# Petition for Writ of Certiorari — Kwoun v. Southeast Missouri Professional Standards Review Organization

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1988
- **Citation:** 486 U.S. 1022

## Text

(\) Supreme Court, U.S.

R6 19 44 5% eS eb
SUN—S- 1987

In THE JOSEPH F. SPANIUL, UR.
OLERK

Supreme Court of the United States

Ocroser Term, 1986

Soune O. Kwouy, et al.,

Petitioners,
vs.

SoutHeEast Missourrt ProFessionaL STANDARDS
Review OrGAnizaTIon, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT

Louis GmpENn*

NoraH J. Ryan
317 North 11th Street
Suite 1220
St. Louis, Missouri 63101
(314) 241-6607

Juurus LEVonneE CHAMBERS
Cuartes STEPHEN RatstTon
99 Hudson Street
New York, New York 10013
(212) 219-1900

Attorneys for Petitioners

*Counsel of Record

UESTION RESENTED

1. Are private physicians’ and
other employees of a Medicare peer review
organization operating under’ contract
with the United States Department of
Health and Human Services entitled to
absolute immunity from claims of race
discrimination and other constitutional
viclations as well as from common-law
tort claims even though Congress, by
statute, has extended only qualified
immunity?

2. Are non-attorney' federal
officials entitled to absolute immunity
from the constitutional tort and race
discrimination claims of a physician
excluded from Medicare reimbursement,
where the exclusion is by a non-judicial
administrative decision made without a
hearing and in the absence of minimal due
process?

3. Are Medicare peer reviewers and

i

federal Medicare administrators entitled
to absolute immunity on policy grounds
arising from the importance of the
Medicare peer review scheme, without
regard to the countervailing importance

of eradicating racial discrimination?

ii

Parties in the Court Below

oo The petitioners, Soung 0.
Kwoun, Henrickson Clinic, Inc.,
Henrickson Clinic Pharmacy, Inc., and

Henrickson Clinic Laboratory, Inc., were
plaintiffs below.

26 The following are respondents
here and were defendants’) below:
Southeast Missouri Professional Standards
Review Organization; Missouri Statewide
Professional Standards Review Council;
Robert M. Kepner; Raymond A. Ritter; Sue
Legaspi; James Armantrout; Larry Baker;
William V. Booth; Jean A. Chapman; V. D.
Delles; R. F. Dettmer; Gordon Eller; Jose
H. Gonzales; T. O. Honaas; Robert C.
Hoye; W. W. Hutton; Christopher Jung; G.
H. Ladyman; John kK. lLegan; Gene UH.
Leroux; R. E. Marts; A. G. Miranda; Jesse
Page; Pin Pu; Vinai Raksakulthai; Ben
Till; A. T. Tuma; Austin Tinsley; Joseph

Blanton; D. E. Edwards; Terry Guiley; Tom

iii

Henderson; Berry B. White; Randall Huss;
George McAnelly; Robert Robbins; Eugene
Ruff; C. F. Sparger; Michael K. Blank;
James Conant; A. N. Sandler; Allen
Spitler; Kirby Turner; E. kK. Buford;
David Clark; Fuad H. Kandalaft; Earl
Kennedy; Martha Reed; Clifford Talbert;
Charles P. McGinty; W. E. Hendrickson;
Robert E. Bregant; Katherine Rosenfeld;
Frank Kram; Don Nicholson; Ralph Ak.
momnant..

3 No review is sought here as to
the following defendants in the courts
below: General American Life Insurance
Company; Tom Zorumski; Clifford A.

Kinnunen; W. F. Montgomery; and Gary

Clark.

iv

A CONTENTS

Page
Questions Preéqgegeead <<. <« « sa i
Parties in the Court Below... . iii
Tone os Geneon «-é¢ «& w & es 8 8 iv
Tabie GE Reese wc « 6 2 6 vii
CITATIONS TO OPINION BELOWS. ... 2
JUL 6 64 Meo es Ys 8) Ue le 3
CONSTITUTIONAL PROVISION, STATUTES,
AND REGULATIONS INVOLVED ..-... 3
Semaeeeees GF Dee GARE « « « «6 * 4
REASONS FOR GRANTING THE WRIT... 16
Be THIS CASE PRESENTS
QUESTIONS OF NATIONAL
IMPORTANCE THAT SHOULD
BE RESOLVED BY THIS
COURT e* s s a e - - se _ = 1 6

II. THE DECISION BELOW CON-
FLICTS WITH PRIOR
DECISIONS OF THIS COURT AND
WITH DECISIONS OF OTHER
CIRCUITS REGARDING THE
CIRCUMSTANCES UNDER WHICH
ABSOLUTE IMMUNITY IS

PX. , 8 5 Ee 21
A. The Decision Below
Conflicts With
Decisions of This
ns. ose ae «se Oe

|” a 5 |

III. THE DECISION BELOW CON-
FLICTS WITH THE DECISIONS
OF OTHER CIRCUITS AS TO
WHETHER PHYSICIANS ENGAGED
IN MEDICARE PEER REVIEW ARE
FEDERAL OFFICIALS AND WITH
STATE COURTS AS TO THEIR
IMMUNITY FROM SUIT... . 32

IV. THE DECISION BELOW RAISES
IMPORTANT ISSUES RELATED
TO THOSE PRESENTED BY A
PENDING CASE, Patrick v.

CONCLUS ION o . *. . . . . . . . . . . 4 3

«

vi

Table of Authorities
Cases: Page

Association of American Physicians
and Surgeons v. Weinberger,
395 F. Supp. 125 (N.D. Ill.
1975), affirmed
opinion, 423 U.S. 975 (1975) . 34

Austin Municipal Securities, Inc. v.
National Association of
Securities Dealers, Inc., 757
F.2d 676 (5th Cir. 1985) 19, 27, 28

Barr v. Mattec, 360 U.S. 564
(1959) . « « «© o « « AL, 123, 14, 35

Bishop v. Tice, 622 F.2d 349
ee eee ee ee ee

Board of Regents v. Roth, 408 U.S. 564
(1972) * > . . . . * . . . . . 7 26

Bothke v. Fluor Engineers &
Constructors, Inc., 713 F.2d 1405
(9th Cir. 1983), vacated on another
ground, 468 U.S. 1201 (1984),

order on remand, 739 F.2d 484 (9th
cir. 1984) . >. . 7 2 . > 19, 20, 31

Buckner v. Lower Florida Keys Hosp.
Dist., 403 Se.2d 1025 (Fla.
App. 1981) . . . . oa - — . > 325 41

Bushman v. Seiler, 755 F.2d 653
[eam Gal. BOGR) « 6 « © 2 © ce oe tS

Butz v. Economou, 438 U.S. 478
(1978)11,12,14,21,22,23,24,28,29,35

vii

Page

Cameron v. IRS, 773 F.2d 126 (7th Cir.
1985) . + 7 . * > * . 7 oo 19, 31

Case v. Weinberger, 523 F.2d 602
Ne

Cleavinger v. Saxner, 474 U.S. , 88
a ee Ue ee eee) |

Clulow v. State of Oklahoma, 700 F.2d
1291 (10th Cir. 1983) ... 19, 26

Denton v. Mr. Swiss of Missouri, 564 F.2d
396. (000 Gees 200th oc ce ce tt it 2

Doe v. St. Joseph’s Hospital of Fort
Wayne, 788 F.2d 411
fou Gees Be) « « «6 « « «@ 38, 42

Dretar v. Smith, 752 F.2d 1015 (5th
Cir. 1985) . . +. aa . © = o .* 7 21

Economou v. Butz, 466 F. Supp. 1351
(S.D.N.Y. 1979) . . . . . . . . 23

England v. Rockefeller, 739 F.2d 140
(60h Gis. 3O66) « 6 6 « 8 0 t@ e 19

Franco v. District Court of Denver, 641
P.2d 922 (Colo. 1982) ... 35, 41

Freeman v. Blair, 793 F.2d 166 (8th
Cir. 1986) o . _ . * 7 . . - _ 19

Gray v. Bell, 712 F.2d 490 (D.C. Cir.
1983) . all > . * 7 * . . > - 20

Hackenthal v. Weissbein, 592 P.2d 1175,

154 Cal. Rptr. 423, 24 C.3d 55
(1979). . 7: . . . . 7 * . . * 36

viii

Harlow v. Fitzgerald, 457 U.S.
a ee

Harper v. Jeffries, 808 F.2d 281 (3rd
ON ee |

Hayden v. Foryt, 407 So.2d 535
(Miss. 1982) . + . . . 7 o s e 35

Imbler v. Pachtman, 424 U.S.
SOD (2976) «§ « « «© © @ B38, 22, 29

Johnson v. Rhode Island Parole Bd.
Members, 815 F.2d 5
(ae Cars BOGT) ss 2 2 2 « « 38, 20

Kompare v. Stein, 801 F.2d 883
(7th Cir. 1986) . a — * * * i . 20

LeClair v. Saunders, 627 F.2d 606
(1980) . 7. . * + - a . . o 19

McKinney v. Whitfield, 736 F.2d 766
pees Gaps Bee) 2. « 2 0 0 ee «C6

McSurley v. McClellan, 753 F.2d 88
.@. Caes 29GB) 6 ss eo ow ew we 8D

Malley v. Briggs, 475 U.S. ‘

89 L.Ed. 2d 271 (1986) .... 25

Matviuw v. Johnson, 26 Ill. Dec.
794, 388 N.E.2d 795, 70 Ill.
App. 3d 481 (1979), aff’d,
67 Ill. Dec. 370, 444 N.E.2d
606, 111 Ill. App. 3d 629
PSE ce hag 4 6 « @ 4. « 36

Mitchell v. Forsyth, 472 U.S. _, 86

L.Ed.2d 411 (1985) . . 12, 24, 25

ix

Page

Nixon v. Fitzgerald, 457 U.S. 731
(aeUek 3 sé se 0 &, eee BE

Patchogue Nursing Center v. Bowen,
797 F.2d 1137 (2nd Cir. 1986) .26

Patrick v. Burget, 800 F.2d 1498 (9th

Cir. 1986), pet. for cert.
pending, No. 86-1145 . . 38, 39, 41

Public Citizen Health Research
Group v. ‘Department of Health,
Education, and Welfare,
668 F.2d 537 (D.C. Cir.
SOR ss x er eee Se Soc Be. 045: 36

Schware v. Board of Bar Examiners,
SES Ui, BO Oe a en oe: ow 8

Sellars v. Procunier, 641 F.2d 1295
(9th cir. 1981) s* * * = - _ 18, 20

Simons v. Bellinger, 643 F.2d 774 (D.C.
(1980) . om o = * * * . . * . a9, 27

Smith v. North Louisiana Medical
Review Association, 735 F.2d
168 (5th Cir. BPeGs 6 eee 6 « 3

State ex rel. Chandra v. Sprinkle,
678 S.W.2d 804 (Mo. en
banc 1984) ° . o . s . . - - . 41

Taylor v. Flint Osteopathic Hospital,
561 Supp. 1152 (E.D. Mich. 1983),

vacated and remanded for trial,
765 F.2d 146 (6th Cir. 1985) . .37

Tripati v. U.S.I.N.S., 784 F2d 345 (10th
Cin. 2966) «. « « 0 « «1 29, Be

Page

Twin City Federal Savings & Loan
Association v. Transamerica
Ins. Co., 491 F.2d 1122
(Oth Gi. BRN. eres ce i 8

U.S. v. University Hospital, 729 F.2d 144
(2nd Civ. 1984) ~ s s * * o 7 . 34

Weiss v. Lehman, 642 F.2d 265 (9th Cir.
1981), vacated on other oranas.

454 U.S. 807 (1981) ... ° 19
Williams v. City of St. Louis, 783 F.2d
334 “Oth Giei 1966) VP. Sw eo! 88

Windsor v. The Tennessean, 719 F.2d 155,

reh. denied, 726 F.2d 277 (6th

Gen. eee 2S PN Ee SS, 31
Statutes and Regulations:
42 co emé § 474.3 a * 7 * . * . = o 4
ee ee Pee ee eee
42 C.F ele § 474.7 . * 7. e* . 7 ae * — 4
SS Cie 6 MR ise SSG
42 €.0.E. §.476.080%. 3 6 ou « 4S, 20
<2 Ties eC 4 6 tk sk ct tt ke S
42 0.02.9 G2eees.. sss ss) 47S, 4
43 U8. 3 A ww ee aS, 6
43 U.8.G.. BAe Se os os YB, 20
42 U.S.C. § 1320c-16(b) . . . 15, 30, 41
42 Weekes § 1981 7 - *. * - 7 . . . 3» 10
42 UcaGe § 1985(3) * = . - o . a Ze 10
PERO Program Memiel . «2 « 6 & es 6 34
Public Law No. 99-660 ........ 40

xi

Other Authorities:
Davis, K., Adequate Health Care

they Morally Compatible?

Winter Daedalus, 227 (1986) .. 16
Gregory, D., Immunity for Physicians

in Peer-Review Committees

’
11 Legal Aspects of Med.
Practice No. 9, 1 (Sept. 1983) . 36

Keith, S., R. Bell, A. Swanson, A.

Williams, Effects of Affirmative
Action in Medical Schools:

Vol. 313, No. 24, The New
England Journal of Medicine
1519 (1985) 7 . * . © . * . . ° 17

J. C. Norman, So-Called Physician

Immunity of Peer-Review

Legal Aspects of Med.
Practice No. 2 (Feb. 1983) .. 36

Note, The Legal Liability of Medical
Peer Review Participants For
Revocation of Hospital Staff

, 28 Drake L. Rev.
Goa TEeTTTes 2 2 4 te 2 ke 35

’

»- a

Note, Medical Peer Review Protection In
the Health Care Industry,
52 Temple L.Q. 552 (1979) ... 35

S. Rep. No. 1230, 92nd Cong., 2d
Sees. (1972) .«. « « «© «© © © « « 30

xii

Page
Southwick and Slee, Quality Assurance
in Health Care

, 5 J. Legal Med.
343 (1984) t > + e e e e e e e 36

132 Cong. Rec. H. 9906 (daily ed.
Oct. 24, 1986) > eo o s o eo e e * 40

xiii

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NO. 86-

il
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IN THE
SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1986

SOUNG O. KWOUN, et al.,
Petitioners,
Vs.
SOUTHEAST MISSOURI PROFESSIONAL
STANDARDS REVIEW ORGANIZATION,
Ge @i:3,

spon ts.

PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF
APPEALS FOR THE EIGHTH CIRCUIT

The petitioner, Soung 0. kwoun,1
respectfully prays that a writ of
certiorari issue to review the judgment
and opinion of the United States Court of
Appeals for the Eighth Circuit entered in

this proceeding on February 4, 1987.

lpr. Kwuon and the_ professional
corporations through which he practices
are plaintiffs-petitioners.

2
CITATIONS TO OPINIONS BELOW

The opinion of the court of appeals
is reported at 811 F.2d 401 (8th Cir.
1987) and is set out in the separate
Appendix to this petition at pp. 1la-55a.
The orders of the court of appeals
affirming the district court and denying
rehearing are set out in the Appendix at
pp. 145a- 148a. The opinions of the
district court are reported at 622 F.
Supp. 520 (E.D. Mo. 1985) and 632 F.
Supp. 1091 (E.D. Mo. 1986) and are set
out in the Appendix at pp. 76a-123a and
124a-139a, respectively. The decision of
the district court denying plaintiffs’
motion to alter or amend the judgment is
unreported and is set out in the Appendix
at pp. 140a-143a. An earlier decision of
the district court in a related case,
entitled Kwoun v. Schweiker, is reported
at 528 F. Supp. 1004 (E.D. Mo. 1981) and

is set out in the Appendix at pp. 5é6a-

'
i
4
;

75a.
JURISDICTION
The judgment of the court of appeals
affirming the district court’s dismissal
of the case in its orders of March 27,
1986, and June 3, 1986, was entered on
February 4, 1987. (A. 145a-146a) The
court of appeals entered an order denying
a timely petition for rehearing en banc,
or, in the alternative, for rehearing by
the panel, on March 9, 1987, and this
petition for certiorari is filed within
90 days of that date. (A. 147a-148a.)
The jurisdiction of this Court is invoked
under 28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISION, STATUTES,
____AND REGULATIONS INVOLVED

This case involves a constitutional

claim of denial of due process under the
Fifth Amendment, and claims of racial
discrimination and conspiracy under 42
U.S.C. § 1981 and § 1985(3), which are

set out in relevant part in the Appendix

at pp.156a-157a.

Other statutes involved are the
Medicare Peer Review Act, as amended, 42
U.S.C. § 1320cC et seqg., including: 42
U.S.C. § 1320c-16(b) (1977), now 42 U.S.C.
§ 1320c-6(1982), § 1320c-5, § 1320c-8,
and § 1320c-9 which are set forth, in
relevant part, in the Appendix at pp.
149a-156a.

Regulations involved are 42
C.F.R. §§ 474.3, 474.4, 474.7, 474.8, and
474.10, along with the PSRO Program
Manual, all of which are set forth in
relevant part in the Appendix at pp.-
158a-167a.

STATEMENT OF THE CASE

The petitioner, Soung 0. kKwoun,
M.D., is a surgeon who was excluded from
eligibility for Medicare reimbursement
for services rendered to his patients by
a ten year sanction decision of the

Health Care Financing Administration

;
:
§

5
(H.C.F.A.) of the Department of Health
and Human Services (HHS), in 1980.

The H.C.F.A. was acting on a
recommendation based upon alleged quality
of care issues issued by the Southeast
Missouri Professional Standards Review
Organization (the SEMO PSRO) which had
been forwarded to the H.C.F.A. by the
Missouri Statewide Professional Standards
Review Council (the Statewide Council).
The SEMO PSRO and the Statewide Council
are non-volunteer peer review
organizations operating under contract
with HHS, pursuant to 42 U.S.C. § 1320c,
et seg., which are incorporated as non-
profit corporations under Missouri law,
and which pay their participants in
accordance with the directives of HHS.

Pursuant to statute and the
implementing regulations, the sanction
decision against Dr. Kwuon was imposed

and a notice of his exclusion from

6

eligibility for Medicare reimbursement
for quality of care reasons was published
in newspapers in the area in which
he practiced prior to a hearing.? He was
required to take an administrative appeal
in order to obtain a hearing before an
adjudicative officer.

Dr. Kwoun appealed the sanction
decision under 42 U.S.C. § 1320c-8(b).
In 1983, after a hearing on the record
before a federal Administrative Law
Judge, Dr. Kwoun was’ restored to

eligibility for Medicare reimbursement. ?

242 U.S.C. § 1320c-9(b) (2); 42
C.F.R. § 474.10(e).

3as a result of information provided
by the HCFA to the Missouri State Board
of Registration For The Healing Arts and
the Missouri Department of Social
Services which administers state Medicaid
payments, Dr. Kwoun was also threatened
with exclusion from eligibility for
Medicaid payments and with revocation of
his medical license. Dr. Kwoun was
cleared of the charges brought by the
Board of Healing Arts on May 18, 1984,
and of the charges made by the Department
of Social Services in the attempt to

7
The Administrative Law Judge, in a
lengthy opinion,* reversed the sanction
decision of the HCFA and held that the

HCFA had failed to establish any

violation of any obligation or any
professional neglect under the Medicare
Act by Dr. Kwoun. (Court of Appeals
Appendix, hereinafter "C.A. App.," 519.)
The ALJ found that the SEMO PSRO,
the Statewide Council, and the HCFA had
excluded Dr. Kwoun from eligibility
without ever having developed
Professional Standards of Health Care
as required by 42 U.S.C. § 1320c-5(a)
against which to compare Dr. Kwoun (C.A.
App. 516-17, 520). The ALJ further found

that the SEMO PSRO and the HCFA had

exclude him from Medicaid payments on
November 7, 1983, after two separate
hearings before the Missouri
Administrative Hearing Commission.

4The opinion is 183 pages, excluding

exhibits, and was based on more than
2,100 pages of transcript.

Tsithettaei er teneeaeaeeuellll

|

8

totally failed to comply with the notice
and opportunity to respond provisions of
42 C.F.R. Part 474, and that ". .. by
reason of the Health Care Financing
Administration’s failure from the onset
of the prosecution of this case to
rectify the procedural errors of the SEMO
PSRO by stating clearly the factual and
legal issues, the respondent did not
receive substantive due process in
accordance with the Social Security Act
and Regulations and the policy of the
Department of Health and Human Services."
(C.A. App. 506) The ALJ found that the
medical records upon which the HCFA based
its sanction decision had been
rearranged, the sanction report had been
tailored, and that at least one document
purportedly found in a patient file had
been contrived. (C.A. App. 528)

In strong language, the ALJ called

the HCFA’s pursuit of sanctions against

we,

co oe

9

Dr. Kwoun "despicable" and conduct not
worthy of professional people, and stated
that there may have been some motive
other than a concern over the quality of
Dr. Kwoun’s care of patients behind the
sanction decision. (C. A. App. 513, 509)
Indeed, at a non-due process
administrative review before an HCFA
official, one of Dr. Kwoun’s witnesses
testified under oath that he had heard a
member of the SEMO PSRO publicly state
that they wanted to get rid of "those
damn Koreans" and that they just about
"had Dr. Kwoun where they wanted hin,"
and that then they were going to start on
another Korean doctor in the area. (C.A.
App. 305.) Although the original
investigation was of the entire hospital
at which Dr. Kwuon practiced, Dr. Kwuon
was the only physician against whom
sanctions were sought.

After the sanction decision was

10
reversed,” Dr. Kwoun brought suit against
four employees of HCFA, in their
individual capacities, fifty-one
physicians and staff persons who were
members and employees of the SEMO PSRO
and of the Statewide Council, the SEMO
PSRO and the Statewide Council
themselves, and certain other defendants
who are not respondents here.©® The suit
alleged claims of discrimination on
account of race (Korean) in violation of
42 U.S.C. § 1981 and 42 U.S.C. § 1985(3),

due process violations under the Fifth

5A prior injunction action, brought
by Dr. Kwoun, Kwoun v. Schweiker, 528 F.
Supp. 1004 (E.D. Mo. 1981), was dismissed
without prejudice by the U.S. District
Court, Eastern District of Missouri, for
failure to exhaust administrative
remedies, and was not appealed. A. 56a-
75a.

6Ppetitioners do not seek review of
the district court’s dismissal of the
General Life Insurance Company or of the
court of- appeals’ decision with regard to
the state employee defendants, Montgomery
and Clark.

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11

Amendment, and state law claims of
malicious prosecution and _ intentional
infliction of severe emotional distress,
and other claims not relevant here. The
jurisdiction of the district court was
invoked under 28 U.S.C. § 1331 and §
1343, and pendent jurisdiction. Damage
allegations were based upon loss of
income, damage to Dr. Kwoun’s practice
and reputation, and emotional distress.

In an order dated September 19,
1985, the district court denied the
federal defendants’ motion to dismiss on
grounds of absolute immunity under Butz
v. Economou, 438 U.S. 478 (1978) and

official immunity under Barr v. Matteo,
360 U.S. 564 (1959). The federal

defendants took an immediate appeal.’

7Plaintiffs argued in the court of
appeals that the denial of the federal
defendants’ motion to dismiss on grounds
of official immunity under Barr was not
an immediately appealable order under
, 472 U.S. » 86

L.Ed.2ad 411 (1985) and Nixon v.

12
The SEMO PSRO defendants’ motions based
on official immunity under Bushman _ v.
Seiler, 755 F.2d 653 (8th Cir. 1985) and
on other grounds were denied by the
district court. A. 76a-123a.

However, on March 27, 1986, the
district court sua sponte entered an
order dismissing the entire case on the
grounds that the peer review defendants
were entitled to what was later described
as “qualified immunity,"® a claim they
had never raised. In so ruling, the

court stated that it would “correct"

Fitzgerald, 457 U.S. 731 (1982).
Although the court of appeals addressed
the question of official immunity under
Barr before it reached the question of
absolute immunity under Butz, the court
did not address the procedural and
jurisdictional question of appealability
anywhere in its opinion.

8tn its March 27 order the district
court did not describe the immunity it
was granting as qualified, but discussed
it in terms appropriate to a grant of
absolute immunity. It was only in its
later June 3 order that the district
court used the term "qualified immunity."

Pw...

13

Congress’ failure to grant Medicare peer
reviewers immunity. A. 124a-139a. In an
order dated June 3, 1986, the district
court held that its dismissal extended to
all defendants, and that it intended to
overrule its September 19, 1985 order
with respect to the federal defendants. ?
A. 140a-143a. Dr. Kwoun appealed from
the latter two orders of the district
court to the Court of Appeals for the
Eighth Circuit. The three appeals were
consolidated for argument and decision.

The court of appeals held that all

of the sixty-some defendants in the case,

9The question of the procedural
unfairness of a sua sponte dismissal of
the case on grounds barring later
litigation on the merits was presented to
the court of appeals but was not
addressed by that court even though the
Eighth Circuit has consistently held that
sua sponte grants of summary judgment are
improper and require reversal. Williams
. 983 #.34 114, 116
(8th Cir. 1986), v . Swi °
Missouri, 564 F.2d 236, 242 (8th Cir.
1977), Twin City Federal Savings & Loan
Association v. Transamerica Ins. Co.

O., 491
F.2d 1122 (8th Cir. 1974).

14

including the peer review physicians,
were entitled to absolute immunity under
Butz _v. Economou, 438 U.S. 478 (1978),
and to the immunity of federal officials
from common-law tort claims under Barr v.
Matteo, 360 U.S. 564 (1959). Therefore,
Dr. Kwuon’s claims’ of racial
discrimination and denial of due process
must be dismissed in their entirety. At
oral argument before the appeals court,
government counsel had expressed the
opinion that the peer review
organizations could claim qualified but
not absolute immunity. Since it held
that all defendants were entitled to
absolute immunity, the court of appeals
did not reach the issue of the
correctness of the district court’s
dismissal purportedly based on qualified
immunity.

Judge Heaney, in a dissenting

opinion, objected to the court of appeals

Boeeb nny

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ordering the case dismissed. Instead, he
urged, the court should have remanded for
a determination by the district court of
the functions performed by the federal
defendants, as this Court did in Butz.
He further urged that the peer review
defendants were not entitled to absolute
immunity in light of the clear language
of 42 U.S.C. § 1320c-16 (1977), which
expressly provides such persons with only
good faith immunity. A. 43a-55a.

A petition for rehearing or for
rehearing en banc was denied, thus
occasioning this petition for a writ of

certiorari.

16

REASONS FOR GRANTING THE WRIT
I. THIS CASE PRESENTS QUESTIONS OF

NATIONAL IMPORTANCE THAT SHOULD BE

RESOLVED BY THIS COURT

The present case raises significant
questions concerning the _ scope ‘of
immunity to which state and federal
officials responsible for carrying out
portions of the Medicare program are
entitled. At issue is not only the
immunity doctrine as developed by
decisions of this Court but also the
intent of Congress when it enacted an
immunity provision as part of the
Medicare Act.

The Medicare program is nationwide
in scope and is one of the primary means
of providing low cost medical care to the
poor and elderly.?° Its administration

depends to a significant degree on the

10x, Davis, “Adequate Health Care
and an Aging Society: Are they Morally
Compatible?" Winter Daedalus, 227, 229-
230 (1986).

3
:
4
i

17

states and on private physicians, both as
providers of care and as regulators. For
the minority poor, often the only source
of medical care is minority physicians
who are willing to establish practices in
their communities.11 Racial discrimi-
nation in the administration of the
program can have a devastating effect,
therefore, not only on the rights of
minority physicians who are excluded as a
result of prejudice but also on those
persons for whose ultimate benefit the
Medicare program is intended.

Physicians excluded from Medicare
payments because of their race or
ancestry not only suffer the immediate
consequence of suspension from

eligibility for reimbursement but suffer

11s, Keith, R. Bell, A. Swanson, A.
Williams, "Effects of Affirmative Action
in Medical Schools: A Study of the Class
of 3975." Vel. 313,. No. 24, The New

England Journal of Medicine 1519, 1524
(1985).

18

serious damage to their reputations and
practices that restoration to eligibility
is inadequate to correct. The only
effective remedy for, and deterrent to,
racial discrimination in this situation
is the availability of damages against
those who violate the civil and
constitutional rights of physicians.

The importance of the issues
presented here are not confined to the
operation of the Medicare program. In
recent years there have been dozens of
reported decisions by both the federal
appellate and district courts that have
grappled with the issue of when and to
what degree particular officials should
be granted immunity from actions for
damages. The results have been
divergent, with courts —— absolute

immunity to some officials,12 and

12p.qg., Johnson _v. Rhode Island
Parole Bd. Members, 815 F.2d 5 (ist Cir.
1987); Sellars v. Procunier, 641 F.2d

4
2
4
%
4
ke
2
=
3
5
z
a

4

19

qualified immunity to others.1}%

1295 (9th Cir. 1981) (parole board
members); Tripati_ v. U.S.I.N.S., 784 F.2d
345 (10th Cir. 1986) (federal probation
officer); Harper _v. Jeffries, 808 F.2d
281 (3rd Cir. 1986) (parole board hearing
officer absolutely immune; probation
officer only entitled to qualified
immunity); Clulow_v. State of Oklahoma,
700 F.2d 1291 (10th Cir. 1983) and Simons
v. Bellinger, 643 F.2d 774 (D.C. Cir.
1980) (attorney disciplinary committees) ;
Austin Municipal Securities Inc. v. Nat’l
Ass’n_ of Securities Dealers, Inc., 757
F.2d 676 (5th Cir. 1985) (securities
dealers’ association).

13E.g., LeClair v. Saunders, 627
F.2d 606 (1980) (dairy farm inspector);
England v. Rockefeller, 739 F.2d 140 (4th
Cir. 1984) (governor not entitled to
absolute legislative immunity); McSurley
v. McClellan, 753 F.2d 88 (D.C. Cir.
1985) (congressional staff member);

, 793 F.2d 166 (8th Cir.
1986) (department of health inspectors) ;

Bothke v. Fluor Engineers & Constructors,
Inc., 713 F.2d 1405 (9th Cir. 1983),
vacated on another ground, 468 U.S. 1201
(1984), order on remand, 739 F.2d 484
(9th Cir. 1984) (IRS official entitled
only to qualified immunity); accord,

Cameron _v. IRS, 773 F.2d 126 (7th Cir.
1985); Tripati v. U.S.I.N.S., supra
(immigration official entitled only to
qualified immunity); Weiss v. Lehman, 642
F.2d 265 (9th Cir. 1981), vacated on
other grounds, 454 U.S. 807 (1981)
(Forest Service employee); Windsor v. The

, 719 F.2d 155, xeh. denied,
726 F.2d 277 (6th Cir. 1983) (U.S.

Attorney acting as employer only entitled

20

The decisions conflict both in terms
of the results and the standards used.
In the present case the court below
decided as a matter of policy that
certain types of officials should have
absolute immunity without requiring a
particularized showing of the functions
performed by the officials. Other courts
have followed the admonition of this
Court in Nixon v. Fitzgerald, 457 U.S.
731 (1982) and have required a rigorous
showing of need and function before

extending absolute immunity.14

to qualified immunity); Kompare v. Stein,
801 F.2d 883 (7th Cir. 1986) (medical
examiner).

14Ssee, e.g., Gray v. Bell, 712 F.2d
490 (D.C. Cir. 1983);

Sellars _v.
Procunier, 641 F.2d 1295 (9th Cir. 1981),

followed, Johnson v. Rhode Island Parole
Bd. Members, 815 F.2d 5 (list Cir. 1987).

Inc., supra (under functional analysis,
IRS official had only qualified
immunity); Tripati_v. U.S.I.N.S., supra
(immigration official who reported alien
to INS had qualified immunity, probation
officers who prepared reports had
absolute immunity); Harper v. Jeffries,

Wane ETA oe Ther tale be.

’
weld

_
Na ee. Reet of

21

Petitioners urge that this case
provides the opportunity for the Court to
resolve a number of issues that have
divided the lower courts and to provide
guidance that will permit them to decide
in particularized cases the degree of
immunity to which an official should be
entitled.
II. THE DECISION BELOW CONFLICTS WITH

PRIOR DECISIONS OF THIS COURT AND

WITH DECISIONS OF OTHER CIRCUITS

REGARDING THE CIRCUMSTANCES UNDER
WHICH ABSOLUTE IMMUNITY IS

APPROPRIATE.
A. The Decision Below Conflicts
With Decisions of This Court

The court below has misconstrued the
scope of absolute immunity delineated in
this Court’s decisions in JImbler v.
Pachtman, 424 U.S. 409 (1976), and Butz

Supra (parole board member has absolute
immunity, probation officer only
qualified immunity). See also

» 736 F.2€ 766 (D.C. Cir.
1984) (functional analysis used to deny
immunity to common-law torts to federal

official acting outside the scope of
authority). Contra Dretar v. Smith, 752

F.2d 1015 (5th Cir, 1985).

22
v. Economou, and has granted absolute
immunity based upon points expressly left
undecided by prior decisions of this
Court.

The decision of the court of appeals
takes the doctrine of prosecutorial and
judicial immunity laid out in Imbler and
extended in Butz, and expands it beyond
all recognition, in holding that all of
the participants in Medicare peer review,
whatever their role, are entitled to the
absolute immunity of prosecuting
attorneys. The result is to completely
bar a physician who claims that his
wrongful exclusion from Medicare
reimbursement was motivated by racial
considerations from recovering for any
part of his loss under common law,
statutory, or constitutional theories.

In Imbler, this Court expressly left

undecided the question whether a

prosecutor performing investigative or

23

administrative tasks would be entitled to
absolute immunity. In Butz, the Court
held that federal hearing examiners or
administrative law judges, agency
attorneys arranging for the presentation
of evidence on the record, and agency
officials responsible for initiating or
continuing a proceeding subject to agency
adjudication were entitled to absolute
immunity because their roles were
analogous to those of judges and
prosecuting attorneys. On the other
hand, officials not performing such
functions would be entitled to only
qualified immunity, and that the actual
functions performed would be determined
by the district court on remand.15

The Court has denied absolute

immunity to the Attorney General of the

15 on remand, Economou v. Butz, 466
F. Supp. 1351 (S.D.N.Y. 1979), the
district court held that two of the
defendants in Butz were not entitled to
absolute immunity.

24

United States, j Vv. S ». 472
U.S. _—, 86 L.Ed.2d 411 (1985), where
the claim to absolute immunity was
asserted based upon policy
considerations. The Court has also
indicated that the "public policy" to be
considered in connection with claims for
absolute immunity has to do with "the
‘inherent’ or ‘structural’ assumptions of
our scheme of government," Nixon v.
Fitzgerald, 457 U.S. 731, 748 xn. 26
(1982), rather than with policy
considerations per se.

In Cleavinger_v. Saxner, 474 U.S.
__, 88 L.Ed.2d 507 (1985), this Court
declined to grant members of a federal
prison discipline committee absolute
immunity, holding that the discipline
committee’s function was not a classic
adjudicatory one. An important factor in
the decision was the unavailability in

the proceedings at issue of the

25
procedural safeguards present in Butz
under the Administrative Procedure Act.
88 L.Ed.2d at 517.

In the present case, both the
district court and the court of appeals
determined that the peer review
physicians and federal officials were
entitled to immunity because of the
importance of Medicare peer review to the
Medicare system. The district court
stated, "Immunity has consistently been
provided for groups and individuals who
by legal mandate, are charged with
undertaking unpopular tasks," (A. 134a)

relying on Malley _v. Briggs, 475 U.S.
, 89 L.Ed.2a 271 42(1986).16 The

1l6~fhe district court, by relying on
Malley, s , apparently intended to
grant the peer review defendants
qualified immunity and to dismiss on that
basis, although it did not so state. The
court did not, in its March 27, 1986
order, apply the analysis set forth in
Harlow v. Fitzgerald, 457 U.S. 800 (1982)
or in Mitchell _v. Forsyth, 472 U.S. __,
86 L.Ed.2dad 411 (1985) to determine
whether the defendants were alleged to

26
district court further stated that
although Congress had "determined that
comprehensive review of government funded
health care is in the public interest,"
Congress had "not specifically provided
immunity to encourage PSROs to vigorously
pursue their appointed task," and "[(t)jhe
Court will correct Congress’ oversight

with its ruling today." (A. 138a-139a.)

have violated rights which were clearly
established at the time of the alleged
conduct. However, in the district
court’s earlier order of September 19,
1985, the court had held that Dr. Kwoun’s
Claim of entitlement to Medicare
reimbursement, provided he complied with
the conditions and requirements of the
Medicare statutes, was within the type of
property interests recognized in Board of
» 406 U.8. 564, 5877
(1972), that his claim of damage to his
practice was recognized in
, 353 U.S. 232, 238
(1957), and that other claimed
deprivations had been recognized by the
Eighth Circuit in Bishop v. Tice, 622
F.2d 349, 357 (8th Cir. 1980). Other
courts have held that physicians have
liberty and property interests in
connection with Medicare reimbursement.
Patchoque Nursing Center v. Bowen, 797
F.2d 1137 (2nd Cir. 1986); Case v.
Weinberger, 523 F.2d €02 (2nd Cir. 1975).

27

The court of appeals granted
absolute immunity to the peer review
defendants, analogizing Medicare peer
review to attorney disciplinary
committees!? and to the disciplinary
committee of a securities dealers’
association,1% to which other circuits
have granted absolute immunity. The
court stated, "we are convinced that
absolute immunity is ‘essential for the
conduct of the public business,’ Butz,
438 U.S. at 507, .. . in this critical
health care area." A. 362.

In affording the federal defendants
absolute immunity, the court of appeals
held that the federal officials’ actions

were at all relevant times prosecutorial

17 Citiag Giniaos._»...S
Oklahoma, 700 F.2d 1291, 1298 (10th Cir.
1983) and Simons v. Bellinger, 643 F.2d
774, 782 (D.C. Cir. 1980).

18 citing Austin Municipal
, 757 F.2d

676, 689 (Sth Cir. 1985).

28

in nature. A. 21a. The court ignored
the differences between the statutory
scheme at issue in Butz under the
Commodities Exchange Act and the
Administrative Procedure Act, and in
Austin, under the Securities and Exchange
Act, where the initial action taken by
the agency is a formal charge that is
followed immediately by a judicial-type
hearing on the record at which a charged
party has the right to counsel and cross-
examination, and the proceedings under
the peer review statute here. The
sanctioned provider is excluded from
reimbursement by an administrative
decision and a publication of the
Medicare denial in a local newspaper long
prior to any opportunity for an
adjudicatory hearing. 42 U.S.C. § 1320c-
9(b) (2), 42 C.F.R. § 474.10(e).

The court of appeals’ logic would
grant absolute immunity to any official,

; Lacs a hoe So is ant Ale a ae ae da ies St SE ae hale uaa aoe Gn 5 a a ae a Sie ee ubiee sg get ae Leese, ee at ab wre ip ti a a abs
oo aah Bh a aR eB a ins SSO . sats saeiniaiiaiiiead scaeiat ce Soe

4
;

29

regardless of his or her actual
functions, if the action taken is
eventually reviewed or subject to an
adjudicatory hearing. Such a result is
wholly at odds with the fundamental
proposition that absolute immunity is the
exception rather than the rule and is to
be granted only to a narrow class of
officials whose duties and functions
particularly require immunization from
the threat of suit. Harlow v.
Fitzgerald, 457 U.S. 800, 807 (1982);
Butz v. Economou, 438 U. S. at 506.

In sum, this case provides the Court
the opportunity to resolve, for the
guidance of the lower courts, two issues
left undecided by Imbler and Butz: (1)
what is the scope of the administrative
and investigatory exception to absolute
prosecutorial immunity; and (2) what are
the limits of the policy considerations

for granting absolute immunity that were

30

discussed in Butz? The issues in this
case are presented in a context in which
Congress has expressly provided that only
limited immunity, of a hybrid variety,
would be available to peer review
participants. 42 U.S.C. § 1320c-16
(1977).49 Although the case does not
present the issue of a Congressional
attempt to abrogate an already
established application of immunity,2° it
does present issues concerning the limits
of Imbler and Butz in the context of an
explicit Congressional determination that
public policy does not require absolute
immunity. 21

19the present statutory section is
42 U.S.C. § 1320C-6(1982).

20Ssee Nixon v. Fitzgerald, 456 U.S.
at 748, n. 27.

2ltfhe legislative history of the
Senate Committee on peer review appears
at S. Rep. No. 1230, 92nd Cong. 2d Sess.
256-58 (1972) and with regard to PSRO
liability states:

The amendment provides

31

With Decisions Of Other

As can be seen from the text and
cases cited above at nn. 12-14, other
circuits have begun with the proposition
that absolute immunity is the exception,
not the norn. E.g., Windsor v. The
Tennessean, 719 F.2d 155, 163-4 (6th Cir.
1983); Cameron v. I-R-S., 773 F.2d 126,
128 (7th Cir. 1985); Bothke v. Fluor

Engineers and Constructors, Inc., 713
F.2d 1405 (9th Cir. 1983). Thus, other

courts of appeals have engaged in a

particularized analysis of the functions

protection from civil liability for
those engaged in required review
activities, or who provide
information to PSROs in good faith,
for actions taken in the proper
performance of these duties.
Activities taken with malice toward
a practitioner or institution, or
group of practitioners would not be
considered action taken in the
proper performance of these duties.

S. Rep., supra, at 266-67.

32
of each of the officials involved to
determine whether absolute or qualified
immunity was appropriate. See, e.gG.,

Tripati v. U.S.I.N.S., 784 F.2d 345 (10th

Cir. 1986); Harper v. Jeffries, 808 F.2d

281 (3rd Cir. 1986).

The court below, on the other hand,
extended absolute immunity to every level
and type of official involved in the peer
review process because of policy
considerations it derived from an
overview of the statutory scheme
involved. The absence of any functional
analysis places the decision in square
conflict with at least five other
circuits.

III. THE DECISION BELOW CONFLICTS WITH

THE DECISIONS OF OTHER CIRCUITS AS

TO WHETHER PHYSICIANS ENGAGED IN

MEDICARE PEER REVIEW ARE FEDERAL

OFFICIALS AND WITH STATE COURTS AS

TO THE SCOPE OF THEIR IMMUNITY FROM

SUIT.

The court of appeals held that

Medicare peer reviewers are federal

33
officials, ignoring both the clear
Congressional intent that Medicare peer

review be placed in the private sector, 2?

227The legislative history of the
Professional Standards Review statute is

set forth in detail in Public Citizen
Health Research Group v. Department of

W , 668 F.2d
537, 542-43 (D.C. Cir. 1981). From its
review of the legislative history the
court concluded:

We begin with the Report of the
Senate Committee on Finance on the
Social Security Amendments of 1972,
S. Rep. No. 92-1230, 92d Cong., 2d
Sess. (1972). It was the 1972
amendments which authorized the
establishment of PSROs. Reading the
Report, we are struck by the strong
and recurrent theme, that the review
process must be conducted by
practicing physicians, not by the
government or government employees.
This theme is sounded over and over
in the report.

= * * .

We think these expressions
demonstrate the fixed purpose of
Congress that PSROs should be
independent medical organizations
operated by practicing physicians in
the private sector, and not
government agencies run by
government employees. Government,
said the committee, should not
undertake to review the
appropriateness and quality of

34

and the decisions of other circuits that
are to the contrary. Public citizen
Health Research Group _v. Department of
Health, Education, and Welfare, 668 F.2d
$37, 844 (D.C. Cir. 1981) U,8.. Wa.
University Hospital, 729 F.2d 144 (2nd
Cir. 1984).

The court of appeals determined that
the peer review defendants were federal
officials in order to reach the further
holding that they were therefore entitled

medical services. A holding that
the Foundation, an organization of
private physicians, constitutes a
government agency would be
inconsistent with the congressional

purpose.
See also Association of American

Physicians and Surgeons v. Weinberger,
395 F. Supp. 125, 140 (N.D. Ill. 1975),

affirmed without opinion, 423 U.S. 975
(1975).

HHS, in the PSRO Program Manual,
states: "The Department of Health,
Education, and Welfare recognizes that
PSROs operate as independent, private,
nonprofit corporations." P.S.R.O.
Program Manual, Chapter XXIV, p. 1, June
20, 1978. See Appendix at 167a.

35

to official immunity from common law tort
claims under Barr v. Matteo, 360 U.S. 564
(1959).23 As the dissent below points
out, however, (A. 5la-53a), a number of
state courts have held that medical peer
review committees, their members, and
witnesses before them have only qualified
immunity. 24

23the court of appeals considered
the issue of official immunity from
common law tort claims under Barr as to
each group of defendants prior to
considering the defendants’ claims to
absolute immunity under Butz v. Economou,
thereby revealing considerable analytical
confusion about the application of these
immunity defenses; absolute immunity
based upon prosecutorial or judicial
functions would subsume the official
immunity established in Barr.

24see, e.g., Franco v. District
, 641 P.2d 922, 925 (Colo.

Court of Denver
1982); (citing, Note, The Legal Liability
of Medical Peer Review Participants For

Revocation of Hospital Staff Privileges,
28 Drake L. Rev. 692 (1978-79); Note,

Health Care Industry, 52 Temple L.Q. 552
(1979)). Hayden v. Foryt, 407 So.2d 535,
536 (Miss. 1982), (granting review
committee and witnesses before committée
qualified immunity); Buckner v. Lower
Florida Keys Hosp. Dist., 403 So.2d 1025,
1028 (Fla. App. 1981) (granting hospital

36

The other circuits that have held
that PSROs were not federal entities have
thereby reached findings that they were
not liable under the Freedom of
Information Act. Public Citizen Health
Research Group _v. Department of Health,
Education, and Welfare, supra; U.S. v.
University Hospital. On the other hand,
the Fifth Circuit in Smith v. North
Louisiana Medical Review Association, 735

staff and disciplinary body and its
agents qualified immunity); Hackenthal v.
Weissbein, 592 P.2d 1175, 154 Cal. Rptr.
423, 426-27, 24 C.3d 55 (1979) (granting
qualified immunity to witnesses at
hearing of peer review committee of
nonpublic institution); Matviuw v.
Johnson, 26 Ill. Dec. 794, 388 N.E.2d
795, 799, 70 Ill. App. 3d 481 1979)
(granting witnesses at hearing of peer
review committee qualified immunity),
aff’d, 67 Ill. Dec. 370, 444 N.E.2d 606,
111 Ill. App. 3d 629 (1980); Southwick
and Slee,

Care, 5 J. Legal Med. 343, 386-96 (1984);

D. Gregory,

- , 11 Legal Aspects
of Med. Practice No. 9, pp. 1, 2-4 (Sept.
1983); J. C. Norman, So-Called Physician
Li

“Whistle-Blowers" Protected: Immunity of

Peer-Review Committee Members from Suit
11 Legal Aspects of Med. Practice No. 2,
pp. 4-7 (Feb. 1983).

37
F.2d 168 (5th Cir. 1984), held that PSROs
were federal entities, thereby affirming
the dismissal of an action under 42

U.S.C. § 1983. A similar result was

reached in Taylor v. Flint Osteopathic
Hospital, 561 Supp. 1152 (E.D. Mich.
1983), vacated and remanded for trial,
765 F.2d 146 (6th Cir. 1985), except that

the plaintiff, a black physician alleging
racial discrimination in a PSRO sanction
decision, ultimately was found to be
entitled to a trial on his 42 U.S.C.
§ 1981 claim. Thus, the result in Taylor
is squarely in conflict with the result
here. Cf. also, Doe v. St. Joseph’s

Hospital of Fort Wayne, 788 F.2d 411 (7th
Cir. 1986), holding that a Korean

physician who had been disqualified from
hospital privileges could not bring an
anti-trust action against a medical peer
review committee because of the state

action doctrine, but could maintain an

38
action under § 1981 for racial
discrimination.

In short, the nature of PSROs,
whether they are federal or private, has
been interpreted virtually at will by the
circuits, but in most cases in a manner
which prevents the assertion of theories
of recovery by persons who claim to be
victims of the PSRO process. The
variation in holdings as to the nature of
PSROs, coupled with the near-uniformity
in rulings against individual physicians
seeking to challenge actions by PSROs,
essentially leaves the medical community
without the protection of any rational
rule of law. The confusion in this area
of law clearly requires resolution by
this Court.

IV. THE DECISION BELOW RAISES IMPORTANT
ISSUES RELATED TO THOSE PRESENTED BY

A PENDING CASE, PATRICK V. BURGET.
Patrick v. Burget, 800 F.2d 1498
(9th Cir. 1986), pet. for cert. pending,

eee ee

39

No. 86-1145, like the present’ case,
concerns the scope of potential liability
for medical peer reviewers who are
alleged to have conducted peer review
activities in bad faith. Patrick also
raises the question of the limits to
judicially-created doctrines of immunity
where Congress has expressly indicated,
by statute, its determination that public
policy requires less than complete
immunity for peer reviewers.

In Patrick the Ninth Circuit
reversed a jury verdict finding the
defendant physicians liable for
conducting in-hospital peer review
activities in a manner that violated
federal anti-trust laws. The Ninth
Circuit held that the peer review
activities at issue in Patrick, which
were authorized by an Oregon statute that

required that medical facilities have

procedures for reviewing staff privileges

40
and professional competence, were immune
from antitrust liability by virtue of the
state statute and state supervision of
the process that the court found to
exist.

The Ninth Circuit’s decision in
Patrick was the impetus behind passage of
the Health Care Quality Improvement Act
of 1986, Title IV, Public Law No. 99-660,
which authorized peer review activities
in private settings and provides for
limited good faith immunity for
participants,*°> and which also
specifically provides that there is a
cause of action remaining under 42
U.S.C. § 1981 against peer reviewers.
The limited good faith immunity provided
in the new law is substantially the same
as that contained in the Medicare peer

review law at issue here, 42

25132 Cong. Rec. H9960 (daily ed.
October 14, 1986) (statement of Rep.
Edwards).

—eee—OO

41

U.S.C. § 1320c-16,2© and is also
substantially the same as that provided
in many state statutes.?7

In the present case, the claims
asserted were not antitrust, but rather
were claims of racial discrimination,
conspiracy, violation of constitutional
rights, malicious prosecution and
intentional infliction of severe
emotional distress. If antitrust claims
had been asserted, there could have been
little basis for the assertion of state
action immunity defense by the peer

review defendants in view of the federal

26Now 42 U.S.C. § 1320c-6.

27state ex rel. Chandra v. Sprinkle,
678 S.W.2d 804, 806 n. 13 (Mo. en banc
1984) (Missouri Supreme Court recognized
in dicta that peer reviewers would have
only good faith immunity under Missouri
Statute) ;
Denver, 641 P.2d 922 (Colo. 1982)
(granting review committee and members
qualified immunity); Buckner v. Lower
Florida Keys Hospital District, 403 So.2d
1025, 1028 (Fla. App. 1981) (granting
only good faith immunity).

42
statute authorizing the establishment of
the SEMO PSRO. However, the absolute
immunity granted by the Eighth Circuit in
the present case, if carried to its
logical conclusion, would bar civil
damages actions arising out of private
peer review as well as Medicare peer
review, on whatever theory.28 There is a
potential for direct conflict between the
Eighth Circuit, which may extend Kwoun to
all medical peer review activities, and
Patrick, should this Court find that the
Ninth Circuit’s decision in Patrick

should be reversed, because in the Eighth

28the decision in Patrick left open
the possibility that state law theories
such as malicious prosecution could be
asserted on remand. Patrick, at 1509.
The Seventh Circuit in Doe v. St.
Joseph’s Hospital of Fort Wayne, 788 F.2d
411 (7th Cir. 1986), held that a
physician excluded from hospital staff
privileges under the hospital’s peer
review process could not assert an anti-
trust claim because of state action
immunity, but remanded for trial on the
physician’s Title VII and 42 U.S.C.
§ 1981 claims based on race, Korean.

43
Circuit, even if an anti-trust theory
lies, all possible defendants would have

absolute immunity from suit.

CONCLUSION
For the foregoing reasons, a writ of
certiorari should be issued to review the

judgment and opinion of the Eighth
Circuit.

Respectfully submitted,

LOUIS GILDEN*

NORAH J. RYAN
317 North 11th Street
Suite 1220
St. Louis, Missouri 63101
(314) 241-6607

JULIUS LeVONNE CHAMBERS

CHARLES STEPHEN RALSTON
99 Hudson Street
New York, N.Y. 10013
(212) 219-1900

Attorneys for Petitioners

*Counsel of Record

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_0339%3A1. Public record. Not legal advice.