Petition for Writ of Certiorari — Willis v. University Health Services, Inc.

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93-440

IN THE SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1993 [. Bunieme Cont Ug

FILED

CAROL H. WILLIS, PETITIONER SEP 20 1993

Vv. r

BERGE OF WE CLERK

UNIVERSITY HEALTH SERVICES, INC., d/b/a ies

UNIVERSITY HOSPITAL; SHERRY HICKS,

individually and in her official capacity

as Head Nurse of Postpartum for University

Hospital; MARY LYNN GOFORTH, individually

and in her official capacity as Director

of Maternal/Child Nursing for University

Hospital; MARILYN BOWCUTT, individually

and in her official capacity as Assistant

Administrator of Nursing Services for

University Hospital; and JOSEPH WwW.

HERZBERG, individually and in his official

Capacity as Director of Personnel Services

for University Hospital, RESPONDENTS

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

=? FOR THE ELEVENTH CIRCUIT

WARNER R. WILSON, JR.

Counsel of Record for Petitioner

WILSON, STRICKLAND & BENSON, P. C.

Suite 1100, One Midtown Plaza me

1360 Peachtree Street, N. E.

Atlanta, Georgia 30309-3214

(404) 870-1800

MARY M. BROCKINGTON

ANNE W. LEWIS

Counsel for Petitioner

WILSON, STRICKLAND & BENSON, P. C.

Suite 1100, One Midtown Plaza

1360 Peachtree Street, N. E.

Atlanta, Georgia 30309-3214

(404) 870-1800

QUESTIONS PRESENTED

1. Whether an entity, which is created

solely for the purpose of managing a

county hospital leased from the county

hospital authority, which is afforded

every possible benefit bestowed on the

hospital authority and which is in fact

indistinguishable from the county hospital

authority, can avoid liability under 42

U.S.C. §1983 by claiming to be private?

2. Whether, if such an entity is deemed

private, a determination of state action

should be made based upon the "symbiotic

relationship” test of Burton v. Wilmington

Parking Authority, 365 U.S. 715 (1961)

rather than the "nexus/joint action,"

"public function” and “state compulsion"

tests set forth in Jackson v. Metropolitan

Edison Company, 419 U.S. 345 (1974), Lugar

v. Edmondson Oil Company, 457 U.S. 922

(1982), Rendell~Baker v. Kohn, 457 U.S.

830 (1982) and Blum v. Yaretsky, 457 U.S.

991 (1982)?

3. Whether, if the “nexus/joint action"

test applies, an entity managing a county

hospital authority is a state actor, -in

light of the conflict on this point

between several Circuits?

4. Whether, if the “public function" test

applies, an entity which performs the

obligations of a county hospital authority

meets that test?

$. Whether, if the "state compulsion"

test applies, an entity which shares its

president and other board members with a

county hospital authority can be deemed a

state actor because of this overlapping

authority?

iii

PARTIES TO THE PROCEEDING

All parties to this proceeding are

listed in the caption of the case. Carol

H. Willis, the sole Petitioner in this

case, is an individual and therefore

certifies, pursuant to Rule 29.1 of this

Court’s Rules, that no corporation, either

parent or subsidiary, is a Petitioner.

TABLE OF CONTENTS

Questions Presented ......-«-e« e« i

List of Parties ..<«+++«e¢e«ee eo Add

Table of Authorities ........ V-xi

Opinions Below ...«++«+s«¢eeecee 2

Juriegiction « «+ s+e*erse2vevteveve

Statutory Provisions Involved .... 4

Statement of the Case ........ 4

Reasons for Granting the Writ .... 23

Com@iuesiog «© -« ce eevee eens sen 3

Appendix A. .«..«5+*cecsvereccve ee Me

Appendiz B.«-eceeecevveveeee sen

Appendix C ..«.+s+-e«ececeereeee « 228

Bppengdiz De. e+ ee vevveccec ene se ae

Appengdin Be. ec es ec ve vvveces eve se s SCR

TABLE OF AUTHORITIES

Cases; Page(s)

Blum v. Yaretsky,

457 U.S. 991 (1982) ... 46, 47, 56, 57

Bonner v. City of Prichard,

661 F.2d 1206, 1209

to ee ee

Burton v. Wilmington

Parking Authority,

365 U.S. 715 (1961) . 24, 25, 39-42, 44,

45, 49, 52, 63

Carnes v. Parker, 922 F.2d 1506

(iGth Cass 992) sc ce sto cs ote SB

Coleman v. University Hosp.,

No. CV 187-117

(S.D.Ga. April 28, 1988) ....... 21

Cases: - Continued Page(s)

Crowder v. Conlan, 740 F.2d

447 (6th Cir. 1984) ....... 61,

Derrington v. Plummer,

240 F.2d 922

(Sth Cir. 1956) - «© «© + 6 «© © 2B, 29,

Eaton v. Grubbs, 329 F.2d 710

(4th Cis. 1964) 7 e ° * e e . es « = . 7.

Farmers Warehouse of Pelham, Inc.

v. Collins, 220 Ga. 141,

137 S.E.2d 619 (1964) .... . 30-33,

Federal Deposit Ins. Corp.

v. United States, 654 F. Supp. 794

(BoB. GO. 3906) « « « 0 eo we se © 0

vil

Cases: - Continued Page(s)

Greco v. Orange Memorial

Hospital Corporation,

513 F.2d 873 (5th Cir. 1975)

cert. denied, 423 U.S. 1000

ae oe a

Hampton v. City of Jacksonville,

304 F.2d 320 (5th Cir. 1962) .... . 62

Hickman v. Hyzer, 261 Ga. 38,

401 S.E.2d 738 (1991) ........ 35

Jackson v. Metropolitan

Edison Company,

419 U.S. 345 (1974) ... . 45-47, 49, 59

viii

Cases: - Continued Page(s)

Jatoi v. Hurst-Euless-Bedford

Hosp. Auth., 807 F.2d 1214

(5th Cir.), modified on other

grounds, 819 F.2d 545

(Sth Cir. 1987) . .. . 23, 36, 37, 55-58

Jeffries v. Georgia Residential

Finance Auth., 678 F.2d 919

(lith Cir. 1982) ...«-«eeecvee SY

Lugar v. Edmondson Oil Company,

457 U.S. 922 (1982) ~. ©. «© «© «© « «© 47, 48

Milo v. Cushing Municipal Hospital,

861 F.2d 1194

(10th Cir. 1988) ..... 36-38, 55-58

Rendell-Baker v. Kohn,

457 U.S. 830 (1982) ..... 47, 59, 60

Cases: - Continued Page(s)

Richards v. Emanuel County

Hosp. Auth., 603 F. Supp. 81

1 SUES: Gicc ck ec Kew ee ee

Richmond County Hospital Authority

v. Richmond County,

255 Ga. 183, 336 S.E.2d 562 (1985) . . 29

Schier v. Board of Trustees of Temple

Univ., 576 F. Supp. 1569

eS |

Sheppard v. Tribble Heating & Air

Conditioning, Inc., 163 Ga. App. 732,

294 S.E.2d 572 (1982) . ~. « « «© « « e« 3i1

Southern Envt’l Group, Inc.

v. Rosebud Landscape Gardening, Inc.,

196 Ga. App. 392,

395 &.B.24 913, 915 (1990) . « «© « « 3

Cases: - Continued Page(s)

Wofford v. Glynn-Brunswick

Memorial Hosp., 864 F.2d 117

Statutes and Regulations: Page(s)

28 U.S.C. § 1254(1) ~. «© «© «© «© «© «© ww 2 4

28 U.S.C. § 1291 . «© «© «© © © © © © © 22

26-28, 30, 35-38, 40, 63

O.C.G.A. §31-7-1 . « «© «© «© © © © © © 29

O.G.-G.A- § 31-7-75 . 7 * > . x ~ 46, 60

Miscellaneous: Page(s)

AHA Guide to Health Care,

1987 and 1992 volumes .....-.«-.«« 49

Ayoub, The State Action

Doctrine in State and

Federal Courts,

11 F.S.U.L.Rev. 893 (1984) ..... 25

Fletcher Cyclopedia

Corporations, Vol. l,

§ 41.1, p- 169 . «© «© © © © eo © © @ «© J)

Savas, Privatization and Persons,

40 Vand.L.Rev. 889, 890 (1987) .... 49

NO.

IN THE SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1993

CAROL H. WILLIS, PETITIONER

UNIVERSITY HEALTH SERVICES, INC., d/b/a

UNIVERSITY HOSPITAL; SHERRY HICKS,

individually and in her official capacity

as Head Nurse of Postpartum for University

Hospital; MARY LYNN GOFORTH, individually

and in her official capacity as Director

of Maternal/Child Nursing for University

Hospital; MARILYN BOWCUTT, individually

and in her official capacity as Assistant

Administrator of Nursing Service for

University Hospital; and JOSEPH WwW.

HERZBERG, individually and in his official

capacity as Director of Personnel Services

for University Hospital, RESPONDENTS.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

Petitioner Carol H. Willis respectfully

petitions this Court for a writ of

certiorari for review of the judgment and

opinion of the United States Court of

Appeals for the Eleventh Circuit, entered

in the above-styled proceeding on June 22,

1993.

OPINIONS BELOW

The opinion of the United States Court

of Appeals for the Eleventh Circuit is

reported at 993 F.2d 837 (llth Cir. 1993)

and is reprinted in the attached Appendix.

(App. A, infra, la - 19a). The judgment

of the Court of Appeals, entered June 22,

1993, is also reprinted in the Appendix.

(App. B, infra, 20a - 2la).

The order of the United States District

Court for the Southern District of Georgia

(Bowen, D. J.) is reported at 804 F.Supp.

1557 (S.D.Ga. 1992); that order and

judgment are reprinted in the attached

Appendix. (App. C and D respectively,

infra, 22a - 39a).

JURISDICTION

Invoking federal jurisdiction under 42

U.S.C. § 1983, Petitioner Carol H. Willis

("Petitioner") brought this action in the

United States District Court for the

Middle District of Georgia. On July 27,

1992, the District Court granted

Respondents’ Motion for Summary Judgment

and entered judgment in favor of Respon-

dents on July 28, 1992. (App. C and D,

infra, 22a - 39a).

Petitioner appealed to the United

States Court of Appeals for the Eleventh

Circuit. On June 22, 1993, the Eleventh

Circuit-— entered an order affirming the

District Court opinion. (App. A, infra,

19a). Petitioner did not seek a re-

hearing.

This Court has jurisdiction to review

the judgment of the Eleventh Circuit

pursuant to 28 U.S.C. § 1254(1) (Supp.

1993).

STATUTORY PROVISION INVOLVED

42 U.S.C. § 1983 Civil Action for

Deprivation of Rights.

Every person who, under color of

any statute, ordinance, regulation,

custom, or usage, of any State or

Territory or the District of

Columbia, subjects, or causes to be

subjected, any citizen of the United

States or other person within the

jurisdiction thereof to the

deprivation of any rights,

privileges, or immunities secured by

the Constitution and laws, shall be

liable to the party injured in an

action at law, suit in equity, or

other proper proceeding for redress.

For the purposes of this section,

any Act of Congress applicable

exclusively to the District of

Columbia shall be considered to be a

statute of the District of Columbia.

STATEMENT OF THE CASE

Petitioner is a registered nurse who

was employed by University Hospital in

Augusta, Georgia from December, 1987

through January 2, 1990, when she was

terminated. On December 28, 1990,

Petitioner brought this action under 42

U.S.C. § 1983 for violation of her rights

under the First and Fourteenth Amendments.

Throughout her tenure at University

Hospital, Petitioner consistently received

excellent annual performance evaluations

and merit raises based on those eval-

uations. In late 1989, Petitioner, who

also was a private instructor in the

Bradley childbirth method, wrote a letter

to the editor of The Augusta Chronicle

expressing her views regarding obstetrical

practices. The letter was signed by

Petitioner but did not identify her as a

nurse or as being affiliated with

University Hospital nor did the letter

contain names of doctors or hospitals.

The Augusta Chronicle published

Petitioner’s letter on the morning of

October 12, 1989. That same morning,

Petitioner received a telephone call from

her supervisor, Respondent Hicks, who

inguired whether Petitioner was the writer

of the letter. When Petitioner responded

affirmatively, Respondent Hicks instructed

Petitioner to appear for a meeting

regarding the letter on Petitioner’s next

scheduled work day.

Meanwhile, Respondent Hicks advised her

acting supervisor, Jim Showman, that

Petitioner was the letter writer. In

turn, Showman informed Respondent

Herzberg, University Hospital’s personnel

director, that the letter had been written

by a staff nurse and that there was a

"concern" on the part of the nursing and

physician staff regarding the content of

the letter. Showman and Respondent

Herzberg discussed the content of the

letter, Petitioner’s right to free speech

and her judgment and intent in writing the

letter. Showman and Respondent Herzberg

then discussed what further action should

be taken and specifically discussed ter-

mination of Petitioner for the expression

of her views in this manner.

When Petitioner arrived at the hospital

on her next scheduled day of work, she was

ushered into a meeting with Showman and

Respondents Hicks and Goforth, the

director of maternal/childbirth nursing.

Showman, Hicks and Gofozth asked

Petitioner what her intent had been in

writing the letter and told her there were

"proper channels" available at the

hospital to express these views and effect

change.

Showman mentioned the possibility of

termination and warned Petitioner that

Georgia is an employment at will state.

Respondent Hicks told Petitioner not to

report for work that day, then prepared a

Special Interview Record, recording the

reprimand and her concerns over. the

content of the letter to the editor.

On January 2, 1990, when Petitioner

reported for her scheduled shift,

Respondent Hicks summoned her to a meeting

with Respondent Goforth. Petitioner was

terminated, effective immediately and

advised that the reason for her termi-

nation was “loss of confidence due to poor

judgment."

Petitioner appealed her termination

through the hospital’s grievance

procedure. Throughout this process, each

administrator who reviewed the termination

confirmed that the basis for Petitioner’s

termination was her expression of opinions

and philosophies different from those of

the hospital.

At the grievance hearing, the final

step in the grievance process, Petitioner

was allowed to present evidence, but was

not allowed to hear any of the witnesses

or evidence against her. After the

grievance procedure concluded, Petitioner

learned that she would not be reinstated.

Petitioner filed suit against

Respondents pursuant to 42 U.S.C. § 1983,

alleging violation of her constitutional

rights to free speech and due process

under the First and Fourteenth Amendments

to the United States Constitution. After

suit was filed, Respondents gave a variety

of explanations for her termination,

including “acts of insubordination against

doctors and other nurses," "frequent

statements evidencing unwillingness to

function as a member of the University

Hospital nursing team," and "poor judgment

with respect to the manner, method and

timing of her expressions of disa-

greement.”" Each of these reasons is

nothing but a pretext for the actual

reason for her discharge, namely,

retaliation for her expression of her

philosophy and her views in favor of

educating pregnant women and assisting

them to give birth. Respondents admitted

in briefs below that the true source of

their dissatisfaction with Petitioner

arose from her “strongly held beliefs in

the Bradley natural childbirth tech-

niques." According to Respondents,

Petitioner’s "beliefs" were at odds with

those of University Hospital.

Asserting that Petitioner’s termination

was the result of the expression of her

views, a position totally refuted by the

facts and one apparently rejected by the

Court of Appeals,’ Respondents denied any

In its findings of fact, the Court

of Appeals found: "On January 2, 1990,

after reading the article, UHS cfficials

fired Willis because of ‘loss’ of

confidence due to poor judgment.’" (App.

A, infra, 3a (emphasis added).

liability under 42 U.S.C. § 1983,

contending that there was no state action

in Petitioner’s termination. According to

Respondents, Petitioner’s termination was

effected by a private, nonprofit

corporation, Respondent UHS, and its

employees. The District Court and Court

of Appeals erroneously agreed with

Respondents’ contention, finding that

there was no state action involved in

Petitioner’s termination. That conclusion

ignores the unique nature of the

relationship between UHS, a corporation

created by Richmond County Hospital

Authority ("RCHA") to lease and operate

its public hospital, and RCHA, which is

Clearly a public entity. UHS is, for all

intents and purposes, RCHA; at the very

least, UHS and RCHA are so intertwined

that the actions of UHS can fairly be

attributed to RCHA.

The University Hospital facility was

built in 1970 with public funds. In 1984,

RCHA decided to create a private, non-

profit corporation, UHS, to lease and

operate University Hospital. The purpose

of this restructuring was to benefit the

public by allowing University Hospital to

compete outside the borders of Richmond

County. UHS, which did not exist prior to

the restructuring, was created solely for

the purpose of operating University

Hospital pursuant to a Lease. On December

id, 1984, RCHA leased its entire

facilities and operation to UHS for 40

years for the sum of only $1.00. At the

termination of this 40 year Lease, all

prelease assets and all additional assets

acquired during the lease term will revert

to RCHA.

RCHA owns all the buildings and land

upon which University Hospital is located.

RCHA’s only function is to assist and

oversee the hospital, as set forth in the

Lease and Amendments. Under the terms of

the Lease, UHS is authorized to bring and

defend lawsuits either in its own name or

in the name of or on behalf of RCHA, to

enforce indigent care contracts in the

name of RCHA and to institute legal action

on behalf of RCHA. The Lease requires

RCHA, upon request by UHS, to exercise its

powers of eminent domain to acquire

property necessary for Richmond County’s

health care needs.

Under the Lease, RCHA retains oversight

responsibilities pertaining to UHS. UHS

is required to disclose information to

RCHA so that RCHA can carry out these

oversight responsibilities.

One man, Donald Bray, serves both as

President and Chief Executive Officer of

UHS and as President of RCHA. Of the

eleven members of the UHS board of

trustees, four are also members of RCHA.

The Lease and the UHS Bylaws require at

least three members of the UHS board of

trustees to be members of RCHA.

The Lease requires UHS to provide RCHA

with facilities and support staff

services, which UHS does. RCHA has no

facilities or secretarial staff other than

the UHS facilities and secretarial staff.

Both UHS and RCHA have the same mailing

address, telephone number and physical

office.

In addition, RCHA appoints all UHS

trustees, including the medical staff

member of the UHS board of trustees. RCHA

has no business which is not conducted by

and through the office of Bray, President

and Chief Executive Officer of UHS and

President of RCHA.

RCHA and UHS hold joint quarterly

meetings at which UHS trustees and RCHA

members meet together and conduct the

business of both UHS and RCHA at the same

time and in the same room. Other than

these combined quarterly meetings with

UHS, RCHA holds no other meetings.

Under the terms of the Lease, UHS must

provide its annual audit both to the

Richmond County Commission and to RCHA.

Likewise, RCHA provides its annual audit

both to the Richmond County Commission and

to UHS.

RCHA and UHS share the same attorneys

and accountants. Certain hospital

licenses and permits, including’ the

clinical laboratory license and hospital

laboratory permit, are still issued in the

name of RCHA, even after the restructuring

and incorporation of UHS. Six years after

the restructuring, in its December 6, 1990

request for Medicare/Medicaid Certifi-

cation, UHS described itself not as a

private corporation, but as a hospital

authority. RCHA is also the loss payee on

property insurance maintained by UHS as

the insured.

Unlike other private corporations, RCHA

is publicly accountable. The original

Lease was first amended on March 28, 1985

to ensure that the operations of Uni-

versity Hospital would continue to be

publicly accountable as they had been

under RCHA. These amendments included a

requirement that the UHS board of trustees

conduct open meetings and furnish RCHA and

the public with annual financial and

operating statements.

In response to continued charges by the

Richmond County Commission that’ the

restructuring would remove University

Hospital from public scrutiny and account-

ability, RCHA and UHS again amended the

Lease so as to (1) extend the open

meetings requirement to UHS’ five

affiliated corporations; and (2) bring UHS

under the Georgia Open Records Act.

Accordingly, all documents of UHS, an

allegedly private corporation, are open

records; all meetings are public meetings.

Furthermore, UHS has a public purpose

and exists to serve the public. The

purpose of UHS, as stated in its Bylaws,

is to provide health care for the benefit

of the public. Bray, UHS’ President and

CEO, testified that UHS has no business

other than providing health care for the

public benefit. Under the Lease, UHS is

required to and does provide indigent care

to the public on behalf of Richmond County

Commission and RCHA.

Finally, UHS receives public financial

benefits to which RCHA is entitled. The

Lease requires RCHA, on request, to issue

revenue anticipation certificates to UHS.

UHS receives public funds from revenue

anticipation certificates issued by RCHA.

In addition, UHS receives $4.4 million in

public funds from the Richmond County

Commission annually for indigent care.

UHS also receives $800,000.00 in public

funds from RCHA annually to operate its

ambulance service. These funds flow from

the Richmond County Commission through

RCHA, directly to UHS.

These facts show that UHS is the alter

ego of RCHA. At the very least, they

demonstrate that the operations of RCHA

and UHS are so closely intertwined as to

make all actions of UHS the actions of

RCHA.

Furthermore, RCHA itself was involved

in Petitioner’s termination in two ways:

(1) through its President, Bray; and (2)

through its grievance procedure. Begin-

ning shortly after Petitioner’s letter to

the editor appeared in print, Bray was

kept apprised of the circumstances which

ostensibly led to Petitioner’s firing.

Bray had discussions with Respondents

Herzberg and Bowcutt and with other

hospital officials regarding Petitioner

and her letter to the editor prior to her

termination. After Petitioner’s

termination, Bray, President of RCHA,

served as one of five members of the

grievance committee which reviewed and

affirmed Petitioner’s termination.

The grievance procedure in effect at

the time of Petitioner’s firing was RCHA’s

grievance procedure. This procedure was

prepared by RCHA on June 1, 1975, prior to

the restructuring and incorporation of

UHS. UHS continued following this same

——————

grievance procedure after UHS' began

leasing the hospital.

Despite all of these facts showing the

inseparability of RCHA and UHS and RCHA’s

involvement in the termination of

Petitioner, Respondents asserted that

there was no state action and moved for

summary judgment. The District Court

erroneously concluded that there was no

state action in Respondents’ termination

of Petitioner. (App. C, infra, 36a). The

District Court rejected the argument that

UHS and RCHA are one and the_ same.

According to the District Court, UHS is a

private actor who can only be charged with

state action when the state plays a role

in the particular conduct at issue. (App.

C, infra, 36a).

Relying on Greco v. Orange Memorial

Hospital Corporation, 513 F.2d 873 (5th

Cir. 1975) cert. denied, 423 U.S. 1000

(1975), the District Court found that

because the Lease purported to give UHS

exclusive control over personnel

management, there could be no_ state

action. The District Court, also relying

on its opinion in a previous termination

case brought by a University Hospital

employee,’

concluded that (1) there was no

sufficient nexus between the state and the

decision to terminate Petitioner; (2)

there was no state ccercion or encourage-

ment of the termination; and (3) UHS, a

private hospital corporation did not

exercise powers "traditionally reserved

exclusively to the state.” (App. C,

infra, 36a).

Petitioner appealed the District

Court’s order to the Court of Appeals for

Coleman v. University Hosp., No. CV

187-117 (S.D.Ga. April 28, 1988). In

Coleman, the pro se plaintiff pointed to

only one indicia of state involvement: the

receipt of federal funds.

the Eleventh Circuit, invoking’ the

appellate court’s jurisdiction under 28

U.S.C. § 1291 to review final decisions of

the district courts. In its opinion, the

Court of Appeals appeared to conclude that

while Petitioner was terminated for

expressing her views (App. A, infra, 3a),

there was no state action under 42 U.S.C.

§ 1983. The Court of Appeals held that

Petitioner failed to show state action

under either the public function test or

the state compulsion test. According to

the Court of Appeals, the only test which

was applicable was the "nexus/joint

action" test. Relying exclusively upon

Greco, a former Fifth Circuit case, the

Court of Appeals found that no state

action existed and affirmed the District

Court’s grant of summary judgment to

Respondents. (App. A, infra, la). The

Court of Appeals did note, however, that

ee |

Petitioner had cited persuasive conflict-

ing authority from another circuit, Jatoi

v. Hurst-Euless-Bedford Hosp. Auth., 807

F.2d 1214 (5th Cir.), modified on other

grounds, 819 F.2d 545 (5th Cir. 1987).

(App. A, infra, 13a).

REASONS FOR GRANTING THE PETITION

This case illustrates one of the perils

of privatization of governmental func-

tions. By creating a private corporation,

leasing that corporation and all of its

assets to the corporation for 40 years for

the sum of one dollar, insisting that the

corporation function as a government

entity, bestowing all of the benefits of

being public upon it, and in fact,

operating through the corporation, RCHA

has effectively retained all the benefits

of being a government entity. However, by

virtue of the Court of Appeals’ decision,

RCHA has managed to escape the burdens of

being a government entity by escaping

liability for constitutional violations

under 42 U.S.C. § 1983.

The tests generally used to determine

whether the conduct of a purely private

actor may be attributed to the state

should not come into play in the instant

case because it is clear that the public

hospital authority and the allegedly

private corporation are one and the same.

Instead, the Court of Appeals should have

applied the symbiotic relationship test of

Burton v. Wilmington Parking Authority,

365 U.S. 715 (1961) to find state action.

Like the instant case, Burton involved a

lease of public property to a private

entity. This Court examined the entire

set of circumstances surrounding the

relationship to determine that state

action was present. Burton, 365 U.S. at

722. Even though the state was not

directly involved in the challenged

action, this Court found the overall

relationship between the public and

private entities constituted state action.

The decision of the Court of Appeals

completely ignores the Burton analysis,

despite its clear applicability.

Instead, the Court of Appeals focuses

on three tests for state action: (1) the

public function test; (2) the _ state

compulsion test; and (3) the nexus/joint

action test. (App. A, infra, lla).

Petitioner urges this Court that the

correct test to be applied is that of

Burton because of the identical

relationship between the public’ and

private actions in that case and the one

at hand. See Ayoub, The State Action

Doctrine in State and Federal Courts, 1l

F.S.U.L.Rev. 893, 901 n. 48 (1984).

However, to the extent that the Court

is inclined to follow the three tests set

forth above, Petitioner implores the Court

to review the Court of Appeals’ appli-

cation of these tests in light of the

facts of this case and the conflicting

decisions of other Circuits. If

Petitioner’s case does not involve state

action, it is difficult to imagine any

case in which an entity claiming non-

governmental status will ever be subject

to § 1983 restrictions, regardless of the

true nature of the entity. What is not

difficult to imagine is the vast number of

governmental entities, including public

universities and school systems, which

will create ostensibly private entities to

retain all of the benefits of being public

while avoiding all the burdens attendant

to public status. Such a trend would

eviscerate the purposes behind § 1983.

The Court of Appeals erred in allowing

UHS to escape liability under 42 U.S.C.

§ 1983 when UHS is simply the alter ego

of RCHA and thus necessarily a state

actor.

The Court of Appeals held that UHS

cannot be liable under § 1983 because it

is a private nonprofit corporation and

therefore cannot act "under color of state

law" as required for a § 1983 action.

While RCHA may have set UHS up as a

private entity, the evidence in the record

clearly shows that UHS is the alter ego of

RCHA, an entity indisputably subject to

liability under § 1983. Wofford v. Glynn

Brunswick Mem. Hosp., 864 F.2d 117, 118

(llth Cir. 1989); Richards v. Emanuel

County Hosp. Auth., 603 F. Supp. 81, 83

(S.D.Ga. 1984). As such, UHS cannot avoid

§ 1983 liability.

Binding precedent in the Eleventh

Circuit provides that state action may be

founded on an alter ego theory. In

Derrington v. Plummer, 240 F.2d 922 (5th

Cir. 1956), the former Fifth Circuit’

considered a § 1983 action in which a

county leased space in its courthouse to a

private entity, which in turn operated a

restaurant that refused to serve blacks.

The court held that in rendering a service

for the benefit of the persons having to

use the courthouse, “the lessee stands in

the place of the county. His conduct is

as much state action as would be the

conduct of the county itself."

In Bonner v. City of Prichard, 661

F.2d 1206, 1209 (llth Cir. 1984) (en

banc), the Eleventh Circuit adopted as

binding precedent all decisions of the

former Fifth Circuit handed down on or

before September 30, 1981.

—————

Derrington, 240 F.2d at 925-26. Likewise,

in the instant case, the lessee, UHS,

stands in the place of RCHA in operating

University Hospital. Thus, its actions

with respect to Petitioner’s termination

were RCHA’s actions.

Both the Court of Appeals and the

District Court apparently rejected the

alter ego theory, based on Richmond County

Hospital Authority v. Richmond County, 255

Ga. 183, 336 S.E.2d 562 (1985). However,

that case involved only the restructuring

of University Hospital, and the Georgia

Supreme Court’s consideration of the

separate nature of UHS and RCHA was

limited to whether UHS and RCHA were

sufficiently separate entities under the

Hospital Authority Act, 0.C.G.A. § 31-7-1

et seqg., so as to allow the restructuring.

Richmond County Hospital Authority v.

Richmond County, 255 Ga. at 185-86, 336

S.E.2d at 565. The Georgia Supreme Court

never considered whether UHS and RCHA were

alter egos for purposes of establishing

state action under § 1983, nor is there

any basis for suggesting that the Georgia

Supreme Court intended the case to support

evisceration of § 1983 liability.

In fact, UHS meets the requirements for

establishing alter ego under Georgia law.

In Farmers Warehouse of Pelham, Inc. v.

Collins, 220 Ga. 141, 137 S.E.2d 619

(1964), the Georgia Supreme Court

enunciated the rule for disregarding a

corporate entity and recognizing its true

identity as the alter ego of individuals

or another entity:

[T]o establish the alter-ego doctrine,

it must be shown that [1] the

stockholders’ disregard of the

corporate entity made it a wmere

instrumentality for the transaction of

their own affairs; [2] that there is

such unity of interest and ownership

that the separate personalities of the

corporation and owners no longer exist;

and [3] to adhere to the doctrine of

corporate entity would promote

injustice or protect fraud.

Farmers Warehouse, 220 Ga. at 150, 137

S.E.2d at 625 (quoting Fletcher

Cyclopedia Corporations, Vol. 1, §

41.1, p. 169). See also Federal

Deposit Ins. Corp. v. United States,

654 F. Supp. 794, 809-10 (N.D. Ga.

1986); Southern Envt’l Group, Inc. v.

Rosebud Landscape Gardening, Inc., 196

Ga. App. 392, 394, 395 S.E.2d 913, 915

(1990); Sheppard v. Tribble Heating &

Air Conditioning, Inc., 163 Ga. App.

732, 733, 294 S.E.2d 572, 573 (1982).

All three requirements are met in the

instant case. First, UHS is clearly "a

mere instrumentality for the transaction

of [RCHA’s] affairs." UHS did not exist

before RCHA’s restructuring in 1985.

After the restructuring, RCHA continued to

operate its affairs through the newly-

created UHS. The President and Chief

Executive Officer of UHS Donald Bray is

also the President of RCHA. RCHA board

meetings are conducted in rooms supplied

by UHS concurrently with UHS_ board

meetings. All necessary facilities and

administrative support for RCHA is

provided by UHS. RCHA uses UHS’ mailing

address and telephone number. All RCHA

minutes are kept and transcribed by UHS

staff. RCHA notices are sent out by UHS.

Bray testified unequivocally that there is

no RCHA business which is not conducted

through his UHS office.

The second element of the Farmers

Warehouse test is also met; “unity of

interest and ownership" could hardly be

stronger than in the instant case. Bray

stated that the purpose of UHS is to serve

the public. As a public hospital author-

ity, RCHA’s interest and purpose is the

same. While legal title to University

Hospital is in RCHA, the overall arrange-

ment between RCHA and UHS suggests the

“unity of ownership" described in Farmers

Warehouse. RCHA leased the assets of

University Hospital to UHS for $1.00.

Since the execution of the Lease, UHS has

added new assets including a paraprofess-

ional building, a parking deck, a new

laundry and has added two nursing homes.

At the end of the Lease, these and all

other assets will revert to RCHA.

Hospital permits and licenses obtained

by UHS also reflect the commonality of

interest and ownership. Since the

restructuring, several permits have been

issued jointly to University Hospital and

RCHA. A request for medicaid/medicare

certification made by Bray’s office in

1990, almost six years after the Lease was

signed, states that University Hospital is

34 -

a hospital authority rather than a private

corporation.

Other indicia of common interest and

ownership include the requirement that UHS

provide RCHA with financial statements and

periodic operating reports. Annual audits

of RCHA and UHS must be reported to each

other and to the Richmond County

Commission. UHS pays the cost of RCHA’s

audit as well as its own.

Under the Lease, RCHA retains oversight

responsibilities in connection with UHS’

operation of University Hospital. In

addition, UHS must provide indigent care

and ambulance service on behalf of RCHA.

RCHA pays UHS for these services with

public funds it receives from the Richmond

County Commission. In summary, the

interests and ownership rights of UHS are

those of RCHA.

The third and final requirement of the

Farmers Warehouse test requires a finding

that “to adhere to the doctrine of cor-

porate entity would promote injustice or

protect fraud." Farmers Warehouse, 220

Ga. at 150, 137 S.E.2d at 625. In Hickman

v. Hyzer, 261 Ga. 38, 401 S.E.2d 738

(1991), the Georgia Supreme Court recently

reaffirmed this requirement, holding that

it would “disregard the separateness of

the corporate entity where the corporation

has overextended its privileges in the use

of the corporate entity to defeat justice,

to perpetrate fraud or to evade statutory,

contractual or tort responsibility."

Hickman, 261 Ga. at 39, 401 S.E.2d at 739.

In the instant case, UHS is attempting

to use its corporate status to evade its

statutory responsibility under § 1983.

The Fifth and Tenth Circuits have both

considered the precise issue of such an

evasion by a private entity which leases

and operates a public hospital; in both

cases, the courts held that the defendants

could not escape § 1983 liability. Milo

v. Cushing Municipal Hospital, 861 F.2d

1194 (10th Cir. 1988); Jatoi v. Hurst-

Euless-Bedford Hosp. Auth., 807 F.2d 1214

(Sth Cir. 1987). In the first case, Jatoi

v. Hurst-Euless-Bedford Hospital Author-

ity, the Fifth Circuit considered the

defendant’s argument that the hospital

authority had no control over daily oper-

ations and therefore could not be said to

have had any involvement the termination

of the plaintiff’s staff privileges.

Jatoi, 807 F.2d at 1221. Noting that the

hospital authority was the lessor and

monitored the activity of the private

entity lessee, the court held: "The

Authority cannot benefit from private

management of the hospital and at the same

time insulate itself from liability for [a

§ 1983 violation] by that manager. The

private defendants cannot receive public

funds, utilize public facilities and serve

a public purpose, yet insist that their

private status forestalls any correction

of a violation of the constitutional

rights of their medical staff." Jatoi,

807 F.2d at 1221-22. The same factors

relied upon by the Jatoi court are present

in the instant case, as Respondent UHS

receives public funds, utilizes public

facilities and serves a public purpose.

Thus, state action is present.

Citing Jatoi, the Tenth Circuit also

refused to allow a private entity to

escape § 1983 liability in Milo v. Cushing

Municipal Hospital, 861 F.2d 1194 (10th

Cir. 1988). In Milo, the _ hospital

authority had contracted with a private

entity for the day-to-day management of

the hospital. The court held: "The

defendants cannot escape liability by

delegating responsibility to another

party." Milo, 861 F.2d at 1197.

Similarly, RCHA’s delegation of some

authority to UHS cannot exempt Respondents

from liability for violation of the

Petitioner’s constitutional right for free

speech.

UHS is the alter ego of RCHA and

therefore is necessarily a state actor.

The Court of Appeals’ decision ignores the

controlling authority of Derrington v.

Plummer, 240 F.2d 922 and allows a sham

arrangement to eviscerate the mandate of

42 U.S.C. § 1983. The Court of Appeals

has set dangerous precedent with its

decision in the case at _ hand. As

discussed briefly above and further below,

the decision also directly conflicts with

decisions of other Circuits. This Court

should grant certiorari to resolve the

conflict.

II.

The Court of Appeals erred. in

failing to apply the symbiotic

relationship test to Petitioner’s

case when Burton v. Wilmington

Parking Authority, 365 U.S. 715

(1961) requires application of that

test.

The Court of Appeals squarely ignored

the holding in Burton v. Wilmington

Parking Authority, 365 U.S. 715 (1961) in

reaching its decision in this’ case.

Burton requires that, in a situation

involving a lease between a public

authority and a private entity, as here, a

court should consider all aspects of the

relationship between the public. and

private entities in determining whether

state action is present. Burton, 365 U.S.

at 722. ;

Burton first addressed the prospect of

a private entity’s status as a § 1983

state actor. In Burton, a public auth-

ority leased a portion of public property

to a private coffee shop. When the

private entity refused the plaintiff

service on the basis of his race, he filed

a § 1983 action, asserting that the cir-

cumstances of the lease made the coffee

shop a state actor.

This Court agreed with the Burton

plaintiff. Initially, the Court noted the

need for an ad hoc determination: "Only

by sifting facts and weighing circum-

stances can the nonobvious involvement of

the state in private conduct be attributed

its true significance." Burton, 365 U.S.

at 722. The Court then considered the

state’s involvement, placing particular

emphasis on the following: (1) the public

ownership of the land and building; (2)

the building’s dedication. "to ‘public

uses’ in performance of the Authority’s

‘essential government function’"; and (3)

the mutual benefits of the lease to the

Authority and the private entity. Burton,

365 U.S. at 723-24. This Court explained

its finding of state action: "The State

has so far insinuated itself into a posi-

tion of interdependence with Eagle that it

must be recognized as a joint participant

in the challenged action, which, on that

account, cannot be considered to have been

so "purely private" as to fall without the

scope of the Fourteenth Amendment."

Burton, 365 U.S. at 725.

Many of the factors on which the

Supreme Court relied to find state action

in Burton are also present in the instant

case; certain of these factors are even

stronger in the instant case. In both

cases, the lessor, a public authority,

leased public property to a private

entity. In the instant case, the private

entity was created for the sole purpose of

serving as the lessee. Both the Burton

building and University Hospital are

dedicated to "“‘’public uses’ in the

performance of the Authority’s ‘essential

government function.’” Burton, 365 U.S.

at 723. Finally, in both cases, mutual

benefits to the state and the private

entity exist. In the instant case, the

Lease benefits RCHA by allowing University

Hospital to serve paying patients from

outside Richmond County, thereby making

the hospital more competitive in the

marketplace. UHS benefits by having use

of millions of dollars in public assets,

including real estate.

In Burton, the Court also considered

whether the specific action challenged

benefitted both the state and the private

entity and found that it did. The same is

true in the case at hand. Respondents

admit that the "plaintiff’s strongly held

beliefs in the Bradley Natural Childbirth

techniques were at odds with University

Hospital’s policies, and such beliefs

caused conflicts between plaintiff and

other hospital nurses and personnel." If

such were the case, then the Respondents’

deprivation of the Petitioner’s rights by

terminating her certainly benefitted the

Respondents in alleviating alleged

conflict. Because of the intricate

relationship between Respondent UHS and

RCHA, including the fact that all assets

will revert back to RCHA at the Lease’s

end, RCHA has every interest in ensuring

that all conflicts are resolved and the

assets are preserved and increased.

pep

The Court of Appeals’ decision

misapplies the tests for state action

by an ostensibly private actor and

demonstrates the need for clarification

of these tests.

Although Petitioner asserts that the

Burton symbiotic relationship test is the

one applicable, as her case also involved

the lease of public property to a private

party, the Court of Appeals used three

other tests and determined that under

those tests, Petitioner failed to show

state action. This decision misapplies

the tests and demonstrates the need for

this Court to clarify the application of

these tests when a public authority ieases

its property and delegates its function to

a private entity.

After Burton, this Court addressed

state action by private entities with some

public connection. Notably, none of these

cases involved a public authority lessor

and private lessee, as in Burton and the

case at hand. If, as the Court of Appeals

holds, even cases like Petitioner’s must

meet one of three state action tests, this

Court’s guidance is needed to establish

how these tests should be applied.

The development of three additional

tests began in Jackson v. Metropolitan

Edison Company, 419 U.S. 345 (1974). The

state action test in Jackson was phrased

in terms of "a sufficiently close nexus

between the State and the challenged

action of the regulated entity so that the

action of the latter may be fairly treated

as that of the State itself." Jackson,

419 U.S. at 351. While this Court found

that state regulation of a utility did not

constitute state action, the Court stated

that the result might be different if a

private entity exercised "powers tradi-

tionally reserved to the State." Jackson,

419 U.S. at 352. In the instant case, UHS

provides indigent care and other services

on behalf of the county hospital author-

ity. Under Georgia law, "[e]very hospital

authority shall be deemed to exercise

public and essential government func-

tions...." O.C.G.A. § 31-7-75 (1991). As

UHS is, in effect, the Richmond County

Hospital Authority and in fact often

describes itself as a hospital authority,

state action is demonstrated under

Jackson.

After Jackson, this Court considered a

trilogy of state action cases in 1982. In

Blum v. Yaretsky, 457 U.S. 991 (1982),

this Court described three methods by

which a plaintiff may show state action by

a private entity: (1) a close nexus as

described in Jackson; (2) state coercion

or encouragement of the challenged action;

or (3) a showing that the private entity

exercises powers traditionally reserved

exclusively to the state. Blum, 457 U.S.

at 1004-05. These three tests are relied

upon by the Court of Appeals in finding a

lack of state action in the case at hand.

Another case in the trilogy, Rendell-

Baker v. Kohn, 457 U.S. 830 (1982),

focused primarily on the third test, that

of public function. In Rendell-Baker, the

Court referenced the test for state action

announced in the third case, Lugar v.

Edmondson Oil Company, 457 U.S. 922

(1982). According to Lugar, a finding of

state action is based on whether the

"conduct allegedly causing deprivation of

a federal right [is] fairly attributable

to the State." lLugar, 457 U.S. at 937.

Recognizing that many tests had emerged,

this Court stated, "Whether these dif-

ferent tests are actually different or

simply different ways of characterizing

the necessarily fact-bound inquiry that

confronts the Court in such a situation

need not be resolved here." Lugar, 457

U.S. at 939.

Although the Lugar court did not seek

to resolve this question, the time for

resolution has come. Depending upon the

particular court, one, some or all of

these tests are used to determine state

action. As more and more government

entities arrange for their functions to be

managed by ostensibly private actors,‘ a

* A 1982 survey showed that of 59

typically governmental services, 25% were

performed by private entities; fully one

quarter to one half of public hospital

(continued...)

coherent state action test for these

situations is a necessity.

In his dissent in Jackson v. Metro-

politan Edison, 419 U.S. 345, 360 (1974)

(Douglas, J. dissenting), Justice Douglas

concluded that the rule of Burton requires

a consideration of the aggregate of

relevant factors rather than the

examination "“seriatim of each of the

factors upon which claimant relies and to

dismiss each individually as_ being

insufficient to support a finding of state

action." Petitioner urges this Court that

Burton is controlling under the facts of

her case and so the proper test is that

which examines the aggregate of relevant

*(...continued)

services were being performed by private

contractors. Savas, Privatization and

Persons, 40 Vand.L.Rev. 889, 890 (1987).

In Georgia alone between 1987 and 1992,

sixteen county hospital authorities turned

over management to ostensibly private

entities. AHA Guide to Health Care, 1987

and 1992 volumes.

factors. As “shown above, such an

examination leads inescapably to a finding

of state action.

Assuming arguendo that this Court

directs that each test be applied sepa-

rately, there is still a need for this

Court to determine the requirements to be

met, particularly with respect to the

nexus test. There is clear conflict in

the Circuits with respect to the facts

necessary to meet this test, especially in

the context of a public hospital authority

creating and contracting with a private

entity for management services.

In Petitioner’s case, the Court of

Appeals relied exclusively upon Greco v.

Orange Memorial Hospital Corporation, 513

F.2d 873 (5th Cir.), cert. denied, 423

U.S. 1000 (1975). The Court of Appeals

concluded that because both Greco and the

case at hand involved leases which re-

quired the private entity to report to the

county, gave the private entity sole

discretion in personnel matters’ and

required the private entity to provide

care to the general public, there was no

state action.

Greco is not properly applied in the

instant case. Conspicuously absent from

Greco is the existence of the hospital

authority which permeates the instant

case. In Greco, the only two entities

were the hospital and the county. Greco,

513 F.2d at 876. Certainly, it is much

easier to presume that in such a

Situation, the county might lack the

requisite control, as the county probably

would not have direct supervision over

every facility it operates.

In the instant case, there is a

hospital authority, RCHA, which (1)

created the corporation now leasing the

hospital; (2) shares offices and staff

with that corporation; (3) shares board

meetings and members with the corporation;

and (4) has only one function: to oversee

the operation of the hospital for county

citizens. In Greco, these intricacies did

not exist. However, the Greco court ex-

plicitly acknowledged Burton’s conclusion

that "‘’fojJnly by sifting facts and

weighing circumstances can the nonobvious

involvement of the State in private

conduct be attributed its true signif-

icance.’" Greco, 513 F.2d at 878 U.S.

715, 722 (1981). When the facts and

circumstances are sifted and weighed in

Petitioner’s case, the state’s involvement

is obvious.

In further examining the relationship

between the state actor and private corpo-

ration, the Greco court also emphasized

the importance of “benefits mutually

a |

conferred." Greco, 813 F.2d at 880.

While in Greco the court found that the

hospital’s abortion policy conferred no

benefit upon the county, the same cannot

be said about the actions of UHS in the

instant case. The Respondents admitted

that they thought Petitioner’s letter

would cause conflict and that University

Hospital benefitted when an employee was

"loyal."

Because RCHA is indistinguishable from

UHS or University Hospital, RCHA receives

any benefit UHS or University Hospital

receives. At the very least, because all

of the assets of University Hospital,

whether acquired before or after the Lease

revert to RCHA at the end of the Lease, it

certainly must be important to RCHA to

have UHS do everything possible to benefit

the hospital. In Greco, there was no such

automatic reversion; instead, the private

_—————————————————

corporation had the option to purchase the

hospital. Greco, 513 F.2d at 876.

Another important connection which

exists in the case at hand but is absent

in Greco is the dual leadership, demon-

strated in the instant case by the role

played by Bray, the President and CEO of

UHS and President of RCHA. Bray wears

both hats, and as the facts make abun-

dantly clear, neither is severable from

the other. In Greco, this inseparable

connection simply did not exist.

Finally, the Greco court found

important the fact that the lease did not

prohibit the activity complained of and

therefore, the county retained no control

over the lessee’s policy regarding the

activity. Greco, 513 F.2d at 88l.

However, in Petitioner’s case, the Lease

from RCHA to UHS does require that UHS

comply with "all applicable rules, orders,

———— << ee

ordinances and regulations of the govern-

mental authorities of the United States,

State of Georgia, County of Richmond and

City of Augusta, and all departments and

subdivisions thereof." Certainly, the

United States Constitution and the Civil

Rights Act fit under this requirement.

For all these reasons, Greco does not

control the instant ' case. Instead,

Petitioner’s case is controlled by a later

Fifth circuit opinion, Jatoi v. Hurst-

Euless-Bedford Hospital Authority, 807

F.2d 1214 (5th Cir. 1987) and by Milo v.

Cushing Municipal Hospital, 861 F.2d 1194

(10th Cir. 1988). In Jatoi, the Fifth

Circuit cited many factors supporting its

finding of a sufficient nexus, including:

(1) The hospital authority was created

under statute;

(2) The facility was publicly owned

and constructed with public funds;

(3) The authority turned the

management of the hospital over to a

oh acinar

new, nonprofit corporation set up for

that purpose;

(4) The corporation appointed the

Board of Trustees;

(5) The authority leased the hospital

to the new corporation;

(6) The corporation ran the day-to-day

operations of the hospital; and

(7) The corporation was required to

submit financial information to the

authority; and

(8) The authority derived financial

benefits from the lease arrangement.

Jatoi, 807 F.2d at 1217, 1221. See

also Milo v. Cushing Memorial Hosp.,

861 F.2d 1194 (10th Cir. 1988).

As outlined above, all these facts are

present in the instant case as well.

In addition to providing a list of

facts which show state action, the Jatoi

court aiso explained why the tests from

Blum v. Yaretsky, 457 U.S. 991 (1982),

both relied upon by the District Court in

the instant case, did not apply. First,

the court noted that Blum did not involve

an institution which was publicly owned;

there was never public ownership nor

construction with public funds. Jatoi,

807 F.2d at 1221. Furthermore, the state

did not gain financial benefit from the

operation of the institution in Blum.

Jatoi, 807 F.2d at i221. Finally, the

court placed particular emphasis on the

~ fact that the private manager had taken

over from the authority. Jatoi, 807 F.2d

at 1221. See also Schier v. Board of

Trustees of Temple Univ., 576 F. Supp.

1569 (E. D. Pa. 1984) (distinguishing Blum

on same grounds).

Like the Fifth Circuit, the Tenth

Circuit has also consistently found state

action when, as here, a public hospital

authority contracts with a private entity

to provide hospital management services.

In Milo v. Cushing Memorial Hospital, 861

F.2d 1194 (10th Cir. 1988) the Tenth

Circuit cites many of the factors present

in Petitioner’s case as constituting a

symbiotic relationship which made the

termination of an employee state action.

Milo, 861 F.2d at 1196. The Tenth Circuit

recently reaffirmed its Milo decision in

Carnes v. Parker, 922 F.2d 1506, 1509

(10th Cir. 1991), another case involving

the termination of an employee by a

private entity which had contracted with a

public hospital authority to manage the

county hospital.

The holdings in the instant case and

Greco cannot be reconciled with the later

Fifth Circuit opinion in Jatoi and the

Tenth Circuit’s decisions in Milo and

Carnes. Certiorari should be granted so

that there will be uniformity in decisions

which involve virtually identical facts.

In reviewing the other two tests, that

of public function and state compulsion,

the Court of Appeals concluded that those

tests were not met in Petitioner’s case.

This conclusion is inconsistent with past

applications of these tests under similar

circumstances. Petitioner does meet the

“public function" test. In Rendell-Baker

v. Kohn, 437 U.S. 830 (1982), this Court

described the test as “whether the func-

tion performed has been ‘traditionally the

exclusive prerogative of the State.’"

Rendell-Baker, 457 U.S. at 842 (quoting

Jackson v. Metropolitan Edison Co., 419

U.S. 345, 353 (1974)). See also Jeffries

v. Georgia Residential Finance Auth., 678

F.2d 919 (llth Cir. 1982). In the instant

case, the function performed by University

Hospital is to provide health care, includ-

ing indigent care, to the public. In

fact, Georgia law specifically provides

that hospital authorities provide "public

and essential government functions."

EEE

O.C.G.A. § 31-7-75 (1991). In his depo-

sition testimony, Bray admitted that UHS

and University Hospital have no business

other than providing health care for the

benefit of the public. It is indisputable

that public health care has “traditionally

[been] the exclusive prerogative of the

State," as required by Rendell-Baker. In

a footnote particularly applicable to the

instant case, the Rendell-Baker Court

suggested that while there was not a

public function in that case, one might be

found if there was evidence of a “sham

arrangement" by which the State attempted

to pass off public services as those of a

private party. Rendell-Baker, 457 U.S. at

842, n. 7.

Petitioner is also able to meet the

test of state action requiring coercion or

significant involvement on the part of the

state with regard to the challenged

—

action. First, as demonstrated above, UHS

is the alter ego of RCHA. The connections

between RCHA and UHS make it difficult to

conceive how any decision of one is not

the decision of the other, including the

decision to terminate Willis. Thus,

coercion or significant involvement in any

decision in inevitable.

Even if the alter ego doctrine is not

applied, the existence of state involve-

ment in the decision to terminate Willis

is clear. Bray, President of both RCHA

and UHS, discussed Petitioner’s termi-

nation with Respondents Herzberg and

Bowcutt and with other University Hospital

officials both before and after it

occurred. Bray also served as a member of

the grievance committee reviewing

Petitioner’s termination. In Crowder v.

Conlan, 740 F.2d 447 (6th Cir. 1984), the

Sixth Circuit, although declining to

recognize state action on the specific

facts of Crowder, recognized:

"Undoubtedly, there may be situations

where state action is manifest in the

decisions of a private entity because

public officials work behind the scene to

influence a particular result or because

powerful and influential public officers

add the prestige of their office to the

actions or findings of a private

institution." Crowder, 740 F.2d at 452.

Along these lines, Bray’s dual roles

within RCHA and UHS make state action

manifest.°®

' Crowder is also important to a

determination of state action in the

instant case for other reasons. Citing

Hampton v. City of Jacksonville, 304 F.2d

320 (Sth Cir. 1962) and Eaton v. Grubbs,

329 F.2d 710 (4th Cir. 1964), the Crowder

court suggested that state action might be

found if there were a reverter for

improper use, as in Hampton, or tax exempt

status or capital construction subsidies

as in Eaton. The court reasoned that such

evidence would show the “pervasive nature"

(continued...)

——— |

CONCLUSION

With the increasing trend toward

privatization of governmental functions,

the continued vitality of 42 U.S.C. § 1983

is severely threatened if, as here,

government entities are allowed to retain

all the benefits of being public but shed

all the burdens of public status. There

is little doubt that, unless this Court

acts, government entities will seek to

escape constitutional restraints in the

fashion the Respondents have, and the

mandate of 42 U.S.C. § 1983 will be

eviscerated entirely. This Court should

grant certiorari to prevent such a

miscarriage of justice.

This Court’s holding in Burton v.

Wilmington Parking Authority, 365 U.S. 715

°(...continued)

of the state in the operation of the

facility. As outlined in the Statement of

the Case, all of these facts are present

in the case at hand.

i elle

(1961) should control the instant case and

lead to a finding of

does not, this Court

state action. If it

should clarify which

test should be applied and should resolve

the conflict currently existing among the

Circuits with respect to the nexus test,

which was applied by

in the case at hand.

the Court of Appeals

Respectfully submitted.

WARNER R. WILSON, JR.

Georgia

Counsel

State Bar No. 769400

of Record for

Petitioner

MARY M.

Georgia

ANNE W.

Georgia

Counsel

WILSON,

P. C.

BROCKINGTON

State Bar No. 084220

LEWIS

State Bar No. 737490

for Petitioner

STRICKLAND & BENSON,

1100 One Midtown Plaza

1360 Peachtree Street N.E.

Atlanta, Georgia 30309

(404) 870-1800

September 17, 1993

APPENDIX OF PETITIONER

APPENDIX A

UNITED STATES COURT OF APPEALS,

ELEVENTH CIRCUIT

NO. 92-8763

CAROL H. WILLIS,

PLAINTIFF-APPELLANT,

Vv.

UNIVERSITY HEALTH SERVICES, INC., d/b/a

UNIVERSITY HOSPITAL; SHERRY HICKS,

individually and in her official capacity

as Head Nurse of Postpartum for University

Hospital; MARY LYNN GOFORTH, individually

and in her official capacity as Director

of Maternal/Child Nursing for University

Hospital; MARILYN BOWCUTT, individually

and in her official capacity as Assistant

Administrator of Nursing Services for

University Hospital; and JOSEPH WwW.

HERZBERG, individually and in his official

capacity as Director of Personnel Services

for University Hospital,

DEFENDANTS~-APPELLEES.

Argued and Submitted March 31, 1993

Decided June 22, 1993

OPINION

HATCHETT, Circuit Judge:

In this appeal from the district

court’s entry of summary judgment for the

appellee, we affirm the district court’s

ruling that a hospital’s firing of the

appellant did not constitute state action

for 42 U.S.C. § 1983 purposes.

FACTS

University Health Services, Inc. (UHS),

the appellee, is a private, nonprofit

corporation that operates University

Hospital pursuant to a lease agreement

with the Richmond County Hospital

Authority (RCHA), a_ public’ hospital

authority. UHS employed Carol Willis, the

appellant, as a registered nurse at

University Hospital in Augusta, Georgia

from December, 1987, until January 2,

1990. During 1989 and January, 1990,

Willis also taught private childbirth

education classes to prospective parents

in Augusta, Georgia. In October, 1990, the

Augusta Chronicle published a letter

Willis wrote to the editor, expressing her

opinions on obstetrical practices.’ On

January 2, 1990, after reading the

article, UHS officials fired Willis

because of “loss of confidence due to poor

+ The text of the published letter

entitled "Offers Criticisms of Doctors and

Mothers" was as follows:

Praise goes _to the very’ few

obstetricians in Augusta who realize an

educated, aware, responsible woman is

an easier patient and much less of a

legal risk.

Shame on the multitude of

obstetricians who patronizingly tells

moms (in words and actions) ‘Don’t

worry about a thing, I’1ll take care of

everything for you.’ No wonder they

get sued so often.

Sympathy goes to the gullible moms

whose babies ‘sucked out, dragged out,

or cut out’ instead of them being

assisted to ‘give birth.’

Pity on the baby who pays the price

with the potential of his life.

Forgive us, nature, for our lack of

faith in you.

judgment."* University Hospital officials

mailed a copy of UHS’s grievance policy to

Willis, and afforded her a full UHS

grievance procedure hearing on August 17,

1990. After the five-hour hearing, the

grievance committee upheld Willis’s

termination.

UHS operates University Hospital

pursuant to a lease agreement with the

RCHA. RCHA is a public hospital authority

“created ... by resolution of the Board of

Commissioners of Richmond County, pursuant

to the Hospital Authorities Act...."

Richmond County Hosp. Authority v.

Richmond County, 255 Ga. 183, 336 S.E.2d

562, 563 (1985). Accordingly, RCHA’s acts

would be state acts for purposes of

Appellees Hicks, University

Hospital Head Nurse; Goforth, University

Hospital employee; Bowcutt, University

Hospital assistant Administrator of

Nursing Services; and Herzberg, University

Hospital Director of Personnel Services;

signed Willis’s termination notice.

section 1983 liability. See Wofford v.

Glynn Brunswick Memorial Hosp., 864 F.2d

117, 118 (llth Cir. 1989) (finding that

the hospital was a public. hospital

authority created under 0.C.G.A. §§ 31-7-1

et seq., and thus, its actions constituted

state action under section 1983).

Willis contends that UHS and RCHA are

so intertwined as to implicate state

action. UHS contends, however, that UHS

and RCHA have only a_— generalized

relationship which is insufficient to

establish state action. Both parties rely

heavily upon the lease agreement and urge

this court to concentrate on the lease

agreement.

Willis highlights the following facts

to show an intertwining relationship

between UHS and RCHA: (1) UHS is a

corporation created for the purpose of

assuming the duties of RCHA; (2) RCHA

leased its facilities to UHS for forty

years for only one dollar; (3) UHS may

bring and defend lawsuits either in its

own name or in the name or on behalf of

RCHA; (4) UHS may enforce indigent care

contracts in the name of RCHA; (5) RCHA

must, upon request from UHS, exercise its

power of eminent domain to acquire

property for the purpose of providing for

Richmond County’s health care needs; (6)

RCHA has four members who serve on the UHS

board of trustees; (7) UHS must provide

RCHA with facilities and support staff

services; (8) UHS and RCHA share the same

address, telephone number, and physical

office; (9) RCHA appoints the UHS trustees

and the medical staff board member from

UHS’ nominations; (10) UHS and RCHA share

the same attorneys and accountants and

report the accountants’ annual audit to

each other; (11) UHS must comply with the

Georgia Open Records Act; and (12) UHS has

a public purpose and exists to serve the

public.

On the other hand, UHS highlights the

following facts to establish that UHS and

RCHA are distinct entities: (1) UHS

assumed control of the hospital so that it

could be competitive outside of Richmond

County; (2) University Health, Inc. is the

parent corpecration for UHS and other

services; (3) UHS has entered a joint

venture with a local hospital to develop

other care facilities; (4) UHS has broad

discretion to diminish, curtail, or cease

services to promote the public health

needs of the community; (5) UHS is

authorized to “augment, improve or

increase any existing service or add any

service or shift current or new services

to another’ facility"; (6) UHS' has

authority to determine whether

acquisition, construction, or improvement

of hospital facilities is necessary; (7)

UHS has sole authority to repair or

replace any of its assets; (8) UHS may

obtain insurance policies payable solely

to UHS; (9) UHS has the authority to

enforce rules and regulations regarding

safety and care; and (10) UHS controls the

daily operations and management of the

hospital.

PROCEDURAL HISTORY

On December 28, 1990, Willis filed this

lawsuit in the United States District

Court for the Southern District of

Georgia, pursuant to 42 U.S.C. § 1983,

claiming that UHS’s relationship with RCHA

implicated state action. In her

complaint, Willis alleged: (1) UHS’s

actions infringed upon her right of free

speech as guaranteed under the First and

Fourteenth Amendments; and (2) UHS’s

actions deprived her of a _ property

interest protected under the Fourteenth

Amendment. UHS moved for summary judgment

contending that: (1) its decision to fire

Willis was not state action under 42

U.S.C. § 1983; (2) its termination of

Willis did not deprive her of rights

secured under the Constitution or laws of

the United States; and (3) its employment

of Willis provided only a privilege and

not a property right entitled to

protection under the Due Process Clause of

the Fourteenth Amendment.

The district court granted summary

judgment for UHS, finding that no state

action existed to support Willis’s claim

under 42 U.S.C. § 1983, 804 F.Supp. 1557

(1992).

ISSUES

To determine whether the district court

erred in granting summary judgment, we

10a

must decide whether UHS’s termination of

Willis involved state action.

STANDARD OF REVIEW

{1} On appeal, a grant of summary

judgment is subject to de novo review.

MacKenzie v. City of Rockledge, 920 F.2d

1554, 1558 (llth Cir. 1991). We review

the evidence and all factual inferences in

the light most favorable to the nonmoving

party to determine whether any genuine

issue of material fact exists and whether

the moving party is entitled to judgment

as a matter of law. MacKenzie, 920 F.2d

at 1558.

DISCUSSION

[2-6] To obtain relief under 42 U.S.C.

§ 1983, Willis must show (1) that the

appellees deprived her of a right secured

under the Constitution or federal law and

(2) that the deprivation occurred under

color of state law. Sims v. Jefferson

lla

Downs Racing Assoc., Inc., 778 F.2d 1068,

1076 (5th Cir. 1985) (citations omitted).

"(A] private hospital is subject to the

provisions of 42 U.S.C. § 1983 and the

Fourteenth Amendment only if its

activities are significantly affected with

state involvement." Greco v. Orange

Memorial Hospital Corp., 513 F.2d 873, 877

(Sth Cir.), cert. denied, 423 U.S. 1000,

96 S.Ct. 433, 46 L.Ed.2d 376 (1975).

Previously, this circuit set forth the

three primary tests the Supreme Court has

used to determine whether state action

exists: (1) the public function tests;

(2) the state compulsion tests; and (3)

the nexus/join action test. National

Broadcasting Co., Inc. v. Communications

Workers of American, AFL-CIO, 860 F.2d

0122, 1026 (llth Cir. 1988).* The public

* This circuit has noted that these

three primary tests apply in cases where a

(continued...)

12a

function test limits state action to

instances where private actors are

performing functions "traditionally the

exclusive prerogative of the state." NBC,

860 F.2d at 1026 (citations omitted). The

state compulsion test limits state action

to instances where the government “has

coerced or at least significantly

encouraged the action alleged to violate

the Constitution.” NBC, 860 F.2d at 1026

(citations omitted). The nexus/joint

action test applies where “the state has

so far insinuated itself into a position

of interdependent with the [private party]

that it was a joint participant in the

enterprise.” NBC, 860 F.2d at 1026-27

(citations omitted). We must determine on

a case-by-case basis whether sufficient

7(...continued)

party seeks to hold a private actor liable

under the state action doctrine. NBC, 860

F.2d at 1025 n. 4.

ee ee

l3a

state action is present from a non-state

actor (defendant) to sustain a section

1983 claim. Bailey v. McCann, 550 F.2d

1016, 1018 (5th Cir. 1977).

Willis contends that she satisfies each

of the three primary tests. After

reviewing the record, however, we conclude

that Willis fails to satisfy the first two

tests. UES did not exercise powers

traditionally reserved exclusively to the

state,- nor did RCHA coerce or encourage

UHS to fire Willis. Hence, we only

address whether Willis has shown that UHS

and RCHA are so intertwined in a

“symbiotic relationship” that they satisfy

the nexus/joint action test, thereby

demonstrating the existence of state

action.

Both parties cite persuasive authority

from other circuits to support their

l4a

contentions.‘ Although each

“intertwining” case must be decided on its

unique facts, our own former Fifth Circuit

has adequately addressed the issue we face

in Greco on similar facts, and we are

persuaded to follow it.°

In Greco, a physician brought a 42

U.S.C. § 1983 action against the Orange

Memorial Hospital Corporation, a private

hospital corporation that operated a

hospital in a publicly owned building

leased from Orange county, alleging that

the hospital’s policy prohibiting

nontherapeutic abortions was

*‘ Willis cites Jatoi v. Hurst-Euless-

Bedford Hosp. Authority, 807 F.2d 1214

(Sth Cir.), modified on other grounds, 819

F.2d 545 (5th Cir. 1987); UHS cites

Crowder v. Conlan, 740 F.2d 447 (6th Cir.

1984).

-° According to Bonner v. City of

Prichard, 661 F.2d 1206, 1209 (llth Cir.

1981) (en banc), the court adopted as

binding precedent all decisions of the

former Fifth Circuit handed down prior to

October 1, 1981.

15a

unconstitutional. The evidence

demonstrated that the county owned the

land and build the building which housed

the hospital. The private hospital

corporation leased the land and hospital

form the county for one dollar per year

and was bound under the provisions of the

lease to operate the hospital as a

nonprofit institution and to furnish

general public medical and surgical care.

The lease required the private corporation

to submit annual audits to the county and

to furnish the county with any information

which it felt necessary to inform the

citizens about the operation and financial

condition of the hospital. Greco, 513

F.2d at 876.

The Fifth Circuit concluded that the

physician failed to establish state action

for purposes of 42 U.S.C. § 1983 because

"Orange County is not_- sufficiently

l6a

connected with the Orange Memorial

Hospital Corporation’s activities to imbue

those actions with the attributes of the

state." Greco, 513 F.2d at 882.

Specifically, the court found that the

private hospital corporation oe

ultimately responsible for the daily

Maintenance, upkeep, and operation of the

facility.” Greco, 513 F.2d at 880.

Additionally, the court found that the

private hospital corporation must

"maintain and operate the hospital at its

own expense and ... hold the lessor

harmless from any liability incurred in

operating the facility ... and provide

adequate insurance." Greco, 513 F.2d at

880. Moreover, the court found that no

direct benefits accrued to Orange County;

rather, only indirect benefits accrued to

Orange County due to the private hospital

corporation relieving the county of the

17a

expense and responsibility of operating

the hospital. Greco, 513 F.2d at 880.

Finally, the court found that even though

the lease obligates the private hospital

corporation "to serve the general public,

to admit indigent patients, to abide by

the provisions of the Hospital Survey and

Construction Act, to provide the county

auditor with the yearly financial report

(and any other information requested), and

to obtain county approval before disposing

of hospital authority," no state action

existed. Greco, 513 F.2d at 881.

[7] Similarly, in this case, the lease

obligates UHS to serve the general public,

including indigent patients, and _ to

provide the auditor with a financial

report. Most importantly, however, the

lease relinquishes RCHA of all

liabilities, give UHS sole discretion to

hire and fire employees, provides that UHS

18a

is the governing body of University

Hospital and medical staff, mandates that

UHS maintain and repair the leased

property at its own expense, requires UHS

to maintain insurance, confers upon _ UHS

the right and authority to make and

enforce rules and regulations and safety

considerations, and demands that UHS hold

RCHA harmless from any court action. Thus

UHS and RCHA are not so intertwined in a

symbiotic relationship as to satisfy the

nexus/joint action test.® Additionally,

the Georgia Supreme Court has previously

determined that RCHA and UHS are separate

P The district court previously

addressed this issue in Coleman v.

University Hospital, No. CV 187-177

(S.D.Ga. Apr. 28, 1988). The court did

not find a nexus between the state, in the

form of RCHA, and the termination of a UHS

employee for section 1983 purposes because

UHS, though "not entirely free of any

vestige of state supervision,” had “sole

and exclusive control over personnel

decisions" under the terms of the lease

agreement between UHS and RCHA. Coleman,

slip op. at 3.

19a

and distinct entities in the eyes of the

law, despite some overlapping personnel at

the highest level. Richmond County Hosp.

Authority, 336 S.E.2d at 565. Hence, we

hold that Willis has failed to show that

state action existed.

Accordingly, we affirm the district

court’s grant of summary judgment for UHS.

AFFIRMED.

20a

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

NO. 92-8763

CAROL H. WILLIS,

PLAINTIFF-APPELLANT,

UNIVERSITY HEALTH SERVICES, INC., d/b/a

UNIVERSITY HOSPITAL; SHERRY HICKS,

individually and in her official capacity

as Head Nurse of Postpartum for University

Hospital; MARY LYNN GOFORTH, individually

and in her official capacity as Director

of Maternal/Child Nursing for University

Hospital; MARILYN BOWCUTT, individually

and in her official capacity as Assistant

Administrator of Nursing Services for

University Hospital; and JOSEPH WwW.

HERZBERG, individually and in his official

capacity as Director of Personnel Services

for University Hospital,

DEFENDANTS~-APPELLEES.

Appeal from the United States

District Court for the Southern

District of Georgia

Filed: June 22, 1993

JUDGMENT

Before KRAVITCH and HATCHETT, Circuit

Judge, and ATKINS*, Senior District Judge.

2la

This cause came to be heard on the

transcript of the record from the United

States District Court for the Southern

District of Georgia, and was argued by

counsel;

UPON CONSIDERATION WHEREOF, it is now

hereby ordered and adjudged by this court

that the order of the said District Court

appealed from in this cause be and the

same is hereby AFFIRMED;

It is further ordered that plaintiff-

appellant pay to defendants-appellees, the

costs on appeal to be taxed by the Clerk

of this Court.

* Honorable C. Clyde Atkins, Senior U.S.

District Judge for hte [sic] Southern

District of Florida, sitting by

designation.

Entered: June 22, 1993

For the Court: Miguel J. Cortez, Clerk

By: /S/ Matt Dandson

Deputy Clerk

ISSUED AS MANDATE: AUG 20 1993

22a

APPENDIX C

UNITED STATES DISTRICT COURT ¢£° 2 THE

MIDDLE DISTRICT OF GEORGIA

AUGUSTA DIVISION

CASE NO. CV 190-317

CAROL H. WILLIS,

PLAINTIFF,

UNIVERSITY HEALTH SERVICES, INC.,

d/b/a UNIVERSITY HOSPITAL; SHERRY HICKS,

individually and in her official capacity

as Head Nurse of Postpartum for University

Hospital; MARY LYNN GOFORTH, individually

and in her official capacity as Director

of Maternal/Child Nursing for University

Hospital; MARILYN BOWCUTT, individually

and in her official capacity as Assistant

Administrator of Nursing Services for

University Hospital; and JOSEPH W.

HERZBERG, individually and in his official

Capacity as Director of Personnel Services

for University Hospital,

DEFENDANTS.

Entered: July 27, 1992

ORDER

Before the Court is Defendants’ Motion

for Summary Judgment in this’ action

brought by Plaintiff under 42 U.S.C. §

1983.

23a

I. BACKGROUND

Plaintiff Carol Willis was employed as

a Registered Nurse by Defendant University

Health Services (UHS) at University Hospi-

tal in Augusta, Georgia, from December

1987 until January 2, 1990.

During 1989 and January 1990, Plaintiff

also taught private childbirth education

classes to prospective parents in Augusta.

In October 1990 the Augusta Chronicle

published a letter to the editor, written

by Plaintiff, in which she expressed

opinions regarding obstetrical practices.’

+ The text of the published letter,

which was captioned in the newspaper as

“Offers criticisms of doctors and mothers"

was as follows:

Praise goes to the very’ few

obstetricians in Augusta who realize an

educated, aware, responsible woman is

an easier patient and must less of a

legal risk.

Shame on the multitude of

obstetricians who patronizingly tells

moms (in words and actions) "Don’t

worry about a thing, I’1ll take care of

(continued...)

24a

On January 2, 1990, UHS fired Ms. Willis

for the stated reason of "loss of confi-

dence [in Ms. Willis] due to [her] poor

judgment." The termination notice was

signed as approved by Defendants Hicks,’

Goforth,’ Bowcutt,‘* and Herzberg.°

Plaintiff subsequently filed suit under

42 U.S.C. § 1983, alleging that Defendants

+(...continued)

everything for you." No wonder they

get suet so often.

Sympathy goes to the gullible moms

whose babies “sucked out, dragged out,

or cut out” instead of them being

assisted to "give birth."

Pity on the baby who pays the price

with the potential of his life.

Forgive us, nature, for our lack of

faith in you.

* Defendant Hicks was employed as a

Head Nurse at University Hospital.

. Defendant Goforth was employed at

University Hospital.

* Defendant Bowcutt was employed as

Assistant Administrator, Nursing Services,

at University Hospital.

Defendant Herzberg was employed as

Director of Personnel Services for

University Hospital.

25a

UHS, Hicks, Goforth, Bowcutt, and Herzberg

infringed Plaintiff’s right of free speech

as guaranteed by the First and Fourteenth

Amendments to the United States

Constitution by terminating her employment

in retaliation for her espousal and

expression of her beliefs in the letter to

the editor and in her private childbirth

classes. Plaintiff also alleged that the

termination procedure resulting in denial

of her due process rights in violation of

the Fourteenth Amendment.

Defendants moved for summary judgment

on the alternative grounds that (1) the

decisions by UHS to fire Ms. Willis as not

“state action” for purposes of a § 1983

claim; (2) UHS’s action in firing Ms.

Willis did not deprive her of rights

secured by the Constitution or laws of the

Untied States; and (3) Ms. Willis’s

employment at UHS was a privilege and not

26a

a property right entitled to protection of

the due process clause of the Fourteenth

Amendment to the United States

Constitution.

II. ANALYSIS

A. The Requirements for Summary

Judgment

The Court should grant summary judgment

only if "there is no genuine issue as to

any material fact and the moving party is

entitled to a judgment as a matter of

law." Fed. R. Civ. P. 56(c). The party

moving for summary judgment bears the

burden of showing that there is no genuine

dispute as to any material fact. Adickes

v. S.H. Kress & Co., 398 U.S. 144, 157

(1970); Clemons v. Dougherty County, 684

F.2d 1365, 1368 (llth Cir. 1982). The

party moving for summary judgment may meet

this burden upon showing that the adverse

party has failed to make a_e showing

sufficient to establish the existence of

27a

an element essential to the adverse

party’s case, and on which the adverse

party will bear the burden of proof at

trial. Celotex Corp. v. Catrett, 477 U.S.

317 (1986). If any factual issue is

unresolved by the motion for summary

judgment, then the Court may not decide

that matter. Environmental Defense Fund

v. Marsh, 651 F.2d 983, 991 (5th Cir.

1981).

The court must resolve all reasonable

doubts in favor of the adverse party.

Casey Enterprises, Inc. v. American

Hardware Mutual Ins. Co., 655 F.2d 598,

602 (5th Cir. 1981). When, however, the

moving party’s motion for summary judgment

pierces the pleadings, the burden then

shifts to the adverse party to show that a

genuine issue of material fact exists.

Anderson v. Liberty Lobby, Inc., 477 U.S.

242 (1986). The adverse party cannot

28a

carry this burden by reliance on the

pleadings, or by repetition of conclusory

allegations contained in the complaint.

Morris v. Ross, 663 F.2d 1032. 1033 (llth

Cir. 1981), cert. denied, 456 U.S. 1010

(1982). Rather, the adverse party must

respond by affidavits or as otherwise

provided in Fed. R. Civ. P. 56.

The Clerk has given the adverse party

notice of the motion for summary judgment,

the right to file affidavits or other

materials in opposition to the motion, and

of the consequences of default. See

Griffith v. Wainwright, 772 F.2d 822 (llth

Cir. 1985). Thus, the notice requirement

of Griffith is satisfied. The parties

having submitted any desired responses and

materials in support thereof, I will now

rule upon the motion.

B. State Action Under 42 U.S.C.

§ 1983

29a

Defendants initially argue that there

was no state action present when UHS fired

Ms. Willis, and that therefore Ms.

Willis’s § 1983 claims against them must

fail as a matter of law.

To be entitled to relief under § 1983,

the plaintiff must show that’ the

defendants deprived her of a right secured

to her by the Constitution or federal law

and that the deprivation occurred under

color of state law. Sims v. Jefferson

Downs, Inc., 611 F.2d 609, 611 (5th Cir.

1980). "“‘(P)rivate conduct is fairly

attributable [to state action] only when————

the state has an affirmative role, albeit

one of encouragement short of compulsion,

in the particular conduct underlying a

claimant’s civil rights grievance.’"

National Broadcasting Co. Vv.

Communications Workers of Am., 860 F.2d

1922, 1925 n.4 (llth Cir. 1988) (emphasis

30a

added). The acts of a private entity may

be deemed to be state acts where: (1)

there is a sufficiently close nexus

between the State and the challenged

action; (2) the state has so coerced or

encouraged a private act that it must be

considered the act of the state; or (3)

the private entity exercises powers

traditionally reserved exclusively to the

state. Blum v. Yaretsky, 457 U.S. 991

(1982).° The determination of whether

there is sufficient state action by a non-

state defendant to sustain a § 1983 claim

must be made on a case-by-case basis.

Bailey v. McCann, 550 F.2d 1016, 1018 (5th

Cis. 1977).

* “While specifically the Blum court

spoke of holding the state liable pursuant

to state action doctrine, the standard

remains constant when a party seeks to

hold a private actor liable under the

state action doctrine." National

Broadcasting Company v. Communications

Workers of Am., 860 F.2d 1022, 1025 n.4

(llth Cir. 1988).

3la

Defendant UHS is a private, non-profit

corporation that operates University

Hospital pursuant to a lease agreement

with Richmond County Hospital Authority

(RCHA). RCHA is a public hospital

authority "created ... by xesolution of

the Board of Commissioners of Richmond

County, pursuant to the Hospital

Authorities Act...." Richmond County

Hosp. Auth. v. Richmond County, 336 S.E.2d

562, 563 (Ga. 1985). As such, RCHA’s acts

would be state acts for purposes of § 1983

liability. See Wofford v. Glynn Brunswick

Mem. Hosp., 864 F.2d 117, 118 (llth Cir.

1989).

The precise question here is whether

state action was present when UHS

terminated an employee. This is not the

first time the Court has addressed this

issue. In Coleman v. University Hosp.,

No. CV187-117 (S.D.Ga. Apr. 28, 1988),

32a

this Court held that there was no nexus

between the state in the form of RCHA and

the termination of a UHS employee for

purposes of a § 1983 action, because UHS

as a private non-profit corporation, while

"not entirely free of any vestige of state

supervision," had “sole and exclusive

control over personnel decisions" under

the terms of the lease agreement between

UHS and RCHA. Id., slip op. at 3. On

this basis, the Court granted summary

judgment for defendant UHS. UHS, of

course, now cites Coleman in support of

its motion for summary judgment here.

In attempting to withstand this motion,

Willis seeks to distinguish Coleman by

asserting that the pro se plaintiff there

pointed only to receipt of federal funds

as a state connection; for that reason,

Willis argues, the Coleman plaintiff could

not withstand summary judgment. Willis

33a

submits additional evidence of

relationships between RCHA and UHS in

support of her position that the acts of

UHS are state acts.

There remains no dispute, however, that

the lease agreement between RCHA and UHS

grants UHS the discretion to “hire,

terminate, promote or assign employees and

to hire agents or independent

contractors." On this point, Greco v.

Orange Mem. Hosp. Corp., 513 F.2d 873 (5th

Cir. 1975), cert. denied, 423 U.S. 1000

(1975), is instructive. In Greco, the

plaintiff brought a § 1983 action against

a private corporation that operated a

hospital in a_publicly-owned building

leased from the county, alleging that the

hospital’s policy prohibiting non-

therapeutic abortions was

unconstitutional. There was evidence

that, inter alia, the county built the

34a

building and owned the land and building

which housed the hospital; the private

hospital corporation leased the land and

hospital from the county for one dollar

per year and was bound under the

provisions of the lease to operate the

hospital as a non-profit institution and

to furnish the general public medical and

surgical care; and the lease required the

private corporation to submit annual

audits to the county and to furnish the

county with any information which it felt

necessary to inform the citizens about the

operation financial conditions of the

institution. Id. at 876.

Nevertheless, the Fifth Circuit

affirmed the district court’s dismissal on

the basis that the plaintiff failed to

establish state action for purposes of §

1983. The private, non-profit hospital

corporation was not a state actor as to

35a

conduct of medical policy that prohibited

elective abortions where the hospital’s

board of directors had exclusive control

of that policy under the terms of a lease

agreement, and neither the county nor

state had sought to regulate or influence

that policy and had remained neutral with

respect to implementation of that policy.

Id. at 880-81. "The involvement of the

County [was] not sufficiently related to

{implementation of the hospital’s medical

policy] to justify the imposition of

Constitutional restrictions upon the daily

business of the hospital." Id. at 882.

Greco is applicable to the

circumstances here; the critical fact

remains that under the lease agreement,

UHS has exclusive control over personnel

management. Furthermore, the Georgia

Supreme Court determined in Richmond

County Hosp. Auth., supra, that RCHA and

36a

UHS are separate and distinct entities in

the eyes of the law, despite some

overlapping personnel at the highest

level. Richmond County Hosp. Auth., 335

S.E.2d at 565. There is no sufficient

nexus between the state and the

determination by UHS to fire Ms. Willis.

Furthermore, the state in the form of RCHA

did not coerce or encourage UHS to fire

Ms. Willis. Finally, UHS as a private

hospital corporation does not exercise

powers traditionally reserved exclusively

to the state. See Greco, 513 F.2d at 882.

CONCLUSION

As in Coleman v. University Hosp., No.

CV187-117 (S.D.Ga. Apr. 28. 1988), there

was no state action present here in

Defendant UHS’s termination of a UHS

employee. It follows that there was no

state action by individual UHS employee

37a

Defendants who participated in that

decision or its implementation.

Accordingly, Defendants’ motion for

Summary Judgment is GRANTED. The Clerk of

Court is directed to enter judgment in

favor or all Defendants, tax costs against

the Plaintiffs, and close the case.

ORDER ENTERED at Augusta, Georgia, this

27th day of July, 1992.

/S/ Dudley H. Bowen, Jr.

UNITED STATES DISTRICT JUDGE

38a

APPENDIX D

UNITED STATES DISTRICT COURT FOR THE

MIDDLE DISTRICT OF GEORGIA

AUGUSTA DIVISION

CASE NO. CV 190-317

CAROL H. WILLIS,

PLAINTIFF,

Vv. .

UNIVERSITY HEALTH SERVICES, INC., d/b/a

UNIVERSITY HOSPITAL; SHERRY HICKS,

individually and in her official capacity

as Head Nurse of Postpartum for University

Hospital; MARY LYNN GOFORTH, individually

and in her official capacity as Director

of Maternal/Child Nursing for University

Hospital; MARILYN BOWCUTT, individually

and in her official capacity as Assistant

Administrator of Nursing Services for

University Hospital; and JOSEPH WwW.

HERZBERG, individually and in his official

capacity as Director of Personnel Services

for University Hospital,

DEFENDANTS.

Entered: July 28, 1992

JUDGMENT

39a

This action came on for hearing before

the Court. The issues have been heard and

a decision has been rendered.

IT IS ORDERED AND ADJUDGED that in

accordance with the Order of this court of

July 27, 1992, Judgment is hereby entered

in favor of all Defendants. Costs to be

taxed against the Plaintiff.

This 28th day of July, 1992.

HENRY R. CRUMLEY, JR., CLERK

By /S/ Brenda McCarthy

Deputy Clerk

40a

APPENDIX E

STATUTORY PROVISION INVOLVED

42 U.S.C. § 1983 provides:

Every person who, under color of any

statute, ordinance, regulation, custom,

or usage, of any State or Territory or

the District of Columbia, subjects, or

causes to be subjected, any citizen of

the United States or other person

within the jurisdiction thereof to the

deprivation of any rights, privileges,

or immunities secured by the

Constitution and laws, shall be liable

to the party injured in an action at

law, suit in equity, or other proper

proceeding for’ redress. For the

purposes of this section, any Act of

Congress applicable exclusively to the

District of Columbus shall be

considered to be a statute of the

District of Columbia.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.