Title: NORTH VALLEY HOSP v KAUFFMAN

State: montana

Issuer: Montana Supreme Court

Document:

No. 13057 I N THE SUPREME COURT O F THE STATE O F M O N T A N A 1975 NORTH VALLEY HOSPITAL, INC. , P l a i n t i f f arid Respondent, -vs - DAVID V. KAUFFMAN, M.D., Defendant and Appellant. Appeal from: D i s t r i c t Court of t h e Eleventh J u d i c i a l D i s t r i c t , Honorable Robert S. Keller, Judge presiding. Counsel of Record : For Appellant : Warden, Walterskirchen and Chris tiansen, K a l i s p e l l , Montana M e r r i t t N. Warden argued, K a l i s p e l l , Montana For Respondent: Murphy, Robinson, Heckathorn and P h i l l i p s , Kalispe1.1, Montana I. James Heckathorn argued, K a l i s p e l l , Montana For Amicus Curiae: Smith, Smith and Sewell, Helena, Montana Chadwick Smith argued, Helena, Montana Submitted : December 1 2 , 1975 Decided: JAN 1 5 1976 'Jir. J u s t i c e John Conway 'iarrisun 9eLivereJ the apinion of t h e &:ourt. This appeal i s from t h e judgment entered i n t h e d i s t r i c t court, Flathead County, Hon. Robert S. Keller, presiding without 3 jury. That judgment orders, adjudges and decrees t h a t David V. Kauffman, M.D., be enjoined from f u r t h e r u t i l i z a t i o n of t h e f a c i l i t i e s of t h e North Valley Hospital, Inc. The p r i n c i p a l s involved herein a r e : (1) North Valley Hospital, Inc., p l a i n t i f f and respondent, hereiriafter r e f e r r e d t o a s Hospital. (2) David V. Icauffman, 1 1 . D. , defendant and a p p e l l a n t , h e r e i n a i t e r r e f e r r e d t o a s Appellant. ( 3 ) The Board of Directors of t h e Hospital, h e r e i n a f t e r z a l l e d the Board. ( 4 ) The p r i v a t e physicians p r a c t i c i n g i n t h e surrounding area who u t i l i z e t h e Hospital f o r p a t i e n t c a r e , h e r e i n a f t e r r e f e r r e d t o a s the Medical S t a f f . The Hospital i s a p r i v a t e , nonprofit corporation, con- 3i;~uc:~ed l n p a r t with Hill-Burton f e d e r a l funds, t h a t operates i n Whitefish, Montana. It i s governed by t h e Board, made up of members UT t h e community. Hospital has no paid s t a f f of doctors o r iriterns. It has a paid administrator, one Burl Hatfield, who handles t h e day t o day operations of t h e f a c i l i t y under t h e o v e r a l l zupervision of t h e Board. Appellant was licensed t o p r a c t i c e medicine i n Montana i n 1338 and has practiced i n t h e Whitefish area s i n c e 1959. Ile a i i l i z e d t h e f a c i l i t i e s of t h e Hospital during t h a t period and held r i l o ~ t of t h e various o f f i c e and served on most of the Hospital's For a number of years Appellant had problems a t t h e Yospiciii which brought about suspensions and d i s c i p l i n a r y measures irom t h e Medical S t a f f . During t h e 1 9 6 0 f s , f o r a one year period, he was required t o have a t Least ane ocher surgeon with him for a l l surgery done a t t h e Hospital. During much of t h e time he practiced a t t h e Hospital he had d i f f i c u l t i e s with t h e s t a f f i n not maintaining proper records i n regard t o h i s p a t i e n t s . F i n a l l y , i n t h e late summer 1974, t h e Medical S t a f f recommended and t h e Board approved, t h a t t h e Hospital p r i v i l e g e s of Appellant not be renewed. Several meetings were held a t which Appellant was present, a t l e a s t f o r p a r t of t h e meeting, where the decision not t o renew was discussed i n some d e t a i l . Appel- l a n t requested a hearing, a s provided i n t h e by-laws of t h e Yospital, and t h a t hearing was held on November 26, 1974. A t t h e hearing a l i s t of some 23 "charges" o r "problem dieas" was presented t o Appellant. H e a l l e g e s t h i s was t h e f i r s t islr~ie he had seen t h e agenda of "charges" o r "problem areas" 2 1 1 which t h e Medical S t a f f had acted. Thereafter, t h e Medical >i law No. 1: hat t h e p l a i n t i f f i s a p r i v a t e , nonprofit cor- poration, but s p e c i f i c a l l y disclaimed any r e l i a n c e upon the ' p r i v a t e ' nature of t h e corporation, and rsked t o be t r e a t e d a s i f it were public; t h a t i n !ight of t h e r e c e i p t and use of Hill-Burton funds, it llust be t r e a t e d a s i f it is public, i n so f a r as liscriminatory r u l e s and regulations a r e concerned. I I Undoubtedly, the Hospital agreed t o a garden v a r i e t y of r u l e s and regulations r e l a t e d t o both i t s operation and t o the use of Hill-Burton funds i n connection with i t s acceptance of b e n e f i t s under t h e Act. Here, we a r e not faced with the type of discrimination t h a t arose i n G.C. Simpkins v. Moses H. Cone Memorial Hospital, 323 F.2d 959, where negro physicians, d e n t i s t s and patients brought an action f o r declaratory and injunctive r e l i e f against hospitals receiving Hill-Burton funds which dis- criminated against Negro c i t i z e n s . Such a r e not the f a c t s i n the i n s t a n t case and we find no basis f o r concluding t h a t by accepting Hill-Burton funds the Hospital unwittingly surrendered any r i g h t s it otherwise possessed t o determine the q u a l i t y of medical practice i n i t s hospital. Montana i s but one of a number of s t a t e s where t h e r u l e making power has been considered favorable t o hospital a u t h o r i t i e s . Moore v. Board of Trustees of Carson-Tahoe Hospital, 88 Nev. 207, 495 P.2d 605; Silver v. Castle Memorial Hospital, (Hawaii-1972), 497 P.2d 564; v. Auburn General Hospital, 10 Wash.App. 361, 517 P.2d 240. The r a t i o n a l e of these cases is t h a t both public and private hospitals have t h e discretionary r i g h t t o exclude, suspend o r take away s t a f f privileges upon grounds s e t by t h e medical s t a f f . The f a c t t h a t Appellant i s a licensed practicing physician i s not, a s Appellant argues, a controlling factor. The general r u l e throughout the country, a s noted i n the Anno. 37 ALR3d, Physician, Surgeon---Hospital Exclusion, pp. 645, 666, is: 1 1 It i s well s e t t l e d t h a t a licensed physician o r sur- geon does not have an unqualified r i g h t , constitutional motherwise, t o practice h i s profession i n a public hospital. Therefore, the cases involving charges of improper exclusion o r discrimination against such i n s t i - tutions have been decided upon other grounds. 1 1 W e concur. The licensing by the s t a t e i s a prerequisite t o admission t o s t a f f membership i n any hospital, p r i v a t e o r public. Granting the privilege of s t a f f membership t o a hospital i s an e n t i r e l y separate matter and t h a t power r e s t s i n a board acting i n accordance with f a i r r u l e s and regulations. Such board i s vested with regulative discretion i n i t s powers of appointment and reappointment of medical personnel t o its s t a f f . This power includes t h e r i g h t of r e f u s a l of membership t o a physician who f a i l s t o abide by the r u l e s of the hospital. Dayan v. Wood River Township Hospital, 18 Ill.App.2d 263, 152 N.E.2d 205. Here, t h e r e a l question i s whether or not the operating r u l e s of the Hospital a r e reasonable and whether o r not the procedures provided by the by-laws f o r notice and hearing were followed. Appellant's second issue i s a s t o the procedure followed, and whether Appellant's r i g h t t o due process was violated. While the r i g h t t o practice a profession i s a l i b e r t y i n t e r e s t protected by the Fourteenth Amendment, Shaw v. Hospital Authority of Cobb County, 507 F.2d 625, here Appellant was not precluded from exercising t h a t r i g h t by the by-laws of the Hospital. He need only have complied with those requirements t o have continued h i s membership on the s t a f f . This consideration i s s u f f i c i e n t t o dispose of h i s possible property i n t e r e s t a s well. ' W e find the hearings conducted afforded due process. Appellant does not deny he received proper n o t i c e but contends he was denied due process of law because the Medical Staff hearing h i s case was prejudiced against him. A s previously s e t f o r t h , the t r i a l court a f t e r hearing the case f o r several days, referred the m a t t e r b c k t o t h e Medical Staff f o r another hearing and t o be c e r t a i n ellant ant's r i g h t s were protected the court attended the hearing a s a spectator t o see t h a t the hearing was f u l l y and f a i r l y conducted. Following t h a t hearing every member of the Medical Staff of the Hospital voted t o deny Appellant s t a f f privileges. This Court i n Hulit, considering t h e court's function i n t h i s area, referred t o a statement i n Sosa v. Board of Managers of Val Verde Memorial Hospital (5th C i r . 1971), 437 F.2d 173, he court i s charged with the narrow responsibility of assuring t h a t the qualifications imposed by the Board a r e reasonably r e l a t e d t o the operation of the hospital and f a i r l y administered. I n short, so long a s [hospital a c t i o n s ] a r e administered with fairness, geared by a r a t i o n a l e compatible with hospital respon- s i b i l i t y , and unencumbered with irrelevant considera- t i o n s , a court should not i n t e r f e r e . Courts must not attempt t o take on the escutcheon of Caduceus."' Our function i s twofold. F i r s t t o determine whether due process was accorded. From our discussion heretofore, it i s c l e a r t h a t i t was. Second, t o determine whether there was an a r b i t r a r y and capricious decision made by the Medical S t a f f . That a conscientious judgment was made i s c l e a r - - j u s t the opposite of an a r b i t r a r y and capricious one. The competent Medical Staff opinions a r e s u f f i c i e n t t o uphold the findings and decision of the S t a f f , the Board and the t r i a l court. Accordingly, the decision of the t r i a l court i s affirmed.