Opposition Brief — Berg v. Shapiro

No. 97-1516 I

Berra oy

In The

Supreme Court of the United States

October Term, 1997

*

DALRIE A. BERG, D.O.,

Petitioner,

JACK SHAPIRO, HUMANA HOSPITAL MOUNTAIN

VIEW, INC., JOHN A. HOFFMAN, THOMAS J.

BLANCHARD and DOES 3 through 10,

Respondents.

¢

On Petition For A Writ Of Certiorari

To The Supreme Court Of Colorado

ra a

BRIEF OF RESPONDENTS JACK SHAPIRO,

HUMANA HOSPITAL MOUNTAIN VIEW, INC.,

JOHN A. HOFFMAN, THOMAS J. BLANCHARD

AND DOES 3 THROUGH 10, IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

°

Peter J. Lucas*

L. RicHARD FReEEsE, JR.

CATHERINE A. G. SPARKMAN

Douerty, Rumsie & But ter, P.C.

1200 Seventeenth Street

Denver, Colorado 80202

(303) 572-6200

*Counsel of Record for Respondents

Counsel for Respondents Jack

Shapiro, Humana Hospital

Mountain View, Inc., John A.

Hoffman, Thomas ]. Blanchard and

Does 3 Through 10

KLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTION PRESENTED FOR REVIEW

Respondents respectfully restate Petitioner’s Ques-

tion Presented for Review: The issue, succinctly stated,

involves whether peer review activities of Respondent

Humana Hospital Mountain View, Inc., a private hospital,

and the other Respondents, who are members of its staff

and peer review committee, constitute state action suffi-

cient to permit Petitioner’s claim based on 42 US.C.

§ 1983. Contrary to Petitioner’s suggestion, the Supreme

Court of the State of Colorado has never concluded that

peer review committees are arms of the state, and has

expressly declined to so hold.

PARTIES TO THE PROCEEDING

The parties to the proceeding below are the Peti-

tioner, Dalrie A. Berg, D.O., and the Respondents Jack

Shapiro, Humana Hospital Mountain View, Inc., John A.

Hoffman, Thomas J. Blanchard, and Does 3 through 10,

who are unknown parties who allegedly participated in

the peer review activities affecting Petitioner.

RULE 29.6 LISTING

Humana Hospital Mountain View, Inc. is now owned

by Columbia-HealthOne, LLC and is called “Columbia

North Suburb Medicai Center.” The managing member of

Columbia-HealthOne, LLC is Columbia/HCA of Denver,

Inc., whose owner is Columbia/Rose Health System, Inc.

Galen Health Care, Inc. is the owner of Columbia/Rose

Health System, Inc. Western Plains Regional Hospital,

Inc., owns Galen Health Care, Inc. Columbia/HCA

Healthcare Corp. owns Western Plains Regional Hospital,

Inc. Humana has no non-wholly owned subsidiaries

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TABLE OF CONTENTS

Page

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peeeeeeree SOP POO CAGE ]

REASON FOR DENYING THE WRIT.............. 8

iv

TABLE OF AUTHORITIES

Page

CASEs:

Blum v. Yaretsky, 457 U.S. 991, 102 S.Ct. 2777 (1982) ..... 9

Burton v. Wilmington Parking Authority, 365 U.S.

FAD CERT Visa RN ONE R ee Oe ed LET CRUERE DT ON ELT 16, 17

Evans v. Newton, 342 US. 296 (1966)... cece access 17

Goss v. Memorial Hospital System, 789 F.2d 353 (5th

Oe | ROTTER PER SER TE TTT ELE TERT Ee See 12

Loh-Seng Yo v. Cibola General Hospital, 706 F.2d 306 |

CE RRE Radic: Oh sob ov sree c beta k vak ea tw eae uous 9 i

Lugar v. Edmondson Oil Co., 457 U.S. 922, 102 S.Ct. |

Ey TO Wee BO LOGE) ook oo in ok seit leeseenns 8

Modaber v. Culpeper Memorial Hospital, 674 F.2d

A ee Sere ery eres ere haere 12

Nicholas v. North Colorado Medical Center, 902 P.2d

Oe SRO. FRR. ROS ob ns Sis ove oo ba CLG hs cece 13

North Colorado Medical Center v. The Committee on

Anticompetitive Conduct, 914 P.2d 902 (Colo.

OR a ee ss 13

Patrick v. Burget, 486 U.S. 94 (1988) ................. 14

Rendeil-Baker v. Kohn, 457 U.S. 830, 102 S.Ct. 2764,

Fa Neel BOO COWIE. 5 6 boc kes O60 pee hoN eee 8, 9, 16

Shulman v. Washington Hospital Center, 222 F. Supp.

Pe Aas: REA eh 8d we ORD ERAS ROKER ORER HS 9

Sokol v. University Hospital, Inc., 402 F. Supp. 1029

rs INN SP bo a a ee 15

Sosa v. Managers of Val Verde Memorial Hospital, 437

Peele SF th CON Nl RTE ao Vic da dee 0 tua etek ante 10

£

;

:

SEA NO A ae RR RR SDT Sn Rs RARE ROR EE a Le ERIE RA RE ET TLS EE MN EE Fo 2B OY ERT OLE TAIRA ROOTES DOES OF PRN LEE OE IE OLS SE SOG REEE LEN CNA 2 ONES LE AP

TABLE OF AUTHORITIES —- Continued

Page

Tunca v. Lutheran General Hospital, 844 F.2d 411

ie te Re ere a tr erie ern gi ORG 12

Ward v. St. Anthony Hospital, 476 F.2d 671 (10th

ie ROT Ee ahd ys 4h ke Ohba ne de 15

wrest .D. dateeme, O07 43S. 07 (2900) 3 oS fe 17

Wong v. Tripling, 881 F.2d 200 (5th Cir. 1989)........ 11

STATUTES AND RULEs:

Re Stang EP ns ede nia Cho sd ae o eae Ook oaks passim

US 6h ee 10

SUS. 2 ee. orca ee 5

secon Tie 10) of oe, CRS... Ses ccse sik wks 1]

CNNGEN LEA ty Stes 65 52 os eke eke ee sen 1]

OC AEA Seta Fa, 0 oo 8s ee eee ee 14

BeCINOn T2-se. oss Shas os i eee passim

Section 12-43.5-101 C.R.S. (L.75, p. 465, § 1

repealed, S.B.261, eff. FURY 2, BUOE isso chins 10, 11

STATEMENT OF THE CASE

Respondents reiterate that the question before this

Court deals solely with an. issue of law: whether peer

review activities conducted by a private hospital of its

hospital staff pursuant to its own bylaws, protocols and

procedures constitute state action for purposes of 42

U.S.C. § 1983. In the proceedings below, Petitioners did

not challenge the trial court’s findings that Respondents

acted with due process and fair procedure in resolving

the complaints against him of inadequate professional

conduct in his obstetrical practice of Humana. Nor did

Petitioner challenge the trial court’s conclusions of law

that peer review immunity statutes should be applied

and that Petitioner’s claims should be dismissed because

Respondents were immune from suit under those stat-

utes. Petitioner brings forward only the issue of whether

he could maintain an action against Respondents under

§ 1983 of the Federal Civil Rights Act.

Nevertheless, Dr. Berg’s petition for certiorari is

replete with allegations from his complaint against

Respondents which have no basis in the record, or in the

trial court’s extensive findings of fact and conclusions of

law entered at the conclusion of the evidentiary hearing

held to address Respondents’ defense of immunity under

the Colorado and Federal statutes.

As found by the trial court, the facts upon which this

case rest are as follows:

Late in the evening of June 10, 1992, or early in the

morning of June 11, 1992, one of Dr. Berg’s patients,

referred to as H.P., was admitted to Humana ready to

deliver her baby. On June 11, 1992, Nurse Mowers, one of

the attending nurses, submitted to Humana an “Occur-

rence Report” regarding the delivery of H.P.’s child. The

Occurrence Report stated that Dr. Berg was in the deliv-

ery room at the time the child was being spontaneously

delivered by the patient and that Nurse Mowers made

repeated suggestions to Dr. Berg that he needed to attend

to the patient, which he refused to do. Nurse Mowers was

required to deliver the child herself. The Occurrence

Report also stated that Dr. Berg administered Methergine

by intravenous push and that Dr. Berg did suturing on a

uterine tear without anesthesia. H.P. repeatedly com-

plained of discomfort during the procedure, yet Dr. Berg

refused to administer anesthesia which was offered by

Nurse Mowers.

At the start of the business day on June 12, 1992,

action commenced with respect to the Occurrence Report.

The Occurrence Report was reviewed and considered by

Dr. Branstetter, the head of the Department of Obstetrics,

Dr. Blanchard, the deputy head of the Department of

Family Practice, Mr. Hoffman, Humana’s assistant admin-

istrative director, and Dr. Haffey, the chief of the medical

staff. Both Dr. Branstetter and Dr. Blanchard stated to Dr.

Haffey, in writing, that it was their opinion that summary

suspension of the obstetric privileges of Dr. Berg was

required. Following discussion among the medical staff,

Dr. Haffey, in his capacity as the chief of the medical staff,

imposed a summary suspension of Dr. Berg’s obstetrical

privileges at Humana pending further investigation. The

trial court found that the “[a]ction was taken by [Dr.]

Haffey under circumstances where failure to take such

action might have resulted in imminent danger to the

health of any individual.” The trial court also concluded

that the summary suspension of Dr. Berg’s obstetrical

privileges was taken with the reasonable belief that the

action was in furtherance of quality health care and after

a reasonable effort to obtain the facts of the matter.

Immediately following the summary suspension, Dr.

Berg received notice of his right to an informal hearing

pursuant to Section 9.3.2 of Humana’s bylaws. The notice

identified several cases where Dr. Berg had encountered

medical problems in addition to the case involving H.P.

Dr. Haffey quickly appointed an ad hoc investigating com-

mittee composed of three medical staff physicians. The ad

hoc investigating committee and Dr. Berg received

advance notice of the matters which were to be consid-

ered and the ad hoc investigating committee discussed the

matters with Dr. Berg “at length.” The ad hoc committee

also interviewed Nurse Mowers.

The ad hoc investigating committee prepared a writ-

ten report to the Medical Staff Executive Committee rec-

ommending that the summary suspension should be

removed, but that Dr. Berg be placed on probation with

certain educational and related conditions. Prompted by

the report, the Medical Staff Executive Committee

decided to remove the summary suspension of Dr. Berg’s

obstetrical privileges on the conditions that Dr. Berg enter

into a continuing educational program and agree to

supervision of his obstetrical practice at Humana. Dr.

Berg, who was present at the Executive Committee meet-

ing, chose not to respond spontaneously to the Executive

Committee’s action, but, rather, indicated that he would

contact his attorney. After seeking the advice of his attor-

ney, Dr. Berg signed a written agreement dated July 1,

1992 which agreed to those two conditions of his continu-

ing to practice obstetrics at Humana. The trial court

found, as a matter of fact, that Dr. Berg’s execution of the

agreement negated any need for further actions or hear-

ings by Humana under its bylaws.

After waiting for about five or six weeks, Dr. Berg

advised Humana that he had decided not to comply with

the agreement of July 1, 1992, and instead requested the

matter to be reopened and that formal peer review pro-

ceedings under the bylaws be instituted. There was no

obligation under the bylaws for the Medical Staff Execu-

tive Committee to reopen the matter, since as found by

the trial court, Dr. Berg had entered into a binding agree-

ment terminating the peer review process. Nevertheless,

Dr. Berg withdrew that request before the Executive

Committee could act on it. The trial court found that Dr.

Berg was fully familiar with his rights under Humana’s

bylaws, particularly because he was chairman of a stand-

ing medical staff “By-Law Committee.” The trial court,

thus, concluded that Dr. Berg’s withdrawal of his new

request for hearing was fully voluntary and knowing,

and was a firm reason for Humana not to proceed with

Dr. Berg’s peer review process further.

Dr. Berg changed his mind again, however, and at his

request, he was permitted to address the Medical Staff

Executive Committee on September 8, 1992. At the Execu-

tive Committee meeting, one of the physicians on the

Committee reported that Dr. Berg had advised him prior

to the meeting that he no longer wished to practice

obstetrics at Humana; however, no written resignation

had been received. Thus, after hearing from Dr. Berg and

subsequent deliberation, the Executive Committee asked

for Dr. Berg either to resign his obstetrical privileges at

Humana in conformity with his prior statement, or his

obstetrical privileges would be suspended. After consul-

tation with his attorneys, on September 9, 1992, Dr. Berg

resigned his obstetrical privileges, which the trial court

found was “a voluntary act on the part of Dr. Berg to the

extent that his free will to make a choice was not over-

come by the conduct of the hospital or any other of the

defendants in this case.” Again, the trial court found that

due to Dr. Berg’s voluntary resignation of his obstetrical

privileges, further hearing or other proceedings under

Humana’s bylaws were neither expected nor required.

However, Dr. Berg went back and forth thereafter,

changing his mind several times over the period of Sep-

tember and October of 1992. During this period, Humana

offered to reinstate Dr. Berg’s obstetrical privileges under

the terms which Dr. Berg had negotiated and agreed to in

the July 1, 1992 agreement. Finally, after negotiations

between his counsel and Humana’s attorneys, Dr. Berg

resigned his privileges once and for all by a letter dated

October 30, 1992. The trial court again found that Dr.

Berg’s actions caused Humana not to move forward with

its formal hearing procedures under its bylaws.

In its conclusions of law, the trial court concluded

that the elements of the immunity statute (42 U.S.C.

§ 11112) had been satisfied, specifically as follows:

(1) The summary suspension of Dr. Berg’s

obstetrical privileges at Humana was taken

under circumstances where failure to act may

have resulted in imminent danger to the health

of any individual;

(2) The actions were taken in the reasonable

belief that the actions were in furtherance of

quality health care;

(3) At each step of the proceeding, the action

was taken after reasonable efforts were taken to

obtain the facts. In connection with activities of

the ad hoc committee, Dr. Berg was given “every

opportunity to explain himself or discuss the

matters”;

(4) Humana’s actions were taken after pro-

cedures which afforded adequate notice and

hearing to Dr. Berg and such procedures were

fair to Dr. Berg; and

(5) Humana’s actions were made in the reason-

able belief that they were warranted by the

facts.

The trial court concluded that the elements of the

Colorado immunity statute had also been satisfied:

(1) The actions were taken after a reasonable

effort to obtain the facts of the matter upon

which action was to be taken;

(2) The actions were taken with a reasonable

belief that the actions taken were warranted by

the facts; and

(3) The actions were taken in good faith within

the scope of the professional review committee

process.

The substandard obstetrical practice of Dr. Berg did

not escape notice of the Colorado State Board of Medical

Examiners. On June 14, 1995, the Colorado Attorney Gen-

eral initiated a formal complaint against Dr. Berg. An

amended complaint was filed by the Colorado Attorney

General on August 31, 1995. The amended complaint set

forth eight specific cases, including patient H.P., in which

Dr. Berg had failed to act properly. The Attorney General

alleged that Dr. Berg committed an act or omission consti-

tuting gross negligent medical practice or two or more

acts or omissions which failed to meet generally accepted

standards of medical practice.

On the eve of a hearing on the formal charges before

the State Board, Dr. Berg entered into a Stipulation and

Final Agency Order with the Attorney General. Pursuant

to that Stipulation, Dr. Berg agreed that, in the absence of

his presenting adequate evidence to the contrary, there

was sufficient evidence to establish a prima facie case of

two or more acts or omissions by him which failed to

meet generally accepted standards of medical practice.

Dr. Berg also agreed that he would not thereafter engage

in any form of obstetrical practice. Dr. Berg further

agreed that his medical license to continue to practice as a

general practitioner (but not as a specialist in obstetrics)

was to be placed on probationary status for a period of

five years. During the probationary period, Dr. Berg

agreed to be monitored by a “practice monitor.”

At the evidentiary hearing, the trial court declined to

admit portions of a report prepared by Somerville &

Associates, a team of consulting psychologists, concern-

ing management matters at Humana. The Court of

Appeals reversed the trial court's evidentiary finding,

holding that the Somerville Report was not protected by

Colorado’s psychologist-client privilege statute and

remanded the case for further proceedings consistent

with its ruling on admissibility and privilege. Contrary to

Petitioner’s assertions, no part of the Court of Appeals

ruling deals with the issue of immunity or good faith,

only that the Somerville Report is not protected by the

psychotherapist-client privilege. No ruling was made as

to the veracity or relevance of the report; admissibility of

the report remains the purview of the trial court upon

remand.

REASONS FOR DENYING THE WRIT

THE CONDUCT OF PEER REVIEW ACTIVITIES BY A

PRIVATE HOSPITAL’S GOVERNING BODY OF ITS

OWN MEDICAL STAFF DOES NOT CONSTITUTE

STATE ACTION TO SUPPORT PETITIONER’S

CLAIMS UNDER 42 U.S.C. § 1983.

A. Peer Review has not traditionally been the exclu-

Sive prerogative of the state

42 U.S.C. § 1983, enacted pursuant to the authority of

Congress to enforce the Fourteenth Amendment, pro-

hibits interference with federal rights under color of state

law. The issue before this Court is whether Humana’s

action, as a private hospital, in temporarily suspending

Dr. Berg’s hospital privileges, is state action. Lugar v.

Edmondson Oil Co., 457 U.S. 922, 937, 102 S.Ct. 2744, 2745,

73 L.Ed.2d 482 (1982). Unless state action is involved, no

constitutional rights are implicated and no claim under

§ 1983 exists. Rendell-Baker v. Kohn, 457 U.S. 830, 102 S.Ct.

2764, 73 L.Ed.2d 205 (1982). If the action of Humana is not

state action, the inquiry ends.

By strained statutory interpretation and facile but

fallacious logic, petitioner attempts to bootstrap the con-

duct of professional review activities into state action and

a private hospital into a division of the Colorado Board of

Medical Examiners. Petitioner’s position is not supported

by history, precedent or sound reasoning. Evaluation of

the competency and qualifications of staff physicians for

purposes of achieving the highest medical practice stan-

dards, patient safety and quality patient care has long

been a prerogative of private medical institutions. Using

the fruits of peer review activities to assist the Colorado

Board of Medical Examiners in the discharge of its licens-

ing and oversight functions does not convert an histori-

cally private function into state action. The existence of a

nexus between professional review organizations and the

Colorado Board of Medical Examiners’ disciplinary pro-

cess does not make the former an instrumentality of the

latter.

This Court has established the parameters for deter-

mining whether state action exists: “We have held that

the question [of state action under § 1983] is whether the

function performed has been ‘traditionally the exclusive

prerogative of the State’” [Court’s own emphasis]. Ren-

dell-Baker v. Kohn, 457 U.S. 830, 842, 102 S.Ct. 2764, 2772,

73 L.Ed.2d 205 (1982). This requirement is reaffirmed in

Blum v. Yaretsky, 457 U.S. 991, 1011, 102 S.Ct. 2777, 2789

(1982). Case authority is both legion and uniform in hold-

ing that, because professional peer review at private hos-

pitals has not traditionally been the exclusive prerogative

of the state, peer review at private hospitals does not

constitute state action. See, e.g., Loh-Seng Yo v. Cibola Gen-

eral Hospital, 706 F.2d 306, 307-08 (10th Cir. 1983).

Private hospitals have routinely engaged in peer

review of their staff physicians for important private

reasons. See, e.g., Shulman v. Washington Hospital Center,

10

222 F. Supp. 59, 64 (D.D.C. 1963). Therein the court

remarked:

“Necessarily hospitals endeavor to secure the

most competent and experienced staff for their

patients. Without regard to the absence of any

legal liability, the hospital in admitting a physi-

cian or a surgeon to its facilities extends a moral

imprimateur to him in the eyes of the public.

Moreover, not all professional men have a per-

sonality that enables them to work at harmony

with others, and to inspire confidence in their

fellows and in patients. . . . It becomes indispen-

sable, therefore, for every such institution to

make choices as to whom it will admit to its

portals.” [Emphasis in original.]

A private hospital engages in peer review “so that it can

have confidence in the competent and moral commitment

of its staff.” Sosa v. Managers of Val Verde Memorial Hospi-

tal, 437 F.2d 173, 177 (5th Cir. 1971).

Peer review activities in Colorado have been tradi-

tionally private in nature. While the Board of Medical

Examiners has historically enjoyed the exclusive author-

ity and responsibility for licensure of physicians in the

State, professional review activities for purposes of ascer-

taining physician qualifications and competence to enjoy

hospital privileges has never been exercised by that state

agency. As early as 1975, a decade before the enactment

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

§ 11101 et seq., the Colorado Legislature recognized the

value of encouraging discipline and control of the prac-

tice of health care rendered by physicians in hospitals by

committees comprised of their peers. See Section

12-43.5-101 C.R.S. (L.75, p. 465, § 1 repealed, S.B.261, eff.

11

July 1, 1989). In fact, nowhere are professional review

activities either claimed or exercised by any Colorado

state agency. Certainly, then, the Colorado Board of Medi-

cal Examiners exercises no “exclusive” control over the

private peer review process.

The current Colorado Professional Review Act

(Colo.Rev.Stat. § 12-36.5-101 et seq.) does not change this

historical and traditional deference. Section 12-36.5-103,

C.R.S., expresses the intent of the General Assembly that

the Board of Medical Examiners utilize and allow profes-

sional review committees and governing boards to assist

it. This language does not delegate any authority to pri-

vate peer review organizations, nor does it abrogate the

Board of Medical Examiners’ traditional exclusive func-

tions concerning the licensure of physicians in this state.

Creating a statutory scheme whereby private hospi-

tals can review the conduct practiced by its staff physi-

cians and oversee the quality of medical care does not

rise to state action just because there is some interrela-

tionship between that private function and state regula-

tory or investigatory authority. In Wong v. Tripling, 881

F.2d 200 (5th Cir. 1989), a physician asserted a § 1983

claim against a private hospital for revocation of his staff

privileges, claiming that there was state action because

“Mississippi's comprehensive scheme governing the sus-

pension, revocation or restriction of hospital staff privi-

leges creates a program whereby hospitals perform a

traditional state function,” allegedly a peer review. Wong,

881 F.2d at 201-02. The Fifth Circuit affirmed the federal

district court’s dismissal of the physician’s § 1983 claim

12

for lack of state action, holding that “the hospital’s execu-

tive committee did not perform a traditional state func-

tion in revoking Dr. Wong’s staff privileges.” Similarly, in

Goss v. Memorial Hospital System, 789 F.2d 353, 356 (5th

Cir. 1986), the Fifth Circuit held that the Texas Medical

Practice Act’s provisions governing peer review did not

create state action for purposes of § 1983. Just like the

Colorado statute, the Texas Act “authorizes a medical

peer review committee to report its finding of a physi-

cian’s incompetency to the Texas State Board of Medical

Examiners.”

In Tunca v. Lutheran General Hospital, 844 F.2d 411 (7th

Cir. 1988), the Seventh Circuit held that even a compre-

hensive statutory scheme requiring hospitals to develop

procedural guidelines for considering applicants for med-

ical staff privileges does not render the hospital a state

actor for purposes of § 1983. The Fourth Circuit held, in

affirming the dismissal of a physician’s section 1983

claim, that where the state statute did not give a private

hospital the authority to revoke a physician’s medical

license, the statute did not delegate to a private entity

“powers exclusively reserved to the State.” Modaber v.

Culpeper Memorial Hospital, 674 F.2d 1023, 1027 (4th Cir.

1982). The Court reasoned:

“The state does not make a hospital’s decision to

revoke privileges dispositive of license revoca-

tion. The hospital makes its own decision for its own |

reasons. Making it State action merely because it |

is reported to the medical licensing authority

would be just as non-sensical as making a pri-

vate employer’s decision to fire a parolee State

action because it is reported to the parole com-

mission. In each case, the reasons for making the

saniitaii a a i

13

decision may be totally independent of the

state’s reason for wanting the information.

[Emphasis added.]

Petitioner’s interpretation of Nicholas v. North Colo-

rado Medical Center, 902 P.2d 462 (Colo. App. 1995), aff'd

sub nom, North Colorado Medical Center v. The Committee on

Anticompetitive Conduct, 914 P.2d 902 (Colo. 1996), is erro-

neous. First, Petitioner asserts that in Nicholas the Court

of Appeals determined that when performing peer

review activities the governing board is clothed with the

status -of a state (Petition for Certiorari, at page 11).

Nicholas specifically did not reach that issue. The Court of

Appeals expressly declined to decide if North Colorado

Medical Center’s governing board was a subordinate

state agency to the Committee on Anticompetitive Con-

duct; rather, it upheld the complaining physician’s stand-

ing to appeal on the alternative ground that C.R.S.

§ 12-36.5-106 itself expressly permitted the loser in a final

administrative action before the Committee on Anticom-

petitive Conduct to appeal to the Colorado Court of

Appeals.'! The Court of Appeals had an opportunity to

revisit its Own opinion in Nicholas in this case, and it

reaffirmed its holding that Nicholas is limited to questions

of anticompetitive conduct and did not address peer

review concerning any other matters, including “whether

peer review on other than noncompetitive conduct

should be deemed action taken under color of state law

' Significantly, the duties of the Committee of Anti-

competitive Conduct, and C.R.S. § 12-36.5-106 under which the

Nicholas proceeding was brought, solely involve a charge that

the peer reviewers’ conduct was anti-competitive. Dr. Berg has

not alleged any anti-competitive conduct.

a LO

14

for 42 U.S.C. § 1983 actions.” (Court of Appeals Opinion,

at p. 4.)

Petitioner urges this Court to adopt an absurd statu-

tory construction: Petitioner urges that, in response to a

1988 antitrust decision arising in Oregon,? the Colorado

General Assembly determined to make a wholesale

change to the peer review process, erase the historical

distinction between private hospitals and public agencies,

and declare all peer review activities of a private hospital

“state action.” Petitioner offers no legislative history or

evidence of legislative purpose to support this assertion.

But, even if the Colorado Legislature determined to miti-

gate this Court’s opinion in Patrick v. Burget, supra, it

adopted a more direct approach to insulate private peer

review organizations from claims of antitrust, by enacting

C.R.S. § 12-36.5-104(14) which declares such peer review

organizations not to be unlawful conspiracies. That

amendment, coupled with the enactment of the provi-

sions establishing the Committee on Anticompetitive

Conduct in § 12-36.5-106, reflects a legislative intent to

deal exclusively with antitrust considerations affecting

peer review activities, and not with any other traditional

private peer review.

Under Petitioner’s theory, every single medical staff

decision made by a private hospital in Colorado would

constitute state action. The General Assembly could not

possibly have intended such a radical federalization of

peer review at private hospitals when it amended the

2 Patrick v. Burget, 486 U.S. 94 (1988).

15

Colorado Professional Review Act to create the Commit-

tee on Anti-competitive Conduct. Adopting such inter-

pretation would charge the private sector with state

action in the performance of functions historically consid-

ered private. Ward v. St. Anthony Hospital, 476 F.2d 671,

675 (10th Cir. 1973); Sokol v. University Hospital, Inc., 402 F.

Supp. 1029, 1031 (D. Mass. 1975).

In summary, there is no authority to support Peti-

tioner’s proposition that the assistance of a private pro-

fessional review organization to a public agency

transforms those activities into state action. The conduct

of a professional peer review is not traditionally, histori-

cally or exclusively the prerogative of the State of Colo-

rado. The relevant statutes create no substantive

participation, supervision, authority or control by the

Colorado Board of Medical Examiners into the private,

internal functions of peer review organizations sufficient

to elevate their conduct into the conduct of the Board of

Medical Examiners itself.

B. A private hospital’s peer review activities are nei-

ther an integral part of the operation of the Colo-

rado Board of Medical Examiners nor indispensable

to the discharge of its functions so that the activ-

ities assume the character of governmental action.

Petitioner’s argument that Respondents’ private peer

review activities constitute state action has been rejected

by virtually every court which has addressed the issue,

because medical staff peer review has traditionally and

historically been the prerogative of private hospitals and

not the exclusive prerogative of the state. Thwarted by

16

the legion of authority on point against his position,

Petitioner attempts to bootstrap his claim into state action

by suggesting that Humana’s private peer review activ-

ities are so entwined and impregnated by state action that

they are in fact the actions of the Colorado Board of

Medical Examiners under Petitioner’s own flawed anal-

ysis of this Court’s opinion in Burton v. Wilmington Park-

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

Petitioner’s argument is without merit. First, the

appropriate test to measure Respondents’ conduct, as

rightly and consistently held by all courts which have

addressed this issue, is whether the conduct complained

of has historically been the exclusive prerogative of the

state. Rendell-Baker v. Kohn, 457 U.S. 830 (1982). Respon-

dents have shown categorically that it is not. Second, the

test enunciated in Burton and its progeny deals with

circumstances on which the state participates in activities

historically private in character. Defining state action in

such circumstances requires a determination, considering

the aggregate of relevant factors, that the state has so far

insinuated itself into an interdependence with private

conduct that it has become a joint enterprise compelling

the finding of state responsibility for private action. Thus,

this Court held in Burton, that state action exists in an

instance where the land and buildings in question were

publicly owned, the property was dedicated to public

use, the performance of the parking authority was

declared to be an essential state function, and the acquisi-

tion, construction and maintenance of the facility were

paid for by revenue bonds financed through proceeds

from the operation of the facility.

17

Similarly, in Evans v. Newton, 382 U.S. 296 (1966),

another case cited by Petitioner, this Court determined

that the status of the city as trustee of a private park

which was an integral part of the city’s activities, main-

tained by city personnel and funds, and exempted from

city taxation, demonstrated a governmental control suffi-

cient to constitute state action. In West v. Atkins, 487 U.S.

42 (1988), yet another case cited by Petitioner, this Court

held that the actions of private physicians hired by the

state of North Carolina to provide medical treatment of

inmates of its prisons were agents of the state because (1)

the state had a federal constitutional obligation under the

Eighth Amendment to provide adequate medical care to

those to whom it had incarcerated; (2) the state hired

physicians to fulfill its constitutional obligation; (3)

inmates must rely solely on those physicians provided by

the state for their medical needs; and (4) the physicians

function within the state system in rendering medical

care and treatment. While the Burton analysis may be

appropriate to test a single, historically private activity

(such as operating a parking garage, or managing a park,

or providing medical treatment to inmates), it is inappli-

cable in circumstances where the totality of private con-

duct is challenged as state action and where such private

conduct has never been the exclusive prerogative of the

state.

However, even if the rule in Burton and its progeny

were applied here, the conduct of Respondents do not

constitute state action because the totality of aggregate

facts here do not support the finding of an intertwined or

symbiotic relationship between private peer review orga-

nizations and the Colorado Board of Medical Examiners

18

so that the former takes on the governmental character of

the latter. The fact that the Colorado Peer Review Act

declares that private hospitals may establish peer review

organizations, governed by their own bylaws, and

administered by their own internal governing bodies, and

the fact that such peer review activities are immunized if

they are conducted in accordance with the principles of

good faith and procedure, does not constitute the take-

over of private peer review by the State of Colorado.

¢

CONCLUSION

Petitioner’s argument that the Colorado Peer Review

Act converts historically and traditionally private hospi-

tal peer review activities into state action is without

merit. Peer review activities have been traditionally, his-

torically and exclusively a private function of hospital-

governing bodies. They are used, encouraged and even

relied upon by the Colorado Board of Medical Examiners.

However, that does not convert these private governing

boards and private peer review organizations into arms

of the state, subjecting every decision they make to

19

federal civil rights scrutiny. Petitioner’s request for a writ

of certiorari should be denied.

Respectfully submitted,

Peter J. Lucas*

L. RicHArD FReEsE, Jr.

CATHERINE A. G. SPARKMAN

Douerty, Rumsie & Butter, P.C.

1200 Seventeenth Street

Denver, Colorado 80202

(303) 572-6200

*Counsel of Record for Respondents

Counsel for Respondents Jack

Shapiro, Humana Hospital

Mountain View, Inc., John A.

Hoffman, Thomas J. Blanchard and

Does 3 Through 10