memorandum in opposition to motion to dismiss

     [||4498796f-f67c-48cf-b5cd-583c451ddb4f||] IN THE UNITED STATES DISTRICT COURT 

  

FOR THE NORTHERN DISTRICT OF INDIANA 

HAMMOND DIVISION 

  

BERNICE TERRY, et al., 

Plaintiffs, 

Ve Ck : No. H 76-373 

METHODIST HOSPITAL OF GARY, INC,., et al,., 3 

Defendants. 

  

  

  

RICHARD GORDON HATCHER, et al., 

Plaintiffs, 

Vv. : No. H 77-154 

METHODIST HOSPITAL OF GARY, INC., et al., 2 

Defendants. 

  

MEMORANDUM OF PLAINTIFFS IN OPPOSITION TO MOTION TO 
DISMISS OF DEFENDANTS METHODIST HOSPITAL OF GARY, 

INC., AND DENIS E. RIBORDY 

  

JACK GREENBERG 

BETH J. LIEF 

10 Columbus Circle 
New York, New York 10019 

JULIAN ALLEN 

2009 Broadway 
Gary, Indiana 

  

MARILYN G. ROSE 

CHRISTINE B. HICKMAN 

1751 N Street, N.W. 
Washington, D.C. 20036 

Attorneys for Plaintiffs 

 



  

4 

uy 

iY. 

1X. 

iv. 

VI. 

Vii. 

viii. 

INDEX 

TABLE OF CONTENTS 

PRELIMIVARY STATEMENT cvs eveasrnvsvvsrsninences 

NEITHER TITLE VI, THE HILL-BURTON ACT, 

SECTION 1122, OR SECTION 504 PRECLUDE 

JUDICIAL REVIEW OF THE SUBJECT MATTER 

OF THE COMPLAINT wus te vicnnonnrinsvassvennvves 

A. Title VI and the Hill-Burton Act ....... 

B. Title VI AanG C1120 cect vets ansovdaceisions 

Cc. SOCEIOoN B04 ft vvsesnner ress virienenniecionins 

PLAINTIFFS HAVE STANDING TO BRING THEIR 

COMPLAINT AND THIS COURT IS CAPABLE OF 

REDRESSING THE HARM THEY SUPPER ..cevevvecens . 

JUDICIAL REVIEW IS APPROPRIATE IN THESE 
ACTIONS: THE CONTROVERSY IS RIPE AND 
PLAINTIFFS ARE IN NO WAY GUILTY OF LACHES ... 

PLAINTIFFS HAVE EXHAUSTED ALL POSSIBLE 

ADMINISTRATIVE REMEDIES, ANY FURTHER 

EFFORTS AT OBTAINING RELIEF THROUGH THE 

ADMINISTRATIVE PROCESS WOULD BE FUTILE, 

AND THE DOCTRINE OF EXHAUSTION OF AD- 

MINISTRATIVE REMEDIES IS INAPPLICABLE TO 

THE CAUSES OF ACTION AGAINST THE SECRETARY 

OF HEW ouvert ncntinsvitvvensnsinesios se oonitis snes 

DEFENDANT METHODIST HOSPITAL IS SUBJECT 

TO THE REQUIREMENTS OF THE FOURTEENTH 

AMENDMENT ® @ & © © © & 0 O° & oO OO SO 8 8 Sd 8 Os OS O° eee ee SO BPO 

THE COMPLAINTS STATE CLAIMS FOR WHICH 

RELIEF CAN BE GRANTED cevevonsesersinsns enone 

OTHER HEALTH CARE PROVIDERS IN THE STATE 

WHO RECEIVE FEDERAL FUNDS ARE NOT INDIS- 

PENSIBLE PARTIES TO THIS ACTION Levers visvssnns 

Page 

11 

25 

29 

34 

36 

38 

 



  

TABLE OF CONTENTS CONT'D. 

Page 

IX. OTHER ARGUMENTS RAISED BY DEFENDANTS ARE 

4 EQUALLY WITHOUT MERIT ® © © © ® 4 © 9 © © 6 © © 6 6 OO O° O° "eee 43 

ol 

X. CONCLUSION wc ccvscvncecssvesnesnes Sv sieve evese “ein a4 

 



  

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF INDIANA 

HAMMOND DIVISION 

  

BERNICE TERRY, et al., 

Plaintiffs, : 

v. s Noo H 16-373 

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

Defendants. 

  

  

RICHARD GORDON HATCHER, et al., : 

Plaintiffs, : 

Vv. x No. H 77-154 

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

Defendants. : 

  

> MEMORANDUM OF PLAINTIFFS IN OPPOSITION TO MOTION TO 

DISMISS OF DEFENDANTS METHODIST HOSPITAL OF GARY, 

INC., AND DENIS E. RIBORDY 

I 

Preliminary Statement 
  

Plaintiffs in the above-entitled consolidated actions 

charge defendants with violating their obligations and the 

rights of plaintiffs and the plaintiff class under Title VI 

OF the Civil Rights Act of 1964, 42 U.S.C. § 2000d, and to 

 



  

equal protection guaranteed by the Fifth and Fourteenth 

Amendments to the Constitution of the United States. 

Defendant Methodist Hospital of Gary, Inc., filed 

a Motion to Dismiss the action of Wesson, et al. v. 
  

Methodist Hospital of Gary, Inc., et al., Cause No. H 76-373. 
  

Defendant Secretary of Health, Education and welfare 

originally filed a Motion to Dismiss or, in the Alternative, 

for Summary Judgment but subsequently wrote a letter to 

inform this Court that the Secretary was currently analyzing 

its policy and asked that the Court withdraw the Motion. 

In a companion case, Hatcher, et al. v. Methodist 
  

Hospital of Gary, Inc., et al., Cause No. 77-154, plaintiffs 
  

charged defendants with identical violations of their rights 

and the rights of the plaintiff class under Title VI and the 

Constitution, as well as discrimination against the handi- 

capped in the provision of health care services in violation 

of Section 504 of the Rehabilitation Act of 1974, 29 U.S.C. 

§ 794. This Court granted the motion of plaintiffs to con- 

solidate the two actions. 

Defendant Methodist Hospital has now filed a second 

Motion to Dismiss against the consolidated actions on the 

grounds that: (1) judicial review is precluded under Title 

VI and the Hill-Burton Act, 42 U.S.C. § 291, Title VI and 

 



Section 1122 of the Social Security Act, 42 U.S.C. § 1320a-1, 

and Section 504 of the Rehabilitation Act of 1974, 29 U.S.C. 

§ 794; (2) plaintiffs lack standing to bring these actions; 

(3) the Court is unable to redress the alleged injury; 

(4) there is a lack of ripeness; (5) plaintiffs have failed 

to exhaust administrative remedies; (6) there is no state 

action under 42 U.S.C. § 1983; (7) there is no jurisdiction 

under § 1361; (8) the complaints fail to state claims for 

relief under the Hill-Burton Act, Title VI, § 504, § 1122, 

and § 1983; (9) the complaint is guilty of laches; and 

(10) plaintiffs have failed to join indispensible parties. 

hyd 
Although the grounds of defendant's motion are numerous, 

many of the issues raised have already been discussed in 

earlier memoranda filed with this Court. In the interest of 

efficiency, plaintiffs will therefore not reiterate points 

already made in their prior memoranda, but will instead 

refer to them in appropriate places. Similarly, since this 

Court is already familiar with the facts which gave rise 

to these lawsuits and to plaintiffs' allegations, plaintiffs 

will refrain from including a Statement of the Facts. 

  

1l/ For purposes of clarity, defendant Methodist Hospital 
and Denis Ribordy will be referred to as "Methodist 

Hospital.  



IT 

Neither Title VI, The Hill-Burton 

Act, Section 1122 or Section 504 

Preclude Judicial Review of the 

Subject Matter of the Complaint. 
  

A. Title VI and the Hill-Burton Act. 

Defendant reiterates three arguments made in prior 

motions for the proposition that judicial review is pre- 

cluded under Title VI and the Hill-Burton Act. First, 

despite the fact, as defendant acknowledges, that HEW 

acknowledges the applicability of Title VI to both the 

Hill-Burton direct grant program and loan guarantee pro- 

grams (see 42 C.¥.R. §:53.112{c); 45 C.F.R.. §8§ 80.2, 

80.12 (f); Memorandum of HEW, p. 5); Methodist Hospital 

persists in its argument that Title VI is inapplicable 

(Defendants' Memorandum in Support of Their Second Motion 

to Dismiss [hereinafter "Second Motion"], pp. 9-10). 

Plaintiffs fully explained the lack of merit to the hospital's 

position in their memorandum in opposition to defendant's 

first motion at pages 5-10, and respectfully refer the 

Court to that discussion. 

Defendant also repeats the argument that the 

Administrative Procedure Act precludes review. Plaintiffs 

have fully briefed this point and refer the Court to 

the Memorandum in Opposition to defendant's first motion.  



  

at pp. 11-15, and to their Memorandum in Opposition to 

defendant Califano's motion, at pp. 16, n. 16, 18-20, 

and 24-25. 

Finally, defendant again arguesthat certain pro- 

visions of the Hill-Burton Act itself preclude judicial 

review (see Memorandum II, pp. 13-14). As stated in 

plaintiffs' Memorandum in Opposition to defendant's first 

motion at pp. 11-12, this argument misperceives the na- 

ture of plaintiffs' complaint for these actions do not 

arise under the Hill-Burton Act. 

Be Title VI snd § 1122 

The purpose of Section 1122 is set forth in its opening 

paragraph (42 U.S.C. § 1320 a-1 (a)): 

- —- to assure the federal funds used to reimburse health 
facilties under the Medicare, Medicaid, and Crippled 
Children's programs are not made to support unnecessary 
capital expenditures; 

- = to assure that such federal reimbursement funds are 
used, to the extent possible, to support health planning 
activities in the various states. 

To accomplish these objectives, a health facility must receive 

approval of capital expenditure programs as a condition for 

receiving federal reimbursement for capital construction costs 
2/ 

under the Medicare, Medicaid, and Crippled Children's programs. 
  

2/ A portion of the reimbursement received by hospitalsincluding 
Methodist Hospital, under these programs represents costs for 
capital construction. 

 



  

Thus, approval of an § 1122 application, such as the 1976 applica- 

tion Methodist Hospital made for expansion of Broadway Methodist 

Hospital, is approval for the receipt of federal financial assist- 

ance and subjects a recipient to the requirements of Title VI, 

Indeed, defendant does not argue that Title VI is inapplic- 

able to the § 1122 process, but contends that judicial review 

is precluded by the provisions of 42 U.S.C. § 1320a-1 (f) which 

states: 

(f) Any person dissatisfied with a determination by the 
Secretary under this section may within six months follow- 
ing notification of such determination request the Secre- 
tary to reconsider such determination. A determination by 
the Secretary under this section shall not be subject to 
administrative or judicial review. 

That section might arguably be applicable if plaintiffs were 

Proceeding under §1122, but they are not. This action is not 

an action arising under § 1122, just as it does not arise under 

the Hill-Burton Act. Plaintiffs do not allege that either 

§1122 or the Hill-Burton Act per se have been violated, but 

rather that defendants have violated the provisions of Title VI, 

which apply to recipients who receive federal financial assistance 
3/ 

as a result of receiving § 1122 approval. 

  

3/ In any event, as the Court of Appeals for this circuit stated 
in Apter v. Richardson, 510 FP. 24 351, 355-56 (7th Cir. 1975): 
  

"Where it is alleged that the agency has transgressed a con- 
stitutional guarantee or violated an express statutory or 
procedural device, otherwise non-reviewable agency action 
should be examined to the extent necessary to determine the 
merits of the allegation. See, e.g., Johnson v. Robinson, 
415 U.S. 361 (1971) (constitutional questions); Brotherhood 
of Railway & Steamship Clerks v. Association for the Benefit 

of Non-Contract Employees, 380 U.S. 650 (1965) (statutory 
duty); Kletscher V, Driver, 411 PF. 2d 436 (28 cir. 1969) 
(statutory duty): Cappadora v. Celebrezze, 356 F 2d 1,6 
(2d cir. 1966) (administrative regulations)". 

  

  

  

  

  

  

In order to review charges of civil rights violations in the contest 
of both the Hill-Burton and § 1122 applications of Methodist 

-~ 6 = 

 



  

To the extent that Methodist Hospital argues that the 

allegations of the complaints concerning the § 1122 process 

does not pertain to it, defendant is correct. That posi- 

tion does not in any way imply, though the judicial 

review of the other defendants' involvement in the review 

and approval of Methodist Hospital's § 1122 application 

concerning Broadway Methodist Hospital in any way lessens 

the viability of plaintiffs' charges against the hospital. 

  

3/ Continued 

Hospital and the application procedures of the other de- 

fendants in these actions, an entire analysis of such 

applications and procedures is necessary to determine 

whether the criteria and judgments mandated by Title VI 

and Section 504 were enforced. 

 



C. Section 504 

Defendant's argument that this Court lacks subject 

matter jurisdiction as to plaintiffs' claims under 

Section 504 of the Rehabilitation Act of 1974, 29 U.S.C. 

§ 794 mirrors those arguments it previously made with 

regard to Title VI, the Hill-Burton Act, and § 1122, 

namely that: (1) recipients of Hill-Burton federal 

financial assistance are exempt from § 504 as "contracts 

of insurance or guaranty;" (2) judicial review of § 1122 

is precluded; and (3) under the Administrative Procedure 

Act, 5 U.S.C. § 701 (a) (2), agency action under §504 is 

committed to agency discretion by law. 

In holding that § 504 confers affirmative rights 

and private right of action, the Court of Appeals for 

the Seventh Circuit in Lloyd v. Regional Transp. Authority, 
  

548 F.24 1277, 1280,-1285 (7th Cir. 1977) noted that § 504 

"closely tracks" Title VI and that the legislative history 

of § 504 makes clear that the striking similarity "was not 

accidental." According to the report of the Senate Labor 

and Public Welfare Committee: 

"Section 504 was patterned after, 

and is almost identical to, the anti- 

discrimination language of section 601 

of the Civil Rights Act of 1964, 42 

U.S.C. 2000d4-1 (relating to race, color, 

or national origin) . . . The section 

therefore constitutes the establishment 

of a broad policy that programs receiving 

Ge  



Federal financial assistance shall 

be operated without discrimination 

on the basis of handicap." 4 U.S. 

Code Cong. & Admin. News, p. 6390 

(1974), cited in Lloyd v. Regional 

Transp. Auth., id. 
  

  

Thus, plaintiffs' discussion, supra, and in earlier memo- 

4/ 
randa establishes that defendants' arguments are as 

equally without merit with regard to § 504 as they are 

with regard to Title VI and Hill-Burton, and plaintiffs 

will not repeat those arguments here. 

Methodist also appears to argue, however, that it is 

somehow unfair to impose the nondiscrimination provisions 

of 504 upon its facilities services because the regulations 

issued by HEW pursuant to § 504 took effect on June 3, 1977, 

after this lawsuit was filed. That argument ignores the 

fact that § 504 was promulgated in 1974; and that the Court 

  

of Appeals in Lloyd, supra, held that § 504 imposed obli- 

gations on recipients of federal financial assistance and 

rights of private action of beneficiaries of recipients 

5/ 
services before the regulations were even issued. 

  

4/ See plaintiffs' Memorandum in Opposition to Methodist 
Hospital's first motion, pp. 3-4. 

3/ ‘Accord, cases cited in Llovad, id., at 1281, n. 14.  



  

Methodist Hospital also ignores the fact that it has and 

presently does continue to receive on an ongoing basis 

.substantialamounts of federal financial assistance, not 

only under its Hill-Burton grant, loan and interest sub- 

sidy, but under Medicare, Medicaid and other service 

programs. See § 7 of Complaint in Hatcher, et al. v. 
  

Methodist Hospital, et al. 
  

. Finally, Methodist Hospital's denial that it discrimi- 

nates against handicapped persons is irrelevant to the 

resolution of a Motion to Dismiss inasmuch as the facts in 

the complaint are accepted as true. 

-10- 

 



  

IX} 

Plaintiffs Have Standing To Bring 

Their Complaint And This Court Is 

Capable Of Redressing The Harm 
They Suffer, 
  

As stated in plaintiffs' memorandum in opposition 

to Methodist Hospital's first motion, the essence of 

2a the question of standing, from the constitutional per- 

spective of whether an Article III "case or controversy" 

exists, is whether the plaintiff has 'alleged such a 

personal stake in the outcome of the controversy' as to 

warrant his or her invocation of federal court juris- 

diction and to justify exercise of the courts' remedial 

powers on his behalf." Wwarth v. Seldin, 422 U.S. 490, 
  

498-99 (1976), citing Baker v. Carr, 369 U. S. 186, 204 
  

(1962). Thus, the plaintiff must have suffered "some 

threatened or actual injury resulting from the putatively 
  

illegally action." Linda BR, 8S, v, Richard D., 410 U. S. 
  

614, 617 (1973); accord, warth v. Seldin, supra, 422 U.S. 
  

at 499; see Data Processing Service v., Camp, 397 U. S. 
  

150, 151-154 (1970) (emphasis added). Each of the plain- 

tiffs clearly meets this requirement. 

As a black resident of Gary who will require use of 

the health facilities at Gary Methodist Hospital, plaintiff 

“11l-~ 

 



  

Hatcher suffers from the segregated health care system 

of Methodist Hospital that discriminates against minority 

s/ 
persons, including Mayor Hatcher. 

The injury from having to receive segregated, unequal 

health services is not, as the defendants suggest, 

"speculative; " Mayor Hatcher lives and works in Gary, and 

he and/or his immediate family could at any moment require 

use of the emergency room at Gary Methodist and/or use 

of the outpatient or inpatient services there, The fact 

that he is not at the present time a patient at Gary 

Methodist in no way lessens his "threatened" injury. See 

Linda R. S. Richard D., supra; Warth v. Seldin, supra: 
  

Data Processing Service v. Camp, supra. Thus, standing 
  

on the basis of future harm irrespective of a showing of 

the realization of such injuries in the past, has been 

upheld in the Supreme Court. Doe v. Bolton, 410 U. S. 
  

179, 188 (1973). The recent decision by the Supreme Court 

in Arlington Heights v. Metropolitan Housing Corp., 
  

DU. Se. , 50 L.Ed.2d 450 (1977) further reinforces 

Mayor Hatcher's standing. 

In Arlington Heights, the plaintiffs, a housing 
  

  

6/ One cannot possibly dispute the fact that segregation 

and discrimination in hospital services is a real injury 

in fact. See Moses v. Simkins Cone Memorial Hospital, 

323 F.24 929, cert. denied, 376 U. S. 938 (1964). 
  

  

-12. 

 



development corporation and certain individuals, challenged 

as racially discriminatory the refusal of a village to 

rezone land to permit the construction of law and moderate- 

income multiple family housing units. The Supreme Court 

held that a black individual who "seeks and would qualify 

for the housing MHDC wants to build" and who testified 

"that if Lincoln Green were built he would probably move 

there" was not a "generalized grievance" or "speculation" 

but a particularized injury that met the standing test. (Emp added) 

Id. The Supreme Court distinguished the individual plaintiff 

in Arlington Heights, supra, from those in Warth wv. Seldin, 
  

  

supra, on the ground that in Arlington Heights, unlike Warth, 
  

plaintiffs were challenging an ordinance in the context of 

a specific housing project. In the instant actions, Mayor 

Hatcher's grievance is not only directed at a specific 

facility but one that is built and in operation — albeit 

2/ 
on a segregated and discriminatory basis. 

Moreover, as the Supreme Court stated in wWarth wv. 
  

Seldin, supra, 422 U.S. at 513-14: 
  

"Congress may create a statutory right 

or entitlement the alleged deprivation 

  

The case cited by defendant, Jackson v. Dukakis, 526 

F.24 64 (ist Cir, 1975), is inapposite. ‘In Jackson, 

which involved an employment discrimination claim, 

  

“13  



of which can confer standing to sue 

where the plaintiff would have suffered 

no judicially cognizable injury in the 
absence of statute." 

Accord, Linda R, §, Richard D., supra, 410 U. S. at 617, 
  

n. 3: Trafficante v. Metropolitan Life Ins. Co., 409 U. S. 
  

205, 215 (1972) (White, J., concurring);Hardin v. Kentucky 
  

gtilities Co,., 390 UY. 8S. 1,6, 19 (1968), 
  

As noted earlier, it is clear that Title VI guarantees 

to racial minorities the right to receive the services of 

a recipient of federal financial assistance, such as 

Methodist Hospital, without being "excluded from partici- 

pating in, be[ing] denied the benefit of, or be[ing] 

subjected to discrimination." 42 U.S.C. § 2000d; Lau v. 

Nichols, 414 U. S. 563 (1974); see, e.g., Llovd v. 
  

  

7/ (Continued) 

the Court held that the plaintiff lacked standing because 

he had not applied for a job with defendant. However, un- 

like the employment context, a person does not "apply" for 

a hospital bed or emergency treatment for sickness is often 

unforeseeable, but must have such services available im- 

mediately when he or she needs them. Moreover, as discussed, 

infra, Methodist Hospital, as a Hill-Burton Hospital, 
is obligated to provide those services to all members of 

the community, including Mayor Hatcher without consideration 
or approval of any application.” 42 C.P.R. § 53.113(4)Y{1) (i). 

  

 



  

Regional Transportation Auth.,supra. In addition, as a Hill-Burton 
  

facility, Methodist must: 

"(l) (i) Make the services it furnishes available to the 
general public.” 45 C. P. R. 53.113 (4d) (1) (i); 8/ 
see 42 U.S.C. §291 c (e). 

  

-8/ As a Hill-Burton hospital, Methodist Hospital is obligated 
to provide"community service" 42 C. F. R. 53.113(a). 
Compliance with the obligation to provide "Community 
Service" is defined at 42 C.F.R. 53.113 (a) to mean in 
pertinent part: 

Hoes BD applicant must: 
(1) (1) Make the service it furnishes available 
to the general public, or 

(ii) Limit the availability of such services 
only on the basis of age, medical indigency, 
or type or kind of medical or mental dis- 
ability, or 
(iii) If the facility constitutes a medical 
or nursing care unit of a home or other in- 
stitution, make such home or other institu- 
tion available in accordance with paragraph 
(4) (1) (i) or (ii) of this section.” 

Sections (ii) and (iii) of the above provision are 
inapplicable to the instant situation and any 
limitations in (11) dc not supercede the inforcement 
of Title VI. Sec. 42, C.P.R. 53.112 

-15- 

 



  

See Cook v. Ochsner Foundation Hospital, 61 F.R.D. 354 
  

(E.D. La. 1972). As a member of the "general public" 

and the "community, Mayor Hatcher thus has the right 

to have the services of Methodist Hospital available 

to him without discrimination or segregation, 42 U.S.C. 

§ 20008; 45 C.BP.R.-Part 80y 42 C.P.R. '§ 53.112, and 

the standing, in view of discrimination by Methodist Hospital to 

challenge the violation of that right. Lau v. Nichols,supra;Lloyd v. 
  

Regional Transportation Auth., supra, 548 F.2d at 1280. 
  

Plaintiff Hatcher also alleges that as: 

"Chief executive officer of Gary, [he] 

is responsible, inter alia, for assuring 

that the social service and health needs 

of his constitutency, including members 

of the plaintiff class, are met. The 

enforcement of that responsibility is 

directly obstructed by the actions of 

defendants complained of herein." 

(Complaint, ¢q 4) (emphasis added) 

  

  

Defendants incorrectly contend that this allegation does 

not constitute injury suffered by Mayor Hatcher. As gtated in the 

SY 
affidavit to be submitted by Mayor Hatcher, part of the 

Mayor's responsibilities are, as the complaint alleges, 

to assure that the health needs of his constitutency, 

including the plaintiff class are met, and that as Mayor 

  

9/ This affidavit is being forwarded to the Court separately. 

“1B6« 

 



  

he has taken numerous actions to fulfill that obligation. 

And, as the complaint states, the programs and practices 

of Methodist Hospital which segregate and discriminate 

against plaintiffs' constitutency who are black and 

Hispanic "directly obstructs] that obligation." Mayor 

Hatcher has standing to challenge practices which "adversely 

affect a relationship between [him] and the persons whose 

rights assertedly are violated." Wwarth v. Seldin, supra, 
  

422 U. 8S. at 510; see, e.g., Doe v, Bolton, supra, 410 
  

Uv. 8S. at 188-189; Eisenstadt vy, Baird, 405 U. 8S. 438 (1972); 
  

Sullivan v. Little Hunting Park, 396 U. S. 229 (1969); 
  

Epperson v. Arkansas, 393 U. S. 97 (1968); Pierce v. Society 
    

of Sisters, 268 U. S. 510, 534-536 (1925). The case cited 
  

by defendant, O'Malley v. Brierly, 477 F.2d 785, 788 (3rd 
  

Cir. 1973) is inapposite since in that case, plaintiff 

priests who challenged the refusal of prison officials to 

permit their admission did not seek relief on the basis 

of the derivative rights of others 
- 

Plaintiffs Metro Corp, Inc., also have standing, both 
  

"to seek relief from injury to itself" and "as representative 

of its members." Warth v. Seldin, supra, 422 U. S. at 511. 
  

wl 

 



  

Paragraph 6 of the complaint in Hatcher, et al. v. 
  

Methodist Hospital, et al. states: 
  

"Plaintiffs Metro Corps, Inc. has in the 
past and will continue to be injured by 
the necessity of expending resources from 
its limited funds in order to transport 
persons to Broadway Methodist Hospital." 

Defendant Methodist Hospital makes the self-serving 

argument that although plaintiff Metro Corps, Inc. has a 

limited budget from which to fulfill a huge number of goals 

and to operate numerous programs, the money plaintiff ex- 

pends solely as a result of Methodist Hospital's discrimi- 

natory operation and placement of its facilities is not 

an injury because the purpose of Metro Corps, Inc. is the 

provision of health services. Methodist Hospital totally 

ignores the fact that Metro Corps, Inc.'s limited funds 

could and would be directed toward other needed services 

which it cannot now provide as a direct result of defendant's 

unlawful actions. A public interest group which is economically 

injured by the discriminatory actions of another has standing 

to challenge these activities. Apter v. Richardson, 510.F.2d 
  

  

351,354 (7th Cir. 1975) Village of Park Forest v. Fairfas 

Realty, Prentice-Hall Equal Opp. in Housing q 13,784 (N.D. 
  

Ill. 1976). The fact that Metro Corps, Inc. is publicly 

funded has no bearing on its standing or the injury it 

suffers - the relevant fact, and the injury suffered, is 

that limited funds are diverted from other services solely 
  

in an attempt to ameliorate the harm suffered by minority 

residents of Gary as a result of Methodist Hospital's dis- 

«18 

 



  

criminatory conduct. 

Moreover, defendant ignores the allegation that 

"Plaintiff Metro Corps, Inc. and its constituency, in- 

cluding members of the plaintiff class, have been injured 

and will continue to be harmed by the segregation of and 

discrimination in the provision of health services by 

ee Methodist Hospital of Gary, Inc." (9 6 of Complaint.) 

Despite this allegation, Methodist Hospital contends 

that "Metro Corps does not allege that any of its consti- 

tuents or members have been denied any services or been 

denied access to any services by Methodist Hospital." 

(Defendant's Second Motion, p. 22) An allegation of 

blatant denial of services or access 1s unnecessary; 

segregation and discrimination are injuries to minorities 

and are against the law. 

As the Supreme Court stated in Warth v. Seldin, supra, 
  

424 U.S. at 511, an association has standing so long as it 

"allege [s] that its members, or any one of them, are suffer- 

ing immediate injury or threatened injury as a result of the 

challenged action." Accord, Simon v. Eastern Kentucky Welfare 
  

Rights Organization, U.S. y 48 L.Ed. 24 450, 461 
  

(1976); Sierra Club v., Marton, 405 U.8, 727, 739 (1972); 

10/ 
NAACP v. Bulton, 371 U.S, 415, 428 (1963). Metro Corps, Inc. 

  

  

  

  

10/ Like the plaintiff in Sierra Club, supra, Metro Corps, 
Inc. has a special interest in seeing that the elderly, handi- 
capped, and minority residents receive equally in health 
services and serves regularly as a responsive representative 
of its members, including the plaintiff class. 

=) Om 

 



  

thus has standing not only as to the injury it suffers but 

also as to the harm suffered by its membership and consti- 

1l/ 
tuency, the minority and handicapped residents of Gary. 

Plaintiff Willie Lee Page is an elderly minority 

resident of Gary who requires continual treatment that is 

not available at Gary Methodist Hospital. As the complaint 

and affidavit to be submitted by plaintiff Page make clear, 

she "has a physical or mental impairment which substantially 

limits one or more of [her] major life activities" and is 

therefore handicapped within the meaning of § 504. 29 U.S.C. 

§ 794; 29 U.S.C. § 706(6);: 42 Fed. Reg. 22676. As stated 

in § 84.21 of the regulations issued pursuant to § 504: 

"No qualified handicapped person shall, 
because a recipient's facilities are 
inaccessible to or unusable by handi- 
capped persons, be denied the benefits 
of, be excluded from participation in, 
or otherwise subjected to discrimina- 
tion under any program or activity to 
which this part applies.” 42 ped. Reg. 
22681. 

Section 84.4 (b) (5) of the regulations further provides: 

“? "(5) In determining the site or location 
of a facility, an applicant for assistance 
or a recipient may not make selections (i) 

. that have the effect of excluding handicapped 
persons from, denying them the benefits of, 
or otherwise subjecting them to discrimination 
nies” 42 Ped. Reg. 22679. 
    

  

1ll/ The situation in Richmond Black Police Officers Ass'n v. 
City of Richmond, 386 P.Supp. 151, 155 (D.Va. 1974), cited 
by defendants, is inapposite because in that case, unlike 
here, there was "no allegation that the Association itself 
suffered . . . an injury in fact." To the extent that it 
holds the Association cannot represent its members who suffer 
injury, the opinion directly contradicts the numerous Supreme 
Court opinions cited above and cannot be followed. 

  

  

-20- 

 



  

The difficulty and harm that plaintiff Page suffers from 

the lack of public transportation or hospital-provided 

transportation to the needed treatment services at Broadway 

Methodist Hospital clearly deprive her of a right guaran- 

teed by § 504 and the regulations just cited, and create 

an injury in fact. Plaintiff Page as a handicapped person, 

is also "protected : by the statute or consti- 

tutional guarantee in question." Data Processing Service 
  

¥Y. Comp, supra, 397-y.8, at 153. 
  

As noted infra at Point VII, reliance on Jackson v. 
  

New York City Health & Hospitals Corp., 419 F.Supp. 809 vi 
  

(S.D.N.Y. 1976) is misplaced. Plaintiffs, including 

plaintiff Page, do not assert that they are entitled "to 

access to medical care at a particular location.” Id. at 

812. Rather, plaintiff Page asserts that Methodist Hospital 

has violated its duty under § 504 and Title VI not to install 

critical services which are not equally accessible to the 

minority, handicapped residents of Gary, including herself 

and/or which have the effect of discriminating against her 

in the provision of critical health services. The plaintiffs 

in Jackson did not raise Title VI and § 504 claims. Moreover, 

the opinion in Jackson was issued after a hearing and was 

based on evidence presented. In contrast, these cases are 

before this Court on a motion to dismiss, where the facts in 

the complaint must be accepted as true and viewed in the light 

most favorable to plaintiffs. 

“dle 

 



Another aspect of the standing requirement is that 

plaintiffs show "an injury to [themselves] that is likely 

to be redressed by a favorable decision." Simon v. Eastern 
  

Kentucky Welfare Rights Organization, 426 U.S. 26 48 L.Ed. 
  

2d 450, 460 (1976). Unlike the plaintiffs in either Simon, 

id., or Linda R.8., v. Richard D,, supra, the relief re- 
    

quested from defendants in these actions will provide relief 

for the injuries suffered by plaintiffs and the plaintiff 

class. 

Defendant Methodist Hospital has direct control over 

the facilities and services of the two hospitals it operates, 

Gary Methodist and Broadway Methodist. The complaint requests 

this Court can enjoin defendant from operating segregated 

discriminatory health facilities in violation of Title VI, 

Section 504 and the Equal Protection Clause of the Fourteenth 

Amendment. Such relief, together with the relief sought from 

the other defendants, will effectively redress plaintiffs’ 

injuries. 

Defendants rely heavily on Simon v. Eastern Kentucky 
  

Welfare Rights Organization, 426 U.S. 26 (1976) and Linda R.S. 
  

  

v. Richard D,, 410 U.S. 614 (1973) to assert that plaintiffs 
  

have failed to allege a redressable injury. These two decisions, 

however, are distinguishable from the facts in the instant case. 

In Linda R.S. the mother of an illegitimate child lacked 
  

-22-  



standing to enjoin state officials who refused to prosecute 

fathers of illegitimate children for non-support. The Court 

reasoned that enforcement of the statute against the father 

would not necessarily result in his payment of child support, 

but only "in the jailing of the child's father." Supra, 410 

  

U.S. at 618. Similarly, in Simon v. Eastern Kentucky Welfare 

Rights Organization, plaintiffs did not have standing to sue 
  

IRS officials since revocation of the tax-exempt status of 

several hospitals would not inevitably lead to the provision 

of free health services to the injured parties. Significantly, 

Justice Powell noted in Simon that: "injury at the hands of a 

hospital is insufficient by itself to establish a case or con- 

troversy in the context of this suit, for no hospital is a 
  

defendant." 426 U.S. at 41 (emphasis added). In essence, 
  

therefore, the requirement of a redressable injury restates 

the need for plaintiffs to demonstrate that the named defendants 

are primarily responsible for the injuries suffered and capable 

of redressing the injuries by providing the relief requested. 

See Rental Housing Association of Greater Lynn v. Hills, 548 
  

F.2d 388, 390 {lst Cir. 1977). In contrast to Simon and 

Linda R.S., the defendants named here are primarily responsi- 
  

ble for the injuries suffered by plaintiffs and the plaintiff 

class, 

Without a single affidavit or other document, defendant 

makes the bold statement that "If the court in the present 

case were to grant plaintiffs' numerous requests for relief, 

the court, by its action, might very well destroy the avail- 

ability of effective health care provision to the plaintiffs.” 

-23=  



(Defendant's Second Motion, p. 25) That assertion cannot 

be considered on a motion to dismiss since it raises facts 

outside the pleadings. Without affidavits or other proof 

to support such a defense, particularly such a stark one, 

defendants cannot raise the issue on a motion for summary 

judgment. See Rule 56, Federal Rules of Civil Procedure. 

In sum, each of the named plaintiffs has alleged 

"an injury in fact" that, on the basis of the facts alleged 

in the complaint, directly flows from and can be redressed 

by the granting of the relief sought against the named 

defendants. 

 



  

IV 

Judicial Review Is Appropriate In These 

Actions: The Controversy Is Ripe And 

Plaintiffs Are In No Way Guilty Of Laches. 
  

Defendants adopt the inherently contradictory position 

that these actions are both insufficiently ripe for judicial 
  

review and "overly" ripe, or in violation of the doctrine of 

laches. 

Initially, plaintiffs note that Methodist Hospital does 

not dispute the fact that it is currently and continually 

receiving federal financial assistance. Moreover, as plaintiffs 

noted in their memorandum in opposition to Methodist Hospital's 

first motion, at p. 26, HEW approved defendant's 1976 proposal 

for expansion of Broadway Methodist Hospital. This con- 

tinual and projected receipt of federal funds by a hospital 

that plaintiffs allege delivers segregated and discriminatory 

health care is not a conjectural complaint at all, but 

a very real, current and continuing one. 

Indeed, plaintiffs challenge defendant's actions at 

a distinctly proper juncture. As stated in the affidavit 

of Alfred Sanchez, Chief of the Health and Social Services 

Branch of the Office for Civil Rights, Region V, Department 

of Health, Education and Welfare, submitted in support of 

defendant Califano's motion, the Office For Civil Rights 

25 - 

 



  

on September 20, 1976 approved the 1976 proposal for 

Broadway Methodist Hospital and found "no potential 

or actual Title VI problems" (94), despite acknowledge- 

ment of segregation at defendant's facilities. It is 

precisely this finding that plaintiffs challenge as in 

blatant violation of HEW's Title VI obligations. It is 

true that, pursuant to HEW procedures under the Hill-Burton 

program, the Secretary must approve final working drawings 

and specifications, and contract bids, and that only after 

such approval may actual construction commence. See 45 

C.F.R. 53.128(b); "Part 2 for Federally Assisted Activities: 

Information for Project Applicants and State Agencies on 

Design and Construction Related Activities," Technical 
  

Handbook for Facilities, Engineering and Construction 
  

Manual, Office of the Secretary, HEW, ch. 2, 3, 4; "Part 2.4 

Guide For Project Applicants: Instruction Management Sources,” 

Office of the Secretary, HEW, Ch. 4. 

However, had plaintiffs waited until such approval had 

been given, Methodist Hospital might have begun actual 

construction the next day. Plaintiffs did not wish to, 

will not, and have not sought to tear down existing facil- 

ities, but have approached this Court at the very point 

before such radical relief, and harm to Methodist Hospital, 

Jw 

 



  

was necessary. 

Moreover, while Methodist Hospital argues that it is 

necessary for plaintiffs to wait until actual construction 

is about to begin or already begun on the expansion of 
  

Broadway Methodist Hospital, they simultaneously argue 

that it is too late to seek relief because the initial con- 

struction of Broadway Methodist Hospital has already 

occurred. The prayer for relief in either of these con- 

solidated actions does not ask that the present facilities 

at Broadway Methodist Hospital be torn down, although 

plaintiffs assert and will establish that the construction 

violated Title VI, and Section 504. Instead, plaintiffs 

seek remedies within the context of the present situation 

which will best ensure that the minority and handicapped 

residents of Gary will receive integrated, equal health 

care services as guaranteed by law. 

The doctrine of laches requires a lack of diligence 

by plaintiff and good faith and reasonable reliance by 
  

defendant to his detriment. Concern About Trident v. Hann 
  

Schlesinger, 400 F. Supp. 454 (D. D.C. 1975). One of the 
  

named plaintiffs, Richard Hatcher, filed a complaint 
12/ 

with HEW opposing the expansion; by filing these actions 

  

12/ Contrary to defendants' assertion at p. 27 of their 
second motion, plaintiffs do not admit in their complaint 

that they did not file Title VI complaints. See 22 of 

3 Fo 

 



  

prior to actual construction of the proposed expansion 

at Broadway, plaintiffs continue to exercise diligence 

in asserting their rights and the rights of the plaintiff 

class. The case cited by defendants are distinguishable 

and inapplicable; neither involve civil rights claims 

and in those cases plaintiffs delayed action for nineteen 

years and eleven years, respectively. Robinson v. Linfield 
  

College, 42 F. Supp. 147 (D. wash. 1941), aff'd, 136 F.2d 

805 (9th Cir. 1943), cert. denied, 320 U. 5. 700; Butcher 
  

vy, United Blectric Coal CO., 174 7.28 1003 (72th Cir. 1949). 
  

  

12/ (Continued) 
complaint in Hatcher, et al. v. Methodist Hospital of Gary, 

Inc., et al. To the extent that defendant's argument as 

to ripeness concerns exhaustion of the administrative pro- 

cess, that issue is addressed in Point V of this memorandum. 

  

  

—-28= 

 



  

Vv 

Plaintiffs Have Exhausted All Possible 

Administrative Remedies, Any Further 

Efforts At Obtaining Relief Through 

The Administrative Process Would be 

Futile, And The Doctrine Or Exhaustion 

Of Administrative Remedies Is Inappli- 

cable To The Cause Of Action Against 

The Secretary Of HEW. 
  

Defendant repeats its argument made in its First Motion, 

that plaintiffs have failed to exhaust their administrative 

remedies. Plaintiffs have responded to this argument insofar as 

it applies to the Title VI claims raised in the complaint and 

will not repeat those arguments here. See memorandum in opposition 

to Methodist Hospital's First Motion, pp. 20-22; memorandum in 

opposition to motion of defendant HEW, pp. 4-16. It is worth 

note, however, that while Methodist Hospital adopts the argument 

made in defendant HEW's motion that the complaints sent by indi- 

viduals, including plaintiff Hatcher, are not really complaints, 

HEW itself subsequently informed this court by letter that it was 

re-evaluating its position and has now withdrawn its motion. It 

can thus be inferred that HEW no longer considers further exhaustion 

to be required. 

Turning to the §504 claim raised, in another context de- 

fendant admits that at the time the complaint was filed, there 

I Clue 

 



  

13/ 
were no regulations issued pursuant to §504. HEW, the agency 

responsible for enforcing §504, has not argued that §504 claims 

must be first represented to itspersonnel; defendant's argument, 

in essence, is that is should defend its actions before HEW and 

not before the court. 

However, the requirement that plaintiffs exhaust admin- 

istrative remedies does not apply when such exhaustion would be 

inadequate to afford the relief sought. Glover v. St. Louis - 
  

San Francisco Railway Co., 393 U.S. 324 (1969); American Federa- 
  

  

tion of Government Employees v. Acree, 475 F.2d 1289 (D.C. Cir. 
  

1973). 

HEW's Office for Civil Rights (OCR), by allocating vir- 

tually no staff to enforce §504, has rendered its enforcement 

procedures for §504 practically Rosdmtive. An examination of 

HEW's OCR Annual Operating Plan for Fiscal Year 1977, the year in 

which the plaintiffs' complaint arose, confirms plaintiffs' as- 

sertion that HEW has inadequate resources to investigate the 

issues raised by this lawsuit. 

According to OCR's 1977 Annual Operating Plan (AOP), 

there are no staff positions in Region Vv, the regional office 

responsible for Lake County, for the investigation and enforce- 

ment of §504 complaints. 42 Fed. Req. 11154 (Feb. 25, 1977). 

  

13/ Methodist Hospital's characterization of the administrative 
process as a "well established and available administrative remedy" 
is hardly an accurate one. 

“30 

 



  

Moreover, OCR allocated only 29 positions for §504 enforcement 

nationwide for FY 1977. 41 Fed. Req. 41776 (Sept. 23, 1976). 

In fact, only 11 positions were eventually filled. (Deposition 

of Gwendolyn Gregory, pp. 35-38, taken in the case of N.A.A.C.P. 
  

v Wilmington Medical Center, Civil Action No. 76-298. (D. Del.), 
  

to be submitted to the Court under separate cover.) These 11 

people are responsible for the investigation of an anticipated 

349 §504 complaints. 

Indeed, OCR in its proposed AOP for 1978 admits that its 

AOP for 1977, which indicated that backlog could be reduced by 

the end of this fiscal year, was "totally unrealistic and dis- 

regarded OCR's other lawful responsibilities," and admits that 

the entire nation and Region V, have a serious backlog of §504 

complaints. 42 Fed. Req. 39824 (Aug. 5, 1977). OCR recognizes 

that the backlog will only be eliminated by fiscal year 1980 

or 1981, id. 

Moreover, as noted in plaintiffs' earlier memoranda, 

the allegation that HEW has failed to enforce §504 is not sub- 

J ject to the exhaustion requirement. Adams v Richardson, 480 F.2d 
  

1159 (b.C. Cir, 1973); Shannen v HUD, 436 F.2d 809, S20 (3rd 
  

Cir. 1970): Lee County School District No. 1 v Gardner, 263 F. Supp. 
  

26, 317{D.s.C. 1987). 

In light of the dual inadequacy of lack of resources 

and inappropriateness of the complaint procedure to deal with 

«3) = 

 



  

allegations implicating those procedures themselves, this Court 

should retain jurisdiction of the §504 counts. In the area of 

discrimination, courts have often retained jurisdiction without 

requiring exhaustion of administrative remedies, or else re- 

tained jurisdiction while overseeing administrative proceedings. 

NAACP v. Wilmington Medical Center, supra, Grubbs v. Butz, 514 
  

F.2d 1323 (p.C. Cir. 1975); Drennon v Philadelphia General 
  

Hospital, 428 F. Supp. 809 (E.D. Pa. 1977); N.A.A.C.P.,, Western 
  

  

Region v Brennan, 360 F. Supp. 1006 (D.C. Cir. 1973). 
  

In N.A,A.C.P. v Wilmington Medical Center, plaintiffs 
  

raised issues of Title VI and §504 discrimination very similar 

to those raised by plaintiffs herein. Mindful of the lack of 

HEW resources to make a prompt and thorough investigation of 

the isstes raised by the action, the plaintiffs did not file 

an administrative complaint with OCR. HEW moved to dismiss 

the complaint for failure to exhaust administrative remedies, 

contending that it did in fact have sufficient resources to in- 

vestigate properly the Title VI and §504 allegations. The 

Court, however, retained jurisdiction and ordered HEW to sub- 

mit a detailed plan for investigating plaintiffs’ allegations. 

The Court stated 

"In view of the grave doubt created by plaintiffs 

over the capability to perform the appropriate 

review, the Secretary will be requested to submit 

“3D 

 



  

for the Court's consideration a detailed plan for 

processing plaintiffs' complaint and an estimate 

of the period of time required to carry out the 

plan. If it later appears that the Secretary is 

unable or unwilling to conduct his review in a 

timely fashion, the Court may find that exhaustion 

of administrative remedies would be futile and 

proceed to consider the Title VI and §504 al- 

legations without benefit of an administrative 

record," 

426 7. Supp. at 925, 

In its Order, the Court further stressed its intention of re- 

taining jurisdiction and supervision over the "administrative" 

process. Paragraph 3 or the Order, attached hereto as Exhibit C 

states 

"If any proposal (for investigation of the Title VI 

and §504 allegations) submitted by the Secretary... 

is not reasonable under the circumstances, the 

Court will proceed in a manner designed to avoid 

prejudicing the rights of the other parties and 

the public interest." 

In Brennan, supra, plaintiffs challenged as inadequate 
  

a plan proposed by the Department of Labor to remedy Title VI 

and other violations brought to light by plaintiffs. The Court 

held that although the agency plan was not so facially deficient 

as to require total abrogation, and that although the doctrine 

of exhaustion applied "to a certain extent" to allow time to 

test the agency plan's sufficiency, it would retain jurisdiction 

"until it [could] be demonstrated that further relief [was] or 

[was] not necessary." 360 F. Supp. at 1018. The letter sent 

“33 

 



  

~~ 

by HEW to hospitals in Lake County (forwarded to this Court) which 

indicates that HEW plans to investigate possible violations of Title 

VI and §504 makes clear that resort to administrative remedies 

should not be required. ' The issuance of that letter, as HEW notes, 

was prompted by facts brought to its attention as a result of 

these cases. Yet, HEW does not indicate when the investigation 

will begin, how many personnel will be assigned to conduct it, 

or when it will be completed. Action taken by HEW, after the 

commencement of this lawsuit, should not and cannot serve to 

frustrate plaintiffs' right to judicial review. As noted above, 

HEW itself does not contend that it does . Rather, as the 

cases cited above hold, judicial review is necessary of the 

actions of Methodist Hospital and of HEW in light of the in- 

adequacy of and consequent futility of resort to the administra- 

tive process. 

The present situation ~ reguires judicial inter- 

vention to insure that plaintiffs receive the relief to which 

they are entitled. 

-33a~ 

 



  

VI 

Defendant Methodist Hospital Is 

Subject To The Requirements Of 

The Fourteenth Amendment. 

Methodist Hospital continues to argue that its 

actions are not "state action" for purposes of the 

Fourteenth Amendment. As shown in plaintiffs' memorandum 

of law in opposition to defendant's first motion, at pp. 

15-19, that argument is without merit because there is 

direct state and federal government regulation and in- 

volvement not only with respect to the approval of federal 

funds for the discriminatory construction program challenged, 

but to the responsibility to insure that Methodist Hospital, 

as a recipient of federal financial assistance, not dis- 

criminate against minority and handicapped persons. In 

contrast, none of the cases cited by defendant, either 

in its first or second motion, involve a violation of 

Title VI and Section 504, or claims of racial racial dis- 

crimination. See Greco v. Orange Memorial Hospital Corp., 
  

5313 P.24 873 (5th Cir. 1975) (challenge to policy of 

prohibiting performance of elective abortions, a policy 

which neither the County nor the State had sought to 

regulate); ward v. St. Anthony Hospital, 476 F.2d 671 
  

(10th Cir. 1973) (challenge to dismissal of doctor); 

“34 

 



  

Blackburn v. Pisk University, 443 P.24 121 (6th Cir. 1971) 
  

(complaint that suspension of students without a hearing 

violates due process); Stavcoff v. Harrisburg Polyclinic 
  

Hospital, 375 F. Supp. 299 (M.D. Penn. 1974) (complaint 
  

that curtailment of doctors privileges without procedural 

safeguards violates due process). 

“3% 

 



  

VII 

The Complaints State Claims 
For Which Relief Can Be Granted 
  

Defendant also claims that even if there is subject matter 

jurisdiction over the complaints, they fail to state claims for 

which relief can be granted under Title VI, Hill-Burton, Section 

504, Section 1122 and 42 U.S.C. § 1983. This argument, set forth 

at pp 33-35, largely reiterates other arguments made by defendant 

elsewhere, and in the interests of efficiency plaintiffs will not 

repeat their response. See pp. 4-10, supra. 

To continue to argue, as defendant does, that plaintiffs 

do not allege facts which constitute a deprivation of constitutional 

rights is to ignore paragraphs 14-16 of the complaint in Hatcher, 

et al.v. Methodist Hospital of Gary, et. al. and paragraphs 9 
  

- 12 of the amended complaint in Terry, et al. v. Methodist 
  

Hospital, et al. which allege facts that establish, if true, that 
  

defendant Methodist Hospital has purposefully created a health 
  

care system that segregates and discriminates against persons on 

the basis of race, and national origin. Such facts, if proven, 

clearly establish a deprivation of plaintiffs' rights to equal 

protection guaranteed by the Fourteenth Amendment. Reliance by 

defendant on Jackson v. New York City Health & Hospitals Corp. 
  

419 F. Supp. 809(S. D. N.Y. 1976) is misplaced. The opinion 

in Jackson was issued after a hearing and was based on the 

-3 

 



  

evidence presented to the Court. In contrast, the cases here are 

before this Court on a motion to dismiss, where the facts pleaded 

in the complaints are accepted as true and must be viewed in the 

light most favorable to the plaintiffs. Conley v. Gibson, 355% U.S. 
  

41, 45-46 (1957); Fuhrer v. Fuhrer, 292 F. 2d 140, 143 (7th Cir. 
  

* 1961). Moreover, the plaintiffs in Jackson, unlike the plaintiffs 

here, did not allege that defendants operated their facilities on 

a segregated basis. 

37 

 



  

vIlY 

Other Health Care Providers In The State 

Who Receive Federal Funds Are Not Indis- 

pPensible Parties To This Action. 
  

Defendants assert that if Methodist Hospital of Gary is 

found to have maintained segregated health facilities, the entire 

federal aid program to hospitals throughout the state would be 

affected. In response to the broad relief which defendants 

anticipate, they come to the remarkable conclusion that all 

health care providers in Indiana--hospitals, clinics and even 

individual doctors--should be joined as indispensable parties 

to this suit under Rule 19, F. R. Civ. P. Such an application of 

Rule 19, however, reflects the defendants' misunderstanding of 

the operation of the compulsory joinder provision and its under- 

lying equitable policies. 

Under Rule 19 a SHYLY is indispensable if: 1) complete 

relief among the existing parties cannot be afforded in his or 

her absence; 2) disposition of the case would adversely affect 

the absent party's interests; or 3) his or her absence would expose 

the existing parties to the risk of multiple or inconsist obliga- 

.tions. Defendants do not claim that complete relief cannot be 

ordered by this court or that they would be subjected to multiple 

or inconsistent liabilities. Instead, defendants rest their 

argument on the speculative theory that all other health care 

providers in Indiana would somehow be prejudiced by a judgment 

against the defendants in this action. At the outset, it should 

be noted that a judgment against defendants Methodist Hospital of 

  

Gary and Denis E. Ribordy would not have res judicata effect on 

any institutions that are not parties to this action. Provident 
  

“38 

 



  

Tradesmen 's Bank Vv. Patterson, 390 U.S. 102, 110 (1968). No 
  

direct relief is sought as to other hospitals or doctors in the 

state. Nor does the fact that the complaint seeks to enjoin 

HEW to enforce Title VI and Section 504 and to assure that all reci- 

pients of federal financial assistance neither segregate nor dis- 

criminate in the provision of health care services in any way suggest 

that the interests of health care providers in Indiana or elsewhere 

would be "adversely affected". All hospitals which receive federal 

aid are already subject to the prohibitions of Title VI and Section 

504. See 45 C.F.R. Part 80, Appendix A; 42 Fed. Reg. 22676 (May 4, 

1977). If civil rights investigations and enforcement by HEW pursuant 

to Title VI and Section 504 of other health care providers in the 

state revealed violations of the law, those providers would have 

an administrative forum in which to present their position. See 

45 CC. 7. R. 8§8§80.7, 80.8, 80.9, 80.10, 80.11; 42 Fed Reg. 22676. 

Violations by other health care providers are simply not included 

in the complaints or before this Court. 

In American Civil Liberties Union of Maryland v. Board of 
  

Public Works, 357 7. Supp. 877 (DD. C. Md. 1972), plaintiffs 
  

challenged the constitutionality of a statute authorizing state aid 

to private colleges and sought the return of such funds by aid 

recipients. At an early stage of the suit, defendants moved to 

dismiss for failure to join twelve private colleges receiving 

state aid, claiming that the relief requested would harm the absent 

parties and require the state to engage in multiple suits to collect 

the improperly disbursed funds. The district court rejected this 

“30 

 



  

argument, stating that "The fact that all recipients of aid under 

a challenged statute have a financial interest in the continua- 

tion of that statute does not lead inevitably to a conclusion that 

all aid recipients must be joined as parties”. Id. at 884 (emphasis 

in original). Accord, Brumfield v. Dodd, 425 F. Supp. 528, 530-31 
  

(E. D. La. 1976) (all private schools need not be joined as de- 

fendants in suit challenging state aid to racially segregated 

private schools). The Maryland court concluded that the absent 

parties could move for intervention under Rule 24 "if they are 

concerned that their interests in this case justify the burden 

that entering into the litigation would place upon them." 357 F. 

Supp. at 884. 

A similar result was reached in Hoots v. Commonwealth of 
  

pennsylvania, 359 F. Supp. 807 (W. D. Pa. 1973), aff'd, 495 F. 
  

2d 1095 (3d Cir.) (per curiam), cert. denied, 419 U.S. 884 (1974). 
  

In a civil rights action alleging that black children were being 

forced to attend racially segregated schools, the court refused to 

join the surrounding school districts as party defendants even though 

they might be affected by the relief ordered. The court instead 

reserved the possibility of joining the adjacent districts at a 

later time and stated that the defendants would be ordered to 

consult the absent parties with regard to any desegregation plan 

to be developed. Id. at 822. 

These two cases indicate that the likelihood that absent 

parties might be concerned with or even adversely affected by a 

court's decision does not in itself necessitate joinder. See also 
  

Provident Tradesmen's Bank v. Patterson, supra at 110 (joinder not 
  

lO 

 



  

required even if the court issues a judgment which practically 

affects nonparties):; Jackson Vv. Sargent, 394 FP. Supp. 162, 173 
  

(D.C. Mass. 1975) (arguable interest of white job applicants in 

Title VII suit brought by minority plaintiffs does not suffice to 

require joinder); Robertson v. National Basketball Association, 
  

389 PF. Supp. 867 (S.D.N.Y. 1975) (decision conceivably affecting 

an absent party does not automatically require joinder). In 

the instant case, other hospitals and clinics have not come for- 

ward to express an interest in the pending suit. If it becomes 

necessary for other health care providers to participate in this 

action, they may move to intervene or the court may join them as 

defendants at a later stage of the proceedings. Robertson v. National 
  

Basketball Association, supra at 879; Hoots v. Commonwealth of 
  

  

Pennsylvania, supra at 822. 
  

Finally, the application of Rule 19 must be governed by 

pragmatic considerations rather than formalistic incantations of 

rigid principles. See Advisory Comm. Note on Rule 19, F.R. Civ. P., 

quoted in 39 F. R. D. 88 (1966). If this court were to accept the 
  

full implications of defendant's argument and order the joinder of 

the chousands of health care providers throughout the state, this 

litigation would be rendered unnecessarily complex, if not totally 

unmanageable, and an effective resolution of the issues would in- 

evitably be delayed immeasurably. Given the numerous issues to be 

resolved and the extensive discovery which will have to be conducted 

with the present defendants, additional parties should not be joined 

-4]- 

 



  

in this action. Fair Housing Development Fund Corp. v. Burke, 
  

55 P.R. D. 414, 420 (D.C.N.Y., 1972); ACLU of Marviand v. Board 
  

of Public Works, supra at 885. 
  

~% 

a 

 



  

aa J 

IX 

Other Arguments Raised By Defendants 

Are Equally Without Merit. 

(1) while defendants are correct that plaintiffs 

do not predicate jurisdiction over Methodist Hospital 

and Denis Ribordy on 29 U.S.C. § 1361 and that the 

Declaratory Judgment Act, 28 U.S.C. §§ 2201 et seg., 

is subject to the "case on controversy" requirement of 

Article III of the Constitution, Aetna Life Insurance 
  

Co. v. Howorth, 300 U. S. 277, 239-40 (1937), these prop- 
  

ositions in no way support defendant's motion. 

(2) Denis Ribordy is President of the Board of 

Directors of Methodist Hospital. Plaintiffs name Mr. 

Ribordy as a defendant in that capacity because he has 

ultimate power over and responsibility for the actions 

of defendant Methodist Hospital and is therefore legally 

liable as President for Methodist Hospital's unlawful 

discriminatory actions. It is not as if plaintiffs named 

a total stranger to Methodist Hospital or that any actions 

of the hospital were taken without his approval -- it is 

undisputable that as President he is the person who author- 

ized the plans and construction programs complained of in 

thsee actions. 

«3 

 



  

X. 

Conclusion 
  

For the reasons stated above and in plaintiffs' earlier 

memoranda submitted to this Court, the Motion to Dismiss of 

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

Ribordy must be denied. 

Respectfully submitted, 

  

Drvi, 4. dort 
| Vv J 

JACK GREENBERG 

BETH J. LIEF 

10 Columbus Circle 

New York, New York 10019 

JULIAN ALLEN 

2009 Broadway 
Gary, Indiana 

MARILYN G. ROSE 

CHRISTINE B. HICKMAN 
1751 N Street, N.W. 

Washington, D.C. 20036 

Attorneys for Plaintiffs 

ram 

 



  

a 

Certificate of Service 
  

I hereby certify that a copy of the foregoing Memorandum 

of Plaintiffs in Opposition to Motion to Dismiss of 

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

Ribordy was served by United States mail, postage prepaid, 

gn 
on the /3 day of Ag n >r , 1977, on counsel for 

J 
  

defendants as follows: 

Rebecca L. Ross, Esq. 

Department of Justice 

10th and Pennsylvania Avenue 

Washington, D. C. 

Marvin G. Garvin, Esq. and Edward L. Koven, Esq. 

Regional Attorney and General Attorney 

Department of Health, Education and welfare 

300 South wacker Drive, 18th Floor 

Chicago, Illinois 

Fred W. Grady, Esq. 

Assistant United States Attorney 

Northern District of Indiana 

Federal Building, 502 State Street 

Hammond, Indiana 46325 

Attorneys for Defendant Secretary of Health, 

Education and Welfare 

Hodges, Davis, Gruenberg, Compton & Sayers 

Bruce E, Sayers, Esg. 

5525 Broadway 

Gary, Indiana 46401 

Attorneys for Defendant Methodist Hospital 

of Gary, Inc. 

 



  

Theodore L. Sendak, Esq. 

Assistant Attorney General of Indiana 

219 State House 

Indianapolis, Indiana 

Attorney for State Defendants 

Anthony DeBonis, Jr., Esq. 

» Joseph E. Costanza, Esq. 

Murphy, McAtee, Murphy & Costanza 

»~ First National Bank Building 
720 W. Chicago Avenue 

East Chicago, Indiana 46312 

Attorneys for Defendant Kipton Kaplan 

J 
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1 
Sth J Leos 
  

Beth J. Lief 
Attorney for Plaintiffs 

 



UNITED STATES DISTRICT COURT 
NORTHERN DISTRICT OF INDIANA 

HAMMOND DIVISION °° . 

  

BERNICE TERRY, ET AL., 

Plaintiffs, 

VS. CIVIL NO. H 76-373 

METHODIST HOSPITAL OF GARY, 
INC... ET AL. 

Defendants. 

EEE EEE EEE EEE ERE EIRETEEEETEE EERSTE EEE EES 

RICHARD GORDON HATCHER, ET AL., 

Plaintiffs 

CIVIL NO. H 66-154 VS. 

METHODIST HOSPITAL OF GARY, 
INC., ET AL., 

Defendants 

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a
 

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AFFIDAVITS IN OPPOSITION TO 
DEFENDANT'S MOTION TO DISMISS 
  

  

Come now plaintiffs, Richard Gordon Hatcher and Willie Lee 

Page, by counsel, and file Affidavits in Opposition to Defendant's 

Methodist Hospital of Gary, Motion to Dismiss. 

CHEST) 

Respectfully Submitted, 

SHROPSHIRE §& ALLEN 
> / / Pd el 

g / ~~ Z4 So ~ 

4 IE 2, (%4 ol 

    

  

CHARLES B. en? 

 



CERTIFICATE OF SERVICE 
  

  

- 

I hereby certify that copies of the foregoing Affidavits in 

Opposition to Defendant's Motion to Dismiss were served by United 

States mail, postage prepaid, on the 16th day of August, 1977, on 

"counsel for defendants as follows: 

Rebecca ‘1. Ross, Esq, 
Department of Justice 
10th and Pennsylvania 
Washington, D. C. 20004 

Marvin G. Garvin, Esq., and Edward L. Koven, Esq. 
Regional Attorney and General Attorney 
Department of Health, Education and Welfare 
300 South Wacker Drive, 18th Floor 
Chicago, Illinois 60606 

Fred W.. Grady, Esq. 
Assistant United States Attorney 
Northern District of Indiana 
Federal Building, 402 State Street 
Hammond, Indiana 46325 

Attorneys for Defendant Secretary of Health, Education 
and Welfare 

Hodges, Davis, Gruenberg, Compton § Sayers 
Bruce E. Sayers, Bsqg. 
5525 Broadway 
Merrillville, Indiana 46410 

Attorneys for Defendant Methodist Hospital 
of Gary, Inc, 

Theodore L. Sendak, Esq. 
Assistant Attorney General of Indiana 
219 State House 
Indianapolis, Indiana 46204 

Attorneys for State Defendants 

Anthony DeBonlis, Jr., Esq. 
Joseph B. Costanza, Esq, 
Murphy, McAtee, Murphy § Costanza 
First National Bank Building 
720 W. Chicago Avenue 
East Chicago, Indiana 46312 

Attorneys for Defendant Kipton Kaplan 

    a” -    
  

z= &. 

¥ LES B. MILLE 
Attorney for Plaintiffs 

 



    

UNITED STATES DISTRICT COURT 
NORTHERN DISTRTCT OF INDIANA AUG 16 

HAMMOND DIVISION 
AN, 

: FRANCIS 1. aranpye=M BERNICE TERRY, ET AL., YS, DISTRICT coy CLERK 

Plaintiffs , 

vs CIVIL NO. H 76-373 

METHODIST HOSPITAL OF GARY, ’ 

rm ET 
N L. LI J J 75 

Ty 7 5 on dm pn 
bot § an en? eo 

1 & 3 ala . aly x 7 kc rol kth hkAhdki%h 

v3 CIVIL NO. 8 712154 

  

¥ ODI ! ( y oD 7 TTA T OF GA RY 

- rm AT | 

Lidl. . ? dat J 3 CR 

£1 ed Sl 
JL Lidia 

FFIDAVIT IN QrPOSITI! ( 
7 ANY - {] PT - ™ "Tf TK 

|. { 1 ¥ 1, he 

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11 4 J. (BR ( til H { J 4 

N ) { al 

* yF actio 

} ( \ 1 \ ¢ i 0) } £31 

( C i | l l >) 4 y= 1 On { ( ¢ 2 . : = LON : 

~ “ ‘ nd ge a" de) EA x 3 3 bl gy - oF oan : f° ie \V4 Ger Of Th 1S Will 8 Yeqgulire two (2) 

yrs 
operations and related treatments since 196¢ 

ney de . - - ia — - = » J TY on a Ld 3. My first operation was at Gary ocilst llosrital, 

iY ol hE i Naa yy of Ql TTP ~ » ay go] oy - ~~ - a a NS - C00 Grant Street, Gary, Indiana, and I rcccive eatments at 

i NE.  — y 48 W rv} “ = yo A 7% %*% 2% an doe a pnp ay ee P ALT PR that facility following that overation on my right . 

COCA } noeratl on wh 1 ven c rev 7 £4} 1 } SSCOonl operacl 2D, -WRIO0HD Was On 1 < } 3 Lp ! Sold 

ge KE = — py po pon ~~ ~~ go um Po ~ fn ~ ~ We J 1- MAP sre JIE le PTI SE J | WL a 1976, and was also performed at Gary Methodist Hospital with ¥ 

4. Since that operation and the treatments which immediately 

followed, I have been sent to Broadway lMethodist Hospital for 

follow up examinations because Gary Methodist Hospital no longer 

had the necessary equipment to treat my condition. 

 



  

  

9. In order for me to go to Broadway Methodist Hospital 

for these follow up examinations, it is sometimes necessary that 

I pay someone to take me out to the facility and bring me back home. 

This creates a financial hardship and burden, because my husband is 

the sole support of my household and I am dependant on his wages to 

provide money for these trips, as well as all normal household 

and living expenses. 

6. As a result of my condition and age, I have a physical 

impairment which substantially limits one or more of my major life 

activities. 

7. I can no longer do housekeeping chores, care for my husband 

and myself without assistance, nor attend church services on a 

regular basis. Due to my condition, on occasion, I am not well 

enough to leave my bed in the morning and feed and care for myself. 

8. Ms a minority and handicapped individual, I have been 

discriminated against in the provision of health services by the 

Defendant Methodist Hospital of Gary, Inc. 

Further affiant saith not. 

  

  

7 { fo Py) Vid ny / / i 7 / / (14. A (iol wr f / /S / 4 \ ; a “LF 

WILLIE LEE PAGE 7% 
  

Subscribed and Sworn to before me this /Z— day of 

August, 1977. 

    
Ps itl] A Sn 

Notary Public 
7 

  

  

  

My Commission expires: 

Yas oe 
4 
  

/ 

 



  

STATE OF INDIANA ) 
} ‘$8: 

COUNTY OF LAKE ) 

IN THE 

UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF INDIANA 

HAMMOND DIVISIO} 

a . —r————   
  

RICHARD GORDON HATCHER, et al., 

Plaintiffs, 

METHODIST HOSPITAL OF GARY, et al., 

Defendants. 

  

AFFIDAVIT 
  

RICHARD GORDON HATCHER, being flrst duly sworn and on oath 

(1) | am a plaintiff, Richard Gordon Hatcher, in opposition 

to defendant, Methodist Hospital of Gary's Motion to Dismiss. 

(2) I1f | become ill and have to be hospitalized, | would 

seek such hospltal care at Methodist Hospital of Gary. 

(5) As Mayor of the City of Gary, | am responsible for the 

public health and welfare of the City of Gary. This responsibility 

is carried out through the following agencies: 

(a) The Health Department 

(b) Model Cities Health Program 

(c) Medical Center of Gary 

(d) The Drug Abuse Center 

(e) Gary Ambulance Service 

(f) Rodent Control 

 



  

(g) Mosquito Abatement 

(h) Immunization Program 

(i) Women's Infant Child Food Program 

(J) Gary Dental Health Program 

Total expenditures for these programs, except for the Medical 

Center of Gary, amounts to approximately 1.6 million dollars 

per year. 

Further, affiant saith not. 

y} 4 J ol 

JALYUY XAY XIHA 
RICHARD YGORDON FATCHER 

i 
SUBSCRIBED and SWORN to before me this _ /A2 day of August, 1977. 

/ /) ¥ 4 off / 
/ / py 4 \_ Fe V J 4 Sf 

I 4 / ff 74 / V4 

SHAY A Nf Mot 
Jf 
  

Noyary Public 

My Commission Expires: 

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