Complaint

     [||c56d2d58-e5b3-46d8-8583-af8bf16761b3||] ¢ go IN THE UNITED STALES DISTRICT COURT oll il 
FOR THE NORTHERN DISTRICT OF INDIANA Vi Ve oJ 

HAMMOND DIVISION 

  

ol IL 

HEC 29 1974 
BARBARA LEEK WESSON, : 
B i+ TERRY, 

LDOLIE GRAY, 

ANDO ROSA KELTON, 

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Plaintiffs 

) gi. 73 
vi. CAUSE ‘NO. H76~ + [OD 

) 
METHODIST DOSPITAL OF ) 
GARY INC., An Indicna ) 
Not-For-Profit ) 
Corporation and DAVID ) 
MATTHEWS, Secretary Dept. ) 
of Health, Education and ) 
Welfare of the United ) 
States of America, ) 

) 
) Defendants 

COMPLAINT 
  

) 
I 

JURISDICTION OF THE COURT 

The jurisdiction of this Court is invoked under 42 U.S.C.A. 

B:291 to 291-0; 42 U.8.C.A. 's 2000D; the Constitution of 

United States of America and more particularly, the Fourteenth 
+ 8
 

a 
Amendment thereto. 

IY 

PARTIES 

  

A. PLAINUILFYS 

l. BARBARA LEEK WESSON, BERNICE wally, FLITE GRAY, and 

ROSA KEETON, are Black persons who are citizens nd 

taxpayers of the United States, at least 21 vear: of age ox 

older, who reside in Gacy, Indiana, who boring this action on 
» 

their own behalf and on behalf of all persons aimilerly situated 

and allege that this class is so numerous that Joincor of all 

members is dmpracticable; that there ave qguestions of law and 

fact common to cho clasu; that the claims of ihe Yoepreseatative 

parties arc typical of the claims of tha class; and that the 

representative parties will fairly aad adequately protect 

the interest of the class.  



| " " | 
B. DuilENDANTS 

  

De Dafendant Methodist Hospital of Gary, Inc., is an 

Indiana Not-fox~Profit Corporation, operating two (2) genoral, 

short term hospitals consisting of 419 bods in Gary and 165 

beds on Broadway in Merrillville, Indiana. 

i BF Defendant David Matthews, purports to bo Sacratary 

of the Departmont of Health, Education and Welfare of the 

United States of Amorica, has his office in Washington, 

D.C. and is oxercising all tha poiars of that office and 

claims the privilages and ewolumonts, financial ond othorwise 

of that office. He is cued an Sccratary oi Health, Education 

and Weliare of the United States of America. 

III 

TIE PACTS 

4. Tha Clty of Gary is located in the northwest corner 

of the 8tata of Indiana. It io the largest city in Lake 

County, a heavily industrialized area with a population 

in 1970 in excess of 630,000. Specifically, Gary, in 1970 

had a population of 175,000. Of this nuabaor, approximately 

33% ara persons commonly roforrcd Lo an Nogro ox Black porsons, 

and 10% ara persons of Mexican or Puerio Rican origin and 

deacent. 

Hh. On Maxeh 1, 1967, tho Gary Joint Hoopital und, Inc. 

was losued a charter by the State of indiana. This organization 

was structured to combine the efforts of many people to enter 

into a cooparative fund raising drive for the bonefit of St, 

. Mary roercy iogspital and Methodist Hospital in Gary. Tho 

dtatad purpose of this fund raising drive was to help rolieve a 

pressing bed shortage and ovar crowded conditions that 

existod at St. Maxy uexcy Hospltal and Methodist Hospital. 

A public subicription goal nought from industry, businasg, 

trust foundai:iona and individuals, in the Gary hospital corvice 

* “1 <3 4.5 area, a minirum of $3,500,000 to ba divided batweoon St. Mary 

Mercy Hospital and Methodist Hospitals. The initial first 

et eS 
L 

 



  

phasa cost of proposed conctruoction was estimated at $8,925,000. 

Bt. Mary Mcrcy Hospital was to rxccaive $4,675,000 and defendant 

Methodist Hoapital $4,250,000. For now conatruction, defendant 

Methodist announced the following plans: 

LAND ACQUISITION 600 Dlock Hayea to S$ 450,000.00 
  

Gaxriiald Surgical and 
Diagnootic Pavilion 
Parking 

  

POWER FACIWITIES To replaca proaon 

facilites and add 

capacity for future 
aexpannion 

SOUTHEAST TOWER Povehintry-14 Ladn 800,000.00 
Mur oriao~-00 bacalnato-—- 

4 Badn-Intonaive Carxro-8 Beds 

  

  

  

SURGICAL IND Oporating Roomg-12 3,500,000.00 
DIAGNOSTIC PAVILION Fn2rgency Room 

A~Ra Nd 

REMODELING 1st and 5th FPloorn 500,000.00 
  

AdG 44 Red: 
Total Increiaae of 70 Li=ds, 60 Bassinets 

(od 1,000,000.00 

TOTAL EAPENDITURES $4,250,000.00 

in a report filed with the Secretary of State of Indiana on 

March 3, 1976, Gary Joint Hospital Fund, Inc. reveals that it 

had raised and paid to St. Mary Mercy Hospital $2,249,500.00 

and to defocndant Methodist $2,249,500.00. 

G. On Decowbaer 1, 1966, at a ovocial mosting ond on 

January 19, 1%67, at a regular mceting, th: mueclionl sinff of 

Methodiat Ilospital, which was predominantly white, conzpired 

and deviged a plan to oppoga aay expansion of c¢aefandont 

Methodist at its Gary site. At the maeting of December 6, 

1966, Dr. Albin Jahns moved that the proposed program 

proposcd by the Administration be unanlitously rojected by 

the medical staff and that any {future consideration for 

expans.on ba a plan combining otaff, Administration and 

lay efforts. The Motion was scconded and passed. 

4  



  

7. What was actually Lullt by Defondant Methodist 

at its Gary nita? 

Land Acquisition 000 Block =- Grant 
to Hayao Acquired 

Powar Facilities Not Built 

Southoailt Towor Not Built 

Surgical and Diagnostic NOt Built 
Pavillon 

Remodelling lat Floor only 

Addition of 44 Beds ot Dona 

The defandant Methodist bullt instead he South Pavilion, which 

is an extendc 1 care facility; moved ito chargoncy room to 

physical thoxapyr and moved intrnsive caro coronary cara to 

tho first {lcoor north. Daefzndant Metlodint than prococdad 

with a plan t2 build a Satollizo Hospital on droadwvay, also 

known as Route 53, gouth of U.S. 30 in Morrillville, Indiana. 

That satellite hospital io now a $18 mililo: goneiral, short 

term hogpital consicting of 165 beads with capacity to expand 

to 600~800 bedas. That facility was completed in December of 1975. 

On July 27, 1973, the defendant Methodint gignod Civil Rights 

Asgurances, (Plaintiffo' Exhibit "A" atiachod hereto and made 

part of thls Complaint). That document wan cxceutsd: 

"..4in connaction with ito opplliection ior a loan guiranuoe 

to assist financing the conctruction of Lroalney Mothodlat 

Hogpital for the period the rodernl Government is paviag 

an interost subsidy...", Paragraph 4 oi that document on page 

2 providea as follows: "4. Prior to any xeductlon of services 

at Gary Methodist Hospital such propocod reduction must be 

submitted to and approved by thn Roglonal Civil Righto Director 

of the Dopartnent of Health, Dducation and Welfare in a manner 

consistant with Title 6 of the Civil Rights Act of 1964 and 

A Ln - the regulations igcucd pursuant thox Len, MH 
Q We * 

8. Plaintif{s allege that tho defondont Methodist 

1 

nat paragraph by reaucing x-ray violated the provisions of t 

 



therapy servicesYly 1ts Gary Site and requi ff all patients to 

travel to the Broadway site for those services without prior 

  

fe
ed

 

approval of Department of Health, Education and Welfare ‘ (See 

attached Exhibit "B" of Julian B. Allen, which is made a part 

of this Complaint). 

9. To illustrate the impact of the actions of the defendant 
Methodist one must compare the facilities at its Gary site 

to its Broadway site: 

      

      

  

GARY BROADWAY 

£-Ray Department 

l. Rooms equipped with image 1 4 
intensifier 

2. X-Ray therapy service for keloid No Yes prevention 

3. Leroradiography to detect breast No Yes cancer 

4. Linear accellerator for deep No Yes X=ray therapy 

Operating Rooms 

l. Ceiling mounted X=ray units 1 4 

2. Separate Cystoscopy rooms 0 1 

General Operating Rooms 

3. Operating room tables equipped to 0 4 utilize image intensifier 

4. Orthopedic table which can be used 1 1 with image intensifier 

Recovery Room 

1. Monitor (heart, lung, ete.) for 0 6 each post-operation patients (cost 
$3,000 each) 

Central Service 

l. Automatic washer for rolling 0 1 equipment such as floor 
dressing cart (helps to reduce 
contamination) 

2. Combination gas and steam 0 1 autoclave with arrcation 

chamber, (the gas is needed for 
: rapid sterilization of new type 

fiber optic instrument) (cost 
$30,000) (Gary has a very small 
unit only $5,000) 

3. Ultrasonic instrument worker 0 1 (this cleans the instruments 
better and increases their 
longevity) 

 



  

Call Room 
  

1. Quarters for physicians and 2 6 

staff call for OB, O.R.;, and E.R. 

10. Defendant Methodist submitted a proposal in 1976 

to defendant Matthews for an $8,143,370 grant and loan program 

which would; "1) provide a new laundry building at its Broadway 

site, replacing an existing facility in Gary, 2) provide a 

health service building in Gary for existing and future . 

ambulatory care services together with a family practice 

residency, 3) provide a health services building in Broadway 

for ambulatory care, pre-admission testing, education of 

patients and staff, hospital base physician services and 

coffee shop." This grant to the defendant Methodist was approved 

by defendant Matthews, in spite of being strongly opposed by 

the Mayor, the Common Council of the City of Gary and leaders 

of other civic organizations. (See attached Exhibit "C", 

which is made a part of this complaint). 

11. Defendant Methodist, has by its actions over the 

last 10 years, has demonstrated its intent to deprive the 

Black residents of the City of Gary of adequate medical services. 

Defendant Methodist does not refuse to admit Black residents 

of Gary at its Broadway site, but those black residents of 

Gary must drive or take taxi cabs to that site which is 

approximately 15 miles south of its Gary site. The rights 

of the Black residents of the City of Gary have been violated 

and abridged by the actions of defendants Methodist and 

Matthews, who acted in concert to abandon the Gary Site. 

SPECIFIC RELIEF REQUESTED 

1 Plaintiffs ask that the defendant Matthews be ordered 

to withhold from defendant Methodist the interest subsidy on 

the financing of its Broadway site for its violation of the 

\ Civil Rights Assurances Agreement signed July 27, 1973. 

2. That defendant Matthews be directed to withhold 

the granting of any of the $8,143,370 Hill-Burton grant and 

loan fund guarantee to defendant Methodist. 

3. And for all other relief which to the Court is 

 



I am ona of tho plaintifiis in tha abova ontitled action, 

  

have rond the foregoing coaplaint by me cubacrlbad, know 

the contonto thorecoi, and that tho osama is true in substanca 

and in fact oxcopt as to the matters that are thorein 

on information and boliocf and ag to thooo matters I believe 

it to be true. 

  

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DOU CY ASM, GRIMES 

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Ta THOMAS V. BARNES 
Si Attorney for Plaintiffs 

 



ATE 

  

CIVIL RIGITS ASSURANCES 
  
    

In crder to alleviate the concerns of the Department 

of llealth, Zducation, and Welfare regarding our compliance with 

Title VI of the Civil Rights Act of 1964 And "ho Regulations 

issued pursucnt thereto (45 C.F.R. part 80), The Methodist 

Hospital of Gary, Inc,, gives the following specific assurances 

in connection with its application for a loan guarantee to 

assist financing ihe construction of Broadway Methodist Hospital 

for the period the Federal Government is paying an interest 

subsidy: 

Ll. Gary Methodist Hospital will continue to 

operate as a4 general acute care hospital, at its 

present or comparable site in Gay, providing no 

less than iis present level of comprehensive 

health services. . 

2... If the Gary Methodist Hospital should 
’ LI 

- 

experience any financial difficulties that would 

> preclude the operation of Gary Methodist Hospital 
( 

as set forth in assurance 1, surpluses, loans, 

and other financial resources generated by the 

Broadway Methodist Hospital operations will bo 

immediately and directly used to provide the 

necessary assistance To Gary Methodist Hospital, 

3. Prior to approval of any additions to 

or expansion of Broadway Methodist liospital, it 

must be demonstrated to and approved by the 

Arca Comprehensive Health Planning Agency, the 
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. 

HeZionnl Cava A1Ghis Diroctoxr of the Department 

of ilealth, Education, and Welfare, and the 

feglional iicallin Director of the oepartment of 

Ylealth, Zducation, and Welfare that adequate 

capital expenditures have been made at Gaxy 

Methodist Hospital, 

= 4. Prior to any ieduction of services at 

Gary Methodist Hospital such proposed reduction 

must be submitted to and approved by the Regional 

Civil Rights Director of the Department of Health, 

Education, and Welfarc in a manner consistent with 

Title VI of The Civil Rights Act of 1964 and the 

regulations issued puvsuant thereto. 

1 5. Any and all plons to duplicate at 

Broadway Methodist Hospital services now present 

at Gary Methodist Hospital or tho implementation 

of new programs, in accordance with Public Law 

02-6035, at cither hospital must he submitted to and 

approved by the Regional Civil Rights Director of 

the Department of Health, Lducation, and Velfare 

in a manner consistent with Title VI of The Civil 

Rights Act of 1964 and the regulations issuad Pua = 

suant thereto. 

6. All staff physicians shall have cqual 

privileges and practice at both hospitals. 

7. All patients are to be assigned to 

Gary sethodist Hospital and Broadway Methodist: 

llospital on the basis of availability of beds



  

\ 

hier ew pS Hl dime es a DIOR LUI et ayaa 

Se 5 SEAR GEE 43 Bt Lone Lh AlayLe Hel Luis LY DAVE EARS 

valid renson exists; however, no patient shall 

\ ! be denied ecual access to either facility on 

- the basis of the distance from the hospital to 

his p.~ce of residence, 

vo, 

. 

hy 
! 

) 

: 3. In implementing the above assurances, 

hi | 

: consideration shall be given to the operation 
| 

iS, of Gary Methodist Hospital and Broadway Methodist 

2 llospital as an integrated and interlocking unit, 

REY : 

| 
, 

g. Consigtent with The re quirements of 

| Section 80.6(b) of the aforementioned regulations, 

hy The Methodist Hospital of Gary, Inc., will keep 

cporonriate records showing the oxtent to which 
wy MA Ma 

[& 

. it has complied with the assurances provided 

| » 
ts 

Sony. 2 hex cin, 

1t is understood that the violation of any assurance 

x" | : ¥ b) . . 2 - oe ger ATT GL ol 5 {7 ST Tc yr 

| may be ground, an itself, for termination of all federal 

) ; . i . \ — bs 9 J y ~ AVP 

ord assistance subject, however, To all applicable Federal laws, 

‘ i ; 

! / 
It is also understood that the affivmative action 

CT t ; 

a ‘plan submitted August 14, 1972 by The Methodist Hospital of 

Las N : . - . - ¢ N 

ts ~ Gary, Inc,, remains applicable; however, in the evenvu of any, 

: inconsistencies between those provisions and these specific 

| ; 

assurances, the specific assurances contained herein shall 

— prevail. 
. 

: it is Jwiherx understood that while the speci fic 

assurances contained herein axe imited to ihe period the 

Federal Government 1s paying an interest subsidy, Title VI 

of the Civil Rights Acti of 1964, the regulations issued put 

suant thereto, and any oiher relevant statutory cox regulatory 

 



  

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Pali | 

. 

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rAviRioANng in affect ov ewhmequently anscted, will remain 

applicable uatil otherwise changed, amended, or repealed, 
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A Sif 2 JA ALND a” 

BY: it A, “Johnson, PR. D. 
RII 

The Methodist Hospital of 
Gaxy, Inc. 

  

  

Approved by the United States 

Depariment of Health, Education, 
and NJ : 

ul 7 
A 

PN y4 ao 2 “Ga 

By; WA A ol @ bid 
JHichard &. Faas / 
Regional, Director 
Region /V/ 

  

    

  

  

  
1s . A 7 yo 5 I 1 [13 os Rh 5. v ar 

Regional Health Director : 

Region V 

  

  

ilenneth A. Mines 

Regional Civil Rights Director 

Region V 
. ey i 

Pate: 1 [ro [15 

| By: K La mA ~ A : bans (282 

  

) ANA y 3 As iN 

Marvin k. Gavin 
Regional Attorney 
Region V 

pate; _Jul, 26 1973 i 
/ 

By: 
  

  

 



  

9 

STATE OF INDIANA ) 
) 
) 

(€
2 

COUNTY OF LAKE 

i 
D 

gy we 

HE eS D T AVI   

Julian B. Allan, first boing duly sworn deposes and 

Bayo: 

That bo 15 an ahornoy duly liconrced to practico 
law in the Stato of Indinna and that Lo in onan of the 
attornnys for the plaintiffs in a cauwra entitled, "Barbara 
cok VWagoon, ot al vn. Mothodiot Hanplitnl of Gory, Inc. 
QL al’, to ho 21104 in £hé Unitcd 3oat Diatrict Court 
for the Northern District of Indica, Gromsona Division. 

That as 4 pact of his yooooarah an ona of Tha attornoys 
for tho plaintiffs, on Hovearbor 17. 18976, ha entlod 
Mr. Alfred Swchoz, who 10 a onaeliallast in chnzgn of hoalth 
and noclal caxwvicang Health, Sducaflon and Veliare, Roglon 
Vv, Chiengo, Illinois, ond tneulzed of him whnther Ox not 
defandant inthodit Honplital hnd orhnaititod and had approved 
by tho Raglonal Clvill Righta Dirac: OL t. hi BRIT Ea T 
of Rcal$h, EE ucotion and Wollnxo FR rafor a roduction 
of x-ray thesnpy narvicen of Ato 'Giy alia an provided An 
the Civil Rightn Doraranooes Agro -mt olgnad July 27, 18173. 
On Novombor 24, 1276, I van invorrd by Mr. Sanchon that 
thao Delendant rothodiot had 2l1icd no Guch applleation fox 

reduction of coxrviceos 

ApgurancQo hgragmont 

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Furthar affiant saith not. 

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Civil + 3» La Ty 
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1973. 
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Mr. David Mathews, Secretary 
Department of Health, Education & 

Welfare 
HEW Building, North 
330 Independent Avenue, S.W. 
Washington, D.C. 20201 

Dear Mr. Mathews: 

It has been brought to our attention that the Methodist 
Hospital of Gary has an application for $8.1 million dollars in 
"Hill-Burton Grant and Loan Guarantees. 

However, Methodist Hospital will not share with the citizens 
of Gary their long range plans for the community. They also will 
not join with the community (The Medical Center of Gary, Inc., 
St. Mary's Medical Center of Gary and the Northwest Indiana Health 
Systems Agency, Inc.) in joint health facility and’ program 
planning to combine, share or eliminate duplications, in order 
to achieve the maximum utilization of health care dollars and 
thereby, maintain full service health facilities of the highest 
quality in Gary. 

We therefore, request that this application not be approved 
unless HEW, itself, performs an on-site investigation of the 
total impact of this proposal on the citizens of Gary. HEW 
should also consider withdrawing the $14 million dollar Hill- 
Burton Loan Subsidy which was given to Methodist Hospital in 
1973 to build their Broadway Suburban Hospital, which is a 
direct cause for the present deteriorating lLospital situation 
in Gary. 

Respectfully, 

Daisy R. Stone, President 

CCCs. Dr. Theodore Cooper, HEW 
Mr. Richard Freedman, HEW 

Dr. E. Frank Bllis, HEW : 
Mr. Alfred J. Sanchez, HEW AAA 
Mr. Kenneth A. Mines, HEW 

    

   



   
    

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| 2198839656 iiGH TDBN GARY IN 09-29 1120A EST". 

( Bb MEDICAL CENTER OF GARY WW » ce : I 2 i 250 GRANT ST 
GARY IN 46402 . S 

5 MEDICA am WUICAL CeNitg Of 
VIMY, 

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( THIS MAILGRAM IS A CONFIRMATION COPY OF THE FOLLOWING MESSAGE: ( 

2198839656 MGM TDBN GARY IN 100 05-29 1120A EST 
( 217 \ 

M DAVID MATHEWS 

HEW BUILDING NORTH 330 INDEPENDENCE AVE 
( SOUTHWEST 

WASHINGTON DC 20201 

-—
— 

| "MIS IS TO INFORM YOU THAT WE STRONGLY OPPOSE THE METHODIST HOSPITAL OF 
\ GARY APPLICATION FOR 8.1 MNILLION DOLLARS IN HILL-BURTON GRANT AND LOAN 

FUND GURANTELS 

(DETAILED LETTER TO FOLLOW 

(  . DAISY STONE, PRESIDENT 
GARY BRANCH OF THE NAACP 

( 1122 EST 

MEMCONMP MGM 

( \ 

( 

: 

 



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l 2198839656 MGM 1D3M GARY IN 09-29 1126A EST 

GEDICAL CENTER OF GARY WW SEP 30 1976 350 GRANT ST MEDICAL Conpies GARY IN 46402 I NTR of ¢: 

(HIS MAILGRAM IS A CONFIRMATION COPY OF THE FOLLOWING MESSAGE: 

198339656 MGM TDBN GARY IN 100 05-29 1126A ES 
Z1P 
wv DAVID MATHEWS 
HEY BUILDING NORTH 330 INDEPENDENCE AVE 
SOUTHWEST 
WASHINGTON DC 20201 

{ 

"MIS I5 TO INFORM YOU THAT WE STRONGLY OPPOSE THE METHODIST HOSPITAL OF GARY APPLICATION FOR 8.1 MILLION DOLLARS IN HILL-BURTON GRANT AND LOAN FUND GURANTEES 

DETAILED LETTER TO FOLLOW 

VERNON SMITH, PRESIDENT 
GARY COMMON COUNCIL 
CITY OF GARY INDIANA 

1128 EST 

MGMCOMP MG 

\ 

\ 

; ( 

 



4 * 
IN THE UNITED STAYWES DISTRICT COURT hw f { £5 hy 
FOR THE NORTHERN DISTRICT OF INDIANA : 

HAMMOND DIVISION 

  

ai a J} 1Q 7 
’ ent (§ BARBARA LEZK WESSON, ) At DLERNICE TERRY, ) FRANCIS. 7 0 LM —~ - - - " 

rx \ YA 

"DT ~~ 
\ 

\ JYK y 
EDDIE GRAY, 

) U. S DIS TRI ¥ O,4C1 ERK AND DAC NM YY TO v 

RIC (0) It 

AND ROSA KELTON, 
COURT 

Plaintiffs 

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BE ST DOSPITAL OF 
GARY INC., An Indicna 
iot-Foxr- =Pro ig = 

Corporation and DAVID 
MATTHEWS, Sccrotar Y Dept. 
of Health, Education and 
Welfare of the United 
States of America, 

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Defendants 

COMPLAINT 
  

JURISDICTION OF THE COURT 

The jurisdiction of this Court ig invoked under 4 

B 291 to 291-0; 42 U.S.C.A. 5 2000D; the Constitution of the 

United States of America and more particularly, the Fourteenth 

Amendment thereto. 

i
 

bd
 

PART ILS 

A. PLAINTLIIS 

1. BARFARA LIEK WESSON, BERNICL THR, EDI ITE. GRAY , and 

ROSA KEETON, are Black persons who are citizens iad 

taxpayers of the United States, at least 21 year; of age or 

oe 
| i. Indiana, who bring this action on 

| 9 

=
 

- 

older, who regide in Gacy, 

their own behalf and on behalf of all pPercong gimilarly situated 

and allege that this class is £0 numerous Loaf Joincor of all 

members is impracticable; that there ave questions of law and 

fact common to tic clanc; that {he Claims of Lha Tepresentative 
l a oN ce - 3 rey £8 = » “ o) von Sta parties arc typlcal of the claims of thao clags; and that the 

representative parties will fairly and adcyguately protect 

the interest of the class. 

 



B. DEFENDANTS 

  

eo Defendant Mothodist Hospital of Cary, Inc., 1s an 

Indiana Not-for-Profit Corporation, oparating two (2) general, 

anort torm hospitals conaisting of 419 bods in Gary and 165 

beds on Broadway in Merrillville, Indiana. 

3 Defendant David Matthawa, purports to bo Sacretary 

of the Departmont of Health, Education and Welfare of the 

United States of Amorica, has his offico in Washington, 

D.C. and is axercising all tho powers of that office and 

claimo the privilogns and cwolumontn, financial and othorwiae 

of that offica. He is cued ar Sccraetary of Health, Education 

and Wellare of the United States of Amarica. 

IXIX 

THE PACYS 

4. Tha City of Gary ia located in ithe northwoot cornar 

of the 8tatae cof Indiana. It ic tho largcat city in Lako 

County, a hoavily industrialized area with co population 

in 1970 in excess of 630,000. Spacifically, Gary, in 1970 

had a population of 175,000. Of thig nuaer, approximately 

53% aro persons commonly roforrcd to as NOgTO ox Black persons, 

and 10% are persons of Mexican or Puerto Rican origin and 

degcent. 

i I On March 1, 1967, tha Gary Joint Yoapltal Fuad, Inc. 

wags iosued a charter by the State of indiana. This organization 

was structured to combine the efforts of many pcople to enter 

into a cooparative fund ralaing drivo for the bonefit of St. 

Mary Marcy Hospital and Methodist locpital in Gary. The 

dtated purpose of this fund raising drivo was to help relieve a 

pressing bed shortage and ovar crcuded conditlong that 

existed at Sc. Mary Mercy Boopltal and Methodist HHoapltal. 

A public subiicription goal mought from industry, businosg, 

truot foundai:iona and individuals, in the Gary hospital corvice 

area, a minimum of $3,500,000 to be divided batwoon St. Mary 

Mercy Hogpital and Methodist Hospitals. Tho initial Firat 

- lu 
y 

 



phase cost of proposoad construction was estimated at $8,925,000. 

  

5t. Mary Mcrcy Hospital wags to rccoive $54,675,000 and defendant 

Methodist Hogpital $4,250,000. For ncw construction, defendant 

Methodist announced the following plans: 

LAND ACQUISITION G00 Dlock Hayos to S$ 450,000.00 
Gariiald Surgical and 
Dingnootic ravilion 
Paring 

  

  

POWER FACILITIES To. mCOIACh pragon. 1,000,000.00 
focilitlieo and add 

capiaciiy Tor future 

  

SOUTHEAST TOWER Povenlatry-14 boda 800,000.00 

Hur orios-060 bBansiaoto- A 

4 Baodo-intonaive Carxo-8 Beds 

  

  

SURGICAL I'Ni Opazrating Roomg-12 1,500,000.00 
DIAGNOSTIC PAVIJ.ION Fmorgency Room 

A=Ray 

REMODELING lot ond 5:h Floorn 500,000.00 
hda 44 Pod. 

Total Incraaog of 70 128s, 60 3aascinets 

TOTAL EAPENDITURES $4,250,000.00 

In a report filed with the Secretary of State of Indiana on 

March 3, 1976, Gary Joint Hospital Fund, Inc. reveals that it 

had raised and paid to St. Mary Mercy Hospital $2,249,500.00 

and to defcndant lMethodist $2,249,500.00. 

6. On Doconboer 1, 1966, at a rpocink moving cnd-on 

January 19, 1267, at a regular mocting, the mecdenl asinfl of 

Methodiat Hoapital, which was predominantly white, conzpired 

and deviged a plan to oppoga aay cxpansion of ¢alfaendant 

Methodist at its Gary site. At the macting of December 6, 

1966, Dr. Albin Jahns moved that the proposed program 

proposed by the Administration be unanimously vojected by 

the medical staff and that any {future conciderition for 

expans..on be a plan combining staff, Adninistration and 

lay efforts. The Motion was gcconded and pasnbed. 

“3 

 



6 » 
1. What was actually built by Defondant Methodist 

  

at its Gary oita? 

Land Acquisition 600 Block =~ Grant 
to Hayoo Acquired 

Powar Facilities Not Built 

Southaailt Towor Not Built 

Surgical and Diagnostic Not Duilt 
Pavillon 

Remodelling lat I"loor only 

Additiloi of 44 Beds lot Dong 

The defendant Methodist built iaoic~d eh South Pavilion, which 

is an extendcl caro facility; wovecda ito CLHQTCBaCY room to 

Physical thoiapyr and movad intensive care coronary care to 

the first {lcor north. Dailzndant letl:.odlni than procogadad 

with a plan t2 build a Satollitoe Iospital on brooadiray, alco 

known ag Route 53, gouth SL YB. 130 in Morrillvilie, Indiana. 

That satellite hospital ig now a 3)8 milllon gonciral, short 

term hogpital consioting of 165 Lads wiih capacity to expand 

to 600-800 beds. That facility was completnd in Decomber of 1975. 

On July 27, 1973, the defendant Methodict oignod Civil Rights 

Assurances, (Plaintiffg! Exhibli "A" aiizchiaa hereto .nd made 

Part of thio Complaint). That docurent wan oxxceutndl 

".eedn connection with ito epplicotion ion A loan guaranice 

to asagiot financing tha conctruction Oi DBiroaCirny Mathodist 

llogpital for the p=riod the Podoxal Government ig paying 

an interest subsidy...", Paragraph 4 of that document on page 

2 provides as follows: "4. DPrior to any reduction of services 

at Gary Methodist Hospital such Proposad reduction must bo 

submitted to and approved by tha Roglonal Civil Rights Director 

of the Dapartront of Health, Education and Welfare in a manner 

consistant with Title 6 of the Civil Pighto Act of 1964 and 

the regulations igacucd pursuant thereto”. 

8. Plaintif{f{o allege that tha dafendant Methodigt 

violated the provisions of that paragraph by reducing Z-YXay 

 



therapy services at its Gary Site and requiring all patients to 

travel to ® Broadway site for those sorvices without prior 

  

approval of Department of Health, Education and Welfare rr (See 

attached Exhibit "B" of .Julian B. Allen, which is made a part 

of this Complaint). 

9, To 1llustrate the impact’ of the actions of the defendant 

Methodist one must compare the facilities at its Gary site 

( 

tO ats Broadway site: 4 

GARY RROOATTMAOIA 
BROADWAY 

Ls Rooms equipped with i mage L “ 
intensifier 

2a R=RAY therapy service for keloid NO Yes prevention 

3% Xeroradiography to ‘detect breast NO Yes cancer 

€. Linear accellerator: for deep NO Yes X-ray therapy 

Operating Rooms 
A J i Ea © An —— 

L. Celling mounted X-ray units : L 4 

2. Separate cystoscopy rooms 0 1 

General Operating Rooms 

3. Operating room tables equipped to 0 4 utilize image intensifier 

y= j=} NYAS 2h ~~ 3X + a 4 ru} p od ] 3 “ hy 4. Qrtthopedic Lande whicn can he I1S.CC0 1 L with image intensifier 

Recovery Room 

1. Monitor. (heart, lung, etc.) for 0 6 cach post-operation patients (cost 
$3,000 each) 

Central Service 

Eh Autonatic washer for rolling 0 1 equipment such as floor 
dressing cart (helps to reduce 
contamination) 

. Combination gas and steam 0 1 
autoclave with arreation 

0)
 

chamber (the gas is needed, for 
rapid sterilization of new Lype 
fiber optic instrument) (cost 
+30,000) (Gary has a very small 
unit only. $5,000) 

3. Ultrasonic instrument wo rker 0 1 (this cleans the instruments 
better and increases their 
longevity) 

 



* . 
1. Quarters for physicians and 2 6 

staff call for oB, O.R., and E.R. 

Call Room 
  

  

10. Defendant Methodist submitted a proposal in 1976 

to defendant Matthews for an $8,143,370 grant and loan program 

which would; "1) provide a new laundry building at its Broadway 

site, replacing an existing facility in Gary, 2) provide a 

health service building in Gary for existing and future 

ambulatory care services together with a family practice 

residency, 3) provide a health services building in Broadway 

for ambulatory care, pre-admission testing, cducation of 

patients and staff, hospital base physician services and 

coffee shop." This grant to the defendant Methodist was approved 

by defendant Matthews, in spite of being strongly opposed by 

the Mayor, the Common Council of the City of Gary and leaders 

of other civic organizations. (See attached Exhibit ."C", 

which is made a part of this complaint). 

11. Defendant Methodist, has by its actions over the 

last 10 years, has demonstrated its intent to deprive the 

Black rodidoALE of the City of Gary of adequate medical scrvices. 

Defendant Methodist does not refuse to admit Black residents 

of Gary at its Broadway site, but those Ilack residents of 

Gary must drive or take taxi cabs to that site which 15 

approximately 15 miles south of its Gary site. The rights 

of the Black residents of the City of Gary have been violated 

and abridged by the actions of defendants lethodist and 

Matthews, who acted in concert to abandon the Gary Site. 

SPECIFIC RELIEF REQUESTED 

1s Plaintiffs ask that the defendant Matthews be ordered 

to withhold from defendant Methodist the interest subsidy on 

the financing of its Broadway site for its violation of the 

\ Civil Rights Assurances Agreement signed July. 27, 1973. 

\ 2 That defendant Matthews be directed to withhold 

the granting of any of the $8,143,370 1ill-Burton grant and 

loan fund guarantee to defendant Methodist. 

3. And for all other relief which to the Court is 

proper and just. 

 



I am ono of tho plaintif{is in tho abova ontitled action, 

  

hava rond the foregoing complaint by mo cubzcribaed, know 

the contonto thorcol, and that tho sama is true in zubstanca 

and in fact aicopt ne to tho mattors that are thorcin stated 

on information and beolicf and as to thocc matters I believe 

it to be true. 

    

a | 

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fy 7 J il a / 
ars i. eh As Spee; lg Codd fy 

/ ins Ralie. LEokh wi SG0N 

  

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footee Af eq — 
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CALA [\C 2A 

ROSA La TON 

  
  

    

  

  

  

  

Subscribed and Oworn to bcfore me this.” 7 day of 
he 

ACC Lora Sip . 1970, 

ry 4 5 rh Ei 4 EN er ’ 
i AR BA wb IL 

Notary ils 
My Commisoion Ixpires: 

FT tut a 7 of 

hey 
—y TT NR 7 fA J 

ty / or 

<<) (\ ! ) z ( 5 3 
DRE nar re —— | WL | / . A 

g: a a TA Y —— igsimaagine i 

JULI J. ALLE a 

Mttornsy for Rlaintiffo 
od by 

  

/ROBLL Dig] DY 
Attornay / LOT dE 
aa 

Gi ny 7 a rr femme . 

ii i. GRIMES 
Attorney flor Plaintiffs 

  

¢ P) \
 

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F
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1)
 

  

THOMAS V. BARNES 
    

  

S Attorney for Plaintiffs 

 



  

CIVIL RIGUTS ASSURANCES 
  

  

In creer to alleviate the concerns of the Departme 

of llealth, Zducation, and Welfare regarding our compliance with 

14. 

Ci1C 
Title VI ol the Civil Rights Act of 1964 and 

> issued pursuant thereto (45 C.F.R. 

Hospital of Cary, Inc., gives the following specific assurances 

in connection with its application ‘for nn Joan 

assist financing the construction of Broadway Methodist Hospital 

Part 50), The 

Regulations 

guarantee 

netexest 
for the period the Federal Government is paying an i 

subsidy: 

1. +. Gay Methodist Hospital will continue to 

operate as a general acute care hospital, at its 

present or comparable site in Gay, providing no 

less than its present level of comprehensive 

health services, 

2. IZ the Gary Mcthodist lospital should 

experience any financial dilfliculties ‘that would 

as set forth in assurance 1, surpluces, 

and other financial resources | vy 

» cnerated by 

loans, 

the 

Broadway lMethodist Hospital operations will bo 

imrediately and directly used to provide tho 

4 

> preclude the operation. of Gaay Methodist Hospital 
8 

necessary assistance %o Gary Methodist lospital, 

3. Priov to approval of any additions to 

or expansion 2f Broadway Adcthodist Hospital, ‘it 

must be demonsirated to and approved by the 

Area Comprehensive Health Planning Agency, the 
’ 

  

( 
POE LAP vy OR 

PLA IIe 

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= legional Uivil Zaghis biractor of the Departmont 

| of ilealth, Education, and Welfare, and tho : 
bl fiogional iicallin Director of the Depariment of ud, : 
or llealth, Zducation, and Welfare that adequate 

ve capital expenditures have Leen made at Gay - 
eo! Methodist Hospital, : 

: 4. Prior to any reduction of services at 
d Ye 4 : * 2 3 1 he 
RL Gary Methodist Hospital such proposed reduction 

5 must be submitted to and approved by the Regional 

Civil Rights Director of Zhe Department of Health, { . 

| Education, and Welfarc in a manner consisteat with | 

id Title VI of The Civil Rights Act of 1964 and tho 
Mi regulations issued puvsuant thereto, 
-y 
; 

NY Oo. Any and all plans to duplicate at 
“4 hg 

Es Broadway Methodist Hospital services now present e’) 

at Gary Methodist Hospital or tho implementation d | 

$ of new programs, in accordance with Public Law 

02-603, at either hospital must be submitted to and 8 | 

ve 

y approved by the Regional Civil Rights Dircctor of 

the Department of Health, Education, and Welfare 4 

ot PR in a manhexr consistent with Title VI of The Civil 

7) - Rights Act of 1964 and the regulations issuod pu 

; suant thereto. 

i | 6. All staff physicians shall have cqual 

privileges and practice at both hospitals, 

: . 4. All patients are to Le assigned to 

* Gary Methodist Hospital and Eroadway Methodist 

llospital on the basis of availability of Leds 
» LJ [J 

. 
’ ® 

. 
! 

. 
’ 

 



. Lilie 

  

) - 
LJ 

‘y 
= - - « oo = * . - se PE 

v Dita Carr lemgnaithie bo 0% LAA AAG HEAL LIL ALARA AMY LAE y 

valic¢ re~son exists; however, no patient shall 
[| ’ 

) . be cdeniad ecual access to either facility on 
L ] 

i the basis of the distance from the hospital to 
: 

) 

ve his p.ace of arcsidenco, 

-" 
: 

‘5 
| 

' 

3. In implementing the above assurances, 

y . : i ; 
consideration shall be given to the operation 

" 

=i of Gary Methodist Hospital and Broadway Methodast 

x Jlospital as an integrated and interlocking unit. 
a4 : 

: 

g., Consistent with the re quirements of 

Scction 80.6(b) of the aforementioned repulations, 

Eee The Methodist Hospital of Gary, Inc., will keep 

% appropriate records showing the cxtenal to whica 

Hwy : 

. it has complied with the assurances provided 

’ J ® 

he : herein, 
hr 

: 1 } 
» 1 J 3 3 : Wo d 

No : It is understood that the violation ol any assuranco 

ri may be ground, in itself, fox tocmination of all Federal 

: ak Boil vo ie 

2 assiscance subject, however, 1o all app iicable Yederal laws, 

. ) . 

' J 
: 

[ 
It is also understood that the afiirmative action 

i ch : 

4 . 

re plan submitted August 14, 1972 by The Methodist Hospital of 

Be ~~ Gary, Inc., TCmains applicable; however, in the event of any 

1nconsistencies between those provisions and these specific 

' 

/ 

assurances, the specific assurances contained herein shall: 

— prevail. : 

> het il 14+ is further understood that while the specific . 

assurances contained herein are 1inited to the period the 

Federal Government is paying an interest subsidy, Title ¥1 

of the Civil Rights Act of 19G4, the regulations issucd pu-—- 

suant thereto, and any other relevant statutory cx regulatory 

 



a -:-@ 2 

  

  

  

gh nrAavigiang in affect or euhsequent)ly ennected, will remain 

Re y do oe $ | 9 : applicable uatil otherwise changed, amended,oxr repealed, 
: : "al he | | 7 /} 

9 | : . \4, vn Bip, ; v 

' ; { fi A patty 

WL | By: /C PALLIAT Sa 3 Nf Dos a” 
Sie Everett A. "Johnson, Ph,D, 
rvs : : . Administr ato, J 

cart, : The Methodist Hospital of 
~=n | Gary, Inc. 

Ve fi 2. 7/9 a » FIR CR) | 4 ( % Date: + 23 Pemicts le 4 & J wr 
” i 

Jl \ 7 ¢ 

' : A: 

Vv ' 
Sad 

Approved by the United States ¢ 
Cg Gy Department of Health, Education, 

3 and Viel Le 11'C A, nl la 
' Ai hs 7 3 2 

7 

  

  
JRichard 5 1 Youn ’ 

Regional Director 

(de 4 ly 
ge Za ‘ - { Vie 

  

  

  

  

  

  

    

  

(ho Date: é 

: TR = 
' , ® = -> 

ly { Ns ni 1 

ad By: GC TONY wae ras Tw) 
he GTR UR 1. EN FXiTS. Pei 
oo Regional Health Director 
Ay. Region V 

" \ : : 

Tad Date: $ L6G 
Wi by | : 
i . | 

Wa | If Y : * y in : . ; 

i! ‘By: K pmsl BA 4 CA Ca 2 
3 . Xenneth A. Mines 

Regional Civil Rights Director 

re Region y, | 

ce NO SE Th Fk | : 
“7 . * » 

) ; N : 

By : WY. ANA Se Go [NT 

Bra : " Yanvin T.. Gavin : ; : 

Regional Attorney 

: Region VY 

Wo <I 
: Date: Sot; 2h 1943. A 

wr ; ye 

 



. Nd 
STATE Or INDIANA ) 

) 8S : ' 

COUNTY OF LAKE ) 

  

  

Julian B. Allan, first boing duly sworn depoccos and 
pays: 

That ho is an attornoy duly licen: cd to practice 
law in tha 8tatoe of Indlnnn and that ko 45 onan 08 tha 
SbieEnays for tho plaintiffs in a caura entitled, "Darbara 
Leak Wegnon, ot al vn. MNMathcdlst fIanplial ox Garry, Inc., 
ct al”, A bo 212d in tho ANnigca tnt woick 

for tho Northern District oi Indica, Go.iaond Divinilon. 

> 

hl , ~ ~ Ie J That an a part of hin xoczarch-an ona 0f Tha attornaya 
for tho plaintiiris, on Boveohr 17, 1270, hi callcd 
Mr. Blfxed Ss nchaz, vho 40 ammncinlleos. in Cchinggn of oalth 
and a Coowican: "Health, LADCN LAO nnG weiiarg, Region 
V, Chicago, 1llinoin, ond inquired of lia manthor or not 
defendant lic chodi at Hosplinl ind orlaiiticd ana had approved 
by tho Raglenal Clvil Rights Dizcciox 
of Hcalih,/ L luecation ang. Welinva, oo wogquens fox a roduciion 

of x-ray tha.npy corvicorn ot Ito Gay alia on provided An 
the Clvil Rlohtn Jacuarances Adaaaiiat olignad July 27, ‘12973. 
On. Rovomborx 24,1276, 1 vo dndoxs 4 by Iw. Sancaan that 
the Dalendant Nothealot had Llled no ouch apniication for 
reductlon od corvices co »rovided in the Clvil Rightno 
Apsasurances hgroomcnt ol July 27, 1973. 

O x {ac Danna rmnont 2 

Furthar affiant saith not. 

LA 9. Yorke d 
~ g : ih / SL 4 

le Mls 2 (LAC Z ’ 
op 

4 | EYIVE ot de 

  

: de, Ib Tiaras vem a win TEN SAN 7's 
subscribed and Swora to baiore ma hla OC day © 

r 1976. 
  

gf / Aire RRC / / 

[br dra! Sop illc Jlrs 
fii C7 Notary Public 
  

My Commigalon Expires: 
2-07 
  

EXHIBIT "RB" 

 



  

y 

\ 

MEMBER] = 
MEDICAL CENTER OF GARY WV In( COE] § Sh 550 GRANT ST U\ | IU) GARY IN 46402 SEP 30 1976 =/ 

MEDICAL CEN E 
y R Or VAKY, IN 

Ad HNC 

THIS MAILGRAM IS A CONFIRMATION COPY OF THE FOLLOWING MESS GE: 

2198839656 MGM TDBN GARY IN 100 09-29 11204 EST 
ZIP 

PR DAVID MATHEWS 
HEW BUILDING NORTH 330 INDEPENDENCE AVE 
SOUTHWEST 
WASHINGTON DC 20201 

‘THIS IS TO INFORM YOU THAT WE STRONGLY OPPOSE THE METHODIST HOSPITAL OF AD 4 

GARY APPLICATION FOR 8,1 MILLION DOLLARS IN HILL-BURTON GRANT AND LOAN 
FUND GURANTEES 

DETAILED LETTER TN FOLLOW 

DAISY STONE, PRESIDENT 
GARY BRANCH OF THLE NAACP 

on
 

1122 EST 

PGMCOMP MGM 

-
 

 



     
rm tr MM LTS 

DEA (| Wa MEER \ 
: Ra pois VBL SAYRE 
I Uign uJ Ud Ud ail 

  

THT CS "MATIH CRAM Ya, CAMETDMAT \ A SN AD ~ To “1 TY LEY RAE RAT CP A pop 'H15 NMAILGRAM IS A CONFIRMATION COPY OF THE FOLLOWING MESSAGE: 

198859656 MGI TDBMN GARY IN 100 09-29 1126A EST 
1D 
1 

INDEPENDENCE AVE 

  

    
    

ITC 1 MIADM. Root wi I er 
AR) ) \ iv Uni I UU LNA WE SEAR UIT RY 

3 APPLICATION FOR 2.1 MI I ON : APPLICATION FOR 3.1 MILLION AURA TET 
Uy LUN A (Y | Oy | 

CTATI OOF A TNA De lALLED Lk { OU 

INU N i 

   "YT TV 

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APSARA ZY AMPA TY (Tal V i \'vi D vi My 
alu ot rr Moll 

  

IE SERA I i WSR all ire ras Pl en 
} 

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