First Amended Complaint; Affidavits of Barbara Wesson, Rosa Keeton, Eddie Gray; Correspondence from Lief to Allen and Miller
Public Court Documents
June 10, 1977
19 pages
-
Case Files, Hatcher v. Methodist Hospital - Hardbacks. First Amended Complaint; Affidavits of Barbara Wesson, Rosa Keeton, Eddie Gray; Correspondence from Lief to Allen and Miller, 1977. 3a135eb3-5484-f111-ab0f-7ced8d2181dd. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/7f69360a-d8c6-40da-8f53-add1b74841e0/first-amended-complaint-affidavits-of-barbara-wesson-rosa-keeton-eddie-gray-correspondence-from-lief-to-allen-and-miller. Accessed October 10, 2026.
Copied!
[||fd12659e-3758-45e0-ac86-e9b9862cf7e7||] IN THE UNITED STA"L,S DISTRICT COURT
FOR THE NORTHERN DISTRICT OF INDIANA Fi L ED
HAMMOND DIVISION JUN 1 9.1977
FRANCIS T. GRANDYS, CLERK
U. S. DISTRICT COURT p,
BERNICE TERRY, et al.,
Plaintiff,
Ve
METHODIST HOSPITAL OF GARY, INC.,
An Indiana-Not-For-Profit
Corporation, and JOSEPH CALIFANO, FIRST AMENDED
as United States Secretary of COMPLAINT
Health, Education and Welfare,
Cause No. H 76-373
Defendants,
1.
l. This is a class action for declaratory and injunctive
relief brought by an individual representing minority residents
of Gary, Indiana against defendants' default of their obligations
under Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 20004
(hereinafter Title VI) and to redress the deprivation of the
rights of plaintiff and the plaintiff class guaranteed by the
Fifth nk Fourteenth Amendments to the Constitution of the United
States and the Civil Rights Act of 1871, 42 G.8.0. § 1983.
2. Jurisdiction of the Court is invoked pursuant to 28
U.S.C. 68 1331, 1343 and 1361. Plaintiff's claim for a declara-
tion of rights is authorized by 28 U.S.C. §§ 2201 and 2202.
The amount in controversy exceeds, exclusive of interest and costs,
: the sum or value of $10,000.
II.
Parties Plaintiff
3. Plaintiff Bernice Terry is a black resident of Gary who
has used the facilities of Gary Methodist Hospital. She had
required and it is likely that she will require use of hospital
facilities, including emergency room treatment, in the future.
Plaintiff Terry is injured and will continue to be injured by
the segregation and discrimination in the provision of hospital
services by defendant Methodist Hospital of Gary, Inc.
4. Plaintiff Terry brings this action on her own and on
behalf of all persons similarly situated. The plaintiff class
is composed of all minority residents of Gary, Indiana who use,
have used, or will use Gary Methodist Hospital and who are,
have been, or will be injured by sie creation, perpetuation,
and expansion of a segregated hospital system. The requirements
of Rule 23 (a) and (b) (2) are satisfied:
(1) the class represented by plaintiffs is so
numerous that joinder of all members is impracticable;
(ii) there are questions of law and fact common
to all class members;
(iii) the claims of the named plaintiffs are typical
of the claims of class members;
(iv) final injunctive and declaratory relief with
respect to the class as a whole is appropriate since
defendants have acted or refuse to act on grounds gen-
erally applicable to the class.
111
Parties Defendant
5. Defendant Methodist Hospital of Gary, Inc., 1s a not-
for-profit corporation organized under the laws of the State
of Indiana, which currently operates a 419-bed facility in the
IE,
City of Gary (hereinafter "Gary Methodist") and a 165-bed
facility in Merrillville, a suburb of Gary (hereinafter
"Broadway Methodist"). Methodist Hospital of Gary, Inc.,
is a recipient of federal funds under the Hill-Burton Act and
the Medicare and Medicaid programs, and other federal programs.
Methodist Hospital has received more than three million dollars
in direct construction grants and more than eight million
dollars in loan guarantees with interest subsidies under the
Hill-Burton Progra, including a grant and loan guarantee for
the construction of Broadway Methodist. As a condition for the
receipt of all federal funds, Methodist Hospital is subject
to the requirements of Title VI.
6. Defendant Joseph Califano is the United States Secretary
of Health, Education and Welfare (hereinafter HEW) and has the
responsibility for all federal programs administered by the
United States Department of Health, Education and Welfare.
Defendant HEW is responsible for the administration and enforce-
ment of Title VI pertaining to the disbursement of federal
financial assistance to programs administered by HEW, including
Hill-Burton grants and loan guarantees.
iv
Statement of Facts
7. Methodist Hospital of Gary, Inc., has operated the Gary
Methodist Hospital, located in the City of Gary, since 1923.
8. The City of Gary is located in the northwest corner of
the State of Indiana. It is the largest city in Lake County,
a heavily industrialized area with a population in 1970 in excess
of 630,000. Gary has a population of approximately 175,000,
i TR
53% of which is Black and 10% of which is Hispanic.
9. On March 1, 1967, the Gary Joint Hospital Fund, Inc.,
was issued a charter by the State of alana. This organiza-
tion was structured to combine the efforts of many people to
enter into a cooperative fund-raising drive for the benefit
of St. Mary Mercy Hospital and Methodist Hospital. The stated
purpose of this fund-raising drive was to help relieve a press-
ing bed shortage and overcrowded conditions that existed at St.
Mary Mercy Hospital and Methodist Hospital, both of which are
located in the City of Gary. A public subscription goal sought
from industry, business, trust foundations and individuals, in
the Gary hospital service area, a minimum of $3,500,000 to be
divided between St. Mary Mercy Hospital and Methodist Hospitals.
The stated purpose of the funds received by Methodist Hospital
of Gary, fn. wad land oaulaliion, modernization and expansion
of Gary Methodist Hospital.
10. Although Methodist Hospital of Gary, Inc., received
approximately $2,249,500.00 from the Gary Joint Hospital Fund,
Inc., it did not undertake the majority of the renovation or
expansion of Gary Methodist Hospital that had been the stated
purpose of the fund drive. Instead, Methodist Hospital proceeded
with a plan to build a Satellite Hospital on Broadway, also
known as Route 53, south of U. 8S. 30 in Merrillville, Indiana,
an overwhelmingly white suburb of Gary. That satellite hospital
is now a $18 million general, short term hospital consisting of
165 beds with capacity to expand to 600-800 beds. That facility
was completed in December of 1975.
11. Eighty percent of the patients treated at Gary Methodist
dln
® @
Hospital are Black and Hispanic while only 10% of the patients
treated at Broadway Methodist Hospital are Black and Hispanic.
Similarly, the overwhelming majority of the staff at each facil-
ity mirrors the race of the patients served.
12. Defendant Methodist, has by its actions over the last
10 years, demonstrated its intent to deprive the black residents
of the City of Gary of adequate medical services. The con-
struction of the Broadway Methodist Hospital has had and will
continue to have the purpose and effect of creating a hospital
system which excludes persons from, denies them the benefit of,
and other wise discriminates against and segregates them on the
basis of race and national origin:
(a) defendants located the new Broadway facility in
an area populated overwhelmingly by whites and removed from the
City of Gary with its concentration of blacks, Hispanics and
elderly and handicapped persons;
(b) defendants have assigned and otherwise employed
personnel in the Broadway and Gary facilities on a racially seg-
regated and otherwise discriminatory basis;
(c) defendants have installed at the Broadway facility
modern and critical facilities (e.g., radiation equipment for
the treatment of cancer) which are not available at the Gary
facility, and not accessible to the minority residents of Gary
by public transportation.
13. Methodist Hospital by Gary, Inc., constructed Broadway
Methodist Hospital with a grant of $1,152,500 and a guarantee on
a loan for $14,336,000 with an interest subsidy totalling
$6,900,000 which it received and continues to receive from the
“ N
defendant HEW pursuant to Title VI of the Public Health Services
Act, 42 U.S.C. § 291 et seqg., (hereinafter "Hill-Burton" Act).
14. HEW approved the Hill-Burton loan and grant applica-
tion of Methodist Hospital of Gary, Inc., to construct Broadway
Methodist Hospital without considering whether the new hospital
would create a segregated, dual hospital system which would dis-
criminate against the minority residents of Ging.
15. Methodist Hospital of Gary, Inc., submitted another
application in 1976 for § 1122 approval and a Hill-Burton grant
and loan guarantee for an $8,143,370 project. The majority of
the funds in this project is to be used to expand the facilities
of Broadway Methodist Hospital.
16. HEW received objections from several sources to the
approval of Hill-Burton funds for the Methodist Hospital of Gary,
Inc. The objections specifically opposed the approval of the
application on the grounds, inter alia, that Methodist Hospital
of Gary, Inc., was operating a dual, segregated hospital system
and was providing inferior health care to the poor and minority
residents of Gary. In its reply to these objections, HEW admitted
that racial segregation "is a realty;" that it relies upon the
HSA for evaluations; and that the HSA "made no attempt to compare
the quality of care at both institutions [Broadway Methodist
Hospital and Gary Methodist Hospital]."
17. HEW gave civil rights' clearance to the 1976 proposal,
and granted the Hill-Burton application. In so doing, HEW ap-
proved the continuation and expansion of a hospital system which
discriminates against persons, including the named plaintiffs,
on the basis of race, color or national origin.
=6m
18. Plaintiff Dbelievesthat in light of HEW's approval
of the 1976 application over the objections of numerous residents
of Gary, including some of the named plaintiffs and HEW's view of
its responsibilities under controlling law, any further efits to
seek HEW enforcement of Title VI, to protect their statutory and
constitutional rights,would be futile.
V.
Causes of Action
19. Defendant Methodist Hospital of Gary, Inc., is violating
Title VI and its implementing regulations, 42 U.S.C. 1983 and 42
C.P.R., 53.112 by: i
(a) having engaged and engaging in policies and prac-
tices which discriminate against and segregate persons on the basis
of race, color, or national origin;
(b) failing to comply with specific assurances which
it made to HEW regarding its obligations under Title VI.
20. Defendant HEW has violated its duties to enforce Title"
VI, and the rights of plaintiffs and the plaintiff class by:
(a) approving and providing federal funds for the con-
struction of Broadway Methodist Hospital by Methodist Hospital of
Gary, Inc., which violated and is violating Title VI and its im~
plementing regulations;
(b) failing to enforce the assurances submitted by the
Methodist Hospital of Gary, Inc.;
(c) approving the $8.1 million loan guarantee and in-
terest subsidy under the Hill-Burton Act;
(d) failing to enforce the civil rights provision of
regulations under the Hill-Burton Act, 42 C.F.R. § 53.112;
(e) failing to enforce the site selection provision
to civil rights' regulations, 45 C.F.R. § 80.3 (b) (3) against
recipients of federal financial assistance, including the de-
fendant Methodist Hospital of Gary, Inc.
Vill
Prayer For Relief
21. WHEREFORE, plaintiff respectfully prays that this
Court enter judgment:
(a) declaring that the policies of Methodist Hospital
of Gary, Inc., complained of herein violate rights secured by
Title VI of the Civil Rights Act of*1964, 42 U.S.C. § 2000d,
and the Civil Rights Act of 1871, 42 U.S.C. 1983;
(b) declaring the HEW's grant of federal financial
assistance to Gary Methodist Hospital, which discriminates against
and segregates persons on the basis of race, color or national
origin, violates rights guaranteed by Title VI;
(c) enjoining Methodist Hospital of Gary from enjoin-
ing in policies and practices which discriminate against and seg-
regate persons on the basis of race, color or national origin
in violation of the rights of plaintiffs and the class they rep-
resent under Title VI and 42 U.S.C. § 1983;
(d) enjoining Methodist Hospital of Gary to take affirm-
ative action to overcome the effects of their present and past
discriminatory actions, such affirmative action to include, inter
i) ceasing all planned and future expansion of
Broadway Methodist Hospital;
ii) placing all new equipment and services in
Gary Methodist Hospital;
1ii) submission of a plan to the Court and HEW outlining
Bn
steps which shall be taken to assure the desegre-
gation of the staff and patient populations at
Gary Methodist Hospital and Broadway Methodist
Hospital;
iv) providing transportation to minority
and handicapped patients, visitors and employees
who are residents of Gary who desire to go to or
to work at Broadway Methodist Hospital;
(e) enjoining the Secretary from engaging in poli-
cies and practices which deprive the plaintiff and the class
she represents of rights secured by Title VI, including, but
not limited to, orders:
i) enjoining the Secretary from refusing or
failing to ensure that recipients of federal finan-
cial assistance, including Methodist Hospital of
Gary, Inc., do not segregate or discriminate against
persons on the basis of race, color or asbional
origin;
ii) enjoining the Secretary to enforce the site
selection provisions of the Title VI regulations, 45
C.F.R. § 80.3(b)3 with respect to all recipients of
federal financial assistance, including Methodist
Hospital of Gary, Inc.;
iii) enjoining the Secretary from granting federal
financial assistance to Methodist Hospital of Gary,
Inc., in connection with loans and grants for Broadway
Methodist Hospital as long as it segregates and dis-
criminates against persons in the provision of services
on the basis of race, color or national origin;
Gs
iv) enjoining the Secretary, in administering
the Hill-Burton Act and its successor law, Title
XVi of the Public Health Services Act, 42 U.5.C. § 3000
et seq. § 314 and its successor law Title XV of the
Public Health Services Act, 42 U.S.C. § 3000k, et seq.,
to assure that requirements of Title VI are met;
v) enjoining the Secretary from granting and con-
tinuing federal financial assistance to Methodist
Hospital of Gary, Inc., in connection with loans and
grants for Broadway Methodist Hospital until the
actions listed in sub-paragraph 21 (d) above are met.
(3) asrdtng costs and reasonable attorneys' fees;
(k) granting such additional relief as the court
deems just and equitable.
Respectfully submitted,
LL Tn o> ol) tem
/JJACK GREENBERG
/ MELVYN R. LEVENTHAL
BETH J. LIEF
10 Columbus Circle
New York, New York 10019
JULIAN ALLEN
2009 Broadway
Gary, Indiana 46407
MARILYN G. ROSE
CHRISTINE B. HICKMAN
1751 N Street, N. WwW.
Washington, D. C. 20036
Attorneys for Plaintiffs
-10-
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION Fl I L D
JUN 1 0 1977
BARBARA WESSON, et al., U. S. DISTRICT coum Vv, s. ICT
Plaintiff,
Vou
Cause No. H 76-373
METHODIST HOSPITAL OF
GARY, INC., and JOSEPH
CALIFANO,
Defendants. i:
STATE OF INDIANA)
} 88.:
COUNTY OF LAKE )
BARBARA WESSON, being duly sworn, deposes and says:
l. I was originally a named plaintiff in the above-entitled
action and am submitting this affidavit to explain my decision
to drop my name as a plaintiff in this case.
2. I am a black citizen of the United States and a long-
time resident of Gary and have used the facilities of Gary
Methodist Hospital. I believed that a suit should be insti-
tuted against Methodist Hospital of Gary, ne, and the
United States Secretary of Health, Education and Welfare, and
desire to be a named plaintiff in such action for the following
reasons:
a) The construction and expansion of Broadway
Methodist Hospital by Methodist Hospital of Gary,
Inc., which was funded and approved by HEW has had
and will continue to have the effect of injuring me
and other minority residents of Gary, Indiana, by
draining needed funds and personnel from Gary
Methodist Hospital, a facility which is older than
Broadway Methodist Hospital and which serves a
larger population;
(b) The placement of crucial x-ray equipment
at Broadway Methodist Hospital rather than Gary
Methodist Hospital discriminates against minority
residents of Gary who require the use of such equip-
ment but who, in many cases, cannot reach Broadway
Methodist Hospital without severe difficulty because
of the lack of public transportation from Gary to
the suburban facility;
(c) The proposed expansion of Broadway Methodist
Hospital will exacerbate the conditions that already
exist and the injury already suffered by minority resi-
dents of Gary.
3. I was able to learn many of the facts concerning the
discrimination by Methodist Kos 5LthL of Gary, Inc., because of
my affiliation with the Medical Center of Gary, Inc. Whatever
goals I hold for the Medical Center of Gary, Inc., or what-
ever differences the Medical Center might have or have had with
the Methodist Hospital of Gary, Inc., have nothing whatsoever
to do with the purposes of the instant action. However, de-
fendants have continually referred to my affiliation with the
Medical Center of Gary, Inc., and I believe that my continued
presence as a named plaintiff in this action might confuse the
true purposes of the lawsuit: to guarantee the right of myself
ee
and other minority residents to lack of discrimination and
segregation in a health care facility financed by federal
funds. Therefore, because I continue to support that purpose,
I have decided to withdraw as a named plaintiff.
Respectfully submitted,
ad en
BARBARA WESSON
Sworn to before me this
20 day or Yay”
:
1977. :
Mv Conn ASS (po CX PVCs
[rely
IN THE UNITED STATES DISTRICT COURT [=| [° ED
FOR THE NORTHERN DISTRICT OF INDIANA
UN 1 01977
HAMMOND DIVISION At
FRANCIS T. GRANDYS ee M
» CLERK U. S. DISTRICT COURT
BERNICE TERRY, et al.,
Plaintiff,
Ve : Cause No. H 76-373
METHODIST HOSPITAL OF GARY,
INC., and JOSEPH CALIFANO,
Defendants. ;
STATE OF INDIANA)
} SS.:
COUNTY OF LAKE )
ROSA KEETON, being duly sworn, deposes and says:
l. I was originally a named plaintiff in the above
entitled action and am submitting this affidavit to explain
why I have decided to drop my name as a plaintiff in this
case.
2. I am a black citizen of the United States and a
resident of Gary for approximately forty years.
3. I originally desired to be a named plaintiff in
an action against Methodist Hospital of Gary, Inc., and the
United States Secretary of HAZLLH, Education and welfare for
the following reasons:
(a) I believe the construction and expan-
sion of Broadway Methodist Hospital by Methodist
Hospital of Gary, Inc., and funded and approved
by HEW has had and will continue to have the
effect of draining needed resources, personnel
and funds from Gary Methodist Hospital, the
facility which serves the minority residents of
Gary;
(b) I believe that the decision to con-
struct and expand Broadway Methodist Hospital
and to place crucial x-ray equipment there
rather than to modernize Gary Methodist Hospital
discriminates against the minority residents of
Gary; : »
(c) Minority residents of Gary, including
myself, are injured by the discriminatory delivery
of health care by Methodist Hospital of Gary, Inc.
4. I continue to hold the beliefs which prompted me to
join as a named plaintiff in this lawsuit. I did not join
this action to promote the interests of the Medical Center of
Gary, Inc., but only to enforce the rights guaranteed to me and
others under the Constitution of the United States and federal
law. However, defendants continually question me and refer to
the fact that I am associated with the Medical Center of Gary,
Inc. I believe that my continued presence as a named plaintiff
might confuse the issues. I therefore have decided to withdraw
as a named plaintiff in order that the true purpose of this
lawsuit not be impeded.
Respectfully submitted,
[dt fol
; ROSA KEETON
Sworn to before me this
BYE day oe May
1977
Hod ELLY.
Me Coir nn sClonN EXPIRES
/2¢/50
* *®
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF INDIANA Fl LE D
HAMMOND DIVISION UN 1 0 1077
TUS igganDYS, Cle
EDDIE GRAY, et al.,
Plaintiff,
Ve
Cause No. H 76-373
METHODIST HOSPITAL OF GARY,
INC., and JOSEPH CALIFANO,
Defendants. : »
STATE OF INDIANA)
} SS.
COUNTY OF LAKE )
EDDIE GRAY, being duly sworn,deposes and says:
l. I was originally a named plaintiff in the above-entitled
action and am submitting this affidavit to explain to the Court
my decision to withdraw as a named plaintiff in this action.
2. I am a black citizen of the United States and a resi-
dent of Gary who is likely to require the use of health care
facilities. |
3. I originally desired to be a named plaintiff in an
action against Methodist Hospital of Gary, Inc., and the United
States Secretary of Health, Education and Welfare, because I
believe the construction and expansion of Broadway Methodist
Hospital by Methodist Hospital of Gary, Inc., which was funded
and approved by HEW has had and will continue to have the effect
of creating a segregated health care. system which discriminates
against me and other minority residents of Gary.
* ps *
4. I continue to believe that the prosecution of the
above-entitled action is necessary to secure the rights
guaranteed to me and other minority residents of Gary under
the Constitution of the United States and federal law.
However, I also believe that my affiliation with members of
the Board of the Medical Center of Gary, Inc., may lead to
the misbelief that my participation as a named plaintiff in
this lawsuit is not solely to seek relief from the discrimina-
tion and segregation referred to above. I, therefore, have
decided to withdraw as a named plaintiff in ‘order that the
true purpose of this lawsuit and its prosecution not be con-
fused in any way.
Respectfully submitted,
Lh Be pc po
EDDIE a
Sworn to before me this
297 day of Mae ’
1977.
/
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¥55/2 76 373 2/2 2440 1.1% 5508 76 373
PLAINTIFFS DEFENDANTS
| WESSON, Barbara Leek; | METHODIST HOSPITAL OF GARY, |
BERNICE TERRY; EDDIE GRAY; INC., and DAVID MATHEWS, Secre-
ROSA KEETON tary of Department of Health,
Education and Welfare
CAUSE
42 USCA 291-291-0; 42 USCA 200D 14th Amendment to Constitution of
United States -- Violation by Defendant, Methodist, of Civil Rights
Assurance Agreement dated July 27, 1973.
ATTORNEYS
Julian B. Allen
2009 Broadway
Gary, IN 46409
219/886-3666
Charles B. Miller,
2009 Broadway
Gary, IN 46407
Esq.
Jack Greenberg
Beth Lief
10 Columbus Circle
New York, N.Y. 10019
212-586-8397
larilyn G. Rose
Christine B. Hickman
1751 N. Street, N. WN.
Washington, D. C. 20030
Milton R. Leventhal
10 Columbus Circle
New York, New York 10019
FOR DEFT. METHODIST HOSPITAL:
L— Bruce Sayers
5525 Broadway
Gary, IN 46410
981-2557
VY, 8S, Atty,
Slit alten) ECA
SEL Lr Dal be APPRAISE
rt, rs tad
- — p / i 9 : : Cy
TCO DTI SC AHCALTIS A CE
-
Qi rod oo, Zh Gebod
CHECK FILING FEES PAID STATISTICAL CARDS
HERE DATE RECEIPT NUMBER C.D. NUMBER CARD DATE MAILED
IF CASE WAS
FILED IN JS5
FORMA S-6
PAUPERIS
UNITED STATES DISTRICT COURT DOCKET DC-111 (Rev. 1/7
May 17, 1977
Julian B, Allen, Esq.
Chuck Miller, Esq.
2009 Broadway
Gary, Indiana 46410
Res Terry v. Methodist Hospital of Gary, Inc.
Dear Chuck:
As I indicated to you on the phone, enclosed
is the First Amended Complaint in our first
case, as well as affidavits for Barbara Wesson,
Bernice Terry and Eddie Gray to sign. As soon
as possible, please have them sign the affidavits
and file the complaint immediately so that we
do not have to make a motion to amend the com-
plaint.
Looking forward to hearing from you about the
construction at Broadway Methodist Hospital.
Sincerely,
Beth Lief
BL/x
Enclosures [||fd12659e-3758-45e0-ac86-e9b9862cf7e7||]