Response to Motion for Continuance of Trial and Motion for Reconsideration of Trial Date; Affidavit of Bruce E. Sayers

     [||cf5a44f7-a581-446a-abd5-6b820893efc2||] IN THE 

UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF INDIANA 

HAMMOND DIVISION 

BERNICE TERRY, et al., 

Plaintiffs 

vs. No. H 76-373 

METHODIST HOSPITAL OF GARY, INC., 

et al., 

Defendants 

RICHARD GORDON HATCHER, et al., 

Plaintiffs 

VS. No. H 77-154 

METHODIST HOSPITAL OF GARY, INC., 

et al., 

Defendants a
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RESPONSE TO PLAINTIFFS' MOTION FOR CONTINUANCE 
OF TRIAL FOR NINETY DAYS AND RESPONSE TO 

DEFENDANT, DEPARTMENT OF HEALTH, EDUCATION 
AND WELFARE'S MOTION FOR RECONSIDERATION 

OF DECEMBER 5, 1977, TRIAL DATE 

  

  

  

  

  

The defendants, Methodist Hospital of Gary, Inc. and 

Denis E. Ribordy, object to the plaintiffs' Motion for Con- 

tinuance of Trial Date for Ninety Days and the Motion of 

the Department of Health, Education and Welfare for Reconsidera- 

tion of Trial Date and in support of such objections state 

to the Court: 

1. That this matter has been pending since December of 

1976, and the continued pendency of this matter creates 

an increasingly intolerable financial burden on the defendants, 

Methodist Hospital of Gary, Inc and Denis E. Ribordy. 

 



. ® » 

  

2. That on September 9, 1977, this Court set this 

matter for trial on December 5, 1977, taking into consideration 

the financial burden on the defendants and with cognizance 

of the rights of the plaintiffs. 

3. That at the time the Court set this matter for 

trial on December 5, 1977, the plaintiffs herein, as well 

as the defendant, Department of Health, Education and Welfare, 

orally objected to such a trial date on the grounds that 

neither the plaintiffs nor the Department of Health, Education 

and Welfare would be able to adequately prepare for trial 

in in the interim. This Court considered and overruled such 

objections. 

4. That in October of 1977 the plaintiffs and the 

Department of Health, Education and Welfare filed Motions 

for Continuance of the Trial Date based On rounds which 

were essentially the same as the grounds for their objections 

as set out in paragraph 3 hereof. 

5. That as further grounds for its Motion for Reconsideration 

of Trial Date the Department of Health, Education and Welfare 

is purportedly offering to stipulate to an extension of 

Methodist Hospital of Gary, Inc.'s Section 1122 certification 

on the building projects which are the subject matter of 

this suit. 

6. That Methodist Hospital of Gary, Inc. has not as 

yet received such stipulation nor is it aware of any of 

the terms and conditions of such stipulation. 

7. That Methodist Hospital of Gary, Inc. will suffer 

significant additional economic harm if the trial of this 

matter is continued. 

 



N eS v 

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WHEREFORE, for the foregoing and reasons set out in 

greater detail in the Memorandum in support hereof and the 

Affidavits attached hereto, defendants, Methodist Hospital 

of Gary, Inc. and Denis E. Ribordy, pray that the Court 

deny plaintiffs' Motion for Continuance and defendant, Department 

of Health, Education and Welfare's Motion for Reconsideration 

of Trial. | 

HODGES, DAVIS, GRUENBERG, COMPTON & SAYERS 
ATTORNEYS FOR DEFENDANTS, 

METHODIST HOSPITAL OF GARY, INC. AND 
DENIS E. RIBOR 

      

   
   

     
  

BY: cla Sh dnt es, 
EDWARD J. HUSSEY J 

5525 Broadway 
Gary, Indiana 46410 
Ph. 981-2557 

 



  

IN THE 

UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF INDIANA 

HAMMOND DIVISION 

BERNICE TERRY, et al., 

Plaintiffs 

VS. No. H 76-373 

METHODIST HOSPITAL OF GARY, INC., 

et al., 

Defendants 

RICHARD GORDON HATCHER, et al., 

Plaintiffs 

VS. No. H 77-154 

METHODIST HOSPITAL OF GARY, INC., 

et al., 

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Defendants 

AFFIDAVIT OF BRUCE E. SAYERS 
  

BRUCE E. SAYERS, first being sworn upon his oath, alleges 

and says: 

1. That I am one of the attorneys for the defendants, 

Methodist Hospital of Gary, Inc. and Denis E. Ribordy, in 

the above-captioned matter. 

2. That I received the Department of Health, 

Education and Welfare's Motion for Reconsideration of the 

December 5, 1977, Trial Date and plaintiffs Motion for Con- 

tinuance of Trial for Ninety Days and have examined same. 

3. That upon learning of said motions for continuance 

I called the architectural firm of Schmidt, Garden & Erikson, 

architects for defendant, Methodist Hospital of Gary, Inc., 

to inquire as to an approximation of additional costs which 

would be incurred by the defendant should further delay 

be experienced prior to the commencement of construction 

 



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of therbulining project which is the subject matter of this 

lawsuit. I was advised by the architects that the hospital 

could expect costs to increase on the order of approximately 

$ to 10% per Soi on the total cost of the project. The 

building program is an $8.3 million dollar proposal and 

at the rate of 10% per year the cost of Methodist Hospital 

of Gary, Inc.'s project will increase in annual increments 

in excess of $830,000.00. Accordingly, a ninety day delay 

can be expected to cost Methodist Hospital of Gary, Inc. 

in excess of $200,000.00. 

4. That the $8.3 million dollar projected cost for 

the building program was a cost projection made by the hospital's 

above-mentioned architects in anticipation of a project 

commencement date of mid-1977. While the hospital has been 

able to make certain minor adjustments in the project to 

minimize cost increases to date such a procedure cannot 

be expected to contain cost increases over a significant 

length of time. 

5. : That 1 have reviewed the motion of the Department 

of Health, Education and Welfare for reconsideration of 

the trial date and have noted that the Department of Health, 

Education and Welfare is purportedly offering to the defendant, 

Methodist Hospital of Gary, Inc. a stipulation for extension 

of Section 1122 certification on Methodist Hospital of Gary, 

Inc.'s current building program. As of this date I have 

not received a copy of such proposed stipulation or been 

advised of its contents nor have I been made familiar with 

 



  

the reaction of the various Indiana state agencies whose 

responsibility it is to implement the Section 1122 review, 

approval and certification process, particularly their willing- 

ness to join in any such continuance. 
C = / 

tl lg gin 
BRUCE E. SAYER / 
  

STATE OF INDIANA ) 

) SS: 
COUNTY OF LAKE ) 

BRUCE E. SAYERS, being first duly sworn upon his oath, 

states that he has read the above and foregoing Affidavit 

and that the contents thereof are true and correct to the 

best of his knowledge. 

   | - 

BRUCE E. SAYERS if 
  

Subscribed and sworn to before me, a NOtary Public, 

this |) Paay of October, 1977.    

  

Notary Public 

  

My Commission Expires: 

5 Sul 
  

 



  

IN THE 

UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF INDIANA 

HAMMOND DIVISION 

BERNICE TERRY, et al., 

Plaintiffs 

VS. No. H 76-373 

METHODIST HOSPITAL OF GARY, INC., 

et al., 

Defendants 

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RICHARD GORDON HATCHER, et al., 

Plaintiffs 

VS. No. H 77-154 

METHODIST HOSPITAL OF GARY, INC., 

et al., 

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Defendants 

MEMORANDUM IN SUPPORT OF RESPONSE TO PLAINTIFFS' MOTION 
FOR CONTINUANCE OF TRIAL FOR NINETY DAYS AND RESPONSE 

TO DEFENDANT, DEPARTMENT OF HEALTH, EDUCATION AND 
WELFARE'S MOTION FOR RECONSIDERATION OF 

DECEMBER 5, 1977 TRIAL DATE 

  

  

  

  

  

The plaintiffs herein filed Cause Number 76-373 in 

December of 1976, and filed Cause Number 77-154 in May of 

1977. Plaintiffs then amended Cause Number 76-373 in Tue 

of 1977. Thereafter, at a hearing on defendants' Motion 

to Dismiss on September 9, 1977, this Court set this matter 

for trial on December 5, 1977, with cognizance of the fact 

that the plaintiffs might very well gain the relief they 

seek simply by the passage of time and that, therefore, 

trial in this matter should be set expeditiously. The Court, 

defendants believe, was aware of the requirement that defendant, 

 



  

Methodist Hospital of Gary, Inc., was required to have 

its building projects, which are the subject matter of this 

lawsuit, under contract by March of 1978 pursuant to the 

project's Section 1122 certification. 

At the time the Court set this matter for trial on 

December 5, 1977, the plaintiffs orally objected to such 

a setting and stated that, due to the complexity of the 

matter, they could not complete their discovery in time 

to be prepared for trial on December 5, 1977. The Court 

considered plaintiffs' objection and overruled that objection. 

In addition, at that time the Department of Health, Education 

and Welfare orally objected to the December 5th trial setting 

on the grounds that its administrative review of health 

care in Lake County, Indiana could not be completed prior 

to December 5, 1977, and that, therefore, the Department 

of Health, Education and Welfare would not be fully prepared 

for trial on that date. The Court considered and overruled 

that objection. 

THE DEPARTMENT OF HEALTH, EDUCATION AND WELFARE'S MOTION 
  

Now, in October of 1977, the Department of Health, 

Education and Welfare has filed its Motion for Reconsidera- 

tion of the December 5, 1977, trial date and renewed its 

objection to said trial date based predominantly on the 

same grounds previously rejected by this Court. The Depart- 

ment of Health, Education and Welfare states in its motion 

that the defendant, Methodist Hospital of Gary, Inc., will 

not be harmed by such a continuance in light of the offer 

made by the Department of Health, Education and Welfare 

to extend Methodist Hospital's Section 1122 approval until 

such a time as this matter has been resolved by the Court. 

As is demonstrated by the attached Affidavit of Bruce E. 

—-—D 

 



  

Sayers, attorney for the defendant, Methodist Hospital of 

Gary, Inc., any further delay in the commencement of this 

building program will cause Methodist Hospital of Gary, 

Inc. significant economic harm. Thus, the statement by 

the Department of Health, Education and Welfare that the 

defendant, Methodist Hospital of Gary, Inc., will not suffer 

harm by a continuance of the trial date is simply not true. 

However, in addition to such economic harm and perhaps more 

significant in the context of this case is the effect and 

operation of the proposed stipulation to extension of Section 

1122 approval. The defendant, Methodist Hospital of Gary, 

Inc., has repeatedly asked attorneys for the Department 

of Health, Education and Welfare for a copy of such stipu- 

lation so it may be reviewed by the attorneys for the hospital. 

At this time the hospital has not received such a stipulation. 

However, the Court should be aware of certain ramifications 

which the defendant believes vitiates the usefulness of 

‘such a stipulation in redressing any possible harm to Methodist 

Hospital by a continuance of this matter. 

Initially there is no indication that the various state 

agencies charged with the determination, approval and certification 

process under Section 1122 will be a party to this stipulation. 

It is clear from the language of Section 1122 that it is 

the state agencies who, to a large extent, make the determination 

and findings pursuant to Section 1122. In addition, pursuant 

to the regulations promulgated to give force and effect 

to Section 1122, it is clear that the designated planning 

agency of the state and the various state agencies involved 

must be a party to any extension of Section 1122 approval. 

(a) Except in the case of a long- 

term construction plan of the type described 
in paragraph (b) of this section, where 
the designated planning agency has found 

5 

 



  

that a proposed capital expenditure 
is in conformity with the standards, 
criteria, and plans described in §100.104 
(a) (2), the obligation for such capital 
expenditure shall be incurred not more 
than one year following the date of 
such finding, or such shorter period 
as may be required by applicable State 
law: Provided, That in the absence 
of any State law to the contrary, the 
designated planning agency may, pursuant 
to a showing of good cause by the person 
proposing such expenditure, extend the 
period during which such obligation 
must be incurred for up to an additional 
six months. If no such obligation is 
incurred within such period, the designated 
planning agency's approval shall, for 
purposes of this subpart, be deemed 
to be terminated upon the expiration 
of such period. 

42 C.F.R. §100.109 (a) 

From the foregoing it is clear that state agencies must 

be a party to any stipulation proposed by the Department 

of Health, Education and Welfare. Furthermore, the defendant, 

Methodist Hospital of Gary, Inc., respectfully refers the 

Court to 42 C.F.R. §100.103(a) (2) (v) which states: 

(v) Any change in a proposed capital 
expenditure which itself meets the criteria 
set forth in this paragraph, shall for 
purposes of this subpart, be deemed 
a capital expenditure; provided, that 
an increase or decrease in the cost 
of a proposed capital expenditure which 
increase or decrease is not related 
to a change in bed capacity or a substantial 
change in services may, at the option 
of the designated planning agency, be 
exempt from review under this subpart. 

42 C.P.R., $§100.103(a) (2) (Vv) 

Thus, the designated planning agency, Northwest Indiana 

Health Systems Agency, Inc., or conceivably any other agency 

participating in the Section 1122 review and approval process 

could declare the certification terminated if the capital 

cost increase of the proposed projects exceeds $100,000.00, 

as defined in 42 C.P.R. $100.103¢(a) (1). 

-d~ 

 



  

(a) (1) For purposes of this subpart, 
a "capital expenditure" is an expenditure, 
including a force account expenditure 
(i.e., an expenditure for a construction 
project undertaken by the facility as 
its own contractor), which, under generally 
accepted accounting principles, is not 
properly chargeable as an expense of 
operation and maintenance and which 
(1) exceeds $100,000, or (ii) changes 
the bed capacity of the facility with 
respect to which such expenditure is 
made, or (iii) substantially changes 
the services of the facility with respect 
to which such expenditure is made. 

42 C.P.R. 8$100.103(a) (1) 

From the foregoing it is clear that to be effective the 

respective state agencies must agree and stipulate to an 

extension of Section 1122 certification. However, perhaps 

more significant is the possibility that even if the Section 

1122 certification is extended it is clear that after a 

delayed Court resolution (during which time the capital 

costs of the hospital's building projects increases more 

than $100,000.00) the Section 1122 certification, even if 

extended, could be withdrawn. It is apparent from the attached 

Affidavit of Bruce E. Sayers that any significant delay 

in the trial date will cause the capital cost of this project 

to increase dramatically. Up to this point in time the 

hospital has, by virtue of certain small adjustments in 

the building program which can be made without recertification, 

been able to minimize capital cost increases. However, 

any further delays could result in significant cost increases 

which would put the Section 1122 certification in serious 

Jeopardy. Thus, despite a stipulated extension of Section 

1122 certification, the plaintiffs could gain the relief 

sought simply by delay. 

The Department of Health, Education and Welfare raises 

an additional point in support of its Motion for Continuance. 

 



  

The Department of Health, Education and Welfare now espouses 

for the Court's consideration the doctrine of Primary Juris- 

diction. This reliance is curious as it represents another 

vacillation in the position of the Department of Health, 

Education and Welfare with regard to the dismissal of this 

action. The doctrine of Primary Jurisdiction is grounds 

for a Motion to Dismiss. As such it would appear that the 

Department of Health, Education and Welfare is now again 

pressing its Motion to Dismiss this matter. Defendant, 

Methodist Hospital of Gary, Inc., is bewildered by this 

development. 

THE PLAINTIFFS’ MOTION 
  

The plaintiffs following the lead of the Department 

of Health, Education and Welfare have renewed their Motion 

for Continuance of Trial. This motion is based on the precise 

grounds which the plaintiffs put forward as their objection 

at the time the Court originally set this matter for trial, 

At that time the Court overruled such objection. The plaintiffs, 

by the extensive Affidavit attached to their Motion for 

Continuance, graphically demonstrate that they do not as 

yet possess sufficient facts to describe or prove either 

a violation of individual civil rights or sufficient facts 

to suggest solutions to such alleged violations. Plaintiffs 

would have the Court believe that, if given enough time, plaintiffs 

will be able to prove that violations did occur and, further- 

more, that if violations did occur, that they have solutions 

to the social problems manifested by those violations. 

The defendant, Methodist Hospital of Gary, Inc., would respect- 

fully suggest to the Court that it is just as reasonable 

to assume that if the plaintiffs are allowed an indefinite 

 



  

period of time within which to search out facts, that they 

will never be able to prove that violations occurred. Plaintiffs 

assert that this matter is so complex that they must be 

allowed sufficient time to examine and review extensive 

materials as well as tap various computers for data contained 

therein. As an example, plaintiffs cite data which is 

contained on the computers of the Indiana Hospital Association. 

Plaintiffs intimate that the material contained on those 

computers is a breakdown of Methodist Hospital of Gary, 

Inc.'s patients by race, sex, census tract, diagnosis, method 

of payment and discharge data. While the computer of the 

Indiana Hospital Association does contain that information, 

the information is only for the month of April, 1975, and 

such information has, to a large extent, been provided to 

the plaintiffs in Methodist Hospital of Gary, Inc.'s answers 

to the plaintiffs first set of interrogatories. 

The only additional grounds pressed by the plaintiffs 

in support of their motion are that the defendant, Department 

of Health, Education and Welfare, has proffered a stipulation 

which will vitiate any harm to the defendant, Methodist 

Hospital of Gary, Inc., by such a continuance and that lead 

counsel for plaintiffs is about to be married, an event 

which will restrict her ability to prepare this case. As 

was demonstrated above, the proffered stipulation will not 

vitiate the harm to the defendant, Methodist Hospital of 

“Gary, Inc., by a continuance of this trial. In addition, 

while Ms. Lief's pending wedding may interfere with her 

ability to prepare for trial, defendant notes that plaintiffs 

are represented by six other attorneys of record, all of 

whom are presumably competent and able to prepare this matter 

Por trial. 

 



  

WHEREFORE, defendants, Methodist Hospital of Gary, 

Inc. and Denis E. Ribordy, respectfully pray that the Court 

deny the Motion of the plaintiffs for Continuance of Trial 

Date for Ninety Days and of the Department of Health, Education 

and Welfare for Reconsideration of the December 5: 1977, 

Trial Date. 

HODGES, DAVIS, GRUENBERG, COMPTON & SAYERS 
ATTORNEYS FOR DEFENDANTS, 
METHODIST HOSPITAL OF GARY, INC. AND 
DENIS E. RIBORDY 

    

HUSSEY 
  
  

  

5525 Broadway 
Gary, Indiana 46410 
Ph. 981-2557 

 



? ® 
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IN THE 

UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF INDIANA 

HAMMOND DIVISION 

BERNICE TERRY, et al., 

Plaintiffs 

VS. No. H 76-373 

METHODIST HOSPITAL OF GARY, INC., 

et al., 

Defendants 

RICHARD GORDON HATCHER, et al., 

Plaintiffs 

VS. No. H 77-154 

METHODIST HOSPITAL OF GARY, INC., 
et al, ; 

Defendants 

AFFIDAVIT OF SERVICE 
  

Edward J. Hussey, first being duly sworn upon his oath, 
alleges and says as follows: 

1. That he is one of the attorneys for the defendant, 
Methodist Hospital of Gary, Inc. 

2. That on the 13th day of October, 1977, he served 
a copy of defendants' Response to Plaintiffs' Motion for Con- 
tinuance of Trial for Ninety Days and Response to Defendant, 
Department of Health, Education and Welfare's Motion for Re- 
consideration of Decenber 5, 1977, Trial Date, the Memorandum 
in Support thereof and Affidavit of Bruce E. Sayers, upon 
the following named attorneys of record in this matter, to- 
wit: 

Julian B. Allen Beth J. Lief 
Attorney at Law Attorney at Law 
2009 Broadway 10 Columbus Circle 
Gary, Indiana New York, New York 10019 

 



  

Rebecca L. Ross, Esq. 
Department of Justice 
10th and Pennsylvania Avenue, N.W. 
Washington, D. C. 

Marvin G. Garvin and Edward L. Koven 

Regional Attorney & General Attorney 
Department of Health, Education and Welfare 
300 South Wacker Drive, 18th Floor 
Chicago, Illinois 

Fred W. Grady 

Assistant United States Attorney 
United States District Court 
Northern District of Indiana 
Federal Building, 507 State Street 
Hammond, Indiana 46325 

Marilyn G. Rose 
Christine B. Hickman 
1751 N Street, N.W. 

Washington, D.C. 20036 

Theodore Sendak 
Attorney General 
State House 
Indianapolis, Indiana 46320 

Anthony DeBonis 
720 West Chicago Avenue 
East Chicago, Indiana 

by depositing same in the United States Mail, postage prepaid, 
and addressed to each of the above-named individuals. 

3. Further affiant sayeth not. 

  

  

EDWARD J. HUSSEY Ie 
Subscribed and. sworn to before me, a Notary Public, £His 

  

13th day of October, 1577. LL 

2 or 
Shirley ae Notary Public 

My Commission Expires: 

March 2; 1981 [||cf5a44f7-a581-446a-abd5-6b820893efc2||]