Court Opinion

ID: 197307
Source: CourtListenerOpinion
Date Created: 2011-02-07 03:26:47+00
Date Added: 2024-06-11T15:11:13.721187
License: Public Domain

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-