Court Opinion

ID: 2964655
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:29:01.726988+00
Date Added: 2024-06-11T09:18:46.743631
License: Public Domain

USCA1 Opinion

	

                            United States Court of Appeals
                                For the First Circuit
                                 ____________________

          No. 96-1409

                                JUAN A. DAVILA-LOPES,

                                Plaintiff, Appellant,

                                          v.

                              JOSE SOLER ZAPATA, ET AL.,

                                Defendants, Appellees.
                                 ____________________

                                     ERRATA SHEET
                                     ERRATA SHEET

               The opinion of this Court issued on April 17, 1997, is
          corrected as follows:

               Page 2, second paragraph, line 5, change "appellants" to
          "appellees."

                            United States Court of Appeals
                                For the First Circuit
                                 ____________________

        No. 96-1409

                                JUAN A. DAVILA-LOPES,

                                Plaintiff, Appellant,

                                          v.

                              JOSE SOLER ZAPATA, ET AL.,

                                Defendants, Appellees.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF PUERTO RICO

                    [Hon. Hector M. Laffitte, U.S. District Judge]
                                              ___________________

                                 ____________________

                                        Before

                                 Selya, Circuit Judge,
                                        _____________
                            Coffin, Senior Circuit Judge,
                                    ____________________
                              and Stahl, Circuit Judge.
                                         _____________
                                 ____________________

            Guillermo Ramos Luina for appellant.
            _____________________
            Sigfredo  Rodriguez-Isaac, Assistant Solicitor General, Department
            _________________________
        of  Justice, with whom Carlos  Lugo Fiol, Solicitor  General, and Edda
                               _________________                          ____
        Serrano Blasini,  Assistant Solicitor General,  were on brief  for the
        _______________
        Commonwealth of Puerto Rico.
            Eli B. Arroyo  for appellees  Ausberto Alejandro Benitez, Jose  M.
            _____________
        Dalmasy Montalvo and Edgar Belmonte.

                                 ____________________

                                    April 17, 1997
                                 ____________________

               COFFIN,  Senior Circuit  Judge.   This  is  an appeal  by  a
                        _____________________

          physician from a judgment dismissing his   1983 complaint against

          officials of  a Puerto Rico  regional hospital  who rejected  his

          initial  application  for  limited  courtesy  privileges  without

          explanation  or hearing, in  violation of  hospital by-laws.   It

          raises the interesting  question whether the  hospital's detailed

          set  of   procedural  regulations  created  a  property  interest

          entitling  appellant to procedural due process.  We conclude that

          they did not.

               Appellant,  a licensed  physician, has  invoked 42  U.S.C.  

          1983, claiming  that his  constitutional right to  procedural due

          process  was violated  by defendants,  who are  various officials

          responsible  for the operation of  the Guayama Area Hospital (the

          "Hospital").1  While some  of the appellees argued below  that no

          state action was involved,  the argument was only very  cursorily

          pursued on appeal,  without citation to  authorities.  Since  the

          Hospital  is  financed  by  the Commonwealth,  its  by-laws  were

          approved  by the Secretary of Health, and its "Governing Body" or

          final decider is the Secretary or his Regional Director, we, like

          the  district court, shall assume that the   1983 prerequisite of

          state  action  is  satisfied.    Appellant  seeks  a  declaratory
                              
          ____________________

               1  There are two groups of defendants-appellees.  One
          consists of the present and former Secretary of the Department of
          Health of the Commonwealth, Regional Director of the Department
          for the Southern Region, and Chief Executive Director of the
          Guayama Area Hospital.  The second consists of the three hospital
          officials, Dr. Alejandro and two other doctors, who constituted
          the Executive Committee which initiated the action complained of. 
          Our reference to "the Hospital" will embrace the interests of
          all.

                                         -3-

          judgment, compensatory  and punitive  damages, and  an injunction

          giving him his requested hospital privileges.2

                                  Factual Background
                                  __________________

               The factual  setting is  the following.   In 1986  appellant

          joined the Hospital's regular staff in the Department of Internal

          Medicine.   In 1987, after  some history of  difficulties, he was

          dismissed from the Medical Faculty of the University charged with

          operating the  Hospital, and all his  privileges were terminated.

          Appellant  thereupon  brought  suit in  a  Commonwealth  Superior

          Court.   That court rendered a judgment  on June 7, 1990 that the

          Hospital  acted  on  ample  grounds, citing  some  seven  reasons

          proffered  by the  Hospital,  ranging from  appellant not  making

          rounds when on call,  to being tardy or not  attending outpatient

          clinics,  and  seeking  out  intensive  care  patients  who  were

          insured.  

               Less than ten  months later,  on April  29, 1991,  appellant

          applied anew for Hospital privileges.  Not having a contract with

          the  University, he  was eligible  for only  Courtesy Privileges,

          which  were reserved for physicians who would not admit more than

                              
          ____________________

               2  Appellant mentions in his brief a pendent state claim
          which he asserts was improperly and inadvertently included in the
          dismissal of the complaint.  He asks us, in the event of an
          affirmance, to clarify the record to show that the dismissal of
          the state claim was for lack of jurisdiction.  We see nothing in
          the complaint that rises to the dignity of a state claim. 
          Although at one point it invokes 28 U.S.C.   1367 (concerning
          supplemental jurisdiction), the only reference to state law is
          found in the prayer for relief from, inter alia, violation "of
                                               _____ ____
          the applicable laws of the Commonwealth of Puerto Rico and
          regulations."  This falls far short of identifying any pendent
          state claim.  

                                         -4-

          fifteen  patients for  hospital  care  per  year.     Thereafter,

          appellant  faced  a  period   of  apparent  stonewalling  by  the

          hospital, as he made repeated  inquiries as to the status of  his

          request.    Eventually, on  November  11, 1991,  his  request for

          privileges was  denied  by the  Regional Director  and he  sought

          review.   A hearing  of sorts  was held on  January 17,  1992, at

          which appellant was unable  to obtain a statement of  reasons for

          the  rejection of his request.  Shortly thereafter, appellant was

          notified  that  the  decision   to  reject  his  application  for

          privileges  had been  ratified.  On  October 23,  1992, appellant

          filed his complaint in the present case.

               The   By-Laws  of   the   Hospital  are   comprehensive  and

          procedurally detailed.   There are five  categories of staff,  of

          which the Courtesy Staff is  one, along with Consulting,  Active,

          Associate,  and  Special  Associate  Staff. (Art.  III,  Sec.  2)

          Appointment  of the  Courtesy Staff  is "through  regular Medical

          Staff  channels."    (Art. VIII,  Sec.  5)    After an  applicant

          furnishes some fifteen different documents (Art. III, Sec. 3) and

          various  releases   and  authorizations  (Art.   III,  Sec.   4),

          subsequent  steps  include a  written  report  by the  Department

          Chief,   deliberation  and   recommendation   by  the   Executive

          Committee,  and, in  the event  of an  adverse  recommendation, a

          hearing before a specially convened hearing committee. 

                 Prior to  any hearing, a notice to the practitioner "shall

          contain a concise statement of the practitioner's alleged acts or

          omissions, including  [patient records]  or the other  reasons or

                                         -5-

          subject matter forming the basis for the adverse recommendation."

          Provisions governing hearings cover the composition of the panel,

          the duties  of the  moderator, allowance for  representation, the

          examining and  cross examining of witnesses,  the introduction of

          exhibits,  the  making of  a record,  and  the filing  of written

          memoranda.  In  hearings on  most issues, the  By-Laws place  the

          burden  on  the  institutional  body  to show  that  the  adverse

          recommendation was  not  "arbitrary, irrational  or  capricious."

          But in  hearings involving  a "Denial  of initial  appointment to

          staff status"  (Item 1,  Article IV,  page 16  of  By-Laws) or  a

          "Denial of  requested clinical  privileges" (Item 7,  Article IV,

          page 17 of By-Laws), the By-Laws provide that

               it  will be  the practitioner  who shall  thereafter be
               responsible for supporting by evidence his challenge to
               the recommendation or action  and shall prevail only if
               he  establishes by clear  and convincing  evidence that
               the recommendation or  action was arbitrary, irrational
               or capricious. (Page 26 of By-Laws)

          Moreover, in hearings relating to these same items,

               the evidence presented by the . . . Executive Committee
               in  support of  its  initial determination  .  . .  may
               relate  to  .  .  .  negative  judgments of  such  body
               regarding information contained  in the  practitioner's
               application  or  request,  and related  references  and
               documentation  to the  effect that such  materials, for
               reasons explained  by such  body, fail to  establish an
               acceptable  basis  for   granting  the  application  or
               request. Id.
                        __

                                      Analysis 
                                      _________

               It  is clear  that the  process given  to appellant  did not

          follow the steps  set forth in the By-Laws.   The appellees, like

          the  district court,  relied  for the  notice requirement  of due

          process  on  the appellant's  knowledge  of the  1987  charges of

                                         -6-

          misconduct,  as  contained  in  the  "Findings  of  Fact"  of the

          Commonwealth  Superior  Court.   This would  seem  to be  a shaky

          foundation in light of the passage of time,  although we note the

          entire absence of  any indication given by appellant that changes

          in his conduct could be expected.

               The critical and  threshold question is  whether appellant's

          interest  in  being given  courtesy  privileges  is "grounded  in

          substantive legal relationships  defined by . . .  specific state

          or federal rules  of law."3   As the Supreme  Court explained  in

          Board of Regents  v. Roth, 408  U.S. 564, 577  (1972), to have  a
          ________________     ____

          constitutionally protected interest, one  must have "more than an

          abstract  need,"     one  must   have  "a  legitimate   claim  of

          entitlement,"  "defined by an existing rule or understanding that

          stems from an independent source such as state law . . . ."   For

          example,  where  rules so  defined  welfare  eligibility that  an

          applicant had a right to a hearing to attempt to demonstrate that

          he  was  within the  statutory  definition,  this  met the  above

          requirements.  See Goldberg  v. Kelly, 397 U.S. 254,  268 (1970);
                         ___ ________     _____

          see also  Bishop v. Wood, 426  U.S. 341 (1976); Meachum  v. Fano,
          ___ ____  ______    ____                        _______     ____

          427 U.S. 215, (1976).

               Our own  opinion in  Lowe v. Scott,  959 F.2d 323,  338 (1st
                                    ____    _____

          Cir.  1992), is relied upon by appellant for the proposition that

          requirements   of  adequate  process   in  decisions  "affecting"

          hospital privileges  can create  a property interest.   Appellant

                              
          ____________________

               3  Laurence H. Tribe, American Constitutional Law 677 (2d
          ed. 1988).

                                         -7-

          overreaches.     In  that  case  plaintiff   was  protesting  the

          suspension of a staff privilege to supervise nurse midwives.  See
                                                                        ___

          id.  at 325.   When  we  stated that  "[A] state  may create  the
          __

          property   interest  in  privileges   directly  by  imposing  the

          requirement . . . that all hospitals  provide physicians adequate

          process in  decisions affecting privileges,"  we were speaking in

          the context, made clear  by the preceding sentence, of  an action

          taking away something that had been enjoyed -- i.e. that a public

          hospital  could  create  a  property interest  by    "regulations

          guaranteeing that  these privileges  will not be  revoked without
                                                            _______

          cause  or  a hearing."   Id.  at 338  (emphasis supplied).   This
                                   __

          meaning was reaffirmed when we subsequently referred to  the kind

          of  state law that would be applicable  to all hospitals, i.e., a

          statute  or  court decision  "requiring  that  the revocation  of
                                                             __________

          hospital  privileges comport  with due  process."   Id. (emphasis
                                                              __

          supplied).4

               Appellant  does not  assert that  any preexisting  status or

          privilege was  taken from him.   Rather, his claim  to a property

          interest is based on the detailed procedural rules of the By-Laws

          of  the Hospital,  together  with  what  he  asserts  is  such  a

                              
          ____________________

               4  Similarly, appellant has sought to overextend Hernandez
                                                                _________
          v. Asociacion Hosp. del Maestro, 106 P.R. Offic. Trans. 96
            _____________________________
          (1977).  Appellant cites it for the proposition that actions by
          hospitals that "affect" staff privileges must comply with due
          process.  But that case involved hospital action in canceling
          membership on a hospital's medical staff and summarily suspending
          all privileges.  See id. at 101.  The Puerto Rico Supreme Court
                           ___ __
          detailed the procedures which were triggered by a suspension or
          revocation and concerned itself solely with ascertaining whether
          they had been followed.  See id. at 106.  
                                   ___ __

                                         -8-

          stringent  substantive  limitation on  the  Hospital's discretion

          that he has "a legitimate  claim of entitlement," citing Laborde-
                                                                   ________

          Garciav. PuertoRico TelephoneCo., 993F.2d 265,267 (1stCir. 1993).
          ______   _______________________

               The  existence  of a  detailed  set of  procedural  rules is

          clearly   inadequate  to  create   a  constitutionally  protected

          property  right.  As Professor  Tribe notes, "the  existence of a

          'careful  procedural  structure'  is  not  enough,"  although  he

          characterizes such  an approach  as "narrowly formalistic."5   In

          Hewitt v. Helms, 459 U.S. 460, 471 (1983), the Supreme Court made
          ______    _____

          it  clear that  "a careful  procedural structure,"  without more,

          cannot create a constitutionally protected interest, saying

               It would be ironic to hold that when a State embarks on
               such desirable  experimentation  it thereby  opens  the
               door to  scrutiny by  the federal courts,  while States
               that  choose  not to  adopt such  procedural provisions
               entirely  avoid  the  strictures  of  the  Due  Process
               Clause.

          The first part of appellant's argument therefore fails.6

               This brings us to appellant's last argument, that appellees'

          discretion was so limited  that appellant could reasonably expect

          to obtain the desired status  if he could present his case.   The

          Supreme Court  articulated the  possibility that  where stringent
                              
          ____________________

               5  Tribe, supra note 3, at 698.
                         _____

               6    This is not to say that it makes any policy sense to
          enact comprehensive rules and then not apply them to those who,
          facially, are covered by them.  It may be that appellees feared
          another lawsuit if they advanced reasons for their refusing to
          grant courtesy privileges to appellant.  Ironically, their
          failure to follow their own rules, however, did not avoid another
          lawsuit.  But, while state law might command faithful adherence
          to an institution's mandatory rules, and result in some remedy or
          sanction, violating a procedural rule does not alone accomplish
          the creation of a protectible constitutional interest.

                                         -9-

          regulations  strictly  limit state  officials'  discretion, these

          procedures  may   give  rise  to  a   constitutionally  protected

          interest.   See Hewitt,  459 U.S.  at 472.   In that  case, state
                      ___ ______

          statutes governing  the  placing of  prisoners in  administrative

          segregation   limited   correction   officials'   discretion   to

          situations in which there was "a need for control,"  "a threat of

          a serious disturbance, or  a serious threat to the  individual or

          others,"  and  notices,  hearings,  investigations,  and  release

          conditions were the subject of mandatory provisions.  Id. at 470-
                                                                __

          71  n.6.   The Court  held that  "[T]he repeated use  of explicit

          mandatory   language  in   connection  with   requiring  specific

          substantive predicates  demands a  conclusion that the  State has

          created a protected liberty interest."  Id. at 472. 
                                                  __

               This  is  to be  contrasted with  the  situation in  Olim v.
                                                                    ____

          Wakinekona, 461 U.S. 238,  249 (1983), where, despite regulations
          __________

          requiring a hearing before  an interstate transfer of  an inmate,

          the Court held that no state-created liberty interest was created

          since the regulations did  not impose "substantive limitations on

          official discretion."  The contours of "substantive  limitations"

          were   discussed  in  Justice  Brennan's  concurring  opinion  in

          Connecticut  Board of  Pardons  v. Dumschat,  452  U.S. 458,  467
          ______________________________     ________

          (1971),  cited with approval by the Olim court, as requiring that
                                              ____

          "particularized  standards" and "objective  and defined criteria"

          guide the State's decision makers.

               Our own precedents are instructive.  In Lombardo v. Meachum,
                                                       ________    _______

          548  F.2d  13,  15  (1st  Cir.  1977),  despite  prison  transfer

                                         -10-

          regulations   which   contained    a   statement   of    purpose,

          rehabilitation,  and a  directive to  officials to  treat inmates

          "with  the  kindness which  their  obedience,  industry and  good

          conduct merits,"  we  held  that no  liberty  interest  had  been

          created  since no  significant  limitations had  been imposed  on

          officials' discretion in ordering transfers.  

               Quite a  different situation was presented in Laborde-Garcia
                                                             ______________

          v. Puerto  Rico Telephone Co., 993  F.2d 265 (1st Cir.  1993).  A
            ___________________________

          telephone employee sought treatment from the State Insurance Fund

          within two months  after a recent accident.  See id. at 266.  She
                                                       ___ __

          was terminated  from her job  because the company  concluded that

          more than  twelve months had  elapsed since  an earlier  illness.

          See  id.   The  company argued  that  reinstatement was  only  an
          ___  __

          expectation  of  reemployment.   See id.  at  267.   However, the
                                           ___ __

          statute  required employers  to "reserve"  an employee's  job and

          "reinstate" the employee  if "no more  than 'twelve months'  have

          "lapse[d] . . . from the date of the accident."  Id.  
                                                           __

               Then Chief Judge Breyer, writing for our court, said:

               [T]he  workmen's  compensation statute  so  narrows the
               government's  discretion  to  refuse to  reinstate  Ms.
               Laborde (during  the relevant  twelve  months) that  it
               provides her with  a 'legitimate claim of  entitlement'
               to that  continued employment.   That is to  say, local
               law's narrowing of the employer's discretion  to decide
               not  to   reinstate  means   that  Ms.   Laborde  could
               reasonably have  believed, and relied  upon her belief,
               that  local  law  would  likely permit  her  to  remain
               employed.  Id.
                          __

               With  these  strictures  in  mind,  we  assess  whether  the

          standards governing the Hospital's extension of privileges are so

          particularized,  objective, and  defined,   and  also narrow  the

                                         -11-

          Hospital's  discretion  so  significantly that  an  applicant  in

          appellant's position could be  reasonably confident that he would

          be granted courtesy privileges.

               To begin, the  substantive standard set forth in the By-Laws

          is that decisions must not be made  arbitrarily, irrationally, or

          capriciously.  Contrary to  appellant's argument, these words are

          not  synonymous  with "just  cause."   Decisions could  be wrong-

          headed, based on false  assumptions, overcautious or overzealous,

          penny-pinching  or  open-handed,  and  exhibit a  poor  sense  of

          priorities and yet escape denomination  as arbitrary, irrational,

          and capricious.  Moreover, in cases involving the kind of request

          appellant was  making, the burden of  proving arbitrariness, etc.

          had been  placed on him.   Not only that,  but he had  the severe

          burden of proof by  clear and convincing evidence.   Finally, the

          decision makers  were entitled to  arrive at a  negative judgment

          that the materials and information submitted failed "to establish

          an acceptable basis for granting the application."

               We  cannot  believe that  words  of  maximum generality  and

          minimum  bite such  as  "arbitrary, irrational  and  capricious",

          twice  and perhaps three times diluted by the shifting of burden,

          the  heightening of required proof  to carry the  burden, and the

          provision  for   a  catch-all  negative  judgment   of  what  was

          "acceptable,"  suffice to  create a  constitutionally protectible

          property right that could serve as the basis for compensatory and

          punitive  damages.  Administrative  officials generally  are held

          under  administrative  procedure  acts  to  a  standard  free  of

                                         -12-

          arbitrariness,  irrationality, and  caprice.   See Administrative
                                                         ___

          Procedure Act, 5 U.S.C.A.    706(2)(A) (West 1996).  It cannot be

          that an  explicit articulation of  the same  standard changes  an

          "abstract  need or desire" into  a protectible right.   In short,

          their discretion was not so  circumscribed that such an  interest

          was created.  

               Affirmed.   Only  the  Alejandro appellees  are entitled  to
               ____________________________________________________________

          costs.7  
          ______

                              
          ____________________

               7  Normally, a successful appellee is entitled to costs.  In
          this appeal we have found the Commonwealth's brief so unhelpful
          that we depart from the usual rule.

                                         -13-