A recent Third Circuit Court of Appeals decision stresses the importance of clear, written documentation of roles and responsibilities in any academic collaborations between a private entity and a state university.
When Angela Borrell, a student in the Nurse Anesthetist Program (NAP) jointly administered by Bloomsburg University and Geisinger Medical Center, was dismissed from the program, she alleged she had been denied due process guaranteed by the Fourteenth Amendment. The Third Circuit, in announcing its ruling, relied heavily on the collaboration documents between the state university and the private hospital entity.
The collaboration between Bloomsburg University and Geisinger Medical Center that established the NAP began in 2007. Bloomsburg was responsible for the academic classroom training, and Geisinger administered the clinical training portion of the program. The written collaboration agreement between the two entities provided that certain responsibilities of each entity were to be clearly distinct. Students participating in the clinical portion of the NAP would be subject to all Geisinger policies and standards, including its policy that drug tests may be administered upon “reasonable suspicion of substance abuse.”
A refusal to submit to a drug or alcohol test when ordered would be cause for disciplinary action, including termination, without any pre-termination hearing or process, that is, without due process.
The Director of the clinical portion of the NAP was a Geisinger nurse anesthetist, Arthur Richer. Under the collaboration agreement, Richer became a joint employee of Geisinger and Bloomsburg, with one-quarter of his salary paid by Bloomsburg. Bloomsburg’s Chair of Nursing, Michelle Ficca, oversaw the academic component of the program.
Angela Borrell, a registered nurse at Geisinger, enrolled in the NAP in 2011 and began her clinical work in 2012. When allegations of Borrell’s use of cocaine, erratic behavior, and sometimes disheveled appearance reached the Assistant Director of the NAP, Richer and a representative of Geisinger’s Human Resources Department (HR) met with Borrell and requested that she take a drug test. Borrell eventually refused to take the drug test. After consulting with HR, Richer decided to terminate Borrell from the clinical training portion of the NAP, and, according to the collaboration agreement, he informed Ficca at Bloomsburg. The termination latter was sent to Borrell on joint Geisinger/Bloomsburg stationery used by the program. Richer signed as Director of the NAP and Ficca, who had seen a draft of the letter and provided comments and suggestions as to the wording of the letter, signed as agreeing to Borrell’s termination.
Borrell sued in district court for the Middle District of Pennsylvania, alleging violation of Section 1983 because of her denial of due process before termination from the NAP.
Section 1983 is part of a federal civil rights statute under which an individual can assert a deprivation of a Constitutional or federal statutory right caused by a “state actor.” The district court ruled that Geisinger, Richer, and Ficca were state actors who had deprived Borrell of a property interest in dismissing her from the NAP without due process. The court granted summary judgment to Borrell. A subsequent jury trial on the issue of damages resulted in an award of $415,000 in compensatory damages and $1,100,000 in punitive damages to Borrell. The total award was subsequently reduced by the court to $1,000,000.
Geisinger, Ricer, and Ficca appealed to the Third Circuit Court of Appeals. The appellate court first examined whether Geisinger and Richer were “state actors,” an essential requirement for a Section 1983 claim against them. Geisinger and Richer, the court concluded, were private actors, although collaborating with a state entity. The court decided that the relevant question was not whether a private actor and the state had a close relationship, but “whether there is such a close nexus [link or bond]. . . that seemingly private behavior may be treated as that of the State itself.” The court then considered whether Richer was wearing his “Geisinger hat” or his “Bloomsburg hat” when he decided to terminate Borrell. The court concluded that the collaboration agreement between Geisinger and Bloomsburg clearly indicated that Richer’s actions were authorized by Geisinger in order to unilaterally enforce its alcohol and drug policy, and not under any authority granted by the state. Ficca’s approval of his decision to terminate Borrell was irrelevant. The court ruled that, “Action taken by private entities with the mere approval or acquiescence [emphasis in the original] of the State is not state action.” Therefore, neither Geisinger nor Richer could be considered state actors liable under Section 1983.
With respect to Ficca, the appellate court ruled that she was entitled to “qualified immunity,” a designation that recognized she was not liable simply because she participated in Richer’s decision by signing the termination letter to Borrell.
Acting for Geisinger, Richer had the sole authority to dismiss Borrell from the NAP. The collaboration agreement simply required that Richer notify Bloomsburg of the termination action; Ficca had no authority to alter Richer’s decision. Borrell had argued that Ficca was Richer’s supervisor, and, therefore, liable for his actions. The court distinguished that Ficca was simply “above” Richer in the University hierarchy, not his direct supervisor in the joint program.
The Third Circuit ultimately reversed the ruling of the district court and remanded the case to the district for entry in favor of Geisinger, Richer, and Ficca. The import of this decision lies in the Third Circuit’s analysis of the test for what constitutes a state actor, and the necessity of the very specific and comprehensive collaboration agreement between the partnering entities. If the collaboration agreement had been less clear, less specific in allocation of authority, this case may have turned out differently. Overall, the Third Circuit decision points to the importance of legal review of all such collaborations between private entities and state institutions.
If you have any questions about legal matters on your college campus, please consult your legal counsel, or one of the attorneys at KingSpry.
This Collegiate Comment is a publication of the KingSpry Higher Education Law Division. It is meant to be informational and does not constitute legal advice.