Eaton v. Grubbs Brief and Appendix of Appellants

    In the

In\t?b (Hmtrl ai Kppmla
F or the F ourth Circuit

No. 9058

H ubert A. E aton, et al.,

- v . -

Appellants,

E mory Grubbs and the B oard op M anagers op J ames 
W alker Memorial H ospital, a Body Corporate,

Appellees.

on appeal prom the united states district court
FOR THE EASTERN DISTRICT OP NORTH CAROLINA

BRIEF AND APPENDIX OF APPELLANTS

J ack Greenberg
Constance B aker Motley
Michael Meltsner 

Suite 1790 
10 Columbus Circle 
New York 19, New York

R obert R. B ond
612 Red Cross Street 
Wilmington, North Carolina

Conrad 0 . P earson
203% East Chapel Hill Street 
Durham, North Carolina

Attorneys for Appellants



I N D E X

PAGE

Statement of the Case ....................................................  1

Questions Presented..........................................................  5

Statement of Facts ..........................................................  6

A bgument — .............................................................................. 13

I. A Reversionary Interest in Land in Favor of 
Government, Restricting Hospital Property to 
Use “as a Hospital for the Benefit of the County 
and City . . . And in Case of Disuse or Aban­
donment to Revert to the Said County and City” 
Subjects the Hospital to the Restraints of the 
Constitution Against Racial Discrimination ..... 13

II. The Total Effect of the Hospital’s Contacts With 
Government Is Sufficient to Place It Under the 
Restraints of the Fifth and Fourteenth Amend­
ments Against Racial Discrimination ..............  18

Conclusion .................................................................................. 31

I ndex to A ppendix A

Relevant Docket Entries ................................................  la

Complaint ...........................................................-............... 2a

Motion to Dismiss ............................................................ 18a

Plaintiffs’ Exhibit A 19a



11
PAGE

Plaintiffs’ Exhibit B ........................................................  21a

Plaintiffs’ Exhibit C ......................................................  22a

Defendants’ Exhibit A ....................................................  58a

Opinion and Order............................................................  61a

Notice of Appeal ..............................................................  69a

Designation of R ecord......................................................  70a

I ndex to A ppendix B

Complaint in Prior A ction ............................................... 71a

T able oe Cases

Baldwin v. Morgan, 287 F. 2d 750 (5th Cir. 1961) ....... 26
Board of Managers of the James Walker Memorial 

Hospital v. City of Wilmington, 237 N. C. 179, 74
S. E. 2d 749 (1953) ................................................... 27, 28

Bolling v. Sharpe, 347 U. S. 497 .....................................  20
Boman v. Birmingham Transit Co., 280 F. 2d 531 (5th

Cir. 1960) .................................................... 18, 20, 23, 26, 28
Brown v. Board of Education, 347 U. S. 483 ..................  27
Burton v. Wilmington Parking Authority, 365 U. S.

715 ........................................................ 2, 4,13,14,16,17,18,
19, 20, 22, 24, 29, 30

City of Charlotte v. Heath, 226 N. C. 750, 40 S. E. 2d
600 ................................................................................... 26

City of Greensboro v. Simkins, 246 F. 2d 425 (4th Cir. 
1959) 16



I l l

City of St. Petersburg v. Alsup, 238 F. 2d 830 (5th Cir.
1956) ............................................................................. 14,17

Conley v. Gibson, 355 U. S. 41 .......................................  30
Coojjer v. Aaron, 358 U. S. 1................. ...................17,18, 20

Eaton v. Board of Managers of James Walker Mem­
orial Hospital, 261 F. 2d 521 (4tb Cir. 1958) cert.
denied 359 U. S. 984 ......................2, 3, 4, 5,13,16,18,19,

20, 22, 23, 24, 25, 26

Hamjiton v. City of Jacksonville, 304 F. 2d 320 (5th 
Cir. 1962) .......................................................... 4,15,18,30

Johnson v. Virginia,------H. S . ------- , 10 L. ed. 2d 195,
83 S. Ct. —  ................................. ..........................  27

Proctor v. State Highway and Public Works Comm.,
230 N. C. 687; 55 S. E. 2d 479.........................................  26

Public Utilities Commission v. Poliak, 343 U. S. 451 ....18, 22,
23, 24, 26, 28

Seaboard Air Line R. Co. v. Atlantic Coast Line R.
Co., 240 N. C. 495; 82 S. E. 2d 771.............................. 26

Tate v. Department of Conservation and Development,
231 F. 2d 615 (4th Cir. 1956) ................................. 16,17

Table of Statutes and R egulations

Code of Federal Regulations:
Title 42, §§53-11, 53-12, 53-13 .................................  23

Defense Public Works Act (Act of Oct. 14, 1940, as 
amended June 28, 1941, 55 Stat. 361; 42 U. S. C. 
§§1531 et seq.) ........................................................ 10,17,20

PAGE



IV

General Statutes of North Carolina:
§40-2 .............................................................................  26
§§131-126 et seq........................................................11,22

Private Laws of North Carolina:
Chapter 12 (1901) ....................................................  7,8
Chapter 38 (1907) ..................................................... 9

Private-Local Laws of North Carolina:
Chapter 66 (1915) ................................................... 9

Public Laws of North Carolina:
Chapter 23 (1881) ..................................................... 7

Public-Local and Private Laws of North Carolina:
Chapter 8 (1937) ........................................................  9
Chapter 470 (1939) ................................................... 9

United States Code:
Title 28, §1343(3)........................................................  1
Title 42, §§291(a) (7), 291f(d) ............................  11
Title 42, §291e (a) (b) (c) (d) ................................  23
Title 42, §§1981, 1983 ................................................. 1

PAGE



I n t h e

luttTft Stairs CEnurt nf Appeals
F or the F ourth Circuit

No. 9058

H ubert A. E aton, et al.,

—v.-
Appellants,

E mory Grubbs and the B oard oe Managers of J ames 
W alker Memorial H ospital, a Body Corporate,

Appellees.

on appeal from the united states district court
FOR THE EASTERN DISTRICT OP NORTH CAROLINA

BRIEF OF APPELLANTS

Statement of the Case

This appeal is from a final order entered April 9, 1963, 
granting Motion to Dismiss for lack of jurisdiction. The 
opinion below is reported, 216 F. Supp. 465, and appears 
at 61a-68a.

Plaintiffs, three Negro physicians and two of their pa­
tients, brought this class action to enjoin the James Walker 
Memorial Hospital and its administrator from continuing 
to deny admission to staff membership and treatment fa­
cilities on a non-discriminatory and non-segregated basis 
(17a).

The complaint asserted “ civil rights” jurisdiction under 
28 U. S. C. §1343(3); 42 U. S. C. §§1981, 1983. Plaintiffs



2

claimed infringement of their rights under the Fifth and 
Fourteenth Amendments to the Constitution of the United 
States (2a, 3a).

The complaint was filed July 11, 1961 (2a-17a), and 
the hospital moved to dismiss for want of jurisdiction on 
July 28, 1961 (18a). The District Court granted the Mo­
tion to Dismiss April 9, 1963 (61a-68a). No hearing was 
held although plaintiffs filed three exhibits supporting the 
allegations of the complaint (19a, 21a, 22a), and the hospital 
filed the affidavit of its Director (58a). Notice of Appeal 
was filed May 8,1963 (69a).

The Posture of This Appeal

The District Court granted the Motion to Dismiss on 
the authority of Eaton v. Board of Managers of James 
Walker Memorial Hospital, 261 F. 2d 521 (4th Cir. 1958), 
cert, denied 359 U. S. 984 (three justices dissenting), on the 
ground that “ a decision of the Court of Appeals should 
be followed . . .  in the absence of a material factual distinc­
tion or a subsequent decision . . . requiring the District 
Court to depart therefrom” (64a). The District Court 
found no change of law “ justifying a change in results” and 
no “ factual element, not before the Court in the prior case 
which shows ‘State action’ on the part of the hospital when 
considered within the totality of the relationships between 
the State and the hospital” (64a-66a).

In the first Eaton case, decided prior to Burton v. Wil­
mington Parking Authority, 365 U. S. 715, three physicians, 
who are plaintiffs here, sought to enjoin the James Walker 
Memorial Hospital from refusing to grant staff membership 
to Negroes on the basis of race. Patients seeking non- 
discriminatory treatment facilities and the right to treat­
ment from physicians of their choice without regard to race 
were not plaintiffs in that action. The District Court



3

granted Motion to Dismiss for lack of jurisdiction, 164 
F. Supp. 191 (E. D. N. C. 1958), and this Court affirmed, 
holding the hospital was operated “by an independent board 
free from State control,” 261 F, 2d at 525, and was not 
an instrumentality of the State. The United States Su­
preme Court denied petition for writ of certiorari, 359 
U. S. 984 (three justices noting their dissent). Both the 
District Court and this Court rested their decision on the 
allegations of the complaint.1

The complaint here alleges facts not alleged in the com­
plaint dismissed in the first suit. In addition, the complaint 
alleges facts, in detail, which were but generally alleged 
in the complaint in the first suit and which were not dis­
cussed by this Court or the District Court.

Specifically, in the first suit this Court did not apparently 
consider the effect of funds received from the United States 
although there was such a general allegation (76a). Here, 
amount, purpose, and origin of the funds are specified 
(11a).

This Court did not apparently consider exercise of the 
power of eminent domain, though there was a brief and 
general allegation (76a). The complaint here reveals the 
occasion, as well as State judicial conclusion that defen­
dant herein “ is a public body, a body corporate and politic 
.. . ” (11a, 12a).

In the first case, the complaint did not reveal the amount 
or the purpose of “ certain financial support from the City 
and County” prior to 1951 (261 F. 2d at 525). The com­
plaint here shows the funds received by the hospital, for 
operating expenses and capital improvement, from City, 
County, State, and United States (8a, 9a, 11a).

1 The complaint in Eaton v. James Walker Memorial Hospital, 261 F. 2d 
521 (4th Cir. 1958), appears, infra, pp. 71a-79a.



4

The District Court did not discuss these expanded alle­
gations for the reason that “ the substance of the allegations 
was fairly presented to and considered by the Court in the 
prior case” (66a). The District Court did, however, ad­
dress itself to the following facts “ urged for the first time” 
and concluded that they “ did not justify” a change in result 
(66a):

(1) The City as self-insurer has made certain pay­
ments to the hospital for services rendered in treating 
Workmen’s Compensation cases;

(2) Since July 1, 1947, the hospital has been required 
to secure a license from the State through the North 
Carolina Medical Care Commission and since that 
time the hospital has complied with the licensing pro­
cedure and standards prescribed by the Commission; 
and

(3) James Walker Memorial Hospital is superior to 
any hospital in the City and County, offering the 
highest standard of medical care, and is the chosen 
instrumentality of the City and County for furnishing 
medical care to their white citizens and affording a 
place to practice for qualified white physicians.

Subsequent to the first Eaton case, the United States 
Supreme Court decided Burton v. Wilmington Parking 
Authority, 365 U. S. 715, a case which the Court of Appeals 
for the Fifth Circuit has concluded would decide the issues 
raised here in favor of plaintiff physicians and patients, 
Hampton v. City of Jacksonville, 304 F. 2d 320, 323 (5th 
Cir. 1962). The District Court did not follow the Hampton 
case, holding, “It is clear that Burton does not enunciate 
a fundamental change in the law” (64a).



5

Questions Presented

1. Whether the Court below erred in failing to enjoin 
a hospital policy of racial discrimination when the hospital 
operated on property donated by City and County with the 
following restriction on use: “ so long as the same shall 
be used and maintained as a Hospital for the benefit of the 
County and City aforesaid and in the case of disuse or 
abandonment to revert to the said County and City.”

2. Whether a hospital—regulated and licensed by the 
State—which has received large sums for capital construc­
tion from the United States and local government; deter­
mined a “ facility necessary for carrying on community life” 
by the United States; operating on property donated by 
government and required by a reverter clause to be used 
only for hospital purposes; and having a long history of 
significant governmental contacts, including use of eminent 
domain and a call upon tax funds, may refuse staff mem­
bership to Negro physicians and non-discriminatory treat­
ment facilities to Negro patients.

3. Whether the Court below erred in dismissing the com­
plaint on the authority of a prior case without permitting 
full presentation of proof on the merits when the complaint 
raised factual and legal issues not decided or considered 
in that case and a decision of the United States Supreme 
Court established principles which supersede the authority 
of the decision relied upon.



6

Statement of Facts

Three plaintiffs are qualified physicians who reside and 
practice in Wilmington, North Carolina.2 They sought and 
were denied hospital staff membership, including the right 
to place and treat patients, because of a hospital policy 
excluding Negro physicians (4a, 5a, 13a, 14a, 15a). The 
hospital bylaws state (14a):

The applicant for membership on the Medical Staff 
shall be a white physician who has his office and prac­
tice in New Hanover County and is a graduate of a 
recognized medical school, legally licensed to practice 
in the State of North Carolina, qualified for member­
ship in the county medical society.

Two plaintiffs, patients of Doctor Roane and Doctor 
Eaton, require treatment at the hospital and desire treat­
ment from physicians of their choice without regard to race 
(5a, 6a). The hospital is by far the largest and best in 
the Wilmington area (12a, 13a, 15a, 16a), but Negro ad­
mission is restricted (12a). Those few Negroes admitted 
are segregated from other patients and placed in a separate 
building (6a). “When the need arises for Negro patients 
to undergo surgery, they are wheeled outdoors from the 
building in which they are segregated” to the place where 
surgery is performed (16a).

In addition to racial segregation, plaintiffs claim injury 
by the policy of refusing Negro physicians staff membership 
for the reason that Negro patients are forced to discharge 
the physician of their choice (in this case Doctor Roane and

2 The physicians alleged that they are “ in all respects, except race, quali­
fied to enjoy courtesy privileges at the James Walker Memorial Hospital” 
(4a, 5a). Their professional qualifications are set forth in detail in the com­
plaint (4a, 5a).



7

Doctor Eaton) if he is a Negro, and replace him with a 
white physician in order to receive treatment at the hos­
pital (16a).

In 1881, the City of Wilmington and the County of 
New Hanover acquired land and constructed a City Hos­
pital for the treatment of the “ sick or infirm poor persons” 
of the City and County (9a, 10a).3 In 1900, James Walker, 
a private citizen, furnished funds for construction of a 
new hospital on the site then occupied by the City Hospital. 
Accordingly, the old building was razed and a new hospital 
building constructed on the same property (10a).

James Walker died in 1901 before completion of the new 
building. Pursuant to his will, moneys necessary for com­
pletion of the new hospital were paid to the City and County 
and the completed building was turned over to the City and 
County for use as a City Hospital, to be “used by them and 
their successors as a hospital for the sick and afflicted” 
(10a).

In 1901, the Board of Managers of the James Walker 
Memorial Hospital was chartered as a corporation.4

The Act chartering the Board provided a majority of 
the Board of Managers would be elected by the Board of 
Commissioners of New Hanover County and the Board of 
Aldermen of the City of Wilmington, vacancies occurring 
thereafter to be filled by a vote of the Board members (7a).

The statute was enacted “ to provide for the government 
of the ‘James Walker Memorial Hospital of the City of 
Wilmington, North Carolina’ ” (7a) and its preamble de­
clares as its purpose “ that suitable provisions should . . . 
be made for the permanent maintenance of the hospital by

3 Chapter 23, Public Laws of North Carolina (1881).

4 Chapter 12, Private Laws of North Carolina (1901).



8

said City and Comity” (7a).5 The Act directed the County 
to set apart annually the sum of Four Thousand Eight 
Hundred Dollars and the City the sum of Three Thousand 
Two Hundred Dollars “ for the purpose of providing the 
proper means for sustaining the said hospital” (7a). Any 
unexpended portion of this appropriation was to be invested 
by the Board in bonds of the City, County or State (8a). 
The Act required the Board to make reports annually to 
both City and County, “which said reports shall contain a 
full time and accurate account of the conduct and manage­
ment of said hospital and dispensary, giving an itemized 
account of their receipts and disbursements, together with 
number, sex, race, age and disease of all occupants of said 
for the preceding year” (8a).

In 1901, the City and County donated to the Board the 
new hospital building and the land upon which it stood 
with the following restriction:

To have and to hold in trust for the use of the Hospital 
aforesaid, so long as the same shall be used and main­
tained as a Hospital for the benefit of the County and 
City aforesaid, and in case of disuse or abandonment 
to revert to the said County and City as their interest 
respectively appear (10a).

Throughout its history, the hospital has received funds 
from government to meet costs of operation and capital 
improvement.

In 1907, the North Carolina General Assembly provided 
that annual appropriations in “ such sums as . . . may be 
necessary” could be made from public funds in order that

5 Another purpose was removal of the management of the hospital “ from 
the vicissitudes which generally result when such an institution is left entirely 
in the control o f local municipal authorities,”  Chapter 12, Private Laws of 
North Carolina (1901) (emphasis supplied).



9

the hospital be run in an efficient manner (8a), and, in 
1915, City and County were directed to share, in equal 
proportions, the appropriations for the support of the 
hospital which “ in any one year shall not be less than 
fifteen thousand dollars ($15,000).” 6

In 1937, the Legislature provided for payments by City 
and County of $25,000 a year, each, to the hospital for three 
successive years (8a).7

In 1939, City and County were authorized to enter into 
contracts with the hospital and empowered to appropriate 
up to $25,000 a year, each, to the hospital. In addition, 
City and County were authorized, if necessary, to lay addi­
tional taxes. The appropriations and the tax levy were 
enacted “ for the purpose of providing hospitalized medical 
attention and maintenance of the indigent sick and afflicted 
poor of the said municipalities” and “ such maintenance 
and care is a necessary expense and that provision for the 
poor and unfortunate is one of the first duties of govern­
ment and that their proper maintenance and care is re­
quired under the law and Constitution of the State of 
North Carolina” (9a).8

During the period 1937-1939, City and County paid 
$30,000 per year to the Hospital. They paid also $60,000, 
of the total cost of $100,000, for addition of a North Wing 
to the Hospital. The United States contributed the balance 
of $40,000 (11a).

In 1944, another new wing, financed by the United States, 
was placed in service. Construction of this wing, and pur­
chase of the land on which it was built, was financed by a

6 Chapter 38, Private Laws o f North Carolina (1907); Chapter 66, Pri­
vate-Local Laws of North Carolina (1915).

7 Chapter 8, Public-Local and Private Laws o f North Carolina (1937).

8 Chapter 470, Public-Local and Private Laws of North Carolina (1939).



10

grant of $508,000 from the United States under the provi­
sions of the Defense Public Works Act (Act of October 14, 
1940, as amended June 28, 1941, 55 Stat. 361; 42 U. S. C. 
§§1531, et seq.). This money was paid by the United States 
to the State of North Carolina and in turn by the State to 
the Hospital (11a). The hospital received the funds on 
“ the basis of need and in determining need no discrimina­
tion shall be made on account of race,” 42 U. S. C. §1533. 
In order to receive the grant, the hospital was designated 
a “ facility necessary for carrying on community life sub­
stantially expanded by the national defense program,” 
42 U. S. C. §1531.

In 1951, the Supreme Court of North Carolina found 
unconstitutional the manner of providing for the continued 
maintenance of the hospital which had been pursued by the 
legislature since 1901, but the Court pointed out that there 
were other methods of supporting the hospital. Thereafter, 
the General Assembly of the State empowered City and 
County to contract with the hospital in order to pay for 
hospitalization of the sick and poor of the area and, sub­
sequently, public funds were paid to the hospital pursuant 
to contract. From 1952 to 1957, the hospital received ap­
proximately $275,000 from City and County (261 F. 2d at 
523). The hospital received $41,119.15 from the County 
during fiscal year 1960-61 and $37,401.99 for the first eleven 
months of fiscal 1961-62 (58a, 59a). In addition, the City 
as self-insurer has made payments to the hospital for ser­
vices rendered in treating Workmen’s Compensation cases 
(11a).

The hospital is exempt from City and County taxes. 
This exemption is worth approximately $50,000 a year to 
the hospital (19a-21a).

The hospital has exercised the power of eminent domain. 
Condemnation was employed to obtain the land for the new



11

wing financed by tlie United States. On two occasions, at 
least, while taking property, the hospital held itself out as 
a public body. In 1944, in connection with the wing con­
structed with federal funds, the hospital recited in a con­
demnation petition that it was “ a municipal corporation, a 
public body and body corporate and politic” and the Su­
perior Court of New Hanover County, found the hospital 
“a public body, a body corporate and politic . . . ”  (11a, 12a).

The State maintains control over the details of hospital 
maintenance and operation by means of “Rules and Regu­
lations for Hospital Licensure” (22a-57a) administered by 
the North Carolina Medical Care Commission.9 Compli­
ance with the standards adopted is required in order to 
receive the license necessary to operate a hospital in North 
Carolina, N. C. Gen. Stats. §§131-126.1 et seq.10

The hospital, by far the largest in the community, offers 
“ the highest standard of medical care in the City of Wil­
mington,” and is the “ chosen instrumentality” of the City 
for providing medical care to its white citizens and a place 
to practice for its white physicians. As such, it is “ in the 
nature of a public utility carrying out functions for the 
City” (13a).

9 For example, the rules provide among other things for medical staff 
organization (23a) ; standards for facilities, organization and procedures in 
surgical operating rooms (25a) ; equipment organization and procedures for 
the obstetric department (27a) ; for separation of pediatric facilities from 
those for adults and the newborn nursing service (32 a ); the circumstances 
for administration o f anesthesia (32a) ; that hospitals have adequate diag­
nostic X-ray and fluoroscopic examination facilities (34 a ); designated treat­
ment facilities for emergency or outpatient service (34a) ; for isolation rooms 
(35a) ; regulation of hospital pharmacies (35a) ; and records (3 6 a ); organi­
zation of the nursing staff is described, including minimum numbers (38a) ; 
and detailed provision for hospital food service is made (39a).

10 North Carolina enacted a “Hospital Licensing Act”  in 1947 in order 
to receive Federal aid under the Hill-Burton Act. The Act requires the states 
to enact legislation providing for compliance with minimum standards of 
maintenance and operation, 42 U. S. C. §§291(a) (7 ), 291f(d).



12

There are four hospitals serving the Wilmington area. 
They admit approximately 16,600 persons per year; 11,000, 
or approximately 66% are admitted to the James Walker 
Memorial Hospital. As one hospital serves children only, 
James Walker Memorial Hospital represents 75% of the 
community’s hospital capacity for adults. The following 
table reveals the manner in which the hospitals serve the 
community (12a, 13a):

Hospital Status
No. Admissions 

Per Year
Kaeial
Policy

James Walker Memorial Non-Profit 11,000 Most persons ad­
mitted are white. 
The few Negroes 
admitted are seg­
regated. No Negro 
doctors on staff.

Community County Owned 2,000 Patients all Ne­
gro. Negro physi­
cians permitted on 
staff. White phy­
sicians on staff 
also.

Babies Non-Profit 2,000 Negro and white 
children admit­
ted. No Negro 
doctor on staff.

Cape Fear Memorial Non-Profit 1,600 No Negroes as pa­
tients or on cour­
tesy staff.



13

A R G U M E N T

I.

A Reversionary Interest in Land in Favor of Govern­
ment, Restricting Hospital Property to Use “ as a Hospital 
for the Benefit of the County and City . . . And in Case 
of Disuse or Abandonment to Revert to the Said County 
and City”  Subjects the Hospital to the Restraints of the 
Constitution Against Racial Discrimination.

In Burton v. Wilmington Parking Authority, 365 U. S. 
715, the Supreme Court held that when a state leases prop­
erty to a private corporation so as to create a relationship 
of mutual benefits, responsibilities and obligations the lessee 
must comply with the proscriptions of the Fourteenth 
Amendment as though they were binding covenants written 
into the lease itself. The Burton case was decided April 
17, 1961. This Court decided Eaton v. James Walker 
Memorial Hospital, 261 F. 2d 521 (4th Cir. 1958), Novem­
ber 28, 1958. Certiorari was denied, 359 U. S. 984, three 
justices dissenting, May 4, 1959.

Appellants contend that the lease in Burton, 365 U. S. 
at 719, for “ restaurant, dining room, banquet hall, cocktail 
lounge and bar and for no other use and purpose” is iden­
tical, as far as its legal consequences are concerned, to 
provisions in the deed of July 19, 1901, by which the City 
and County gave to the Board the hospital building and 
the land upon which it stands “ to have and to hold in trust 
for the use of the hospital aforesaid, as long as the same 
shall be used and maintained as a hospital for the benefit 
of the County and City aforesaid, and in case of disuse or 
abandonment to revert to the said County and City as their 
interest respectively appear” (10a).



14

By means of this retained property interest, the City and 
County have dictated absolutely the use to which the hos­
pital building and land is to be put. If the Board uses 
the property for any purpose other than as a “hospital 
for the benefit of the County and City,” or abandons the 
property, building and land revert to City and County. 
The retained property interest confers, therefore, complete 
present control over the use of the property, for it assures 
City and County that the land and building will always be 
used as a “hospital for the benefit of the County and City.” 
Freedom of choice in the use of property characteristic of 
truly private institutions in our society is absent here.

The court below did not suggest any conceptual distinc­
tion, insofar as state involvement is concerned, between 
a long-term lease for a particular purpose with the right 
of cancellation of the lease if that purpose is not carried 
out, as in Burton, 365 U. S. at 719, and a conveyance sub­
ject to the right of reversion if property does not continue 
to be used for the purpose prescribed. In both cases the 
obviously significant decision as to what use shall be made 
of property is dictated and enforced by government. Nor 
does it matter what label the law of real property attaches 
to the property interest retained by City and County for 
only the consequence of its retention is important in the 
context of Fourteenth Amendment rights. See, e.g., City 
of St. Petersburg v. Alsup, 238 F. 2d 830 (5th Cir. 1956) 
(holding it irrelevant to Fourteenth Amendment rights 
that a City operated parks and swimming facilities in a 
proprietary capacity, as a business, rather than in a gov­
ernmental capacity).

The United States Court of Appeals for the Fifth Cir­
cuit has concluded that the holding as to the lease for a 
particular purpose “ and no other” in Burton, supra, is indis­
tinguishable from the situation created by the limitation



15

on use here. Hampton v. City of Jacksonville, 304 F. 2d 
320, 322, 323 (5th Cir. 1962). In Hampton, golf courses were 
sold by the City to private individuals who refused to 
permit Negroes to play. The deeds of sale provided that 
the properties were to be used as golf courses only or 
would revert to the City. The presence of the reverter 
clause was sufficient to invoke the restraints of the Con­
stitution against racial discrimination. It should be noted 
that in Hampton the condition limiting use of the properties 
to that of golf courses was the only relationship between 
the City and the vendees considered by the Court, 304 
F. 2d at 323, whereas the condition and trust here limiting 
use of the property to use as a hospital “ for the benefit of 
the County and City” (10a) is but one of a number of 
significant relationships between the hospital and govern­
ment.

In Hampton, 304 F. 2d at 322, the Court found the prop­
erty interest retained amounted to “ complete present con­
trol” :

Conceptually, it is extremely difficult, if not impos­
sible, to find any rational basis of distinguishing the 
power or degree of control, so far as relates to the 
state’s involvement, between a long term lease for a 
particular purpose with the right of cancellation of 
the lease if that purpose is not carried out on the one 
hand, and an absolute conveyance of property, subject, 
however to the right of reversion if the property does 
not continue to be used for the purpose prescribed by 
the state in its deed of sale. Appellees in this case 
stress the fact that there is no “ immediate control” and 
that there is no “present interest” in the City of Jack­
sonville. These are empty phrases when considered in 
connection with the absolute allegation on the part of 
the present owners of the property that they imme­



16

diately, presently, and always nse the leased property 
for golf course purposes and no other. This is com­
plete present control even though the daily operations 
is, of course, not subject in other matters to the City’s 
directions. (Emphasis in original.)

The court explicitly rejected the authority of Eaton v. 
James Walker Memorial Hospital, 261 F. 2d 521 (4th Cir. 
1958):

With reference to the Fourth Circuit case of Eaton 
v. James Walker Memorial Hospital, supra, it appears 
that it was decided before the Supreme Court an­
nounced its decision in the Wilmington Parking case, 
supra. Being unable, as we are, to find any valid dis­
tinction between the effect of the lease in the Wilming­
ton Parking Authority case and the sale with a rever­
sionary interest in the Walker Hospital case, we doubt 
whether the Fourth Circuit would have decided the 
hospital case as it did had it followed the Supreme 
Court decision. (304 F. 2d at 323.)

The City and County have retained not only a valuable 
present interest in the hospital property and a severe limi­
tation on the property rights of the Board, but also have 
the practical assurance that the property will always be 
used as City and County desire. As far as the Fourteenth 
Amendment is concerned, retention by the City and County 
of a present interest in property, which absolutely defines 
the use to which it may be put, makes the hospital an in­
strumentality of the State to the same extent as if title had 
not passed and the transaction had been cast in the form 
of a long-term lease. Cf. Burton v. Wilmington Parking 
Authority, 365 U. S. 715; Tate v. Department of Conserva­
tion and Development, 231 F. 2d 615 (4th Cir. 1956); City of 
Greensboro v. Simkins, 246 F. 2d 425 (4th Cir. 1959). Cer­



17

tainly, the form of the State’s property interest cannot 
determine plaintiffs’ constitutional right, for “ state action” 
extends to “ participation through any arrangement, man­
agement, funds or property,” Cooper v. Aaron, 358 U. S. 1, 
4, 19; Burton, 365 U. S. at 722; Tate, supra; City of St. 
Petersburg v. Alsup, 238 F. 2d 830 (5th Cir. 1956).

Under the Burton rule, if the hospital had leased the 
property from the City and County, it would be forbidden 
to follow its policy of racial discrimination. It is immate­
rial that a reverter was used instead of a lease, for com­
plete control of present use was retained.

Assurance that the property will be used for a hospital 
or will revert to government ownership is highly significant 
to the City and County. James Walker Memorial accounts 
for 75% of Wilmington’s adult hospital capacity. The hos­
pital is, as determined by the United States, a “ facility 
necessary for carrying on community life,” 42 U. S. C. 
§1531, which government would obviously have to replace 
if it ceased to operate. In practice, the retained property 
interest assures that change in use or abandonment is 
unlikely to occur. Should it occur, however, City and County 
would be able to take over the hospital operation at no 
cost. As the replacement cost of the hospital increases— 
as it has, significantly, since 1901—the value and signifi­
cance of the retained property interest increases, for the 
reverter is proof against the massive replacement cost 
which City and County would otherwise have to bear in 
the event of disuse or abandonment. Finally, the limitation 
on use is retained in the form of a trust “ for the benefit 
of the County and City” (10a). It is unlikely, therefore, 
that the Board could even change the manner of hospital 
operation from a non-profit to a private, profit-making, 
institution.



18

Public Utilities Commission v. Poliak, 343 U. S. 451, is 
authority for the rule of law urged here. In that case, the 
court found a streetcar company subject to the Constitution 
for the reason that it held a franchise to perform a service 
for the benefit of the community and was regulated by 
government. Boman v. Birmingham Transit Co., 280 F. 2d 
531, 534, 535 (5th Cir. 1960) reached a similar conclusion. 
So, here, the Board received a gift of a hospital from gov­
ernment on the express condition that it be used as a hospi­
tal and held in trust “ for the benefit of the County and 
City” (10a). Cf. Hampton v. City of Jacksonville, 304 F. 2d 
at 323. The hospital’s continued performance of this public 
function, enforced by the retained property interest, makes 
the hospital an agent of the State for the purposes of the 
Fourteenth Amendment.

II.

The Total Effect of the Hospital’s Contacts With Gov­
ernment Is Sufficient to Place It Under the Restraints of 
the Fifth and Fourteenth Amendments Against Racial 
Discrimination.

Burton, 365 U. S. at 722, 724, explicitly rejected single 
factor tests of state responsibility under the Fourteenth 
Amendment. In contrast to the absence of day-to-day con­
trol, relied on in the first Eaton case, the Court in Burton, 
365 U. S. at 725, found it sufficient that the State place “ its 
power, property, and prestige” behind an institution which 
discriminated. Despite a private board “ in full control” 
(as relied upon in Eaton, 261 F. 2d at 525), the Court in 
Burton found the State “a joint participant in the chal­
lenged activity,” 365 U. S. at 725. Moreover, the Court 
reasserted the test of Cooper v. Aaron, 358 U. S. 1, 4, 19, 
that responsibility under the Fourteenth Amendment ex­



19

tends to “ State participation through any arrangement, 
management, funds or property,” 365 U. S. 722 (emphasis 
added). Under the rule of Burton, the total effect of the 
relationship, including all benefits, obligations and assis­
tance provided, is considered when determining whether the 
Constitution applies to restrain racial discrimination.

This Court in the first Eaton case did not consider the 
total effect of contacts between the hospital and govern­
ment under the rule announced in Burton. Nor did this 
Court actually have before it all of those contacts because 
some were not alleged in the complaint in that case and 
because others were alleged without precision or detail.

Financial Contributions for Capital Construction

In the first Eaton case the plaintiffs alleged only that 
“defendants . . . have received large grants of money from 
the Federal Government for expansion and maintenance 
of the said Hospital” (76a). No mention of this allegation 
of federal assistance was made in the opinion of the Dis­
trict Court or this Court. Here, plaintiffs allege (11a):

The hospital has received money from the United 
States under provisions of the Defense Public Works 
Act (Act of October 14, 1940 as amended June 28, 
1941, 55 Stat. 361) for the expansion and maintenance 
of its facilities. In March, 1944 a new addition to 
the hospital, financed by the United States, under 
said Act to the extent of $508,000 was placed in service 
at the hospital. This money was paid by the United 
States to the State of North Carolina and in turn by 
the State of North Carolina to the James Walker 
Memorial Hospital.

The impact of a federal grant in excess of half a million 
dollars to the hospital satisfies the rule of Burton that



20

state financial support of racial discrimination violates the 
Fourteenth Amendment (and the Fifth Amendment, Bolling 
v. Sharpe, 347 U. S. 497). Here, then, there is govern­
mental participation through “ funds” as well as “property” 
(the limitation on use) calling for application of constitu­
tional principles against racial discrimination, Cooper v. 
Aaron, 358 U. S. 1, 4, 19. It is significant that the grant 
of $508,000 in federal funds was given to the hospital be­
cause it was a “ facility necessary for carrying on com­
munity life expanded by the National Defense Program,” 11 
42 U. S. C. §1531, the funds being allocated “ on the basis 
of need and in determining need no discrimination shall be 
made on account of race.” 42 TJ. S. C. §1533. Such an in­
stitution is certainly carrying on a “useful and necessary” 
activity for the community, if not the nation, and, there­
fore, subject to the Constitution, Boman v. Birmingham 
Transit Co., 280 F. 2d 531, 535 (5th Cir. 1960); Burton, 
365 TJ. S. at 723, 724.

In addition to the federal grant to construct a new hos­
pital wing, City and County have joined with the United 
States to construct another wing of the hospital. In the 
first Eaton case, it was alleged that “ said City [and County] 
has for many years prior to 1951 made direct annual con­
tributions from its treasury for the support, maintenance 
and operation of said hospital” (75a, 76a). While it is 
true, of eourse, that capital contributions could be con­
sidered under such an allegation, the opinion of this Court 
shows that as far as the allegations as to City and County 
funds for “ support, maintenance, and operation” are con­
cerned, the Court did not interpret the allegation to apply 
to appropriations for capital construction. See 261 F. 2d

11 Hospital expansion was financed by the United States in order to meet 
an “ acute”  national need of “ public works necessary to the health, safety or 
welfare of persons engaged in national defense activities,”  42 U. S. C. §1532.



21

521, 524, 525. Here, the amount and purpose of City and 
County contribution for capital construction are alleged 
with specificity (11a):

Hospital costs for capital construction have been 
paid for by the City and County. For example, from 
fiscal 1937 to 1939, the City and County in addition to 
their regular appropriations for $15,000 per annum, 
paid $60,000 of the total cost of $100,000 for the addi­
tion of a North Wing to the hospital. The balance of 
$40,000 was contributed by the United States.

Two wings of the hospital, the main hospital building 
and the real property on which the main building and a 
wing of the hospital stand, are, therefore, the product of 
funds and property donated by government. Without funds 
and property received from government, it is doubtful 
whether the Board would be able to operate an institution 
in any way comparable to the present, over 300 bed, hos­
pital.

Were these funds general appropriations expended for 
hospital operation at a particular time in the past it might 
be argued that their present effect on the hospital was not 
crucial; while the hospital might once have been subject 
to the Fifth or Fourteenth Amendments it was not so sub­
ject now. But these funds were not general appropriations 
for hospital operation, hut grants for capital construction 
and land acquisition. The consequences of their expenditure 
are as great today as in 1939 and 1944. Capital construc­
tion is by its very nature an investment for the future. 
Government support of the hospital in the past has re­
sulted in hospital buildings and land serving the com­
munity today.



22

Regulation and Licensing

In addition to funds for capital construction and land 
purchase, the conveyance of hospital and land in 1901, 
and the restriction on use of hospital property, the total 
relationship between government and the hospital includes 
numerous other significant contacts.

A  factor not considered by the Court in the first Eaton 
case and clearly relevant under the broad test of Burton, 
is the effect of the North Carolina Hospital Licensure Act, 
§§131-126, et seq., of the General Statutes of North Caro­
lina and the Rules and Regulations of the North Carolina 
Medical Care Commission (22a-57a). While the Rules and 
Regulations are not specifically alleged in the Complaint 
they fairly come within its terms (13a) and they were con­
sidered by the District Court (66a). The Rules and Regula­
tions of the Commission are mandatory as a hospital can­
not operate in North Carolina without a license issued 
by the Commission, §131-126.3. General Statutes of North 
Carolina. These Rules and Regulations (22a-57a) prescribe 
specific standards which effectively control the full range 
of day-to-day hospital administration and operation. They 
set forth minimum standards for the physical plant, clinical 
services, auxiliary services and food services of the hos­
pital, which are enforced by an agency of the State. The 
result of this regulation is comprehensive control of the 
manner in which the hospital is operated sufficient, in it­
self, to invoke the Constitution. Public Utilities Commis­
sion v. Poliak, 343 U. S. 451, 462. Plaintiffs do not contend, 
however, that every institution the state regulates becomes 
an instrumentality of the state for the purposes of the 
Fourteenth Amendment, but that state control of operating 
standards is another factor to be considered in evaluating 
the total relationship between hospital and government. 
As such, they provide evidence of day-to-day control, the



absence of which was relied upon in the first Eaton case, 
supra, at 261 F. 2d at 525.

The license itself is, of course, a grant of government 
power which the Supreme Court and the Fifth Circuit 
have held sufficient, when the licensee operates in an area 
of high public importance, to invoke the Fifth and Four­
teenth Amendments. Public Utilities Commission v. Poliak, 
343 U. S. 451; Bornan v. Birmingham Transit Co., 280 
F. 2d 531 (5th Cir. 1960). While it is true that the state 
licenses a variety of persons and institutions, it is an 
easily verifiable fact that some licenses grant more power 
than others. The state would be hardpressed to justify 
denial of a driver’s license or a doctor’s license on the 
ground that there already existed drivers or doctors in the 
community. But the public interest would not be the same 
if a license were denied to those who would construct a 
hospital in a place where there was already sufficient hos­
pital care available. North Carolina has accepted this prop­
osition by submitting a State Plan under the Hill-Burton 
Act which controls the number of hospitals which may be 
built in given areas throughout the State, 42 C. F. E. 
§§53-11, 53-12, 53-13; 42 U. S. C. §291e (a) (b) (c) (d). 
So here the grant of a hospital license, after inspection to 
insure conformance with multiple standards of operation, 
confers far greater State power than many other licenses. 
The United States, for example, is not in the habit of 
giving large sums of money to automobile drivers, but it 
did grant over half a million dollars to this hospital.

Such a comprehensive scheme of governmental regula­
tion was sufficient to require decision of a Fifth Amendment 
due process claim where the principal government involve­
ment was a decision by a regulatory body to do nothing 
about private activity. Public Utilities Commission v. 
Poliak, 343 U. S. 451, 462. And this case, of course, has



24

elements that the Poliak case did not, e.g., financial sup­
port and restrictions on the use of real property among 
others.

Tax Exemption

In the first Eaton case, the complaint alleged as one 
facet of state participation exemption from City and County 
taxes. This factor was not mentioned in the District Court 
or this Court’s opinion. Secondly, no estimate of the value 
of tax exemption was before the Court in Eaton, supra. But 
in Burton, 365 U. S. at 724, the Court, when denoting the 
factors which led to its conclusion that the restaurant was 
subject to the Fourteenth Amendment, considered that 
“ should any improvements effected in the leasehold . . . 
become part of the realty, there is no possibility of in­
creased taxes being passed on to it since the fee is held 
by a tax exempt government agency.” The value of tax 
exemption to the hospital is, therefore, a factor which now 
must be considered in evaluating the relationship of gov­
ernment and this hospital.

The tax rate of New Hanover County was $1.30 per 
$100.00 valuation in 1961 and the tax rate of the City of 
Wilmington was $2.15 per $100.00 valuation (21a). Tax 
assessment is at 50 percent of actual value (21a). The 
James Walker Memorial Hospital has been appraised (19a, 
20a) by a realtor, familiar with the Wilmington area, at 
a value of approximately $3,000,000. Therefore, tax exemp­
tion from City and County subsidizes the hospital to the 
extent of approximately $50,000 per year. This is further 
evidence of substantial support from government which 
was not before the Court in the first Eaton case.



25

Em inent Domain

In Eaton, supra, the complaint alleged only “ that from 
time to time the said defendants . . . have exercised the 
right of eminent domain” (76a). The allegation was not 
discussed by this Court or the District Court. The present 
complaint alleges (11a):

4. The hospital has exercised the power of eminent 
domain in aid of the expansion of its facilities. De­
fendant Board of Managers of said hospital, on April 
28, 1942, filed a petition . . .  to condemn land for use 
by the hospital in connection with the addition to the 
hospital facilities completion in 1944. The condemna­
tion petitions in which the defendant alleged that it 
was “a municipal corporation, a public body and body 
corporate and politic” was granted in the Superior 
Court of New Hanover County, State of North Caro­
lina on December 5, 1944, which recited that the defen­
dant herein “ is a public body, a body corporate and 
politic. . . . ”

5. On another occasion in which the hospital sought 
a declaratory judgment in the State Courts of North 
Carolina adjudging its right to support from the City 
and County, it alleged that it was a public body. . . .

Not only did the hospital receive large amounts of City, 
County and Federal funds to expand its facilities, but it was 
granted the power of eminent domain to obtain the prop­
erty on which to build. Not only was the money to purchase 
the land and the right to acquire the property supplied by 
government, but the hospital alleged that it was at the 
time a public or municipal corporation and was adjudi­
cated such. As the hospital has used public power for a 
public purpose it cannot discriminate.



26

In North Carolina hospitals exercise eminent domain for 
“works, which are authorized by law and which involve a 
public use or benefit,” §40-2, General Statutes of North 
Carolina, and the hospital must be “wholly or partly de­
pendent upon the State for maintenance” and “ in need of 
land for its location.” Ibid. Significantly, eminent domain 
is granted hospitals along with other public service insti­
tutions such as railroads, power producers, streetcar com­
panies and motor carriers. Ibid. Cf. Public Utilities Com­
mission v. Poliak, 343 U. S. 451, 461-63; Boman v. Birming­
ham Transit Co., 280 F. 2d 531, 535 (5th Cir. 1960); Baldwin 
v. Morgan, 287 F. 2d 750, 755 (5th Cir. 1961). Moreover, 
in order to exercise eminent domain, these institutions must 
furnish the public with “ some necessity or convenience 
which cannot readily be furnished without the aid of gov­
ernmental power, and which is required by the public as 
such,” City of Charlotte v. Heath, 226 N. C. 750, 40 S. E. 2d 
600, 604, 605; cf. Boman v. Birmingham Transit Co., supra. 
And the use which justifies a taking by eminent domain is 
use by or for government or the general public, and, con­
sequently, only government or quasi public agencies are 
authorized to exercise the power. Proctor v. State Highway 
and Public Works Comm., 230 N. C. 687; 55 S. E. 2d 479; 
City of Charlotte v. Heath, 226 N. C. 750; 40 S. E. 2d 600; 
Seaboard Air Line R. Co. v. Atlantic Coast Line R. Co., 
240 N. C. 495; 82 S. E. 2d 771, 784.

Financial Contribution for Hospital Operation

“ The record before” the Court in the first Eaton ease 
did “not reveal” the amount of “ certain financial support 
from the City and County” received by the hospital, 261 
F. 2d at 525. The complaint there only alleged “ that said 
City [and County] has for many years prior to 1951 made 
direct annual contributions from its treasury for the sup­
port, maintenance and operation of said Hospital” (75a).



27

It is clear, however, from the present complaint that both 
City and County undertook, up to 1951, to carry out their 
responsibility under the statute chartering the Board to 
provide “ for the permanent maintenance of the hospital” 
(7a). City and County expended large sums to support the 
hospital (7a-9a) and were authorized to lay taxes in order 
to obtain such funds (9a).

The Supreme Court of North Carolina declared uncon­
stitutional the method by which City and County supported 
the Hospital in Board of Managers of the James Walker 
Memorial Hospital of Wilmington v. City of Wilmington, 
237 N. C. 179, 74 S. E. 2d 749 (1953), but City and County 
have nonetheless paid public funds to the hospital pursuant 
to contract. In other circumstances, payment of public 
funds by contract to a hospital might not result in “ state 
action.” But such payments are merely a continuation, 
by a different means, of the City and County policy, going 
back to 1901, of supporting the operations of the hospital. 
Secondly, this history of financial support—when consid­
ered along with the limitation on use of hospital property, 
contribution of capital funds and property, grant of emi­
nent domain and the other contacts shown by the complaint 
—demonstrates again that the hospital is the chosen instru­
ment of City and County, akin to a public utility, for pro­
viding medical care to their white citizens.

The complaint reveals that only James Walker Memorial 
Hospital is capable of meeting the medical needs of the 
community’s population (12a, 13a). Had not the City and 
County continuously conferred the benefit of governmental 
action upon the hospital, a public hospital would have been 
built long ago to meet the needs of the community and, of 
course, such a hospital could not racially discriminate, 
Brown v. Board of Education, 347 U. S. 483; Johnson v. 
Virginia,------U. S . ------- , 10 L. ed. 2d 195, 83 S. Ct. ------.



As much as streetcar companies in Public Utilities Com­
mission v. Poliak, 343 U. S. 451 and Boman v. Birmingham 
Transit Co., 280 F. 2d 531, 535 (5th Cir. 1960), the hospital 
“ is about the public’s business. It is doing something the 
state deems useful for the public necessity and convenience. 
This is what differentiates the public utility which holds a 
special franchise from an ordinary business corporation 
which in common with all others is granted the privileges of 
operating in corporate form but does not have that special 
franchise of using state property for private gain to per­
form a public function”  (emphasis added).

Board of Managers of the James Walker Memorial Hos­
pital of Wilmington, North Carolina v. The City of Wil­
mington, 237 N. C. 179, 74 S. E. 2d 749, held the method of 
supporting the hospital unconstitutional, under state law, 
as unauthorized local legislation pertaining to health. The 
Court emphasized, however, that only the manner of sup­
porting the hospital was invalid and that the end could be 
accomplished easily through other means. 237 N. C. at 196, 
197. Subsequent to this decision, the contractual device 
suggested by the Court was adopted by City and County 
(9a). Although the Court denied the hospital’s right to 
annual appropriations from City and County, it did not 
thereby—nor could it—erase the consequences of such sup­
port for Fifth and Fourteenth Amendment purposes. And, 
of course, nothing decided in that case in any way changes 
the consequences of the continuous use by the hospital of 
other government power and property.

Summary

The hospital is by far the largest and best hospital in 
Wilmington. If it had not received government funds and 
property, government would have had to take direct action 
to meet the medical needs of the community. It holds a 
valuable license and is closely regulated by the State.



29

Throughout its history, indigent sick have been plaeed in 
the hospital by local government. Government appointees 
sat on the hospital Board for many years. The United 
States determined it a facility “necessary for carrying on 
community life.” The hospital has exercised the “ public” 
power of eminent domain for the benefit of the general 
public and at that time held itself out as a “public corpo­
ration.” The hospital has been granted and presently uses 
large amounts of “ state” and federal property. Two wings 
of the hospital in service today are the product of construc­
tion financed by government. The hospital building, also in 
service today, and the land on which it and a hospital wing 
stand are the gift of government. The Board owns hospital 
property “ for the benefit of the County and City” (10a). 
Bestrictions imposed by government on that property as­
sure the continued operation of the hospital either for com­
munity benefit or, in case of disuse or abandonment, under 
government ownership. Public funds have been appropri­
ated for the operation of the hospital for over fifty years. 
Tax exemption subsidizes the hospital to the extent of 
$50,000 annually.

But for the “ power” and “property” of government and 
the “benefits mutually conferred” (Burton, 365 U. S. at 724, 
725) the hospital would be a far different institution than 
it is now, poor in physical resources, and certainly not a 
facility “necessary for carrying on community life,” 42 
U. S. C. §1531. Support of the hospital enabled City and 
County to create an institution able to serve the medical 
needs of its citizens while enabling the hospital to fulfill its 
chartered purpose. This is as much a relationship of “bene­
fits mutually conferred” as found in the Burton case be­
tween a municipal parking authority and a coffee shop. It 
would be to divorce this hospital from its history to hold it 
may discriminate on the basis of race. For “ state action,” 
taking many forms, has always supported the hospital, and



30

the fruits of government support—still clearly in evidence 
to any patient or physician—have played a crucial role in 
providing the hospital with the resources with which it 
presently serves the community.

Right to Hearing

The complaint alleges contacts between the hospital and 
government in detail, but that is no substitute for a full 
record. “ Only by sifting facts and weighing circumstances 
can the non-obvious involvement of the state in private con­
duct be attributed its true significance.” Burton, 365 II. S. 
at 722. The District Court, by refusing the opportunity 
to submit detailed proof of the allegations of the complaint, 
has necessitated resolution of the constitutional status of 
the hospital without the concrete and revealing surround­
ings of a complete record.12 But it is “ the accepted rule” that 
a complaint “ should not be dismissed for failure to state 
a claim unless it appears beyond doubt that the plaintiff 
can prove no set of facts in support of his claim which 
would entitle him to relief.” Conley v. Gibson, 355 U. S. 
41, 45-47. Considering the Fifth Circuit decision in Hamp­
ton, 304 F. 2d 320 (5th Cir. 1962), which supports granting 
plaintiffs relief because of the limitation on use alone, and 
the numerous other consequential relationships between 
government and the hospital present here, it is far from 
“beyond doubt that plaintiffs can prove no set of facts in 
support of [their] claim which would entitle [them] to 
relief.” Conley v. Gibson, supra. Plaintiffs are entitled to 
a hearing in order to prove, in detail, those allegations of 
the complaint which establish they are entitled to relief.

12 For example, the hospital building and land, conveyed in 1901, plus 
two wings of the hospital, were gifts from government. Evidence may be 
extremely useful in gauging the significance of this property in terms of the 
total hospital operation. Similarly, evidence may be of great assistance in 
evaluating the other contacts between the hospital and government.



31

CONCLUSION

W herefore, for  the foregoing reasons, appellants pray 
that the judgment o f the court below be reversed.

Respectfully submitted,

Jack Greenberg
Constance B aker Motley
Michael Meltsneb 

Suite 1790 
10 Columbus Circle 
New York 19, New York

R obert R. B ond
612 Red Cross Street 
Wilmington, North Carolina

Conrad 0 . P earson
2031/2 East Chapel Hill Street 
Durham, North Carolina

Attorneys for Appellants



APPENDIX



A P P E N D I X  A

E mory

7-11-61 
7-28-61 

3- 8-62 
5-14-62 

9-12-62 

9-15-62 

9-28-62

10- 4-62
3- 9-63
4- 9-63

5- 8-63

Relevant Docket Entries

H ubert A. E aton, et al.,

Grubbs and T he B oard of Managers of J ames 
W alker H ospital, a body corporate.

Filed Complaint and Cost Bond 
Filed defendants’ Motion to Dismiss 

Filed plaintiffs’ Motion for Hearing 
Filed plaintiffs’ Motion for Hearing 

Filed plaintiffs’ Exhibit A  

Filed plaintiffs’ Exhibit B

Filed affidavit of Robert R. Martin, defendants 
Exhibit A

Filed plaintiffs’ Exhibit C
Filed plaintiffs’ Motion for Judgment
Filed Opinion and Order Granting Motion to 
Dismiss
Filed Notice of Appeal to United States Court 
of Appeals for the Fourth Circuit



2a

Complaint

(Filed: July 11, 1961)

IlST THE

UNITED STATES DISTRICT COURT 
F ob the E astern D istrict op North Carolina

W ilmington D ivision

H ubert A. E aton, D aniel C. R oane, Samuel James Gray, 
V ernetta E. H ussey and L eland M. Newsome, on be­
half of themselves and others similarly situated,

Plaintiffs,
— v .—

E mory Grubbs and T he B oard op Managers op J ames 
W alker Memorial H ospital, a body corporate,

Defendants.

I

A. The jurisdiction of this Court is invoked pursuant to 
Title 28 United States Code §1343(3). This is an action 
authorized by Title 42 United States Code §1983 which 
authorizes any citizen of the United States or other per­
son within the jurisdiction thereof to commence a suit in 
the district courts of the United States to redress the 
deprivation, under color of any state law, statute, ordi­
nance, regulation, custom, or usage of any right, privilege, 
or immunity secured by the Constitution of the United 
States or any Act of Congress providing for equal rights 
of citizens or of all persons within the jurisdiction of the 
United States.



3a

B. Plaintiffs are Negro citizens of the United States 
and of the State of North Carolina who seek redress for 
the deprivations of rights, privileges, and immunities se­
cured by the Fourteenth Amendment to the Constitution 
of the United States, §1, and also secured by Title 42 
United States Code §1981 providing that Negro citizens 
shall have the same benefits under law as are enjoyed by 
white citizens. Plaintiffs also assert rights under the due 
process clause of the Fifth Amendment to the Constitution 
of the United States.

Complaint

I I

This is a class action brought by plaintiffs on behalf of 
themselves and on behalf of other Negroes similarly situ­
ated, pursuant to Rule 23(a)(3) of the Federal Rules of 
Civil Procedure. Plaintiffs herein are of the class of per­
sons who because of their race have been denied access to 
the facilities of defendant hospital on the same basis and in 
the same manner as white persons similarly situated in the 
City of Wilmington, North Carolina. Plaintiffs, Hubert 
Eaton, Daniel C. Roane and Samuel James Gray are physi­
cians who are duly licensed by the State of North Carolina 
to practice the profession of medicine within the state. 
Plaintiffs Yernetta E. Hussey and Leland M. Newsome 
are Negro citizens residing in the City of Wilmington who 
seek admission to defendant hospital for the purpose of the 
diagnosis and treatment of illness without racial discrim­
ination and by a physician of their choice who without 
regard to his race is qualified to practice in said hospital. 
Common questions of law and fact are involved, plaintiffs 
assert common grievances which arise out of common 
wrongs, and they seek common relief for themselves and 
for the members of the class they represent.



4a

III

This suit seeks an injunction on behalf of plaintiffs and 
those similarly situated prohibiting defendants from re­
fusing to grant courtesy staff privileges to plaintiff-physi­
cians including the right to treat their own patients when 
admitted to the hospital, and requiring defendants to 
grant to plaintiff-patients access to the facilities of defen­
dant hospital without distinction based upon race or color.

IV
A. Plaintiff, Hubert A. Eaton a Negro and citizen of the 

United States and the State of North Carolina, is and has 
been a resident of the City of Wilmington, where he has 
been practicing medicine for the past seventeen years. 
He has been a surgeon in said city for the past fifteen years 
on the active surgical staff of the Community Hospital. 
He holds a B. S. degree from Johnson C. Smith University, 
Charlotte, North Carolina, and M. S. and M. D. degrees 
from the University of Michigan, Ann Arbor, Michigan. 
He served one year of internship at the Iv. B. Reynolds 
Hospital in Winston-Salem, North Carolina prior to be­
ginning practice in Wilmington, North Carolina. He is in 
all respects, except race, qualified to enjoy courtesy privi­
leges at the James Walker Memorial Hospital.

B. Plaintiff, Daniel C. Roane a Negro and citizen of the 
United States and the State of North Carolina, is and has 
been a resident of the City of Wilmington, where he has 
been practicing medicine for the past twenty-three years. 
He holds B. S. and M. D. degrees from Howard University, 
Washington, D. C. He served one year of internship and 
a residency in internal medicine at Kansas City General 
Hospital, Kansas City, Missouri. He also served a resi­

Complaint



5a

dency in 1938 at Community Hospital, Wilmington, North. 
Carolina. Since then he has been engaged in the general 
practice of medicine and surgery in New Hanover County. 
Dr. Eoane is presently chief of staff and acting head of 
the Department of Obstetrics, Community Hospital, Wil­
mington, a member of the Old North State Medical Society, 
John Andrew Surgical Society of the Carolinas, the Wil­
mington Academy of Medicine and the National Medical 
Association. He is in all respects except race, qualified to 
enjoy courtesy privileges at the James Walker Memorial 
Hospital.

C. Plaintiff, Samuel James Gray a Negro and citizen of 
the United States and the State of North Carolina is and 
has been a resident of the City of Wilmington, where he 
has been practicing medicine for the past twenty-two years. 
He holds B.S. and M.D. degrees from Howard University, 
Washington, D. C. He served one year (1937-1938) as an 
interne at Lincoln Hospital, Durham, North Carolina, and 
eighteen months residency at Community Hospital, Wil­
mington. Dr. Gray is a member of the surgical and medical 
staff of Community Hospital, Wilmington. He is in all 
respects, except race, qualified to enjoy courtesy privileges 
at the James Walker Memorial Hospital.

V

A. Plaintiff, Vernetta E. Hussey is a Negro and citizen 
of the United States and the State of North Carolina and 
has resided in Wilmington, North Carolina for the past 34 
years. She suffers from low back pains and a feeling of 
pelvic organs falling, especially while in motion. She also 
suffers from low abdominal pains and interference with 
digestive processes. She is a patient of Dr. Daniel C.

Complaint



6a

Eoane and desires to remain his patient but cannot obtain 
treatment or diagnosis by him at James Walker Memorial 
Hospital because of its racial policy. She desires to secure 
treatment and diagnosis at James Walker Memorial Hos­
pital and is in all respects eligible to enter James Walker 
Memorial Hospital but has not because she is unable to 
retain the physician of her choice there. Moreover, she 
desires, when admitted to said hospital not to be segregated 
solely because of her race, which racial segregation is the 
policy of said hospital.

The plaintiff, Leland M. Newsome is a Negro and citizen 
of the United States and the State of North Carolina and 
has resided in New Hanover County for the past 11 years. 
The policy of the company for which he works requires that 
employees in his capacity take a thorough physical exam­
ination once each year using the best services and medical 
equipment available. He is a patient of Dr. Hubert A. 
Eaton and wishes to take these yearly physical examina­
tions as Dr. Eaton’s patient. He desires to enter James 
Walker Memorial Hospital where the best medical equip­
ment in this locality is available. He cannot enter James 
Walker Memorial Hospital and retain Dr. Eaton as his 
physician because of the racial policy at the hospital. He 
is in all respects eligible to enter James Walker Memorial 
Hospital for these yearly physical examinations but has not 
because he is unable to retain the physician of his choice. 
Moreover, he desires, when admitted to said hospital not to 
be segregated solely because of his race, which racial seg­
regation is the policy of said hospital.

V I

A. The defendant, Emory Grubbs is the Secretary of 
the Board of Managers of the James Walker Memorial

Complaint



7a

Hospital. He has overall control and management of the 
James Walker Memorial Hospital, is its chief administra­
tive officer, and is sued in his official and individual capaci­
ties.

B. Defendant, Board of Managers of the James Walker 
Memorial Hospital, is a body corporate under and by 
virtue of the laws of the State of North Carolina (Private 
Laws of North Carolina—1901, Chapter 12, ratified Janu­
ary 23, 1901). The aforesaid statute was enacted “ to pro­
vide for the Government of the ‘James Walker Memorial 
Hospital of the City of Wilmington, North Carolina.’ ”

1. The preamble to said statute declares as its purpose 
“ that suitable provisions should . . .  be made for the per­
manent maintenance of the hospital by said City and 
County.”

2. Provisions were made in said act for a majority of 
the Board of Managers, corporate defendant herein, to be 
elected by the Board of Commissioners of New Hanover 
County and the Board of Aldermen of the City of Wilming­
ton, vacancies occurring thereafter to be filled by a vote of 
the Board Members.

3. Provisions were made in said act for the Board of 
Commissioners of New Hanover County to set apart an­
nually the sum of four thousand eight hundred dollars and 
for the Board of Aldermen of the City of Wilmington to 
set apart annually the sum of three thousand two hundred 
dollars to “be placed in the hands of the said Board of 
Managers”—“for the purpose of providing the proper 
means for sustaining the said hospital.”

4. The act declares that it shall be the duty of the Board 
of Managers to invest any unexpended portion of the an-

Complaint



8a

nual appropriations by the County of New Hanover and 
City of Wilmington in bonds of the City of Wilmington or 
County of New Hanover, or State of North Carolina.

5. The act requires that the Board of Managers shall 
make two separate reports annually, one to the Board of 
County Commissioners of New Hanover County, the other 
to the Board of Aldermen of the City of Wilmington “which 
said reports shall contain a full time and accurate account 
of the conduct and management of said hospital and dis­
pensary, giving an itemized account of their receipts and 
disbursements, together with the number, sex, race, age 
and disease of all occupants of said for the preceding year.”

6. Subsequent enactments of the North Carolina General 
Assembly provided for appropriations from public funds 
for the maintenance of defendant hospital:

a. The Private Act of 1907, Chapter 30 of the North 
Carolina General Assembly, provided that annual appro­
priations could be made from public funds of the City of 
Wilmington and the County of New Hanover in order that 
the hospital be run in an efficient manner.

b. The Private-Local Act of 1915, Chapter 66, provided 
that the appropriation for the support of the James Walker 
Memorial Hospital should be contributed and paid in equal 
proportions by the above-mentioned City and County.

c. The Public-Local and Private Act of 1937, Chapter 8, 
provided for the payment from the public treasury of 
twenty-five thousand dollars each for three successive years 
by each of the respective municipalities, the County of 
New Hanover and the City of Wilmington.

d. The Public-Local and Private Laws of 1939, Chapter 
470, authorized the City and County to enter into contracts

Complaint



9a

with the defendant hospital and empowered each of them 
to appropriate to the defendant hospital, a snm not to ex­
ceed twenty-five thousand dollars annually and authorized, 
if necessary, an additional tax levy. In terms of this act, 
this authorized appropriation and tax levy was “ for the 
purpose of providing hospitalized medical attention and 
maintenance of the indigent sick and afflicted poor of the 
said municipalities and that such maintenance and care is 
a necessary expense and that provision for the poor and 
unfortunate is one of the first duties of government and 
that their proper maintenance and care is required under 
the law and the Constitution of the State of North Carolina.”

e. The Session Laws of 1951, Chapter 906, provided for 
contributions of the City and County to be on a per diem 
basis for purposes of providing for the indigent sick and 
afflicted poor of said City and County. The enactment re­
peated the expression of public purpose set out immediately 
above.

7. Since 1951, when by judicial decision of the highest 
court of the State of North Carolina, the legislatively pur­
sued manner of making provisions for the continued main­
tenance of defendant hospital was declared unconstitu­
tional, public funds of the City of Wilmington and County 
of New Hanover have nevertheless been continually paid 
to defendant hospital pursuant to contract.

VII

A. Pursuant to the Public Laws of North Carolina, 
Chapter 23 (1881), the City of Wilmington and County of 
New Hanover acquired the tract of land known as Block 
227 in the City of Wilmington and caused to be built there­
on the City Hospital of Wilmington, as a public institution

Complaint



10a

administering to the infirmities of the sick and afflicted of 
said City and County.

B. In 1900, James Walker furnished funds for the erec­
tion of a new hospital on the site then occupied by the City 
Hospital of Wilmington. Accordingly, the old building used 
by the City Hospital was razed and a new hospital building 
was completed in 1901.

C. In 1901, James Walker died. His will instructed his 
executors to turn the recently completed building over to 
the City and County for use by them as a City hospital for 
treatment of the indigent “ sick and afflicted.”

D. Pursuant to the legislative act of 1901, above-men­
tioned, the City of Wilmington and County of Hanover, 
chartered the defendant Board of Managers as a corpora­
tion and conveyed to them the tract of land upon which the 
hospital stood “to have and to hold in trust for the use of 
the Hospital aforesaid, so long as the same shall be used 
and maintained as a Hospital for the benefit of the County 
and City aforesaid, and in case of disuse or abandonment 
to revert to the said County and City as their interest re­
spectively appear.”

E. The City of Wilmington has provided financial sup­
port for the hospital by granting the hospital exemption 
from the payment of City taxes.

1. The County of New Hanover, has provided financial 
support for the Hospital by granting the Hospital exemp­
tion from the payment of County taxes.

F. Other indicia of the continuing control and influence 
exercised by the City and County over the affairs and oper­
ation of the James Walker Memorial Hospital and of its 
essentially public character are the following:

Complaint



11a

1. The City as self-insurer has made certain payments 
to the hospital for services rendered in treating Workmen’s 
Compensation cases.

2. Hospital costs for capital construction have been paid 
for by the City and County. For example, from fiscal year 
1937 to 1939, the City and County, in addition to their reg­
ular appropriations for $15,000 per annum, paid $60,000 
of the total cost of $100,000 for the addition of a North 
wing to the hospital. The balance of $40,000 was contributed 
by the United States.

3. The hospital has received money from the United 
States under provisions of the Defense Public Works Act 
(Act of October 14, 1940 as amended June 28, 1941, 55 Stat. 
361) for the expansion and maintenance of its facilities. 
In March 1944 a new addition to the hospital, financed by 
the United States, under said Act to the extent of $508,000 
was placed in service at the hospital. This money was paid 
by the United States to the State of North Carolina and 
in turn by the State of North Carolina to the James Walker 
Memorial Hospital.

4. The hospital has exercised the power of eminent do­
main in aid of the expansion of its facilities. Defendant, 
Board of Managers of said hospital, on April 28, 1942, 
filed a petition for the condemnation of land owned by 
Kirby C. Sidbury and wife, to condemn such land for use by 
the hospital in connection with the addition to the hospital 
facilities completed in 1944. The condemnation petition in 
which the defendant alleged that it was “ a municipal cor­
poration, a public body and body corporate and politic” 
was granted by final judgment in the Superior Court of 
New Hanover County, State of North Carolina on Decern-

Complaint



12a

ber 5, 1944 which recited that the defendant herein “ is a 
public body, a body corporate and politic . . . ”

5. On another occasion in which the hospital sought a 
declaratory judgment in the State Courts of North Carolina 
adjudging its right to support from the City and County, 
it alleged that it was a public body. Board of Managers of 
the James Walker Memorial Hospital of Wilmington v. 
City of Wilmington and New Hanover County, 237 N. C. 
179, 74 S. E. 2d 749.

VIII

A. In Wilmington, North Carolina, there are the fol­
lowing hospitals:

1. James Walker Memorial Hospital which has 250 beds 
and approximately 11,000 admissions per year. This hos­
pital is the instrumentality of the City of Wilmington for 
affording hospital care to its white residents. By far the 
greatest number of its admissions are of white persons 
although some Negroes are admitted to it on a racially 
segregated basis. It is far superior to any other hospital 
in Wilmington, North Carolina.

2. Also in Wilmington, North Carolina, is the Com­
munity Hospital. This hospital is owned by the City of 
Wilmington and the County of Hanover. This is the in­
strumentality of the City of Wilmington by which it affords 
hospital care to its Negro residents. Patients at this hos­
pital are all colored and Negro physicians are admitted to 
practice in Community Hospital. White physicians are 
permitted to practice there also. The Community Hospital 
has somewhat in excess of 2,000 admissions per year.

3. Another hospital facility in the City of Wilmington 
is the Babies Hospital. This hospital furnishes care for

Complaint



13a

white children only. It is a private hospital with somewhat 
in excess of 2,000 admissions per year.

4. The only other hospital in Wilmington is the Cape 
Fear Memorial Hospital. This, too, is a white hospital with 
somewhat in excess of 1,600 admissions per year.

B. The James Walker Memorial Hospital as the chosen 
instrumentality of the City of Wilmington for furnishing 
medical care to its white citizens and affording a place to 
practice for qualified white physicians, as such and as the 
institution which offers the highest standard of medical 
care in the City of Wilmington, is in the nature of a public 
utility carrying out functions for the City of Wilmington, 
North Carolina and is, therefore, performing state action 
subject to the Fourteenth Amendment to the Constitution 
of the United States.

Complaint

IX

A. In compliance and conformity with the procedure, 
rules, and regulations set out and adopted by defendant 
hospital governing the granting of “ courtesy staff privi­
leges” in the James Walker Memorial Hospital, each of 
the plaintiff-physicians herein on or before the 19th day 
of March 1955, timely and properly presented applications 
to defendant hospital for admission to the use of courtesy 
staff privileges, particularly the privilege of treating their 
own patients when they are admitted to the hospital. These 
plaintiffs presented with their applications, their records 
of past academic achievements, references as to character, 
and such other materials as were required. These plaintiffs 
were ready and willing to abide by all lawful regulations 
of defendant hospital.



14a

B. Despite these plaintiffs’ possession of all of the neces­
sary qualifications, defendant hospital denied and refused 
to grant to them courtesy staff privileges at the hospital. 
Such denial and refusal was solely because of the race and 
color of these plaintiffs, pursuant to a bylaw of said hos­
pital which provides:

“ The applicant for membership on the Medical Staff 
shall be a white physician who has his office and prac­
tice in New Hanover County and is a graduate of a 
recognized medical school, legally licensed to practice 
in the state of North Carolina, qualified for member­
ship in the county medical society.”

N
Following this refusal plaintiff-physicians filed suit in 

the United States District Court for the Eastern District 
of North Carolina, sub nom. Eaton v. Board of Managers 
of the James Walker Memorial Hospital, Civ. No. 700, al­
leging, inter alia, that said exclusion denied to them rights 
secured by the Fourteenth Amendment to the United States 
Constitution. Said court held that “ for the lack of juris­
diction the complaint must be dismissed, and it is so or­
dered.” 164 F. Supp. 191, 198. Said judgment was affirmed 
by the Court of Appeals for the Fourth Circuit, 261 F. 2d 
521, cert, denied 358 U. S. 948.

X I

A. During the month of April, 1960, each of the plaintiff- 
physicians by letter addressed to defendant, Superintendent 
Grubbs, renewed their requests for permission to use the 
“ courtesy staff privileges” of defendant Hospital. Each

Complaint



15a

letter referred to the jjrevious request made in 1955 and its 
refusal. Each letter stressed the dissatisfaction among the 
Negro population of the community with the conditions of 
racial exclusion at defendant hospital. Plaintiffs expressed 
the hope that the traditional policy of defendant by which 
Negro physicians have been denied use of the hospital’s 
facilities would be changed in light of the fact that since 
the earlier requests, conditions and circumstances had 
changed sufficiently for defendant’s policy to be reconsidered 
in the light of present circumstances. In addition, plain­
tiffs stated their inability to give the best medical care 
possible to their patients because they were barred from 
the facilities of the defendant hospital. Plaintiffs also com­
plained that due to the exclusionary policies of the hospital, 
their patients if desirous of using these facilities, could no 
longer continue to employ them as their physicians. Each 
of the named plaintiffs again stated his medical background 
and qualifications.

B. By letter under date of April 26, 1960, defendant 
Grubbs sent to each of the named defendants, an applica­
tion blank for them to fill in and return to the hospital. The 
letter stated that upon receipt of the form properly filled 
in, it would be “handled in the usual manner.” Plaintiffs 
completed said blanks and returned them to the hospital.

C. Thereafter, by letter under date of September 7,1960, 
signed by the defendant Emory Grubbs, plaintiffs were in­
formed simply that their applications were not approved. 
In fact, these applications were denied because of plaintiffs’ 
race and color pursuant to the bylaw set forth above.

D. Defendants have by the aforesaid acts denied to 
plaintiff-physicians the equal protection of the laws secured

Complaint



16a

by the Fourteenth Amendment to the Constitution of the 
United States and by the due process clause of the Fifth 
Amendment to the Constitution of the United States.

XII

A. Plaintiffs, Vernetta E. Hussey and Leland M. New- 
some are patients of Drs. D. C. Eoane and Hubert A. 
Eaton respectively. They desire to be admitted to defen­
dant hopsital and to be treated and examined by Drs. 
Eoane and Eaton when so admitted. Plaintiffs desire to 
be admitted to defendant hospital because the facilities 
there are the best in the locality and as residents of the 
locality they desire to have the same right as is accorded 
to white residents to take advantage of these facilities. 
Plaintiffs, moreover, desire to continue to be treated by 
Drs. Eoane and Eaton who are the physicians of their 
choice but because of the discriminatory practices of de­
fendant hospital, their right to the continuation of the 
medical services they have thus far received from Drs. 
Eoane and Eaton have been and will be denied should they 
be admitted to defendant hospital and such denial is clearly 
to their detriment and will occasion them serious injury.

B. Defendant hospital when it admits Negro patients, 
segregates them from other patients in a separate build­
ing; when the need arises for said Negro patients to under­
go surgery, they are wheeled outdoors from the building 
in which they are segregated, a practice hazardous and 
inconsiderate of their health and safety, to the building 
in which the surgical operation is to be performed. Fol­
lowing surgery they must be wheeled back again. This 
practice is not followed with respect to white patients.

Complaint



17a

C. Defendants have by the aforesaid acts denied to 
plaintiff patients the equal protection of the laws secured 
by the Fourteenth Amendment to the Constitution of the 
United States and by the due process clause of the Fifth 
Amendment to the Constitution of the United States.

XIII

Plaintiffs and those similarly situated suffer and are 
threatened with irreparable injury by the acts herein com­
plained of. Both classes of plaintiffs have no plain, ade­
quate or complete remedy to redress these wrongs other 
than this suit for injunction. The pursuit of any other 
remedy would be unavailing and occasion to these plain­
tiffs and to others similarly situated, great hardship, in­
convenience and vexation and would not afford them sub­
stantial relief.

W herefore, plaintiffs respectfully pray this Court to 
advance this cause on the docket and order a speedy hear­
ing of this action and upon such hearing to :

a. forever enjoin defendants herein from denying to 
these plaintiffs and all others similarly situated the use 
of the facilities of the James Walker Memorial Hospital 
because of race and color, to wit: the right of plaintiff- 
physicians to enjoy courtesy staff privileges and of plain­
tiff patients to be admitted for treatment on a nonsegre- 
gated and nondiscriminatory basis;

b. allow plaintiffs their costs herein and such further, 
other or additional relief as may appear to the Court to be 
equitable and just.

Complaint



18a

Motion to Dismiss

(Filed: July 28, 1961)

[ s a m e  t i t l e ]

Now comes the Defendants, Emory Grubbs and the 
Board of Managers of James Walker Memorial Hospital, 
a North Carolina corporation, and move to dismiss the 
above entitled action under Rule 12 of the Federal Rule 
for Civil Procedure for that the Court has no jurisdiction 
over the subject matter of this action, said motion being 
based upon the following matters and things:

For that it appears from the face of the Complaint that 
the said action is by Plaintiffs as individuals, against the 
Defendants as individuals, and that the Defendants are 
not performing state action subject to the provisions of 
the Fifth and Fourteenth Amendments to the Constitution 
of the United States; and that the action complained of by 
the Plaintiffs is not such action that redress may be had in 
the Federal District Court under 28 U. S. C. A. 1343 (3).

W h e r e f o r e , your Defendants, Board of Managers of 
James Walker Memorial Hospital, a North Carolina cor­
poration, and Emory Grubbs respectfully pray that the 
action be dismissed and that these Defendants recover 
their costs to be taxed by the Clerk.

C. D. H ogue, J r.
Attorney for Defendants 

P. 0. Box 1268
309 Carolina Power & Light Bldg.

Wilmington, North Carolina



19a

Plaintiffs’ Exhibit A

(Filed: September 12, 1962)

State of North Carolina 
County of New H anover

A ffidavit

R. F. L ee, being duly sworn deposes and says:

That he is a Real Estate Broker in Wilmington, North 
Carolina; that the attached “Appraisal of James Walker 
Memorial Hospital, Wilmington, North Carolina,” was pre­
pared by the said R. F. Lee and represents his appraisal 
of all the physical assets of the said James Walker Memo­
rial Hospital.

Further this deponent says not.

R. F. L ee 
Affiant

Subscribed and sworn before me, 
this 10 day of September, 1962.

Clemmon L. Jacobs 
Notary Public

My commission expires: Feb. 27, 1963 

[Notarial Seal]



20a

A ppraisal of J ames W alker Memorial H ospital 
W ilmington, N. C.

September 8,1962

Plaintiffs’ Exhibit A

Total Evaluation ................................................... 3,009,120

— Breakdown —

Nurses Home ........................................................  200,000

All other buildings ................................................. 2,559,120

127,956 sq. ft.
@  $20.00/sq. ft.

Land ........................................................................ 50,000

All furniture and equipment................................ 200,000

3,009,120

The above appraisal is based on information contained 
in the 1957 Jacque Norman (Hospital Consultant) Hospi­
tal Survey and on my general knowledge of real estate 
values in this area.

Signed,

/ s /  E. F. L ee

E. F. Lee, Eealtor

/ s /  H elen F redlaw 
Witness



21a

Plaintiffs’ Exhibit B

(Filed: September 15, 1962)

State op North Carolina 
County op New H anover

A ffidavit

T. D. L ove, being first duly sworn deposes and says:

That he is the duly elected Auditor of New Hanover 
County, North Carolina; that he knows the tax rate of 
New Hanover County, North Carolina, to be $1.30 per 
$100.00; valuation and the tax rate of the City of Wilming­
ton, North Carolina, to be $2.15 per $100.00; valuation and 
that the tax assessment of both said properties is 50 per 
cent of the actual value.

These are the tax rates for 1961.

Further this deponent says not.

T. D. L ove

Subscribed and sworn before me, 
this ....... day of .................. , 1962.

Notary Public 

My commission expires:



22a

R ules and R egulations foe H ospital L icensure 
in North Carolina

(Filed: October 4, 1962)

R evised September 16,1960

SECTION I—ADMINISTRATION
A. GOVERNING BOARD

The governing board, or owner, or the person or persons 
designated by the owner as the governing authority shall 
be responsible for seeing that the objectives specified in the 
charter (or resolution if publicly-owned) are attained. 
This shall include the selection and appointment of a com­
petent administrator and a medical staff and the formula­
tion or approval of such bylaws as may be desirable for the 
proper operation of the hospital. The governing board 
shall be the supreme authority in the hospital to which the 
administrator, the medical staff, the personnel, and all 
auxiliary organizations are directly or indirectly respon­
sible.

B. ADMINISTRATOR

There shall be a competent, well-trained executive officer 
or administrator with authority and responsibility for the 
operation of the hospital in all its administrative and pro­
fessional functions, subject only to the policies enacted by 
the governing board and to such orders as it may issue. 
The administrator shall be the direct representative of the 
governing authority in the management of the hospital and 
shall be responsible to said board alone for the proper 
performance of his duties.

Plaintiffs’ Exhibit C



23a

C. ACCOUNTING

The financial and statistical records of the hospital shall 
be available for inspection at all times within business 
hours by the Commission through its duly authorized offi­
cers, agents or employees.

D. TELEPHONES
There shall be a telephone in the building and additional 

telephones or extensions as required to summon help 
promptly in case of fire or other emergency.

E. PERSONNEL

All professional and non-professional personnel shall be 
given a preemployment examination consisting of a general 
physical examination including a chest x-ray, and stool 
cultures if a history of typhoid is elicited.

The physical examination including the chest x-ray is to 
be repeated annually on all personnel. Any person who 
shows signs of upper respiratory infections, skin lesions, 
diarrhea, or other communicable disease shall be excluded 
from work if, in the judgment of a physician, it is necessary 
to do so for the protection of patients and others.

SECTION II— CLINICAL SERVICES
A. MEDICAL STAFF

1. Organisation and Qualifications

In any hospital used by two or more physicians for the 
treatment of injury or disease, the physicians and surgeons 
privileged to practice in the hospital shall be organized as 
a definite medical staff which shall initiate and, with the

Plaintiffs’ Exhibit C



24a

approval of the governing authority of the hospital, adopt 
rules, regulations, and policies which specifically provide:

a. For eligibility for membership on the staff;

b. That the medical staff meetings be held at least 
once a month;

c. That the medical staff review and analyze at regu­
lar intervals their clinical experience in the various 
departments of the hospital; the medical records of 
the patients, free and pay, to be the basis for such 
review and analysis.

Every person admitted to practice in the hospital shall 
qualify for membership on the medical staff by submitting 
a signed application in writing which shall contain the fol­
lowing data: age, year, and school of graduation, date of 
licensure, statement of postgraduate or special training 
and experience, statement of the type of medicine the ap­
plicant desires to practice, a pledge that if appointed the 
applicant will comply with the rule and regulations of the 
hospital so far as they affect him and his membership on 
the medical staff, and include a statement of his own special 
qualifications and a resolution against division of fees in 
accordance with the requirements of the American College 
of Surgeons.

All rules and regulations and policies adopted by the 
medical staff and a roster of medical staff members shall 
be available to the Commission upon request.

In hospitals with twenty-five beds or more, the organized 
medical staff shall annually elect a staff member to be 
chief-of-staff, and it shall elect a member to be the respon­
sible head or chief of each of the departments or services

Plaintiffs’ Exhibit C



25a

in the hospital, such as obstetrics, pediatrics, surgery, med­
icine, etc. In hospitals of less than twenty-five beds, the 
medical staff shall annually elect one of its members to 
be chief-of-staff.

2. Supervision of Patient Care

All persons admitted to any institution covered by these 
standards must be under the care of a physician or surgeon 
who has (a) a degree of Doctor of Medicine, is in good 
standing, and legally licensed to practice in North Carolina; 
(b) competent in his field; and (c) worthy in character and 
in matters of professional ethics; and does not practice 
fee-splitting under any guise whatsoever. A  diagnosis shall 
be entered in the admission records.

3. Orders for Medication and Treatment

No medications or treatments shall be given in institu­
tions covered by these standards except on the order of a 
physician.

4. Availability for Emergencies

All hospitals shall have one or more duly licensed physi­
cians available on call for emergencies at all times.

B. SURGERY

1. Facilities

Every hospital in which surgical operations are per­
formed shall have an operating room; scrubbing and toilet 
facilities; sterilizing apparatus; and other equipment and 
instruments in keeping with the requirements of modern 
surgery.

Plaintiffs’ Exhibit C



26a

This room shall be provided for exclusive use as an 
operating room and shall be located as not to be used as 
a passage between other parts of the hospital and shall not 
be subject to contamination from other parts of the hospital.

Hospitals with less than 20 beds— (see OBSTETRICS—
1.—c. Delivery Room).

2. Organisation

The operating room shall be under the supervision of 
registered nurses. Surgical operations shall be done only 
by physicians designated by the hospital as qualified to do 
surgery.

An accurate and complete description of the technique of 
operation and the findings and a statement of organs or 
tissues removed together with the post-operative diagnosis 
shall be entered by the surgeon in the patient’s record im­
mediately following the operation. It shall be the policy of 
all hospitals providing services for surgical care to have 
available facilities for the pathological examination of tis­
sue specimens, except tonsils and adenoids, either on the 
premises or by arrangement through affiliation, or other 
means, with a competent pathological laboratory.

3. Procedures

An acceptable aseptic technique shall be observed in all 
major or minor operative procedures. Proper care shall be 
taken to prevent contamination of the surgical field, sterile 
tables or operating team by visitors. After an operation on 
a septic case, the operating room shall be thoroughly 
cleansed in a manner adequate for the type of contamina­
tion existing.

Plaintiffs’ Exhibit C



27a

Plaintiffs’ Exhibit C

C. OBSTETRICS

1. Facilities

a. Maternity

Obstetrics and newborn services shall be located and 
arranged as to provide for complete protection of mothers 
and newborn infants from infection and from cross-infec­
tion from patients in other services in the hospital.

There shall be written provisions and policies in regard 
to the care of patients with an infectious, contagious or 
communicable disease which will insure the protection of 
other maternity or newborn infants and other patients.

The hospital shall have adequate facilities for steriliza­
tion of equipment, supplies and instruments.

b. Labor Boom

There must be satisfactory provision for the care of 
patients in labor either in the patient’s room or in a desig­
nated special labor room.

Rooms used for this purpose should afford desirable 
privacy, be conveniently located with reference to the de­
livery room, and should be so located as to minimize the 
possibility of sound reaching other patients’ rooms.

If analgesia is used, beds shall be equipped with guard 
rails.

There must be facilities for examination and prepara­
tion of patients as required by the attending physician.

c. Delivery Room

Hospitals with less than twenty beds: a delivery room 
used for no other purpose is recommended. If one room is 
used for both surgery and delivery room, the admission of



28a

infected cases to the surgery will be discouraged. However, 
if the surgery is used for an infected case, it will receive 
a thorough scrubbing of all floors and walls, there will be a 
thorough cleaning and sterilization of all equipment after 
such use, before being used as a delivery room.

Hospitals with twenty beds or more: the delivery room 
shall be used for no other purpose, and it should be used 
only for the delivery of non-infected patients.

Delivery rooms shall include the following:

(1) Sphygmomanometer and stethoscope.

(2) Adequate facilities for anesthesis shall be provided. 
A small table conveniently placed shall contain arti­
cles needed by the anesthetist.

(3) There shall be several sterile syringes, with suitable 
needles for osytocics and emergency medications.

(4) A sterile package of instruments and gauze for 
uterine packing shall be at hand.

(5) Instruments for repair of lacerations and handling 
other occasional delivery accidents shall be provided 
in sterile packages if they are not supplied routinely 
in the delivery set.

(6) Facilities for intravenous therapy shall be available. 
In addition to flasks of sterile glucose and saline solu­
tion, all hospitals accepting maternity patients shall 
have, on the premises, a standard preparation of 
blood plasma or serum.

(7) A properly-heated bassinet shall be available for 
each delivery. There shall be no hazardous electrical 
equipment on the bassinet.

Plaintiffs’ Exhibit C



29a

(8) A table or tray shall be provided containing articles 
needed for treating cord, and silver nitrate or pen­
icillin or other accepted chemotherapeutic agent for 
treating the eyes of the infant.

(9) There shall be available facilities for suction, such 
or tracheal catheter, and equipment for administer­
ing oxygen to the infant.

(10) An acceptable means of identifying each infant shall 
be available in every delivery room ,

d. Nursery

A nursery, not to be used for any other purpose, must 
be provided for the newborn with adequate space, light 
and ventilation.

There shall be provisions for a suspect nursery for in­
fants suspected of a contagious, infectious or communicable 
disease; and there shall be provisions for the complete 
isolation of infants with a known infectious, contagious or 
communicable disease. Newborn and older infants admitted 
from the outside shall not be cared for in the newborn 
nursery.

Suction apparatus and oxygen should be easily and 
quickly available in the nursery.

The premature should be cared for in a separate nursery 
or should be segregated in the newborn nursery.

A large plainly legible wall thermometer shall be pro­
vided for the nursery.

An accurate scale for weighing newborn shall be pro­
vided.

Running hot and cold water and suitable receptacles 
for the disposal of waste and soiled linens shall be provided 
in or adjacent to each nursery.

Plaintiffs’ Exhibit G



30a

Plaintiffs’ Exhibit C

2. Organization

a. Maternity

Every birth occurring in a hospital shall be attended by 
a medical doctor who shall possess the qualifications pre­
scribed in Section II, A above. Nothing in this paragraph 
is intended to prevent members of the hospital resident 
staff, when acting under the authority and supervision of 
the attending medical doctor, from attending at births.

A graduate registered nurse when available shall be 
responsible at all times for the nursing care of maternity 
patients and newborn infants.

The needs of the individual hospital will determine the 
number of nurses to be employed. It is desirable that nurses 
caring for maternity patients shall not care for other pa­
tients.

b. Nursery

Nurses assigned to infected infants shall not care for 
other infants at the same time.

3. Procedures

a. Maternity

Routine nursing procedures for care of obstetric patients 
and newborn infants shall be prepared in written form.

Accurate and complete medical records must be provided 
for all maternity patients, and separate records for infants. 
The standard forms approved by the American College of 
Surgeons are recommended.

Any indication of infection must be reported immediately 
to the attending physician in charge of the patient.



31a

Immediate segregation and isolation of all mothers with 
infection, fever or other condition inimical to the safety and 
welfare of others must be provided in a separate room.

A mother shall be considered infected i f :

(1) She has a communicable disease or is suspected of 
such, or if she is a carrier.

(2) She nurses an infected infant.

(3) She is delivered outside the maternity unit of the 
hospital in which she is afterwards cared for.

(4) She has an unexplained fever during the puerperium.

For the protection of mothers and newborn infants, the 
Commission requests every institution receiving maternity 
patients to observe the following rules and regulations.

(1) The number of visitors to a maternity patient should 
not exceed two, exclusive of the husband, at any time.

(2) Visitors known to have an existing or recent com­
municable infection, as well as those having contact 
with such infection, shall be excluded.

(3) Visitors must not sit on beds or place articles of 
clothing on the beds of maternity patients.

(4) Children under 12 years of age are not permitted to 
visit in the maternity department of a hospital.

(5) Visitors may not enter the nursery or have direct 
contact with infants.

(6) Whenever babies are shown to visitors, there must 
be a complete separation, by a glass window, of 
babies from visitors. No visitors should be allowed 
in the mother’s room during nursing hours.

Plaintiffs’ Exhibit C



32a

b. Labor and Delivery Room

The physician shall be notified when the patient is ad­
mitted and immediately upon onset of labor.

D. PEDIATRICS

1. Facilities

Hospitals providing pediatrics care shall have proper 
facilities for the caring of children apart from the services 
for adult patients, apart from the newborn nursing service 
and there shall be proper facilities and procedures for the 
isolation of children with infectious, contagious or com­
municable conditions.

E. ANESTHESIA

1. Facilities

In the surgical department or division of any hospital, 
there shall be facilities and equipment for the administra­
tion of anesthesia, commensurate with the needs of the 
hospital.

2. Procedures

Operations under a general anesthetic (inhalation, spinal, 
intravenous or rectal) shall not be performed nor a general 
anesthetic given until the patient has had a physical ex­
amination including examination of the chest for respira­
tory infection or cardiac disease and including a urinalysis 
with tests for albumin and sugar. In ease of an emergency 
the operation may be done without the physical examination 
and tests, but a note shall be made in the patient’s record 
stating the reason for the operation and be signed by the 
attending surgeon and another member of the staff qualified

Plaintiffs’ Exhibit C



33a

to use the operating room for surgery. The results of these 
examinations, together with the pre-operative diagnosis, 
shall be entered on the patient’s record. After the adminis­
tration of a general or spinal anesthetic, patients shall be 
constantly attended by a nurse until they have regained 
consciousness, or until the effects of the anesthetic have 
worn off. After any major operation, adequate nursing 
services shall be provided so that patients are closely 
watched and given all necessary care.

F. CLINICAL PATHOLOGICAL LABORATORY

1. Facilities

Hospitals of 49 beds and under shall provide facilities 
for performing routine chemical and microscopic examina­
tions of the urine and complete blood counts.

Hospitals of 50 beds or over shall have a laboratory 
capable of making the standard hematological, bacterio­
logical, pathological and chemical examinations, or have 
regular arrangements for obtaining all such services from 
an approved laboratory.

2. Organisation

The laboratory shall be under the actual supervision of 
a physician, preferably a trained clinical pathologist or one 
who has had special training in clinical laboratory diagno­
sis, whose judgment should be accepted in doubtful finds.

3. Records

All requests for laboratory service shall be presented 
in writing; results from all laboratory tests should be writ­
ten indelibly on the patient’s record.

Plaintiffs' Exhibit C



34a

4. Required Tests

All patients above 16 years of age, except maternity 
patients who have had a blood test during their current 
pregnancy, shall have a recognized standard blood test 
for syphilis, within 3 days after admission. If examina­
tions of blood for syphilis are performed in the hospital 
laboratory, the requirements as defined by the State De­
partment of Health for pre-marital or pre-natal serology 
test must be met.

G. RADIOLOGY

1. Facilities

All hospitals shall have adequate space and equipment 
for diagnostic x-ray and fluoroscopic examinations.

There shall be space for safe film storage, view boxes, 
and a dark room.

2. Organization

X-ray department shall be in charge of properly qualified 
physicians.

3. Records

A written report on each x-ray film taken shall be made 
and properly recorded as a part of the patient’s record.

H. OUT-PATIENT DEPARTMENT

Any hospital concerned with emergency or out-patient 
shall provide space and facilities for emergency treatment, 
including the administration of blood or blood plasma and 
intravenous medication, facilities for the control of bleed­
ing, and the emergency splinting of fractures, and it shall

Plaintiffs’ Exhibit C



35a

provide for facilities for the administration of oxygen and 
anesthesia. Competent personnel shall be at all times avail­
able on call for the care of emergencies.

I. ISOLATION

There shall be available a room or rooms which shall be 
used for isolation of a patient or patients with communi­
cable disease. These rooms can be planned at the end of 
a corridor or off a sub-corridor, and there must be observ­
ance of accepted measures of aseptic technique in care of 
such cases.

SECTION III—AUXILIARY SERVICES
A. PHARMACY

1. Facilities

Hospitals operating and maintaining a pharmacy shall 
have adquate space for storage and compounding and 
dispensing drugs. The compounding of prescriptions shall 
be done by a pharmacist licensed to practice pharmacy in 
North Carolina.

There shall be adequate refrigeration for biologicals and 
such drug jjroducts as require refrigeration.

2. Storage of Medicine

All medicines, poisons, and stimulants kept in a nursing 
service division shall be plainly labeled and stored in a 
specially designed medicine cabinet, closet or storeroom, 
and made accessible only to authorized personnel.

The cabinet for drugs shall be well illuminated.

Plaintiffs’ Exhibit C



36a

3. Narcotics and Special Prescriptions

When orders have been discontinued or the patient dis­
missed, all medication shall be discarded, or returned to 
the pharmacy, or taken out with the patient according to 
the doctor’s orders and the suitability of the medication 
for re-issue for the use of other patients.

Narcotics must be securely locked at all times and ac­
cessible only to persons in charge.

B. MEDICAL RECORDS AND REPORTS

1. Facilities

Provisions shall be made for safe storage of all medical 
records.

2. Organization

The responsibility for supervision, filing, and indexing 
of medical records shall be delegated to a trained medical 
records librarian or to a responsible employee of the hos­
pital.

In hospitals of 25 beds or more, medical records shall be 
indexed fo r : the patient, the disease, the medical or surgical 
procedure involved, the physician, the results and any 
other pertinent information deemed necessary by the med­
ical staff. A member or committee of members appointed 
by the medical staff should be appointed to ascertain 
whether or not the medical records are adequate and 
up-to-date; and to formulate rules and regulations and 
assist in their enforcement.

Records of patients are the property of the hospital and 
must not be taken from the hospital property except under 
subpoena. When taken from the hospital property under

Plaintiffs’ Exhibit C



37a

subpoena, they must be returned to the hospital at the end 
of the hearing for which they were directed to be procured. 
The administrative officer shall be responsible for the en­
forcement of this rule.

3. Content

Adequate and complete medical records shall be written 
for all patients admitted to the hospital. These records 
shall be filed in an orderly and accessible manner in the 
hospital. A minimum medical record shall include the fol­
lowing information:

Identification data (name, address, age, sex, marital 
status)

Date of admission 

Date of discharge 

Personal and family history 

Complaint
History of present illness 
Physical examination

Special examination, if any, such as: consultations, 
clinical, laboratory, x-ray

Provisional diagnoses

Medical treatment
Complete surgical record, if any

Progress and nurse notes
Temperature chart including pulse and respiration, 

medications

Plaintiffs’ Exhibit C



38a

Final diagnoses

Condition on discharge

In case of death—autopsy findings, if any

All orders of physicians for medication and other ser­
vices shall be written in ink and signed by the prescribing 
physician or undersigned by him within 24 hours.

If narcotics are administered from a stock secured by 
the hospital under a Federal permit, each dose shall be 
recorded on a permanent narcotic record, wherein shall 
be recorded the date, hour, name of patient, kind of nar­
cotic, dose and by whom administered. If administered 
by prescription only, it shall be sufficient to record each 
dose on the clinical record of the patient.

SECTION IV—NURSING SERVICE
A. ORGANIZATION

The department of nursing and all nursing personnel 
shall be organized to provide complete and efficient care 
to each patient, and the authority, responsibility and func­
tion of each nurse and all nursing personnel shall be clearly 
defined, by establishing definite personnel policies.

There shall be regular meetings of the professional nurs­
ing staff to review and analyze the nursing service and 
to determine the quality of the nursing care rendered to 
patients and to increase the efficiency of the nursing care.

Applications for employment as to registered nurse shall 
be submitted, in writing, to the person responsible for nurs­
ing personnel, and each application shall contain accurate 
information as to the education, training, experience and 
personal background of each applicant. All professional

Plaintiffs’ Exhibit C



39a

nursing personnel shall be registered in the State of North 
Carolina.

B. PROFESSIONAL PERSONNEL

There shall be at least one professional registered nurse 
on duty at all times.

In hospitals of 50 beds or more, there shall be a pro­
fessional registered nurse on duty or on call for each 
specific service or department in the hospital.

The superintendent or director of nursing service shall 
be a competent and well-trained person with administrative 
and executive ability and she shall be a graduate nurse and 
registered in the State of North Carolina.

Nursing care shall be that amount of professional and 
non-professional care essential to provide proper treatment 
for the well-being and the recovery of the patient.

C. NON-PROFESSIONAL PERSONNEL

Practical nurses, subsidiary workers, orderlies and at­
tendants, both male and female, who are employed by 
hospitals, shall be assigned only those duties for which they 
are trained. They shall be under the supervision of a 
graduate nurse staff. All practical nurses shall be regis­
tered in the State of North Carolina.

SECTION Y—FOOD SERVICE 

A. SUPERVISION

The dietary department shall be under the supervision 
of a trained dietitian or a person skilled in the handling, 
preparation and serving of foods and the supervision and 
management of food handlers.

Plaintiffs’ Exhibit C



40a

The dietitian or person in charge of the department shall, 
with the approval of the administrator of the hospital, 
initiate policies and procedures with which each employee 
shall be familiar and these shall provide for the adminis­
trative and technical guidance of all personnel handling 
food.

B. PHYSICAL APPLIANCE AND EQUIPMENT

The floors of kitchens, diet kitchens, dining rooms, and 
pantries, and the floors of all rooms in which food is stored, 
prepared, or served, or in which utensils are washed, shall 
be of such construction as to be easily cleaned, shall be 
smooth, and shall be kept in good repair. The walls and 
ceilings of such rooms shall have a smooth washable sur­
face, and shall be kept clean and in good repair. In con­
struction done after the adoption of these regulations and 
where practical to change in existing structures, all walls 
and ceilings shall be finished in light color. All such rooms 
shall be so constructed as to prevent the entrance of rats 
and mice.

All rooms in which food is stored, prepared, or served, 
and in which utensils are washed, shall be well lighted and 
provided with adequate ventilation.

Where flies are prevalent, all doors and windows, or 
other openings into the outer air, shall be effectively 
screened, and the doors shall be self-closing, unless other 
effective means are provided to prevent the entrance of 
flies.

Storerooms and cupboards, including shelves and racks, 
shall be constructed of easily cleanable, smooth material, 
and shall be kept clean and orderly. The contents of such 
rooms and storage places shall be neatly stored at least 15 
inches above the floor, and unnecessary and obsolete items 
shall not be permitted to accumulate therein.

Plaintiffs’ Exhibit C



41a

All eating, drinking, and cooking utensils, and all tables, 
shelves, refrigeration equipment, sinks, and other equip­
ment or utensils used in connection with the hospital 
kitchen, shall be so constructed as to be easily cleaned, and 
shall be kept in good repair.

All equipment, including shelves, tables, counters, re­
frigerators, stoves, hoods, sinks, meat blocks, potato peel­
ers, grinders, slicing machines, saws, and mixers shall be 
kept clean and free from dust, dirt, insects, and other con­
taminating material. All cloths and rags used by chefs 
and other employees in the kitchen shall be clean. Single 
service containers shall be used only once.

C. DISHWASHING

All dishes, knives, forks, drinking glasses, cups, and 
other eating and drinking utensils shall be thoroughly 
washed, rinsed, and subjected to an approved bactericidal 
treatment after each usage. All multi-use utensils, such as 
mixing bowls, cream dispensers, stock pots, baking pans, 
and other utensils used in the storage, preparation, cook­
ing, or serving of food and drink shall be thoroughly 
cleaned and rinsed immediately after the day’s operation, 
or upon completion of each meal, if necessary.

The minimum dishwashing facilities shall consist of a 
heavy gauge three compartment sink of adequate size and 
depth, with hot and cold running water service for each 
vat, splash back protection, continuous with the sink and 
an integral part of the sink, and drain boards on each end 
of ample size to accommodate the number of eating and 
drinking utensils involved. Separate facilities shall be re­
quired when necessary for the washing of glasses, and, 
when needed, separate facilities shall be required for the 
washing of pots, pans, and vegetables. The facilities for

Plaintiffs’ Exhibit C



42a

the heating of water shall be adequate and effective, and 
the storage capacity shall be ample. When dishwashing 
machines are used, the machines shall be approved, and 
shall be fitted with drain boards of ample capacity on each 
side, and include a counter-sunk sink or other approved 
means for pre-cleaning or pre-soaking of the utensils in 
the dirty dish lane. Thermometers indicating the tempera­
ture of the wash and rinse water shall be required.

Where it is deemed necessary, mechanical glass and dish­
washing equipment shall be required.

After cleaning (i.e., cleaning to sight and touch), and 
thorough rinsing, all such utensils are effectively subjected 
to one or more of the following, or other equivalent bac­
tericidal processes:

1. Immersion for at least two minutes in clean hot water 
at a temperature of at least 170° F. An approved ther­
mometer shall he availably convenient to the vat. The 
pouring of scalding water over washed utensils shall 
not be accepted as satisfactory compliance. Where hot 
water is used for bactericidal treatment, there shall he 
provided a hot water heater (preferably controlled by 
a thermostat) capable of maintaining water temperature 
of at least 170° F. in the vat at all times when the dishes 
are being washed. The heating device may be integral 
with the immersion vat. In any case, the supply of 
hot wTater must be ample to last through the period of 
greatest demand.

2. Immersion for at least two minutes in a chlorine rinse 
containing at least 50 p.p.m. of available chlorine, if hy­
pochlorites are used, or concentration of equal bacterici­
dal strength if chloramines are used. WThere chlorine 
treatment is used, a three-compartment vat shall be re-

Plaintiffs’ Exhibit G



43a

quired, the first compartment to be used for washing, the 
second for rinsing, and the third for chlorine immersion. 
The first basket of utensils will remain in the chlorine 
rinse for at least two minutes while the second basket 
is in the plain rinse, and the third basket is being 
washed. If hot water is maintained in the chlorine rinse, 
the dishes will dry quickly after the basket is removed 
from the third vat. Silver and silver-plated tableware 
should not be treated with chlorine, as silver chlorides 
are formed which blacken the silver.

3. Exposure in a steam cabinet, equipped with an indicated 
thermometer, located in the coldest zone to at least 
170° F. for at least 15 minutes or to at least 200° F. 
for at least 5 minutes.

4. A  sufficient supply of glasses, dishes, cups, goblets, 
tableware, etc. is provided so that enough time is al­
lowed for proper washing, rinsing, and bactericidal 
treatment of those that are being used.

5. In washing machines, where strong alkalies and higher 
wash water temperatures may be used for cleansing, a 
shorter exposure period for the final treatment may be 
employed. In such cases, the above standards for bac­
tericidal treatment will not apply.

After bactericidal treatment, no utensils shall be stored 
except in a clean, dry place protected from flies, dust, and 
other contamination, and no utensils shall be handled ex­
cept in such a manner as to prevent contamination so far 
as practical. Single service utensils shall be purchased only 
in sanitary containers and shall be stored therein in a 
clean, dry place until used. Adequate space should be pro­
vided in the diet kitchen for the storage of an ample supply 
of clean glasses.

Plaintiffs’ Exhibit C



44a

D. STORAGE AND HANDLING OF FOOD

All food shall be stored, handled, and served as to be 
protected from dust, flies, rats, vermin, handling, droplet 
infection, overhead leakage, and other contamination. No 
animals, or fowls shall be kept or allowed in any room 
in which food is prepared or stored. All means neces­
sary for the elimination of flies and roaches shall be 
used. All readily perishable food or drink shall be kept 
at or below 50° F., except when being prepared or served. 
All fresh meats, except in small portions for immediate 
use, shall be stored at or below 40° F. Where available, 
grade “A ” milk products shall be used. These products 
shall be served in the original containers in which they are 
received from the distributor, so that the name and grade 
of the contents, and the name of the producer or distribu­
tor, may be readily observed by the patient. This require­
ment shall not apply to buttermilk which is used strictly for 
cooking purposes only. Milk products shall be stored in a 
sanitary manner and shall be kept refrigerated except when 
being served. Bottles shall not be completely submerged 
in water. All foods shall be wholesome and free from 
spoilage. Food that is spoiled or unfit for human consump­
tion shall not be kept on the premises. Portions of food 
once served to patients, or employees, shall not be served 
again.

E. EMPLOYEES

All employees shall be free of communicable and infec­
tious diseases, such as tuberculosis, syphilis, and gonorrhea, 
communicable skin diseases, and are not carriers of typhoid. 
It shall be the responsibility of the management to require

Plaintiffs’ Exhibit C



45a

such, inspections and tests as often as are necessary to 
safeguard the health of the patients and other employees.

All employees shall wear clean outer garments, and shall 
keep their hands clean at all times when handling food, 
drink, utensils, or equipment. Kitchen employees shall not 
smoke while engaged in food handling operations. All 
precautions necessary shall be observed by the nurses and 
others having contact with patients known to have a com­
municable disease, and no such persons shall administer 
to other patients or employees without first eliminating all 
chances for transmitting disease by observing standard 
hospital isolation technique.

SECTION VI—PHYSICAL PLANT

A. CONSTRUCTION
Each institution must be so planned, organized, equipped, 

manned, and administered so as to furnish adequate care 
for each class of persons wlhich it receives for care or treat­
ment.

The design and construction shall be in accordance with 
the construction standards of the North Carolina Medical 
Care Commission, the North Carolina Building Code, and 
local municipal codes.

1. Submission of Plans

Before construction, assisted with Federal and State 
funds, is begun, plans and specifications covering the con­
struction of new buildings, alterations, or additions, to 
existing buildings, and plants, or any change in facilities, 
may be submitted to the Commission for approval. There­
upon, the Commission will investigate the plans so contem-

Plaintiffs’ Exhibit C



46a

plated and will notify the licensee that said buildings, alter­
ations, additions, or changes are approved or disapproved 
with such recommendations as the Commission will care 
to make.

In order to avoid unnecessary expense in changing final 
plans, it is suggested that as a preliminary step, proposed 
plans in sketch form be reviewed with the Commission.

The preliminary plans shall include a plot plan showing 
the size and shape of the entire site and the location of all 
existing or proposed facilities.

2. Location

The site for new construction or expansion, assisted with 
Federal and State funds, must have the approval of the 
Commission.

Hospitals should be so located that they are free from 
undue noise from railroads, freight yards, main traffic 
arteries, schools and children’s play grounds. The site 
should not be exposed to smoke, foul odors, or dust from 
nearby industrial plants.

The area of the site should be sufficient to permit future 
expansion and to provide adequate parking facilities.

The site should be easily accessible to patients, doctors, 
and employees. Available paved roads, adequate water, 
sewerage, and power lines should be taken into considera­
tion in selecting the site.

3. Fire Protection

Facilities and construction shall be in accordance with 
rules and regulations of the State Fire Marshal.

Plaintiff s ’ Exhibit C



47a

Plaintiffs’ Exhibit C 

a. Anesthetics

In addition to all the other requirements pertaining to 
fire safety, as set forth in these regulations, surgeries, de­
livery room, minor surgeries, and similar places shall be 
made to comply with the following general requirements.

All electrical lighting fixtures and convenience outlets 
located below a level of seven feet from the surgery floor 
shall be of the vapor proof type as approved by the Under­
writers Laboratory for use in hazardous locations.

Open gas flames, electrical heating elements, portable 
electrical heaters, similar devices not of the type approved 
for the use in hazardous locations shall not be used in 
rooms subjected to combustible anesthetic gases. Gas fired 
sterilizers, hot water heaters, similar equipment located in 
rooms directly adjacent to the surgery, having doors lead­
ing thereto, shall be located at a distance of at least ten 
feet from the door leading into the surgery room. Excep­
tion to this may be made at the discretion of the Commis­
sion if adequate mechanical ventilation which will eliminate 
the possible explosion hazards is provided in this room.

Heating in surgeries and similar rooms shall be by 
steam radiator, hot water or some other device which would 
not contribute to the ignition of combustible gases.

Special precaution shall be taken at all times toward the 
elimination of static electricity which might provide the 
ignition of combustible anesthetic gases within this type of 
occupancy. This may be accomplished by the use of the 
Horton intercoupler, the electro-static grounding intercoup­
ler, or a method of applying a conductive rubber floor cover­
ing properly grounded, or some other recognized means of 
adequately eliminating the possibility of static electricity. 
Recognition is also given to the maintenance of a humidity



48a

within the surgery room which will greatly reduce the static 
hazard.

Every effort should be made to prevent the use of open 
lights of any description, radio knives, high frequency 
electrical apparatus, live cauteries, or any other source of 
ignition in the vicinity of combustible anesthetic gases.

Smoking is prohibited in surgeries or in similar hazard­
ous areas, or within ten feet of the doorway of any room 
in which combustible anesthetic gases are being used.

B. ACCOMMODATIONS FOB PATIENTS

1. Rooms

Each patient’s room shall have an outside exposure. 
Booms extending below ground level shall not be used for 
patients unless they are dry, well ventilated, have the 
required window space and are otherwise suitable for occu­
pancy. New Construction: No patient’s room shall be al­
lowed below ground level.

No room shall be used for bed care of patients which can 
only be reached by passing through another patient’s room.

a. Floor Area
Beds must be spaced so as to provide adequate room 

for nursing procedures and to prevent the transmission of 
infection. Beds must be placed at least three feet apart. 
New Construction: Private rooms shall have a minimum of 
100 square feet floor area. Semi-private rooms or wards 
shall have a minimum of 80 square feet per bed with at least 
3 feet between beds.

b. Window Area
Window area shall not be less than one-eighth of the 

floor area.

Plaintiffs’ Exhibit C



49a

Plaintiffs’ Exhibit C

c. Doors

Doors to patients rooms should be sufficiently wide to 
permit easy removal of the occupied bed with at least a 
4-inch overall clearance. Vision panels should be placed in 
all double acting doors.

d. Storage Space

There shall be satisfactory safe storage space for cloth­
ing, toilet articles, valuables, and other personal belongings 
of the patients.

2. Room Furnishings

A separate bed shall be provided for each patient with 
separate mattresses, pillow and bedding.

Gatch beds or equivalent shall be provided unless other­
wise indicated by the type or medical condition of the 
patient.

There shall be a chair and bedside table for each patient.

a. Signals

Means of signaling nurses must be provided within easy 
reach of the patient confined to bed.

b. Patients’ Screens

Screens shall be provided in wards or multi-bedrooms in 
order to secure privacy for each patient.

New Construction: All wards or multi-bedrooms shall be 
provided with cubicle curtains, or equivalent equipment 
which shall completely shield the patient.

3. Bedside Equipment

Individual bedpans, wash basins and mouth wash cups 
shall be provided for each patient. This equipment shall



50a

be plainly marked for each patient, stored so that it cannot 
be inter-changed and shall be sterilized when the patient 
is discharged.

Thermometers must be sterilized before each use.
Hot water bags must be covered before being placed in 

bed and carefully checked for temperature and leakage.
Electrical heating pads shall be checked at least annually 

by an electrician.
Restraints may be applied only when they are necessary 

to prevent injury to the patient or to others, and shall be 
used only when alternative measures are not sufficient to 
accomplish these purposes. In applying restraints, careful 
consideration shall be given to the method by which they 
may be speedily removed in case of fire or other emergency.

Oxygen apparatus either for nasal oxygen or oxygen 
tents, shall be provided in adequate amounts.

4. Central Supply and Sterilizing

In hospitals of 100 or more beds, there shall be a central 
supply room with adequate facilities for sterilization of 
supplies and equipment to be used in the hospital.

In hospitals of 100 or more beds, separate sterilizer rooms 
shall be required for obstetrical units and surgical units. 
Sterilizer space shall be required in a central supply room.

Adequate cabinets, cupboards or other suitable enclosed 
spaces shall be provided for keeping sterile equipment and 
supplies in a clean, convenient and orderly manner. All 
sterilization of supplies and equipment in a hospital shall 
be under the direct supervision of a registered nurse.

5. Service Room

Utility rooms shall have adequate lighting and ventila­
tion. They shall be conveniently located for efficient conduct 
of work.

Plaintiffs’ Exhibit C



51a

A bedpan hopper shall be provided in each utility room 
and/or bedpan cleansing room. The bathtub, lavatory, or 
laundry tray shall not be used for cleaning the bedpan.

C. HEATING

1. Temperature

Heating plans shall be adequate to maintain a cold 
weather temperature of 70° F. in all rooms used by patients.

D. LIGHTING

1. Artificial

Each patient’s room must have artificial lighting adequate 
for reading and other uses needed.

Every room, including storage rooms, hallways, and 
others shall have sufficient artificial light to make all parts 
clearly visible and to permit efficient performance of all 
necessary work.

All hallways, stairways, inclines, ramps, and entrances 
shall be well lighted.

2. Emergency

Safe emergency lighting facilities shall be provided and 
distributed so as to be readily available to personnel on 
duty at all times.

E. VENTILATION

Each patient’s room will have at least one window, open­
ing to the outside to permit ventilation and source of nat­
ural light.

Kitchens, bathrooms, and service rooms shall be located 
and ventilated by window or mechanical devices to prevent

Plaintiffs’ Exhibit C



52a

offensive odors from entering patient’s room and public 
balls.

F. STAIRWAYS & ELEVATORS

Stairways should be of a width and design which will 
easily accommodate removal of a patient by stretcher.

Elevators and machinery shall be so constructed and 
maintained as to comply with the regulations of the North 
Carolina Insurance Commission.

G. MAINTENANCE

The hospital structure and component parts and facilities 
shall be kept in good repair and maintained with considera­
tion for the safety and comfort of the patient.

H. SANITATION

1. Water Supply

The water shall be obtained from a municipal water sup­
ply or a private supply system, the location, construction, 
and operation of which will comply with the standards 
approved by the North Carolina State Board of Health.

The water shall be distributed to conveniently located 
taps and fixtures in the building.

There shall be an ample supply of hot water available 
at all times for general use.

All ice shall be washed, stored, handled, and served in a 
sanitary manner. Ice storage boxes, buckets and containers 
shall be maintained in good repair and kept clean. Buckets, 
containers, etc. shall be stored so as not to be subject to 
contamination. Ice boxes shall be covered.

Plaintiffs’ Exhibit C



53a

2. Sewage Disposal

Sewage shall be discharged into a municipal sewerage 
system where such a system is available; otherwise, the 
sewage shall be collected, treated, and disposed of in an 
independent sewerage system which complies with the 
standards approved by the State Department of Health.

3. Plumbing

a. Codes
All plumbing installed must be in accordance with the 

North Carolina Building Code.

b. Cross Connections and Bach Siphonage
All plumbing facilities, whether for sterilization of uten­

sils, instruments or supplies, general water supply or waste 
disposals, shall be installed in such a manner as to com­
pletely prevent possibility of cross connections between 
safe and unsafe supplies or back siphonage.

c. Facilities
Toilet facilities shall be provided in reasonable ratio to 

the number and kind of patients cared for in the institution, 
and in reasonable ratio to the number of employees.

4. Garbage Disposal

All garbage and trash shall be kept in suitable receptacles 
in such manner as not to become a nuisance. Garbage shall 
be removed daily and all garbage cans shall be washed at 
least daily and kept clean.

A space for the refrigeration of garbage should be pro­
vided. There should be an adjacent cement floor area pro­
vided with a drain for washing and sterilizing the garbage

Plaintiffs' Exhibit C



54a

cans by means of hot water and steam jets. This depart­
ment should obviously be accessible to the outside so that 
garbage can be readily removed.

5. Incineration

Incineration facilities shall be provided for disposal of 
infected dressings, surgical, and obstetrical waste and other 
similar material.

6. Screens

All outside doors, windows and other outside openings 
shall be screened against mosquitoes, flies, and other in­
sects. All screen doors shall open outward and be equipped 
with self-closing devices.

7. Handwashing

There shall be adequate handwashing facilities in the 
institution, within or conveniently located with regard to 
every patient’s room or patient earing service. Hand scrub­
bing sinks shall be provided in operating, delivery, and 
labor rooms, nurseries, examining and treatment rooms, 
and in rooms used in the isolation of patients. Handwash­
ing facilities must be provided for foodhandlers and other 
hospital employees.

I. HOUSEKEEPING

Housekeeping facilities and service are required to be 
such that comfortable and sanitary living conditions for 
patients and employees are maintained constantly. Ac­
cumulated waste material must be removed daily.

There must be a frequent cleaning of the floors, walls, 
woodwork, and windows.

Plaintiffs’ Exhibit C



55a

The premises must be kept free from rodents and insect 
infestation.

Bath and toilet facilities must be maintained in a clean 
and sanitary condition at all times.

.J. LINEN

A supply of towels, washcloths, bath blankets, and all 
other linen which comes directly in contact with the patient 
shall be provided as needed for each individual patient. 
No such linen should be interchangeable from one patient 
to another before being properly cleaned or laundered.

Bedpan covers should not be used interchangeably.

K. LAUNDRY

The institution shall make provision for proper cleaning 
of linen and other washable goods with special provision 
for handling contaminated linen.

Where linen is sent to an outside laundry, it is advisable 
for the superintendent, or a responsible member of the 
staff, to visit such laundry and note facilities and methods 
for handling the hospital linen.

General Criteria Applying to Classification of 
Medical Facilities Subject to Licensure by the 

Medical Care Commission

The classification “Hospital” shall be restricted to facili­
ties that provide as their primary functions diagnostic 
services and intensive medical and nursing care in the 
treatment of acute stages of illness. On the basis of the 
specialized facilities and services available, each such hos­
pital will be licensed as to the following medical types: 
(1) general; (2) mental; (3) tuberculosis; (4) rehabilita-

Plaintiffs’ Exhibit C



56a

tion, including orthopedics; (5) maternity; (6) pediatric; 
(7) eye, ear, nose and throat; and (8) physician’s clinic- 
hospital. Extenuating circumstances will be considered in 
continuing the classification of a facility licensed as a hos­
pital prior to September 1, 1960.

All other medical facilities accepting patients requiring 
skilled nursing care that are not operated as a unit of a 
hospital within the above meaning shall be classified as a 
“ Nursing Home.”

Each facility applying for licensure will be classified in 
accordance with the determination of the Medical Care 
Commission.

SECTION VIII—TYPES OF LICENSES FOR 
HOSPITALS

A. CLASSIFICATION OF LICENSES

Each hospital license issued shall indicate thereon 
whether it is a Class I license or a Class II license or a 
Temporary Conditional Hospital License in accordance 
with the provisions set out below:

1. Hospital License, Class I, will be issued to new and 
existing hospitals that comply with the requirements 
of (a) the construction standards established in the 
State Building Code, (b) the Sanitary Regulations 
of the State Board of Health, and (c) the Rules and 
Regulations of the Medical Care Commission.

2. Hospital License, Class II, will be issued to existing 
hospitals that do not comply with the construction 
standards established in the State Building Code 
but have completed measures recommended by the 
State Insurance Department to provide to occupants

Plaintiffs’ Exhibit C



57a

a maximum of safety which can be afforded by com­
pliance with such recommendations, and otherwise 
have met the requirements of the Medical Care Com­
mission.

3. Temporary Conditional Hospital License will be is­
sued to hospitals that do not fully meet the require­
ments of (a) the construction standards established 
in the State Building Code and have not completed 
measures recommended by the State Insurance De­
partment to provide a minimum of safety, or (b) 
the State Board of Health, or (c) the Medical Care 
Commission, but which agree to correct the specific 
deficiencies in question within a prescribed period 
of time.

Plaintiffs’ Exhibit C



58a

(Filed: September 28, 1962)

AFFIDAVIT OF ROBERT R. MARTIN, 
DIRECTOR, JAMES WALKER MEMORIAL 

HOSPITAL

R obert R. M artin being duly sworn deposes and says 
that he is the Director of James Walker Memorial Hospital 
and as such has available to him all of the books and 
records of the Hospital and is familiar with the operation 
of the Hospital; that he has examined the records of the 
Hospital and is familiar with these records, and that he 
knows to his own knowledge that there has been no change 
in the ownership or operation of the Hospital with relation 
to payments or receipts to the Hospital from the City of 
Wilmington, North Carolina, or the County of New 
Hanover since the decision was rendered in the case of 
Eaton et al. v. James Walker Memorial Hospital on the 
29th day of November, 1958, other than a change in the 
per diem charge to the County for treatment of patients 
which is renegotiated each year.

Further with regard to the present operation of the 
Hospital affiant doth state:

(a) That the total receipts of the Hospital for the fiscal 
year commencing October 1, 1960 and ending September 30, 
1961 were $1,978,224.43. That the total receipts of the 
Hospital for the eleven month period of the 1961-1962 
fiscal year, through August 31, 1962, were $1,929,989.89.

(b) That for the 1960-1961 fiscal year referred to above 
the total amount paid to the Hospital by the County of 
New Hanover under contract for the treatment of welfare 
patients was $41,119.15, and that for the eleven month

Defendants’ Exhibit A



59a

period which has passed in the 1961-1962 fiscal year, the 
total payment for treatment for welfare patients by the 
County was $37,401.99.

(c) That the payments by the County of New Hanover 
are based on a per diem payment for each welfare patient 
which is treated; that the charge to NewT Hanover County 
for the 1960-1961 year was $17.50 per diem per patient. 
For the fiscal year 1961-1962 which has not yet ended, the 
charge per diem per welfare patient is $19.00. That the 
amount paid by New Hanover County is renegotiated at 
the beginning of each fiscal year in relation to the past 
per diem cost of patient care for the previous fiscal year.

(d) That the Hospital has no contract for the treatment 
of any employees of the City of Wilmington, North Caro­
lina in Workmen’s Compensation cases. That the charges 
made to the City for the treatment of these employees 
are based on the usual charges of the Hospital; however 
in the case of Workmen’s Compensation patients, all 
charges of the Hospital are subject to review and regula­
tion by the North Carolina Workmen’s Compensation Com­
mission. The total amount paid by the City for this 
treatment was $1599.21 since October 1, 1961.

(e) That the only contractual relationship between New 
Hanover County and the Hospital is on the per diem rate 
of $19.00 for certified charity in-patients; a rate of 50  ̂
per visit is charged to the County for certified out-patients 
who are treated in the clinics of the Hospital, and a charge 
of $2.50 is made for certified welfare patients for emer­
gency room treatment. In the event the patient treated 
in the emergency room becomes an in-patient the charge 
for the emergency room is waived, the emergency room

Defendants’ Exhibit A



60a

treatment being included in the per diem charge made with 
regard to the patient.

This the 26th day of September, 1962.

/ s /  R obert R. Martin 
Robert R. Martin

Sworn to and subscribed before me 
this 26th day of September, 1962.

/ s /  Charlotte S imon 
Notary Public

My commission expires: 9-15-64.

( S e a l )

Defendants’ Exhibit A



61a

Opinion and Order

(Filed: April 9, 1963)

[ s a m e  t i t l e ]

This is a class action for injunctive relief brought by 
three Negro physicians and certain of their Negro patients, 
on behalf of themselves and others similarly situated, to 
prohibit defendants from denying plaintiff-physicians 
courtesy staff privileges1 at James Walker Memorial Hos­
pital in Wilmington, North Carolina, solely on account of 
their race or color, and requiring defendants to admit 
plaintiff-patients to said hospital for treatment on a non- 
segregated and nondiscriminatory basis.

Federal jurisdiction is invoked on the theory that the 
Board of Managers of the hospital, a corporation created 
by an act of the General Assembly of North Carolina, is 
an instrumentality of the State, which is prohibited by 
the Fourteenth Amendment to the Constitution of the 
United States from denying to any person within its juris­
diction the equal protection of the laws. Jurisdiction is 
also based on asserted rights under the due process clause 
of the Fifth Amendment, and on 28 U. S. C. A. §1343(3), 
which gives district courts original jurisdiction of pro­
ceedings to redress the deprivation of civil rights under 
color of any State statute or usage.2

The defendants moved to dismiss under Buie 12, Fed. 
Buies Civ. Proc., 28 U. S. C. A., for lack of federal juris-

1 The sole privilege of the members o f the “ courtesy staff”  is the use of 
private rooms and pay wards for their patients.

2 See, 42 U. S. C. A. §1983.



62a

diction for the reason that the hospital is a private cor­
poration not performing “ State action” within the prohibi­
tion of the Fifth and Fourteenth Amendments, nor within 
the purview of 28 U. S. C. A. §1343(3).

The question presented by the motion is whether, from 
the facts set forth in the complaint and in the affidavits 
filed by the parties, the hospital is an instrumentality of 
the State. If, from the totality of the relationships between 
the State and the hospital, the hospital is performing State 
action, this Court has jurisdiction and the motion should 
be denied. If, despite the admitted relationships, the hos­
pital is not an agency of the State, but acts independently 
as a private corporation, this Court is without jurisdiction 
and the motion to dismiss should be granted.

“ It is clear, as it always has been since the Civil Rights 
Cases, supra [109 U. S. 3, 3 S. Ct. 18, 27 L. Ed. 835], 
that ‘individual invasion of individual rights is not the 
subject-matter of the amendment’ * * * and that private 
conduct abridging individual rights does no violence to 
the Equal Protection Clause unless to some significant 
extent the State in any of its manifestations has been 
found to have become involved in it.” Burton v. Wilming­
ton Parking Authority, 1961, 365 U. S. 715, 722, 81 S. Ct. 
856, 860, 6 L. Ed. 2d 45; Shelley v. Kraemer, 1948, 334
U. S. 1, 68 S. Ct. 836, 92 L. Ed. 1161.

Whether James Walker Memorial Hospital is an in­
strumentality of the State is not presented here for the 
first time. In Eaton v. Board of Managers of James Walker 
Memorial Hospital, 4 Cir., 261 F. 2d 521, affirming 164 
F. Supp. 191 (E. D. N. C. 1958), cert. den. 359 IJ. S. 984, 
3 L. Ed. 2d 934, 79 S. Ct. 941, the identical physicians who 
are plaintiffs here sought admission, in a class action, 
to courtesy staff privileges at James Walker Memorial

Opinion and Order



63a

Hospital. Relief was denied on motion of the defendants 
for lack of jurisdiction in that the hospital was not per­
forming State action. Judge Soper, speaking for the 
Fourth Circuit Court of Appeals, said: “ * * * (T)he 
facts clearly show that when the present suit was brought, 
and for years before, the hospital was not an instru­
mentality of the State but a corporation managed and 
operated by an independent board free from State con­
trol.” Id., 261 F. 2d 521, 525.

Plaintiffs contend that they have alleged facts and cir­
cumstances not considered or adjudicated in Eaton; that 
the decision in Eaton is based on a single factor test of 
day-to-day control and that the United States Supreme 
Court in the subsequent case of Burton v. Wilmington 
Barking Authority, supra, has announced a new standard 
for determining State action based on a consideration of 
the totality of the relationships between the hospital and 
the State.3

Defendants contend that all material facts before the 
Court in this case relating to State action were presented 
to and considered by the Court in the prior Eaton case, 
and that the decision in Eaton is determinative of the 
issues here presented, and binding upon this Court.

It is a recognized principle of law that a previous opinion 
deciding contentions identical in fact, law, and application 
with those in a subsequent case should be followed under 
the doctrine of stare decisis. Grand Rapids & I. R. Co. v. 
Blanchard, 6 Cir., 38 F. 2d 470; United States v. Egelak, 
D. C. Alaska, 173 F. Supp. 206; 21 C. J. S. Courts §186.

Opinion and Order

3 In Hampton v. City o f Jacksonville, 304 F. 2d 320, 323 (5 Cir. 1962), 
the Court said: “ * * * (W )e doubt whether the Court of Appeals for the 
Fourth Circuit would have decided the Hospital case (Eaton) as it did had it 
followed the Supreme Court decision (Burton).”



64a

It is fundamental that a decision of the Court of Appeals 
should be followed in a subsequent case in a District Court 
of that circuit in the absence of a material factual distinc­
tion or a subsequent decision of the Court of Appeals or 
of the United States Supreme Court requiring the District 
Court to depart therefrom. Williams v. Carolina Coach 
Co., I l l  F. Supp. 329, affirmed 4 Cir., 207 F. 2d 408; 
Adkins v. School Board, 148 F. Supp. 430, affirmed 4 Cir., 
246 F. 2d 325; 21 C. J. S. Courts §198.

Therefore, the decision of the Fourth Circuit Court of 
Appeals in the prior Eaton case is binding on this Court 
in the absence of (1) a change in the law since the previous 
decision justifying a change in results, or (2) a factual 
element, not before the Court in the prior case, which 
shows “ State action” on the part of the hospital when 
considered within the totality of the relationships between 
the State and the hospital.

It is clear that Burton does not enunciate a fundamental 
change in the law. The same general principles were 
recognized, applied and limited to the particular facts in 
the Eaton and Burton cases. Each case must rest on its 
peculiar facts and no universal principle or criteria for 
determining State action has yet been established.4

Opinion and Order

4 “ Because readily applicable formulae may not be fashioned, the conclu­
sions drawn from the facts and circumstances of this record are by no means 
declared as universal truths * * * Owing to the very ‘largeness’ of government, 
a multitude of relationships might appear to some to fall within the Amend­
ment’s embrace, but that, it must be remembered, can be determined only in 
the framework of the peculiar facts or circumstances present. * * * Specifically 
defining the limits of our inquiry, what we hold today is that when a State 
leases public property in the manner and for the purpose shown to have been 
the case here, the proscriptions of the Fourteenth Amendment must be com­
plied with by the lessee as certainly as though they were binding covenants 
written into the agreement itself.”  Burton v. Wilmington ParJcing Authority, 
365 TJ. S. 715, 725.



65a

Therefore, unless there are one or more additional facts 
in this case not previously before the Court, which, viewed 
as a component part of all existing relationships between 
the hospital and the State, show that the State is involved 
in the conduct of the hospital to a significant extent, the 
decision in the prior Eaton case is controlling.

The allegations of the complaint in the prior case re­
lating to State action were as follows:

(1) That certain of the land upon which the hospital 
stands was conveyed in 1901 by deed from the City of 
Wilmington and the County of New Hanover to the Board 
of Managers of the hospital “ so long as the same shall 
be used and maintained as a hospital for the benefit of 
the City and County aforesaid, and in case of disuse or 
abandonment to revert to the said City and County as their 
interest respectively appear” ;

(2) That the City and County provide financial support 
for the hospital by granting the hospital exemption from 
City and County taxes;

(3) That prior to 1951 the City and County made direct 
contributions for the support, maintenance, and operation 
of the hospital;

(4) That since the year 1951 per diem contributions to 
the hospital were made by the City and County for ser­
vices rendered certain residents of each;

(5) That the hospital exercised the power of eminent 
domain; and

(6) That the hospital received large grants of money 
from the federal government for expansion and main­
tenance.

Opinion and Order



66a

These facts are alleged in more detail in the present 
complaint. The substance of the allegations was fairly 
presented to and considered by the Court in the prior case.

The following facts are urged for the first time as show­
ing the relationship of the hospital to the State:

(1) The City as self-insurer has made certain payments 
to the hospital for services rendered in treating Workmen’s 
Compensation cases;

(2) Since July 1, 1947, the hospital has been required 
to secure a license from the State through the North Caro­
lina Medical Care Commission and since that time the 
hospital has complied with the licensing procedure and 
standards prescribed by the Commission; and

(3) James Walker Memorial Hospital is superior to any 
hospital in the City and County, offering the highest 
standard of medical care, and is the chosen instrumentality 
of the City and County for furnishing medical care to 
their white citizens and affording a place to practice for 
qualified white physicians.

These additional facts do not justify a different result 
here. The payments for services rendered in Workmen’s 
Compensation cases by the City is not unlike the per diem 
payments for services to indigent patients by the County 
discussed at length in the prior opinions. It appears by 
affidavit filed by the Director of the hospital, that there 
is no contract between the hospital and the City for such 
services and that since October 1, 1961, the total amount 
paid by the City is $1599.21 or one-tenth of one per cent 
of the gross income of the hospital since that date.

Opinion and Order



67a

Under the North Carolina Hospital Licensing Act, both 
private and public hospitals in North Carolina are re­
quired to be licensed. The purpose of the statute is “ to 
provide for the development, establishment and enforce­
ment of basic standards: (1) For the care and treatment 
of individuals in hospitals and (2) For the construction, 
maintenance and operation of such hospitals, which, * * * 
will insure safe and adequate treatment of such individuals 
in hospitals * * * ” 5 The statute is designed to protect the 
public health and does not constitute the licensee an 
instrumentality of the State. To hold otherwise would 
change the character of every private hospital by the 
mere act of licensing. Williams v. Howard Johnson, 4 Cir., 
268 F. 2d 845; Slack v. Atlantic White Tower System, Inc., 
181 F. Supp. 124, affirmed, 4 Cir., 284 F. 2d 747.

Whether the hospital is superior or inferior to others in 
the immediate area is not a significant fact of State 
manifestation in the conduct of the hospital. Here the 
hospital is chartered by the State as an ordinary private 
corporation—there is no “ special franchise” as in Boman 
v. Birmingham Transit Co., 5 Cir., 280 F. 2d 531.

The plaintiff-patients in this case, who seek admission 
to defendant hospital on a nondiscriminatory basis, were 
not parties to the prior Eaton case. This fact does not 
affect the basic question whether the hospital is performing 
State action.

It follows, therefore, that the relationships between the 
State and the hospital, viewed singly and collectively, do 
not constitute the hospital an instrumentality of the State,

Opinion and Order

5 N. C. General Statutes §131-126.2.



68a

and upon the authority of the prior Eaton case, the motion 
to dismiss for lack of jurisdiction is allowed.

It is so Ordered.

This the 5th day of April, 1963.

A lgernon L. B utler 
Chief Judge, U. S. District Court

Opinion and Order



69a

Notice of Appeal

(Filed: May 8,1963)

[ same title}

Notice of A ppeal to the United States Court of A ppeals 
for the F ourth Circuit

Notice is hereby given that the plaintiffs in this cause 
hereby appeal to the United States Court of Appeals for 
the Fourth Circuit from the Order of the District Court 
dismissing the action filed by the District Court on April 
9,1963.

Dated: 1963

M ichael Meltsner

J ack Greenberg
J ames M. Nabrit, III 

10 Columbus Circle 
New York 19, New York

Robert R. B ond
612 Red Cross Street 
Wilmington, North Carolina

Conrad 0 . P earson 
P. 0. Box 1428 
203% E. Chapel Hill Street 
Durham, North Carolina

Attorneys for Plaintiffs



70a

Designation of Parts of Record Appellants 
Propose to Print

In the United States Court of A ppeals 

F or the F ourth Circuit 

No. 9058

[ s a m e  t i t l e ]

T o : C. D. Hogue, Jr., Esq.
309 Carolina Power & Light Building 
Wilmington, North Carolina

P lease take notice that pursuant to Rule 10 of the United 
States Court of Appeals for the Fourth Circuit, appellants 
hereby notify you that they plan to print the following as 
an appendix to their brief in the above entitled case:

1. Clerk’s Docket Entries.

2. Complaint.
3. Motion to Dismiss.

4. Plaintiffs’ Exhibit A.

5. Plaintiffs’ Exhibit B.

6. Plaintiffs’ Exhibit C.

7. Affidavit of Robert R. Martin.

8. Opinion.

9. Notice of Appeal.

10. This Designation.



71a

A P P E N D I X  B

Complaint in Prior Action

United States District Court 

Eastern District of North Carolina 

Wilmington Division

Hubert A. Eaton, Daniel C. Eoane, and 
Samuel James Gray,

PLAINTIFFS

vs.

Board of Managers of the James Walker Memorial Hos­
pital, a body corporate, H. B. Hamilton, Secretary of the 
Board of Managers of the James Walker Memorial Hos­
pital, the City of Wilmington, North Carolina, and the 

County of New Hanover, North Carolina,

DEFENDANTS

1.
(a) The jurisdiction of the Court is invoked under Title 

28, United States Code, Section 1331, this being a suit 
which arises under the Constitution and laws of the United 
States, viz: The Fourteenth Amendment to said Consti­
tution and sections 1981 and 1983 of Title 42 of the United 
States Code, wherein the matter in controversy exceeds, 
exclusive of interest and the costs, the sum of $3,000.00.

(b) The jurisdiction of this Court is also invoked under 
Title 28, United States Code, Section 1343 (3), this being



72a

a suit authorized by law to be brought to redress the depri­
vation under color of law, statute, regulation, custom, and 
usage of the State, of rights, privileges, and immunities 
secured by the laws of the United States providing for 
equal rights of citizens of the United States and all other 
persons within the jurisdiction of the United States, viz, 
section 1981 of Title 42 of the United States Code.

2.

The plaintiffs further show that this is a proceeding for 
a Declaratory Judgment and Injunction under Title 28, 
United States Code, sections 2201 and 2202 for the pur­
pose of determining questions in actual controversy by the 
parties to wit:

(a) The question of whether the custom and practice 
of the defendants in denying, on account of race and color 
to plaintiffs and other qualified Negro physicians similarly 
situated the right to courtesy staff privileges, including the 
right to treat their patients when they are admitted to 
defendants hospital, the James Walker Memorial Hospital, 
Wilmington, North Carolina, is unconstitutional and void 
as being a violation to the Fourteenth Amendment to the 
Constitution of the United States.

3.

All parties to this action are residents and citizens of 
North Carolina and of the United States.

4.

This is a class action authorized under Rule 23, of the 
rules of Civil Procedure for the District Courts of the 
United States. The rights herein involved are of common

Complaint in P rior Action



73a

and general interest to the members of the class repre­
sented by the plaintiffs, namely Negro physicians of Wil­
mington, North Carolina and New Hanover County, North 
Carolina.

5.
The plaintiff, Hubert A. Eaton is a Negro and a citizen 

of the United States and the State of North Carolina, and 
is now and has been a practicing physician in Wilmington, 
North Carolina for the past twelve (12) years, and has 
been a surgeon in said City for the past ten (10) years; 
that said plaintiff holds the following degrees: B.S. from 
Johnson C. Smith University, Charlotte, North Carolina; 
M.S. and M.I). from the University of Michigan, Ann 
Arbor, Michigan; that said plaintiff served one (1) year 
of internship at the K. B. Reynolds Hospital prior to be­
ginning practice in Wilmington, North Carolina. Said 
plaintiff is presently a member of the surgical and medical 
staff of the Community Hospital of Wilmington, North 
Carolina.

6.

The plaintiff, Daniel C. Roane is a Negro and citizen 
of the United States and the State of North Carolina and 
is now and has been a practicing physician in Wilmington, 
North Carolina for the past eighteen (18) years. The said 
plaintiff holds the following degrees: B.S. and M.D. from 
Howard University, Washington, D. C.; said plaintiff 
served one (1) year of internship and one (1) year resi­
dency in internal medicine at Kansas City General Hos­
pital, Kansas City, Missouri. He also served residency in 
1938 at the Community Hospital, Wilmington, North Caro­
lina, New Hanover County, since that time he has been

Complaint in P rior Action



74a

engaged in general practices of medicine and surgery in 
New Hanover County. Said plaintiff is presently chief of 
the Department of Obstetrics at the Community Hospital, 
Wilmington, North Carolina.

Complaint in P rior Action

7.
The plaintiff, Samuel James Gray, is a Negro and a 

citizen of the United States and the State of North Caro­
lina and is now and has been a practicing physician and 
surgeon in Wilmington, North Carolina for the past six­
teen (16) years; that said plaintiff holds the following 
degrees: B.S. and M.D. from Howard University, Wash­
ington, D. C.; the said plaintiff served one (1) year in­
ternship (1937-1938) Lincoln Hospital, Durham, North 
Carolina and eighteen (18) months residency at the Com­
munity Hospital, Wilmington, North Carolina. Said plain­
tiff is presently a member of the surgical and medical staff 
of Community Hospital, Wilmington, North Carolina.

8.

The defendant, the Board of Managers of the James 
Walker Memorial Hospital, is a body Corporate under and 
by virtue of the laws of the State of North Carolina and 
in act of the General Assembly ratified on the 23rd day of 
January, 1901, charged with the management and super­
vision of said hospital but is in fact subsidiary to an in­
strumentality of said City of Wilmington and County of 
New Hanover and is sued in its official capacity.

9.

H. E. Hamilton is the Secretary of the Board of Man­
agers of the James Walker Memorial Hospital, that he



75a

has overall control and management of the James Walker 
Memorial Hospital and is its chief administrative officer, 
and is sued in his official capacity.

10.

The defendant, City of Wilmington, North Carolina is 
a Municipal Corporation, located in New Hanover County, 
North Carolina, and it is engaged in the usual duties and 
activities pertaining to Municipal Corporations, and it has 
provided financial support for the said James Walker 
Memorial Hospital by granting said Hospital exemption 
from the payment of City taxes; that said City has for 
many years prior to 1951 made direct annual contributions 
from its treasury for the support, maintenance and opera­
tion of said Hospital and that since the year 1951, the said 
City has made per diem contribution to said Hospital in 
payment of services rendered certain residents of the City 
of Wilmington, North Carolina.

11.

The defendant, New Hanover County, is a body politic 
and corporate of the State of North Carolina and it is en­
gaged in the usual duties and activities pertaining to such 
bodies, and it has provided financial support for the James 
Walker Memorial Hospital by granting said Hospital ex­
emption from the payment of County taxes; that said 
County has for many years prior to 1951, made direct 
annual contributions from its treasury for the support, 
maintenance and operation of the said hospital; and that 
since the year 1951, the said County has made per diem 
contributions to said hospital in payment of services ren­
dered certain residents of the County of New Hanover.

Complaint in P rior Action



76a

Complaint in Prior Action

12.

That from time to time the said defendants, including 
defendant Hospital, have exercised the right of eminent 
domain and have received large grants of money from the 
Federal Government for expansion and maintenance of the 
said Hospital. That under the Will of the said James 
Walker, deceased, the said hospital originally was erected 
and built by him to be held and used by the defendants, 
City and County and their successors as a hospital for the 
treatment of the “ sick and afflicted.”

13.

The defendants, New Hanover County and City of Wil­
mington purchased the original tract of land in the year 
1881, being all of Block 227 in the City of Wilmington 
upon which the late James Walker built or caused to be 
built, the original “ James Walker Memorial Hospital,” see 
copy of said deed hereto attached and marked Exhibit No. 1 
and it is prayed that said deed be made a part of the com­
plaint as if fully set out herein.

14.

That on or about the 19th day of July, 1901, the de­
fendants, City of Wilmington and the County of Hanover, 
after having been authorized through the Board of Aider- 
men of the City of Wilmington and the County Commis­
sioners of the County of New Hanover, did by deed trans­
fer the land upon which was situated the James Walker 
Memorial Hospital to the Board of Managers of the James 
Walker Memorial Hospital in trust for the benefit of the 
said County and City aforesaid. A copy of the said in­
denture is hereto attached and marked Plaintiff’s Exhibit



77a

No. 2, and it is prayed that said deed be made a part of 
this complaint as if fully set out herein.

15.

That now and at the time complained of, the City of 
Wilmington and the County of Hanover were and are the 
owners in fact of the James Walker Memorial Hospital.

16.

In compliance and conformity with the procedure, rules 
and regulations set out and adopted by these defendants 
governing the granting of “ courtesy staff privileges” in 
the James Walker Memorial Hospital, the plaintiffs and 
each of them on or before the 19th day of March, 1955, 
timely and properly presented applications to these de­
fendants for “ courtesy staff privileges” in the James Walker 
Memorial Hospital with such records of past academic 
achievements, character and other materials as required; 
that plaintiffs are ready and willing to abide by all lawful 
regulations of defendants; that despite plaintiffs admitted- 
possession of all the necessary qualifications, these de­
fendants have denied and refused to grant the plaintiffs 
and each of them “ courtesy staff privileges,” including the 
right to treat their patients when they are admitted to 
defendant hospital because of their race and color. While 
at the same time, granting “ courtesy staff privileges” in 
the James Walker Memorial Hospital to white applicants 
with the same qualifications as those possessed by the 
plaintiffs.

17.
(a) That on or about the 30th day of January, 1956 

the plaintiffs appealed to the Board of County Commis-

Complaint in P rior Action



78a

sioners of New Hanover County requesting the County 
Board of Commissioners to direct the James Walker Memo­
rial Hospital to cease discriminating against them on ac­
count of color. The said County Board of Commissioners 
by letter dated March 3, 1956, a copy of which is hereto 
attached and asked to be made a part of this Complaint 
as if fully set out herein, refused to intervene.

(b) That on or about the 30th day of January, 1956 
the plaintiffs appealed to the Wilmington City Council re­
questing it to direct the James Walker Memorial Hospital 
to cease discriminating against them on account of color. 
The said Wilmington City Council by letter dated Febru­
ary 28, 1956, a copy of which is hereto attached and asked 
to be made a part of this complaint as if fully set out 
herein, refused to intervene.

By virtue of such wrongful action and illegal customs 
and usages on the part of the defendants and each of them, 
the plaintiffs are damaged and have no adequate remedy 
at law.

WHEREFORE, plaintiffs respectfully pray the court:
(1) That the court adjudge and decree and declare the 

rights and legal relations of the parties to the subject mat­
ter herein controverted in order that such declaration shall 
have the force and effect of the final judgment and decree.

(2) That this court should order a judgment or decree 
declaring that the policy, and usage of the defendants in 
refusing to grant “ courtesy staff privileges” to the plain­
tiffs and other qualified Negroes to the James Walker 
Memorial Hospital solely on account of their race and 
color is unconstitutional and violative of the Fourteenth 
Amendment to the United States Constitution.

Complaint in P rior Action



79a

(3) That this court issue a permanent injunction forever 
restraining and enforcing the defendants and each of them 
in denying to the plaintiffs possessing the qualifications of 
“ courtesy staff privileges” in the James Walker Memorial 
Hospital solely because of color.

(4) That this court will allow the plaintiffs their costs 
herein and such further and other additional or alternative 
relief as may appear to the court to be just and equitable 
in the premises.

Complaint in P rior Action

[Attorneys Names Omitted]
*  # #

Hubert A. Eaton, Daniel C. Eoane, and Samuel James 
Gray, who being duly sworn depose and say: That they 
are the plaintiffs in the foregoing action, that they have 
read the complaint herein; that the same is true of their 
own knowledge, except those matters and things stated 
upon information and belief, and as to those they believe 
it to be true.

*  #  #

[Notary & Names Omitted]