“[A]ll circuit courts to address the issue have uniformly agreed that the [HCQIA]

‘does not create a private right of action in favor of a physician against a

professional peer review group that has violated due process.’” (quoting Hancock

v. Blue Cross-Blue Shield of Kan., Inc., 21 F.3d 373, 374 (10th Cir. 1994)))

(collecting cases); Knatt v. Hosp. Serv. Dist. No. 1 of E. Baton Rouge Par., No. 03-

442, 2005 WL 8155168, at *5 (M.D. La. Aug. 4, 2005) (The “HCQIA does not

explicitly or implicitly afford an aggrieved physician with a cause of action when a

hospital or physician fails to follow HCQIA’s prescribed peer review procedures.”);

Rogers v. Columbia/HCA of Cent. La., Inc., 971 F. Supp. 229, 237 (W.D. La. 1997)

(“The question presented is whether the HCQIA provides a private cause of action.

The statute does not explicitly provide a cause of action. We also find that the

HCQIA does not imply a private right of action.”), aff’d, 140 F.3d 1038 (5th Cir.

1998). Because the HCQIA does not create a private right of action, Julapalli’s

purported claim under the HCQIA must fail.

C. JULAPALLI’S DECLARATORY JUDGMENT CLAIM IS REDUNDANT

Julapalli also seeks a declaratory judgment that “Defendants performed

state action and acted under color of state law by implementing the Vaccine

Mandate.” Dkt. 21 at 44.

“The Declaratory Judgment Act is designed to afford parties, threatened

with liability, but otherwise without a satisfactory remedy, an early adjudication of

an actual controversy.” Collin Cnty. v. Homeowners Ass’n for Values Essential to

Neighborhoods, 915 F.2d 167, 170 (5th Cir. 1990). I have “broad discretion to grant

(or decline to grant) declaratory judgment.” Wilton v. Seven Falls Co., 41 F.3d 934,

935 (5th Cir. 1994). “Courts in the Fifth Circuit regularly reject declaratory

judgment claims seeking the resolution of issues that will be resolved as part of the

claims in the lawsuit.” Am. Equip. Co. v. Turner Bros. Crane & Rigging, LLC, No.

4:13-cv-2011, 2014 WL 3543720, at *4 (S.D. Tex. July 14, 2014) (collecting cases).

I have already found that Defendants did not perform state action and did

not act under color of state law by implementing the Policy. This issue has been

resolved within Julapalli’s other claims. As such, Julapalli’s declaratory judgment

claim is redundant and should be dismissed.

CONCLUSION

For the reasons explained above, I recommend Defendants’ Rule 12(b)(6)

Motion to Dismiss (Dkt. 18) be GRANTED and this case be dismissed.

The parties have 14 days from service of this Memorandum and

Recommendation to file written objections. See 28 U.S.C. § 636(b)(1)(C); FED. R.

CIV. P. 72(b)(2). Failure to file timely objections will preclude appellate review of

factual findings and legal conclusions, except for plain error.

SIGNED this 30th day of May 2024.

______________________________

ANDREW M. EDISON

UNITED STATES MAGISTRATE JUDGE