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Tenth Circuit Holds Peer Review Is Not State Action


HLD, v. 31, n. 4 (April 2003)

Tenth Circuit Holds Peer Review Is Not State Action

Plaintiff Brian E. Conner, M.D. was denied reappointment to the staff of the Salina Regional Health Center, Inc. (SRHC) after a peer review panel recommended denying his application. Plaintiff filed suit against SRHC in federal district court following exhaustion of all administrative remedies, claiming violations of his due process and free speech rights under 42 U.S.C. � 1983. Plaintiff contended that, under Kansas law, designated healthcare providers such as SRHC are "state officers" thereby making � 1983 applicable. Plaintiff claimed that the denial of his application for reappointment was the denial of a protected property interest and he should have been afforded due process. Plaintiff also claimed that his right to free speech had been violated because his suspension and the denial of his application were in retaliation for comments he made about patient care. SRHC argued that it could not act under color of state law because it is a privately owned corporation, and moved to dismiss under Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief could be granted. The district court granted the motion to dismiss, and plaintiff appealed.

The Tenth Circuit affirmed the district court's dismissal of plaintiff's claims. The appeals court noted that for a � 1983 claim a party must allege that it has been deprived of a federal right by a party acting under color of state law. Finding that plaintiff had alleged the deprivation of a federal right in his due process and free speech claims, the court then turned to the issue of whether the deprivation was under color of state law. Under the Kansas Risk Management Act (KRMA), Kan. Stat. Ann. � 65-4929, healthcare providers that perform peer reviews are considered "state officials engaged in a discretionary function and all immunity of the state shall be extended to such healthcare providers . . . including that from the federal and state antitrust laws." According to plaintiff, the KRMA makes SRHC a state actor. The appeals court analyzed � 65-4929 and found that the section could not be read to subject healthcare providers to � 1983 liability. Subsection (c) of � 65-4929 suggests that the legislature did not intend for healthcare providers to be subject to the same responsibilities and liabilities of state officials.

Plaintiff also contended that, because the KRMA mandates the peer review process used to deny his application, the state was delegating the duties of peer review to healthcare providers. The appeals court noted that, for a party to have a successful � 1983 claim, the state's involvement must be "so pervasive" that the challenged action can be said to be "fairly attributable to the state." According to the appeals court, the regulatory scheme in this case did not have such state involvement, because, while the KRMA provides guidelines for healthcare providers to establish risk management programs and to have them approved by the state, the regulations did not develop a system for the implementation of peer review programs. Therefore, said the appeals court, the regulations are not sufficient to establish state action, and traditionally peer review has not been regulated by the state. Accordingly, the appeals court affirmed the judgment of the district court dismissing plaintiff's claims.

Conner v. Salina Reg'l Health Ctr., Inc., No. 00-3348, 2003 WL 295545 (10th Cir. Feb. 12, 2003) (5 pages).

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