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SHULMAN v. WASHINGTON HOSP. CTR.

October 9, 1963

Isidore SHULMAN, Plaintiff,
v.
WASHINGTON HOSPITAL CENTER et al., Defendants



The opinion of the court was delivered by: HOLTZOFF

The question presented in this case is whether the failure of a private hospital to renew the membership of a physician on its 'Courtesy Staff', is subject to judicial review. It is one of novel impression in this jurisdiction. This Court answers the question in the negative, subject to the possible qualification that there may be judicial review only if the hospital violates procedural requirements prescribed by its own charter, constitution, by-laws, rules or regulations. The last mentioned aspect is not involved in this case.

The plaintiff, Dr. Isidore Shulman, has been a member of what is known as the 'Courtesy Staff' of the defendant Washington Hospital Center, located in Washington, D.C. Appointments to the staff are made for a period of one year, and may be renewed from year to year. The plaintiff's membership was not renewed for 1963. He brings this suit in order to secure reinstatement and prays for a declaratory judgment and an injunction, as well as for damages against the hospital and its officers for malicious defamation of his professional standing. The case is now before this Court on the defendants' motion for summary judgment.

 The salient facts may be briefly summarized as follows. The defendant Washington Hospital Center is a nonstock, non-profit corporation organized by private individuals under the laws of the District of Columbia. Its affairs and funds are controlled and managed by a Board of Trustees elected by members of the corporation. It owns, maintains and operates a hospital in Washington, D.C., likewise known by the same appellation as the corporation. Pursuant to authority conferred by Acts of Congress, the hospital was built by the Federal Government on a site owned by the United States, which formerly formed a part of the grounds of the Soldiers' Home. Likewise, pursuant to Congressional authority the hospital was conveyed by the Government to the defendant corporation. The latter owns, maintains, and operates the hospital without any participation on the part of any representative of the United States and receives no funds or other aid from the United States beyond the original conveyance of the land and the plant. In addition to treating private patients, the hospital also gives medical care to indigent persons and by contract with the District of Columbia receives compensation for so doing.

 The Board of Trustees is required by its by-laws to appoint a medical staff, each appointment to be effective for one year only, but renewable on recommendation of the medical staff. The by-laws further provide that the Board of Trustees shall have the right to permit any doctor of medicine to practise his profession at the hospital and to exclude any physician who had previously done so. The medical staff is subdivided into four groups, known as emeritus, consulting, active and courtesy staffs. Members of the courtesy staff, which consists of over 650 persons, are permitted to recommend their private patients for admission to the hospital, and to attend to them there. The plaintiff, Dr. Isidore Shulman was named to the courtesy staff in February, 1958. His appointment was renewed from year to year, until January 1963. At that time the Medical Board recommended against the renewal of five appointments to the courtesy staff, Dr. Shulman's being one of them. This recommendation was accepted by the Board of Trustees. The reason for this action is not disclosed in the record. The plaintiff thereupon brought this suit, seeking reinstatement and damages.

 The first question to be considered is the legal status of the defendant hospital. All hospitals (with the exception of those maintained by the United States for members of its armed forces and for veterans) may be divided into two categories, -- public hospitals and private hospitals. A public hospital, as its very name implies, is one owned, maintained and operated by a governmental unit, such as a municipality, or county, and supported by governmental funds. The Court takes judicial notice of the fact that there are two such hospitals in the District of Columbia, -- the District of Columbia General Hospital maintained by the local government, and Freedman's Hospital, a unique instituion, belonging to the Federal Government. A private hospital is one that is owned, maintained and operated by a corporation or an individual without any participation on the part of any governmental agency in its control. The fact that a hospital is operated for the benefit of the public and not for profit, does not detract from its character as a private institution, if it is established and maintained by a private corporation or individual with authority to elect or appoint is own officers and directors.

 This distinction between public and private institutions was formulated by the Court of Appeals of Maryland in Levin v. Sinai Hospital of Baltimore City, 186 Md. 174, 178, 46 A.2d 298, 300, in the following manner:

 'The essential difference between a public and a private corporation has long been recognized at common law. A public corporation is an instrumentality of the State, founded and owned by the State in the public interest, supported by public funds, and governed by managers deriving their authority from the State. Public institutions, such as State, county and city hospitals and asylums, are owned by the public and are devoted chiefly to public purposes. On the other hand, a corporation organized by permission of the Legislature, supported largely by voluntary contributions, and managed by officers and directors who are not representatives of the State or any political subdivision, is a private corporation, although engaged in charitable work or performing duties similar to those of public corporations. * * * So, a hospital, although operated solely for the benefit of the public and not for profit, is nevertheless a private institution if founded and maintained by a private corporation with authority to elect its own officers and directors. * * *'

 The fact that a private hospital may receive donations or subventions from the Government, or compensation from a city or county for caring for sick or disabled indigent persons, does not transform it into a public institution, Van Campen v. Olean General Hospital, 210 App.Div. 204, 205 N.Y.S. 554, 556, affirmed 239 N.Y. 615, 147 N.E. 219. Similarly, the circumstance that it was constructed with the aid of Government funds, as is the case in this instance, does not detract from its status as a private hospital. Thus, it was said by the Supreme Court of Appeals of Virginia, in Khoury v. Community Memorial Hospital, Inc., 203 Va. 236, 123 S.E.2d 533, 538:

 'The hospital is not owned by the federal or the state government, albeit federal and state funds may have made its construction possible. It is not an instrumentality of government for the administration of any public duty, although the service it performs is in the public interest. Its officers are not appointed by and are not representatives of government, notwithstanding that their authority stems from legislative enactments. Under these circumstances, the hospital falls squarely within the time-honored definition of a private corporation.'

 The Supreme Court of Florida in West Coast Hospital Ass'n. v. Hoare (Fla.) 64 So.2d 293, 296, stated that such an institution may be conducted as a public charity and may be supported by appropriations by the state, county, or municipality, without becoming a public hospital.

 In Edson v. Griffin Hospital, 21 Conn.Sup. 55, 144 A.2d 341, 344, the test of a private hospital was formulated as follows:

 'The test is whether, under the charter or corporate powers granted, they have the right to elect their own officers and directors, with the power to manage their own affairs.'

 The conclusion is inescapable that the Washington Hospital Center is a private hospital within the criterion enunciated by the authorities. It is owned, maintained and operated by a corporation in which no governmental agency participates, either in respect to ownership or control. The corporation elects its own officers and directors and manages its own affairs. As shown above, the fact that originally the hospital was built with government funds and then conveyed to the corporation, and that it receives compensation from the District of Columbia for caring for indigent patients does not affect its legal status as a private institution.

 A private hospital is not a public utility in the legal sense of that term. Neither is the operation of the hospital a public calling, such as that of a common carrier, light or power companies, or a telephone company. Thus, rates and charges of a private hospital are not subject to governmental regulation. Such an institution is not required to accept every person who demands access to its facilities, but may select and choose only those prospective patients whom it feels it is in a position to benefit to the extent of its capacity. Otherwise, any hypochondriac, or any person who is only slightly ...


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