Simkins v Moses H Cone Memorial Hospital Brief for Appellant
Public Court Documents
February 1, 1963

53 pages
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Brief Collection, LDF Court Filings. Simkins v Moses H Cone Memorial Hospital Brief for Appellant, 1963. ebf5a660-c49a-ee11-be37-00224827e97b. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/4c5b8cb0-970d-467e-b91c-524533678fa1/simkins-v-moses-h-cone-memorial-hospital-brief-for-appellant. Accessed April 29, 2025.
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BRIEF FOR APPELLAN T, UNITED STATES OF AM ERICA In the United States Court of Appeals for the Fourth Circuit No. 8908 GL C. Sim kins , J r., et al., and U nited States of A merica, appellants v. M oses EL Cone M emorial H ospital, a Corporation ET AL., APPELLEES ON A PPE A L FROM THE UNITED STATES D ISTR IC T COURT FOR THE M ID D LE D ISTR IC T OF NORTH CAROLINA BURKE M ARSHALL, Assistant A ttorn ey General, W IL L IA M H. MURDOCK, United States Attorney, ST. JOHN BARRETT, HAROLD H. GREENE, HOW ARD A. GLICKSTEIKT, A ttorneys, Departm ent o f Justice, W ashington 25, D.C. I N D E X Statement of the case___________________________________ 1 Questions presented_____________________________________ 7 Statutes involved________________________________________ 8 Statement of facts_______________________________ 10 Argument_______________________________________________ 15 I. The conduct of defendant hospitals in discriminat ing against N egro patients is State action----------- 15 A. The controlling principles________________ 15 B. The hospitals are acting for the State and are subject to constitutional limitations. 20 C. The non-discrimination provision of the Hill-Burton A ct_______________________ 32 II. The provision of the Hill-Burton Act sanctioning the construction of separate-but-equal hospital facilities is unconstitutional____________________ 40 Conclusion______________________________________________ 48 TABLE OF CASES Aaron v. Cooper, 261 F. 2d 97 (C.A. 8, 1958)------------------- 17 American Communications Ass’n v. Douds, 339 U.S. 382 (1950)________________________________________________ 16 Ashwander v. Tennessee Valley Authority, 297 H.S. 288 (1936)_________________________________ 40 Baldwin v. Morgan, 287 F. 2d 750 (C.A. 5, 1961)________ 35,43 Bolling v. Sharpe, 347 U.S. 497 (1954)________________ 16,43, 45 Boman v. Birmingham Transit Gompany, 280 F. 2d 531 (C.A. 5, 1960)________________________________________ 35 Boynton v. Virginia, 364 U.S. 454 (1960)------------------------- 23 Browder v. Gayle, 142 F. Supp. 707 (M.D. Ala., 1956), affirmed, 352-U.S. 903 (1956)---------------------------------------- 42 Brown v. Board of Education, 347 U.S. 483 (1954)------------ 42 Burton v. United States, 196 U.S. 283 (1905)--------------------- 40 Button v. Wilmington Parking Authority, 365 U.S. 715 (1961)____________________________________ 5,17,18,38,41,44 Page ( i ) 6T7083— 63— 1 Catlette v. United States, 132 F. 2d 902 (C.A. 4, 1943)_____ 45 City of Greensboro v. Simpkins, 246 F. 2d 425 (C.A. 4, 1957), affirming, 149 F. Supp. 562 (M.D. N.C. 1957)_________ 17 Civil Rights Cases, 109 U.S. 3 (1883)_________________ 15, 19, 34 Coke v. City of Atlanta, 184 F. Supp. 579 (N.D. Ga. 1960)_ 17 Cooper y. Aaron, 358 U.S. 1 (1958)_______________________ 16,44 Dawson v. Mayor and City Council of Baltimore, 220 F. 2d 386 (C.A. 4, 1955), affirmed, 350 U.S. 877 (1955)_______ 42 Eaton v. Board of Managers of James Walker Memorial Hospital, 261 F. 2d 521 (C.A. 4, 1958), cert, denied, 359 U.S. 984 (1958)__________________________ _____________ 5 Flemming v. South Carolina Electric and Gas Company, 224 F. 2d 752 (C.A. 4, 1955), appeal dismissed, 351 U.S. 901 _ 35 Garner v. Louisiana, 368 U.S. 157 (1961)________________ 28 Gomillion v. Lightfoot, 364 U.S. 339 (1960)_______________ 46 Henry v. Greenville Airport Commission, 279 F. 2d 751 (C.A. 4, 1960)______________________________________________ 42 Hirabayashi v. United States, 320 U.S. 81 (1943)__________ 46 Hurd v. Hodge, 334 U.S. 24 (1948)_______________________ 46 Jones v. Marva Theatres, 180 F. Supp. 49 (D. Md. 1960)__ 17 Lawrence v. Hancock, 76 F. Supp. 1004 (S.D. W. Va. 1948)_ 17 Lynch v. United States, 189 F. 2d 476 (C.A. 5, 1951)______ 45 Marsh v. Alabama, 326 U.S. 501 (1946)__________________ 23 Ming v. Horgan, 3 RR. L. Rep. 693 (Cal. Super. Ct. 1958)- 46 Muir v. Louisville Park Theatrical Association, 347 U.S. 971 (1954), vacating and remanding, 202 F. 2d 275 (C.A. 6, 1953)________ 17 McCabe v. Atchison, Topeka and Santa Fe Ry. Co., 235 U.S. 151 (1914)________________________________________ 37,38,44 Nash v. Air Terminal Services, 85 F. Supp. 545 (E.D. Va. 1949)_____________________________________________ 17 Nixon v. Condon, 286 U.S. 73 (1932)_____________________ 23 Picking v. Pennsylvania R. Co., 151 F. 2d 240 (C.A. 3, 1945)_________________________________________________ 45 Ples.sy v. Ferguson, 163 U.S. 537 (1896)__________________ 37,43 Smith v. Allwright, 321 U.S. 649 (1944)__________________ 23 Steele v. Louisville & Nashville Railroad Co., 323 U.S. 192 (1944)_________________________________________________ 43,45 Strauder v. West Virginia, 100 U.S. 303 (1880)__________ 42 n Page Tate v. Department of Conservation, 133 F. Supp. 53 (E.D. Ya., 1955), affirmed, 231 F, 2d 615 (C.A. 4, 1956), cert. denied, 352 U.S. 838 (1956)------------------------------------------- 17, 42 Terry v. Adams, 345 U.S. 461 (1953)------------------------------- 23 United States v. Auto Workers, 352 U.S. 567 (1957)--------- Western Union Telegraph Co. v. Foster, 247 U.S. 105 (1918) _ 46 Williams v. Hot Shoppes Inc., 293 F. 2d 835 (C.A. D.C. 1961)_________________________________________________ 36 STATUTES 28 U.S.C. 2403__________________________________________ 3 42 U.S.C. 291(a)______________________________ 21,28,30,32,41 42 U.S.C. 291b(a)(3)------------------------------------------------------- 21 42 U.S.C. 291d__________________________________________ 28 42 U.S.C. 291e(f)________ 3, 7, 13, 20, 22, 29, 30, 31, 32, 39, 42, 47 42 U.S.C. 291f(a)(4)_____________________________________ 13,21 42 U.S.C. 291h(a)_______________________________________ 28 42 U.S.C. 291h(e)_______________________________________ 34 42 U.S.C. 291m_________________________________________ 29, 30 42 U.S.C. 291n__________________________________________ 28 42 U.S.C. 2641-2643____________________________________ 26 42 U.S.C. 2642(b)_______________________________________ 26 42 C.F.R. 53____________________________________________ 25 42 C.F.R. 53.111________________________________________ 8,26 42 C.F.R. 53.112______________________________ 2, 8, 9, 14, 15, 26 42 C.F.R. 53.113______________________________________ 9, 14,26 42 C.F.R. 53.127(d)_____________________________________ 25 Rule 24a of the Federal Rules of Civil Procedure------------- 3 MISCELLANEOUS H. Rep. No. 2519, 79th Cong____________________________ 29 BLR. No. 1756, 87th Cong., 2d Sess--------------------------------- 26 Senate Report No. 674, 79th Congress, 1st Sess----------------21, 29 Hearings Before Senate Committee on Education and Labor on S. 191, 79th Cong., 1st Sess--------------------------- 22 91 Cong. Rec. 11714-------------------------------------------------------- 29 91 Cong. Rec. 11716------- 24 Cong. Rec. August 28, 1962, p. 16856------------------------------ 27 Ill Page In the United States Court of Appeals for the Fourth Circuit No. 8908 G-. C. S im kins , Jr., et al., and U nited States op A merica, appellants v. M oses H. Cone M emorial H ospital, a Corporation et al., appellees ON A P P E A L FROM T E E UNITED STATES D ISTR IC T COURT FOR TIIE M ID D LE D IST R IC T OF N O R TE CAROLINA BRIEF FOR APPELLANT, UNITED STATES OF AMERICA STATEMENT OF THE CASE On February 12, 1962, the plaintiffs, Negro citizens suing on behalf of themselves and other Negro physicians, dentists and patients similarly situated, filed a complaint seeking injunctive and declaratory relief in the United States District Court for the Middle District of North Carolina (4aj. The com plainants alleged, inter alia, that the defendants—-the Moses H. Cone Memorial Hospital, its director, Harold Bettis, the Wesley Long Community Hospital and its administrator, A. 0. Smith—had discriminated against them because of their race in violation of the Fifth and Fourteenth Amendments to the United 2 States Constitution (13a-14a). The relief sought was (1) an injunction restraining the defendants from continuing to enforce the policy, practice, custom and usage of denying plaintiff physicians and dentists the use of staff facilities at the Moses H. Cone and Wesley Long Community Hospitals in Greensboro, North Carolina, on the ground of race; (2) an injunction- restraining defendants from continuing to enforce the policy, practice, custom and usage of denying and abridging admission of patients on the basis of race and refusing to permit patients, on the basis of race, to be treated by their own physicians and dentists at the Moses H. Cone Memorial Hospital and the Wesley Long Community Hospital in Greensboro, North Caro lina ; (3) a declaratory judgment declaring a portion of the Hill-Burton Act (Hospital Survey and Con struction Act of 1946, 60 Stat. 1041, as amended; 42 ILS.C. 291 et seq.) and a regulation pursuant thereto (42 C.F.R. 53.112; 21 F.R. 9841), which authorize the construction of hospital facilities and the promo tion of hospital services with funds of the United States on a separate-but-equal basis, unconstitutional, invalid and void as violative of the Fifth and Four teenth Amendments to the United States Constitution (17a-18a). Subsequently (on May 4, 1962) the plain tiffs filed a motion for preliminary injunction and a motion for summary judgment (68a; 72a). On April 2, 1962, the defendants filed a motion to dismiss for lack of jurisdiction over the subject mat ter for the reason that the plaintiffs were seeking redress for the alleged invasion of their civil rights by private corporations and individuals (19a). 3 Since this proceeding is one in which “ the constitu tionality of * * * [an] Act of Congress affecting the public interest * * * [has been] drawn in question,” the United States, pursuant to 28 U.S.C. 2403 and Rule 24(a) of the Federal Rules of Civil Procedure, moved on May 8, 1962, to file a pleading in interven tion (165a). This pleading in intervention alleged that “ the Moses TL Cone Memorial Hospital has refused and is presently refusing to admit Negro patients on the same terms and conditions as white patients;” that “ the Wesley Long Community Hos pital has refused and is refusing to admit Negro patients on the basis of race;” that the conduct of the hospitals complained of was authorized by the North Carolina State Plan of Hospital Construction which was adopted pursuant to the Hill-Burton Act and the regulations issued thereunder; and that the conduct of the hospitals violates the Fourteenth Amendment of the Constitution (171a). The United States prayed that the District Court declare that so much of 42 U.S.C. 291e(f) as authorizes the Surgeon General to prescribe regulations concerning separate hospital facilities for separate population groups is unconstitutional, null and void (171a-172a). On August 9, 1962, the United States moved for summary judgment and asked for: (1) declaratory relief with respect to the challenged portion of the Hill-Burton Act, and (2) an injunction enjoining the defendant hospitals from discriminating, on account of race and color, in the admission of patients (189a). On June 26, 1962, the District Court held a full 4 hearing on all pending motions, at the conclusion o f which an order was entered granting the motion of the United States to intervene (188a). The case was submitted to the District Court on the documentary' evidence filed by the parties, and on December 5, 1962, the Court issued its findings of fact, conclusions of law and opinion (211 U Supp. 628; 195a-222a). The Court noted that “ the sole qxiestion for determination is whether the defendants have been shown to be so impressed with a public interest as to render them instrumentalities of government, and thus within the reach of the Fifth and Fourteenth Amendments to the Constitution of the United States. In making this determination, it is necessary to examine the various aspects of governmental involvement which the plain tiffs contend add up to make the defendant hospitals public corporations in the coUstitutional sense” (206a-207a). The Court analyzed each of the factors alleged to demonstrate state involvement and rejected each as a sufficient basis for creating constitutional obligations (221a). With respect to the receipt of Hill-Burton funds, the Court noted that “ all funds received, or to be received, by both hospitals were allocated and granted to, and accepted by, the hospitals with the express written understanding that admission of patients to the hospital facilities might be denied because of race, color or creed” (214a). The Court found that the fimds granted were unrestricted and that the federal regulations governing Hill-Burton appropriations are 5 designed to ensure properly planned and well con structed facilities and not to control internal opera tions. The Court concluded (217a) : Since no state or federal agency has the right to exercise any supervision or control over the operation of either hospital by virtue of their use of Hill-Burton funds, other than factors relating to the sound construction and equip ment of the facilities, and inspections to ensure the maintenance of proper health standards, and since control, rather than contribution, is the decisive factor in determining the public character of a corporation, it necessarily fol lows that the receipt of unrestricted Hill- Burton funds by the defendant hospitals in no way transforms the hospitals into public agencies. The Court also rejected the argument that a differ ent result would be required if instead of concentrat ing on individual elements it considered the totality of governmental contacts. The Court accepted the defendants’ argument that “ zero multiplied by any number would still equal zero” (218a). It distin guished Burton v. Wilmington Parking Authority, 365 TJ.S. 715 (1961) and relied on Eaton v. Board of Managers of James Walker Memorial Hospital, 261 F. 2d 521 (C.A. 4, 1958), cert, denied, 359 U.S. 984 (1958)d 1In that case, although there were certain contacts between the hospital and governmental bodies, the Court found that the discriminatory policies of the hospital were not subject to constitutional restriction. 677083— 68-------2 6 The Court expressly refused to pass on the constitu tionality of the Hill-Burton proviso, stating (220a- 221a) : It is a cardinal principle that courts do not deal in advisory opinions, and avoid rendering a decision on constitutional questions unless it is absolutely necessary to the disposition of the case. Barr v. Matteo, 355 U.S. 171, 2 L. Ed. 2d 179, 78 S. Ct. 204 (1957). I f the defendants were claiming any right or privilege under the separate but equal provisions of the Hill- Burton Act, it would perhaps be necessary to the disposition of the case to rule upon the con stitutionality of those provisions. Here, how ever, as earlier stated, the defendants make no such claim, and it is unnecessary for the Court, as requested by the United States, to advise the Surgeon General with respect to his legal obli gations under the Act. There has been no showing that the statute in question has resulted in depriving the plaintiffs or any other citizens of their constitutional rights. The only issue involved in this litigation is whether the defend ants have become governmental agencies in the constitutional sense by the acceptance of public fimds in the construction and equipment of their hospitals, and their other involvements with public agencies. The constitutionality of the separate but equal provisions of the Hill- Burton Act is not an issue, and a declaration as to its constitutionality is not necessary to the disposition of the case. What the plaintiffs and the United States are really asking in their prayer for declara tory relief is an order desegregating all private facilities receiving Hill-Burton funds over a 7 period of years, even though the funds were given with the understanding that the private facilities might retain their freedom to conduct their private affairs in their own way. This court is not prepared to grant the declaratory relief prayed for, thereby retroactively altering established rights, particularly when it is unnec essary to do so, in deciding the jurisdictional question. The Court concluded that since the defendants were “ private persons and corporations, and not instrumen talities of government (221a),” they were not subject to the Fifth and Fourteenth Amendments and that, consequently, the Court was without jurisdiction over the subject matter of the action. The motions for summary judgment by the plaintiffs and by the United States were denied and the defendants’ motion to dismiss the action for lack of jurisdiction over the subject matter was granted (223a). Plaintiffs and the United States filed notices of appeal January 4 and 11, 1963 respectively (224a, 225a). QUESTIONS PRESENTED 1. Whether, as a result of defendants’ participation in the Hill-Burton hospital system, they are governed by the due process clause of the Fifth Amendment or the equal protection clause of the Fourteenth Amend ment in their admission policies. 2. Whether those portions of 42 U.S.C. 291e(f) and 42 C.F.R. 53.112 which authorize racial discrimination violate the Fifth or Fourteenth Amendments. 8 STATUTES INVOLVED 42 U.S.C. 291e(f) provides: ( f ) That the State plan shall provide for adequate hospital facilities for the people re siding in a State, without discrimination on account of race, creed, or color, and shall pro vide for adequate hospital facilities for persons unable to pay therefor. Such regulation may require that before approval of any application for a hospital or addition to a hospital is recom mended by a State agency, assurance shall be received by the State from the applicant that (1) such hospital or addition to a hospital will be made available to all persons residing in the territorial area of the applicant, without dis crimination on account of race, creed, or color, but an exception shall be made in cases where separate hospital facilities are provided for separate population groups, if the plan makes equitable provision on the basis of need for fa cilities and services of like quality for each such group; and (2) there will be made available in each such hospital or addition to a hospital a reasonable volume of hospital services to per sons unable to pay therefor, but an exception shall be made if such a requirement is not feasi ble from a financial standpoint. 42 C.F.R. §§ 53.111-53.113 provide: § 53.111 General. The State plan shall pro vide for adequate hospital, diagnostic or treat ment center, rehabilitation facility, and nursing home service for the people residing in a State without discrimination on account of race, creed, or color, and shall provide for adequate facilities of these types for persons unable to pay therefor. 9 § 53.112 Nondiscrimination. Before a con struction application is recommended by a State agency for approval, the State agency shall ob tain assurance from the applicant that the facilities to be built with aid under the Act will be made available without discrimination on ac count of race, creed, or color, to all persons residing in the area to be served by that facility. However, in any area where separate hospital, diagnostic or treatment center, rehabilitation or nursing home facilities, are provided for sep arate population groups, the State agency may waive the requirement of assurance from the construction applicant if (a) it finds that the plan otherwise makes equitable provision on the basis of need for facilities and services of like quality for each such population group in the area, and (b) such finding is subsequently approved by the Surgeon General. Facilities provided under the Federal Act will be consid ered as making equitable provision for separate population groups when the facilities to be built for the group less well provided for here tofore are equal to the proportion of such group in the total population of the area except that the State plan shall not program facilities for a separate population group for construction beyond the level of adequacy for such group. § 53.113 Hospital, diagnostic or treatment center, rehabilitation facility, and nursing home service for persons unable to pay therefor. Before a construction application is recom mended by a State agency for approval, the State agency shall obtain assurance that the applicant will furnish a reasonable volume of free patient care. As used in this section, “ free 10 patient care” means hospital, diagnostic or treatment center, rehabilitation facility, or nurs ing home service offered below cost or free to persons unable to pay therefor, including under “ persons unable to pay therefor” , both the legally indigent and persons who are otherwise self-supporting but are unable to pay the full cost of needed care. Such care may be paid for wholly or partly out of public funds or contributions of individuals and private and charitable organizations such as community chests or may be contributed at the expense of the hospital itself. In determining what con stitutes a reasonable volume of free patient care, there shall be considered conditions in the area to be served by the applicant, including the amount of free care that may be available other wise than through the applicant. The require ment of assurance from the applicant may be waived if the applicant demonstrates to the sat isfaction of the State agency, subject to subse quent approval by the Surgeon General, that furnishing such free patient care is not feasible financially. STATEMENT OF FACTS 2 Six of the plaintiffs are qualified physicians and three are qualified dentists, all practicing in Greens boro, North Carolina (197a). These plaintiffs seek admission to the staff facilities of the Cone Hospital and the Long Hospital without discrimination on the basis of race (197a). They have applied for admis 2 We emphasize only those facts that are pertinent to the argument made in this brief. A complete statement o f the facts is contained in plantiffs’ brief, pp. 5-19. 11 sion to the staff of Cone Hospital and have been re jected, and they have requested staff application forms from Long Hospital but these requests have not been honored (198a). Plaintiffs A. J. Taylor and Donald R. Lyons are in need of medical treatment and desire to enter either the Wesley Long Community Hospital or the Moses H. Cone Memorial Hospital where complete medical equipment and the best facilities for treatment in the Greensboro area are available. Plaintiffs also desire treatment from their personal physicians (197a). They cannot, however, be admitted to the Long Hos pital since that hospital follows a policy, practice, custom and usage of refusing to admit Negroes to the use of its facilities. Plaintiffs cannot enter the Cone Hospital on the same basis as whites nor can they enter the Cone Hospital and be treated by their per sonal physicians because the Cone Hospital will not admit Negro doctors or dentists to staff facilities (198a). Defendants, Moses H. Cone Memorial Hospital, Inc., and Wesley Long Community Hospital, Inc., are North Carolina corporations that have established and now maintain in Greensboro, North Carolina, the Moses H. Cone Memorial Hospital and the Wesley Long Community Hospital, respectively, which are non-profit, tax exempt and State licensed (197a). De fendant Harold Bettis is the Director of the Moses H. Cone Memorial Hospital, Inc. and defendant A. O. Smith is the Administrator of the Wesley Long Com munity Hospital (198a). 12 The Long Hospital is a charitable corporation gov erned by a self-perpetuating board of twelve trustees (200a). The Cone Hospital is also a charitable North Carolina corporation governed by fifteen trustees of which five are appointed by agents or subdivisions of the State and one is appointed by a “public agency” (199a).3 Both hospitals are exempt from ad valorem taxes assessed by the City of Greensboro and Guilford County at tax rates of $1.27 and $0.82 per $100 valu ation respectively (200a). The Cone Hospital cooperates in a nurses’ training program with two tax-supported institutions of higher learning.4 The Cone and Long Hospitals are part of the Hill- Burton Hospital system. Plaintiffs, in their brief, have set forth in detail the nature of the relationship between the defendant hospitals and the Hill-Burton system. They also discuss the extent of federal finan cial contributions to defendant hospitals, the nature of the North Carolina State Plan of Hospital Care 3 Three members are appointed by the Governor of North Carolina; one member is named by the Board of Commissioners of the City of Greensboro; one member is named by the Board of Guilford County; and one member by the Guilford County Medical Society (199a). The Guilford County Medical So ciety is a component o f the Medical Society o f North Carolina which appoints the Board of Medical Examiners o f North Carolina and elects four members of the State Board of Health (11a). The District Court assumed for purposes o f its decision that the Guilford County Medical Society is a “ public agency” (207a). 4 See plaintiffs’ brief, pp. 18-19, for a detailed description of that program. 13 and the sundry federal and state controls over defend ants’ activities.5 These controls are divided into seven categories: (1) Controls over the construction contracts and the construction period; (2) Controls over details of hospital construction and equipment; (3) Controls over future operations and status of hospitals; (4) Controls over details of hospital maintenance and operation; (5) Control of size and distribution of facilities; (6) Rights of project applicants and state agencies; (7) Regulation of racial discrimination. We believe that plaintiffs’ description of defendants’ relationship to the Hill-Burton system is well stated, and we will not duplicate their discussion. However, we would like to add the following to the discussion of the manner in which the Hill-Burton Act regulates racial discrimination and the provision of services to the needy. A State, to participate in the Hill-Burton program, is required to submit for approval by the Surgeon General a state plan setting forth a “ hospital con struction program” which, among other things, “meets the requirements as to lack of discrimination on ac count of race, creed, or color, and for furnishing needed hospital services to persons unable to pay therefor, required by the regulations prescribed under section 291 e (f). * * *” (42 U.S.C. 291f(a)(4).) 5 See plaintiffs’ brief, pp. 8-18. 677083— 63- -3 (14 The State may meet the non-discrimination require ment “ in any area where separate hospital, diagnostic or treatment center, rehabilitation or nursing home facilities, are provided for separate population groups * * * if * * * the plan otherwise makes equitable pro vision on the basis of need for facilities and services of like quality for each such population group in the area, and * * * such finding is subsequently approved by the Surgeon General.” (Regulation 52.112, 42 C.F.R., 53.112.6) Where a separate-but-equal plan is in operation, the individual applicant for aid need not give any assurance that it will not discriminate and, in fact, may expressly indicate on its application form that “ certain persons in this area will be denied admission to the proposed facilities as patients because of race, creed, or color” (93a). The arrangement to extend aid is formally concluded by a memorandum of agreement signed by representatives of the appli cant, the State agency and the Surgeon General. Where a State seeks to meet the non-discrimination requirement by programming separate facilities for separate population groups, it is required to submit to the Surgeon General a “ Non-Discrimination Report” (Form PH S-8) (120a-121a). The prepa ration of this report requires the State agency specifi cally to enumerate the number of hospital beds available for each racial group. The North Carolina 6 The requirement to provide care for the needy will be waived “ if the applicant demonstrates to the satisfaction of the State agency, subject to subseqiient approval by the Sur geon General, that furnishing such free patient care is not feasible financially.” (Regulation 53.113, 42 C.F.R. 53.113.) 15 Medical Care Commission submitted such a “ Non- Discrimination Report” on January 3, 1962 (120a- 121a). That report lists the L. Richardson Memorial Hos pital as having 91 acceptable beds for “ non-white” patients and none for “ white” ; Wesley Long Com munity Hospital as having none for “ non-white” patients and 220 for “ white” ; and Moses H. Cone Hospital as having none for “ non-white” and 182 for “ white” (120a). Significant duties are imposed on the Surgeon Gen eral with respect to the “ Non-Discrimination Report.” Regulation 53.112 provides that a State agency’s find ings must be approved by the Surgeon General.7 Consequently the Surgeon General has the duty of determining whether the State properly has applied the separate-but-equal formula, i.e., whether the State’s plan actually makes “ equitable provision” for all population groups. AEGU M EST I. The conduct o f defendant hospitals in discriminating against Negro patients is State action A. The controlling principles From the declaration in the Civil Bights Cases, 109 U.S. 3, 11 (1883), that the Fourteenth Amendment “ nullifies and makes void * * * State action of every kind, which * * * denies * * * the equal protection of the laws” to the Supreme Court’s pronouncement 7 The “ Non-Discrimination Report” submitted by the North Carolina Medical Care Commission on January 3, 1962 was approved by the Surgeon General on January 22, 1962 (120a). 16 in Cooper v. Aaron, 358 IJ.S. 1, 19 (1958), that state participation ‘ ‘ through any arrangement, management, funds or property” is sufficient to make racial dis crimination in such circumstances violative of the Fourteenth Amendment, it has been clear that the mere outward trappings of private activity are not sufficient to insulate an activity from the commands of the Fifth and Fourteenth Amendments. Racially discriminatory acts of individuals are so insulated only insofar as they are “ unsupported by State authority in the shape of laws, customs, or judicial or executive proceedings*” or are “ not sanctioned in some way by the State.” \Qivil Rights Cases, supra at 17. Where racial discrimination is accompanied by some form of governmental support, the appli cability of the F ifth8 and Fourteenth Amendment is clear.9 \. Only recently, the Supreme Court had, before it the problem of determining whether a State had become so involved in private conduct as to make the action of private individuals subject to the Fourteenth Amend ment. In holding that a private restaurant operating in a public building under a lease from a public au thority could not engage in racial discrimination, the 8 Cf. Bolling v. Sharpe, 347 IJ.S. 497 (1954). 9 The interrelationship between governmental and private activity was aptly described by Chief Justice Vinson in Ameri can Communications Ass'n v. Douds, 339 IJ.S. 382, 401 (1950) where he wrote: “ * * * when authority derives in part from Government’s thumb on the scales, the exercise o f that power by private persons becomes closely akin, in some respects, to its exercise by Government itself.” 17 Court noted (Burton v. Wilmington Parking Au thority, 365 U.S. 715, 722, 725 (1 9 6 1 )):10 Only by sifting facts and weighing circum stances can the nonobvious involvement of the State in private conduct be attributed its true significance. * * * * But no State may effectively abdicate its re sponsibilities by either ignoring them or by merely failing to discharge them whatever the motive may be. It is of no consolation to an in dividual denied the equal protection of the laws that it was done in good faith . . . By its in action, the Authority, and through it the State, has not only made itself a party to the refusal of service, but has elected to place its power, 10 Even before Burton there was a large body of case law which proscribed discrimination by a lessee of public property or facilities. See Muir v. Louisville Park Theatrical Associa tion, 347 U.S. 971 (1954), vacating ancl remanding, 202 F. 2d 275 (C.A. 6, 1953) (leased open air theater); Aaron v. Cooper, 261 F. 2d 97 (C.A. 8, 1958) (leased school); City of Greens- boro v. iSimpkin-s, 246 F. 2d 425 (C.A. 4, 1957), affirming, 149 F. Supp. 562 (M.D.N.C. 1957) (leased cafeteria); Coke v. City of Atlanta, 184 F. Supp. 579 (N.D. Ga. 1960) (leased air port restaurant), Jones v. Marva Theatres, 180 F. Supp. 49 (D. Md. 1960) (leased motion picture theatre); Tate v. Department of Conservation, 133 F. Supp. 53 (E.D. Va. 1955), affirmed, 231 F. 2d 615 (C.A. 4, 1956), cert, denied, 352 U.S. 838 (1956) (leased beach) ; Nash v. A ir Terminal /Services, 85 F. Supp. 545 (E.D. Va. 1949) (leased airport restaurant) ; Lawrence v. Hancock, 76 F. Supp. 1004 (S.D. W . Va. 1948) (leased swim ming pool). Although these decisions are rested on various grounds—in some, that the lease was a technique of evading state responsibility; in others, that the property, though pri vately operated, was being used for a public purpose—they have been uniform in reaching the conclusion that the discrim ination effectuated by the private lessee was constitutionally forbidden. 18 property and prestige, behind the admitted dis crimination. [Emphasis added.] 11 Relying primarily upon the Burton decision, plain tiffs argument that the totality of governmental involve ment, in the activities of the defendant hospitals is such as to make applicable the prohibitions of the Fifth and Fourteenth Amendments.12 While we sup port this argument, we will not develop it in this brief. Rather, wo will demonstrate here that it is because of the relationship of the defendant hospitals to the Hill-Burton system that their admission policies must be deemed “ state action.” Our position is based on the fact that the Hill-Burton system contemplates a State obligation to plan for facilities to provide adequate hospital service to all the people of the 11 The concurring and dissenting opinions provided even broader tests of governmental responsibility. Justice Stewart, concurring, stated that legislative enactments “ authorizing dis criminatory classification based exclusively on color * * * is clearly violative o f the Fourteenth Amendment.” [Emphasis added.] (365 U.S. at 726-27.) Justice Frankfurter, dissenting, commented: “For a State to place its authority behind discrimi natory treatment based solely on color is indubitably a denial by a State of the equal protection o f the laws, in violation o f the Fourteenth Amendment” (365 U.S. at 727). Dissenting Jus tices Harlan and Whittaker also indicated that they “ would certainly agree” with Mr. Justice Stewart’s formulation (365 U.S. at 729). 12 In support of this argument, plaintiffs rely on the follow ing aspects o f governmental involvement: (a) financial support; (b) licensing; (c) tax exemption; (d) the composition of the Board of Trustees of the Cone Hospital; (e) the participation o f the Cone Hospital in a program of nurses’ training in coop eration with tax-supported state institutions of higher learning and (f) the role of defendant hospitals, under the Hill-Burton Act, as integral components o f a federal-state system o f hospital care. 19 State. To the extent that this obligation is carried out by otherwise private institutions, these recipients of the federal grants are acting for the State and are therefore subject, in this respect, to the obliga tions imposed upon State agents and instrumentalities by the Fourteenth Amendment. At the outset, however, it is important to stress what we are not contending. We do not argue that purely private activities are governed by the standard established by the Fifth and Fourteenth Amendments. The Civil Bights Cases, supra, have established that an otherwise private institution is not subject to the nondiscrimination provisions of the Constitution merely because, unlike a home for example, it is gen erally open to the public. We do not attack that rule. Nor do we urge that the receipt of government finan cial aid is sufficient, without more, to deprive an otherwise private institution of its non-governmental character. Under circumstances different from those present in this case, many colleges, universities, re search institutions, and hospitals enjoy such financial aid without becoming subject to the constitutional obligations resting on the federal and State govern ments. As we shall demonstrate, however, this case involves something more, in the way of governmental involvement, than the grant of financial aid. While the line between governmental and private action is necessarily delicate, we submit that, on balance, the governmental involvement under the Hill-Burton Act is sueh that the participating hospitals cannot be re- 20 gardecl as exempt from the equal protection require ment of the Constitution. B. The hospitals are acting for the State and are subject to constitutional limitations 1. The Hill-Burton Act requires that each partici pating State set up a comprehensive plan of hospital care for the benefit of all of the people of the State. It was Congress’ intention that the participating States plan for facilities to provide adequate hospital service to “ all the people” of the State (sections 291(a) and 291e(f)), and each partici pating State is required to make an undertaking to that effect. Any State which has assumed this, ob ligation is therefore responsible, under the scheme of the Hill-Burton Act, to design a plan assuring that “ all the people” of that State are provided adequate hospital services. The means used. for carrying out this obligation may vary; the State may employ the services of governmental hospitals or non-profit hospi tals. But, to repeat, the obligation is the State’s, .and if, for example, the number of beds in non-profit hos pitals appear to lie inadequate to meet the needs, the State would undoubtedly have to plan for beds in governmental institutions to have a program meeting the requirements of the law. Accordingly, when, the State draws a non-State institution into the State plan, the latter performs one of the State’s acknowledged functions. It follows that such a non-governmental institution becomes pro tanto a State instrumentality with concomitant obligations, . . v. . . 21 2. Congress enacted the Hill-Burton Act to meet vital national needs. As the report of the Senate Com mittee on Education and Labor on the Act noted: 13 Your committee has given careful considera tion to the national need for hospital facilities as shown by the testimony of a large number of well-informed witnesses from many walks of life. It has been pointed out that our national health rests upon four main pillars—medical research, preventive medicine, medical care, and hospitalization. This bill is designed to strengthen all four through the provision of more adequate hospital facilities. Lack of hospital facilities—properly placed and ade quately equipped—represents one of the weak est spots in our national health structure. 42 U.S.C. 291(a) declares that the basic and over riding purpose of the Act is to assist the several States in the development of programs for hospital construc tion that will afford the necessary facilities “ for furnishing adequate hospital, clinic and similar serv ices to all their people.” 14 Accordingly, Section 291e(f) similarly provides that the Surgeon General shall adopt regulations making it mandatory that the State plan of hospital construction provide “ for 13 Senate Report No. 674, 79th Congress, 1st Sess., p. 2-3. 14 This broad declaration of Congressional policy (42 U.S.C. 291(a) ) is carried forward into the survey and planning pro visions (42 U.S.C. 291b(a) (3), o f which North Carolina took advantage, and thence into the State plan for construction (42 U.S.C. 291f (a) (4) (C ». 677083— 63- -4 22 adequate hospital facilities for the people residing in a State * * *” 15 Senator Hill, in describing the purpose of his bill, quite correctly described the ultimate result when he said that it was intended to assist the States in pre paring “ a State-wide program for new construction so that all people of the State may have adequate health and hospital services.” 16 This emphasis on the creation of a State-wide system of hospitals for the provision of hospital serv ice to all of the people of the State indicates that the Hill-Burton program was not limited to the granting of financial aid to individual hospitals. It shows, rather, a congressional design to induce the States, upon joining the program, to undertake the super vision of the construction and maintenance of ade quate hospital facilities throughout their territory. Upon joining- the program a participating State in effect assumes, as a State function, the obligation of 15 Section 291e(f) also stipulates that State plans shall make provision for hospital admissions without discrimination on account of race, color, or creed. We discuss the full significance o f this provision in a subsequent part, o f this brief. Suffice it to say here that the requirement o f non-discrimination is an indication that Congress felt that what was involved was' a governmental responsibility, or it would not have imposed upon the States (and authorized the Surgeon General to impose, through them, on all participating hospitals) a constitutional non-discrimination obligation binding only upon governmental entities. ’ h h - , q' o : 16 Hearings , before Senate; . Committee . on Education and Labor on S. 191, 79th Cong., 1st Sess., p. 8 ., 23 planning for adequate hospital care. And it is, of course, clear that when a State function or responsi bility is being exercised, it matters not for Fourteenth Amendment purposes that the agent or instrumental ity would otherwise be private: the equal protection guarantee applies. Marsh v. Alabama, 326 TT.S. 501 (1946) ; Nixon v. Condon, 286 U.S. 73 (1932) ; Smith v. Allwright, 321 U.S. 649 (1944) ; Terry v. Adams, 345 U.S. 461 (1953). Boynton v. Virginia, 364 U.S. 454 (1960), even though not reaching any constitutional issue, is' an analogy on this point. There the bus carrier had vol unteered to make terminal and restaurant facilities available to its passengers. Here the State has volun teered to set up a hospital system that makes hospital services available to all its people. There the terminal and restaurant had cooperated in the undertaking. Here the defendant hospitals have cooperated in the hospital system. The Court held that under these cir cumstances the terminal and restaurant were bound by the same federal obligations as was the bus carrier and said (364 U.S. at 460-461) : “ * * * if the bus car rier has volunteered to make terminal and restaurant facilities available to its interstate passengers as a regular part of their transportation, and the terminal and restaurant have acquiesced and cooperated in this undertaking, the terminal and restaurant must per form these services without discrimination prohibited by the Act. In the performance of these services under such conditions the terminal and restaurant 24 stand in the place of the bus company in the perform ance of its transportation obligations.” So here, the defendant hospitals stand in the place of the State in the performance of its Constitutional obligations. 3. There are other indications in the statute that hospitals which participate in the Hill-Burton pro gram have asserted to perform a governmental func tion. The very comprehensiveness of the program points in this direction. So does the fact that Con gress has placed the federal-state program of hospital care under the detailed supervision and administra tion of governmental bodies. Senator Hill, in ex plaining how the program would operate, made clear the total involvement of government. He said (91 Cong. Rec. 11716) : The provision in the bill requiring each state to formulate and have approved by the surgeon general a State plan based upon a State-wide inventory of existing hospitals and a survey of needs, and the requirement that each applica tion for funds must be in conformity with the State plan and be approved by the State agency administering it, will greatly stimulate and help to bring about an integrated system of health and hospital facilities within each state. The over-all standards and general regulations issued by the Surgeon General of the Public Health Service, together with his expert advice and help, will bring about a more uniform and integrated national system of hospital and health facilities. 25 In other words, the Hill-Burton program was de signed to encourage the creation of a state-wide sys tem of hospital service. The adoption of a plan for such a system was required by Congress as a condition to receiving aid. And the Surgeon-General is given extensive supervisory control over the plan and its operation. Under the Act, the Surgeon General is granted rule-making power over the methods of administra tion of the plan and the standards of construction and equipment for hospitals. He also regulates the manner in which the State agency administering the plan determines the priority of projects to receive federal funds and sets standards for determining the number of hospital beds necessary to provide ade quate hospital services to people residing in the State. Pursuant to this authority, the Surgeon General has promulgated regulations which must be adhered to by the State agency administering the plan and by all applicants for aid. These regulations—42 C JAR. 53—are extremely detailed and cover such matters as the distribution of diagnostic and treatment centers and equipment.17 17 The regulations prescribe a multitude o f requirements that an applicant must meet to be approved by the State agency for participation in the State plan. For example, in approving any application the State agency is required by regulation (42 C.F.R. 53.127(d)) to certify that the application contains reasonable assurances as to title, payment o f prevailing rates of wages, and financial support for the construction arid opera tion o f ; the project; that the plans and specifications for con struction - o f the project1 are in accord with the minimum construction standards in the Federal regulations; that the application contains-an assurance that the applicant will con 26 The recent Public Works Acceleration Act of 1962, 76 Stat. 542, 42 C.S.C. 2641-2643-—provides an indi cation of the status of Hill-Burton hospitals. The purpose of the 1962 Act is to accelerate public work projects in order to combat unemployment. In sec tion 2641 of the Act, Congress declared that “ The Nation has a backlog of needed public projects, and an acceleration of these projects now will not only increase employment at a time when jobs are urgently required but will also meet long-standing public needs, improve community services, and enhance the health and welfare of citizens of the Nation.” To carry out this purpose, the President is “ authorized to initi ate and accelerate in eligible areas those Federal public works projects which have been authorized by Congress, and those public works projects of States and local governments for which Federal financial assistance is authorized under provisions of law other than this chapter. * * *” (42 U.S.C. 2642(b).) Significantly, Congress considered that assistance to nonprofit hospitals would be an appropriate public works project. Thus, H.R. No. 1756, 87th Cong. 2d Sess., p. 17, states: “ Hospitals represent another area of pressing public need on which activity could be begun promptly. The assistance in this bill, which form to the requirements of sections 53.111, 53.112, and 53.113 o f the regulations regarding the provision of facilities for persons unable to pay therefor; that the application contains an assurance that the applicant will conform to State standards for operation and maintenance and to all applicable State laws and State and local regulations; that the application is en titled to priority over other projects within the State; and that the State agency has approved the application. 27 could be used for both public and private nonprofit hospitals, would be particularly helpful in meeting the urgent need for modernization of older hospitals.” See also Cong. Rec., August 28, 1962, p. 16856. 4. In appraising the effect of the Hill-Burton Act, it is important to remember the context of the statute. A very substantial proportion of the country’s hospi tals are unquestionably public, albeit non-governmen tal, institutions.18 As the memorandum of the General Counsel of the Department of Health, Education, and Welfare (175a) reveals, non-profit hospitals have a decidedly public character. Indeed, governmental hospitals “ differ little from private non-profit hospitals except in the manner of selection of the governing boards, and sometimes in having a cal] upon tax funds to meet deficits” (176a). Both governmental and non-profit hospitals serve as general community hospitals. Such “ community hospitals have become essential, both to provide hospital service to the people of the commu nity and to enable its physicians to practice good medicine” (179a). In addition, all hospitals have very substantial governmental contacts. The record in this case demonstrates the detailed licensing and regula tion to which hospitals are subjected. Moreover, hos pitals have long been dependent upon public support in the form of tax exemptions as well as substantial grants. These circumstances seem significant in determining 18 In 1960, there were 524 accredited governmental hospitals, 2,276 accredited private non-profit hospitals and 154 proprie tary (profit-making) accredited hospitals (175a). 28 whether it is likely that through the Hill-Burton Act, Congress has in fact established a program which uses the participating non-profit hospitals as government instrumentalities for the limited purpose of meeting the community’s need for hospital services. The pro portion of hospitals which were State, county or mu nicipal institutions, the degree of public interest, the dependence upon tax exemptions, the existing systems of licensing and regulations, all show that the pro gram as we conceive it involves no drastic change in institutions except in race relations where the change is impelled by the Constitution. Cf. Garner v. Loui siana, 368 U.S. 157, 183 (1961) (Mr. Justice Douglas concurring). 5. To be sure, there are provisions in the Act which show that Congress did not intend under the Hill- Burton program to require state control of partici pating non-profit hospitals in all their functions. Thus, a number of provisions of the Act use the words “non-profit” in contra-distinction to the adjective “public” in describing the types of hospitals to be as sisted.19 We do not believe, however, that the use of such terms—which merely describe the nature of the ownership of the recipients of federal assistance- overrides the legal import of a federal-state program specificially designed to furnish hospital services to all the people. For example, under our view of this case, the Cone Hospital will continue to be a non-profit hospital in the sense that its present Board of Trus tees, and not the State, will be responsible for its management. Only with respect to the admission to 19See, e.g., 42 U.S.C. 291(a), 291d, 291h(a), 291n. 29 hospital services will the hospital be considered a governmental instrumentality required to adhere to the commands of the Fourteenth Amendment. Other provisions of the Act, and portions of the legislative history, do suggest that the statute was in tended to establish simply a program of grants-in- aid.20 I f these stood alone, a different question would 20 See, e.g., the following: (a) 42 U.S.C. 291m (60 Stat. 1049), entitled “ State control of operations” which provides: “ Except as otherwise specifically provided, nothing in this subchapter shall be construed as con ferring on any Federal officer or employee the right to exercise any supervision or control over the administration, personnel, maintenance, or operation o f any hospital, diagnostic or treat ment center, rehabilitation facility, or nursing home with respect to which any funds have been or may be expended under this subchapter” (emphasis added). [While the title “ State con trol of operations” is used in the Statutes at Large, the United States Code uses the phrase “ State control of agencies.” ] (b) The House Committee Report (H. Rep. No. 2519, 79t,h Cong., p. 8) states that regulations under 42 U.S.C. 291e(f) will “ relate solely to administration o f the plan submitted by the State agency and do not in any way relate to the admin istration of hospitals.” (c) Senator Hill stated: “ The bill does not provide a Federal program of hospital construction. It does provide a program of Federal aid to the states and their localities for hospital construction.” 91 Cong. Rec. 11714. (d) Senate Report No. 674, 79th Cong. 1st Sess. p. 7, states: “ The bill is not a Federal hospital construction bill. The need for a country-wide program of hospital construction has been demonstrated. It remained for the committee to consider and determine the relationship that should exist between the Federal Government and the States in planning and carrying out such a program. The committee believes that a Federal-aid program of the character set forth in the reported bill, which will supplement State and local funds for planning and carry ing out a construction program, but will at the same time encourage the States to assume the responsibility for carrying 30 be presented. We believe, however, that these pro visions should be read as expressing Congress’ intent not to put the federal government into the business of directly administering hospitals. The Hill-Burton program was meant to provide a federal stage on which the states and the hospitals designated to par ticipate in the State system would be the principal actors. Congress was intent on establishing an elabo rate framework to make possible the rendition of hospital services to all the people but it was not Con gress’ intent to impose on the federal government the obligation of constructing on that framework. That this is so is clearly illustrated by 42 U.S.C. 291m (60 Stat. 1049) which, although it disavows federal super vision or control over assisted hospitals, makes clear in its title—“ State control of operations”■—that there shall be control, but by the States.21 Finally, the argument that the Hill-Burton Act establishes only a program of construction grants is inconsistent with the clear language of 42 IT.S.C. 291e(f). That argument necessarily treats 291e(f) as doing no more than assuring an equitable distribu tion of the money so that proportionate shares will out the program to the greatest possible extent consistent with a proper check upon expenditure of Federal appropriations, will be most effective in a long-range hospital-construction program.” 21 It is significant that the disavowal o f federal administrative control applies equally to the “private” non-profit hospitals and to those admittedly “ public.” Moreover, Section 291m is intro duced by the phrase “ Except as otherwise specifically pro vided * * *” As we have indicated, 42 U.S.C. 291(a) and 291e(f) demonstrate a Congressional intention to make it a matter o f federal concern as to whom hospital services are provided. 31 reach the institutions serving whites, Negroes and other segregated groups, and that Congress was not concerned with the actual provision of hospital serv ices to the needy or with discrimination in the rendi tion of services. But this argument is invalid. Sec tion 291e(f) shows on its face that Congress was concerned not merely with the distribution of the money but with what is done with the new hospital facilities in the continuing rendition of hospital serv ices. Far from being content to leave this to private decision, Congress imposed upon the States, and au thorized the Surgeon General to require them to impose on the hospitals, the twin obligations of aiding the needy and avoiding unconstitutional discrimination. Section 291e(f), therefore, cannot be explained away as only an effort to see that money is equi tably distributed, with the governmental responsibility stopping at that point. We think that, in conjunction with the other considerations noted, it is sufficient evi dence that Congress did regard the availability of hos pital services as a State responsibility to be met either through hospitals run by governmental agen cies or by non-profit organizations on behalf of the State, although managed by private citizens. But even if the opposing evidence be thought stronger with respect to the overall character of the non-profit hospitals, we submit that Congress unques tionably undertook to deal, and to require the States to deal through the hospitals, with the problem o f dis crimination on grounds of race, creed or color. Hav 32 ing taken this step neither ' government could, consistently with the Fourteenth Amendment, do less than the Amendment requires; and, at least in that respect, the hospitals must he acting as the instru ments of the State and bound by the same limitation. C. The non-discrimination provision of the Hill-Burton Act 1. We have argued above that hospitals voluntarily participating in the Hill-Burton system are govern mental instrumentalities for the purpose of providing- hospital care to all the people. This argument is based on our analysis of the Hill-Burton Act, particularly sections 291(a) and 291e(f), and its legislative history which, we believe, demonstrates that Congress in tended through the Act to promote hospital services for all the people. As an alternative to the above argument, we now contend that the hospitals, even if otherwise private, are acting for the government in using the grants to provide hospital facilities without unconstitutional discrimination. It is clear that under the Hill-Burton program, the admission policies of participating hos pitals are made a matter of federal and State concern. This is not a subject on which the federal statute is silent ; it is not a subject over which the State agencies have no responsibility. Rather, under the statute, the Surgeon Greneral is required to participate in and direct the implementation of the congressional policy that Hill-Burton hospital be for the use of all the peo ple on an “ equitable” basis. By imposing this 33 duty on State agencies and the Surgeon General, Congress has made the public availability of Hill- Burton facilities a subject of governmental concern and control. Here, then, the statute providing for a hospital program and financial assistance directly and positively concerns itself with the admission policies of those to receive the assistance. Whether in the absence of this governmental supervision and control racially restrictive admission policies of Hill- Burton hospitals would otherwise be purely “ private action7’ and subject to no constitutional strictures need not be considered. Congress has removed the racial admission policies of Hill-Burton hospitals from the realm of private action. Congress has regulated and has authorized the Surgeon General to regulate those policies in the national interest. It has further pro vided that the several States regulate those policies and give binding assurances as to the nature of those policies. And the final performance of the continuing obligation, which the government accepted and im posed upon the States, falls on the hospital in render ing services. At least to this extent, the Act contemplates that the hospitals are to act as, and for, the State. What a hospital does with respect to race, creed or color must therefore conform to the Four teenth Amendment. The essential point is that, even in the case of otherwise private hospitals, Congress was unwilling to leave the avoidance of unconstitutional dis crimination to free private decision. Congress per ceived, and forced the States (and also the hos 34 pitals choosing to participate in the program) to accept a governmental obligation. In effect, it im pressed a trust for these two purposes upon the money and any facilities into which the funds are converted. Anyone taking the money would take it, as it were, subject to the trust, and in performing the trust the taker would be acting for the government and subject, in this respect, to its constitutional obligations.22 Con sequently, it may fairly be said that the admission policies of Hill-Burton hospitals are sanctioned by force of law; for these policies are formulated and carried out with government assistance and pursuant to statutory authorization and governmental direction. a. Legal precedent supports our position. It is now clear that State laws requiring racial discrimination by private businesses or individuals are unconstitu tional. Hot only are the laws themselves unconstitu tional, but the conduct which the law compels of the. private individuals is itself unconstitutional even though, absent the law, it would be permissible as “ private action” . As indicated, supra, as early as the Civil Rights Cases, 109 TT.S. 3, 17 (1883) the Supreme Court made clear that discriminatory acts of private 22 Our view that federal funds contributed under the Hill- Burton program are impressed with a trust is supported by 42 U.S.C. 291h(e) which provides that i f a hospital is sold or transferred to a person or agency not qualified to file an application under the Act or ceases to be a “non-profit hos pital” , the United States may recover a proportionate share of the then value as its contribution was to the cost o f the project. This provision suggests that the Federal Government has a continuing interest in the recipients of its aid. 35 persons are insulated from the Fourteenth Amend ment only insofar as they are “ unsupported by State authority in the shape of laws, customs, or judicial or executive proceedings,” or are “ not sanctioned in some way by the State. ’ ’ More recently, courts have found that where private persons segregate pursuant to posi tive provisions of the law, the actions of the private persons are within the ambit of the Fourteenth Amend ment. In Boman v. Birmingham Transit Company, 280 F. 2d 531 (C.A. 5, 1960) a city ordinance per mitted passenger carriers to make rules for the seating of passengers. The Court of Appeals held that the action of the bus company in promulgating and en forcing the rules was “ state action” and said (280 F. 2d at 535) : Of course, the simple company rule that Ne gro passengers must sit in back and white pas sengers must sit in front, while an unnecessary affront to a large group of its patrons, would not effect a denial of constitutional rights if not enforced by force or by threat of arrest and criminal action. Where, as here, the City dele gated to its franchise holder the power to make rules for seating of passengers and made the violation of such rules criminal, no matter how peaceful, quiet or rightful (as the court here held), such violation was, we conclude that the Bus Company to that extent became an agent of the State and its actions in promulgating and enforcing the rule constituted a denial of the plaintiffs’ constitutional rights. See also Baldwin v. Morgan, 287 F. 2d 750, 755-56 (C.A. 5, 1961) ; Flemming v. South Carolina Electric 36 and Gas Company, 224 F. 2d 752 (C.A. 4, 1955), ap peal dismissed, 351 U.S. 901. A similar conclusion was reached by Judges Bazelon and Edgerton in Williams v. Hot Shoppes, Inc., 293 F. 2d 835 (C.A.D.C. 1961).23 They said (293 F. 2d at 846) : When otherwise private persons or institu tions are required by law to enforce the declared policy of the state against others, their enforcement of that policy is state action no less than would be enforcement of that policy by a uniformed officer. Baldwin v. Morgan, 5 Cir., 1958, 251 F. 2d 780 ■ Flemming v. South Carolina Electric & Gas Co., 4 Cir., 1955, 224 F. 2d 752, appeal dismissed, 1956, 351 U.S. 901, 76 S. Ct. 692, 100 L Ed. 1439. “ The pith of the matter is simply this, that when [private groups] * * * are invested with an authority independent of the will of the association in whose name they undertake to speak, they become to that extent the organs of the state itself, the repositories of official power.” Mxon v. Condon, supra at page 88. b. It is true that the above cases deal with laws which required racial discrimination or which enforced private discrimination by criminal sanctions. It is equally true, however, that statutes authorizing or permitting racial segregation run just as afoul of the equal protection clause as statutes compelling segregation. 23 Although. Judges Bazelon and Edgerton were dissenting, they were the only members o f the couil; to consider the ques tion. The majority of the court, relying on the equitable abstention doctrine, did not reach the merits. 37 Almost fifty years ago, the Supreme Court consid ered this question in McCabe v. Atchison, Topeka and Santa Fe By. Co., 235 U.S. 151 (1911). There the State of Oklahoma had enacted a. statute requiring railroads to provide separate-but-equal facilities for their intrastate passengers. Had the legislature stopped at that point its effort would, of course, have been within the Constitution under the then pre vailing doctrine of Plessy v. Ferguson, 163 U.S. 537 (1896). The State legislature, however, went further and, having imposed the equality of treatment for mula which was then recognized by the courts as valid, went on to provide that the railroads need not follow that formula with respect to sleeping, dining and chair cars—so-called luxury facilities. Several Negroes sued to enjoin enforcement of that statute. The Dis trict Court determined that the statutory proviso with respect to the luxury facilities did not offend the equal protection clause. The Court of Appeals affirmed. The Supreme Court, in an opinion written by Justice Hughes, overruled the lower courts on this point. While the Court did not dispute the principle that the State could, by remaining silent, have left the railroads to discriminate on the basis of race, it held that if the passenger “ is denied by a common carrier, acting in the matter under the authority of a state law, a facility or conveyance in the course of his jour ney which under substantially the same circum stances is furnished to another traveler, he may prop erly complain that his constitutional privilege has 38 been invaded” (235 U.S. at 162). [Emphasis added.] 24 Here, as in McCabe, government has inserted itself into an activity that might otherwise be regarded as “ private” in order to set a standard of non-discrimi nation for the benefit of the entire public. Congress has chosen to inject the force of federal law into the area of hospital admissions. It need not have done that. It could have provided that funds be granted free of conditions relating to admission. But Con gress has chosen to concern itself with the admission practices of participants in the Hill-Burton program and expressly has authorized and sanctioned discrimi nation. Here also, as in McCabe, the legislative au thority has been exercised to allow discrimination of the type which the courts have ruled cannot be in dulged in by the governmental authority itself. This authorization is unconstitutional and the admission policies of defendant hospitals, as an exjjress subject of Congressional regulation, are required to conform to the commands of the Fifth and Fourteenth Amendments. 2. It may be objected, however, that the only obli gation Congress perceived is to see that proportion ately equal, although separate, hospital facilities are available to whites and Negroes and other groups. One answer is that Congress obviously believed that the major obligation, declared by the first sen 24 The principle of McCabe recently was endorsed by the Supreme Court in Burton v. Wilmington Parking Authority 365 U.S. 715 (1961). There the court. again made clear that racial discrimination under the authority o f State law was pro scribed by the Fourteenth Amendment. 39 tence of 42 IT.S.C. 291e(f), was to avoid discrimina tion and comply with constitutional standards in the provision of hospital services. It believed that sepa rate but equal facilities would meet the obligation and it was therefore willing to accept such facilities as an exception to the general rule. This assumption was a mistake. Even though the government might have left the selection of patients entirely to the hospitals, it could not constitutionally put an imprimatur of government approval upon segregation. Taking the statute as it was enacted, without speculating about political probabilities, it seems fair to say that the avoidance of unconstitutional discrimination was the dominant aim of 42 IT.S.C. 291e(f) and that since a choice must be made between invalidating the whole or excising the unconstitutional portion, the subor dinate exception must be excised, leaving the domi nant undertaking intact. A second answer is that once Congress undertook to eliminate discrimination in the availability of hospital facilities, it could use no standard other than that found in the Fifth and Fourteenth Amendments. Congress could not license part performance of a constitutional duty. In short, it can be conceded that a government— whether State or federal—can give away money or grant property and leave the recipient free to dis criminate or not discriminate, on the basis of race, in the use of the property. Where, however, the gov ernment exercises control to assure that the money or property is used for the benefit of all the people, the standards set by the government, and the conduct of 40 recipients of aid acting under those standards, must conform to the Constitution. II. The provision o f the Hill-Burton Act sanctioning the construction o f separate-but-equal hospital facilities is unconstitutional 1. The United States fully recognizes that it is ex ceptional for the federal government to participate in a suit to urge that an act of Congress be declared un constitutional. Not only do we acknowledge our gen eral obligation to defend Congressional enactments, but we also are keenly aware of the self-imposed judi cial inhibition against passing on the validity of an Act of Congress “ unless absolutely necessary to a decision of the case.” Burton v. United States, 196 U.S. 283, 295 (1905)20. However, as we have demon strated, we believe that the conduct of the defendant hospitals is subject to constitutional limitations prin cipally because of their participation in the Hill- Burton hospital system in North Carolina. This conclusion, in our view, is dispositive of the constitu tionality of the separate-but-equal provisions of the Hill-Burton Act. The inescapable fact is that the discrimination challenged in this action stems directly from federal invitation—accepted by the State in its plan and by defendant hospitals in their construction projects. Defendants’ discriminatory acts are an integral part of an interrelated federal-state-private program in which each of the three entities has played an indispensable 25 25 See also Ashtvander v. Tennessee Valley Authority, 297 U.S. 288, 345 et seq. (1936); United States v. Auto Workers, 352 U.S. 567, 589-593 (1957). 41 part, and in which none of the three can he exonerated from responsibility for the resulting discrimination. It was the underlying federal statute which unques tionably led to the North Carolina program of hos pital construction and which instigated the discrim inations which this action seeks to enjoin. As in Burton v. Wilmington Parking Authority, supra, here the State and federal governments have so far insinuated themselves into a position of interdependence with defendant hospitals that they must be recognized as joint participants in the chal lenged activities. Therefore, if this Court concludes that the discrimination complained of in this ease is constitutionally impermissible it necessarily will be required to consider the validity of the statute that has permitted these two governments to sanction and to participate in such discrimination. Indeed, if the defendants are ordered to cease their discriminatory practices, such an order would be in direct conflict with the terms of the Hill-Burton proviso. We be lieve, therefore, that defendants’ conduct cannot escape constitutional interdiction without the statute that has authorized that conduct also being invali dated. 2. In the Hill-Burton Act, Congress has authorized federal-state cooperation in a federally financed, State-administered program of hospital construction for the benefit of all the people (42 H.S.C. 291(a)). Although the Act specifically provides that State hos pital construction programs shall not discriminate “ on account of race, creed or color,” Congress has further 42 prescribed that this non-discrimination standard may be met if the State program provides for the construc tion of separate-but-equal facilities.26 42 U.S.C. 291e ( f ) . Thus, the Hill-Burton Act is not merely neu tral or silent on the question of racial discrimination. Rather, Congress incorporated into the statute a standard based on race and has authorized and sanc tioned racial discrimination by State-connected in stitutions—racial discrimination that clearly violates the Fourteenth Amendment. Congress has no power, under the Fifth Amendment, to do this. First, section 291e(f) of Title 42 is, on its face, violative of the Constitution. That section expressly permits the separate-but-equal treatment of Negroes. This is contrary to the now well established principle 26 It is clear that separate-but-equal treatment of racial groups does not meet the standards of the Equal Protection clause of the Fourteenth Amendment. As long ago as Strauder v. West Virginia, 100 U.S. 30-3, 308 (1880) the Supreme Court recognized that Negroes are entitled to “exemption from legal discriminations, implying inferiority in civil society * * *” And, in Brown v. Board of Education, 347 U.S. 483, 494 (1954), the Supreme Court approved the find ing o f the district court that “ the policy of separating the races is usually interpreted as denoting the inferiority of the negro group.” Since Brown, the courts have been consistent in re jecting the separate-but-equal formula. See, e.g., Dawson v. Mayor and City Council of Baltimore, 220 F. 2d 386, 387 (C.A. 4, 1955), affirmed, 350 U.S. 877 (1955); Browder v. Gayle, 142 F. Supp. 707 (M.D. Ala. 1956), affirmed, 352 U.S. 903 (1956) ; Tate v. Department o f Conservation, 133 F. Supp. 53 (E.D. Va., 1955), affirmed, 231 F. 2d 615 (C.A. 4, 1956), cert, denied, 352 U.S. 838 (1956) ; Henry v. Greensville A ir port Commission., 279 F. 2d 751 (C.A. 4, 1960). 43 that racial classifications with respect to public facil ities and services are “ irrelevant and invidious.” 27 The Constitution prohibits “ state action in which color i.e., race) is the determinant * * * The fac tor of race is irrelevant from a constitutional view point.” Baldwin v. Morgan, 287 F. 2d 750, 754 (C.A. 5, 1961). This principle was enunciated in the classic language of the first Mr. Justice Harlan, dissenting in Plessy v. Ferguson, 163 U.S. 537, 554, 559 (1896) : [T]he Constitution of the United States does not * * * permit any public authority to know the race of those entitled to be protected in the enjoyment of * * * [civil] rights. * * * - * # Our Constitution is color-blind, and neither knows nor tolerates classes among its citi zens. * * * The law regards man as man, and takes no account of his surroundings or of his color when his civil rights as guaranteed by the supreme law of the land are in volved. * * * Certainly, there is no conceivable justification for racial classifications by government with respect to hospital admissions. I f it is beyond the power of gov ernment to make available schools or recreational fa cilities on the basis of race it is equally unpermissive to support a hospital system where the availability of service may depend upon a person’s race. The Con 27 Steele v. Louisville <& Nashville Railroad Co., 323 U.S. 192, 203 (1944). See also BoIlim,g v. Sharpe, 347 U.S. 497, 499 (1954) where the Court said: “ Classifications based solely upon race must be scrutinized with particular care, since they are contrary to our traditions and hence constitutionally suspect.” 44 stitution does not permit Congress to use race as a yardstick in determining the recipients of govern mental benefits. Where, as here, Congress has re quired the Surgeon General to insure that the Hill- Burton program enures to the benefit of all the people within a state without racial discrimination, Congress may not, at the same time, require that the Surgeon General approve the separate-but-equal treatment of racial groups. Second, the Hill-Burton Act expressly sanctions racial discrimination by State-connected institutions. It is now beyond question that racial discrimination by a State runs afoul of the Constitution since, “ [f]or a State to place its authority behind discriminatory treatment based solely on color is indubitably a denial by a State of the equal protection of the laws, in vio lation of the Fourteenth Amendment.” 28 Neverthe less, despite this clear principle, under the Act, the States are expressly authorized to devise hospital con struction programs that provide separate facilities for the races.29 The State program must be ap 28 Mr. Justice Frankfurter, dissenting on other grounds in Burton, v. Wilmington Parking Authority, 365 IJ.S. 715, 727 (1961). 29 It is without significance that the Hill-Burton Act does not compel the States to devise separate-but-equal hospital construc tion programs. It is enough that racial discrimination is per mitted or sanctioned. See the discussion of McCabe v. A tchison, T. <fs S.F. By. Co. at pp. 36-37, supra. Nor is it significant that the State plan involved in this case does not compel individual hospitals to discriminate. The actions of the State o f North Carolina in this case are sufficient to meet the tests o f uncon stitutional state action as set forth in Cooper v. Aaron, 358 IJ.S. 1, 19 (1958) where the Court said: “ State support of segregated schools through any arrange- 45 proved by the Surgeon General and he must deter mine whether the State has properly applied the separate-but-equal formula. In effect, therefore, the federal government takes a very direct part in co operating with the States in the effectuation of a separate-but-equal hospital program. This is State- sponsored racial discrimination with a federal impri matur. For Congress expressly to authorize such a scheme necessarily violates the due process clause of the Fifth Amendment.30 And while Congress cer m e t, ma.7iagem.ent, funds, or property cannot be squared with the [Fourteenth] Amendment’s command that no State shall deny to any person within its jurisdiction the equal protection o f the laws. The right of a student not to be segregated on racial grounds in schools so maintained is indeed so funda mental and pervasive that it is embraced in the concept of due process o f law. Bolling v. Sharpe, 347 U.S. 497.” [Emphasis added.] See also Oatlette v. United States, 132 F. 2d 902 (C.A. 4, 1943); Picking v. Pemisylvcmia R. Go., 151 F. 2d 240 (C.A. 3, 1945); Lynch v. United- States, 189 F. 2d 476 (C.A. 5, 1951). 30 In Bolling v. Sharpe, 347 U.S. 497 (1954) the Court indi cated that, with respect to racial discrimination, the reach of the due process clause of the Fifth Amendment was coexten sive with that of the equal protection clause of the Fourteenth Amendment. The Court said (347 U.S. at 500) : “ In view of our decision that the Constitution prohibits the states from maintaining racially segregated public schools, it would be unthinkable that the same Constitution would impose a lesser duty on the Federal Government. We hold that racial segregation in the public schools of the District of Columbia is a denial o f the due process o f law guaranteed by the Fifth. Amendment to the Constitution.” See also Steele v. Louis mile <fc Nashville R.R. Go., 323 U.S. 192 (1944) where Justice Murphy, in a concurring opinion, stated (323 U.S. at 208) : “ The Act [the Railway Labor Act] contains no language which directs the manner in which the bargaining representa tive shall perform his duties. But it cannot be assumed that 46 tainly has power to promote hospital construction, it cannot use that power “to attain an unconstitutional result.” Western Union Telegraph Go. v. Foster, 247 U.S. 105, 114 (1918). Cf. Gomillion v. Lightfoot, 364 U.S. 339 (I960).31 In short, it is clear that Congress may not enact a statute authorizing a hospital construction program based on a separate-but-equal formula, and a State may not administer such a program. In view of this, the United States is compelled to concede the uncon stitutionality of the separate-but-equal provision of the Hill-Burton Act and the regulation enacted pur suant thereto. We believe the proper constitutional standard was enunciated in Hirabayashi v. United States, 320 U.S. 81, 100 (1943) where the Court said: Distinctions between citizens solely because of their ancestry are by their very nature odious to a free people whose institutions are founded upon the doctrine of equality. 3. While the separate-but-equal provision of the Hill-Burton Act and the correlative portion of its implementing regulation must fall, we believe that the Congress meant to authorize the representative to act so as to ignore rights guaranteed by the Constitution. Otherwise the Act would bear the stigma of unconstitutionality under the Fifth Amendment in this respects.” Of. Hurd v. Hodge, 334 U.S. 24 (1948). 31 In Ming v. Horgan, 3 R.R. L. Rep. 693, 699 (Cal. Super. Ct. 1958) the court held that private persons who accepted federal mortgage guarantees were bound by the Fifth Amend ment. With regard to the absence of an explicit non-discrimi nation provision in the act of Congress in issue, the court said: “ I f it be objected that Congress refused to so ordain, it must be replied that Congress could not ordain otherwise—the law does not permit it to differentiate between races, and whether it expresses that limitation in so many words or not. * * *” 47 remainder of section 291e(f), providing for hospital facilities without discrimination, should properly re main in effect.32 As we have demonstrated supra, the basic and overriding purpose of the Hill-Burton Act was to permit the States to develop programs of hos pital construction that would provide adequate serv ices “ to all their people” . To assure full realization of this purpose, Congress expressly provided that the State plans of hospital construction must provide for adequate hospital facilities for the people residing in a State without discrimination on account of race, creed or color. Congressional provision for separate-but-equal facilities was obviously simply an adherence to then prevailing constitutional doctrines. Congress’ domi nant purpose, clearly, was to prevent use of the national treasury to subsidize a State hospital system which practices racial discrimination in the admis sion of patients. The proviso could thus have vitality only so long as it might be sanctioned by the Consti tution. The Constitutional premise for the separate- but-equal proviso having fallen, the proviso falls, too. It is the broader provision dealing with racial dis crimination that gives effect to the primary purpose of the Congress—a purpose that should continue to be fulfilled. 32 We challenge only that portion of 42 U.S.C., § 291e(f) which reads: * * * * but an exception shall be made in cases where separate hospital facilities are provided for separate popu lation groups, i f the plan makes equitable provision on the basis of need for facilities and services of like quality for each such group; * * *” 48 CONCLUSION Wherefore, it is respectfully requested that the judgment of the District Court be reversed. B cuke M arshall, Assistant Attorney General. W illiam H. M urdock, United States Attorney. St. J ohn B arrett, H arold H . G reene, H oward A. Glickstein, Attorneys, Department of Justice, W ashing ton 25, D.C. F ebruary 1963. U .S. GOVERNMENT PRINTING OFFICE:1963