State Defendant's Pre-Trial Brief

     [||5574630f-a6cc-4626-9921-4b77248fd71b||] IN THE UNITED STATES DISTRICT COURT 
FOR THE NORTHERN DISTRICT OF INDIANA 

HAMMOND DIVISION 

  

BERNICE TERRY, et al., ) 

) 
Plaintiffs, ) 

) 
z. ) CIVIL NO. H-76-373 

) 
METHODIST HOSPITAL OF CARY ) 

INC... et: al. ) 

) 
Defendants. ) 

) 
) 

RICHARD GORDON HATCHER, et al. 5) 

) 
Plaintiffs, ) 

) 
Vv. ) CIVIL NO. H-77-154 

) ~ 
METHODIST HOSPITAL OF GARY ) 

INC. , el al, 4) 
) 

Defendants. ) 

) 
) 

  

STATE DEFENDANT'S 
PRE-TRIAL BRIEF 
  

In the complaint filed in this consolidated action, plaintiffs 

allege that the state defendants, in the course of their review and 

recommendation on certain applications for federal financial assist- 

ance under §1122 of the Social Security Act, (hereinafter 

§1122") and Title VI of the Public Health Services Act, (hereinafter 

"Hill-Burton"),. violated Title VI of the Civil Rights Act of 1967, 42 

USC 2000d (hereinafter "Title VI"). 

Title V1 provides, in part, that: 

"No person in the United States shall, 
on the grond of race, color, or 
national origin, be excluded from 
participation in, be denied the 
benefit of, or be subjected to 
discrimination under any program or 
activity receiving Federal financial 
assistance," 42 U.8.C. 20004. 

This provision was implemented by rules and regulations adopted 

under authority granted by Title VI, which pertinent portion, 

states: 

 



  

"Each Federal department and agency 
which is empowered to extend Federal 
financial assistance to any program 
or activity, by way of grant, loan 
or contract other than a contract of 
insurance or guaranty, is authorized 
and directed to effectuate the pro- 
visions of section 2000d of this title 
with respect to such program or 
activity by issuing rules, regulations, 
or orders of general applicability 
which shall be consistent with achieve- 
ment of the objectiives of the statute 
authorizing the financial assistance in 
connection with which the action is 
taken. No such rule, regulation, or 
order shall become effective unless and 
until approved by the President." 42 
U.8.C. 20004. 

It is evident that the responsibility for applying Title VI 

is on the "Federal Department or Agency which is empowered to extend 

Federal financial assistance. Responsibilities of the state defend- 

ants under §1122 and the Hill-Burton program include merely review 

of applications and recommendation to the Secretary of the Depart- 

ment of Health,Education and Welfare [hereinafter "HEW'"]. It is 

HEW which grants the approval of an application and is the federal 

agency, ''empowered to extend Federal financial assistance'. 

The Indiana Board of Health has an agreement with the Secretary 

of HEW to carry out provisions of §1122 as the ''Designated Planning 

Agency or DPA. The DPA also operates its §1122 review in accordance 

to regulations adopted pursuant to §1122, 42 C€.F.R. Part 100. 

Section 1122 regulations mandate four review criteria: 

""(a) Whether the proposed project is needed 
or projected as necessary to meet the needs 
of the community in terms of health services 
required: Provided, That projects for highly 
specialized services (such as open-heart 
surgery, renal transplantation, or radiation 
therapy) which will draw from patient 
population outside the community in which 
the project is situated will receive appro- 
priate consideration; 
(b) Whether the proposed project can be 
adequately staffed and operated when com- 
pleted; 
(c) Whether the proposed capital expenditure 
1s economically feasible and can be accommo- 
dated in the patient charge structure of the 
health care facility or health maintenance 
ovganiastion without unreasonable increases; 
an 
(d) Whether the project will foster cost 
containment or improved quality of care 
through improved efficiency and productivity, 
including promotion of cost-effective 
factors such as ambulatory care, preventive 

 



  

health care services, home health care, and 
design and construction economics or 
through increased competition between 
different health services delivery systems." 
42 CFR 100.107. 

In neither the §1122 agreeement with HEW or the regulation pro- 

mulgated by HEW are there mandated review criteria concerning 

Title VI. 

Under the Hill-Burton program, the Indiana Board of Health 

makes recommendations on projects to HEW for allocation of Hill- 

Burton funds based on priorities established in a state plan. The 

state operates under regulation adopted pursuant to Hill-Burton, 

42 CFR Part 53, which again do not mandate a Title VI review prior 

to their recommendation. 

CONCLUSION = 
  

The Department of Health, Education and Welfare has the 

ultimate authority with regard to the distribution of federal 

financial assistance under Section 1122 and Hill-Burton and 

determines how the state agency administers its responsibilites 

under §1122 and Hill-Burton, including matters related to Title VI 

of the. .rivil Rights Act of 1964, 

Respectfully submitted, 

THEODORE L. SENDAK 
Attorney General of Indiana 

{AC mie 
ERIC B. SERVAAS 
Deputy Attorney General 

  

Office of Attorney General 
219 State House 
Indianapolis, Indiana 46204 
Telephone: (317) 633-6268 [||5574630f-a6cc-4626-9921-4b77248fd71b||]