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Greisman v. Newcomb Hospital

Decided: August 17, 1962.

PAUL A. GREISMAN, D.O., PLAINTIFF,
v.
THE NEWCOMB HOSPITAL, A NON-PROFIT CORPORATION OF THE STATE OF NEW JERSEY, BOARD OF TRUSTEES OF THE NEWCOMB HOSPITAL, A NON-PROFIT CORPORATION OF THE STATE OF NEW JERSEY, AND MEDICAL STAFF OF THE NEWCOMB HOSPITAL, AN UNINCORPORATED ASSOCIATION OF THE STATE OF NEW JERSEY, JOINTLY, SEVERALLY AND IN THE ALTERNATIVE, DEFENDANTS



Civil action in lieu of prerogative writs. Cross-motions for summary judgment.

Cafiero, A.j.s.c.

Cafiero

This is on cross-motions for summary judgment. They arise out of a complaint in lieu of prerogative writs to review the legality and constitutionality of the action of the medical staff and the board of trustees of the Newcomb Hospital in Vineland, New Jersey, in refusing to issue or to consider an application by the plaintiff for admission as a member to the courtesy medical staff of the Newcomb Hospital, thereby depriving him of the customary use of the facilities and services of the hospital which is extended to such members.

The parties agree that the issue which is to be resolved is the reasonableness of a requirement of the by-laws that includes as basic qualifications for membership on the courtesy medical staff of the hospital that the applicant be a graduate of a medical school approved by the American Medical Association, and a full or associate member of the county medical society.

The parties have stipulated that the plaintiff does not have such qualifications, but that he is a graduate of the Philadelphia College of Osteopathy, fully licensed to practice medicine and surgery in New Jersey; that he resides in the City of Vineland, New Jersey; practices his profession in that city, and also maintains offices for that purpose in Newfield, New Jersey. It is further stipulated that the Newcomb Hospital has 160 beds and is the only hospital in the City of Vineland; that the other hospitals in the general area are in the municipalities of Millville, Bridgeton and Elmer, which are located at a distance of approximately 5, 12 and 14 miles, respectively, from the Vineland Hospital. It is also stipulated that the hospital is an incorporated non-profit institution and affected with the public interest in that it treats members of the general public who apply for and require its services. Payment is made by its patients for the services rendered. Indigents residing elsewhere in the county outside the City of Vineland are paid for by the County of Cumberland, and the

City of Vineland pays a yearly sum for its indigents. The hospital also solicits and receives funds in the form of subscriptions, endorsements, contributions and donations from members of the general public. Neither the City of Vineland nor the County of Cumberland has any voice in the government of the hospital, nor was it created or endowed by either of the said governments.

The purpose of the stipulation is to determine the applicability of the principles of law set forth in Falcone v. Middlesex County Medical Society , 62 N.J. Super. 184 (Law Div. 1960), affirmed 34 N.J. 582, 598 (1961).

The plaintiff alleges that the above basic qualifications are arbitrary, capricious, unreasonable and void as against the public policy of this State under the holdings in Falcone, supra.

The defendants contend in substance that Falcone is not applicable to the facts in this matter; that its rationale and holding should be restricted to cases involving facts similar to those involved in that case; that the foregoing preliminary or basic qualifications are reasonable and valid, and that the status of the defendant hospital as a private hospital prevents any judicial scrutiny by this court of the reasonableness or unreasonableness of its bylaws.

In the alternative, the defendants also contend that if the ruling in Falcone is determined to be applicable, these provisions of its bylaws are reasonable and valid and do not contravene the public policy or public welfare of this State.

Although other motions have been made in this action, the decision on these cross-motions makes their determination unnecessary.

Stated briefly, plaintiff contends (1) that the Newcomb Hospital and its medical staff is an organization of such a nature that this court should intervene to protect the public, and (2) that his exclusion from the medical staff of Newcomb Hospital results in substantial injury to him.

If the plaintiff's situation is within the spirit and rationale of the Falcone case, his cause of action is entitled to judicial review.

AS TO WHETHER THE COURT SHOULD INTERVENE.

It appears to be the rule generally that the exclusion of a physician or surgeon from practicing in a private hospital is a matter which rests in the discretion of the managing authorities. Annotation, "Hospital-Physician-Discrimination," 24 A.L.R. 2 d 850, 852. Only where the trustees of the private hospital have abused their discretion may the court intervene to grant relief. Van Campen v. Olean General Hospital , 210 App. Div. 204, 205 N.Y.S. 554, 555 (1924), affirmed per curiam 239 N.Y. 615, 147 N.E. 219 (Ct. App. 1925), and cited in Joseph v. Passaic, etc. , 38 N.J. Super. 284, 289 (App. Div. 1955).

Although plaintiff concedes the status of the Newcomb Hospital as a private hospital, he argues that the scope of the Falcone case is not confined to medical societies or other similar membership groups as such, but applies equally to a private hospital and to its medical staff, especially when its status and operations are affected with a public interest to the extent that it was stipulated to exist at the Newcomb Hospital.

This court concludes that the ruling in the Falcone case is applicable to private hospitals (and their medical staffs) that are affected with a public interest, in order to determine whether their status and operations are such as to permit judicial scrutiny of their actions in excluding or expelling physicians or surgeons from their medical staffs.

Presumably the trustees of Newcomb Hospital ultimately control the selection and qualifications of the members of its medical staff. Otherwise their action in delegating that ultimate control to its medical staff is void as an abuse of their fiduciary discretion as to who may use the hospital and its facilities. Ware v. Benedikt , 225 Ark. 185,

280 S.W. 2 d 234 (Sup. Ct. 1955); Restatement, Trusts, section 171.

In the final analysis, through the medium of its medical staff, whose membership it controls, the Newcomb Hospital has the nature of a membership entity or organization which in any given occasion attempts to exclude or admit individuals to its medical staff pursuant to its bylaws. It is, therefore, an organization within the rationale and purport of the decisions of the Falcone case, supra.

The Newcomb Hospital is the only hospital within the entire metropolitan area of the City of Vineland, which city is the largest, or one of the largest, in area in the State of New Jersey. The metropolitan area also includes Malaga, Franklinville, Norma, Alliance, East Vineland, North Vineland, Landisville, Minetola, Buena, Richfield and Newfield.

The certificate of incorporation of Newcomb Hospital provides in section 3B that the hospital shall be used first, for the care, nurture and maintenance of sick and injured persons residing in the Borough of Vineland and Township of Landis (including the City of Vineland); second, for the care, etc., of sick and injured persons residing in the vicinity of Vineland aforesaid; and thereafter for the care, etc., of such other sick and injured persons as the facilities of the hospital will permit.

In other words, the trustees have no discretion to refuse to admit all members of the public in the order aforesaid, provided there are sufficient facilities, and provided the sick or injured person complies with any reasonable term or condition established by the trustees.

Secondly, the Newcomb Hospital is a non-profit private corporation because any profit accruing from its operation must be invested for or applied toward the maintenance, betterment or addition to, improvement and enlargement of the buildings, grounds and equipment, or the increasing of the endowment fund. Ibid. , section 3B, last sentence.

Thirdly, the Newcomb Hospital has received, or is receiving, public funds for the purposes hereinbelow mentioned:

(1) a fund each year from the City of Vineland for the treatment of indigent patients of the said city.

(2) funds from the County of Cumberland on a per diem basis for the care and treatment of indigent patients from ...


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