Hicks v. Southern Maryland Health Systems Agency

737 F.2d 399
CourtCourt of Appeals for the Fourth Circuit
DecidedJune 18, 1984
DocketNo. 83-1305
StatusPublished
Cited by10 cases

This text of 737 F.2d 399 (Hicks v. Southern Maryland Health Systems Agency) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hicks v. Southern Maryland Health Systems Agency, 737 F.2d 399 (4th Cir. 1984).

Opinion

MURNAGHAN, Circuit Judge:

The action arose out of the discharge, on August 1, 1980, of William H. Hicks and Vivian H. Mills, by their employer the Southern Maryland Health Systems Agency. The SMHSA is one of three types of health systems agencies contemplated in the National Health Planning and Resource Development Act.1 It operates largely autonomously of the federal entity involved, the Department of 'Health and Human Services. In June, 1980, through an error by the Maryland National Bank, but through no fault of SMHSA, the paychecks of Mills and other employees were dishonored. SMHSA and MNB arranged to rectify the matter, and all SMHSA employees were apprised of the occurrence and correction of the error.

At this point, the parties disagree as to the facts, although, as will be shown, the dispute is over matters irrelevant to the propriety of the district court’s disposition of the action. According to appellees, on July 10, 1980, Hicks and Mills met with Gail Valentinsen, the Regional Office Project Officer of the Department of Health and Human Services dealing with SMHSA. They told her that some staff members had not been paid for June, and suggested the possibility of fraud within SMHSA. They secretly sent the Regional Office a photocopy of the MNB overdraft statement erroneously .listing six checks as unpaid and returned, despite their knowledge that none of the checks had been returned.

Appellants agree that the July 10 meeting did indeed take place. Their affidavits, however, relate only that “[sjubsequent to some remarks ... about payless paydays,” Valentinsen questioned them about the occurrence, and “expressed some surprise to find that some paychecks had not been honored prior to July 1, 1980.” Although appellants contend that there was no further contact between them and Valentinsin prior to their discharge, it is uncontrovert-ed that Hicks did forward to the federal authorities the erroneous copy of the MNB statement.

SMHSA took the position that plaintiffs’ conduct violated a policy directive concerning communication with the federal authorities. It further regarded the communication a false statement, casting aspersions on the integrity of SMHSA. On August 1, 1980, the plaintiffs were dismissed by confidential written notices. Plaintiffs exercised their right to appeal the discharge, and hearings before the SMHSA Management Committee were held on August 25, 1980, after which the Committee unanimously found that Hicks and Mills had been discharged for cause.

Plaintiffs thereafter filed an action, naming as defendants the SMHSA; Robert W. Sherwood, Jr., the executive director of the SMHSA; the Secretary of the Department of Health and Human Services; Gail Valen-tinsin; the State of Maryland; Prince George’s County; Calvert County; St. Mary’s County; and Charles County. The action sought monetary damages from all defendants for alleged violations of 1) the First Amendment; 2) the due process clauses of the Fifth or Fourteenth Amendments; 3) 5 U.S.C. § 2302(b)(8); 4) Titles VI and VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000d et seq. and 2000e-2; 5) 42 U.S.C. § 1983; 6) Md.Ann.Code art. 41 § 252; and 7) the Federal Act at 42 U.S.C. § 300Z-l(b)(3)(C).

All the defendants filed either or both motions to dismiss and motions for summary judgment. Plaintiffs’ sole response was the filing of their own Motion for Partial Summary Judgment, and an opposition to the Motion for Summary Judgment of the Federal Defendants. Their motion was supported solely by affidavits from Hicks and Mills, which discussed only the facts surrounding the July 10 meeting with Va-lentinsen and subsequent discharge. No affidavits were filed regarding any other [402]*402factual issue.2 Nor were responses to the motions of any other defendants filed.

The district court granted the motions of each of the defendants, and plaintiffs appealed. On appeal, appellants contend that “the trial court erred in finding no state action, no federal action, no standing and in dismissing the Title VI claim. Therefore, the Trial Court erred in dismissing all Counts.” We proceed to consider each of the contentions.

I.

Whether plaintiffs should have been permitted to proceed with their claims under the first, fifth and fourteenth amendments depends on whether there is state or federal action. The somewhat elusive terrain of the doctrine of state action was the subject of three Supreme Court decisions in 1982, Lugar v. Edmondson Oil Co., 457 U.S. 922, 102 S.Ct. 2744, 73 L.Ed.2d 482 (1982), Rendell-Baker v. Kohn, 457 U.S. 830, 102 S.Ct. 2764, 73 L.Ed.2d 418 (1982), and Blum v. Yaretsky, 457 U.S. 991, 102 S.Ct. 2777, 73 L.Ed.2d 534 (1982). From these eases, it is clear that

[t]he ultimate issue in determining whether a person is subject to suit under § 1983 is the same question posed in cases arising under the Fourteenth Amendment: is the alleged infringement of federal rights “fairly attributable to the State?”

Rendell-Baker v. Kohn, supra, 457 U.S. at 838, 102 S.Ct. at 2770, citing Lugar v. Edmonson Oil Co., supra, 457 U.S. at 937, 102 S.Ct. at 2754.

In Rendell-Baker v. Kohn, supra, 457 U.S. at 839-843, 102 S.Ct. at 2770-2772 (private school not a state actor despite public funding and “close relationship” with state) and Blum v. Yaretsky, supra, 457 U.S. at 1005-1012, 102 S.Ct. at 2786-2790 (private nursing home not a state actor despite state regulation and state and federal funding), the Court considered four factors, gleaned from its earlier state action cases, in determining whether the relevant actions were “fairly attributable to the State”: 1) the extent and nature of public funding to the institution, 2) the extent and nature of regulation on the institution, 3) whether the institution’s activity constitutes a public function in the “exclusive prerogative” of the state, and 4) whether there is a “symbiotic relationship” between the institution and the state.3

The first, third, and fourth considerations are easily disposed of here. The SMHSA’s funding is federal, not state. As for “public function,” the court in Blum restricted its application to cases where the state traditionally and exclusively had assumed day-to-day administration, a situation in no way demonstrated to be present in the ease of the SMHSA. Since plaintiffs did not show that the state profited from the termination of plaintiffs’ employment, no “symbiotic relationship” exists.

On the critical factor of regulation, the district court found that the SMHSA was not an official state agency, that the SMHSA’s personnel policies were not subject to regulation, and that the goals of the Federal Act were wholly distinct from internal administration of personnel of the Health Systems Agencies. Those determinations, uncontested in all essential respects by plaintiffs,4

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737 F.2d 399, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hicks-v-southern-maryland-health-systems-agency-ca4-1984.