Sumter v. Drummond Transcript of Record
Public Court Documents
February 23, 1962
Cite this item
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Brief Collection, LDF Court Filings. Sumter v. Drummond Transcript of Record, 1962. 051c6960-c59a-ee11-be37-00224827e97b. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/1119a676-d6b8-4048-b9ec-96cf834e70f2/sumter-v-drummond-transcript-of-record. Accessed April 27, 2025.
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BILL LANN LEE
CONSTANCE L. RICE
KEVIN S. REED
ROBERT GARCIA
NAACP LEGAL DEFENSE AND EDUCATIONAL FUND,
O R lG iM A L
F I L E D
1 4 1994
315 West Ninth Street, Suite 208
Los Angeles, CA 90015
(213) 624-2405
RICHARD W. W iE K I N G
CLERK, U.S. DISTRICT COURT
NORTHERN DISTRICT Of CALIFORNIA
LESA RENEE MCINTOSH
3718 MacDonald Avenue
Richmond, CA 94805
(510) 237-2618
Attorneys for Plaintiffs
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
I
CATHERINE LATIMORE, PERCY
AND BETTY JAMES, DOROTHY
KOUNTZ, RALPH MCCLAIN, NEW ST.
JAMES MISSIONARY BAPTIST
CHURCH, EASTER HILL UNITED
METHODIST CHURCH, ELISABETH
BAPTIST CHURCH, SOJOURNER
TRUTH PRESBYTERIAN CHURCH,
and UNITY CHURCH,
Plaintiffs,
vs.
COUNTY OF CONTRA COSTA,
CONTRA COSTA COUNTY
DEPARTM ENT OF HEALTH
SERVICES, and STATE OF
CALIFORNIA DEPARTMENT OF
HEALTH SERVICES,
Defendants.
- u .
CASE NO. CV 94-
PLAINTIFFS’ M EM ORANDUM OF
POINTS AND AUTHORITIES IN
SUPPORT OF EX PARTE
APPLICATION FOR A
TEMPORARY RESTRAINING
ORDER AND APPLICATION FOR
PRELIMINARY INJUNCTION
Memorandum of Points & Authorities
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TABLE OF CONTENTS
I. INTRODUCTION ........................................................................................................... 1
II. STATEMENT .................................................................................................................... 3
A. Demographics........................................................................................................... 3
B. Public hospital services for the poor................................................................. 6
C. Contra Costa County Health Plan..................................................................... 8
D. Proposed Merrithew Replacement............................................................ 10
E. Proceedings............................................................................................................. 13
III. THE STANDARD FOR PRELIMINARY INJUNCTIVE R E L I E F ........... 13
IV. THE BALANCE OF HARDSHIPS TIPS SHARPLY IN PLAINTIFFS’
F A V O R .............................................................................................................................. 14
A. Harm to Plaintiff.................................................................................................. 14
1. Preconstruction and construction costs............................................. 14
2. Joint Community Hospital Proposal.................................................. 16
3. Adverse Health Risks to the Minority Poor.................................... 18
B. Absence of Harm to Defendants..................................................................... 19
C. Harm to the Public.............................................................................................. 19
V. PLAINTIFFS HAVE DEMONSTRATED A LIKELIHOOD OF
SUCCESS ON THE M E R IT S .................................................................................... 20
A. Disparate Impact Claim..................................................................................... 20
B. Purposeful Discrimination Claims................................................................... 22
VI. CONCLUSION .............................................................................................................. 25
Memorandum of Points & Authorities
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TABLE OF AUTHORITIES
Cases: Pages:
Alexander v. Choate,
469 U.S. 287, 105 U.S. 712, 83 L. Ed. 2d 661
(1985) ................................................................................................................................ 21
Arlington Heights v. Metro Housing Corp,
429 U.S. 252, 97 S. Ct. 555, 50 L. Ed. 2d 450
(1977) ........................................................................................................................... 22, 23
Assoc, of Mexican American Educators v. State of
California,
836 F. Supp. 1534 (N.D. Cal. 1993) ........................................................................... 21
Cannon v. University of Chicago,
441 U.S. 677, 99 S. Ct. 1946, 60 L. Ed. 2d 560
(1979) ............................................................................................................................ 21
Gilder v. PGA Tour, Inc.,
936 F.2d 417 (9th Cir. 1991) ................................................................................. 13, 14
Guardians Association v. Civil Service Commission,
463 U.S. 582, 103 S. Ct. 3221, 77 L. Ed. 2d 866
(1983) ................................................................................................................................ 21
Hamilton Watch Co. v. Benrus Watch Co.,
206 F.2d 738 (2d Cir. 1953) 20
Larry P. v. Riles,
793 F.2d 969 (9th Cir. 1984) ................................................................................. 21, 22
Linton v. Com’r of Health and Environment,
779 F. Supp. 925 (M.D. Tenn. 1990) ...................................................................... 21
Republic of the Philippines v. Marcos,
862 F.2d 1355 (9th Cir. 1988) ............................................................................... C , -d
Scelsa v. City University of New York,
806 F. Supp. 1126 (S.D.N.Y. 1992) ............................................................................... 13
State of Alaska v. Native Village of Venetia,
856 F.2d 1384 (9th Cir. 1988) .................................................................................... 13
Statutes: Pages:
Cal. Health & Safety Code §1340 et seq .............................................................................. 9
Cal. Health and Safety Code §32000 et seq ....................................................................... 7
Cal. Welfare and Inst. Code §14200 ...................................................................................... 8
Cal. Welfare & Inst. Code §§14085.5 ....................................................................................... 11
ii Memorandum of Points & Authorities
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Pages
Cal. Welfare Inst. Code §17000 6
28 U.S.C. §§1343(3)(4) ............................................................................................................. 13
42 U.S.C. §1981 ....................................................................................................................... 13, 22
42 U.S.C. §1983 ................................................................................................. •................... 13, 22
42 U.S.C. §2000d ................................................................................................................... passim
42 U.S.C. §2000e ............................................................................................................................ 21
U.S. Const., Amend. XIV ................................................................................................. 13, 22
in Memorandum of Points & Authorities
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INTRODUCTION
This proposed class action is brought on behalf of the minority poor of Contra
Costa County, who principally reside in West and East County areas, e.g., in the cities of
Richmond, Antioch and Pittsburg, to challenge both the location of a proposed County
hospital for the poor in a Central County area that is largely inaccessible to the minority
poor, and the failure of the Contra Costa Health Plan (hereafter "County Health Plan"),
the County-operated health maintenance organization to provide the opportunity to
obtain prepaid hospital care in areas of minority population in West and East County.
Plaintiffs ex parte application for a temporary restraining order and application for
preliminary relief seeks to enjoin pending trial any further expenditure or any further
preconstruction or construction activity for the proposed County hospital for the poor
until equal access to County hospital services is made available to the minority poor in
West and East County.
Balance of Hardships. First, Administration and congressional health reform
legislative proposals have jeopardized the federal MediCal reimbursement funding that
the County cited in its bond documents as the ultimate source for capital construction.
The proposed legislation largely eliminates the reimbursement, although the precise
outcome will not be known, if then, until the end of the present term of Congress when
any health reform package is enacted. The cost of preconstruction and any construction
is irrecoverable. If the project is cancelled or enjoined, the County can recover the cost
of the and prepayment penalty by putting the proceeds in taxable bonds and engaging in
arbitrage but the County cannot recover preconstruction and construction costs. Left to
its own devices, the County will encumber millions of the County’s already-inadequate
health services budget on preconstruction and construction.
Second, in response to a request by the County Health Services Department, the
three community district hospitals in Contra Costa County submitted a formal joint
proposal to the County Board of Supervisors in December 1993 to provide County
I.
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hospital services in West, East and Central County areas at their respective facilities
immediately at far less cost and greater accessibility than construction of a replacement
Merrithew. At present the community hospitals have twice the number of vacant beds as
the replacement Merrithew would put into service. The joint proposal would provide to
the minority poor instant accessible hospital services in well-maintained, modern, local
institutions. In contrast, the present Merrithew hospital is dilapidated and any
replacement Merrithew is not only financially risky, but would not be ready for several
years. The County failed to respond to the joint proposal and one of the community
facilities has been taken over by a receiver. Rather than impose a moratorium on
construction, the County has moved up the groundbreaking for construction from August
to June 1994.
Third, the expenditure of funds to build a Central County hospital for the poor
perpetuates the County’s system of hospital services for the West and East County
minority poor inferior to that available to predominantly white Central County residents.
As a result, the West and East County poor will continue to suffer from adverse health
risks.
The County, on the other hand, will suffer no hardship because of the injunctive
relief.
Likelihood of Success. Plaintiffs can demonstrate likelihood of success under the
claim made pursuant to the implementing regulations of Title VI of the Civil Rights Act
of 1964, because they merely have to prove disparate impact. The adverse effect of
building a Central County hospital on the minority poor in West and East is clear and
unmistakable. The location cannot be justified on the basis of necessity. Even if it could,
the joint community hospital proposal is a nondiscriminatory alternative that negatives any
necessity justification. Plaintiffs also are able to show that their intentional discrimination
claims raise serious questions going to the merits.
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II.
STATEMENT
A. Demoeraphics.
The poor in West and East County, most of whom are minority persons, have the
greatest unmet need for health services, including accessible hospital care, in Contra Costa
County.
Contra Costa County is California’s ninth most populous county with a 1990
population of 803,732. The County is commonly recognized to have four regional
subdivisions: West, East, Central and South County. Overall, the County is 70 percent
white, 12 percent Latino or Hispanic, nine percent African American and nine percent
Asian American. The minority population, however, is concentrated in West County
(principally in the City of Richmond and several smaller cities along the coast) and in
East County (principally in the cities of Pittsburg, Brentwood and Antioch). West County
is 55 percent minority and East County is 35 percent minority; in contrast, Central County
is over 80 percent white and South County is almost 90 percent white. See Exh. A, App.
4-5, 13 (Public and Environmental Health Advisory Board, 1992 Report on Status of
Health in Contra Costa and Recommendations for Action, October 26, 1992).
Ninety percent of the black population in the County resides in West or East
County; 63 percent of the County Latino population and 62 percent of the County Asian
American population resides in West or East County. The minority population of the
County, which is concentrated in West and East County, is increasing at the highest rates:
The 1990 Asian American population increased 156 percent over the 1980 population, the
Latino population grew by 63 percent, and the African American population by 23
percent. The County’s white population increased by only 11 percent in the same period.
See Exh. A, App. 13.
The majority of the County’s poor reside in West and East County. Of 78,679
MediCal eligible County residents in September 1991, fully 78 percent lived in West or
East County, 47 percent in West County and 31 in percent East County. Only 22 percent
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of MediCal eligible residents lived in Central County. The County’s MediCal population
is 59 percent minority and 41 percent white. West County is home to the largest number
of households headed by women and contains over half of the county’s homeless
population. East County has the lowest average household income of any region and
contains one-third of all the County’s AFDC recipients, despite having only one-fifth of
the total population. Over 57,000 Contra Costans live in poverty, including 22,000
children. Of children in poverty, four times as many are African American as white. As
a result of the higher rates of poverty, residents of West and East County are at increased
risk for serious health problems. See Exh. A, App. 4-5; Wills Deck 113; Exhibit V, App.
303-307 (California Medical Association statistical data).
Most of the minority poor live in West or East County. Most of the Central
County poor are white. See Id.
Richmond, Pittsburg, and Antioch, which have the highest minority populations,
have the highest hospitalization rates for chronic diseases, indicating lack of prevention
and adequate health care programs in West and East County. West County residents fare
substantially poorly in low birth weight, inadequate prenatal care and other indicators of
perinatal health. Half of all homicides in the County occurred in West County. Children
in West and East County are twice as likely to be hospitalized due to injury as children
in other regions. Exh. A, App. 8. After a comprehensive review of County’s state of
health, the County’s Public and Environmental Health Advisory Board concluded in 1992
as follows:
Poverty, poor education and housing, and limited access to health care place
growing numbers of [poor] families, particularly those living in West and
East County, at risk for poor health status.
* * *
[Hjealth problems . . . are occurring more frequently in West and East
Counties, where higher percentages of low income families, single heads of
households, homeless and other disadvantaged and undeserved groups
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reside. These areas and subpopulations must be a priority for services . .
.. Services should be located in West and East County and must address
barriers to care such as . . . transportation . . . concerns.
Exh. A, App. 2, 11.
The fact that there is only one County Hospital, located in the central part of the
County, means that access to non-emergency hospital care is limited for large numbers
of patients because:
The geography of the County is such that poor people who reside in the western
and eastern portions are far removed from any central site and those areas are the
most rapidly growing;
The difficulties posed by the geographic spread are compounded by the
inadequacies of the public transportation system, particularly during evening, night
and weekend hours; and
Transporting patients to the County Hospital by ambulance or ambuvan offers
some relief from the access problem but it is very costly and currently limited to
patients with very specialized needs.
A majority of the patients served by Merrithew Memorial Hospital are poor or medically
indigent. They are significantly affected by the access problem since many live in western
and eastern portions of the County and often lack reliable means of private
transportation. As a consequence, they frequently delay seeking treatment until a minor
condition has escalated into an emergency. Exh. B, App. 19 (1988-89 Contra Costa
Grand Jury, "County Hospital Replacement," May 26, 1989).
The State of California has promulgated standards for accessibility to hospitals for
MediCal participants in prepaid plans of 30 minutes regular travel time or 15 miles
distance. See Exh. M, App. 231-32 (Cal Dept, of Corp., "Health Care Services Plan Act,
Instructions for Exhibits to Plan License Application, Item H," January 1986). The
County operates a special bus service, the "Martinez Link," between Richmond and
Merrithew, consisting of five round trip bus runs during work week daytime hours. The
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scheduled running time between the Richmond/Bart stop and Merrithew is approximately
48 minutes. The distance is approximately 30 miles. Regular bus service takes
substantially longer. Travel from Richmond to Central County on BART requires
doubling back to Oakland to change to trains to Central County; there is no BART stop
in Martinez. There is no special bus service between East County and Merrithew; bus
transportation can take over an hour. The distance between Antioch and Merrithew is
approximately 19 miles. See Exh. B, App. 29.
B. Public hospital services for the poor.
The County has historically failed to provide accessible hospital services on an
equal basis throughout the County, concentrating services in Central County to the
detriment of the minority poor in West and East County.
Merrithew Memorial Hospital was established in Martinez in Central County in
1881 as the County hospital for the poor pursuant to Cal. Welfare Inst. Code §17000.
The County maintains Merrithew as the only County facility providing hospital services
for the poor throughout Contra Costa County, although most of the poor reside in West
and East County. Merrithew is also the centerpiece of the County Health Plan. The
County operates a principal clinic in Martinez, at the same site as Merrithew, and outlying
clinics at Concord, Pittsburg and Richmond, which feed patients who need hospital
services to Merrithew even when closer facilities are available in West and East County.
Anderson Deck U2. The County receives federal and state funds to provide hospital
services to MediCal and other poor persons. County hospital services are provided by
staff physicians employed by the County. See Exh. C, App. 67 ("Certificates of
Participation (Merrithew Memorial Hospital Replacement Project),” April 29, 1992).
Merrithew is a dilapidated facility that has been cited repeatedly for its failure to
provide accessible, effective hospital services. The major portions of the current main
hospital were constructed in the 1940’s and 1950’s. Although still in service, a majority
of the hospitals physical plant and systems are out-of-date and at or beyond the limits of
their projected useful life. Many of the facilities generally do not meet the standards of
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current health, safety, building and engineering codes, although code divergences have
been grandfathered in. See Exh. C, App. 67. The 1993 State Health Services Department
Medical Audit assessed the County Health Plan at the Martinez flagship clinic, which
feeds patients to Merrithew, for a "major deficiency" for persistent problems in patient
access to non-emergency care. The clinic had received the same major deficiency
assessment in its prior audit. (A major deficiency means "a problem of non-compliance
with policy, regulations, and contract standards that has the potential to endanger patient
care and/or operations.") The Audit found that waiting time for new patient
appointments is eight weeks to three months. Patients wait up to four hours in the
emergency room. The initial time for initial appointments is over six weeks and routine
appointments are not available within six weeks. There is no procedure to determine the
number of non-English speaking persons to assess adequacy of translators and
multilanguage information materials. Handicapped parking is not accessible. Exh. D,
App. 78, 81-82 (MediCal Review, "Report of the 1993 Annual Medical Audit of Contra
Costa County Health Plan," undated).
In contrast to the County’s central hospital system, privately-operated Raise*-
Permanente provides accessible hospital services to middle class persons under the same
Contra Costa County demographic conditions using a system of regional hospitals. See
Exh. Q, App. 271 (O ’Rourke curriculum vitae) O ’Rourke Decl. H2.
Brookside Hospital in West County with 217 active beds, Los Medanos Hospital
in East County with 101 active beds and Mt. Diablo Hospital in Central County with 260
active beds are community district hospitals established pursuant to Cal. Health and Safety
Code §32000 et seq. The community hospitals are governed by elected boards and have
authority to levy taxes within their districts. Each is a modern, well-maintained facility
which serves an economically integrated patient population. Brookside and Los Medanos
treat large numbers of MediCal patients on a fee for service basis, although the MediCal
reimbursement rate received by the community hospitals is lower than that received by
the County. In addition, Brookside and Los Medanos provide substantial amounts of
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unreimbursed care to medically indigent patients (for which the County receives funding)
through their emergency rooms because the travel time to Central County often renders
Merrithew practicably inaccessible, and County clinics in West and East County are closed
in the evenings and weekends and have long waiting lists. The provision of below-cost
MediCal reimbursed care and unreimbursed care to the medically indigent have put
Brookside and Los Medanos under severe financial pressure, and Los Medanos was put
in receivership in March 1994. See O’Rourke Deck, 113.
The community district hospitals, which have high hospital bed vacancy rates, have
declared their desire to assist the County to provide accessible hospital services for the
poor in their districts at their facilities. They are unable to do so on the below-cost
MediCal reimbursement fee for service rate or unreimbursed basis in a comprehensive
way, but have proposed providing accessible hospital services for the poor, including the
West and East County minority poor, on a prepaid basis through the Contra Costa Health
Plan at the same rates the Plan now receives for hospital-based services. See id. at H4.
C. Contra Costa County Health Plan.
The County has failed to provide equal access to hospital services in its prepaid
health maintenance organization, the Contra Costa Health Plan, for the West and East
County minority poor.
The County Health Plan is a federally and state subsidized and qualified prepaid
health maintenance organization operated by the County at Merrithew and County clinics.
The County Health Plan has a contract to serve MediCal-eligible and other poor persons
receiving public assistance as well as commercial paying patients. The Health Plan is
governed by a board consisting of the County Board of Supervisors. The Plan is funded
by prepayment and an annual County subsidy. The County subsidy in 1994 was eight
million dollars. Exh. E, App. 119 (Contract between State Department of Health Services
and County of Contra Costa, January 18, 1994); O’Rourke Decl.1I5.
The County Health Plan was originally established in 1973 to serve MediCal-
eligible and other poor persons exclusively pursuant to Cal. Welfare and Inst. Code
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§14200. The Plan was subsequently expanded to commercial patients and licensed by the
California Department of Corporations pursuant to the Knox-Keane Health Care Service
Plan Act of 1975, Cal. Health & Safety Code §1340 et seq. See O’Rourke Deck 116. The
Plan is operated pursuant to a contract, last renewed in January 1994, between the State
Health Services Department and the County which requires that the County will not
discriminate against members or eligible beneficiaries because of race or color in
accordance with Title VI and the Title VI regulations, and that the County "agrees to
serve a population broadly representative of the various . . . so c ia l. . . groups within the
service area.” The contract specifies that the service area is the entire County. Exh. F,
App. 124, 128-29.
The County Health Plan’s single Central County hospital, on its face, cannot
comply with the MediCal hospital accessibility standards of 30 minutes travel or 15 miles
distance for the West and East County minority poor. Although more than three-quarters
of MediCal-eligible persons live in West and East County, the County Health Plan
principally serves Central County patients. Almost all of the Central County poor are
white. The Health Plan has failed to enroll any appreciable number of West and Eas4
County MediCal-eligible and other poor persons because it offers no hospital services in
West and East County. In contrast, the Plan’s commercial patients are almost exclusively
Central County residents because of the availability of an accessible Central County
hospital. See O’Rourke Deck H 7.
The County recently declined to permit the County Health Plan to provide prepaid
MediCal coverage to West and East County in collaboration with the Contra Costa
County Coalition for Managed Care (an organization of physicians, nurses, pharmacists
and other health professionals who provide health care to the minority poor in West and
East County), other West and East County traditional MediCal providers and the
community district hospitals. Such an arrangement would have permitted the County
Health Plan to provide hospital services to the West and East County poor as well as
Central County poor. Instead, the County has stated that its Health Plan should provide
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prepaid hospital services only in Central County. The County Health Plan thereby seeks
to cater to the predominantly white commercial participants and Central County poor to
the detriment of the minority poor in West and East County. See Wills Decl. 114.
The State Department of Health Services has failed to enforce requirements that
the County make Health Plan hospital services available on an accessible basis throughout
its entire service area and make County Health Plan hospital services accessible to the
minority poor in West and East County.
D. Proposed Merrithew Replacement.
The County proposes to use MediCal and Medicare reimbursement funding to
build a replacement Merrithew facility in Central County that will fail to provide
accessible hospital services for West and East County, where three-quarters of the
MediCal-eligible patients and most of the minority poor reside. While permitting the
County to provide upgraded hospital services for commercial County Health Plan
participants, the replacement will siphon off and encumber health services funds that the
County properly should use to provide equal access to hospital and other health services
for the minority poor in West and East County.
At any given time, only 50 percent of beds at the community district hospitals are
utilized. The total number of vacant beds at the community district hospitals, figured on
the basis of that utilization level, is 288 beds: West County (Brookside), 108 beds; East
County (Los Medanos), 50 beds; and Central County (Mount Diablo), 130 beds. The
long term trend in medical care is toward lower hospitalization rates, suggesting that the
low community district hospital utilization rate will fall even more. See O ’Rourke Decl.
118.
The County has considered various proposals for a replacement for Merrithew for
over a decade. Proposals for a larger facility have been rejected largely for financial
reasons. The County did not consider the needs of the West and East County minority
poor or seek to justify the adverse impact of locating the replacement in Central County
on the poor, most of whom are minority residents of West or East County. The County
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failed to consider proposals to implement plans to provide County hospital services in
community hospitals. For instance, a 1978 report to the County Board of Supervisors
recommended that Merrithew should not be rebuilt and that most of the functions of
Merrithew be placed in community hospitals in order to provide more accessible hospital
services. See O’Rourke Deck 119; Exh. R, App. 274-86.
The County Board of Supervisors submitted plans to the State Health Services
Department for the construction of a 144-bed replacement for Merrithew, less than half
the number of vacant beds currently available at the community district hospitals, in May
1993. Construction contracts limited to site work were let in 1993. State Department of
Health Services reviews of the plans and final contracts are expected to be completed in
May 1994. See Exh. C, App. 69.
In order to finance the Merrithew replacement, the County has issued certificates
of participation or bonds of over 125 million dollars, and created a non-profit public
benefit corporation that will actually own the replacement and lease it back to the County.
The County planned to make lease payments to the corporation for 30 years, which will,
in turn, be paid to the bond holders as debt service on the certificates. See Exh. S
(Gilbert curriculum vitae); Gilbert Deck 114. The source of the lease payments was
supposed to be supplemental MediCal service reimbursement payments under Cal.
Welfare & Inst. Code §§14085.5; 14105.98 (federal and state matching funds for hospitals
serving a "disproportionate share" of Medicaid patients). See Exh. C, App. 51-53; Exhs.
F and U (statutes). Under these programs, the County is liable for any reduced federal
financial participation. Cal. Welfare & Inst. Code §§14085.5(h)(i); 14105.98(p). Id.
Health reform proposals imperil the federal financing for debt service for the
replacement Merrithew. The Medicaid disproportionate share program was budgeted in
1993 at 17.9 billion dollars nationally. However, the Administration’s health reform bill,
S.1757, eliminates the disproportionate share program and replaces it with a discretionary
program. The Administration’s program is budgeted at only 800 million dollars annually
on a nationwide basis and restricts a hospital to only five years of payments. See Exh. G,
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App. 186 ("Public hospitals fear funding gap after disproportionate payments end," Nov.
22, 1993); Exh. H, App. 192 (S. 1757). The bill proposed by Rep. Pete Stark that passed
the Subcommittee on Health of the House Committee on Ways and Means in March 1994
replaces the disproportionate share program with a discretionary share program totalling
I. 2 billion dollars annually for the entire nation. See Exh. I, App. 198-203 (Stark bill
description). Should federal funding become unavailable or reduced, County general
funds for health services for the next 30 years would be encumbered to construct the
replacement Merrithew to the detriment of the West and East County minority poor. See
Exh. C, App. 53 Health care services would have to be sacrificed for an unnecessary
hospital.
On April 13, 1993, plaintiffs filed an administrative complaint of discrimination
with the Office of Civil Rights of the U.S. Department of Health and Human Services.
The complaint challenged the location of the replacement Merrithew in Central Count)'
as racially discriminatory in violation of Title VI and Title VI regulations. The
administrative charge is still pending. See Exh. F, App.__ (letter administrative
complaint).
The County requested the Central County community district hospital, Mount
Diablo, to prepare a plan to provide countywide County health services at Mount Diablo
in lieu of a replacement Merrithew in fall 1993. On December 11, 1993, Mount Diablo
together with the other community district hospitals, Brookside and Los Medanos,
formally presented a joint proposal to provide accessible County hospital services in West,
East and Central County areas in their respective facilities at far less cost and greater
accessibility than construction of a replacement Merrithew. The County has failed to
respond to the joint proposal. See Exh. J, App. 205 ("Joint Hospital District," December
II, 1993); Exh. K, App. 218 (Letter to Supervisor Powers from Hospital Districts, April
1, 1994).
Groundbreaking and construction of the replacement Merrithew have been
advanced to commence in June 1994 instead of the original August 1994 date. The
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County has rejected all requests for a moratorium on expenditure of funds for the
proposed hospital. See O ’Rourke Deck 1111; Exh. K, App. 218.
The State Department of Health Services has failed to enforce requirements that
the County provide accessible hospital care on an equal basis throughout the Count}' and
make County hospital services accessible to the minority poor in West and East County.
E. Proceedings.
The applications for a TRO and preliminary injunction are being filed with a class
action civil rights complaint by several minority West and East County MediCal-eligible
individuals who allege that they have been adversely affected by the proposed location of
the Merrithew replacement and the restriction of County Health Plan hospital services to
Central County, Catherine Latimore, Percy and Betty James, Dorothy Kountz, and Ralph
McClain. Joining as plaintiffs were several churches with MediCal-eligible and other poor
members and persons served in their ministries, the New St. James Missionary Baptist
Church, Easter Hill United Methodist Church, Sojourner Truth Presbyterian Church and
Unity Church Complaint.
The complaint is brought under 28 U.S.C. §§1343(3) and (4) and 42 U.S.C. §1983
to enforce the Title VI regulations, Title VI, 42 U.S.C. §1981 and the Fourteenth
Amendment/42 U.S.C. §1983 for preliminary and permanent injunctive relief. Id.
III.
THE STANDARD FOR PRELIMINARY INJUNCTIVE RELIEF
The Ninth Circuit has stated that plaintiffs are entitled to preliminary injunctive
relief if they demonstrate either (1) a likelihood of success on the merits and the
possibility of irreparable injury, or (2) the existence of serious questions going to the
merits and the balance of hardships tipping sharply in their favor. Gilder v. PGA Tour,
Inc., 936 F2d 417, 422 (9th Cir. 1991); Republic o f the Philippines v. Marcos, 862 F2d 1355,
1362 (9th Cir. 1988)(en banc); Slate o f Alaska v. Native Village o f Venetia, 856 F2d 1384,
1389 (9th Cir. 1988); see Scelsa v. City University o f New York, 806 F. Supp. 1126 (S.D.N.Y.
1992)(granting preliminary injunction in Title VI challenge to location of ethnic studies
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institute);
"The critical elem ent in determining the test to be applied is the relative hardships
to the parties. If the balance of norm tips decidedly toward the plaintiff, then the plaintiff
need not show as robust a likelihood of success on the merits as when the balance tips
less decidedly." Gilder, 936, F2d at 422, quoting Benda v. Grand Lodge o f International
Association o f Machinists & Aerospace Workers, 584 F2d 308, 315 (9th Cir. 1928), cert,
dismissed, 441 U.S. 937, 99 S. Ct. 2065, 60 L. Ed 2d 667 (1929).
IV.
THE BALANCE OF HARDSHIPS TIPS SHARPLY IN PLAINTIFFS’ FAVOR
A. Harm to Plaintiff.
Continued expenditure of funds and preconstruction and construction activities for
the new hospital works three distinct hardships on plaintiff. First, federal funding is in
jeopardy and construction costs may very well encumber County health and other services
for the poor. Second, preliminary injunctive relief until equal access to hospital care is
assured the West and East County minority poor is necessary to prompt immediate
consideration of the joint community hospital proposal, a less costly, nondiscriminatory
alternative that would provide accessibility. Third, the construction of a Central County
hospital perpetuates racially disparate County hospital service policies, that impose
adverse health risks on the minority poor.
1. Preconstruction and construction costs.
Funds to pay these and other construction costs were raised by the County through
issuance of 125 million dollars of certificates of participation or bonds. The prospectus
for the issuance states that the two large sources for financing are SB 1732 and AB 855,
which are funded by Medicaid "disproportionate share" funds. Exh. C, App. 14-16. In
1993, the disproportionate share program provided hospitals with 17.9 billion dollars for
construction. SB 1732, codified as California Welfare and Instit. Code §140 85.5, provides
supplemental MediCal reimbursement for the cost of capital construction for 53 percent
of the debt service. These supplemental MediCal funds, most of which are passthrough
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federal disproportionate share funds, are to be used for hospitals that contract to provide
inpatient MediCal services affected by serving a "disproportionate share" of MediCal
patients. Welfare & Institutional Code §1408.5.5(a). SB 1732, however, does not
guarantee continued funding. Cal. Welfare & Instit. Code §14085.5(h)(i) ("[a] hospital
receiving supplemental reimbursement pursuant to this section shall be liable for any
reduced federal financial participation resulting from the implementation of this section").
Exh. T, App. 295.
SB 855, codified as Cal. Welfare & Instit. Code §14105.98, provides MediCal
payment adjustments to hospitals for care of uninsured and underinsured patients, that
the County projected in its prospectus to pay for 36 percent of the debt service. Exh. C,
App. 15-16. SB 855 funds are federal disproportionate share and state matching monies.
SB 855, like SB 1732, contains an express disclaimer of continued financial support. Cal.
Welfare & Instit. Code §14105.98(p) ("If, for any payment adjustment year, the amount
in the fund, when matched by federal funds . . . are insufficient to pay some or all of the
payment adjustment amounts otherwise due under this section, payment amounts should
be reduced . . . "). Exh. U, App. 300.
The Administration’s health reform bill, S.1757, eliminates the state
disproportionate share allotments that fund SB 1732 and AB 855. See S.1757, §4231(c)
("the state DSH allotment shall be zero"). Exhs. G, & H, App. 189. Section 3481(b)
replaces the current disproportionate share program with a discretionary program in which
"[a]n eligible hospital shall receive a payment under this section for a period of 5 years,
without regard to the year for which the hospital first receives a payment." Exh. H, App.
192. The discretionary program is projected to fund only 800 million dollars annually on
a national basis, for a reduction of 95 percent from 1993 funding levels. A replacement
bill authored by Rep. Pete Stark, passed the Subcom. on Health of the House Committee
on Ways and Means in March 1994. The Stark bill similarly creates a much-reduced
discretionary program for capital construction at hospitals to replace the disproportionate
share program. See Exh. I, App. 196. Under the Stark bill, the replacement program
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totals 1.2 billion dollars annually on a nationwide basis, for a reduction of 93 percent from
1993 levels. See Exh. I, App. 198-203.
The Stark bill caps capital expenditure grants to any hospital at 25 million dollars.
See Exh. I, App. 203. In contrast the County has projected disproportionate share funds
of 110 million dollars under both SB 1732 and AB 855. Under either the Administration
or Stark bills, most of the federal financial funds anticipated by the County will not be
forthcoming.
In the event the project is cancelled for fiscal or other reasons or enjoined by this
Court, the County can defease or pay off the 1992 issuance to cover the cost of the
prepayment penalty by using the proceeds from the issuance to invest in higher-yielding
taxable bonds and engaging in arbitrage. See Gilbert Deck 115. Preconstruction and
construction costs, however, cannot be defeased though arbitrage. Id. The County has
covenanted under its lease arrangement with the special benefit corporation that will
actually own the replacement Merrithew to "take such action as may be necessary to
include all Base Rental Payments and Additional Payments for such properties in its
annual budgets and to make the necessary annual appropriations therefor." Exh. C, App.
53. If, as is likely, federal funding should fail, the County would have to pay
preconstruction and construction costs out of the same pool of funds it uses for County
health services for the poor, using service dollars for bricks and diminishing the already-
inadequate level of health services for the plaintiff minority poor and the other poor of
Contra Costa County. Prudence requires that hospital costs be curbed in the face of fiscal
uncertainty.
2. Joint Community Hospital Proposal.
As early as 1978, the county was advised to consider having the community district
hospitals provide county hospital services instead of rebuilding Merrithew. See O’Rourke
Deck 119, Exh. R, App. 285-86. The community district hospitals jointly have 288 vacant
hospital beds available in institutions accessible to residents of West, East and Central
County. See O’Rourke Deck 11113,8. That is fully twice the 144 beds that the replacement
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Merrithew will supply. In fall 1993, the County Health Services Department requested
the Central County community district hospital, Mount Diablo, to prepare a plan to
provide County hospital services for the entire County instead of proceeding with
Merrithew. Mount Diablo requested the two other community hospitals, Brookside in
West County and Los Medanos in East County, to join it in devising a plan. See Exhs.
J & K, App. 205, 218. On December 11, 1993, the three community hospitals submitted
a joint proposal to provide County hospital services in their three regions of the County
at their respective facilities at less cost and with greater accessibility than the construction
of a replacement Merrithew. Id.
However, County Supervisor Mark DeSaulnier has submitted a request, to be heard
at the April 19, 1994 County Board of Supervisors meeting, directing County staff to
negotiate with the community district hospitals concerning their joint proposal. Exh. P,
App. 269-70.
The joint proposal offers a compelling, nondiscriminatory alternative. The joint
community hospital proposal would provide the plaintiff class with the accessible County
hospital care they seek. On March 18 , 1994, the East County community hospital, Los
Medanos, was taken over by a receiver for failure to meet its obligations, largely because
of financial distress caused by providing below-cost MediCal reimbursed care and
unreimbursed care of the medically-indigent. If Los Medanos were permitted to
participate in the joint proposal, its financial distress - resulting from the existence of the
Merrithew facility which prevents Los Medanos form obtaining a more favorable MediCal
reimbursement rate and which receives reimbursement for care of the medically indigent -
- would be cured. However, if the receiver were to sell Los Medanos or otherwise use it
as other than a community hospital, the joint proposal would be jeopardized and plaintiffs
precluded from obtaining meaningful relief. See O’Rourke Deck 1112. Preliminary
injunctive relief enjoining expenditure for the Merrithew replacement until equal access
to County hospital service is made available to the minority poor in West and East County
should assure prompt consideration of the joint proposal.
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3. Adverse Health Risks to the Minority Poor.
The provision of inaccessible hospital services imposes the following adverse health
risk on the minority poor:
In emergencies, and for urgent care needs nights and weekends after local county
clinics have closed, the minority poor use the often crowded emergency rooms of
community district hospitals. Their medical records are unobtainable to the private
physicians who attend them and follow up care at county clinics lacks continuity for this
reason. See O’Rourke Deck H 10.
Primary care clinics are accessible geographically, but cutbacks in recent years have
curtailed preventive health programs and clinic hours, creating delays for appointments
of several weeks. When referrals are required for consultations, X-ray, laboratory and
imaging examinations not available in local clinics, patients must make the long trek to
Martinez each referral visit. Inability to comply is frequent and failure to do so, due to
lack of means of transportation, results in delays in treatment, exacerbation of illness, and
the need to be hospitalized when early intervention could have prevented this eventuality.
Id.
Case management for illnesses of major import is also seriously impaired when
hospital-based resources are not proximate. Preadmission procedures, hospital workup,
and effective discharge planning lose continuity when patients who are poor are forced
to use a hospital far from home. Visits by friends and family are discouraged, leaving
patients vulnerable to fear, apprehension, and depression in the absence of support critical
to their prompt recovery. Length of stay is prolonged and instructions for continuing care
at home made very difficult. Such circumstances conspire to bring about complications
and poor treatment outcomes. Id.
Health maintenance organizations, to be most effective, place hospital-based
technology and services as close as possible to both primary care providers and those
specialists who are in most common demand to serve the enrolled population in the
communities where they reside. This service strategy is absolutely critical for low income
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minorities whose mobility is much more restricted than middle class members of an health
maintenance organization. Id. See Decls. of Latimore, Kountz, Peicy James, McClain
& Bernstine (harm to plaintiffs).
B. Absence of Harm to Defendants.
In contrast, defendants County, and County and State Health Service Departm ent
will suffer no detriment by issuance of preliminary injunctive relief for plaintiffs. Final
state approvals on the County’s plans and contracts is not expected until May 1994. The
original construction date is not until August 1994. The County may argue that any delay
will jeopardize contracts it has already entered or delay its accelerated timetable. Such
"penny wise and pound foolish" arguments are counterbalanced by federal fiscal
uncertainty about the kind and level of support available for hospital construction. These
arguments also must be balanced against the significant public benefits of the joint
community district hospital proposal.
C. Harm to the Public.
The issuance of a preliminary injunction serves the public interest in obtaining
better health care for the minority poor and in avoiding waste of scarce public funds. As
the County’s Public Health and Environmental Advisory Committee found, the public
health of the County as a whole is best served by pr oviding accessible health care to West
and East County poor, particularly the minority poor. See Exh. A, App. __. A
replacement Merrithew is not needed in light of the large number of vacant beds at the
County district hospitals and the December 1993 joint proposal of the district hospitals
to provide County hospital services accessible to residents of West, East and Central
County. In an era of limited resources, proceeding with the construction is tantamount
to fiscal waste. Gilbert Decl. 113. At the same time, the joint community district hosprtal
proposal is a nondiscriminatory alternative that is not only fiscally attractive, but desirable
on public health and civil rights grounds.
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V.
PLAINTIFFS HAVE DEMONSTRATED
A LIKELIHOOD OF SUCCESS ON THE MERITS
In light of plaintiffs’ showing on the balance of relative hardship to the parties the
Ninth Circuit requires merely the existence of serious questions going to the merits.1
In fact, plaintiffs can demonstrate likelihood of success on the merits or their
disparate impact Title VI regulatory claim as well as the existence of serious questions
going to the merits on their purposeful discrimination claims.
A. Disparate Impact Claim.
Title VI provides that: "No person in the United States shall on the ground of race,
color, or national origin, be excluded from participation in, be denied the benefits of, or
be subjected to discrimination under any program or activity receiving Federal financial
assistance." The Title VI regulations provide, in pertinent part that:
(1) A recipient . . . may not, directly or through contractual or other
arrangements, utilize criteria or methods of administration which have the effect
of subjecting individuals to discrimination because of their race, color, or national
origin, or have the effect of defeating or substantially impairing accomplishments
of the objectives of the program as respect individuals of a particular race, color
or national origin.
(2) In determining the site or location of a facility, an applicant or recipient
may not make selections with the effect of excluding individuals from, denying
1 According to the Ninth Circuit:
For purposes of injunctive relief, "‘serious questions’ refers to questions which
cannot be resolved one way or the other at the hearing on the injunction and as to
which the court perceives a need to preserve the status quo lest one side prevent
resolution of the questions or execution pf any judgment by altering the status quo."
Republic o f the Philippines, 862 F2d at 1362. "Serious questions are ‘substantial,
difficult and doubtful, as to make them a fair ground for litigation and thus for
more deliberate investigation.’" Id. (quoting) Hamilton Watch Co. v. Benms Watch
Co., 206 F2d 738, 740 (2d Cir. 1953)." Serious questions need not promise a
certainty of success, nor even present a probability of success, but must involve a
‘fair chance of success on the merits’" Id. (quoting Natural Wildlife Federation v.
Coston, 773 F2d 1513, 1517 (9th Cir. 1985).
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them the benefits of, or subject them to discrimination under any programs to
which this regulation applies, on the ground of race, color, or national origin; or
with the purpose or effect of defeating or substantially impairing the
accomplishment of the objective of the Act or this regulation.
The Supreme Court has judicially implied a right to bring civil actions to enforce
both Title VI, see Cannon v. University o f Chicago, 441 U.S. 677, 99 S.Ct. 1946, 60 L.Ed.
2d 560 (1979) (Title IX case), and the Title VI disparate impact regulations. Alexander
v. Choate, 469 U.S. 287, 292-94, 105 U.S. 712, 716, 83 L.Ed. 2d 661 (1985); Guardians
Association v. Civil Service Commission, 463 U.S. 582, 103 S.Ct. 3221, 77 L.Ed.2d 866
(1983); Lany P. v. Riles, 793 F2d 969, 981-83 (9th Cir. 1984); Assoc, o f Mexican American
Educators v. State o f California, 836 F. Supp. 1534, 1545-48 (N.D. Cal. 1993) (Orrick, J.);
Linton v. C om ’r o f Health and Environment, 779 F. Supp. 925, 934-35 (M.D. Tenn. 1990)
(enjoining nursing home bed certification policy with unjustified adverse impact). In
order to prove a Title VI disparate impact regulatory violation, the Ninth Circuit has
adopted Title VII employment discrimination disparate impact standards. L a n y P., 793
F2d at 982 n. 9 and accompanying text and, 983; see also Mexican-American Educators, 836
F. Supp. at 1545. These standards have been legislatively codified in the 1991
amendments to Title VII, 42 U.S.C. §2000e-2(k)(l)(A), 2 requiring consideration of
plaintiffs’ showing of disparate impact of the facially neutral practice or policy, defendants’
showing of necessity for the practice or policy, and plaintiffs’ showing of a
nondiscriminatory alternative. * (i)
2 An unlawful employment practice based on disparate impact is established under
this subchapter only if
(i) a complaining party demonstrates that a respondent uses a particular
employment practice that causes a disparate impact on the basis of race, color . . .
or national origin and the respondent fails to demonstrate that the challenged
practice is job-related for the position in question and consistent with business
necessity; or
(ii) the complaining party makes [a] demonstration . . . with request to an
alternative employment practice and the respondent refuses to adopt such
alternative employment practice.
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With respect to disparate impact, the construction of a Central County hospital for
the poor has a clear and unmistakable impact on the minority poor because of Contra
Costa County’s demographics. The Central County poor, who receive preferential County
hospital services, are predominantly white. Ninety percent of the African American
population, 63 percent of the Latino population and 62 percent of the Asian American
population live in either West or East County. Fully 78 percent of the mostly minority
MediCal eligible population lives in West or East County. Most of the minority poor live
in West and East County where they are outside the prepaid plan MediCal hospital
accessibility standard of 30 minutes travel and 15 miles distance for Merrithew. See supra.
Plaintiffs believe that defendants cannot demonstrate that the location of the sole
County hospital for the poor in Central County is justified on necessity grounds.
Even if defendants were able to justify the location, the joint community district
hospital proposal — which provides accessible care on an immediate basis at less cost in
existing local hospitals -- is a nondiscriminatory alternative that would negative any
showing of necessity. Any necessity justification, in any event, would be undermined by
the likely disappearance of much of the federal funding the County had relied upon for
hospital construction.
B. Purposeful Discrimination Claims.
Plaintiffs’ Title VI, 42 U.S.C. §1981 and 42 U.S.C. §1983/Fourteenth Amendment
claims acquire proof of intentional discrimination. See, e.g., Lany P., 793 F. 2d 981. The
Supreme Court has declared that "[determining whether invidious discriminatory purpose
was a motivating factor demands a sensitive inquiiy into such circumstantial and direct
evidence of intent as may be available." Arlington Heights v. Metro Housing Corp, 429 U.S.
252, 266, 97 S.Ct 555, 50 L.Ed 2d 450 (1977). Arlington Heights lists the following
evidence that should be considered in determining if discriminatory purpose exists: (1) the
impact of the official action, whether it bears more heavily on one race than another, may
provide an important starting point; (2) the historical background of the decision,
particularly if a series of official actions was taken for invidious purposes; (3) departures
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from the normal procedural sequence; and (4) substantive departures, particularly if the
factors usually considered important by the decisionmaker strongly favor a decision
contrary to the one reached. 429 U.S. at 266-67.
The instant record, in addition to the showing of adverse impact, shows:
Historical background. The proposed hospital construction perpetuates a
longstanding, historic pattern of providing County health services to the West and East
County minority poor inferior those provided by the County in Central County. The
pattern is exemplified by the failure to even provide County hospital services in West and
East County, thus imposing a unique transportation burden on the minority poor; by the
provision of inferior clinics with no evening or weekend hours in West and East County
while maintaining a 24 hour Central County Martinez clinic Anderson Deck 113; by the
centralization of preventive public health services for West and East County in Central
County Id. at H14.; and by the concentration in recent years of County health services
cutbacks in West and East County. See Exh. N, App. 233, (1992 cuts); Exh. O, App. 256
(1989 cuts); Anderson Deck H5.
The proposed hospital construction perpetuates an overall pattern of providing
County services to the minority poor inferior to those provided by the County in Central
County. For example, the Office of Civil Rights of the U.S. Department of Agriculture
ruled on December 30, 1992, that the County’s centralization of its general assistance and
food stamp program in Central County would have an unjustified disproportionate impact
on minority residents in violation of Title VI regulations. The Department of Agriculture
found that: "While the plan appears to apply equally to all clients, it falls more harshly on
clients whose ethnic origin is African American, Hispanic, Vietnamese and Latino and
devices equal areas to service to persons with disability, the non-English speaking, the
homeless and aged [general assistance and food stamp] recipients." The Department of
Agriculture cited demographic data showing that the general assistance and food stamp
population in Martinez where the County had planned to centralize its operations was
three-quarters white, while clients of facilities in West and East County cities of
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Richmond, Antioch and El Sobrante were predominantly minority. As a result, the
Department of Agriculture found that the transportation burden of the centralization
policy would fall disproportionately on minorities. See Exh. L, App. 220 (investigation
report, December 30, 1992).
Procedural Departures from Regularity. 1 he proposed hospital construction
departs from procedural regularity. For instance, the planning for the replacement
Merrithew and operations of the Health Plan have proceeded largely without public
scrutiny or participation. Certificates of participation for construction of the Merrithew
replacement were issued that avoided public scrutiny or debate instead of County general
obligation bonds, which would have required a 2/3 vote of County residents.
Notwithstanding the countywide service area of its Health Plan, the County has declined
to consider arrangements with the Coalition for Managed Care and the community district
hospitals that would effectuate the provision of accessible countywide hospital and other
services. Until December 1993, the County ignored the requests of community district
hospitals to provide hospital services in lieu of a Merrithew replacement. Even then, the
County sought a proposal solely from the Central County community hospital and has
failed to respond to the joint proposal of the community hospitals. The County has
proceeded with preconstruction and construction activities notwithstanding the pendency
of the Title VI administrative charge, and fiscal uncertainty, and the joint community
hospital plan. See supra.
Substantive Departures from Regularity. The proposed hospital construction
departs from substantive regularity. For example, the County is proceeding with
construction of a new 144-bed hospital notwithstanding that there are twice the number
of available vacant beds in community district hospitals. Both the location of the
replacement Merrithew in Central County and the restriction of County Health Plan
hospital services to Central City violate the prepaid MediCal plan standard of 30 minute
or 15 mile hospital accessibility rule for the West and East County minority poor. The
County maintains and subsidizes a Health Plan out of Merrithew that purports to have
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luite 208
a countywide service area, but in fact principally serves a predominately white Central
County participants. See supra.
Plaintiffs, at the very least, present serious questions going to the merits on their
claims of purposeful discrimination.
VI.
CONCLUSION
The Court should grant the exparte application for a temporary restraining order
and the application for preliminary injunction.
Dated: April 14, 1994
N A A C P L E G A L D E F E N S E A N D
EDUCATIONAL FUND, INC.
315 West Ninth Street, Suite 208
Los Angeles, CA 90015
(213) 624-2405
LESA RENEE MCINTOSH
3718 MacDonald Avenue
Richmond, CA 94805
(510) 237-2618
Attorneys for Plaintiffs
25 Memorandum of Points & Authorities