Reply Brief — Kwoun v. Southeast Missouri Professional Standards Review Organization

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No. 86-1944. ii d

sep 19 13)

IN THE JOSEPH F. SPANIOL, JR

CLERK

Supreme Court of the Unifey States

Octoser Term, 1987

Soune O. Kwovuy, e¢ al.,

Petitioners,

VS.

SouTHEAST Mrssourt PRoFEssIoNAL STANDARDS

Review OrGanizaTion, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE EIGHTH CIRCUIT

REPLY MEMORANDUM FOR PETITIONERS

Louis GILDEN*

NoraH J. Ryan

317 North 11th Street

Suite 1220

St. Louis, Missouri 63101

(314) 241-6607

Jctivus LeEVonne CHAMBERS

CuaARLES STEPHEN RaLsTon

99 Hudson Street

New York, New York 10013

(212) 219-1900

Attorneys for Petitioners

Counsel of Record

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TABLE OF CONTENTS

Page

Team OF Gees .« « 6 6 ee ee Ole 3

.. The Response of the United

pS a a a ee ee a 2

II. The Response of the Private

Cemameeee « 6 tt le etl hl Oh ll

Table of Cases

Pages

Association of American Physicians

and Surgeons v. Weinberger,

395 F. Supp. 125 (N.D. Ill.

1975), aff’d, 423 U.S. 975

(1979) «ss es * eS SS 6

Butz v. Economou, 438 U.S. 478

(1978) o * a . .- - a o — o . o 6

Cassim v. Bowen, 824 F.2d 791

(9th Cir. 1987)... .-+-- 6

Marrese v. Interqual Inc., 784 F.2d

373 (7th Cir. 1984) ...-.-+-+ 3

Patrick v. Burget, U.S.S. Ct.

No. 86-1145 e . . 7 . e © ° . Ae 2

Tambone v. Memorial Hospital for

McHenry County Inc., ____ F.2d

___, 56 U.S. Law Week 2129

(7th Cir., July 14, 1987) . .- 3

ii

No. 86-1944

In The

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1987

SOUNG O. KWOUN, et al., -

Petitioners,

vs.

SOUTHEAST MISSOURI PROFESSIONAL STANDARDS

REVIEW ORGANIZATION, et al.,

Respondents.

On Petition For A Writ of Certiorari

To The United States Court Of Appeals

For The Eighth Circuit

REPLY MEMORANDUM FOR PETITIONERS

This Reply Memorandum will address

primarily the contentions raised by the

United States in its Brief in Opposition,

particularly as they relate to the

position of the government taken in No.

86-1145, Patrick v. Burget. We will also

address briefly the arguments made in the

2

Brief in Opposition of the other

respondents.

oe

The Response of the United States

We urge that certiorari should be

granted in this case along with

certiorari in Patrick v. Burget and that

the cases be set down for oral argument

together. There is a common question

underlying both cases: i.e., whether and

to what extent private individuals who

are members of peer review organizations

established under either federal law, as

here, or state law, as in Patrick, should

be granted immunity from liability under

federal civil rights or anti-trust

statutes because they have been given

functions related to the enforcement of

federal or state law.

The government urges that certiorari

should be granted in Patrick to decide

whether the "state action" doctrine

immunizes peer review organizations’

members from anti-trust liability because

the actions they have taken are done

under the auspices of state law. Thus,

review is urged to decide whether "a

state may .. . give immunity to private

parties" in a case involving "an attempt

by private parties, not gcvernmental

units, to achieve immunity from Sherman

Act liability."2 In the present case,

the question is whether the same persons,

viz., private physician members of peer

review organizations, should be given

absolute immunity from liability under

federal civil rights statutes because

1 Compare Tambone v. Memorial

Hospital for McHenry County, Inc., __

F.2d _, ~2+56 U.S. Law Week 2129 (7th

Cir., July 14, 1987), with Marrese v.

Interqual Inc., 784 F.2d 373 (7th Cir.

1984).

2 Brief for the United States As

Amicus Curiae in No. 86-1145, pp. 7-8.

%

they have been given a role under federal

law in determining whether persons should

be excluded from Medicaid reimbursement

programs.

In its Brief in Opposition in the

present case the federal defendants

decline to address this issue for reasons

that are not clear.?3 They argue

essentially that the question presented

here will not recur because of changes in

the statute and regulations that provide

more procedural protections during the

peer review process; but this argument is

inaccurate and irrelevant. The claim

here is that the actions of the members

of the peer review organization were

motivated by racial bias towards the

petitioner, and that the federal

3 As we noted in the petition for a

writ of certiorari, at oral argument in

the court of appeals the United States

took the position that the PRO members

should only have qualified immunity.

5

defendants failed to ensure that the peer

review defendants had provided petitioner

with due process of law in making their

recommendation. The fact that such

actions are now subject to certain

procedures will not in any way whatsoever

lessen the possibility that the motives

for initiating the actions were illegal

under the civil rights’ statutes.

Moreover, the notice and opportunity to

be heard provisions of the regulations

existing at the time were ignored.

Thus, the basic question of the

extent to which courts should extend

immunity to private persons who serve a

role in an administrative procedure is

still raised by the present case. It is

an issue that has not been decided by

this cCourt* and, we submit, is an

4 This Court’s only ruling to date

was to summarily affirm without opinion a

lower court’s holding that the medical

6

important and recurring one that has

lead, as demonstrated by our petition for

a writ of certiorari, to substantial

confusion in the lower courts.°® In

addition, the question of the limitations

of Butz v. Economou, 438 U.S. 478 (1978)

as it relates to the federal defendants

is not changed by the promulgation of new

regulations. Thus, this case does not

involve a “straight-forward application"

of Butz, as the SEMP PSRO respondents

suggest.

peer review statute was not

unconstitutional on its face.

v. W , 395 F. Supp. 125

(N.D. Ill. 1975), aff’d, 423 U.S. 975

(1975).

> cf. Cassim v. Bowen, 824 F.2d 791,

796 (9th Cir. 1987), for a description of

the disagreement between the circuits as

to the nature of the constitutional right

involved in the denial of Medicaid

reimbursement.

II.

The bulk of the private respondent’s

Brief in Opposition attempts to

demonstrate that there is no conflict

between the circuits. We will not repeat

what we have already said in the petition

for writ of certiorari but simply wish to

reemphasize that there is a clear

conflict between the decision of the

Eighth Circuit and a number of state

court decisions, including decisions of

the highest state courts of several

states, as to whether peer review

organization members should have absolute

or qualified immunity. See cases cited

in the Petition for A Writ of Certiorari,

p. 35, n. 24. This is an independent

basis for granting the petition and again

illustrates the importance and recurring

8

nature of the issues presented.

For

CONCLUSION

the foregoing reasons, the

petition for writ of certiorari should be

granted.

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