James Gaston v. Parthasarathi Ghosh ( 2019 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 17-3618 & 18-1281
JAMES GASTON,
Plaintiff-Appellant,
v.
PARTHASARATHI GHOSH, et al.,
Defendants-Appellees.
____________________
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 11-cv-6612 — Edmond E. Chang, Judge.
____________________
ARGUED MARCH 27, 2019 — DECIDED APRIL 3, 2019
____________________
Before EASTERBROOK, KANNE, and HAMILTON, Circuit
Judges.
EASTERBROOK, Circuit Judge. Iskander v. Forest Park, 690
F.2d 126 (7th Cir. 1982), holds that private corporations,
when deemed to be state actors in suits under 42 U.S.C.
§1983, must be treated the same as municipal corporations.
This means that they are not subject to vicarious liability.
See, e.g., Ashcroft v. Iqbal, 556 U.S. 662, 676–77 (2009); Monell
v. New York City Department of Social Services, 436 U.S. 658,
2 Nos. 17-3618 & 18-1281
691–94 (1978). Iqbal, Monell, and other decisions hold that
municipalities and public employees may be held liable for
their own decisions and policies but are not liable under the
doctrine of respondeat superior for the acts, decisions, and pol-
icies of other persons, including subordinate public officials.
Iskander held that the same approach applies to private cor-
porations and their agents, to the extent that they are treated
as state actors for the purpose of §1983. James Gaston asks us
to overrule Iskander and hold that in litigation under §1983 a
private corporation may be liable vicariously to the same ex-
tent as a private corporation in the law of torts.
That argument has been made before but left unresolved,
because the appeals could be decided on other grounds. See,
e.g., Collins v. Al-Shami, 851 F.3d 727, 734 (7th Cir. 2017); Glis-
son v. Indiana Department of Corrections, 849 F.3d 372, 379 (7th
Cir. 2017) (en banc); Shields v. Illinois Department of Correc-
tions, 746 F.3d 782 (7th Cir. 2014). That is equally true today,
and for the same reason as in Collins: the employee “is not
liable, so—even if the theory of respondeat superior were
available—neither is his employer.”
Gaston, a prisoner of Illinois, suffered injuries that led to
surgery on both of his knees. (He had other medical prob-
lems, but treatment for them is no longer in dispute.) He first
complained about pain in his left knee in May 2009. Drugs
did not solve the pain, and the knee did not heal on its own.
Liping Zhang, a physician employed by Wexford Health
Sources, which Illinois uses to provide medical care in the
state’s prisons, eventually alerted Parthasarathi Ghosh, who
referred Gaston to an orthopedic surgeon. Delay in imple-
menting that decision followed; the consultation occurred in
September 2010. Dr. Ghosh, the head of medical services at
Nos. 17-3618 & 18-1281 3
the prison, approved a magnetic resonance imaging (MRI)
exam, which the specialist had recommended, but it was not
conducted until February 2011. It revealed a lingering injury.
In August 2011 Samuel Chmell performed arthroscopic sur-
gery on Gaston’s left knee, a step approved by Imhotep
Carter, who replaced Dr. Ghosh after his retirement. (Dr.
Chmell is an orthopedic surgeon on the staff of the Universi-
ty of Illinois hospital system, which handled all of the spe-
cialist work, MRI exams, and surgeries we mention.)
While Gaston’s left knee was healing, a consultative body
within Wexford delayed approving an MRI image of his
right knee, stating that one knee had to be sound before
treatment of the other could proceed. In May 2012 the pris-
on’s interim medical director (Dr. Carter having left) re-
ferred Gaston for an MRI exam on the right knee. It showed
serious problems, and Dr. Chmell recommended another ar-
throscopic surgery. In August 2012 Saleh Obaisi, the prison’s
new medical director, approved Dr. Chmell’s recommenda-
tion, and surgery occurred in October 2012. This did not
bring the hoped-for relief, and Dr. Chmell recommended ar-
throplasty (i.e., knee replacement). That surgery, a much
more substantial medical intervention, was delayed while
specialists determined whether Gaston’s pulmonary and
cardiology systems would handle the strain. More delay
may have been caused by inamention to the case. The arthro-
plasty took place in February 2015 and was successful.
Gaston acknowledges that he has received a great deal of
medical care. He does not contend that the diagnosis or the
selected interventions can lead to §1983 liability under the
approach of Estelle v. Gamble, 429 U.S. 97 (1976); Farmer v.
Brennan, 511 U.S. 825 (1994); and PeIies v. Carter, 836 F.3d
4 Nos. 17-3618 & 18-1281
722 (7th Cir. 2016) (en banc). Instead he contends that the de-
lays while waiting for surgeries reflect deliberate indiffer-
ence to his pain, so that the pain became a form of unauthor-
ized punishment in violation of the Eighth Amendment (ap-
plied to the states through the Due Process Clause of the
Fourteenth Amendment). After the district court dismissed
Gaston’s complaint, we remanded, holding that a complaint
based on unwarranted pain during extended delay in treat-
ment states a claim under the Eighth Amendment. 498 F.
App’x 629 (7th Cir. 2012) (nonprecedential disposition).
Back in the district court Gaston, although represented
by counsel, proceeded premy much as if anyone whose com-
plaint states a legal claim prevails without needing to prove
the complaint’s allegations. Defendants conducted discov-
ery; Gaston not so much. In particular, Gaston did not try to
find out either who was responsible for the delays (the four
physicians named as defendants? back-office staff? someone
else?) or why those delays occurred (a desire that Gaston’s
pain continue? indifference to his pain? simple negligence?
medical judgment?). For their part, defendants offered some
evidence that would tend to support a conclusion that the
delays could be chalked up to medical judgment—a prefer-
ence for conservative treatment before surgery—plus occa-
sional oversight, but never to any desire to injure Gaston or
indifference to his pain. Dr. Chmell testified in a deposition
that the treatment afforded to Gaston was within the stand-
ard of care in the medical profession—in other words, not
even negligence, let alone punishment inflicted with the sub-
jective standard required for constitutional liability.
Gaston contended that Wexford should be held liable
even if none of the four physicians is culpable. In making
Nos. 17-3618 & 18-1281 5
this contention, he assumed that, if Iskander should be over-
ruled, then Wexford and other private corporations would
become liable under §1983 for their employees’ negligence,
no mamer what standard applies to the personal liability of
those employees.
The district court granted summary judgment to the four
individual defendants, ruling that the record does not show
that any of them acted (or delayed acting) with the state of
mind required for culpability. 2017 U.S. Dist. LEXIS 195234(N.D. Ill. Nov. 28, 2017). The court recognized that it lacks
the authority to depart from Iskander. Wexford could be lia-
ble for its own unconstitutional policies, but the court con-
cluded that the policies to which Gaston pointed, such as
treating one condition at a time, reflected medical judgment
rather than a constitutional problem.
It is not as if Wexford has a policy of ignoring life-
threatening conditions while a prisoner heals from surgery.
Nor did Wexford ignore the pain from one knee while Gas-
ton recovered from surgery on the other. He received pain-
alleviating drugs. The district court’s decision is addressed
to a policy providing time between surgeries, a policy that
Dr. Chmell testified is medically appropriate. The district
judge was confident that, if a prisoner being treated for the
flu broke his leg, Wexford would immediately provide the
care needed to deal with a broken leg. 2017 U.S. Dist. LEXIS
195234 at *43. (The district court added that Gaston has not
established that “treat one condition at a time” is Wexford’s
policy, as opposed to a medical decision made about his sit-
uation, in particular.)
In this court, Gaston scarcely engages with the district
court’s reasoning or the consequences of his failure to intro-
6 Nos. 17-3618 & 18-1281
duce evidence. Instead he asks us to overrule Iskander in the
belief that this will eliminate the need to show that any of
Wexford’s employees violated the Eighth Amendment. That
not only contradicts Collins, which Gaston does not mention,
but also misunderstands the nature of vicarious liability. It
is—well, there’s no bemer word than vicarious.
With vicarious liability, one person is liable for another’s
wrong. In an employment relation, that means an employee
or other agent. The wrongdoer need not be a defendant, but
there must be an actionable wrong, by a person whose con-
duct is imputed to the employer. Medical negligence by one
of Wexford’s employees could support liability under state
tort law but not the Eighth Amendment. If only intentional
wrongdoing by an employee leads to personal liability, then
an employee’s negligence does not justify holding the em-
ployer liable. There’s nothing to be vicariously liable for.
These are fundamental principles of tort and agency law,
where vicarious liability has long been common. “Vicarious
liability is not based upon the defendant’s own fault. Rather,
it is based upon the principle that he must bear legal respon-
sibility for another’s wrong. From the employer-defendant’s
point of view, vicarious liability is strict liability, since he is
liable without personal fault. That is not quite the case from
the plaintiff’s point of view. The plaintiff must prove that the
employee commimed a tort and was acting within the scope
of employment when he did so.” 2 Dan B. Dobbs, Paul T.
Hayden & Ellen M. Bublick, The Law of Torts 782 (2d ed. 2011
& update 2018). See also, e.g., Rosenthal & Co. v. CFTC, 802
F.2d 963, 966 (7th Cir. 1986); National Union Fire Insurance Co.
v. Wuerth, 122 Ohio St. 3d 594, 599 (2009) (“a principal is vi-
cariously liable only when an agent could be held directly
Nos. 17-3618 & 18-1281 7
liable”); Elias v. Unisys Corp., 410 Mass. 479, 481 (1991) (“The
liability of the principal arises simply by the operation of law
and is only derivative of the wrongful act of the agent”); Re-
statement (Second) of Agency §217B (1958). This also implies
that vicarious responsibility does not change the substantive
standard. “Vicarious liability is not an independent cause of
action, but rather is a legal concept used to transfer liability
from an agent to a principal”. Crawford v. Signet Bank, 179
F.3d 926, 929 (D.C. Cir. 1999).
Vicarious liability makes a person responsible for some-
one else’s wrong but does not change the proof required to
show that a legal wrong has occurred. So even if we were to
overrule Iskander, Gaston would need to show that someone
whose acts are imputed to Wexford violated the Eighth
Amendment, as understood in Gamble, Farmer, and PeIies.
He did not seriously try to do so. This makes it unnecessary
to decide whether Iskander was correctly decided.
One final observation. Gaston and other plaintiffs have
contended that Iskander leads Wexford and similar organiza-
tions to skimp on medical care in order to enrich themselves.
Wexford responds that, because it does not pay for the cost
of MRI exams, surgeries, and other hospital treatment out-
side the prisons, it has no financial reason to withhold ap-
propriate medical treatment. That may be true, but so far
Wexford has not supplied evidence that it is true. Perhaps
Wexford has contracts with hospitals providing that they
will not bill it, but it has not produced them. Perhaps Illinois
pays for out-of-prison treatment under the Medicaid pro-
gram, but again the record lacks proof. Dr. Chmell testified
that Wexford did not pay him, but the record does not reveal
whether Wexford paid the University of Illinois. Gaston has
8 Nos. 17-3618 & 18-1281
lost this case for want of evidence, but the need to back up
one’s contentions with evidence applies as much to Wexford
as it does to any prisoner.
AFFIRMED
Nos. 17-3618 & 18-1281 9
HAMILTON, Circuit Judge, concurring. I join the court’s
judgment and opinion. For reasons explained in Shields v. Illi-
nois Dep’t of Corrections, 746 F.3d 782 (7th Cir. 2014), whether
we should continue to apply the Monell standard to private
corporations when they act under color of state law presents
a substantial question. These appeals, however, are not the oc-
casion to decide that larger question. Dr. Chmell’s testimony
about the defendants’ care of plaintiff Gaston helps show that
plaintiff cannot prove that one or more agents of Wexford
acted with deliberate indifference toward his serious medical
needs. Also, plaintiff has given up trying to prove that Wex-
ford had a policy of deliberate indifference that would satisfy
the Monell standard. Cf. Glisson v. Indiana Dep’t of Corrections,
849 F.3d 372, 379–82 (7th Cir. 2017) (en banc) (reversing sum-
mary judgment for private healthcare provider where evi-
dence would support finding that provider deliberately chose
not to provide for coordination of medical care in complex
cases, and that absence of such coordination caused prisoner’s
death).
I write separately to highlight a set of subtler but im-
portant issues that parties, lawyers, and judges need to con-
front in exploring the path suggested in Shields. Proving a vi-
olation of the Eighth Amendment’s prohibition on cruel and
unusual punishment requires proof of an intentional or crim-
inally reckless tort. Farmer v. Brennan, 511 U.S. 825, 839–40
(1994); Petties v. Carter, 836 F.3d 722, 728 (7th Cir. 2016) (en
banc). The question is how to prove that a corporation acted
with the required state of mind.
The legally simplest case would prove that a specific, iden-
tified employee acted with the required deliberate indiffer-
ence. The employer would then be vicariously liable for its
10 Nos. 17-3618 & 18-1281
employee’s tort committed within the scope of employment.
The net result in such a case, however, would not differ much
from the widespread practice of employers indemnifying
their employees.
The next simplest case would be one in which one em-
ployee acted with deliberate indifference, but it is not possible
to identify that employee. I expect that as long as the wrong-
doer is identified reliably as an employee acting within the
scope of employment, ordinary principles of respondeat su-
perior liability would apply.
The more challenging cases, and the problems that con-
tribute to the need to reexamine the application of Monell to
private corporations, are cases where the plaintiff cannot
show that a single employee acted with deliberate indiffer-
ence, but where the evidence allows an inference that a group
of employees acted with a collective indifference to a pris-
oner’s health or safety. Experience with many prisoners’
health care suits suggests this pattern may be common, espe-
cially within corporate structures that diffuse responsibility
among different people. Consider, for example, the possibility
of a scheduling team who do not try to schedule promptly
surgeries that prisoners need to treat serious pain.
General tort law does not seem to provide a consensus on
the problems of collective intent posed by claims for inten-
tional torts against corporations. See Burlington Industries, Inc.
v. Ellerth, 524 U.S. 742, 756 (1998) (discussing vicarious liabil-
ity for intentional torts); Restatement (Second) Agency §§ 219
& 228 (1958) (addressing when master will be liable for inten-
tional torts by servant); Prosser & Keeton on The Law of Torts
§ 70, at 505–06 (1984) (master will be liable for fraud or defa-
mation by sales representative); see also Restatement (Third)
Nos. 17-3618 & 18-1281 11
of Agency § 7.03, comment (e) (2006) (discussing different ap-
proaches to corporate intent for purposes of punitive dam-
ages).
The problem of corporate intent can also be thorny under
federal statutes, such as those providing civil remedies for se-
curities fraud. See Makor Issues & Rights, Ltd. v. Tellabs Inc., 513
F.3d 702, 707–09 (7th Cir. 2008) (focusing on state of mind of
corporate management for corporate liability in securities
fraud cases and discussing Southland Securities Corp. v. INSpire
Ins. Solutions, Inc., 365 F.3d 353, 366 (5th Cir. 2004)); Patricia S.
Abril & Ann Morales Olazábal, The Locus of Corporate Scienter,
2006 Colum. Bus. L. Rev. 81, 114 (2006) (“The perceived weak-
nesses in the respondeat superior approach have led to the
development of a corollary to the agency principle that allows
for aggregation of the knowledge of several corporate em-
ployees in order to find the corporation liable: the collective
knowledge doctrine.”); Ashley S. Kircher, Corporate Criminal
Liability versus Corporate Securities Fraud Liability, Analyzing the
Divergence in Standards of Culpability, 46 Am. Crim. L. Rev. 157,
161 (2009) (“Courts in the United States are in notable disarray
when analyzing the intent of corporations sued under the se-
curities laws. Some courts have rejected the application of the
doctrine of collective scienter, while others have embraced the
doctrine with varying degrees of strength.”).
I do not propose to answer those questions here, but I hope
that parties pursuing the larger Monell issue will pay attention
to them as they make their records and write their briefs.