Defendant's Answer to Plaintiffs' First Amended Complaint

     [||93b79901-265b-47f1-81c8-8b885ded0a70||] IN THE C 

  

UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF INDIANA rep 1713/8 

HAMMOND DIVISION RICHARD | 

. BERNICE TERRY, ET AL., 

Plaintiffs 

VS. Cause No. H 76-373 

METHODIST HOSPITAL OF GARY, INC., 

An Indiana Not For Profit 
Corporation, and JOSEPH CALIFANO, 
as United States Secretary of 
Health, Education and Welfare, 

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Defendants 

DEFENDANT'S, METHODIST -HOSPITAL-OF- GARY, -INC., 
ANSWER TO PLAINTIFFS FIRST -AMENDED--COMPLAINT 
  

  

I. 

1. Defendant denies each and every allegation in rhetorical 

paragraph 1 of Paragraph I of plaintiffs' Amended Complaint. 

2. Defendant denies each and every allegation in rhetorical 

paragraph 2 of Paragraph I of plaintiffs' Amended Complaint. 

IX, 

3. Defendant admits that plaintiff, Bernice Terry, 

is a Black, is a resident of Gary, Indiana, and has used the 

facilities of Gary Methodist Hospital. Defendant has no 

knowledge sufficient to form a belief as to the truth of 

the allegations that it is likely that she will require 

use of hospital facilities, including emergency room treatment 

in the future. Defendant denies each and every remaining 

allegation in rhetorical paragraph 3 of Paragraph II of 

the plaintiffs' Amended Complaint. 

 



  

4. Defendant denies each and every allegation in rhetorical 

paragraph 4 in Paragraph II of the plaintiffs' Amended Complaint. 

III. 

5. Defendant admits the allegations of rhetorical 

paragraph 5 in Paragraph III of the plaintiffs' Amended 

Complaint, except that defendant denies that as a condition 

for the receipt of all federal funds Methodist Hospital 

is subject to the requirements of Title VI. 

6. Defendant admits the allegations in the first sentence 

of rhetorical paragraph 6 in Paragraph III of the plaintiffs’ 

Amended Complaint. Defendant has no knowledge sufficient 

to form a belief as to the truth of the allegations contained 

in the second sentence of rhetorical paragraph 6 in Paragraph 

III of the plaintiffs' Amended Complaint. 

IV. 

7. Defendant admits the allegations of rhetorical 

paragraph 7 in Paragraph IV of the plaintiffs' Amended Complaint. 

8. Defendant admits the allegations of rhetorical 

paragraph 8 in Paragraph IV of the plaintiffs’ Amended Complaint, 

except that it has no knowledge sufficient to form a belief 

as to the truth of the allegation that the population of 

Gary is 53% Black and 10% Hispanic. 

9. Defendant admits the allegations of rhetorical 

paragraph 9 in Paragraph IV of the plaintiffs' Amended Complaint 

that on March 1, 1967, the Gary Joint Hospital Fund, Inc., 

was issued a charter by the State of Indiana, that this 

organization was structured to combine the efforts of many 

people to enter into a cooperative fundraising drive for 

the benefit of St. Mary Mercy Hospital and Methodist Hospital, 

and that a public subscription goal was sought from industry, 

iD 

 



  

business, trust foundations and individuals in the Gary 

Hospital service area, in the amount of $3,500,000.00, which 

was to be divided between St. Mary Mercy Hospital and Methodist 

Hospitals. Defendant denies each and every remaining allegation 

of rhetorical paragraph 9 in Paragraph IV of the plaintiffs’ 

Amended Complaint. 

10. Defendant admits that it received approximately 

$2,249,500.00 from the Gary Joint Hospital Fund, Inc. Defendant 

denies each and every remaining allegation of rhetorical 

paragraph 10 in Paragraph IV of the plaintiffs' Amended 

Complaint. | 

11. Defendant denies each and every allegation of rhetorical 

paragraph 11 of Paragraph IV of the plaintiffs' Amended 

Complaint. 

12. Defendant denies each and every allegation of rhetorical 

paragraph 12 of Paragraph IV of the plaintiffs' Amended 

Complaint. 

13. Defendant admits the allegations of rhetorical 

paragraph 13 of Paragraph IV of the plaintiffs' Amended 

Complaint. 

14. Defendant denies the allegations of rhetorical 

paragraph 14 of Paragraph IV of the platnt ils’ Amended 

Complaint. 

15. Defendant admits the allegations of rhetorical 

paragraph 15 of Paragraph IV of the plaintiffs' Amended 

Complaint. 

16. Defendant has no knowledge sufficient to form a 

belief as to the truth of the allegations of rhetorical 

paragraph 16 of Paragraph IV of the plaintiffs' Amended 

Complaint. 

 



  

17. Defendant admits that HEW gave Civil Rights clearance 

and granted the Hill-Burton application for the 1976 proposal. 

Defendant denies each and every remaining allegation of 

rhetorical paragraph 17 of Paragraph IV of the plaintiffs’ 

Amended Complaint. | 

18. Defendant denies each and every allegation of rhetorical 

paragraph 18 of Paragraph IV of the plaintiffs' Amended 

Complaint. 

Vv. 

19. Defendant denies each and every allegation of 

rhetorical poaragraph 19 of Paragraph V of the plaintiffs’ 

Amended Complaint. 

20. Defendant denies each and every allegation of rhetorical 

paragraph 20 of Paragraph V of the plaintiffs' Amended Complaint. 

21. That as to any allegation made by the plaintiffs 

in any rhetorical paragraph not heretofore admitted, denied 

or otherwise addressed, the same is now specifically denied. 

22. That the action brought by the plaintiffs is frivolous 

and without merit. 

AFEIRMATIVE DEFENSES 
  

I. This Court lacks jurisdiction of the subject matter 

of this Complaint for the following reasons: 

l. The Administrative Procedures Act, 5 U.S.C. 

$101, et seq., precludes judicial intervention into HEW's 

§1122 approval of defendant's Hill-Burton loan guarantee 

and interest subsidy application. 

 



  

2. The plaintiffs' Complaint fails to disclose 

the existence of a case and controversy as is required for 

a constitutional exercise of jurisdiction since (a) plaintiffs 

herein lack standing to bring this suit in that they have 

not alleged an injury in fact and the Court is unable to 

redress the individual plaintiffs' alleged injuries by granting 

the relief requested and (b) this matter is not ripe for 

judicial review since a final administrative decision has 

not been made regarding certain civil HEI Wen 

lodged against Methodist Hospital concerning the subject 

matter of this suit and therefore the controversy has not 

reached a sufficiently concrete stage and is too speculative 

to warrant judicial consideration. 

3. The Complaint fails to disclose the existence 

of an "actual controversy" which is a further limitation 

on suits brought under the Declaratory Judgment Act, 28 

U.5.C. §2201 et seg. 

4. The actions taken by Methodist Hospital are 

not "State actions" under the Civil Rights Act of 1871, 

42 U.S.C. §1983 or the "State actions" to which the Fourteenth 

Amendment applies. 

6. That no private right of action exists under 

Title VI of the Civil Rights Act of 1964 against a private 

institution such as Methodist Hospital or against an individual 

such as Denis E. Ribordy. 

II. Plaintiffs have failed to state a claim upon which 

relief can be granted for the following reasons: 

1. Plaintiffs have failed to exhaust the administrative 

remedies available to them under 45 C.F.R. §80.0 et seq. 
  

Under this regulation, any person who believes he has been 

the subject of discrimination in a program receiving financial 

 



  

assistance through the Department of Health, Education and 

Welfare may avail himself of the remedy provided in 45 C.F.R. 

§80.7. The plaintiffs have failed to pursue this satisfactory 

remedy. Furthermore, plaintiffs have failed to avail themselves 

Of the remedy prescribed pursuant to I.C. §22-9-1-1 (The 

Indiana Civil Rights Act) or the Regulations promulgated 

thereunder or the procedures applicable thereto under I.C. 

§4-22-1-1 et seq. (The Indiana Administrative Procedural 

Act), and have thereby failed to exhaust administrative 

remedies. 

2+. “The Hill-Burton Act, 42 U.8.C. 8291 et seq. , 

which sets out the various provisions governing loan guarantee, 

exempts loan guarantee programs from its coverage and provides 

that the program, such as the one in question in this suit, 

is incontestable except Soir cases involving fraud and mis- 

representation. No such allegations have been made in the 

plaintiffs' Complaint. 

2 Section 1122 of the Social Security Act, as 

amended in 1972, 42 U.S.C. §1320 a-1 is in no way applicable 

to Methodist Hospital since plaintiffs have not nor could 

allege a factual situation, short of fraud or criminal collusion, 

which would state a cause of action against Methodist Hospital 

under Section 1122. 

4. Plaintiffs have not alleged facts sufficient 

to show a violation of 42 U.S.C. §1983 in that it has not 

shown that Methodist Hospital was acting under color of 

state law and plaintiffs have not alleged facts sufficient 

tC constitute a deprivation of a right guaranteed by the 

Fourteenth Amendment to the Federal Constitution. 

III. Plaintiffs are guilty of laches in that they 

seek to reverse certain administrative decisions which were 

made, with full knowledge of a number of the plaintiffs, 

more than four years prior to the institution of this action. 

-6— 

 



  

“ * 

These plaintiffs, who knew exactly what administrative 

determinations were being made, did not complain about the 

alleged deprivation of their rights until some four years 

later, until after Methodist Hospital had expended huge 

sums of money in reliance upon those administrative decisions. 

IV. Plaintiffs have failed to join an indispensible 

party, as is required under the Federal Rules of Civil Procedure, 

Rule 19, in that the broad relief requested by plaintiffs 

would effect all health care providers in this State and 

not just Methodist Hospital. 

WHEREFORE, defendant prays that plaintiffs' First Amended 

Complaint be dismissed and that defendant have judgment 

for reasonable attorney's fees and its costs in this action. 

HODGES, DAVIS, GRUENBERG, COMPTON & SAYERS 
ATTORNEYS FOR DEFENDANT, METHODIST HOSPITAL 
OF GARY, INC. () 

Cs Disalhl BY: we 
rs 
  

"EDWARD J. HUSSEY Ly 

5525 Broadway 
Gary, Indiana 46410 
Ph. 981-2557 [||93b79901-265b-47f1-81c8-8b885ded0a70||]