Richard Chudacoff v. University Medical Center, et al

Filing

FILED OPINION (STEPHEN R. REINHARDT, MICHAEL DALY HAWKINS and N. RANDY SMITH)AFFIRMED in part, REVERSED in part, and REMANDED for further proceedings consistent with this Opinion. Chudacoff s Motion for Sanctions is referred to the district court for disposition along with the remaining issues in this case. Costs on appeal to appellant. Judge: MDH Authoring, FILED AND ENTERED JUDGMENT. [7779765] [09-17558, 09-17652]

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
FOR PUBLICATION

RICHARD CHUDACOFF, M.D.,
Plaintiff-Appellant-Cross-Appellee,
v.
UNIVERSITY MEDICAL CENTER OF
SOUTHERN NEVADA, a political
subdivision of Clark County, State
of Nevada; BRUCE L. WOODBURY,
TOM COLLINS, CHIP MAXFIELD,
LAWRENCE WEEKLY, CHRIS
GIUNCHIGLIANI, SUSAN BRAGER, and
RORY REID, Clark County
Commissioners, ex-officio, the
Board of Trustees of University
Medical Center of Southern
Nevada; KATHLEEN SILVER, an
individual; THE MEDICAL AND
DENTAL STAFF OF THE UNIVERSITY
MEDICAL CENTER OF SOUTHERN
NEVADA; JOHN ELLERTON, M.D., an
individual; MARVIN J. BERNSTEIN,
M.D., an individual; DALE
CARRISON, M.D., an individual;
DONALD ROBERTS, M.D., an
individual,
Defendants-AppelleesCross-Appellants.





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Nos. 09-17558
and
09-17652
D.C. No.
2:08-cv-00863ECR-RJJ
OPINION

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CHUDACOFF v. UNIVERSITY MEDICAL CENTER

Appeal from the United States District Court
for the District of Nevada
Edward C. Reed, Senior District Judge, Presiding
Argued and Submitted
December 9, 2010—San Francisco, California
Filed June 9, 2011
Before: Stephen Reinhardt, Michael Daly Hawkins, and
N. Randy Smith, Circuit Judges.
Opinion by Judge Hawkins

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COUNSEL
Jacob Hafter, Law Office of Jacob Hafter & Associates, Las
Vegas, Nevada, for the plaintiff-appellant/cross-appellee.
Lynn M. Hansen, Jimmerson Hansen, Las Vegas, Nevada, for
the defendants-appellees/cross-appellants.

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Kim Irene Mandelbaum and Robert McBride, Mandelbaum,
Schwarz, Ellerton & McBride, Las Vegas, Nevada, for the
defendants-appellees/cross-appellants.

OPINION
HAWKINS, Senior Circuit Judge:
Richard Chudacoff, M.D. (“Chudacoff”) appeals the grant
of summary judgment (the “November Order”) in his civil
rights action arising from the suspension of his medical staff
privileges at the University Medical Center of Southern
Nevada (“UMC”), a county hospital organized under the laws
of Nevada, as well as the denial of his motion for leave to file
a third amended complaint asserting claims under 42 U.S.C.
§ 1983.
This case is not about whether Chudacoff’s UMC staff
privileges were a protected property interest or whether he
was denied adequate procedural protections when his privileges were suspended without notice or opportunity to be
heard. See Kildare v. Saenz, 325 F.3d 1078, 1085 (9th Cir.
2003). These issues were resolved in Chudacoff’s favor by an
earlier decision of the district court (the “April Order”) and
have not been appealed by defendants. Instead, this case asks
us to determine only whom, if anyone, Chudacoff may sue
under 42 U.S.C. § 1983 for his constitutional injury.
We answer this question by reversing as to the individually
named doctor defendants who serve as voting members of
UMC’s physician credentialing committee and who therefore
directly participated in the unlawful suspension of Chudacoff’s staff privileges. The individual committee members may
not be county employees, but their physician credentialing
decisions on behalf of a county hospital constitute state
action. Because Chudacoff has not shown that his due process

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injuries were the product of institutional policies, however,
we affirm as to all other defendants.1
BACKGROUND
I.

The Defendants

UMC is a county hospital created by the Clark County
Board of Commissioners and supported through public funds.
See Nev. Rev. Stat. §§ 450.020-.060, 450.230-.390. Because
the population of Clark County is greater than 400,000, the
Clark County Commissioners constitute, ex officio, the UMC
Board of Trustees (“the Board”), as required by Nevada law.
See id. § 450.090. The Board has final approval authority over
UMC’s Bylaws. Chudacoff seeks to name all Clark County
Commissioners as defendants in their ex officio capacity as
the Board.
Staff privileges at UMC are initially granted, suspended, or
otherwise modified by the Medical and Dental Staff of UMC
(“Medical Staff”), a professional peer-review body created
and delegated this authority by the UMC Bylaws. The Medical Staff acts through its governing arm, the Medical Executive Committee (“MEC”), also expressly created by the UMC
Bylaws, whose membership includes, inter alia, the UMC
Chief of Staff (at all relevant times defendant John Ellerton),
the Vice Chief of Staff (defendant Dale Carrison), the Secretary (defendant Marvin Bernstein), and the chief of each
department (including defendant Donald Roberts, Chief of the
Department of Obstetrics and Gynecology). In addition,
UMC’s CEO (defendant Kathleen Silver) sits as a non-voting
member of the MEC. The MEC’s staff credentialing decisions
are guided by the hospital Bylaws, Credentials Procedures
Manual, and Fair Hearing Plan.
1

We address the remaining issues on appeal and cross-appeal in a separate memorandum disposition filed concurrently with this opinion.

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Like the hospital itself, the Medical Staff owes its existence
to Nevada law, which requires UMC, as a county hospital, to
“organize a staff of physicians composed of each regular
practicing physician, podiatric physician and dentist in the
county in which the hospital is located who requests staff
membership and meets the standards set forth in the regulations prescribed by the board of hospital trustees.” Nev. Rev.
Stat. § 450.440(1). Through the UMC Bylaws, the Board has
delegated considerable administrative and oversight duties
over the hospital and its physicians to the Medical Staff,
though the Board retains final appellate review of the MEC’s
staff credentialing decisions as well as final policymaking
authority.
II.

Suspension of Chudacoff’s Privileges

Chudacoff was appointed an Assistant Professor with the
University of Nevada School of Medicine in 2007 and granted
staff privileges at UMC in the ob/gyn department shortly
thereafter. A few months after being granted staff privileges
at UMC, Chudacoff received a May 28, 2008 letter from
Ellerton informing him that at its monthly meeting the day
before, the MEC had suspended Chudacoff’s obstetrical privileges indefinitely, imposed a direct supervision requirement
on his performance of surgeries, and ordered mandatory drug
testing and physical and psychological evaluations. This disciplinary action was not a thirty-day “summary suspension,”
(which can be immediately imposed pursuant to Article XI of
the hospital Bylaws upon showing that a physician’s conduct
poses a substantial and imminent risk of danger to others), but
rather a “routine administrative action,” which may be
undertaken only upon satisfaction of specific procedural
requirements, as laid forth in the hospital Bylaws, Credentialing Manual, and Fair Hearing Plan. The letter did not explain,
as required by the Bylaws, the basis for the adverse actions.
Chudacoff alleges he had no knowledge until he received this
letter that the MEC was considering altering his privileges.

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The letter also informed Chudacoff of his right to a fair
hearing, pursuant to the hospital’s Bylaws and Credentialing
Manual. He requested one on June 2. However, before he
finally received a response six weeks later, and well before he
actually had an opportunity to be heard before a fair hearing
committee, several significant events had already transpired:
the University of Nevada had terminated his employment with
the School of Medicine due to his suspension of clinical privileges; defendants had filed a report with the National Practitioners Data Bank2 (“NPDB”) stating that Chudacoff’s
privileges had been suspended indefinitely for “substandard
or inadequate care” and “substandard or inadequate skill
level;” and several other health care facilities had denied or
revoked Chudacoff’s privileges in turn.
The fair hearing committee ultimately disagreed with the
MEC’s suspension of Chudacoff’s privileges based on the
allegations of substandard care. At its October 28 monthly
meeting, the MEC adopted the Fair Hearing Committee’s recommendation to lift the suspension based on substandard care
and instead required only peer review of Chudacoff’s practice.
III.

Procedural History

Chudacoff initiated this lawsuit on July 2, 2008 and later
moved for partial summary judgment on two issues of law:
(1) “whether the defendants violated his due process rights by
suspending his hospital privileges and then reporting that suspension to the NPDB without notice or an opportunity to be
heard”; and (2) whether the defendants are entitled to immu2

The National Practitioner Data Bank is a national clearinghouse
designed to facilitate information-sharing and thus prevent incompetent
doctors from moving freely between states who might otherwise be unable
to trace their negative records. Under the Health Care Quality Improvement Act (HCQIA), hospitals are required to report to the NPDB adverse
professional review actions affecting a physician’s clinical privileges. 42
U.S.C. § 11133(a)(1)(A); 45 C.F.R. § § 60.5(c), 60.10.

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nity under the Health Care Quality Improvement Act
(“HCQIA”).” See Chudacoff v. Univ. Med. Ctr. of S. Nev.
(“Chudacoff I”), 609 F. Supp. 2d 1163, 1171 (D. Nev. 2009).
The district court issued a partial summary judgment order in
which it concluded that Chudacoff’s due process rights were
violated when defendants suspended his staff privileges
before giving him any type of notice, and reported him to the
NPDB before providing him with any opportunity to be heard.
Id. at 1173-74. The court further held that defendants failed
to comply with 42 U.S.C. § 11112(a) and therefore were not
entitled to HCQIA immunity. Id. at 1176-77. The district
court denied defendants’ motion to reconsider, and defendants
appealed the issue of HCQIA immunity only.
Shortly after the district court granted partial summary
judgment on the due process issue, Chudacoff sought leave to
file a Third Amended Complaint to insert a reference to 42
U.S.C. § 1983 in his first and second counts, which previously
alleged only violations of the Fourteenth Amendment. In
seeking leave to amend, Chudacoff acknowledged his Second
Amended Complaint was not properly pled because “the Constitution and its Amendments do not, in and of themselves,
create a private right of action.”
Defendants moved for summary judgment on all claims,
including state law claims that are addressed in a separate
memorandum disposition filed concurrently with this opinion.
The district court then issued its final summary judgment
order. It granted summary judgment to defendants on Chudacoff’s federal due process claims on the basis of its finding that
the physician defendants were not state actors and that the
municipal defendants did not have a policy or practice of due
process violations such as would allow municipal liability
under Monell v. Dep’t of Soc. Servs., 436 U.S. 658 (1978).3
3

The district court apparently found these rulings to be consistent with
its conclusion in its first summary judgment order that Chudacoff’s due
process rights were violated by the defendants.

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Based on its grant of summary judgment, the district court
denied Chudacoff’s motion for leave to amend as futile. Chudacoff timely appealed.
STANDARD OF REVIEW
A grant of summary judgment is reviewed de novo. Viewing the evidence in the light most favorable to the nonmoving
party, we must determine whether there are any genuine
issues of material fact and whether the district court correctly
applied the relevant substantive law. Charles Schwab & Co.,
Inc. v. Debickero, 593 F.3d 916, 918 (9th Cir. 2010); Lopez
v. Smith, 203 F.3d 1122, 1131 (9th Cir. 2000) (en banc).
Denial of a motion for leave to amend a complaint is
reviewed for abuse of discretion. Gardner v. Martino, 563
F.3d 981, 990 (9th Cir. 2009) (citing Westlands Water Dist.
v. Firebaugh Canal, 10 F.3d 667, 677 (9th Cir. 1993)).
DISCUSSION
I.

Due Process Claim

[1] To establish § 1983 liability, a plaintiff must show both
(1) deprivation of a right secured by the Constitution and laws
of the United States, and (2) that the deprivation was committed by a person acting under color of state law.4 Broam v.
Bogan, 320 F.3d 1023, 1028 (9th Cir. 2003); Am. Mfrs. Mut.
4

Chudacoff limited his first motion for partial summary judgment to the
first of these two prongs, and the district court’s ruling was commensurately limited in scope. The district court did not, as Chudacoff argues,
hold that the violation of his due process rights occurred under color of
law. As the moving party, Chudacoff bore the burden of presenting the
absence of any genuine issue of material fact, and his belief to the contrary
is erroneous. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986);
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Accordingly,
the district court did not err in entertaining defendants’ subsequent motion
for summary judgment on the entire due process claim based on lack of
state action.

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Ins. Co. v. Sullivan, 526 U.S. 40, 49-50 (1999); see 42 U.S.C.
§ 1983. The “under color of law” requirement under § 1983
is the same as the Fourteenth Amendment’s “state action”
requirement. Lugar v. Edmonson Oil Co., 457 U.S. 922, 928
(1982).
A.

Individually Named Doctors

Several key matters are undisputed: (1) UMC is a county
hospital; (2) the UMC Bylaws delegate authority to the Medical Staff, through its executive committee, to take adverse
administrative actions against hospital staff, including suspension of physicians’ hospital privileges; and (3) defendants
Ellerton, Carrison, Bernstein, and Roberts were all voting
members of the MEC whose names appeared on the May 28,
2008 letter suspending Chudacoff’s staff privileges purportedly pursuant to the MEC’s authority.
Although determining state action can admittedly be an
imperfect science, we do not consider this case a difficult one.
This is not the case of a private hospital whose only state link
is its subjection to state regulation. See, e.g., Jackson v.
Metro. Edison Co., 419 U.S. 345, 350 (1974) (“The mere fact
that a business is subject to state regulation does not by itself
convert its action into that of the State for purposes of the
Fourteenth Amendment.”); Sutton v. Providence St. Joseph
Med. Ctr., 192 F.3d 826, 837-39 (9th Cir. 1999); Pinhas v.
Summit Health, Ltd., 894 F.2d 1024, 1034 (9th Cir. 1989)
(compliance with statutorily created system of physician peerreview and with reporting requirements is insufficient to
establish state action). Nor is this the case of a private, nonprofit hospital whose state links consist merely of receipt of
federal funds under the Hill-Burton, Medicaid, and Medicare
programs, and exemption from state and federal taxes. See,
e.g., Taylor v. St. Vincent’s Hosp., 523 F.2d 75, 77 (9th Cir.
1975) (finding insufficient nexus to establish state action);
Watkins v. Mercy Med. Ctr., 520 F.2d 894, 896 (9th Cir.
1975); Carter v. Norfolk Cmty. Hosp. Ass’n, Inc., 761 F.2d

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970, 972 (4th Cir. 1985); Briscoe v. Bock, 540 F.2d 392, 39596 (8th Cir. 1976); see also Blum v. Yaretsky, 457 U.S. 991,
1008 (1982).
This is not even the case of a publicly financed hospital that
has leased its management and operation to a private corporation—circumstances under which appellate courts have found
sufficient nexus to establish state action in the suspension of
a physician’s staff privileges. See, e.g., Milo v. Cushing Mun.
Hosp., 861 F.2d 1194, 1197 (10th Cir. 1988) (“The defendants cannot escape liability by delegating responsibility to
another party.” (internal citations omitted)); Jatoi v. HurstEuless-Bedford Hosp. Auth., 807 F.2d 1214, 1221-22 (5th Cir.
1987) (“The private defendants cannot receive public funds,
utilize public facilities, and serve a public purpose, yet insist
that their private status forestalls any correction of a violation
of the constitutional rights of their medical staff.”); Malak v.
Assoc. Physicians, Inc., 784 F.2d 277, 282 (7th Cir. 1986)
(“[T]he conduct of a public hospital and its employees is
clearly state action and the conduct of otherwise private entities that act jointly with them is also state action.”).
[2] Rather, UMC is through and through a public hospital,
and “there is no dispute that the operation of [a public] hospital is state action and that [a public hospital] is required to
meet the provisions of the Fourteenth Amendment in the
admission of physicians to its staff.” Woodbury v. McKinnon,
447 F.2d 839, 842 (5th Cir. 1971); see Briscoe, 540 F.2d at
394-95; Birnbaum v. Trussell, 371 F.2d 672, 677 (2d Cir.
1966).
[3] Despite this, the doctor defendants insist that they cannot be held liable for their conduct at issue here because they
are private individuals not employed by the county hospital.
But Chudacoff does not seek to sue them for actions performed in their capacity as private physicians. Rather, the
basis for his § 1983 claims is their actions taken within the
course and scope of their duties as governing members of the

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Medical Staff, a subdivision of UMC mandated by state law.
Even conduct of a private individual constitutes state action
when there is a “such a close nexus between the State and the
challenged action” that the individual’s conduct “may be
fairly treated as that of the State itself,” such as when the
nominally private actor is “controlled by an agency of the
State, when it has been delegated a public function by the
State, when it is entwined with governmental policies, or
when government is entwined in its management or control.”
Brentwood Acad. v. Tenn. Secondary Sch. Athletic Ass’n, 531
U.S. 288, 295-96 (2001) (internal quotation marks and citations omitted); see also Rendell-Baker v. Kohn, 457 U.S. 830,
838 (1982); Sutton, 192 F.3d at 835.
[4] We think it clear that a sufficiently close nexus exists
here and that the doctor defendants, in suspending Chudacoff’s privileges to practice at a county hospital, were
“ ‘clothed with the authority of state law.’ ” West v. Atkins,
487 U.S. 42, 49 (1988) (quoting United States v. Classic, 313
U.S. 299, 326 (1941)). Although comprised of privately
employed physicians, the Medical Staff of UMC is controlled
and managed by the UMC Board. Further, the doctors’
authority to deprive Chudacoff of his staff privileges flows
directly from the UMC, whose authority to regulate physician
privileges at a county hospital is in turn directly authorized by
Nevada law. The actions of defendants Ellerton, Carrison,
Bernstein, and Roberts as governing members of the Medical
Staff are therefore fairly attributable to the state, and they cannot now escape liability for their direct and personal participation in Chudacoff’s unlawful suspension of staff privileges by
claiming private conduct.
B.

Kathleen Silver

[5] As CEO of UMC, Silver sits on the MEC, but she does
so in a non-voting, non-deliberating capacity. She does not
ordinarily take part in the MEC’s peer-review based credentialing decisions, and there is no evidence that she acted dif-

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ferently here. Chudacoff does not dispute her limited, passive
role at these MEC meetings but asserts that her presence as
the “eyes and ears of the Commissioners” subjects her to liability for the MEC’s unconstitutional actions. In the absence
of evidence of her personal participation in the constitutional
deprivation, Silver’s mere non-voting membership in the
MEC is insufficient to show that she was an “integral participant” in the deprivation of Chudacoff’s rights, as is required
to establish § 1983 liability. Boyd v. Benton County, 374 F.3d
773, 780 (9th Cir. 2004). Summary judgment in her favor was
thus proper. See Chuman v. Wright, 76 F.3d 292, 294-95 (9th
Cir. 1996); Taylor v. List, 880 F.2d 1040, 1045 (9th Cir.
1989).
C.

UMC, the Board, and the Medical and Dental
Staff

[6] Chudacoff also names three entity defendants: UMC;
the Clark County Commissioners, in their official capacities
as the UMC Board of Trustees; and the Medical and Dental
Staff of UMC. Liability will lie against a municipal entity
under § 1983 only if a plaintiff shows that his constitutional
injury was caused by employees acting pursuant to an official
policy or “longstanding practice or custom,” or that the injury
was caused or ratified by an individual with “final policymaking authority.” Villegas v. Gilroy Garlic Festival Ass’n, 541
F.3d 950, 964 (9th Cir. 2008) (internal quotation marks and
citation omitted); see Monell, 436 U.S. at 694.
[7] Chudacoff has established neither. Not only has he
failed to identify any custom or policy of UMC or the Medical and Dental Staff as the “moving force” behind his constitutional injury, see Bd. of Cnty. Comm’rs of Bryan Cnty.,
Okla. v. Brown, 520 U.S. 397, 404 (1997); Galen v. Cnty. of
L.A., 477 F.3d 652, 667 (9th Cir. 2007), but his entire claim
against the individually named doctor defendants hinges on
their alleged noncompliance with the official policies and
practices of the hospital. Nor has he established that an actor

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with final policymaking authority personally participated in
his constitutional injury. Although the Board has final policyand decision-making authority over the UMC Bylaws and the
MEC’s disciplinary actions, Chudacoff presents no evidence
that any Trustee took part in the deprivation of his due process rights. The Board’s role in staff privilege matters is limited to appellate review of the MEC’s decisions, and in this
instance, far from ratifying the MEC’s actions, it in fact
ordered the MEC to reconsider its decision to report Chudacoff to the NPDB and mandated a second clinical fair hearing
on the quality of care issue. The MEC’s actions cannot be
attributed to UMC or the Board. See Avalos v. Baca, 596 F.3d
583, 587-88 (9th Cir. 2010).
[8] Although the individual voting members of the MEC
can be held liable under § 1983 for Chudacoff’s constitutional
injuries, nowhere does Chudacoff allege that these doctors
have final policymaking authority for the county hospital, and
there is no respondeat superior liability under § 1983. Monell,
436 U.S. at 692; Jones v. Williams, 297 F.3d 930, 934 (9th
Cir. 2002). The district court correctly granted summary judgment in favor of UMC, the Commissioners, and the Medical
and Dental Staff with respect to Chudacoff’s constitutional
claims.
II.

Leave to Amend

Leave to amend a party’s pleading pursuant to Rule 15(a)
of the Federal Rules of Civil Procedure “should [be] freely
give[n] . . . when justice so requires,” Fed. R. Civ. P. 15(a),
and generally shall be denied only upon showing of bad faith,
undue delay, futility, or undue prejudice to the opposing
party, see Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d
522, 532 (9th Cir. 2008) (citing Foman v. Davis, 371 U.S.
178, 182 (1962)). Rule 15(a) is designed “to facilitate decision on the merits, rather than on the pleadings or technicalities.” United States v. Webb, 655 F.2d 977, 979 (9th Cir.

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1981); see DCD Programs, Ltd. v. Leighton, 833 F.2d 183,
186 (9th Cir. 1987).
[9] As discussed above, the district court erred in determining that only the MEC, not named a party to this suit,
could be liable for Chudacoff’s alleged § 1983 claims.
Because Chudacoff pled sufficient facts alleging that Ellerton
and the other individually named voting members of the MEC
acted under color of state law in effecting the unconstitutional
deprivation of his protected property interest, amending his
Complaint to include reference to § 1983 would not have been
futile, and, as the district court noted, granting Chudacoff
leave to amend would not prejudice defendants, who have litigated this action as though Chudacoff had properly pleaded
claims under § 1983. Given the district court’s conclusion that
defendants’ actions amounted to due process violations, combined with our determination that Ellerton, Carrison, Bernstein, and Roberts’ conduct clearly constituted state action,
refusing Chudacoff leave to amend a technical pleading error,
albeit one he should have noticed earlier, would run contrary
to Rule 15(a)’s intent. Chudacoff must be permitted to amend.
CONCLUSION
UMC is not a private hospital, but a public one. Consequently, the official actions of its administrative subdivisions,
such as the MEC, are actions of the state, and the individual
members of the MEC responsible for wrongfully depriving
Chudacoff of his protected property interest in UMC staff
privileges cannot escape § 1983 liability as private actors. To
the contrary, when exercising their delegated authority to suspend, revoke, or otherwise limit Chudacoff’s staff privileges
at a public hospital, defendants Ellerton, Carrison, Bernstein
and Roberts acted as agents of the state.
AFFIRMED in part, REVERSED in part, and
REMANDED for further proceedings consistent with this
Opinion.

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Chudacoff’s Motion for Sanctions is referred to the district
court for disposition along with the remaining issues in this
case.
Costs on appeal to appellant.