McKeesport Hospital v. Accreditation Council for Graduate Medical Education

Opinions of the United
1994 Decisions States Court of Appeals
for the Third Circuit
5-17-1994
McKeesport Hospital v. Accreditation Council for
Grad. Med'l Ed.
Precedential or Non-Precedential:
Docket 93-3194
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1994
Recommended Citation
"McKeesport Hospital v. Accreditation Council for Grad. Med'l Ed." (1994). 1994 Decisions. Paper 20.
http://digitalcommons.law.villanova.edu/thirdcircuit_1994/20
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 1994 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 93-3194
MCKEESPORT HOSPITAL
V.
THE ACCREDITATION COUNCIL FOR GRADUATE MEDICAL EDUCATION,
an Unincorporated Association;
JOHN T. BOBERG, Ph.D. as Executive Secretary
of the Accreditation Council for Graduate Medical Education
THE ACCREDITATION COUNCIL FOR GRADUATE MEDICAL EDUCATION
and JOHN T. BOBERG, Ph.D.,
Appellants
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
(D.C. Civil Action No. 92-02335)
Argued December 10, 1993
Before: BECKER and NYGAARD, Circuit Judges,
and YOHN, District Judge*
(Opinion Filed May 17, 1994)
RICHARD S. DORFZAUN, ESQUIRE
DAVID B. FAWCETT, JR., ESQUIRE
Dickie, McCamey & Chilcote
Two PPG Place
Suite 400
Pittsburgh, PA 15222
DOUGLAS R. CARLSON, ESQUIRE (Argued)
GARY E. DYAL, ESQUIRE
Wildman, Harrold, Allen & Dixon
225 West Wacker Drive
Chicago, IL 60606
Attorneys for Appellants
1
* Honorable William H. Yohn, Jr., United States District Judge
for the Eastern District of Pennsylvania, sitting by designation.
ROBERT V. CAMPEDEL, ESQUIRE (Argued)
ANN BAILY, ESQUIRE
Doepken, Keevican, Weiss & Medved
600 Grant Street
USX Tower, 37th Floor
Pittsburgh, PA 15219
Attorneys for Appellee
WILLIAM M. JANSSEN, ESQUIRE
Saul, Ewing, Remick & Saul
3800 Centre Square West
Philadelphia, PA 19102
Attorney for Amici Curiae The American Board of Surgery, The
American Board of Colon and Rectal Surgery, The American Board of
Neurological Surgery, The American Board of Orthopaedic Surgery,
The American Board of Plastic Surgery, The American Board of
Thoracic Surgery, and The American Board of Urology
DOROTHY G. HARWOOD, ESQUIRE
The Federation of State Medical Boards
of the United States, Inc.
6000 Western Place
Suite 707
Forth Worth, TX 76107
Attorney for Amicus Curiae
JANET DUFFY CARSON, ESQUIRE
National Board of Medical Examiners
3930 Chestnut Street
Philadelphia, PA 19104
Attorney for Amicus Curiae
JOYCE McKEEVER, ESQUIRE
Office of Chief Counsel
Pennsylvania Department of State
619 Transportation and Safety Building
Harrisburg, PA 17120
Attorney for Amicus Curiae The Pennsylvania State Board of
Medicine
JACK R. BIERIG, ESQUIRE
Sidley & Austin
One First National Plaza
Chicago, IL 60603
Attorney for Amici Curiae The American Medical Association and
The American Dental Association
2
OPINION OF THE COURT
NYGAARD, Circuit Judge.
McKeesport Hospital brought this 42 U.S.C. § 1983
action against the Accreditation Council for Graduate Medical
Education (the "ACGME") and the Executive Secretary of its
residency review committee for surgery, alleging that their
withdrawal of the accreditation of the Hospital's general surgery
residency program violated due process. The district court
entered a preliminary injunction blocking the accreditation
withdrawal. Because we conclude that the ACGME's conduct was not
state action, we will reverse.
I.
Pennsylvania's Medical Practice Act of 1985 (the
"Act"), 63 Pa. Cons. Stat. Ann. §§ 422.1 - 422.25, requires that
the admission standards, facilities, curricula, and training at
any medical college or "medical training facility" in the
Commonwealth "meet the requirements set by the [Pennsylvania
State Board of Medicine (the "Board")] and any accrediting body
which may be recognized by the board." Id. §422.23(a). The term
"medical training facility" includes a medical college, hospital
or other institution providing graduate medical training. Id.
§422.2. Graduate medical training, which is commonly referred to
as a residency, is defined in the Act as
training approved or recognized by the board
which is either:
3
(1) accredited as graduate medical
education by any accrediting body
recognized by the board for the
purpose of accrediting graduate
medical education. . . ; or
(2) provided by a hospital
accredited by any accrediting body
recognized by the board and is
acceptable to an American specialty
board towards the training it
requires for the certification it
issues in a medical specialty or
subspecialty. . . .
Id. § 422.2.
The Act provides that
[i]t shall be the duty of the board, in its
discretion, periodically to ascertain the
character of the instruction and the
facilities possessed by each of the medical
colleges and other medical training
facilities offering or desiring to offer
medical training in accordance with the
requirements of this act.
Id. § 422.23(b). If the Board deems a program inadequate, "the
board shall not recognize the education or degrees obtained from
[it] during the period of inadequacy." Id. § 422.23(c). The
Board must provide "due notice" to any institution found not to
meet its standards. Id. Its actions, moreover, are "subject to
the right of notice, hearing and adjudication, and the right to
appeal therefrom, in accordance with the provisions of Title 2 of
the Pennsylvania Consolidated Statutes (relating to administra-
tive law and procedure)." Id. § 422.9.
The Board has by regulation recognized the ACGME as the
accrediting body for graduate medical training programs in
Pennsylvania. The relevant regulation reads
[t]he Board is responsible for determining
the character of instruction and the
4
facilities possessed by each of the various
medical education institutions and hospitals
who carry out graduate medical education
programs in this Commonwealth. The Council on
Medical Education of the American Medical
Association [the ACGME's predecessor]
possesses the facilities and staffing
required to perform evaluations of the
qualifications of the various programs and
also the mechanism for accreditation of
acceptance programs. The Board and the
Council . . . work cooperatively in
evaluating and approving the training
programs in this Commonwealth. A comity
exists between the board and the Council . .
. under which all intended observations of
training programs for accreditation are
communicated to the Board and the Board makes
all requests for accreditation or
investigation of training programs to the
Council . . . . If an investigation of the
programs of the various institutions in this
Commonwealth is to be conducted, the Board
will provide one of its members or appoint an
individual to accompany the investigator on
each occasion. An institution within this
Commonwealth seeking approval of its programs
by the Council . . . will be informed that
action taken by the accrediting agency will
be related to the Board.
49 Pa. Code § 17.23. The ACGME is a private, unincorporated
association made up of representatives of five medical
organizations -- the American Board of Medical Specialties, the
American Medical Association, the American Hospital Association,
the Association of American Medical Colleges, and the Council of
Medical Specialty Societies -- that evaluates and accredits
residency programs throughout the United States.
The ACGME's review is governed by its own set of
standards, The Essentials of Accredited Residencies. The ACGME
has organized twenty-six residency review committees, one for
5
each of twenty-six medical specialties, that evaluate the
programs in each area under these standards. The committee for
surgery, for example, is composed of 12 members appointed by the
American Board of Surgery, the American College of Surgeons, and
the American Medical Association.
The evaluation process begins when an application is
submitted by the residency program's director. The committee
then sends a surveyor to the training facility to verify the
information. When reviewing a program in Pennsylvania, the ACGME
notifies the Board of the visit, and a Board member or
representative may accompany the surveyor to the facility. The
surveyor meets with faculty and students, reviews program data,
and submits a report to the committee. The submission of the
report ends the site surveyor's role; he or she does not
participate in the committee's decision.
The residency review committee then reviews the report
and the program's file, and recommends either full accreditation,
probation, or withdrawal of accreditation. A training facility
that is dissatisfied with the recommendation may request
reconsideration by the committee and, if the committee adheres to
its position, may seek a hearing before an appeals panel
consisting of three directors of accredited residencies in the
program's specialty. A facility requesting an appeals panel
hearing receives a list of potential members from which it may
delete up to one-third of the candidates; the panel is
constituted from those who remain. The facility may submit
additional information at both the reconsideration and appeal
6
stages and may be represented by counsel and present witnesses
before the appeals panel.
The appeals panel's recommendation, the material it
considered, and a transcript of its hearing are reviewed and
either adopted or rejected by the ACGME's executive committee.
The executive committee's determination is then voted on by the
ACGME, whose decision is final. A training facility whose
accreditation is withdrawn may, however, reapply for ACGME
accreditation at any time.
II.
McKeesport Hospital, a community hospital in
McKeesport, Pennsylvania, offers graduate medical training in
several specialties, including general surgery. The Hospital's
general surgery residency program was first accredited by the
ACGME's predecessor in 1961, although its ACGME accreditation has
been provisional since 1979. The program has had Board
recognition since the Board began recognizing residency programs
under the Act.
After a November 1990 site visit and its review, the
ACGME's residency review committee for surgery recommended
withdrawal of the program's accreditation, citing five
deficiencies that allegedly rendered the program not in
substantial compliance with The Essentials of Accredited
Residencies. The Hospital requested reconsideration and the
committee, as a result, rescinded one of the deficiencies and
extended the withdrawal's effective date by one year. The
Hospital appealed to an appeals panel, which held a hearing and
7
ultimately affirmed the committee's action. The appeals panel's
decision was adopted by the ACGME's executive committee and then
by the entire ACGME, and the Hospital was notified that the
program's ACGME accreditation would be withdrawn.
It does not appear that the ACGME communicated this
decision to the Board. Rather, the Hospital sought review of the
ACGME's decision by the Board. The Board, however, dismissed the
case, concluding that it had no authority to intrude upon the
ACGME's accreditation process and, because the Hospital had
failed one of the two criteria to be a medical training facility
in Pennsylvania, no jurisdiction over the Hospital's appeal. The
Hospital appealed the Board's dismissal to the Pennsylvania
Commonwealth Court.
Before the Commonwealth Court rendered any decision in
the case against the Board, however, the Hospital commenced this
action against the ACGME, alleging that its decision to withdraw
the program's accreditation lacked due process.0 After a three-
day hearing, the district court made extensive findings of fact
and conclusions of law and granted the Hospital's motion for a
preliminary injunction to prevent the accreditation withdrawal
from becoming effective. The ACGME appealed.
After this appeal was filed, the Commonwealth Court
reversed the Board's dismissal order. McKeesport Hosp. v.
Pennsylvania State Bd. of Medicine, 628 A.2d 476 (Pa. Commw. Ct.
0
In addition to the due process claim, the Hospital's complaint
asserted federal antitrust and Pennsylvania contract law claims.
The district court dismissed the antitrust and breach of contract
counts; that dismissal is not at issue on appeal.
8
1993). The Commonwealth Court determined that under the plain
language of the Act, the Board is "the final arbiter of matters
involving the accreditation of medical training facilities in
Pennsylvania," and remanded the case to the Board for a hearing.
Although the court agreed that the Board could not intervene in
the ACGME's accreditation process, it disagreed that the ACGME's
decision ended the Board's inquiry. Id. at 479 & n.12. The
court stated: "[a]ccreditation by the ACGME merely is a tool
which establishes critical facts leading to the Board's
recognition" of a medical training facility. Id. at 479. The
court ordered that the program remain recognized until the Board
holds a hearing and issues a final order in the case. Id. The
Board has filed a petition for allowance of appeal to the
Pennsylvania Supreme Court, but that court has not yet granted or
denied allocatur.
III.
The district court had jurisdiction over the Hospital's
section 1983 claim under 28 U.S.C. §§ 1331 and 1343(a)(3); we
have jurisdiction over this appeal under 28 U.S.C. § 1292(a)(1).
We review the grant of a preliminary injunction to determine
"whether there has been 'an abuse of discretion, a clear error of
law, or a clear mistake on the facts.'" Hoxworth v. Blinder,
Robinson & Co., 903 F.2d 186, 198 (3d Cir. 1990) (citation
omitted). If we find either or both of the fundamental
preliminary injunction requirements -- a likelihood of success on
the merits and the probability of irreparable harm if relief is
9
not granted -- to be absent, the district court's order cannot be
affirmed. Id.
The Fourteenth Amendment protects individuals against
government action. To succeed on the merits of its Section 1983
due process claim, the Hospital must therefore show that the
action of the ACGME, a private entity, is "fairly attributable"
to the Commonwealth of Pennsylvania. Lugar v. Edmondson Oil Co.,
457 U.S. 922, 937, 102 S. Ct. 2744, 2753 (1982). The district
court concluded, based on the "close nexus between the ACGME and
the Board" and "the delegation of the Pennsylvania State Board of
Medicine's duties to the ACGME" that it was likely that the
Hospital would be able to do so. Our review of this legal
determination, a prerequisite to the grant of the injunction, is
plenary. John F. Harkins Co. v. Waldinger Corp., 796 F.2d 657,
658 (3d Cir. 1986), cert. denied, 479 U.S. 1059, 107 S. Ct. 939
(1987).
The question of whether a private accrediting body's
decision constitutes state action is, for us, one of first
impression. In cases involving accrediting organizations other
than the ACGME, a number of courts have not found state action.
Medical Inst. of Minn. v. National Ass'n of Trade & Technical
Sch., 817 F.2d 1310, 1312-14 (8th Cir. 1987); Peoria Sch. of
Business, Inc. v. Accrediting Council for Continuing Educ. &
Training, 805 F. Supp. 579, 581-83 (N.D. Ill. 1992); Transporta-
tion Careers, Inc. v. National Home Study Council, 646 F. Supp.
1474, 1478-79 (N.D. Ind. 1986); Dietz v. American Dental Ass'n,
479 F. Supp. 554, 556 (E.D. Mich. 1979); Parsons College v. North
10
Central Ass'n of Colleges & Secondary Sch., 271 F. Supp. 65, 70
(N.D. Ill. 1967). We have uncovered only one case where state
action was found, Marjorie Webster Junior College v. Middle
States Ass'n of Colleges & Secondary Sch., 302 F. Supp. 459
(D.D.C. 1969), rev'd on other grounds, 432 F.2d 650 (D.C. Cir.),
cert. denied, 400 U.S. 965, 91 S. Ct. 367 (1970), but it was
decided long before the Supreme Court's state action trilogy,
Lugar v. Edmondson Oil Co., 457 U.S. 922, 102 S. Ct. 2744 (1982),
Rendell-Baker v. Kohn, 457 U.S. 830, 102 S. Ct. 2764 (1982), and
Blum v. Yaretsky, 457 U.S. 991, 102 S. Ct. 2777 (1982), which
binds us now.
These cases do not answer our question as to the ACGME,
because the state action determination is a "necessarily fact
bound inquiry." Lugar, 457 U.S. at 939, 102 S. Ct. at 2755.
Before we begin that inquiry, however, we note that a New York
state court indicated in dicta that an accreditation decision by
the ACGME did not fall within the state action doctrine.
Interfaith Medical Ctr. v. Sabiston, 133 Misc. 2d 308, 309, 507
N.Y.S.2d 124, 125 (1986), aff'd in part and rev'd in part on
other grounds, 136 A.D.2d 238, 527 N.Y.S.2d 48 (2d Dept. 1988).
Moreover, although a Maryland district court found an ACGME
accreditation withdrawal to be state action in St. Agnes Hosp. v.
Riddick, 668 F. Supp. 478, 479-82 (D. Md. 1987), it later
questioned that conclusion in light of the Supreme Court's
decision in National Collegiate Athletic Ass'n v. Tarkanian, 488
U.S. 179, 109 S. Ct. 454 (1988), but did not resolve the issue
11
because it ruled for the defendant on other grounds. St. Agnes
Hosp. v. Riddick, 748 F. Supp. 319, 326 (D. Md. 1990).
Because the Hospital's challenge is to the ACGME's
decision to withdraw the program's accreditation alone, this case
presents a "typical" state action issue -- "a private party has
taken the decisive step that caused the [alleged] harm to the
plaintiff, and the question is whether the state was sufficiently
involved to treat that decisive conduct as state action" and thus
permit the Hospital to sue the ACGME instead of the state Board.
Tarkanian, 488 U.S. at 192, 109 S. Ct. at 462. State action may
be found if the private party has acted with the help of or in
concert with state officials. Compare Edmonson v. Leesville
Concrete Co., 500 U.S. 614, 111 S. Ct. 2077 (1991), and Lugar,
supra, and Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S. Ct.
1598 (1970) (finding state action) with Flagg Bros., Inc. v.
Brooks, 436 U.S. 149, 98 S. Ct. 1729 (1978) (finding no state
action). Alternatively, it may be found when the private party
has been "delegated . . . a power 'traditionally exclusively
reserved to the State.'" Flagg Bros., 436 U.S. at 157, 98 S. Ct.
at 1734 (quoting Jackson v. Metropolitan Edison Co., 419 U.S.
345, 352, 95 S. Ct. 449, 454 (1974)). Finally, state action may
be found if "there is a sufficiently close nexus between the
state and the challenged action of the [private] entity so that
the action of the latter may fairly be treated as that of the
State itself." Jackson, 419 U.S. at 351, 95 S. Ct. at 453.
We conclude on the undisputed facts of this case that
the ACGME's withdrawal of the program's accreditation was not
12
state action. First, it is certain that no state officials
participated in the ACGME's accreditation withdrawal. The
applicable standard is one of "overt, significant assistance."
Edmonson, 500 U.S. at ___, 111 S. Ct. at 2084. Although a Board
member did accompany the ACGME's site surveyor to the Hospital,
he acted only as an observer, and played no part in the
surveyor's inspection or in any stage of the ACGME's decision.
This is not enough to make the ACGME's withdrawal decision state
action. Cf. Flagg Bros., 436 U.S. at 156-57, 98 S. Ct. at 1733-
34 (in a suit where the plaintiff was challenging a warehouse-
man's threat to sell her belongings pursuant to a state self-help
statute, the fact that the city marshal had supervised the
plaintiff's eviction and arranged for her possessions to be
stored at the defendant's warehouse did not constitute overt
official involvement in the challenged conduct).
The district court concluded that the Board delegated
its duties to the ACGME, thereby rendering the ACGME's actions
fairly attributable to the state. We cannot agree. As the
Commonwealth Court's decision makes clear, under the Act the
state Board remains ultimately responsible for approving medical
training facilities in Pennsylvania. Cf. Tarkanian, 488 U.S. at
195-98, 109 S. Ct. at 464-65 (finding no delegation when the
state retained the ability to adopt or reject a private
association's decision). Merely because the state Board deems
its obligation met by following the ACGME's accreditation
decisions does not imbue the ACGME with the authority of the
state nor shift the responsibility from the state Board to the
13
ACGME. The Board remains the state actor. Moreover, even if a
delegation occurred, that alone is insufficient. For state
action, the private actor must be exercising a power that is
"'traditionally the exclusive prerogative of the state[,]'" Blum,
457 U.S. at 1005, 102 S. Ct. at 2786 -- for example, running an
election, Terry v. Adams, 345 U.S. 461, 73 S. Ct. 809 (1953), or
providing a municipal park, Evans v. Newton, 382 U.S. 296, 86 S.
Ct. 486 (1966). This, of course, is not the case here.
Medical residencies are a vital component of medical
education, providing new doctors with a supervised transition
"between the pure academics of medical school and the realities
of medical practice." Interfaith Medical Ctr. v. Sabiston, 136
A.D.2d 238, 239, 527 N.Y.S.2d 48, 49 (2d Dept. 1988). The
evaluation and accreditation of medical education in this country
is neither a traditional nor an exclusive state function. Rather,
United States medical schools have been privately accredited for
nearly a century. See Rosemary Stevens, American Medicine and
the Public Interest 55-73 (1971). The ACGME's predecessor, the
Council on Medical Education, began accrediting medical schools
in 1906, Siirila v. Barrios, 398 Mich. 576, 614, 248 N.W.2d 171,
186 (1976) (Williams, J., concurring), and has been reviewing and
evaluating residency programs since the 1950s, Stevens, supra, at
378-414. That, in doing so, the ACGME serves the public interest
does not make it a state actor. Rendell-Baker, 457 U.S. at 842,
102 S. Ct. at 2772; Jackson, 419 U.S. at 352-55, 95 S. Ct. at
454-55. Furthermore, although the state Board has taken on the
function of approving Pennsylvania residency programs under the
14
Act, "that legislative policy choice in no way makes these
services the exclusive province of the State." Rendell-Baker,
457 U.S. at 842, 102 S. Ct. at 2772.
The district court also found the connection between
the state Board and the ACGME sufficient to turn the latter into
a state actor. We must disagree. Sometimes, a state and an
ostensibly private entity are so interdependent that state action
will be found from their symbiotic relationship alone. See
Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S. Ct.
856 (1961) (finding state action based on lease relationship that
benefitted and obligated both parties). The relationships of the
University of Pittsburgh and Temple University to the Common-
wealth provide an example. The Universities are designated by
their governing legislation as "instrumentalit[ies] of the
Commonwealth" and "State-related institution[s]." These statutes
provide for one-third of the Universities' voting trustees to be
appointed by state officials and for several officials to serve
as ex officio trustees; allow the Commonwealth to set tuition and
fee schedules; promise annual appropriations, to be used as the
Commonwealth specifies; impose stringent reporting requirements
as to fiscal and other affairs; authorize the same capital
development assistance as allowed wholly-owned state colleges;
and create tax exemptions for income derived from bonds the
Universities issue and loans secured by mortgages on their
properties. See Krynicky v. University of Pittsburgh, 742 F.2d
94, 101-02 (3d Cir. 1984), cert. denied, 471 U.S. 1015, 105 S.
Ct. 2018 (1985); Braden v. University of Pittsburgh, 552 F.2d
15
948, 959-61 (3d Cir. 1977). The ACGME's relationship to the
state is clearly distinguishable. The ACGME is self- governed
and financed, and its standards are independently set; the state
Board simply recognizes and relies upon its expertise.
Alternatively, a connection between the state and a
specific decision of a private entity may render that decision
chargeable to the state. See Jackson, 419 U.S. at 351, 95 S. Ct.
at 453. Under this approach, however, state action will be found
only "when [the state] has exercised coercive power or has
provided such significant encouragement, either overt or covert,
that the [private decision] must in law be deemed that of the
State[;]" "mere approval of or acquiescence in" the decision is
not enough. Blum, 457 U.S. at 1004, 102 S. Ct. at 2786. The
required state coercion or encouragement of the ACGME's actions
is not present here.
The Hospital is challenging the ACGME's decision to
withdraw the program's accreditation, not the Board's action in
response. The Board, however, does not control or regulate the
ACGME's standard-setting or decision-making processes. Although
it recognizes them, state law does not dictate or influence those
actions. Rather, the ACGME's decisions are "judgments made by
private parties according to . . . standards that are not
established by the State." Blum, 457 U.S. at 1008, 102 S. Ct.
2788. That the Board bases its approval of medical residency
programs on ACGME accreditation does not turn the ACGME's
decisions into state action. See Tarkanian, supra (state
university's suspension of basketball coach in compliance with
16
NCAA recommendation did not convert NCAA decision into state
action); Blum, supra (state officials' adjustment of Medicaid
benefits in response to private nursing homes' decisions to
discharge or transfer patients did not render the state
responsible for those decisions). To paraphrase the Supreme
Court's conclusion in Tarkanian, it is more accurate to say that
the Board conducts its approval of medical residency programs
under color of the ACGME's policies than that those policies were
developed and enforced under color of Pennsylvania law. See
Tarkanian, 488 U.S. at 199, 109 S. Ct. at 466.
IV.
Accordingly, because we conclude the ACGME performed no
state action, we will vacate the preliminary injunction order and
remand the cause to the district court.
17
McKeesport Hospital v. The Accreditation Council for Graduate
Medical Education, an Unincorporated Association; JOHN T. BOBERG,
Ph.D., as Executive Secretary of the Accreditation Council for
Graduate Medical Education, No. 93-3194
BECKER, Circuit Judge, concurring in the judgment.
I cannot agree with the majority that there is no state
action in this case. As I read the record, Pennsylvania has
totally ceded any meaningful responsibility to conduct reviews of
residency programs to the Accreditation Council for Graduate
Medical Education (the "ACGME"), and has delegated to the ACGME
the power to find the critical facts that are necessary for the
Pennsylvania State Board of Medicine (the "Board") to determine
whether a residency program satisfies the Board's standards. In
essence, the ACGME decides whether residents trained at such a
facility can be licensed to practice in Pennsylvania. I believe
that this delegation of power with respect to a function that
will have a direct effect on licensing decisions is state action.
I nevertheless concur in the judgment because I am satisfied
that, when it withdrew accreditation of McKeesport's surgical
residency program, the ACGME afforded McKeesport due process.
I. State Action
In this case, as the majority recognizes, a private
party has taken the decisive step that injured the plaintiff. The
case is, therefore, not controlled by National Collegiate
Athletic Association v. Tarkanian, 488 U.S. 179, 109 S. Ct. 454,
18
102 L. Ed. 2d 469 (1988), which involved a situation in which the
state took the final action that harmed the plaintiff.
Consequently, we must determine whether state action exists
either because there is a "nexus" between the Board and the
ACGME, see Jackson v. Metropolitan Edison Co., 419 U.S. 345, 351,
95 S. Ct. 449, 453, 42 L. Ed. 2d 477 (1974), or a "joint
participant" relationship between the Board and the ACGME, see
Burton v. Wilmington Parking Authority, 365 U.S. 715, 725, 81 S.
Ct. 856, 862, 6 L. Ed. 2d 45 (1961).0 In my view there is state
action under either a "nexus" or "joint participant" approach.
That is because the relationship between the Board and the ACGME
is sufficiently direct that the ACGME's functions can be fairly
attributed to the Board, and because, as the state regulations
make clear, the Board and the ACGME act in concert in determining
whether a residency program will be licensed.
Although there is little actual participation by
Pennsylvania in the residency reviews conducted by the ACGME,
that is because the State has delegated the factfinding role to
the ACGME. The importance of this delegation should not be
underestimated. The ACGME finds the facts that determine whether
a residency program should be accredited. The Board so far has
not independently reviewed residency programs, nor has it
demonstrated any inclination to do so in the future. The Board's
role, even in light of the Commonwealth Court's decision in
0
We have held that the Burton "joint participant" test survived
the so-called Lugar trilogy. See Krynicky v. University of
Pittsburgh, 742 F.2d 94, 101 (3d Cir. 1984), cert. denied, 471
U.S. 1015, 105 S. Ct. 2018, 85 L. Ed. 2d 300 (1985).
19
McKeesport v. Pennsylvania State Board of Medicine, 628 A.2d 476
(Pa. Commw. Ct. 1993), seems to be limited to reviewing the
adequacy of the record developed by the ACGME. Thus the ACGME,
in effect, performs the threshold adjudicatory function in
Pennsylvania's residency program approval scheme.
Although Pennsylvania has delegated to the ACGME only a
threshold adjudicatory power and not the ultimate authority to
approve the residency programs, it is clear that if the ACGME or
a similar organization did not exist, the Board would have to
perform the ACGME's function itself. See Marlboro Corp. v.
Association of Independent Colleges & Schools, Inc., 556 F.2d 78,
80 (1st Cir. 1977) (suggesting that state action exists when it
appears that if the accreditation agency did not perform its
function the government would do so itself). Delegation of this
function to the ACGME does not change the nature of the function,
and does not remove the process from constitutional mandates.
Indeed, the State benefits financially by having the ACGME incur
the expense of reviewing the programs, something we have said is
an important factor in finding state action. See Krynicky v.
University of Pittsburgh, 742 F.2d 94, 101 & n.9 (3d Cir. 1984),
cert. denied, 471 U.S. 1015, 105 S. Ct. 2018, 85 L. Ed. 2d 300
(1985).
Moreover, the key accreditation cases upon which the
majority relies, Medical Institute of Minnesota v. National
Association of Trade & Technical Schools, 817 F.2d 1310, 1312-14
(8th Cir. 1987), Peoria School of Business, Inc. v. Accrediting
Council for Continuing Education & Training, 805 F. Supp. 579,
20
581-83 (N.D. Ill. 1992), and Parsons College v. North Central
Association of Colleges, 271 F. Supp. 65, 70 (N.D. Ill. 1967),
differ in critical respects from this case.0 In Medical
Institute of Minnesota, the plaintiff had claimed that state
action existed because: 1) the accreditation decision would
0
The majority also relies on two other cases which, in my
opinion, do not strengthen its position. First, the majority
states that Interfaith Medical Center v. Sabiston, 133 Misc. 2d
308, 309, 507 N.Y.S.2d 124, 125 (1986), aff'd in part and rev'd
in part on other grounds, 136 A.D.2d 238, 527 N.Y.S.2d 48 (2d
Dept. 1988), held that the ACGME is not a state actor. But in
Interfaith the entire discussion of the state action question was
as follows: "[t]his court, at its level, will refrain from
viewing plaintiff's complaint under the doctrine of 'State
Action' nor expand the doctrine to embrace the allegations of
plaintiff's complaint." Id. There is simply no analysis of the
question.
Second, the majority cites St. Agnes Hospital, Inc. v.
Riddick, 748 F. Supp. 319, 326-27 (D. Md. 1990) ("St. Agnes II"),
as a case in which the court cut back on its earlier conclusion
in St. Agnes Hospital, Inc. v. Riddick, 668 F. Supp. 478, 480 (D.
Md 1987) ("St. Agnes I"), that the ACGME was a state actor.
According to the majority, St. Agnes II "questioned its
conclusion [that the ACGME was a state actor] in light of the
Supreme Court's decision in [Tarkanian]." The majority, however,
ignores the following language from St. Agnes II:
The circumstances of Tarkanian, however, are certainly
distinguishable from the facts sub judice. Most
importantly, the final act that caused the alleged harm
to Tarkanian was committed by a party conceded to be a
state actor, while in this case, the ACGME has taken
the decisive step. The Court in Tarkanian emphasized
that the [National Collegiate Athletic Association
("NCAA")] was not authorized to directly discipline
Tarkanian or any other state employee. In St. Agnes,
the ACGME had the authority and did in fact make the
final determination to withdraw plaintiff's
accreditation. Consequently, Tarkanian is not
analogous to the situation at hand.
This language hardly supports the majority's implication that St.
Agnes II reversed itself on its state action conclusion. To the
contrary, it appears that the court reaffirmed that the ACGME was
a state actor.
21
affect eligibility of its students for federal aid; and 2) the
accreditation agency was regulated by the Department of
Education. In Peoria and Parsons, the plaintiffs made the
eligibility for federal aid argument and added the argument that
state action existed because the accreditation agency was
incorporated, and thus a creature of state law.
The arguments asserted in those cases were easily
disposed of under traditional state action doctrine. Collateral
consequences of eligibility for federal aid is not enough for
state action under Blum v. Yaretsky, 457 U.S. 991, 102 S. Ct.
2777 (1982); a company is not a state actor merely because it is
itself regulated, see Jackson, 419 U.S. at 352-55, 95 S. Ct. at
454-55; and a corporate charter cannot create "state action"
because such a rule would transform nearly every business entity
into a state actor, cf. Burton, 365 U.S. at 726, 81 S. Ct. at 862
(recognizing the need to avoid a rule that creates universal
application of state actor status).
In this case, by contrast, McKeesport can point to much
more than the collateral consequences of the negative
accreditation decision, regulation of the accreditation entity,
or a corporate charter to show state action. It can point to a
statute, Pa. Stat. Ann. 63 tit., § 422.23, and a regulation, 49
Pa. Code § 17.23, which recognize 1) that the facilities of the
ACGME are better suited to evaluate the programs, and 2) that the
Board will rely on the ACGME when making its own decisions.
Indeed § 17.23 recognizes a relationship of "comity" between the
Board and ACGME which would require a formal exercise of state
22
power to be changed. The Board made this clear in its briefs
before the Commonwealth Court: "In the event the Board should
choose to withdraw its endorsement [of] the ACGME accreditation
process, it will do so by amending its regulations." Although
the majority fails to recognize this comity between the Board and
the ACGME, we have said before that such a relationship supports
a finding of state action when ensconced in regulations. See
Krynicky, 742 F.2d at 94 (one factor supporting state action was
the fact that relationships between the state and two
universities were defined by statute and regulation, and a formal
exercise of legislative power would be necessary to change that
relationship).
Additionally, McKeesport can point to the fact that the
ACGME's decisions have a direct impact on decisions made by the
Board to recognize residency programs and, ultimately, to license
doctors. The directness of this relationship is something that
the Board itself has demonstrated quite clearly in its briefs
before the Commonwealth Court by taking the position that it does
not even have jurisdiction to review the ACGME's decision. In
particular, the Board asserted that "[t]he Legislature has not
conferred upon the Board the authority to be a 'super accrediting
agency.'" According to the Board, that power has been delegated:
"[a]ccreditation by the ACGME is a tool which establishes a
critical fact leading to the Board's recognition that an
applicant's training meets the statutory requirements. This is
consistent with the Constitution of Pennsylvania and the law
related to the delegation of governmental functions." Indeed,
23
the Commonwealth Court accepted this characterization of the
delegation of power to the ACGME in its opinion interpreting the
statutory scheme. McKeesport, 628 A.2d at 479.
The majority's statement that such a delegation is not
enough because the delegation must be of a power which has been
traditionally the exclusive prerogative of the state, is, I
believe, out of step with current state action doctrine. To
begin with, the assertion seems to come too close to saying that
the only time the exercise of state delegated power can create
state action is when the power being exercised is traditionally
the exclusive function of the state. I am not sure that is even
a correct statement of the "public function" approach after
Edmonson v. Leesville Concrete Co., 500 U.S. 614, 111 S. Ct.
2077, 114 L. Ed. 2d 660 (1991), which seemed to eliminate the
"exclusivity" requirement of the public function test for state
action. Id. at 2083, 2085 (describing the public function
question as whether "the actor is performing a traditional
governmental function").
A delegation of state authority can certainly show
nexus or joint participation even if the function is not a
traditional and exclusive state function. That is the clear
implication of Tarkanian, 488 U.S. at 195, 109 S. Ct. at 464,
which asked whether there was a delegation of state power in the
context of applying the Burton "joint participant" approach. And
Tarkanian was not novel in this respect. Courts commonly hold
that a state agency, like a county hospital district, for
example, is a state actor even though it is not engaged in
24
actions that are traditionally the exclusive province of the
state. See, e.g., Stern v. Tarrant County Hosp. Dist., 755 F.2d
430, 433 (5th Cir. 1985), cert. denied, 476 U.S. 1108, 106 S. Ct.
1957, 90 L. Ed. 2d 365 (1986). And state agencies are state
actors largely because they are exercising some form of delegated
authority. Id.; see also Lombard v. Louisiana, 373 U.S. 267,
282, 83 S. Ct. 1122, 1129, 10 L. Ed. 2d 338 (1963) (Douglas, J.,
concurring) (stating that a state agency is a state actor because
it has the requisite nexus). Why should not the same be true
when the state delegates authority to a "private" party? As
Edmonson put it, "[t]he fact that the government delegates some
portion of [its] power to private litigants does not change the
governmental character of the power exercised." Edmonson, 111 S.
Ct. at 2087.0
Furthermore, notwithstanding any theoretical
relationship between the Board and the ACGME, the practical, day-
to-day relationship between the Board and the ACGME evidences a
delegation sufficient to create state action. Tarkanian,
although not controlling, is instructive on this point. In
Tarkanian, the Court held that there had not been a sufficient
delegation of authority to the NCAA in part because the
University of Nevada at Las Vegas ("UNLV") and the NCAA had
"acted much more like adversaries than like partners engaged in a
0
Nor do I think it makes a difference to the analysis that the
ACGME claims that Pennsylvania has unilaterally deputized it to
perform the accreditation decisions for the state. As I see it,
the question whether someone is a state actor depends on whether
it is exercising (or purporting to exercise) state power, not
whether it has sought such power.
25
dispassionate search for the truth." Tarkanian, 488 U.S. at 196,
109 S. Ct. at 464. It was largely on the basis of this
adversarial relationship that the Court was able to distinguish
the "joint participant" cases like Burton and Dennis v. Sparks,
449 U.S. 24, 101 S. Ct. 183, 66 L. Ed. 2d 185 (1980), which had
found state action in part by concluding that the state and the
private party had acted in concert. See Tarkanian, 488 U.S. at
196 & nn.16, 17; 109 S. Ct. at 464 & nn.16, 17.
No such adversarial relationship exists in this case.
Quite to the contrary, the relationship between the Board and the
ACGME is extremely close. As has been mentioned above, the Board
quite clearly has taken the position that it will in no way
challenge the ACGME's decisions and will simply rubber stamp any
decision that the ACGME has made. Indeed, it does not wish even
to review the ACGME's decisions, having taken the position that
it has no jurisdiction over them. In terms of gauging the
practical relationship of the Board and the ACGME, the Board's
arguments are powerful evidence that the Board has done, and will
continue to do, everything it can to pass off its accreditation
responsibility to the ACGME.
Finally, while it may be true, as the majority states,
that the accreditation of medical residency facilities is not a
traditional and exclusive function of the state, there is little
doubt that the ACGME's decision is a vital component of the
licensing scheme for residency programs, and, ultimately, of the
licensing scheme for doctors. Graduation from an approved and
accredited residency program is a prerequisite to an unrestricted
26
license to practice medicine in Pennsylvania. See Pa. Stat.
Ann. tit. 63, § 422.29(b). And licensing of doctors is, by all
accounts, a traditional and exclusive state function, since it
lies at the core of the state's police power (to protect the
health and welfare of its citizens). We should be careful not to
permit a state to insulate a critical component of that licensing
scheme from constitutional requirements simply by delegating that
component to a private organization.
In sum, Pennsylvania has formally deputized the ACGME
to exercise the state's duty to collect and analyze the critical
facts for determining the qualification of residency programs;
the State directly benefits financially from this relationship
with the ACGME; and the Board and the ACGME act in concert in
making any accreditation decisions. I believe that these facts
make the ACGME a state actor. I must therefore address the due
process issues raised on this appeal.
II. Due Process
Issues of procedural and substantive due process are by
their nature highly contextual inquiries. Rules requiring
adequate notice and an opportunity to be heard, as well as rules
requiring that decisions be supported by substantial evidence and
not be arbitrary and capricious, are little more than general
guideposts when applied to any particular case. The facts
dominate the inquiry. A review of the facts demonstrates that
the ACGME provided McKeesport all the process it was due.
A. Background
27
1. The ACGME's procedures.
As the majority opinion mentions, the ACGME has in
place an elaborate accreditation scheme that has both substantive
and procedural components. The substantive components are
specified in The Essentials of Accredited Residencies (the
"Essentials"), which details the requirements for accreditation.
Among other things, the Essentials directs residency programs to
provide certain types of surgical training and to ensure that
each resident gets a similar range of operative experience. It
also directs programs to teach and to maintain a certain level of
scholarly activity, such as publishing articles in peer-reviewed
journals. Programs must be in "substantial compliance" with the
Essentials to be accredited. Although this standard leaves the
ACGME some flexibility when making accreditation decisions, the
Essentials otherwise provides residency programs with fairly
detailed guidance regarding the types of clinical and academic
training they must provide.
The procedural components are specified in The Manual
of Structure and Functions for Graduate Medical Education Review
Committees (the "Manual"), which outlines the procedures for
accreditation, including the procedures for withdrawing
accreditation. According to the Manual, before an accreditation
can be withdrawn the ACGME must conduct a seven stage process: 1)
the program director submits documents to the ACGME; 2) a site
visit is made by a member of the ACGME field staff; 3) the
ACGME's Residency Review Committee ("RRC") assembles the
information and decides whether to withdraw accreditation; 4) the
28
RRC may reconsider an adverse ruling; 5) the ACGME's appeals
panel decides whether the adverse ruling was supported by
substantial or credible evidence; 6) the ACGME's Executive
Committee reviews the appeals panel's ruling, and, if it agrees
with the adverse ruling, informs the full ACGME; and 7) the
ACGME, at a plenary session, makes the final decision whether to
withdraw accreditation. Throughout the process the residency
program may submit additional information about the program as
long as the information relates to the status of the program
before the review began.
2. Withdrawal of McKeesport's accreditation.
The McKeesport surgical residency program has had a
long history of substandard performance. Although it has been
involved in the accreditation process since the 1960's, it has
never reached full accreditation status. The program has
continuously been engaged in a cycle of provisional
accreditation, followed by voluntary or involuntary withdrawal of
accreditation, followed by reapplication.
This appeal is part of the latest cycle. Following its
review of the McKeesport program in 1989, the RRC voted to grant
provisional accreditation. At that time, however, the RRC
expressed "serious concern" that five areas of the program were
deficient: 1) basic science education, 2) scholarly activity, 3)
operative data (which was unreliable), 4) operative experience
(which was too variable), and 5) numbers of operations in several
areas (they were insufficient).
29
The next review, the one at issue here, began in late
1990. Despite a generally positive review from the site
surveyor, the RRC decided to withdraw McKeesport's accreditation.
The RRC cited five areas of deficiency with citations to the
relevant parts of the Essentials: 1) lack of scholarly activity,
2) failure to provide accurate data, 3) inadequate pre- and post-
operative experience, 4) an excessive drop-out rate, and 5)
otherwise deficient operative experience. As the RRC's review
suggests, many of the problems that had been identified in 1989
remained in 1990.
After the adverse recommendation from the RRC,
McKeesport exhausted all of the internal remedies available to it
(outlined in the Manual). It first requested that the RRC
reconsider its decision. The RRC complied. As part of the
reconsideration procedure, two RRC committee members prepared
separate reports on McKeesport's program and both recommended
that RRC sustain the withdrawal of accreditation. Although the
RRC rescinded one of the five areas of deficiency (the drop-out
rate), it reaffirmed its decision to withdraw accreditation.
McKeesport then appealed. At the appeal, McKeesport
was represented by counsel, made extensive oral argument, and
submitted four volumes of additional material. McKeesport also
questioned one of two RRC members who had reviewed McKeesport
about the reasons for the withdrawal. The appeals panel upheld
30
the RRC's decision to withdraw accreditation.0 In summary the
appeals panel stated that
0
It cited the following reasons:
1. [T]here is little independent scholarly activity
within the Department of Surgery at McKeesport
Hospital. The only potential scholarly activity that a
resident may participate in is by going to another
institution. There is no attempt at an ongoing
clinical research program and there have been no
articles published in peer-review journals, even though
there are a few papers that have received awards from
the local chapter of the American College of Surgeons.
Each resident allegedly completes a clinical study each
year. These reports have not appeared in print. While
there is some evidence of resident research projects,
the four full-time faculty are woefully deficient in
spite of previous warning[s] in this regard.
2. After review of the appropriate documents, the
Appeals Panel recognizes an ongoing inadequacy in the
accruing of data, not only as to types of operations
done, but also who has done those operations. The
Program Director depends entirely on the house staff to
accumulate the data and it is often flawed by the fact
that there has been inadequate participation on the
part of the Program Director in the data collecting
process and therefore there is no check and balance
system. The Program Director does not know in some
instances whether the resident has done the case or
whether it is on a private patient because it will
always be reported as a first assistant. These
continuing flaws in accruing data and monitoring it
carefully with a check and balance system by the
Program Director leaves the Board to sustain the
citation.
3. Continuation of care by residents is poorly
documented. There is a lack of careful follow-up by
the Program Director or his designee to make sure there
is continuity of care on the part of the house staff
either in the public clinic or in the private offices.
The Panel searched the voluminous records of the public
clinic and could not find consistent attendance by the
senior residents. There is no documented teaching
during these clinic sessions. It appears that the
junior residents attend these clinics, but there is no
31
[t]he surgical leadership at the McKeesport
Hospital does not fully understand that the
citations here (insufficient data, continuity
of care, scholarly activity, and sufficient
number of operations) are the very fabric by
which we are judged. There seems to be
little recognition that this is important in
the management of a residency training
program, and the Board of Appeals therefore
sustains the recommendation of the Residency
Review Committee.
The ACGME accepted the decision of the appeals panel and withdrew
McKeesport's accreditation.
It appears from the record that the ACGME went by the
book in withdrawing McKeesport's accreditation. It followed all
the procedures outlined in the Manual and specified the
requirements in the Essentials that the hospital had failed to
meet. Despite this, the district court concluded that the
procedures were inadequate and that the ACGME's decision was
"arbitrary and capricious and not supported by substantial
evidence."
consistent follow-up on the part of the senior
resident.
4. Deficiencies in operative experience are well
documented in the area of vascular, pancreas,
endocrine, trauma, pediatric, and head and neck
surgery. There is by contrast a great sufficiency of
cases as first assistant. Instances that are mentioned
above need to be reemphasized because of the poor
record keeping; it is impossible to discern whether a
resident has done a case on a private patient or not
and, also, there is no evidence that the Program
Director, follows the cases done by the residents
carefully, thereby being able to even out the total
experience of the residents. There may be adequate
cases documented for one resident, while his
counterpart in the same year may have a dearth to none
of such cases.
32
B. Procedural Due Process
The appropriate level of procedural safeguards to
satisfy due process depends upon a balancing of the factors
enumerated in Mathews v. Eldridge, 424 U.S. 319, 335, 96 S. Ct.
893, 903, 47 L. Ed. 2d 18 (1976): 1) the private interest at
stake, 2) the government's countervailing interest, and 3) the
risk of an erroneous deprivation of the private interest through
procedures used, and the probable value, if any, of additional or
substitute procedural safeguards.
Although McKeesport has a protectable property interest
in its license to conduct a surgical residency program, the
interest is probably not very strong. Withdrawal of the
program's accreditation will affect only one part of the
hospital's operations; indeed it will affect only one of many
residency training programs the hospital maintains. Although the
hospital may lose some federal funding, the ACGME's withdrawal of
accreditation will not force McKeesport to close its doors. In
any event, the hospital may reapply for accreditation if it
remedies the deficiencies in its surgical residency program.
By contrast, the ACGME has a significant interest as an
accreditation agency in ensuring that the residents in general
surgery are adequately trained. Accreditation of a surgical
residency program in effect certifies to society that those who
were trained in the program are fit to be surgeons. Consistent
with this interest, the procedures the ACGME currently has in
place are quite detailed. As has been mentioned, the procedures
the ACGME employed included 1) notice to McKeesport that its
33
accreditation status was in jeopardy, 2) an initial review of the
program which included a site visit, 3) reconsideration of the
review in which McKeesport was allowed to present new evidence,
and 4) review before a separate appeals panel at which McKeesport
was represented by counsel, and was provided an opportunity to
present witnesses, question members of the RRC, and present
additional evidence.
The district court believed that these accreditation
procedures did not satisfy procedural due process because they
employed vague standards, gave McKeesport inadequate notice,
placed undue emphasis on past violations, and did not allow
cross-examination. I do not believe that any of these supposed
defects are supported by the evidence or would in any event
constitute a denial of McKeesport's due process rights. Curing
these asserted defects would do little to decrease the risk of an
erroneous withdrawal, and any additional procedures would seem to
be of negligible worth when compared to their cost.
First, the district court thought two requirements in
the Essentials, the "substantial compliance" and "operative
experience" ones, were vague. In contrast to the district court,
I believe that the formulation of these requirements preserved
the ACGME's ability to exercise its professional judgment in
making accreditation decisions. More particularly, the ACGME was
entitled to make a conscious choice in favor of flexible
standards to accommodate the variations among its member
institutions, and to avoid forcing all programs into a rigid
mold. See St. Agnes II, 748 F. Supp. at 339; Rockland Inst.,
34
Div. of Amistad Vocational Schools, Inc. v. Association of Indep.
Colleges & Schools, 412 F. Supp. 1015, 1018 (C.D. Cal. 1976);
Parsons College, 271 F. Supp. at 73. Although the incorporation
of professional judgment into a professional standard may prevent
program directors from predicting with mathematical precision
what will or will not satisfy the standard, it does not make the
standard unconstitutionally vague, particularly where, as here,
experienced program directors can develop a good sense of how
that judgment is commonly exercised.
Second, despite the district court's conclusion to the
contrary, the ACGME gave McKeesport adequate notice of its
alleged deficiencies. On several occasions, the ACGME sent
McKeesport detailed letters of notification stating the areas in
which McKeesport needed improvement. After ACGME notified
McKeesport of the withdrawal, McKeesport again received a
detailed notice of the RRC's evaluation. It was even notified of
specific concerns of the RRC and the appeals panel, and was
allowed to submit additional information to address those
concerns. Such notification procedures were not constitutionally
infirm.
Third, the district court's conclusion that it was
unfair for the RRC to consider the history of the program when
making its decision while the appeals panel would not consider
changes in the program following the RRC's decision, reflects an
erroneous view of the different functions performed by the RRC
and the appeals panel. In the ACGME's accreditation process, the
RRC makes the original substantive decision with respect to the
35
accreditation. At that stage, it seems perfectly appropriate to
take into account past performance as a predictor of future
performance. However, at the appeals stage, which is designed
only to ensure that the RRC acted properly, subsequent changes to
the program are irrelevant. Thus there is no unfair asymmetry in
preventing the program director from presenting evidence of
changes in the program following the RRC decision. It is based
upon the acceptable policy decision to fix the accreditation
decision at a certain point in time so that the ACGME can make a
concrete assessment of the program and not face a moving target.
Fourth, the district court's conclusion that the
procedures were infirm because McKeesport could not cross-examine
and confront the RRC reviewers overstates the constitutional
requirement of "adequate notice and an opportunity to be heard by
an appropriate tribunal." St. Agnes II, 748 F. Supp. at 337
(internal quotations omitted). The Constitution requires a
proceeding appropriate under the circumstances; it does not
require confrontation and cross-examination in every proceeding.
See also Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 545,
105 S. Ct. 1487, 1495, 84 L. Ed. 2d 494 (1985) (stating that a
pretermination hearing need not be elaborate and that notice and
an opportunity to respond are the critical components).
Cross-examination and confrontation, which are
generally procedures aimed at resolving questions of historical
fact that may turn on the credibility of the participants, are
not absolutely necessary in a procedure related to accreditation
decisions like the one here. The ACGME's proceeding is aimed at
36
the application of a standard of quality in a field of medical
education. In this case, as in most cases, the facts were
essentially undisputed. While the effect that such facts might
have on the accreditation decision were in dispute, this
determination was largely a question of professional judgment,
rather than of credibility. Confrontation and cross examination
would have added little to that determination. Thus the lack of
such procedures did not deny McKeesport procedural due process.0
In short, none of the reasons cited by the district
court supports the conclusion that McKeesport was likely to
succeed on the merits of its procedural due process claim. At
bottom, McKeesport's claim that the ACGME's procedures violate
constitutional requirements of due process really rests on the
proposition that procedures which allow an accrediting body to
exercise its professional judgment when reaching its decisions
violate constitutional standards of due process. But insofar as
the ACGME's professional judgment is the most important tool it
0
Two of the court's other findings, that an inadequate amount of
time was allotted in the RRC hearing for consideration of
individual cases and that the ACGME's procedures disregarded the
site surveyors' findings, are potentially problematic. Under the
current ACGME review procedures, only two reviewers carefully
evaluate the program. Although their results are then reported
to the RRC along with a number of other reviews of programs, the
full membership of the RRC relies on their notes and appears to
give only perfunctory review to each individual program (50 to 70
programs are reviewed during a single day-and-a-half session).
Similarly, the site surveyor, who has in-depth knowledge of the
program, cannot make recommendations about accreditation. The
decisions to limit the review by the RRC of individual programs
and to limit the role of the site surveyor, however, reflect the
ACGME's exercise of its judgment as to the procedures appropriate
for the review of programs, something that I would not lightly
disturb.
37
has to ensure the quality of residency programs, that proposition
cannot be correct.
C. Substantive Due Process
The district court's conclusion that the ACGME violated
substantive due process in its review of McKeesport is also
flawed. The court's conclusion was based on random entries in
site surveyors' reports and comments from the RRC reviewers who
reconsidered the adverse action. In particular, the court
pointed to comments by site surveyors to the effect that the
ACGME tended "to come down strong" on community hospital programs
(McKeesport is a community hospital), and that the ACGME was
hostile to programs with large numbers of foreign doctors.0 The
district court also found that, by the time the appeals panel
considered McKeesport's program, every claimed deficiency except
for McKeesport's lack of scholarly activity had been remedied or
had been deemed insupportable by the evidence.
0
The conclusion that the ACGME is biased against foreign trained
doctors is apparently based on an isolated statement in the
record from a state observer that the ACGME "sees with a
jaundiced eye the inclusion of foreign medical graduates in
residency programs." There is otherwise little or no support for
such a finding. Nevertheless, it is a matter of common knowledge
that nearly every hospital in the United States (teaching and
non-teaching) has a significant number of such doctors, and yet
most teaching hospitals have satisfied the ACGME requirements.
Moreover, the notion that ACGME is biased against community
hospitals lacks significant record support. But whether or not
the district court's findings were correct on this issue, the
ACGME's findings were otherwise supported by enough evidence that
I do not believe that the ACGME ran afoul of substantive due
process.
38
But the existence of some evidence contrary to the
ACGME's decision does not mean that the decision was not
supported by substantial evidence. Courts must pay special
deference to a professional accreditation organization's
substantive decisions in light of the special expertise required
to determine professional competency. See Marjorie Webster
Junior College, Inc. v. Middle States Ass'n of Colleges and
Secondary Schools, Inc., 432 F.2d 650, 655 (D.C. Cir. (1970),
cert. denied, 400 U.S. 965, 91 S. Ct. 367, 27 L. Ed. 2d 384
(1970). And the record shows that the ACGME very carefully
reviewed the program and found substantial support for at least
four of the five deficiencies.
Following its review of the McKeesport program in 1989,
the RRC expressed "serious concern" in five areas and stated that
the next survey would occur in one year. It is undisputed that
during the 1990-91 review the program director submitted
incorrect information to the RRC. It is also not seriously
disputed that there was substantial evidence to support the
ACGME's finding that McKeesport has a deficient level of
scholarly activity: the ACGME repeatedly complained about
McKeesport's lack of adequate scholarly activity, particularly
its lack of peer-reviewed journal articles, and McKeesport does
not seriously contend otherwise.
The ACGME also had substantial evidence to support its
finding that there were deficiencies in surgical experience at
McKeesport. Although the Essentials does not set forth a precise
number of required operations, the numbers of vascular, pancreas,
39
endocrine, trauma, pediatric, and head and neck operations at
McKeesport were known, and the most recent data had shown that
the McKeesport program was unable to provide adequate experience
in six of the thirteen major categories of surgery. Of the two
McKeesport graduates, one was deficient in seven of the defined
categories, and the other in four. In the ACGME's professional
judgment, McKeesport's program did not have the "breadth, depth,
complexity, and volume to sustain an adequate experience for two
residents, and that each of these residents did not have what
[the ACGME] would accept as a broadly based surgical experience."
This conclusion was within the ACGME's competence to decide and
was not arbitrary and capricious.
In view of the supported ACGME conclusions about
scholarly activity and surgical experience, both of which it
considers important criteria for program certification, I am
satisfied that McKeesport had no probability of success on the
merits of the substantive due process claim.0
D. Common Law Due Process
0
Because I believe that McKeesport has not shown a likelihood of
success on the merits, I need but briefly discuss the balance of
the harms, but that consideration also militates in favor of
setting aside the district court's injunction. To begin with,
the balance of harms does not clearly favor McKeesport since the
ACGME, and the state, have a strong interest in maintaining the
quality of surgeons, and a grant of a preliminary injunction
would compromise that interest. Moreover, because the public
interest in having qualified surgeons is a strong interest
weighing in the ACGME's favor, I believe that McKeesport would
have had to make a very strong showing of likelihood of success
in order to be entitled to a preliminary injunction, something it
clearly did not do.
40
McKeesport's complaint averred only a violation of
constitutional due process. It appears, however, that McKeesport
could have also claimed a violation of common law due process (as
it now seeks leave to amend to do). Many courts have recognized
a state or common law duty on the part of "quasi-public" private
professional organizations or accreditation associations to
employ fair procedures when making decisions affecting their
members. See Wilfred Academy of Hair & Beauty Culture v.
Southern Ass'n of Colleges & Schools, 957 F.2d 210, 214 (5th Cir.
1992); Medical Inst. of Minn. v. National Ass'n of Trade & Tech.
Schools, 817 F.2d 1310, 1313 (8th Cir. 1987); Marlboro Corp. v.
Association of Indep. Colleges & Schools, Inc., 556 F.2d 78, 79
(1st Cir. 1977); Marjorie Webster Junior College, Inc. v. Middle
States Ass'n of Colleges and Secondary Schools, Inc., 432 F.2d
650, 655 (D.C. Cir. (1970), cert. denied, 400 U.S. 965, 91 S. Ct.
367, 27 L. Ed. 2d 384 (1970); Peoria School of Business, Inc. v.
Accrediting Council for Continuing Educ. & Training, 805 F. Supp.
579, 582 (N.D. Ill. 1992); St. Agnes II, 748 F. Supp. at 338;
Interfaith Med. Ctr. v. Sabiston, 136 A.D.2d 238, 242-43, 527
N.Y.S.2d 48, 50-51 (App. Div. 1988). Such a common law duty
appears to exist under Pennsylvania law. See School Dist. v.
Pennsylvania Interscholastic Athletic Ass'n, 309 A.2d 353, 357
(Pa. 1973); Psi Upsilon of Philadelphia v. University of Pa., 591
A.2d 755, 758-59 (Pa. Super.), appeal denied, 598 A.2d 994 (Pa.
1991); Boehm v. University of Pa. School of Veterinary Medicine,
573 A.2d 575, 579 (Pa. Super.), appeal denied, 589 A.2d 687 (Pa.
1990). Importantly, unlike the constitutional due process cause
41
of action, the common law due process cause of action has no
state action requirement. See St. Agnes II, 748 F. Supp. at 337-
338.
McKeesport avers that it should be given the
opportunity to seek leave to amend its complaint to assert a
common law due process claim. I note, however, that the
requirements of common law due process are quite similar to those
for constitutional due process, and most courts treat them
interchangeably. See, e.g., Marlboro Corp., 556 F.2d at 79; see
also North Jersey Secretarial School, Inc. v. National Ass'n of
Trade & Tech. Schools, 597 F. Supp. 477, 479-80 (D.D.C. 1984)
(stating that accrediting associations owe its members a duty to
provide fair and impartial procedures, to base decisions on
substantial evidence, and to avoid arbitrary and capricious
actions), vacated without op., 802 F.2d 1483 (D.C. Cir. 1986).
Thus, because I believe that McKeesport cannot make out a claim
for violation of constitutional due process, I doubt that it will
be able to succeed on a claim for violation of common law due
process either, though I acknowledge that the question should be
addressed by the district court in the first instance.
III. Conclusion
While I believe the ACGME is a state actor, I also
believe that it satisfied the requirements of procedural and
substantive due process, and consequently, McKeesport had no
likelihood of success on the merits. Because I too would reverse
42
the order granting the preliminary injunction, I concur in the
judgment of the court.
43