Leslie Kushner is an Associate for Holland & Knight's New York office.
Private hospitals commonly associate with public entities in running a variety of programs. These collaborations raise the question in civil rights litigation of whether and when the private hospital is a state actor. Under 42 U.S.C. § 1983, a public college may not dismiss a student without adequate due process. In many of the collaborations between hospitals and educational institutions, the private hospital provides a clinical training program for medical and/or nursing students enrolled in the public university. But is a private hospital a state actor when it dismisses a public university student from its clinical training program? According to a recent decision from the United States Court of Appeals for the Third Circuit, a private hospital that applies its own employment policies to dismiss a student from its clinical training program, independently of the associated public university, is not a state actor.
In Borrell v. Bloomsburg University, Nos. 15-2823, 16-3837, 16-3959, 2017 WL 3725001 (3d Cir. Aug. 30, 2017), Geisinger Medical Center dismissed a student from its nurse anesthetist training program after the student refused to submit to a drug test when she was suspected of using cocaine. The manager of the hospital's clinical program, who had a joint appointment as director of the Bloomsburg University's (University) nurse anesthetists program, requested that the student submit to the drug test. The dismissal letter, which was written and signed by the clinical program's manager, was also signed by the University's Chair of Nursing who oversaw the academic component of the nurse anesthetist program. The student requested, but was denied, a hearing from the University in order to contest her termination from the clinical program. The student brought a § 1983 action in U.S. District Court for the Middle District of Pennsylvania.
The District Court found that, because the manager of the hospital's clinical program was also director of the University's nurse anesthetist program, and the letter of termination was signed by both him and the University's chair of nursing, the student's termination from the clinical program was a state action. For that reason, the District Court held that the hospital, the manager of the clinical program, and the head of the academic portion of the program were in violation of the student's due process right to a pre-deprivation hearing.
The Third Circuit reversed the District Court and remanded for entry of judgment in favor of the defendants. Following Supreme Court jurisprudence, the Third Circuit applied three tests to determine whether the hospital and clinical program manager were state actors: (1) did they exercise powers that belong exclusively to the state; (2) did they act with the assistance of state officials; and (3) was the state so interdependent with the hospital that it must be recognized as a joint participant in the student's termination?
The Third Circuit found that, when the clinical program manager dismissed the student, he was acting in his capacity as a hospital administrator, not university employee, because he was enforcing a hospital policy that pre-existed the University collaboration. The hospital's drug and alcohol policy stated that drug tests "may be administered upon reasonable suspicion of substance abuse" and that any hospital worker who refused to cooperate in the testing is subject to disciplinary action, including termination. The policy provided for no pre-termination hearing or process. The hospital drug and alcohol policy applied to all employees, contractors, and clinical students. Thus, in dismissing the student from the clinical training program, the clinical program's manager was exercising the policies of the hospital, and not acting under state authority.
Contrary to the reasoning of the District Court, the Third Circuit did not conclude that the University assisted or participated in the student's dismissal from the clinical program. The agreement between the hospital and University clearly indicated that the hospital had the sole authority to dismiss a student from clinical training according to its own policies. Because the University had no control over the student's dismissal from the clinical program, the signature of the head of the University academic program on the dismissal letter did not convert the hospital's action into a state action. Moreover, lack of authority over the clinical program manager's actions in dismissing the student supported a finding of qualified immunity for her.
In sum, in the Third Circuit, a private hospital that exercises its unilateral authority over personnel participating in its programs, even when those programs are part of a collaboration with a public entity, is not a state actor subject to § 1983. Regardless of the outcome here, this case serves as a reminder that a private hospital entering into a collaboration with a public entity can protect against claims of due process violation by ensuring that such a collaboration does not abrogate its unilateral authority to apply its pre-existing personnel policies to individuals involved in the hospital's programs.
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