Case Title: HAM v HOLY ROSARY HOSPITAL

Citation: 

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1974-12-11T00:00:00Z

Document:
No. 12457 I N THE SUPRENE C O U R T O F THE STATE O F M O N T A N A 1974 J A M E S HAM, MOD, and RICHARD WILLIAM K R A N S K Y and CLAUDIA ANN K R A N S K Y , husband and wife, e t a l . , P l a i n t i f f s and Appellants, H O L Y R O S A R Y HOSPITAL, a Montana Non-profit corporation, Defendants and Respondents. Appeal from: D i s t r i c t Court of the Sixteenth J u d i c i a l D i s t r i c t , Honorable C. B. Sande, Judge presiding. Counsel of Record: For Appellants : Robert La Stephens, Jr., argued, Billings, Montana For Respondents : Crowley, Kilbourne, Haughey, Hansen and Gallagher, Billings, Montana Stephen H. Foster, argued, Billings, Montana Submitted: November 13, 1974 Decided : - QFC X 1 1974 Filed: i;3f"i" "g 4974 M r . Justice Wesley Castles delivered the Opinion of the Court. This i s an appeal by the p l a i n t i f f s from an order of the d i s t r i c t court, County of Custer, granting defendant's motion for summary judgment. P l a i n t i f f s f i l e d s u i t i n the United States District Court, District of Montana, on December 1, 1972, seeking an order compelling Holy Rosary Hospital-%- t o permit James Ham, M.D., t o surgically s t e r i l i z e Claudia Ann Kransky i n that hospital on December 13, 1972, when she was scheduled t o deliver her third child by cesarean section. The complaint alleged the hospital, i n refusing t o permit its f a c i l i t i e s t o be used for surgical s t e r i l i z a t i o n , was infringing upon rights secured t o p l a i n t i f f s by the United States Constitution. The court dismissed the case on December 8, 1972, for want of jurisdiction. A n opinion was subsequently issued explaining that the court found no s t a t e involvement i n the hospital's enforcement of its s t e r i l i z a t i o n rules and therefore the court lacked jurisdiction under 28 U.S.C. 5 1343. N o appeal was taken from that decision. Plaintiffs then f i l e d their complaint i n t h i s action on December 11, 1972, seeking the same r e l i e f from the d i s t r i c t court. O n December 12, 1972, the court granted a temporary injunction restraining the hospital from enforcing i t s s t e r i l i z a - tion rules insofar a s M r s . Kransky was concerned. Thereafter, on December 15, 1972, summary judgment was entered on the merits i n favor of the hospital. In the interim, the s t e r i l i z a t i o n was performed on Claudia Kransky. Although t h e case may be moot a s t o ms. Kransky, the issues remain with respect t o D r . H a m and members of the class t o which the named p l a i n t i f f s belong. Plaintiff Claudia Ann Kransky a t a l l times material t o the issues was twenty-two years of age and married to p l a i n t i f f Richard Kransky. She i s a resident of Miles City, Custer County, Montana, and a citizen of the United States. She had, prior t o the instant pregnancy, a medical history of two prior cesarean sections. Following consultations with her attending physician, Dr. Ham, it was determined by plaintiffs that Mrs. Kransky should have a tubal ligation performed contemporaneously with her third scheduled cesarean section. For a number of personal reasons Mr. and Mrs. Kransky determined they did not desire additional childreo. The sole purpose of the proposed tubal ligation was contraception. Excepting the customary and usual residual effects of three cesarean sections and the desire to avoid future pregnancies, Mrs. Kransky had no medical indication for permanent sterilization. Defendant Holy Rosary Hospital is a nonprofit Montana corporation. The members and corporate board of the corporation are members of the congregation of Presentation Sisters of Aberdeen. Presentation Sisters of Aberdeen is a religious congregation of sisters organized pursuant to authorization of the Roman Catholic Church. The corporate board, however, has delegated primary responsibility for control and administration of Holy Rosary Hospital to a board of trustees comprised of seven members of the Presentation Sisters of Aberdeen and four lay members. The hospital's physical facilities at Miles City are owned by defendant Holy Rosary Hospital. Originally established in 1906, Holy Rosary Hospital was re- built in 1950. The total cost of the physical facilities at that time was $1,560,500, of which approximately $77,600 was voluntarily contributed by individual citizens of the community following an appeal to the public at large.. In 1958, Holy Rosary Hospital received the benefit of approximately $70,000 voluntarily contributed by citizens of the community following an appeal to the public for funds to assist in operating the hospital. Except for these two fund drives the hospital has made no appeal to the public for voluntary contributions. It does receive unsolicited memorials and contributions from time to time of approximately $2,000 per year. Members of the Presentation Sisters have contributed services valued in excess of $796,000 to the operation of the hospital since its inception. A t no time has t h e hospital received any funds under t h e Hill-Burton Act (42 U.S.C. $291 e t seq.) o r any other grants from c i t y o r county governments, the s t a t e of Montana, o r t h e United States government f o r construction of physical f a c i l i t i e s , purchase of equipment, o r operation of t h e hospital. Holy Rosary Hospital serves an area i n southeastern Montana including t h e counties of Garfield, Fallon, Carter, P r a i r i e , Rose- bud and Custer. It i s the only hospital i n Miles City and has f a c i l i t i e s f o r cesarean sections and postpartum care. With t h e same area, there a r e a l s o hospitals located a t Jordan, Ekalaka, Baker, Forsyth, and Glendive. O f these hospitals, only those i n Forsyth and Glendive have f a c i l i t i e s f o r performing cesarean sections and postpartum care. Forsyth i s 46 miles and Glendive i s 76 miles d i s t a n t from Miles City. P l a i n t i f f James H a m i s admitted t o f u l l s t a f f privileges t o practice i n and use t h e hospital i n Forsyth. Tuba1 l i g a t i o n i s a medically accepted surgical procedure f o r female s t e r i l i z a t i o n . It has not been performed a t Holy Rosary Hospital because of the interpretation placed upon t h e publication " ~ t h i c a l and Religious Directives f o r Catholic ~ o s p i t a l s " which is incorporated by reference i n the bylaws of the medical s t a f f of Holy Rosary Hospital. Holy Rosary Hospital had n o t adopted any guidelines f o r s t e r i l i z a t i o n procedures except a s provided by t h e Ethical and Religious Directives f o r Catholic Hospitals, nor has the defendant created a s t e r i l i z a t i o n committee t o review re- quests f o r s t e r i l i z a t i o n . By l e t t e r dated July 11, 1972, Mrs. Kransky requested permission from the hospital f o r the s t e r i l i z a t i o n procedure a t the time of t h e cesarean section. This request was considered by t h e Board of Trustees. The administrator of the h o s p i t a l replied by l e t t e r dated September 15, 1972, explaining t h a t s t e r i l i z a t i o n was prohibited by t h e Ethical and Religious Directives f o r Catholic Hospitals. Holy Rosary Hospital has expressed no other reasons f o r denying the tuba1 l i g a t i o n . There a r e no formal appeal procedures from decisions of t h e Board of Trustees r e l a t i n g t o applications f o r s t e r i l i z a - tion. P l a i n t i f f , James Ham, M.D., i s a physician specializing i n o b s t e t r i c s and gynecology i n Miles City. Outside of t h e Billings area, D r . H a m is t h e only OB-Gyn s p e c i a l i s t i n the eastern Montana area. A s a condition t o admission t o s t a f f privileges, D r . H a m has consented to,and agreed t o be bound by, the medical s t a f f bylaws of Holy Rosary Hospital. Holy Rosary Hospital requires i t s medical s t a f f t o abide by the medical s t a f f bylaws, t h e principles of medical e t h i c s of t h e American Medical Association, and the Ethical and Religious Directives f o r Catholic Hospitals insofar a s they r e l a t e t o a physician's services within Holy Rosary Hos- p i t a l . Holy Rosary Hospital is subject t o s t a t e regulation and control i n accordance with T i t l e 69, Chapters 52 and 53, Revised Codes of Montana, 1947, and is licensed annually by t h e s t a t e of Montana upon proper application by the hospital. I n addition, t h e hospital i s subject t o t h e regulations f o r hospitals and r e l a t e d i n s t i t u t i o n s pzomulgat,ed by t h e Montana Department of Health and Environmental Sciences. The hospital has had the benefit of general exemptions from taxation a s provided by sections 84-202 and 84-1501, R.C.M. 1947, f o r nonprofit corporations organized f o r charitable, s c i e n t i f i c , r e l i g i o u s o r educational purposes. The hospital has a l s o been paid with public funds f o r services rendered t o e l i g i b l e patients under s t a t e and federal welfare, medicare and medicaid programs. In t h e i r argument and b r i e f , p l a i n t i f f s have raised a number of federal constitutional issues. However, a s a condition precedent t o the consideration of those issues, t h i s Court must f i r s t find t h a t the actions of the h o s p i t a l involve s t a t e action prohibited by the federal constitution. W e hold, a s did the federal d i s t r i c t court, t h a t the actions of defendant Holy Rosary Hospital a r e merely private conduct, not s t a t e action, and a r e thus not proscribed by the Constitution. Finding no s t a t e action, we do not reach plain- t i f f s ' main issues. I n addition, t h i s action, a s t o t h e constitu- t i o n a l issues, is barred by t h e application of the doctrine of - r e s judicata. Plaintiffs also claim that the hospital's actions violate section 69-5217(1), R.C.M. 1947. W e hold there has been no violation of that statute. In support of their allegation that s t a t e action i s involved i n Holy Rosary ~ o s p i t a l ' s decision t o forbid the use of i t s f a c i l i t i e s for voluntary sterilization, p l a i n t i f f s present several facts which they claim lead t o that conclusion: (1) the hospital's use of "public" funds derived from its public appeals for contri- butions; (2) the hospital's submission t o regulations prescribed pursuant t o the s t a t e ' s participation i n other Hill-Burton projects; (3) the hospital's monopoly position i n the Miles City area; (4) the hospital's subjection t o s t a t e licensing and regulation; (5) the operation of a hospital i s per se a public function; and (6) the hospital's preferred position under s t a t e law due t o i t s tax exemption status. W e find none of these facts, either individually o r taken together, t o be sufficient t o warrant a finding that the actions of Holy Rosary Hospital, a private corporation, constitute s t a t e action subject t o constitutional limitations. Since the parties and the issues were the same, we adopt and quote from the unreported opinion of Judge Russell E. Smith, dated December 20, 1972, Civil No. United States District Court for the District of Montana, Billings Division: "It is not disputed that the 14th amendment 'erects no shield against merely private conduct however dis- criminatory o r wrongful.' Burton v. Wilmington Parking Authority, 365 U.S. 715 (196Q; Moose Lodge No. 107 v. I r v i s , 407 U.S. 163 (1972). Holy Rosary Hospital i s a private yerson and unless the s t a t e has 'significantly involved i t s e l f with the claimed discrimination there i s not s t a t e action and the court has no jurisdiction. Moose Lodge No. 107 v. I r v i s , supra. '1 Under controlling decisions (Moose Lodge No. 107 v. I r v i s , supra) the court i s required t o s i f t the facts and weigh the circumstances t o determine whether i n a given case there i s a non-obvious involvement of the s t a t e i n private conduct. * * * "As I independently weigh. and s i f t the facts and c i r - cumstances here I a m unable t o conclude that there i s any significant relationship between the s t a t e and the action here sought t o be enjoined. It does not appear that the tax benefits or the s t a t e patronage enjoyed by Holy Rosary Hospital a r e dependent upon the enforcement of a s t e r i l i z a t i o n policy. Were that so, a different problem would be presented, but the receipt of tax benefits alone i s not sufficient t o make the action of the beneficiary the action of the state. Browns v. Mitchell, 409 F.2d 593 (10th C i r . 1969); Blackburn v. Fisk University, 443 F.2d 121 (6th C i r . 1971). The State of Montana has not by s t a t u t e or regulation attempted t o prohibit or regulate operations resulting in the s t e r i l i t y of noncustodial males and females. "It is urged that Holy Rosary Hospital has assumed a public function and may not i n the exercise of such function r e s t r i c t the fundamental rights of citizens. The cases i n support of t h i s proposition a r e analyzed i n the case of Powe v. Miles, 407 F,2d 73 (2d C i r . 1968) and the rule stated i n them was held t o be inapplicable t o private schools incor- porated under s t a t e law, regulated by s t a t e law, and aided t o some extent by s t a t e funds. What i s said i n Powe v. Miles, supra, with respect t o private schools i s equally applicable t o private hospitals. In f a c t , s t a t e supported and managed education i n America a t a l l levels for many years has been a more common thing than s t a t e supported and managed hospitals. "The fact that Holy Rosary Hospital has a practical, but not state-enforced, monopoly i n obstetrical services i n Miles City does not make i t s action s t a t e action. Martin v. Pacific Northwest B e l l Telephone Company, 441 F.2d 1116 (9th C i r . 1971). " W e w i l l discuss b r i e f l y two of the factual bases, not discussed i n Judge Smith's opinion, which p l a i n t i f f s here urge require the conclusion that the hospital's decision t o forbid the use of i t s f a c i l i t i e s for voluntary s t e r i l i z a t i o n constitutes s t a t e action. Plaintiffs' contention that the hospital's use of "public funds" derived from i t s public appeals for contributions constitutes s t a t e action i s without merit, The fact that the appeal was t o the public a t large i s immaterial t o a finding that the power of the s t a t e i s involved i n the operation of the hospital. A t no time have funds derived from the s t a t e been used i n a legal sense i n the operation of Holy Rosary Hospital. P l a i n t i f f s ' contention that the hospital's subjection t o s t a t e licensing and regulation constitutes s t a t e action was answered i n Moose Lodge No. 107 v. I r v i s , 407 U.S. 163, 92 S.Ct. 1965, 32 L ed 2d 627, 639. There, the United States Supreme Court held that the mere licensing of Moose Lodge t o serve liquor by the Pennsylvania Liquor Control Board did not amount t o such s t a t e involvement with the club's a c t i v i t i e s a s t o make i t s discriminatory practices for- bidden by the Fourteenth Amendment. With respect t o s t a t e regulation, the court said: "However detailed t h i s type of regulation may be in some particulars, it cannot be said t o i n any way foster o r encourage r a c i a l discrimination. Nor can it be said t o make the State i n any r e a l i s t i c sense a partner o r even a joint venturer i n the club's enterprise. II In the instant case, the regulation of kospitals prescribed pursuant t o Chapters 52 and 53, T i t l e 69, R.C.M. 1947, cannot be said t o i n any way foster or encourage a decision by the hospital on the subject of sterilization. A t most, section 69-5223, R.C.M. 1947, s e t forth l a t e r i n this opinion, merely l e t s the decision r e s t with the hospital, free from any s t a t e coercion either way. Neither can it be said that these regulations i n any r e a l i s t i c sense make the s t a t e of Montana a partner or joint venturer i n the hospital's decision t o forbid voluntary sterilizations within the walls of i t s f a c i l i t y . W e now consider the issue of whether the argument of p l a i n t i f f s , that the hospital i s violating plaintiffs' federal constitutional rights by refusing t o permit s t e r i l i z a t i o n operations, must be rejected because the order dismissing the federal court action i s res judicata on that issue. In 28 U.S.C. J 1343, Congress granted - the federal d i s t r i c t courts jurisdiction t o enforce the Fourteenth Amendment. The jurisdiction conferred by that section i s restricted t o cases where the defendant has acted "under color of any State law, statute, ordinance, regulation, custom or usage." Whether there i s "color of State lawff f o r purposes of 5 1343 and whether there i s I I a significant involvement of the s t a t e i n private conduct", i.e, I1 s t a t e action", for Fourteenth Amendment purposes a r e identical questions. See: Moose Lodge v.Irvis, supra; United States v. Wiseman, 445 F.2d 792 (2d C i r . 1971); Hall v. Garson, 430 F.2d 430, 439 (5th C i r . 1970). Attempting t o invoke jurisdiction under 28 U. S.C. § 1343 p l a i n t i f f s alleged i n t h e i r federal court complaint that the hospital, acting under color of s t a t e law, was infringing upon rights secured tothem by the United States Constitution, Based upon stipulated facts virtually identical t o those i n the instant case, Judge Smith dismissed the case for lack of jurisdiction, holding, contrary t o the allegations of the complaint, that the hospital was not acting under color of s t a t e law. Plaintiffs i n t h e i r brief here return t o the same issues involved i n the federal court case and argue a t length that the hospital's s t e r i l i z a t i o n prohibition infringes upon rights secured t o them by the F i r s t , Fifth, Eighth, Ninth and Fourteenth Amend- ments t o the United States Constitution. Since these Amendments r e s t r i c t only s t a t e action and not purely private action, t h i s argument again raises the issue of whether or not the s t a t e i s "significantly involved" i n the hospital' s prohibition against sterilization. Judge Smith ruled against p l a i n t i f f s on t h i s pre- c i s e issue and h i s ruling i s conclusive here. The general rule respecting the conclusive effect of a dismissal for lack of jurisdiction on grounds material t o the merits of the cause 9s stated i n the Annotation, 49 A.LR2d 1036, 1068 (1956): "In some situations a decision on the jurisdiction of a court may depend upon questions of fact which a r e also material i n determining the merits of the cause of action. The weight of the cases, expressly or by inference, sup- ports the r u l e that where a question of fact material t o the merits has been decided by and is essential t o a judgment for defendant based on lack of jurisdiction, such determination i s conclusive upon the parties i n a subse- quent action either for the same or a different cause of action. I t The applicability of t h i s rule i n the instant case cannot be questioned. Significant s t a t e involvement i n the hospital's s t e r i l i z a t i o n rules i s essential not only t o the federal court's jurisdiction but also t o the merits of the claim that the hospital is denying p l a i n t i f f s t h e i r constitutional rights. The parties here are the same as w e r e before the federal court; the subject matter i s the same a s was before the federal court; the issue of s t a t e action i s the same and r e l a t e s t o the same subject matter; and, the capacities of the parties are the same. Consequently, Judge smith's finding that there i s no s t a t e participation in the hospital's rules against sterilization is conclusive, and precluded a ruling here that such rules are sub- ject to Fourteenth Amendment restrictions. Smith v. County of Musselshell, 155 Mont. 376, 378, 472 P.2d 878, 879. Plaintiffs claim that the hospital's sterilization rules vio- late section 69-5217, R . C . M . 1947. That statute provides in pertinent part: " ( 1 ) No person who operates a facility may discriminate among the patients of licensed physicians. The free and confidential professional relationship between licensed physician and patient shall continue and remain unaffected. Physicians shall continue to have direction over their patients. f I The actions of Holy Rosary Hospital did not violate section 69-5217. There is no discrimination among patients. All patients are alike subject to the hospital's rule prohibiting sterilizations to be performed within the hospital. As a private hospital, which voluntarily initiated and voluntarily provides these hospital factilities, Holy Rosary Hospital has a legal right to prescribe the terms upon which it furnishes its services to the public so long as it does not discriminate against some patients in providing those services. The confidential relationship between physician and patient is unaffected. The relationship which these rules affect is that between the hospital and the physkian or the hospital and the patient. The free and confidential relationship between patient and physician was never intruded upon by Holy Rosary Hospital. Plaintiffs were at all times free to choose another facility, albeit inconvenient, for the tuba1 ligation. The last sentence of section 69-5217, R . C . M . 1947, heretofore quoted, does appear to create some difficulty however. The sentence is ambiguous in that it may mean either ( 1 ) the physician has exclusive direction over his patient to the extent that he can totally disregard reasonable rules and regulations of a private hospital, or it may mean ( 2 ) that the physician has exclusive direction over his patient subject to reasonable rules and regula- tions of a private hospital. Although not enacted when this s u i t commenced, the legislature has subsequently enacted a s t a t u t e which c l a r i f i e s t h i s ambiguity with respect t o the issue a t hand. Section 69-5223, which became effective March 31, 1974, provides i n part: "(I) N o private hospital or health care f a c i l i t y s h a l l be required contrary t o the religious or moral tenets o r the stated religious beliefs or moral convictions of such hos- p i t a l or f a c i l i t y as stated by i t s governing body o r board t o admit any person for the purpose of s t e r i l i z a t i o n o r t o permit the use of i t s f a c i l i t i e s for such purpose. Such refusal shall not give r i s e t o l i a b i l i t y of such hospital or health care f a c i l i t y , or any personnel or agent or governing board thereof, t o any person for damages allegedly arising from such refusal, nor be the basis for any dis- criminatory, disciplinary, or other recriminatory action against such hospital or health care f a c i l i t y , o r any per- sonnel,agent, o r governing board thereof." Although the constitutionality of section 69-5223 was questioned by p l a i n t i f f s i n o r a l argument, we need not decide that issue a t the present time. W e merely use section 69-5223 a s persuasive authority, bearing on the legislative intent in enacting section 69-5217, for the purpose of resolving the ambiguity inherent i n the l a s t sentence of section 69-5217, R.C.M. 1947. Viewing the two sections together, the resolution of the ambiguity is readily apparent. With respect t o the issue of voluntary s t e r i l i z a t i o n , the physician has exclusive direction over h i s patient subject t o rules and regulations based upon religious o r moral tenets. It i s clear the hospital's rules respecting s t e r i l i z a t i o n violate neither the United States Constitution nor the laws of the s t a t e of Montana. The finding of no "state action" by the federal d i s t r i c t court i s - r e s judicata i n t h i s action. The d i s t r i c t court therefore properly refused t o issue a permanent injunction re- straining Holy Rosary Hospital from enforcing its rules prohibiting sterilizationd.Mn the hospital by granting summary judgment i n favor of the hospital. The judgment i s a£ firmed. Justice. 0 W e concur: / r---rF-rPrrr*rbrrrrd-~---r--r----------- Chief Justice n -- Justices.