Simkins v Moses H Cone Memorial Hospital Brief of Appellants

    In the

Hnttt'd States (Enurt nf Appals
F or the F ourth Circuit

No. 8908

G. C. Simkins, Jr., et al., and United States of A mebic;.,

Appellants,

“ v'“  o
Moses H. Cone Memorial H ospital, a corporation, et al.,

Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE 
MIDDLE DISTRICT OF NORTH CAROLINA

■A

BRIEF OF
APPELLANTS G. C. SIMKINS, JR., ET AL.

Jack Greenberg 
J ames M. Nabrit, III 
Michael Meltsner 

10 Columbus Circle 
New York 19, New York

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

Attorneys for
G. C. Simkins, Jr., et al.



I N D E X

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

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

PAGE

Statement of F acts .....................................................   5

Hill-Bnrton Program .....................      8

A. Federal Funds for Hospital Construction ...........  9

B. General Facts About Hill-Burton Program .......  10

C. The North Carolina State P la n ..............................  11

D. Division of Federal and State Controls............... 12

The Training of State Nursing School Students at 
Cone .......................................................................    18

Argument ...........................................   20

I. The Appellees’ Contacts With Government Are 
Sufficient to Place Them Under the Restraints of 
the Fifth and Fourteenth Amendments Against 
Racial Discrimination..... .....    20

Financial Contributions......................................  21

State and Federal Controls to Implement 
Public Policy ..............................................   23

Affirmative Governmental Sanction of Dis­
crimination .................................................. ......  31

Additional Factors Applicable to Cone Hos­
pital .........      33

Conclusion of Part I ............... ...........................  36



11

II. Those Portions of Title 42 U. S. C., §291e(f) 
and 42 C. F. R., §53.112 Which Authorize Racial 
Discrimination Violate the Fifth and Fourteenth 
Amendments ............................................................  37

Conclusion .................................... ........................ .............. 41

PAGE

T able oe Cases

Allen v. County School Board of Prince Edward
County, 198 F. Supp. 497 (E. D. Va. 1961) .... ......  23

Ashwander v. Tennessee Valley Authority, 297 U. S.
288 ........................................... .......................................... 40

Bailey v. Patterson, 369 U. S. 31 ............... ................ . 38
Baldwin v. Morgan, 287 F. 2d 750 (5th Cir. 1961) ..26, 28, 30,

31, 33, 39
Betts v. Easley, 161 Kan. 459, 169 P. 2d 831 ...........27, 28
Bolling v. Sharpe, 347 II. S. 497 ............................... ...20, 39
Boman v. Birmingham Transit Co., 280 F. 2d 531 (5th

Cir. 1960) ............. ......................... ............. ..22,27,30,31,33
Brown v. Board of Education, 347 TJ. S. 483 .......20, 38, 39
Burton v. Wilmington Parking Authority, 365 U. S.

715 ............................................................20, 21, 22, 23, 25, 26,
31, 32, 34, 35, 36

Civil Rights Cases, 109 U. S. 3 .............................. ... ....20, 31
Cooper v. Aaron, 358 U. S. 1 ...... ............................20, 22, 23

Dartmouth College v. Woodward, 17 U. S. (4 Wheat.)
518 .......................................................... ............................ 35

Dawson v. Mayor and City Council of Baltimore, 220
F. 2d 387 (4th Cir. 1955), aff’d 350 U. S. 877 ...........  38

Derrington v. Plummer, 240 F. 2d 922 (5th Cir. 1956), 
cert. den. sub nom. Casey v. Plummer, 353 U. S. 924 .. 22



I l l

Eaton v. Board of Managers of James Walker Me­
morial Hospital, 261 F. 2d 521 (4th Cir. 1958), cert, 
den. 359 U. S. 984 ..........................................................  25

Flemming v. South Carolina Electric & Gas Co., 224 
F. 2d 752 (4th Cir. 1955), appeal dismissed, 351II. S.
901 ...................................................................................... 33

Freeman v. Retail Clerks Local 1207, 45 Lab. Eel. Ref. 
Man. 2334 (1959) .........    30

Gantt v. Clemson Agricultural College of South Caro­
lina (4th Cir. No. 8871, Jan. 16, 1963) ....................... 39

Gayle v. Browder, 352 U. S. 90 ....................................... 38

Hampton v. City of Jacksonville, 304 F. 2d 320 (5th 
Cir. 1962), cert. den. sub nom. Gioto v. Hampton,
9 L. ed. 2d 170 ....... ..................................................... .25, 26

Hirabayashi v. United States, 320 U. S. 8 1 ................... 20
Holmes v. City of Atlanta, 350 U. S. 879 ....................... 38

Kerr v. Enoch Pratt Free Library, 170 F. 2d 212 (4th 
Cir. 1945) ...................................     22

McCabe v. Atchison, Topeka and S. F. R. Co., 235 U. S.
151 (1914) .........    32

Marsh v. Alabama, 326 U. S. 501 .......................22, 26, 30, 35
Ming v. Horgan, 3 Race Rel. L. Rep. 693 (Cal. Super.

Ct. 1958) ............................................................................ 27
Monroe v. Pape, 365 IT. S. 167.................................. ....... 22

New Orleans City Park Improvement Asso. v. Detiege,
358 U. S. 54 ....... ................ .............................................  38

Nison v. Condon, 287 U. S. 73 ...................................... 22, 33
Norris v. Mayor and City Council of Baltimore, 78

F. Supp. 451 (D. Md. 1948) ............................ ........ ....  35
N. L. R. B. v. Babcock & Wilcox Co., 351 U. S. 105.......  30

PAGE



IV

Pennsylvania v. Board of Directors of City Trusts, 353
U. S. 230 ........ ........ ..... .................... ................... ..........  34

Plessy v. Ferguson, 163 U. S. 537 ----------------------------  38
Public Utilities Comm’n v. Poliak, 343 U. S. 451 .......26, 27

Railroad Trainmen v. Howard, 343 U. S. 768 ............... 21
Railway Employees Dept. v. Hanson, 351 U. S. 225 .... 27 
Republic Aviation Corp. v. N. L. R. B., 324 U. S. 793 .... 30

Shelley v. Kraemer, 334 U. S. 1 .... ..............................26, 30
Smith v. Allwright, 321 U. S. 649 ..................................  22
State Athletic Commission v. Dorsey, 359 U. S. 533 .... 38
Steele v. Louisville, N. R. R. Co., 323 U. S. 192...........  27
Syres v. Oil Workers Int’l Union, 223 F. 2d 739 (5th 

Cir. 1955), rev’d per curiam, 350 U. S. 892 ............... 27

Terry v. Adams, 345 U. S. 461-------------------- --------- ----- 22
Turner v. Memphis, 369 U. S. 350 ...............................35, 38

United States v. Raines, 362 U. S. 1 7 ..............................  22

Williams v. Hot Shoppes, 293 F. 2d 835 (D. C. Cir. 
1961) ........................... ....... -............................................. 33

PAGE

Statutes I nvolved

28 U. S. C,, §§1331, 1343(3) ........................................... 3

28 U. S. C., §2403 ..............................................................  3

42 C. F. R., §53.1 (v) ........................................................  28

42 C. F. R., §53.11 ............      16

42 C. F. R., §§53.12, 53.13 ............................................... 17

42 C. F. R., §§53.71-53.80 ................................................. 17

42 C. F. R., §53.111 .......................................... ........ 11,18, 37



V

42 C. F. R., §53.112 .......................................... 2, 5,11,17,18,
21, 37, 38

42 C. F. R., §53.124 .................    17

42 C. F. R., §53.125 ..........................................................  13

42 C. F. R., §53.127(b) .............     17

42 C. F. R., §§53.127(c ) ( l) - (9 )  .........................   13

42 C. F. R., §53.127(d)(l) ......        15

42 C. F. R., §§53.101, 53.127(d)(2) .................    13

42 C. F. R., §53.127(d) (4) .....       18

42 C. F. R., §53.127(d)(5) ............................................... 15

42 C. F. R., §53.127(d) (6) ............................................... 17

42 C. F. R., §53.128 .........   13

42 C. F. R., §53.130 ....................................................   14

42 0. F. R., §§53.131 et seq........................................... .13,14

42 C. F. R., §53.134 ......   14

42 C. F. R., §§53.150(a), 53.151 ......      14

42 U. S. C., §291 ...........        30

42 U. S. C., §291e(a) (b )(0)(d ) .......... ....... .................. -  16

42 U. S. C., §291e(e) ......................................................... 13

42 IJ. S. C., §291e(f) .............  2,5,11,17,18,20,
31, 32, 37, 38

42 U. S. C., §291f(a)(4)(D ) ............     17

42 U. S. C., §291f (a) (7) ................  15

42 U. S. C., §291f (a) (8) ..........      17

PAGE



42 U. S. C., 129 I f id) ....... ........ ........... ......... ............. -.15,16

42 U. S. C., §291f(e) ....... .................. ..... - .....................  10

42 IT. S. C., §291g .......................................... ...................  10

42 U. S. C., T 29 111 in) ....................................... ....... -..... 13,17

42 1’ . S. C., §291h(d) ...... ...............................................  24

42 IT. S. ('., §291h(e) .................................-............  14. 21.25

42 U. S. C., §291j .................................................. ............. 17

42 U. S. C., §291m ....... .... .................... - .........................  15

42 IT. S. C., §§292, et seq..................................................  15

42 IT. S. C., §292g ............................................ -................  15

42 IT. S. C., §§1981, 1983 ................................................  3

State Statutes

N. C. Gen. Stats., §§90-1 et seq.......................................  33

N. C. Gen. Stats., §§122-3, 122-5, 122-83, 122-84, 122- 
88, 116-26 ........ .................................................. -.............  38

N. C. Gen. Stats., §§130-4 et seq.....................................  33

N. C. Gen. Stats., §131-117 ..............................................  6

N. C. Gen. Stats., §131-120 ..............................................  11

N. C. Gen. Stats., §§131-126.1 et seq. .........................15,16

Private Laws of N. C., 1913, ch. 400 .........................  6

Session Laws of N. C., 1961, ch. 234 ................    6

Session Laws of N. C., 1947, c. 933 ............................. 16

vi

PAGE



V ll

Other A uthorities
PAGE

“ Equal Protection of the Laws Concerning Medical 
Care in North Carolina” (Subcommittee on Medical 
Care of the North Carolina Advisory Committee to 
the United States Commission on Civil Eights) 
(mimeographed) ................................... ..... .................. 36, 37

“Hill-Burton Program—Progress Report, July 1, 1947- 
June 30, 1961,” U. S. Department of HEW, Public 
Health Service Publication No. 880 (1961) ............. . 10

“ The Nation’s Health Facilities: Ten Years of the 
Hill-Burton Program 1946-1956,” Public Health Ser­
vice Publication No. 616 (1958) ..................................  31

Reitzes, Negroes and Medicine, 1958 ..............................  36



I n  t h e

lutteft CEmirt of Appeals
F oe the F ourth Circuit 

No. 8908

G. C. Simkins, Jr., et al., and United States of A merica,

Appellants,

Moses H. Cone Memorial H ospital, a corporation, et al.,

Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE 
MIDDLE DISTRICT OF NORTH CAROLINA

BRIEF OF
APPELLANTS G. C. SIMKINS, JR., ET AL.

Statement of the Case

This appeal is from a final order entered December 17, 
1962, granting defendants’ Motion to Dismiss for lack of 
jurisdiction and denying motions by plaintiffs and the 
United States (which intervened) for summary judgment 
(223a). The opinion below, 211 F. Supp. 628, appears at 
195a-222a.

Plaintiffs, a group of Negro physicians, dentists and pa­
tients, brought this class action to enjoin two hospitals in 
Greensboro, North Carolina (the Moses H. Cone Memorial 
Hospital and Wesley Long Community Hospital, herein­
after called Cone Hospital and Long Hospital) and their ad-



2

ministrators from continuing to deny them and other 
Negroes admission to staff and treatment facilities on the 
basis of race. They also sought a declaration that a portion 
of the Hill-Burton Act (Hospital Survey and Construction 
Act of 1946, Act of Aug. 13,1946, 60 Stat. 1041, as amended; 
42 IT. S. C. §291 et seq.) and a regulation pursuant thereto 
(42 C. F. R. §53-112; 21 F. R. 9841) were unconstitutional. 
The provisions attacked authorize racial segregation or ex­
clusion of Negroes from hospitals receiving grants under 
the Act on a “ separate but equal” theory, as an exception 
to a statutory requirement of racial nondiscrimination.1

| 42 U. S. C. §291(e)(f) provides:
“ 291e. General regulations.—Within six months after the enactment of 

tills title, the Surgeon General, with the approval of the Federal Hospital 
Council and the Secretary of Health, Education, and Welfare, shall by 
general regulation prescribe—

* * * * *
“ ( f )  The State plan shall provide for adequate hospital facilities for 

the people residing in a State, without discrimination on account of race, 
creed, or color, and shall provide 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 
recommended 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 appli­
cant, without discrimination 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, i f  the plan makes equitable pro­
vision on the basis of need for facilities 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 persons unable to pay therefor, but an exception shall be made i f  such 
a requirement is not feasible from a financial standpoint.”

42 C. F. E. 553-112 provides:
tt* *. “ §53.112 Nondiscrimination. Before a construction application is
* recommended by a State agency for approval, the State agency shall 

obtain assurance from the applicant that the facilities to be built with 
aid under the Act will be made available without discrimination on account 
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 separate population groups, the State agency may waive the require­
ment of assurance from the construction applicant i f  (a) it finds that the



3

The complaint asserted “ federal question”  and “ civil 
rights” jurisdiction under 28 U. S. C. §§1331, 1343(3); 42 
U. S. C. §§1981, 1983.* 2 Plaintiffs claimed infringement of 
their rights under the due process clause of the Fifth 
Amendment and the due process and equal protection 
clauses of the Fourteenth Amendment to the Constitution.

The complaint was filed February 12, 1962 (4 a ); there­
after defendants moved to dismiss (19a) and filed affidavits 
and exhibits supporting the motion (20a-67a). Defendants 
urged that the court lacked jurisdiction over the subject 
matter saying that plaintiffs claimed civil rights depriva­
tions only by “private corporations and other individuals” 
(19a). Plaintiffs countered with a motion for summary 
judgment (72a) supported by affidavits and certified public 
documents supporting the complaint (76a-164a).3

The United States of America filed a Motion to Intervene 
(165a) and a Pleading in Intervention (166a-172a), May 8, 
1962. The motion, under 28 U. S. C. §2403 and Rule 24(a), 
F. R. C. P., asserted the Government’s right to intervene 
since “ the constitutionality of an Act of Congress . . .  af­
fecting the public interest . . . [was] drawn into ques­

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 considered as making 
equitable provision for separate population groups when the facilities to 
be built for the group less well provided for heretofore 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.”  A  

' * —
2 The jurisdictional amount was alleged, and plaintiff physicians and den­

tists asserted a loss of earnings and interference with the practice of their 
professions (5a, 16a).

3 The affidavits and exhibits in Appellants’ Appendix are fairly repre­
sentative of the materials. The other materials are largely cumulative or 
adequately covered by the Findings of Fact. The original record on file here 
contains all exhibits, including affidavits by all plaintiffs and papers document­
ing each of the Federal Government financial grants to defendants.



4

tion . . . ”  (165a). The pleading in intervention supported 
plaintiffs’ complaint that defendants’ conduct violated the 
Fourteenth Amendment and that the portion of the Hill- 
Burton Act authorizing the Surgeon General of the United 
States to prescribe regulations concerning separate hospi­
tal facilities for separate population groups should be de­
clared unconstitutional (171a-172a).

The court heard all pending motions June 26, 1962, 
granted the motion to intervene (188a), and denied plain­
tiffs’ motion for preliminary injunction (68a, 192a). As 
the parties agreed that only legal issues were disputed, the 
court directed that they file proposed findings and conclu­
sions based upon the documentary evidence (193a-194a). 
This was done and all briefs and responses were submitted 
by J uly 30, 1962.

The court determined that there was “ no dispute as to 
any material fact” on the basis of these submissions and 
proceeded to find the facts and determine the merits of the 
case (196a). In an opinion dated December 5, 1962 (195a), 
the Court said that racial discrimination was “ clearly estab­
lished” (205a), and that the “ sole question” was whether 
“ defendants have been shown to be so impressed with a 
public interest as to render them instrumentalities of gov­
ernment, and thus within the reach of the Fifth and Four­
teenth Amendments . . . ” (206a-207a). After examining 
defendants’ various contacts with federal and state govern­
mental agencies the Court concluded that defendants were 
not subject to constitutional restraints against racial dis­
crimination (221a). The Court refused to decide the validity 
of the “ separate but equal” provision of the Hill-Burton 
Act, ruling this unnecessary to the disposition of the case 
(220a). Judgment was entered accordingly December 17, 
1962 (223a).

Plaintiffs and the United States filed notices of appeal 
January 4 and 11, 1963, respectively (224a, 225a).



5

Questions Presented

1. Whether the appellees’ contacts with government are 
sufficient to place them under the restraints of the Fifth and 
Fourteenth Amendments against racial discrimination.

2. Whether those portions of Title 42, XL S. C., §291e(f) 
and 42 C. F. E., §53.112 which authorize racial discrimina­
tion violate the Fifth and Fourteenth Amendments.

Statement of Facts

Six plaintiffs are physicians and three are dentists; all 
are duly licensed and practice their professions in Greens­
boro. They sought and were denied staff privileges at the 
hospitals because of racial exclusionary policies (198a, 
205a). Two plaintiffs, patients of doctors Noel and Simkins, 
need and desire treatment by their doctors at defendant 
hospitals (197a). They sought relief against Long Hos­
pital’s policy of completely excluding Negro patients, and 
Cone Hospital’s policy excluding all Negroes but a selected 
few admitted on conditions not applied to whites (198a).4

The claims of racial discrimination were amply docu­
mented. Indeed, the hospitals’ applications for federal 
grants for construction projects stated that “ certain persons 
in the area will be denied admission to the proposed 
facilities as patients because of race, creed or color” (93a), 
and these applications were approved by the North Carolina 
Medical Care Commission and the Surgeon General of the

4 Cone Hospital’s policy regarding Negro patients is detailed at 80a. 
Negroes are admitted only where they require services not available at the 
all Negro hospital, and they have a physician who is on both the Negro 
hospital and the Cone staffs. Only white physicians are on both staffs. Thus, 
to transfer a patient must discharge his Negro doctor and obtain a white 
doctor (see 78a, 83a).



6

United States (99a).5 The North Carolina Medical Care 
Commission, a State agency (N. C. Gen. Stats. §§131-117 
et seq.) planned separate hospital facilities for Negroes 
and whites in Greensboro, designating Long and Cone for 
white patients and the L. Richardson Memorial Hospital 
for Negroes (120a). The project applications reflect the 
planned racial separation (99a), as well as the Surgeon 
General’s approval of North Carolina’s “ State Plan” (103a).

On the day following the order dismissing the ease, Cone 
Hospital advised plaintiffs, and publicly announced, that it 
would consider staff applications from Negroes. The policy 
with respect to Negro patients was not changed. This 
development, of course, does not appear in the record, but 
was confirmed in an exchange of correspondence between 
counsel.

Both Cone and Long are nonprofit hospitals owned and 
governed by boards of trustees.6 The Wesley Long Hospital 
is a charitable corporation governed by a selfperpetuating 
board of twelve trustees (200a). Its Certificate of Incor­
poration as amended appears at 60a.

The Cone Hospital is also a charitable North Carolina 
corporation governed by fifteen trustees. Cone Hospital’s 
Articles of Incorporation filed in 1911 (22a), were ratified 
and certain additional powers and provisions for the future 
government of the hospital were granted by the State of 
North Carolina through a Legislative Charter enacted in 
1913 (32a-44a; Private Laws of N. C. 1913, Ch. 400), and 
amended in 1961 (45a-54a; Session Laws of N. C. 1961, Ch.

5 The citations are to the government files on an application by Long 
Hospital— Project No. NC-311. Similar materials in four other projects ap­
pear in the record as Exhibits A, G, D and E supporting plaintiffs’ motion 
for summary judgment.

6 In 1960 the United States had about 5,567 nonprofit hospitals, 1,784 
governmentally owned hospitals and 1,010 proprietary hospitals, excluding 
psychiatric hospitals (175a).



7

234). The currently applicable enactment (45a-54a) pro­
vides that the 15 Cone trustees be selected for four year 
terms as follows (50a-52a):

(a) Three appointed by Governor of North Carolina;

(b) One appointed by Greensboro City Board of Com­
missioners;

(c) One appointed by Board of Commissioners of Guil­
ford County, North Carolina;

(d) One appointed by Guilford County Medical Society;7

(e) Eight seats on board appointed by Mrs. Bertha Cone 
until her death in 1947, now elected by entire board of 15 
members;

(f) One seat appointed by Board of Commissioners of 
Watauga County, North Carolina until 1961 amendment to 
Charter, now elected by entire board of 15 members.

The corporate charters of the hospitals reflect their pur­
poses to maintain general hospitals on a nonprofit basis. 
Cone’s charter provides that the “board of trustees shall 
have full power to prescribe the classes of patients, as re­
gards diseases,8 who shall be admitted or refused or dis­
missed: Provided, however, that no patient shall be re­
fused admission nor be discharged because of inability to 
pay” (49a-50a). Long’s certificate of incorporation au­
thorizes it to conduct a general hospital in Greensboro or 
Guilford County with such facilities as are necessary and 
desirable to serve “ the public and the community in which 
said hospital is located” (61a), and its income is to be used 
for various medical activities including promoting “ the

7 The court below assumed for purposes of its decision, that the Guilford 
County Medical Society was a “public agency”  (207a). Plaintiffs’ argument 
that the society’s function is “ governmental”  in Fourteenth Amendment 
terms for purposes of this ease appears in the argument, infra p. 33.

8 Emphasis supplied.



8

general health of the community” (65a). Neither hospital’s 
charter contains any provision explicitly or implicitly au­
thorizing or requiring the exclusion of Negro professionals 
or patients.

Both hospitals are exempt from ad valorem taxes as­
sessed by the City of Greensboro and Guilford County at 
tax rates of $1.27 and $0.82 per $100 valuation respectively. 
The cost of the construction projects for the two hospitals 
revealed in this record (Cone: $7,367,023.32; Long: 
$3,927,385.40) indicates that their property is extremely 
valuable and that the value of the tax exemption is a sub­
stantial sum for each hospital.9

Hill-Burton Program

Both hospitals have a variety of contacts with govern­
ment as a result of their involvement in the Hill-Burton 
hospital construction program. In summary, both hospitals 
have received large amounts of public funds, paid by the 
United States to the State of North Carolina and by North 
Carolina to the hospitals; they received the funds as a 
part of a “ State Plan” for hospital construction, which 
contemplates and authorizes them to exclude Negroes and 
was approved by the Surgeon General of the United States 
under statutory authorization; and they are subject to a 
complex pattern of governmental regulations and controls 
arising out of the Hill-Burton participation. These various 
relations justify a detailed explanation.

9 Assuming assessment at 50% of actual value, and given the combined 
city-county rate of $2.09 per $100, Cone’s exemption is worth about $76,985 
per annum and Long’s is worth about $40,681 per annum.



9

A. Federal Funds for Hospital Construction

When this action was commenced, the United States 
had appropriated $1,269,950.00 to Cone Hospital and 
$1,948,800.00 to Long Hospital. Cone had already received 
these funds which amounted to about fifteen percent of the 
total construction expenses involved in its two projects. 
Long had received most of the funds appropriated to it 
(over $1,500,000 already paid) which constitute about fifty 
percent of the total cost of its three projects (203a-204a).

The following table summarizes the various grants:10

CONE HOSPITAL
Project No. 
and Year 
Approved Purpose

Federal Funds 
Appropriated 

5J8/62
Total Cost 
of Project

Federal % 
of Cost

NC-86
(1954)

General hospital 
Construction

$ 462,000.00 $5,277,023.32

NC-330
(1960)

Diagnostic and 
treatment center ; 
general hospital 
construction

807,950.00 2,090,000.00

Total $1,269,950.00** $7,367,023.32 17.2%*

LONG HOSPITAL
NC-311
(1959)

New hospital 
construction

$1,617,150.00 $3,314,749.40

NC-353
(1961)

Laundry 66,000.00 120,000.00

NC-358
(1961)

Hospital Nurses 
Training School

265,000.00 492,636.00

Total $1,948,800.00** $3,927,385.40 49.6%*
*The Court found “ approximately”  15% for Cone and “approximately”  50% for Long. 

**AU funds to Cone had been paid as of 5/8 /62; $1,596,301.60 had been paid to Long by 
that date.

10 See, generally, Findings 11 through 17 (201a-204a). Further details 
appear in the original record, Exhibits A  through E to plaintiffs’ Motion for 
Summary Judgment. (Parts of Exhibit B appear at 93a-103a.)



1 0

B. General Facts About Hill-Burton Program

0  The Hill-Burton program requires that states wishing 
to participate must inventory existing facilities to deter­
mine hospital construction needs and develop construction 
priorities under federal standards. State agencies are 
designated to perform this function and to adopt state­
wide plans to be submitted for the approval of the Surgeon 
General of the United States. The Act establishes grants 
of federal funds for construction of new or additional 
facilities for governmentally owned hospitals and voluntary 
nonprofit hospitals.*

In the first fifteen years of the program (1947-1961), 
approximately $1.55 billion of federal funds were approved 
for such projects. Slightly more than half of the total 
went to voluntary nonprofit hospital projects. In the same 
period state and local funds (governmental and nongovern­
mental) totaled about $3.38 billion; thus, the federal share 
of Hill-Burton projects was slightly more than thirty per­
cent of their total cost. About 238,946 additional hospital 
beds were made- available by the program.44

The allotment of federal funds among the states is deter­
mined by a mathematical formula basgd on population and 
per capita income (42 U. S. C. §291^). The “ federal share” 
of costs of particular projects within a state is gove|^e^. 
by federal approved state plans (42 U, SL C. i-9H‘(>)).

' North Carolina’s current plan programs general hospital 
/  facilities based on a “ federal share” of 55% (112a).

A helpful description of the over-all program and of the various types 
of hospitals is contained in the “Affidavit and Report”  of the General Coun­
sel of the Department of HEW who was the principal technical draftsman 
of the law (173a-188a). This Report was filed in the court below by the 
United States^-— ■

12_; See “ Hill-Burton Program—Progres Report, July 1, 1947—June 30, 
%  1961,”  U. S. Department of HEW, Public Health Service Publication No. 

880, 1961.



1 1

The Surgeon General has authorized state plans to meet 
the racial nondiscrimination requirement of 42 U. S. C. 
§291e(f) by planning separate facilities for “ separate 
population groups” (42 C. F. E. §53.112). When state plans 
are submitted on this basis, the state agency and the 
Surgeon General may waive the requirement that facilities 
built under the Act “ be made available without discrimina­
tion on account of race, creed or color, to all persons 
residing in the area to be served by that facility” (42 
C. F. E. §53.112; see also, §53.111).

C. The North Carolina State Plan

In North Carolina the state agency authorized to operate 
under the Hill-Burton program is the North Carolina 
Medical Care Commission (N. C. Gen. Stats. §131-120). 
The Medical Care Commission has adopted and periodically 
revised a “ State Plan” for separate facilities for Negroes 
and whites in the Greensboro area (120a):

Existing 
Acceptable Beds

Area Name of Facility Location White
Non-
White

B-6 L. Eichardson Memorial
Hospital Greensboro 0 91

Wesley Long Hospital Greensboro 220 0

Moses H. Cone Hospital Greensboro 482 0

Subtotal 702 91

Accordingly, when the various project applications were 
made by Cone and Long, the required assurance against 
racial discrimination was waived by the Medical Care



1 2

Commission and this was approved by the Surgeon Gen­
eral.13 *

Federal funds under the program are paid by the United 
States to the Treasurer of the State of North Carolina, 
and are disbursed by him to the hospital (I lia ) .

D. Division of Federal and ,State Controls

The overall plan of the Hill-Burton program reflects a 
division of power and responsibility between federal and 
state governments for control and supervision of various 
matters affecting participating hospitals. The following 
description of the statutory and regulatory framework ap­
plicable to defendant hospitals, divides the provisions into 
seven categories: (1) controls over construction contracts 
and the construction period; (2) controls over details of 
hospital construction and equipment; (3) controls over 
future operation 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; and (7) regulation of racial 
discrimination. The following is designed to enumerate 
and describe the statutes and regulations which are too 
lengthy conveniently to be set out in full.

1. Controls over construction contracts and the con­
struction period. (Federally imposed rules.)

13 On Projects NC-86 and NC-330, the Cone Hospital initially gave an 
assurance of nondiscrimination, but this was withdrawn with the approval of 
the Medical Care Commission and the Surgeon General, on the ground that
“ the non-discrimination agreement was erroneously executed as a result of 
clerical inadvertence”  for which the Commission was responsible (104a-106a, 
201a-202a).



13

The Surgeon General is authorized by 42 U. S. C. §291h 
(a) to enforce certain requirements. Applicable regulations 
are in 42 C. F. R. §§53.127(c) ( l) - (9 ) ,14 and in §53.128.15

2. Control over details of hospital construction and 
equipment. (Detailed federal minimum standards, and al­
lowance for States to impose higher standards.)

The Act authorizes the Surgeon General to prescribe 
“ General standards of construction of hospitals and equip­
ment for hospitals of different classes and different types 
of location” (42 U. S. C., §291e(e)). The Surgeon General 
has adopted such regulations— Subpart M' of the Public 
Health Service Regulations, “ General Standards of Con­
struction and Equipment” (42 C. F. R. §§53.131 to 53.155). 
He has provided that plans and specifications for each 
project must be in accord with them (42 C. F. R. §§53.101, 
53.127(d) (2 )), and that state agencies must adopt standards 
“not less than” the federal standards (42 C. F. R. §53.125). 
North Carolina’s State Plan adopts the federal standards 
as its minimum standards (llO a-llla ). North Carolina’s 
additional standards for hospital physical facilities are 
section VI of the licensing regulations (145a-156a), as well 
as the Building Code and local municipal codes (145a).

14 To briefly summarize the requirements, hospitals must give assurances 
that: (1) “ fixed price”  construction contracts will be used, with competitive 
bidding and awards to the lowest responsible bidder; (2) construction laborers 
will be paid federally prescribed minimum wages; (3) contracts will provide 
against “kickbacks” ; (4) bidding advertisements will await the Surgeon 
General’s approval of final drawings and specifications; (5) Surgeon General 
must approve of any contracts in excess of approved costs; (6) contractors 
agree to furnish performance bonds and insurance; (7) contract changes 
increasing costs must be approved by Surgeon General; (8) Surgeon General 
and State agency will have access to inspect work during progress; and (9) 
competent architects and engineers supervise construction work.

15 This provision governs the details of installment payments and pro­
vides for State agency inspection of work and certification that federal pay­
ments are due.



14

Special requirements relate to submission of plans and 
locations for projects assisted with federal and state funds 
under the licensing rules (145a-146a).

The federal construction and equipment standards are 
designed “ to insure properly planned and well constructed 
hospital . . . which can be maintained and efficiently op­
erated to furnish adequate service” (42 C. F. R. §53.131).16

3. Control of future status and operations of hospitals. 
(Federal requirements.)

The Act provides that if within 20 years after completion 
of a project a hospital is sold to anyone who is not qualified 
to file an application under the Act or is not approved by 
the State agency, or if the hospital ceases to be “non­
profit,” the United States can recover a proportionate share 
of its grant to the hospital (42 U. S. C., §291h(e)). The 
State agency is required to give notice of any such changes 
of status (42 C. F. R. §53.130).

In addition, the State agency is required to certify that 
an application “ contains reasonable assurance as to title, 
payment of prevailing rates of wages, and financial support 
for the non-federal share of the cost of construction and the

16 The federal standards of Subpart M are so detailed that they ean he 
described here only in very general terms as regulating hospital sites, the 
departments required in hospitals and the type of facilities to be available 
in each department, and other requirements for all hospitals. There is de­
tailed description of the types, sizes, locations, contents, arrangements, equip­
ment and other characteristics of almost every hospital area. To illustrate the 
detail, in all hospitals there are required door widths, corridor widths, stair 
widths, elevator standards, and rules pertaining to laundry chutes, nurses call 
systems, fire safety, ray protection, radioisotopes, x-ray equipment, ceiling 
heights, insulation, parking space, and floor, wall, and ceiling finishes (42 
C. F. R. 5553.150(a), 53.151). See the detailed regulation of each general 
hospital department, 42 C. F. R. 553.134.

Hospitals must also submit complete equipment lists with their project ap­
plications for approval by the state and federal agencies. Abstracts of these 
lists are in the project applications in the record (Exhibits A, B, C, D, E, to 
plaintiffs’ Motion for Summary Judgment).



15

entire cost of maintenance and operation when completed” 
(42 C. F. R. §53,127(d) (1)). The regulation requires that 
hospitals submit proposed operating budgets and other 
financial data relating to the two year period following 
completion of a project “ to assure the availability of funds 
for maintenance and operation” (Id.).

4. Control over details of hospital maintenance and ope­
ration. (State control of operations required by federal 
law.)

The Hill-Burton Act has a provision entitled “ State 
control of operations” which denies federal officers “ the 
right to exercise any supervision or control over the ad­
ministration, personnel, maintenance, or operation” of 
facilities receiving grants, “ except as otherwise provided” 
(42 U. S. C. §291m).17 But, the Act says that State Plans 
must “provide minimum standards (to be fixed in the dis­
cretion of the State) for the maintenance and operation of 
hospitals which receive Federal aid . . . ” (42 U. S. C. 
§291f(a)(7)). No federal grants may be allotted to any 
state which does not enact “ legislation providing that com­
pliance with minimum standards of maintenance and opera­
tion shall be required . . . ” (42 U. S. C. §291f(d)). Federal 
regulations require the State agency to certify that each 
project application “ contains an assurance that the ap­
plicant will conform to the State standards for operation 
and maintenance . . . ” (42 C. F. R. §53.127(d) (5)).

Accordingly after the passage of the Hill-Burton Act 
North Carolina enacted a “Hospital Licensing Act” in 1947, 
(N. C. Gen. Stats. §131-126.1 et seq.) authorizing the adop­
tion of detailed requirements governing hospital main-

17 Another slightly different provision, 42 TJ. S. C. §292g, relates only to 
research facilities aided under another law (“ The Health Research Facilities 
Act of 1956” ; 42 U. S. C, §292 et seq.) and does not apply to hospitals under 
Hill-Burton.



16

tenance and operation. The standards adopted are in the 
“ Rules and Regulations for Hospital Licensure” (122a- 
157a). The Hill-Burton Act set an initial deadline of July 
1, 1948, for states wishing to participate to enact such 
requirements (42 TJ. S. C. §291f(d)), and North Carolina 
enacted its Licensing Act in 1947 (Session Laws of N. C., 
1947, c. 933; N. C. Gen. Stats. §131-126.1 et seq.). The 
North Carolina rules (122a-157a) provide in great detail 
for the management and operation of hospitals, covering a 
variety of subjects, including as major categories: Ad­
ministration, Clinical Services, Auxiliary Services, Nursing 
Service, and Food Service (122a-145a).18

5. Size and distribution of facilities. (Federal and State 
control.)

The Act provides for federal decision as to the number 
of general hospital beds and other facilities required to 
provide “ adequate service” in a State, for general methods 
of distribution in areas of a State, and for the general 
manner in which a State agency shall determine priorities 
of projects based on relative need (42 TJ. S. C. §291e(a) (b)- 
(c )(d )) . State allowances in terms of number of beds per 
thousand population have been fixed by regulation (42 
C. F. R. §53.11), as have the methods to be used by State 
agencies in distributing hospitals in a State (42 C. F. R.

18 For example, the rules provide among other things for medical staff 
organization (123a); standards for facilities, organization and procedures in 
surgical operating rooms (125a-126a) ; equipment organization and pro­
cedures for the obstetric department (126a-131a); for separation of pedi­
atric facilities from those for adults and the newborn nursing service (132a) ; 
the circumstances for administration of anesthesia (132a) ; for clinical patho­
logical laboratories and blood tests (133a) ; that hospitals have adequate 
diagnostic X-ray and fluoroscopic examination facilities (134a); designated 
treatment facilities for emergency or outpatient service (134a); for isolation 
rooms (135a); regulation of hospital pharmacies (135a-136a) and records 
(136a-138a); organization of the nursing staff is described, including mini­
mum numbers (138-139a); and detailed provision for hospital food service 
is made (139a-145a).



17

§§53.12, 53.13). The “ separate but equal”  provisions stipu­
lates that facilities for separate population groups not be 
programmed for construction “beyond the level of adequacy 
for such group” (42 C. F. R. §53.112). Federal standards 
governing the state agencies’ determination of the priority 
of projects are set out in 42 C. F. R. §§53.71 to 53.80. See 
also 42 C. F. R. §53.127(b), and 42 C. F. R. §53.127(d) (6).

6. Rights of project applicants and State Agency. (Fed­
eral requirements.)

A  project applicant is granted the right to “ a fair hear­
ing before the State agency”  if “dissatisfied with any action 
of the State agency regarding its application” (42 C. F. R. 
§53.124; see 42 U. S. C. §291f(a)(8)).

The Act provides that before the Surgeon General may 
withhold certification of any project, the State agency shall 
be accorded a hearing by the Surgeon General (42 U. S. C. 
§291j). A State agency dissatisfied with action of the Sur­
geon General on a project application may obtain review 
of his decision in the United States Court of Appeals for 
the Circuit, and may seek further review in the Supreme 
Court of the United States (42 U. S. C. §291j).

7. Regulation of racial discrimination. (General federal 
requirement; States allowed to plan racial separation as 
exception.)

The Hill-Burton Act prohibits racial discrimination in 
general terms, providing that State Plans “ shall provide 
for adequate hospital facilities for the people residing in 
a State without discrimination on account of race, creed or 
color” (42 U. S. C. §291e(f); see note 1, supra). Both 
state plans (42 U. S. C. §291f(a)(4) (D)) and project appli­
cations (42 U. S. C. §291h(a) are subject to the non­



18

discrimination requirement. The parallel regulations are 
42 C. F. E. §§53.111, 53.127(d)(4).

However, the Act authorizes the Surgeon General to 
make regulations permitting State Plans to provide an 
exception to the racial nondiscrimination rule by establish­
ing separate hospital facilities for separate population 
groups if there is “ equitable provision” for each group 
(42 U. S. C. §291e(f)). The Surgeon General has promul­
gated such a regulation (42 C. F. R. §53.112), which stipu­
lates that the State agency may waive assurances of non­
discrimination from a hospital if the State Plan otherwise 
makes equitable provision for each group, and this finding 
is approved by the Surgeon General. It also includes the 
Surgeon General’s standard for determining if “ equitable 
provision” is made for such groups (Id.).

The Training of State Nursing School Students at Cone

Cone Hospital’s charter includes as one corporate purpose 
“ the training of nurses, and the giving and receiving of 
instructions . . . ” (47a-48a). Cone Hospital participates in 
a nurses training program with two tax supported state 
schools, The Woman’s College of the University of North 
Carolina and the Agricultural and Technical College of 
North Carolina (an all Negro school). Student nurses at 
the schools receive part of their training at Cone Hospital 
(55a-57a).

Students carry out assignments at the hospital under the 
supervision of their teachers, including assisting doctors 
and nurses, treating patients, keeping hospital records, etc. 
Woman’s College students work periods as full-time ap­
prentice nurses paid at 3/4ths of beginning nurses pay 
(57a). Students’ programs are arranged by their teachers 
but cleared with the hospital (56a).



19

The hospital subsidizes the meals and laundry of the 
A&T College students. It provides conference and instruc­
tional rooms without charge (56a).

Cone authorized a grant of $100,000 to underwrite the 
entire cost of the Woman’s College clinical nursing program 
from 1957 to 1960, and actually paid $86,835.13 under this 
grant. For the 1960-61 program, the hospital paid $20,000. 
For the period 1961-1963 Cone paid $25,000; it had an equal 
amount still available for the period. Cone also gave $10,500 
for student scholarship loans for the Woman’s College nurs­
ing program (57a-58a). The A&T program has cost the 
hospital $3,337.59 for meal and laundry subsidies since 
1954 (56a).

The program is beneficial to both colleges, providing 
clinical experience deemed essential for student nurses. 
According to the Cone Hospital Director, Cone “ . . .  is 
interested in and has supported both programs as a public 
service and in order to foster and to reap the intangible 
benefits to be derived from the creation of sources of well- 
trained nurses . . .  ” , but has “ no priority to employ any 
nurses graduating in either program . . . ” (59a).

Because of the scarcity of nurses in North Carolina the 
State Commission gives “high priority on its funds” to 
expanding nurses training facilities for hospitals (116a- 
119a). Throughout the nation hospitals perform similar 
educational functions, and “ teaching hospitals are generally 
regarded as providing, by and large, the highest quality of 
care. . . . Although student services are availed of by the 
hospitals in varying degree, these educational activities 
incur substantial net deficits which are generally recouped 
by charging paying patients somewhat more than the im­
mediate cost of services to them.” (Affidavit of Mr. Allison 
W illeox; 177a).



20

A R G U M E N T

U

The Appellees5 Contacts With Government Are Suffi­
cient to Place Them Under the Restraints of the Fifth 
and Fourteenth Amendments Against Racial Discrimina­
tion.

Decisions of the United States Supreme Court leave 
little doubt that governmental action as broad, significant, 
and effective as that found in this case results in the ap­
plication of the restraints against racial discrimination of 
the due process clause of the Fifth Amendment19 and the 
due process and equal protection clauses of the Fourteenth 
Amendment.20 Racial discrimination is constitutional only 
when “unsupported by State authority in the shape of laws, 
customs, or judicial, or executive proceedings” or when 
“ not sanctioned in some way by the State.” 19 20 21 Discrimina­
tion is forbidden when the State participates “ through any 
arrangement, management, funds or property” 22 or when 
the State places its “power, property or prestige” behind 
the discrimination.23

z In this case racial segregation, which repeatedly has been 
held to constitute discrimination per se since Brown v. 
Board of Education, 347 U. S. 483,24 is explicitly authorized

19 Bolling v. Sharpe, 347 U. S. 497; Eirabayashi V. United States, 320 
IT. S. 81, 100.

20 Brown v. Board of Education, 347 U. S. 483; Cooper v. Aaron, 358 
U. S. 1, 19.

21 Civil Bights Cases, 109 U. S. 3, 17.

22 Cooper v. Aaron, 358 IT. S. 1, 4, 19.

23 Burton v. Wilmington Parking Authority, 365 U. S. 715, 725.

24 See



2 1

by a federal statute25 26 27 antedating Brown. The discrimina- 
been approved by agencies and officials
and the United States .413a,

‘-126a). Large amounts of public funds have been expended 
by government to support the hospitals practicing dis­
crimination. The hospitals have submitted to a compre­
hensive pattern of sfgte and federal controls in return for 
these funds.** has granted these hospitals
the power to operate and the privilege of receiving federal 
aid. The hospitals are aided by the State because they 
fulfill a public function which the State would have to per­
form if the hospitals did not.1*7 Xn^^addltion’j—as,-r'tO'-’Uone
Hosprtahr-the-'Stat-e'4ias.-.passedUogisla-tion''diret;tiHg“pTtblic 
official? to appoint members of its governing board and has 
chosen to- train students, enrolled at public colleges at 
Gottk*8"'"

Financial Contributions.

The Cone and Long Hospitals are the beneficiaries of 
approximately 1.2 and 1.9 million dollars, respectively, paid 
to them through the Treasurer of the State of North Caro­
lina, from the United States of America under the Hill- 
Burton program. Although the District Court found the 
amount “ substantial” (213a), it deemed “ control rather than 
contribution . . . the decisive factor” (217a), and found 
receipt of these funds from government constitutionally 
insignificant.

Control, however, has never been more than one factor 
which the courts have employed to evaluate the “ totality” 29

25 42 U. S. 0., §291e(f) ; 42 C. F. B., 553-112.

26 See supra, pp. 12-18 (97a, 103a).

27 .See infra, pp. 28-31.

28 See supra, pp. 7, 18-19.

29 Burton v. Wilmington Parking Authority, 365 XT. S. 715, 722-725.



2 2

of governmental relationships with persons and institutions 
for the purposes of the Fifth and Fourteenth Amendments. 
Indeed, many cases dealing with the issue have not found 
control by government necessary in order to result in gov­
ernmental responsibility.30 If any generalization suffices, it 
might be said that where governmental action, whatever 
its form, significantly affects conduct in the “ private” 
sphere, the restraints of the Constitution apply to forbid 
racial discrimination. Burton v. Wilmington Parking Au­
thority, 365 U. S. 715; Cooper v. Aaron, 358 U. S. 1, 4.

The present case does include massive governmental con­
trol over the defendant hospitals, as is urged below. How­
ever, appellants submit that the effect of government as­
sistance upon an otherwise “private” entity is highly rele­
vant in deciding whether the restraints of the Constitution 
should apply.31 The conclusion of the District Court that 
the effect of three million dollars of public funds on the 
hospitals was insignificant for purposes of the Fifth and

30 There was no control o f the “ private”  activity in Burton v. Wilmington 
ParMng Authority, 365 TJ. S. 715, 723, 724, or in many of the public accom­
modation eases involving use of governmental property which preceded it. 
See 365 TJ. S. at 925, n. 2. Indeed, many of these cases expressly assumed 
the absence of “ control.” See, e.g., Derrington v. Plummer, 240 F. 2d 922 
(5th Cir. 1956), cert. den. sub nom. Casey v. Plummer, 353 TJ. S. 924. Where 
property has a governmental character, Marsh v. Alabama, 326 TJ. S. 501, or 
where it is used for the public benefit, Boman v. Birmingham Transit Co., 280 
F. 2d 531, 535, government is responsible without inquiry as to control. A 
state is responsible even though the acts of its agents are not controlled or 
even permitted by state law. Monroe v. Pape, 365 TJ. S. 167; United States 
v. Baines, 362 TJ. S. 17, 25. The same is true when government delegates 
(Nixon v. Condon, 287 TJ. S. 73), authorizes (Smith v. Allwright, 321 U. S. 
649) or acquiesces in ( Terry v. Adams, 345 TJ. S. 461), the exereise of essen­
tially governmental functions by private bodies. As said in Burton, supra, at p. 
722, the Supreme Court has never attempted “ to fashion and apply a precise 
formula for recognition of state responsibility under the Equal Protection 
Clause.”

31 This is apart from the possibility that the amount of the contribution 
can result in control. Cf. Kerr v. Enoch Pratt Free Library, 170 F. 2d 212 
(4th Cir. 1945).



23

Fourteenth is, in appellants’ view, erroneous. Prior to 
receipt of Hill-Burton assistance, Long Hospital operated 
a 78 bed hospital considered “ obsolete” by North Carolina 
(160a) and “ unsuitable” by the United States (93a). Long 
has now constructed and operates a 220 bed modern gen­
eral hospital, a nurses training school and a $120,000.00 
laundry constructed under Hill-Burton with fifty percent 
federal funds. Cone Hospital has completed construction of 
a 300 bed hospital, a 182. bed hospital addition, and a diag­
nostic and treatment center with the assistance of the 
State of North Carolina and the United States under the 
Hill-Burton Program. g

|5 i  tJ ‘ V . ^  uTheses federal grants in excess of %, million dollars to '  
Aaeh hospital, distributed in accordance with state and 
federal priorities and plans, » e  obviously substantial. ‘She- 1 r y  
tax exempt status of the hospitals’ property increases the 
financial subsidy, cf. Burton v. Wilmington Parking Au­
thority, 365 U. S. 715, 724; cf. also Allen v. County School 
Board of Prince Edward County, 198 F. Supp. 497, 503 
(E. D. Va. 1961), appeal pending. Thus, there is govern­
mental participation through an “ arrangement,” “ funds,” 
and “ property,” calling for application of constitutional 
principles against discrimination. Cooper v. Aaron, 358 
U. S. 1, 4, 19. It would be difficult to know what the Cooper 
v. Aaron principle can i|Lean, if it does not embrace con­
tributions of funds in the million dollar range to build tax 
exempt property.

State and Federal Controls to Implement Public Policy.

In addition to the contribution of public funds, these 
hospitals are subject to a variety of governmental controls 
by virtue of their participation in the federal-state hospital 
construction program. The character of the physical facili­
ties and the equipment of the hospitals is closely controlled



24

by both federal and state governments.32 The effect of this 
regulation of construction and equipment on the future 
operations of the hospital is manifest. Requiring that a 
hospital build and arrange a particular department in a 
certain way and obtain certain equipment obviously deter­
mines the character of the service the hospital will render 
in the future. Beyond this, the federal statute requires 
that the states must directly regulate the details of hospi­
tal maintenance and operation. In order to participate in 
the Hill-Burton Program North Carolina has undertaken 
an elaborate regulatory and licensing scheme.33 This state 
control over the defendant hospitals’ operations is exact and 
detailed. In addition, the Federal Government exercises 
control over the general status of hospitals for a twenty 
year period.34

-f^Tlio funds paid to these hospitals under the Hill-Burton 
Act are to be used solely for carrying out the project as 
approved by the State and Surgeon General.35 If the hos­
pitals sell or transfer ownership within twenty years to 
anyone not qualified under the Act to apply for funds or 
not approved by the state agency, or if the hospitals cease 
to be “ nonprofit” the United States is authorized to recover 
the present value of the federal share of the approved 
project.36 These provisions operate to insure against mis­
use of federal funds in the manner of a reverter retained 
by government to insure particular use of property. The 
Fifth Circuit has found retention of such an interest in 
property sold by a municipality to private persons suffi­
cient to invoke constitutional restraints. In Hampton v.

32 See Statement of Facts, supra, pp. 13-14.

33 See Statement of Facts, supra, pp. 15-16.

34 See Statement of Facts, supra, at pp. 14-15.

35 42 U. S. C., §2911i (d).

36 42 U. S. C., §291h(e).



2 5

City of Jacksonville, 304 F. 2d 320 (5th Cir. 1962), cert. den. 
sub nom. Ghioto v. Hampton, 9 L. ed. 2d 170, the City sold 
two municipal golf courses with the deeds providing that 
the City would regain title if the properties were used for 
other purposes. This was the only connection retained by 
the City. Chief Judge Tuttle found that “ conceptually it 
is extremely difficult if not impossible to find any rational 
basis of distinguishing the power or degree of control, so 
far as relates to the State’s involvement between a long­
term lease for a particular purpose with the right of can­
cellation . . .  if that purpose is not carried out” (as in 
Burton v. Wilmington Parking Authority, 365 U. S. 715), 
“ and an absolute conveyance of property subject . . .  to the 
right of reversion if property does not continue to be used 
for the purpose prescribed” (304 F. 2d at 322). On this 
reasoning the Fifth Circuit declined to follow this Court’s 
decision in Eaton v. Board of Managers of the James 
Walker Memorial Hospital, 261 F. 2d 521 (4th Cir. 1958), 
cert. den. 359 IT. S. 984,87 saying that as Eaton was decided 
prior to Burton, its holding probably would not be adhered 
to in this Court^J

Appellants submit that the interest retained by Govern­
ment in these hospitals pursuant to 42 IT. S. C., §291h(e), 
for a 20 year period is a substantial factor supporting the 37

37 Eaton does not control this case. In Eaton all governmental aid in the 
construction of facilities ceased in 1901; neither the district court nor this 
Court’s opinions so much as mentions assistance received from the federal 
government; the hospital in Eaton was not part of a State Plan for hospital 
construction and expansion nor did it have to conform to the requirements 
and standards of the Hill-Burton Act; those resources it did receive from 
government, for the treatment of indigent patients, amounted to 4.5 percent 
of the hospital’s total income; no governmental appointees sat on the Board 
of the hospital in Eaton nor did it participate in any arrangement with state 
educational institutions; while the hospital was licensed, the North Carolina 
Licensing process and its relation to the Hill-Burton program was not argued 
before this Court or discussed in its opinion; finally, segregation was not pur­
suant to authorization of federal law.



2 6

conclusions that these hospitals are subject to the Four­
teenth Amendment. Hampton v. City of Jacksonville, supra.

The court below distinguished Burton v. Wilmington 
Parking Authority, 365 U. S. 715, which held discrimination 
forbidden at a restaurant on property leased by Govern­
ment without retaining any control of the restaurant opera­
tion, on the ground that the instant case involved no 
leasing of government property. But there is nothing 
talismanic about a leasing arrangement as such, for the 
Fourteenth Amendment is concerned with the effect of 
governmental action rather than with its form. In Burton 
the Court did not rely solely upon the fact that the dis­
crimination occurred on government property leased to a 
private persons but based its decision upon the effect of 
the totality of governmental participation. The Burton 
opinion cited decisions of this and other appellate courts 
based upon the leasing of governmental property38 but did 
not adopt this as its sole ground of decision. Nor does the 
fact that property is privately owned render it immune 
from the restrictions of the Fourteenth Amendment. Cf. 
Marsh v. Alabama, 326 U. S. 501; Shelley v. Kraemer, 334 
U. S. 1; Baldwin v. Morgan, 287 F. 2d 750, 754, 755 (5th 
Cir. 1961); and see note 42, infra.

Because of the control exercised by government over 
these hospitals, the principle enunciated in Public Utilities 
Comm’n v. Poliak, 343 U. S. 451, 462, applies. There the 
Supreme Court found sufficient governmental responsibility 
to require decision of a Fifth Amendment due process 
claim where the principal governmental involvement was 
a decision by a regulatory body to do nothing about private 
activity (radio broadcasts on streetcars) it could have 
prohibited. The hospitals in this case are regulated by

38 365 U. S. at 725, n. 2.



27

government in as significant a degree as the transit com­
pany was in Poliak. And this case has elements that the 
Poliak case did not, e.g., financial support and statutory 
authorization of racial segregation among others.

The hospitals in this case are also like the certified 
labor unions required to represent all persons within a 
particular bargaining unit without discrimination. As labor 
organizations receive substantial power and benefits by 
having been licensed and regulated under federal law, the 
Supreme Court has found that serious Fifth Amendment 
due process questions would arise if the federal statutes 
involved were not construed to require nondiscrimination.39 
The hospitals here are licensed and controlled by govern­
ment and have received substantial benefits under a com­
prehensive federal scheme for regulation of an area of 
national importance to much the same extent as labor 
organizations.

?  In rejecting . .the significance of the licensing process 
whereby North' î rpolina grants these hospitals the power 
to operate after insuring compliance with comprehensive 
standards of operation, the District Court found the licenses 
granted these hospitals no different from those granted 
facilities such as restaurants. But licenses are distinguished 
on the basis of the power they grant and the purpose for 
which they are granted. See Bomcm v. Birmingham Transit

39 Steele v. Louisville N. B.B. Co., 323 U. S. 192 (Railway Labor Act) ; 
Syres v. Oil Workers Int’l Union, 223 F. 2d 739 (5th Cir. 1955), rev’d per 
curiam, 350 U. S. 892 (Labor Management Relations A c t ) ; Bailway Em­
ployees Dept. v. Hanson, 351 U. S. 225, 232, n. 4. In Railroad Trainmen v. 
Howard, 343 U. S. 768, Negroes in a separate bargaining unit were entitled 
to enjoin a white union from striking to eliminate the Negroes’ jobs. See, 
Betts v. Easley, 161 Ean. 459, 169 P. 2d 831 (holding certified labor union 
with responsibilities under federal law and receiving benefits therefrom sub­
ject to Constitution). Cf. Ming v. Horgan, 3 Race Rel. L. Rev. 693, 699 
(Cal. Super. Ct. 1958) (persons accepting federal mortgage guarantee bound 
by Fifth Amendment).



2 8

Co., 280 F. 2d 531, 535 (5th Cir. 1960), holding that because 
a bus company was performing a service for the public 
necessity and convenience, by having a franchise to operate 
on the public streets of Birmingham, “ the acts of the bus 
company in requiring racially segregated seating were 
‘state acts.’ ” 40 These hospitals perform services for the 
public at least as significant as those of a local bus com- 
panyJfAs stated by the General Counsel of the Department 
of Health, Education, and Welfare, “ [T]he Hill-Burton 
Act recognizes the interchangeability of public and non­
profit community hospitals and aids the two on the same 
terms, leaving the choice in each individual case to the 
community and the state. The State Plan must be ad­
dressed to the provision of adequate facilities for all of 
the people of the State, but effectuation of the plan may 
be through any combination of public and nonprofit in­
stitutions” (179a-180a).

It would be totally misleading to consider these hospitals 
on the same footing as an ordinary licensed private busi­
ness. In order to receive Hill-Burton funds the hospitals 
must be nonprofit “ community facilities” defined as fur­
nishing service to the general public with admission limited 
only on the basis of age, medical, indigency, or mental 
disability.41 Cone Hospital is chartered on the condition 
that “no patient shall be refused admission nor be dis­
charged because of inability to pay” (50a), and the Board’s 
power to decide who shall be admitted is conferred in terms 
of “ classes of patients, as regards diseases” (49a). Long 
Hospital was formed “ to serve the public and the com­
munity” (61a). Not only do nonprofit hospitals like Cone

40 See also, Baldwin v. Morgan, 287 F. 2d 750, 755 (5th Cir. 1961) ; Betts 
if. Easley, 161 Kan. 459, 169 P. 2d 831.

41 42 C. F. R., §53.1 (v).



29

and Long perform “ the same community functions” as 
public hospitals, “ but they do so in the same way and with 
the same relationships to their patients and to the prac­
ticing profession. They enjoy substantially the same free­
dom from taxation and offer the same or similar support 
from public funds. Such differences as there may be in 
the make-up of the governing boards or in the financial 
structure are all but invisible to patients or to physicians”  
(179a).

Over 85% of the “ acceptable”  hospital beds (702 of 793 
beds) in the Greensboro area are at Long and Cone Hos­
pitals ; the remaining 91 beds are at the all-Negro L. 
Richardson Memorial Hospital (120a).

Under Hill-Burton, the number and distribution of hos­
pital beds in an area is decided by State and Federal 
Governments. Once funds are granted bringing an area 
up to the standard of hospital beds considered adequate 
for the population, no further beds can be programmed. 
(See Statement of Facts, supra, pp. 16-17.) If North Caro­
lina had chosen to build publicly owned hospitals in Greens­
boro, Cone and Long could have been denied all federal 
aid. On the other hand, the aid granted them now prohibits 
the construction of duplicating city, county, or other non­
profit facilities with federal aid. The participating hos­
pitals have become the chosen and exclusive instruments 
to carry out governmental objectives.

In such a community these hospitals are performing an 
essential governmental function for the State. If the State 
did not provide for this service indirectly by control and 
support of defendants, it would necessarily have to provide 
the service directly through operation of a public hospital. 
Though privately owned, they are essential community 
facilities, operated for the benefit of the general public, in 
relation to which the constitutional principle of Marsh v.



30

Alabama, 326 U. S. 501, 50642 (that facilities “ built and 
operated primarily to benefit the public” are circumscribed 
by the constitutional rights of the public) must be applied.

Nonprofit community hospitals such as Long and Cone 
are fundamentally different from “ private” profit making 
hospitals which are “ essentially business undertakings” and 
ineligible for Hill-Burton assistance (178a). As part of a 
State Plan the purpose of which is to afford “ necessary 
physical facilities for furnishing adequate hospital, clinic 
and similar services to all [the] people,” 43 Long and Cone 
are doing something state and federal governments deem 
“useful for the public necessity or convenience” , Boman 
v. Birmingham Transit Co., 280 P. 2d 531, 535 (5th Cir.
1960) ; Baldwin v. Morgan, 287 F. 2d 750, 755 (5th Cir.
1961) . It is because of this public responsibility that they 
have received governmental support,44 and they are in-

42 “ Ownership does not always mean absolute dominion. The more an 
owner, for his advantage, opens up his property for use by the public in 
general, the more do his rights become circumscribed by the statutory and 
constitutional rights of those who use it. . . . ”  Marsh has been specifically 
applied to the equal protection clause. Shelley v. Kraemer, 334 U. S. 1, 22. 
Cf. Republic Aviation Corp. v. N.L.R.B., 324 TX. S. 793, 798, 802, n. 8; 
N.L.R.B. v. Babcock <$■ Wilcox Co., 351 XI. S. 105, 112; Freeman v. Retail 
Clerks Local, 1207, 45 Lab. Eel. Eef. Man. 2334 (1959), all eases applying 
the Marsh principle to private property.

43 42 TJ. S. C., §291.

44 The Department of Health, Education, and Welfare has stated the 
philosophy of Hill-Burton to be “ assistance of nonpublic groups, for public 
ends” :

“ The underlying social philosophy of the program under Title VI of 
the Public Health Service Act is that the health of the Nation is a 
national resource and that Federal leadership and financial encourage­
ment are warranted and necessary in establishing a systematic network 
of facilities for hospital and medical facilities. For this purpose, com­
prehensive planning by the States themselves is regarded as essential, 
based on careful inventories of existing facilities, while local initiative 
and local financing must launch specific projects in accordance with the 
State Plan, i f  Federal assistance is to be provided.

“ No distinction is made between public and private sponsors of projects 
aided, provided personal gain or profit from the operation of the hospital



3 1

struments of government policy within the Fifth and Four­
teenth Amendments. Bomrni v. Birmingham Transit Co., 
supra; Baldwins. Morgan', supra.

Affirmative Governmental Sanction of Discrimination.

In addition to the interrelations of the hospitals with 
government discussed above, an additional factor compels 
the conclusion that the discrimination practiced against ap­
pellants is within the purview of the Constitution. This 
discrimination was affirmatively sanctioned by a federal 
statute and federal regulations, and by a State Plan for 
hospital construction on a segregated basis. The conduct 
of private persons is insulated from constitutional require­
ments only insofar as it is “unsupported by State author­
ity in the shape of laws, customs, or judicial or executive 
proceedings” or is “not sanctioned in some way by the 
State.” Civil Rights Cases, 109 U. S. 3, 17. Here the af­
firmative governmental sanction of racial segregation (the 
State Plan for segregation in the Greensboro area) en­
ables the hospitals to avoid giving an assurance not to 
discriminate as a condition of receiving the funds. This is 
in accord with the Hill-Burton Act (42 U. S. C. §291e(f)) 
which allows the States to authorize or require segregation 
in either government hospitals or nonprofit hospitals. The 
segregation is supported by federal statute and regulations 
and by State executive decisions, e.g., the State Plan.

The principle enunciated in Mr. Justice Stewart’s con­
curring opinion in Burton v. Wilmington Parking Author-

is not involved. This is believed to be the first major example of Federal 
assistance to nonpublic groups, for public ends. Such action was found 
essential to a comprehensive program, because of the dual nature of the 
entire existing hospital system, which had evolved to a large degree under 
private auspices.” The Nation’s Health Facilities: Ten Years of the Hill- 
Burton Program 1946-1956, p. 15, Public Health Service Publication No. 
616 (1958).



32

ity, 365 U. S. 715, 726-727, justifies the grant of relief to 
appellants here. In Burton, Justice Stewart read the Dela­
ware law as “ authorizing discriminatory classification based 
exclusively on color” (365 U. S. at 727) and found this 
sufficient to invalidate the law and reverse a decision deny­
ing an injunction against a restaurateur who excluded 
Negroes. Three dissenters (Justices Frankfurter, Harlan 
and Whittaker) agreed that a statute authorizing a non­
governmental entity to discriminate would “ indubitably” 
(365 U. S. at 727) and “certainly” (Id. at 730) offend the 
Fourteenth Amendment and open up an “ easy route to 
decision” (Id. at 728). But they found the meaning of the 
Delaware law uncertain. The majority opinion in Burton 
did not discuss the issue. However, McCabe v. Atchison 
Topeka and S. F. R. Co., 235 U. S. 151, 162 (1914), is based 
upon the same theory, holding that a Negro “might properly 
complain that his constitutional privilege has been invaded” 
if common carriers “ acting in the matter under the authority 
of a state law” denied Negroes sleeping car, dining car and 
chair car facilities. The only defendants in the case were 
a group of rail carriers who were authorized to discriminate 
by an Oklahoma law. Belief was denied only on the ground 
that complainants had not actually sought to use the rail­
roads or to otherwise show that equitable intervention was 
necessary to protect the rights declared in the opinion. 
Here, as in McCabe, defendants are relieved of obedience 
to a general requirement of non-discrimination (emanating 
in McCabe from the common law duty of carriers, and 
here from the underlying non-discrimination rule of 42 
U. S. C. §291e(f)) by action of a State. In McCabe the 
State action was statutory; here it is executive in the shape 
of the State Plan and the Medical Care Commission’s action 
on defendants’ project applications.

\ l  When individuals effect racial discriminations at the 
behest of a State they become subject to the limitations



3 3

applicable to the States themselves. Flemming v. South 
Carolina Electric & Gas Co., 224 F. 2d 752, 753 (4th Cir. 
1955), appeal dismissed, 351 U. S. 901. A railroad terminal 
company and a local bus company were enjoined from 
discriminating in Baldwin v. Morgan, 287 F. 2d 750, 755 
(5th Cir. 1961) and Boman v. Birmingham Transit Co., 
280 F. 2d 531, 535 (5th Cir. 1960), where their discrimina­
tory actions were taken under authority conferred by State 
and local laws.45

Additional Factors Applicable to Cone Hospital.

Two additional factors applicable to Cone Hospital (but 
not to Long Hospital) are present which support the con­
clusion that Cone should be subjected to the restraints of 
the Constitution. These are the special arrangements for 
the appointment of Cone’s trustees and Cone’s nurses train­
ing program.

Five Cone trustees are appointed by persons who are 
clearly state officers, e.g., the Governor of North Carolina, 
and the governing bodies of the City of Greensboro and 
of Guilford County, North Carolina. They exercise power 
to appoint Cone trustees under authority conferred by a 
legislative enactment, Cone’s charter. The Guilford County 
Medical Society is also given power to name a trustee by 
the North Carolina legislation. This Society is a component 
of the State Medical Society which has other powers granted 
by statute, in selecting members of North Carolina’s Board 
of Medical Examiners and Board of Health, Gen. Stats, of 
N. C. §90-1 et seq. and §130-4 et seq. The private law grant­
ing this appointing power to the Guilford County Medical 
Society (as well as to the Governor and the City and County

45 See Williams v. Rot Shoppes, 293 F. 2d 835, 845, 846 (D. C. Cir. 1961), 
where Judges Bazelon and Edgerton, in dissenting from the majority’s decision 
to abstain, urged that the action of persons required by law to enforce a 
segregation rule is state action within the reach of the Fourteenth Amendment.



34

Boards) is a delegation of governmental power which sub­
jects its recipient to the Fourteenth Amendment, Nixon v. 
Condon, 286 U. 8. 73. The six trustees so selected repre­
sent the interests of government in the operation of the 
Cone Hospital. The court below rejected this as unim­
portant stating that the “ private” trustees (i.e., the other 
nine not selected by governmental bodies) were in a ma­
jority. The court made no mention of the fact that the 
governmentally chosen trustees participate in the election 
of these other nine trustees, thus extending the potential 
for actual governmental control of a majority of the board. 
But, there is no reason to presuppose conflict between the 
governmental and nongovernmental members of the board. 
It is obvious that the members appointed by government 
have the power to substantially influence the affairs of the 
corporation. By granting a corporate charter directing 
government officials to appoint members of the governing 
body of the hospital the state “has elected to place its 
power . .. and prestige behind the admitted discrimination,” 
Burton v. Wilmington Parking Authority, 365 U. S. 715, 
725. In Pennsylvania v. Board of Directors of City Trusts, 
353 U. S. 230, the “ Girard College Case,” a governmental 
body served as trustee to carry out a discriminatory policy 
ordained by a private grantor. The State had no part in 
creating the discriminatory policy, but it nevertheless was 
prohibited by the Supreme Court from carrying it out. 
Here the grantor required no discrimination. The board 
of trustees, including representatives of the State, have 
formulated as well as enforced discrimination. While this 
ease lacks the fully governmental body present in the 
Girard College case, it more than makes up for this by 
virtue of the participation of the governmental agents in 
formulating the policy of discrimination.

It is submitted that the court below erred in undertaking 
to determine if defendants were “public corporations”  under



the standards of Mr. Justice Story’s concurrence in Dart­
mouth College v. Woodward, 17 U. S. (4 Wheat.) 518, 671. 
For the purposes of the Fourteenth Amendment numerous 
corporations have been held subject to the Constitution 
without regard to any such inquiry.46 See, e.g., Burton v. 
Wilmington Parking Authority, supra; Turner v. Memphis, 
369 U. S. 350; Marsh v. Alabama, supra.

The nurses training program conducted at Cone Hospital 
by two publicly supported institutions of higher learning 
is another arrangement which makes it clear that the “ State 
has so far insinuated itself into a position of interdepen­
dence with . . . [Cone] that it must be recognized as a joint 
participant in the challenged activity, which, on that ac­
count, cannot be considered to have been so ‘purely private’ 
as to fall without the scope of the Fourteenth Amendment.” 
Burton v. Wilmington Parking Authority (365 TJ. S. at 725). 
North Carolina, faced with a shortage of nurses and desir­
ing to train them (116a-119a), undertakes to do so at Cone 
Hospital, an institution aided and assisted with federal 
funds under a state plan for hospital construction. This 
nurses training program is but another part of the pattern 
of “ benefits mutually conferred” (Burton v. Wilmington 
Parking Authority, 365 U. S. at 724) characteristic of

46 The Dartmouth College ease discussion of “public” and “private”  cor­
porations involved no issue of the responsibility of a corporation under 
standards applicable to government. In that ease the only relevant “ state 
action” was clearly present, i.e., a New Hampshire law affecting the College. 
The discussion of whether the corporation was “ public”  or “private” was part 
of the court’s decision that the corporation’s charter did constitute a contract, 
which government could not impair.

The only precedent cited by the court below for applying these notions to 
a Fourteenth Amendment issue of “ state action”  is Norris v. Mayor and City 
Council o f Baltimore, 78 F. Supp. 451, 458 (D. Md. 1948), in which an 
educational institution leased property from government. That opinion is cer­
tainly inconsistent with many modern decisions holding government leased 
property subject to the Fourteenth Amendment. Burton v. Wilmington Bark­
ing Authority, 365 TJ. S. 715, 725, note 2.



3 6

Cone’s relations with government. For Fourteenth Amend­
ment purposes, it does not matter that this part of the 
arrangement may be more advantageous to the State than 
it is to Cone, for both obviously benefit from it. Whether 
the work actually performed by the student nurses (91a), 
and the intangible benefit to the hospital from creating a 
source of trained nurses (59a) equals the dollar value of the 
hospital’s payments for the program cannot be judged by 
the standards of profit-making businesses. It is sufficient 
under the Burton rule that the arrangement with the state 
schools enables Cone to carry out one of its charitable 
purposes (48a) and that Cone and the State are engaged in 
a joint endeavor.

Conclusion of Part f -

' The immensity and authority of governmental power, 
property, and prestige demands use to foster the objectives 
of the Constitution. Racial discrimination by community 
hospitals is a matter of grave importance to Negro citi­
zens.^ By financial contribution, and a complex pattern of 

v 47

47 Racial discrimination by hospitals has drastie consequences.
Because Negro physicians are so often excluded from the main stream of 
medical development they have increasingly in recent years eschewed practice 
in the South. Notwithstanding the increase in Negro population in major 
southern cities the absolute number of Negro physicians in such cities is 
decreasing. Reitzes, Negroes and Medicine, pp. 272, 295, 316 (1958). Bor 
example, in North Carolina, there is a white physician for every 725 white 
persons, but the Negro population per Negro doctor is 7,915. See “ Equal 
Protection of the Laws Concerning Medical Care in North Carolina” , p. 19 
(Subcommittee on Medical Care of the North Carolina Advisory Committee 
to the United States Commission on Civil Rights (mimeographed)). Hospital 
discrimination not only affects the quantity of medical care available to the 
Negro community, but seriously affects the quality. For as Reitzes has 
written:

. . . The most important single element in the continued education of 
physicians is affiliation with a hospital. The nature of the affiliations 
and the type of hospital with which a physician is affiliated is probably 
the best single index of his ability to keep abreast of good medical prac­
tice. Op. cit. at 275. Cf. 49 Journal of the National Medical Association,



37

controls, by authorizing the hospitals to do the work of 
government, and bĵ  affirmatively sanctioning racial dis­
crimination by legislative and executive decision, the State 
and Federal Governments have so insinuated themselves 
into the affairs of the Cone and Long hospitals, as to com­
pel the conclusion that the egalitarian principles embodied 
in the idea of “due process of law” and the “ equal protection 
of the laws” should apply to the hospitals as they do to more 
conventional agencies of government. Jf

II.

Those Portions of Title 42 U. S. C., §2 9 1 e(f) and 42 
C. F. R., §53.112 Which Authorize Racial Discrimina­
tion Violate the Fifth and Fourteenth Amendments.

The provisions of the Hill-Burton Act and the federal 
regulations pertaining to racial discrimination, and North 
Carolina’s action pursuant thereto, have been detailed in 
the Statement of Facts, supra, pp. 17-18. The statu­
tory and regulatory framework (principally 42 IT. S. C., 
§291e(f); 42 C. F. R., §§53.111, 53.112 and North Caro­
lina’s State Plan (113a, 120a)) represents a federal deter­
mination that hospitals aided under the Act may not 
racially discriminate unless the State adopts a plan for 
racial separation which is approved by the Surgeon Gen­
eral and which “makes equitable provision” for each racial 
group. Thus, in accordance with the constitutional standard 
prevailing in 1946 when the Hill-Burton Act was passed,

272, 352, 429 (1957) (setting forth reports on discrimination in hospitals 
throughout the nation).

The statistics illustrate the shameful results of racial discrimination by 
medical facilities. In North Carolina, the rate of Negro infant mortality is 
twice the rate of whites, and the chances of maternal death are five times 
greater. “Equal Protection of the Laws Concerning Medical Care in North 
Carolina” , supra, Appendix K.



the States were allowed to permit or require48 racial segre­
gation in governmental and nonprofit hospitals aided by 
the program if they provided “ separate but equal” facilities. 
The statute makes an exception to the general nondis­
crimination rule in deference to the “ separate but equal” 
doctrine of Plessy v. Ferguson, 163 U. S. 537.49

Of course, since Brown v. Board of Education, 347 U. S. 
483, the Plessy doctrine has been repudiated in regard to 
every type of facility to which it was applied. Dawson v. 
Mayor and City Council of Baltimore, 220 F. 2d 387 (4th 
Cir. 1955), a ft Vi 350 U. S. 877; Holmes v. City of Atlanta, 
350 U. S. 879; Gayle v. Browder, 352 U. S. 90; Bailey v. 
Patterson, 369 U. S. 31; Turner v. Memphis, 369 U. S. 350 ; 
New Orleans City Park Improvement Asso. v. Detiege, 
358 U. S. 54; State Athletic Commission v. Dorsey, 359 
IT. S. 533.

48 North Carolina still requires segregation in state hospitals for treat­
ment of mental diseases and disorders. N. C. Gen. Stats., §§122-3, 122-5, 
122-6, 122-83, 122-84, 122-88, 116-126.

49 Appellants challenge the 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 population groups, if  the plan makes 
equitable provision on the basis of need for facilities and services of like 
quality for each such group; . . . ”

Appellants also challenge so much of 42 C. F. R., §53.112 as reads:
“ . . . However, in any area where separate hospital, diagnostic or treat­

ment center, rehabilitation or nursing home facilities, are provided for 
separate population groups, the State agency may waive the requirement 
of assurance from the construction applicant i f  (a) it finds that the 
plan otherwise makes equitable provision on the basis of need for facil­
ities 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 considered as 
making equitable provision for separate population groups when the facil­
ities to be built for the group less well provided for heretofore 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.”



39

It is simply beyond the constitutional competence of 
government to support racial segregation in any way. 
Government cannot make racial distinctions (Baldwin v. 
Morgan, 287 F. 2d 750, 754 (5th Cir. 1961)); or “ encourage” 
racial segregation (Gantt v. Clems on Agricultural College 
of South Carolina (4th Cir. No. 8871, Jan. 16, 1963)).

Insofar as the Hill-Burton Act and the federal regula­
tions authorize the defendants, as agencies of the State 
and federal governments to engage in racial discrimination, 
they are obviously in conflict with the prevailing doctrine 
which has repudiated the separate but equal theory. They 
violate the Fifth and Fourteenth Amendments. Bolling 
v. Sharpe, 347 TJ. S. 497; Brown v. Board of Education, 
347 TJ. S. 483.

The District Court found that the Long and Cone Hos­
pitals were not subject to the restraints of the Constitution 
forbidding racial discrimination, and, therefore, found it 
unnecessary to decide the constitutionality of the Hill- 
Burton provisions which authorized the discrimination at­
tacked. Should this Court determine that Cone and Long 
Hospitals are subject to constitutional restraints, the 
validity of the Hill-Burton Act would unavoidably be 
presented for decision, since the Act and Regulations 
authorize the very conduct the Court would be adjudging 
unconstitutional and restraining. To the extent that the 
Constitution forbids racial discrimination by agents of 
government, it also forbids statutory authorization of such 
discrimination. To hold the conduct of these hospitals 
subject to constitutional responsibility without granting 
appellants declaratory relief—declaring the statute which 
authorized such conduct unconstitutional—would be in-



4 0

consistent as well as potentially confusing.50 To be sure, 
settled principles of constitutional construction reflect the 
judicial concern with unnecessary decisions of constitu­
tional questions.51 But there is no suggestion in the cases 
-—and more important, in the theory of judicial restraint 
underlying them—that a statute authorizing invalid con­
duct will not be declared unconstitutional when the conduct 
itself is held unconstitutional. Such a result would turn 
a rule of avoidance of unnecessary constitutional decisions 
into a rule of abdication. Failure to declare the “ separate- 
but-equal” provisions of the Hill-Burton Act unconstitu­
tional would not be avoidance of a decision of “ gravity 
and delicacy” 52 53 * * * * for fundamental considerations of political 
organization, but a simple failure to articulate an in­
escapable conclusion.58

50 The United States argued forcefully in the District Court that failure 
to adjudicate the constitutionality of the Hill-Burton Act in such a context 
would subject the administration of the Act to uncertainty and subject the 
United States to possible liability for maladministration. “Not only is it 
unseemly for a high executive official o f the United States to continue admin­
istering a statute which under the decisions of the courts seems clearly 
unconstitutional, but if  the Surgeon General misconceives his legal obligations 
under the Act he may well subject himself to suit by those injured by his 
conduct.”  (Memorandum in Support of Conclusions of Law proposed by the 
United States, p. 21.)

51 See Ashwander v. Tennessee Valley Authority, 297 U. S. 288, 345 et seq.

52 Ibid.

53 Nor is it material that appellees did not rely on the Hill-Burton Act
provision authorizing segregation. They have received the benefit of and acted
in accordance with its terms. Presumably, appellees did not defend on the
basis of the validity of their statutory authorization to segregate because
decisions of this Court and the United States Supreme Court made such an
argument preposterous.



41

CONCLUSION

It is respectfully submitted that the judgment below 
should be reversed.

Respectfully submitted,

Jack Greenberg 
J ames M. Nabrit, III 
Michael Meltsner 

10 Columbus Circle 
New York 19, New York

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

Attorneys for 
G. C. Simkins, Jr., et at.