F I L E D

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

United States Court of Appeals

Tenth Circuit

FEB 12 2003

PATRICK FISHER
Clerk

BRIAN E. CONNER, M.D.,

Plaintiff - Appellant,
v.
SALINA REGIONAL HEALTH
CENTER, INC.,

No. 00-3348
D.C. No. 99-CV-2451-GTV
(D. Kansas)

Defendant - Appellee.
ORDER AND JUDGMENT*
_______________________________________
Before SEYMOUR and PORFILIO, Circuit Judges, STAGG, District Judge.**
__________________________________________

Brian E. Conner, M.D. (Conner) applied for reappointment to the medical staff
of Salina Regional Health Center (SRHC). The privately-owned hospital referred the
matter to its peer review panel, which recommended denial of the application. SRHC
affirmed the panel and this lawsuit followed. Finding that SRHCs decision to deny
Conners application could not be fairly attributable to the state of Kansas, the district

This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
*

The Honorable Tom Stagg, United States District Judge for the Western District
of Louisiana, sitting by designation.
**

court granted a Rule 12(b)(6) motion to dismiss. As a result, Conners federal and
supplemental state law claims were dismissed. Conner appeals these dismissals. For the
reasons set forth below, we AFFIRM the district courts dismissal of Conners claims.
I.

BACKGROUND

SRHC is a privately-owned Kansas corporation. Prior to 1997, Conner served as

an opthamologist on SHRCs medical staff. As required by SRHC by-laws, Conner
submitted an application for reappointment to SRHCs medical staff. However, on
February 3, 1997, SRHC notified Conner that his application for reappointment to the
medical staff was denied.
After exhausting all administrative remedies, Conner filed this action alleging
violations of his rights to due process and free speech under 42 U.S.C. 1983.1 In his
complaint, Conner asserted that as health care providers are heavily regulated under
Kansas law, they can be liable under section 1983. See Kan. Admin. Reg. 28-34-6a and
Kan. Stat. 65-4921-4930. Conner further contended that section 65-4929(b)2 of the
In his complaint, Conner also asserted breach of contract and tortious interference
as theories for recovery. Below, the district court declined the opportunity to exercise
supplemental jurisdiction over these claims after dismissing all federal law claims. As we
are affirming the district courts dismissal of all federal claims, it is unnecessary to revisit
the state law issues.
1

Section 65-4929(b) provides:

Health care providers and review, executive or impaired

provider committees performing their duties under K.S.A. 654922, K.S.A. 65-4923 and K.S.A. 65-4924 and peer review
pursuant to K.S.A. 65-4915 and amendments thereto for the
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Kansas Statutes designates health care providers, such as SRHC, as state officers and as
such SRHC could be attacked under section 1983. Conners due process claim rested on
his assertion that he was deprived of protected property interests without due process of
law. According to Conner, this deprivation was specifically manifested in an October
1995 administrative suspension which prevented him from performing certain medical
procedures, and ultimately the denial of his application for reappointment to SRHCs
medical staff. Conners freedom of speech claim was based on his argument that his
suspension and application denial were meted out in retaliation for complaints he had
made in relation to the quality of patient care at SRHC. In lieu of an answer, SRHC
moved to dismiss for failure to state a claim upon which relief can be granted. See
Fed.R.Civ.P. 12(b)(6). SRHC asserted that it was a privately-owned hospital corporation
and, therefore, could not act under color of state law.
In a Memorandum and Order granting SRHCs motion, the district court found
that the language of section 65-4929(b) was written to protect qualified health care
providers against antitrust liability and noted that there were different analyses to
determine the existence of the state action immunity doctrine for protection from antitrust

purposes expressed in subsection (a) and 65-4915 and

amendments thereto shall be considered to be state officers
engaged in a discretionary function and all immunity of the
state shall be extended to such health care providers and
committees, including that from the federal and state antitrust
laws.
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liability as compared with the analysis to establish state action for purposes of section
1983. As a result, the court found that section 65-4929(b) did not in and of itself
establish that such health care providers act under color of law for purposes of section
1983. The court explained that the issue is whether a private health care providers
actions are fairly attributable to the State and that under traditional section 1983
analyses, SRHCs decision in denying reappointment of plaintiff to its medical staff was
not an action fairly attributable to the State. On appeal, Conner contends that the district
court misinterpreted section 65-4929(b) and erred in determining that under no set of
facts could he prove that SRHCs denial of his application constituted state action.
II.

DISCUSSION

We review the granting of a Rule 12(b)(6) motion to dismiss de novo, applying the
same standard as the district court. See Ramirez v. Dept. of Corrections, State of
Colorado, 222 F.3d 1238, 1240 (10th Cir. 2000). The purpose of a motion to dismiss is to
test the sufficiency of the complaint, and the court must accept all allegations of the
complaint as true and must construe them in the light most favorable to the plaintiff.
Coosewoon v. Meridian Oil Co., 25 F.3d 920, 924 (10th Cir. 1994). The court accepts as
true all well-pleaded facts, as distinguished from conclusory allegations,3 and reads all
reasonable inferences in favor of the plaintiff. See Witt v. Roadway Express, 136 F.3d
1424, 1428 (10th Cir. 1998). We will uphold dismissal only when it appears that the
See Maher v. Durango Metals, Inc., 144 F.3d 1302, 1304 (10th Cir. 1998).

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plaintiff can prove no set of facts in support of the claims that would entitle him to relief.
Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99 (1957).
In order to state a claim under section 1983, two allegations are required. First,
Conner must allege that some person has deprived him of a federal right. Second, he
must allege that the person who has deprived him of that right acted under color of state
or territorial law. Gomez v. Toledo, 446 U.S. 635, 640, 100 S. Ct. 1920, 1923 (1980)
(internal citation omitted). As Conner has raised due process and free speech claims in
his complaint, he has unquestionably alleged deprivation of his federal rights. The
primary issue, therefore, is whether these alleged deprivations were accomplished under
color of state law.
In determining if SRHC acted under color of state law, the ultimate issue is
whether its actions were fairly attributable to the state. Lugar v. Edmondson Oil Co.,
457 U.S. 922, 937, 102 S. Ct. 2744, 2753 (1982). In Lugar, the Supreme Court adopted a
two-part approach to determine the question of fair attribution. First, the deprivation of
the right must be caused by the exercise of some right or privilege created by the State or
by a rule of conduct imposed by the State or by a person for whom the State is
responsible. Id. Second, the depriving party must fairly be said to be a state actor. Id.
A party can be fairly said to be a state actor if he is a state official, if he has acted
together with or has obtained significant aid from state officials, or if his conduct is
otherwise chargeable to the State. Id.
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Conners appeal primarily flows from his interpretation of section 65-4929 of the
Kansas Statutes. Section 65-4929 is a part of the Kansas Risk Management Act
(KRMA) which was enacted as a part of comprehensive medical malpractice legislation
in 1986. See Anglemyer v. Hamilton County Hospital, 58 F.3d 533, 540 (10th Cir. 1995).
In an effort to protect the publics general health, the KRMA requires
[i]mplementation of risk management plans and reporting systems . . . and peer review.
Kan. Stat. 65-4929(a). Under section 65-4929(b), health care providers required to
perform these duties are considered state officials engaged in a discretionary function
and all immunity of the state shall be extended to such health care providers . . . ,
including that from the federal and state antitrust laws. Conner argues that such
language transforms SRHC, a private hospital, into a state actor.
A federal court should apply the rules of statutory interpretation and construction
applied by the highest court of that state. Citizens for Responsible Govt State Political
Action Comm. v. Davidson, 236 F.3d 1174, 1191 (10th Cir. 2000); Commr v. Estate of
Bosch, 387 U.S. 456, 465, 87 S. Ct. 1776, 1782 (1967) ([The District Court] may be said
to be, in effect, sitting as a state court). The Supreme Court of Kansas has held that [i]n
interpreting a statute, we must give effect to its plain and unambiguous language, without
determining what, in our view, the law should be. George v. Capital South Mortgage
Invs., Inc., 961 P.2d 32, 43 (Kan. 1998). However, courts are not permitted to consider
isolated parts of an act but must construe all parts together because literal interpretation of
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one section, alone, could conceivably contravene the purpose of the legislation. See
Kansas Commn. on Civil Rights v. R.G. Howard, 544 P.2d 791, 794 (Kan. 1975).
When read in its entirety, section 65-4929, by itself, cannot be read to subject
health care providers to section 1983 liability. Although Conner correctly points out that
health care providers that perform the duties set out under the KRMA are considered state
officials, no mention is made of the potential for section 1983 liability. Rather,
immediately following this language, section 65-4929(b) clearly and unambiguously
provides that all immunity of the state shall be extended to such health care
providers . . . , including that from the federal and state antitrust laws.
While such language explicitly manifests the Kansas legislatures intention to
shield health care providers from antitrust liability, it is not necessarily instructive of a
desire within the legislature to create new liabilities. In fact, the Supreme Court has
stated, [a]lthough by no means identical, analysis of the existence of state action
justifying immunity from antitrust liability is somewhat similar to the state action inquiry
conducted pursuant to 1983 and the Fourteenth Amendment. Natl Collegiate Athletic
Assn v. Tarkanian, 488 U.S. 179, 195 n. 14, 109 S. Ct. 454 n. 14 (1988). We have also
recognized that there is a distinction between the state action immunity doctrine for
purposes of federal antitrust laws and the requirement that a private party act under
color of law for purposes of section 1983 claims. See Tarabishi v. McAlester Regl
Hosp., 951 F.2d 1558, 1565 n. 6 (10th Cir. 1991) (holding that the determination that a
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public hospital was liable under section 1983 was not dispositive of the issue of whether
the hospital was entitled to antitrust immunity) (comparing Ezpeleta v. Sisters of Mercy
Health Corp., 800 F.2d 119, 122 (7thCir. 1986), implicitly overruled on other grounds by
Patrick v. Burget, 486 U.S. 94, 99-101, 108 S. Ct. 1658 (1988)). In order to establish
state action immunity, the challenged restraint must be clearly articulated as state policy
and the policy must be actively supervised by the state itself. See Patrick, 486 U.S. at
100, 108 S. Ct. at 1663. By contrast, the test for state action under section 1983 requires
that the infringement of federal rights be fairly attributable to the state. See Lugar, 457
U.S. at 937, 102 S. Ct. at 2753. As such, the language of section 65-4929(b) is not
indicative of the statutes ability to attach section 1983 liability to health care providers.
To the contrary, section 65-4929(c) provides that [n]othing in this section shall be
construed to require health care providers or review, executive or impaired provider
committees to be subject to or comply with any other law relating to or regulating state
agencies, officers or employees. Such language suggests that the legislature did not
intend to subject health care providers to the same responsibilities and liabilities of state
officials. Accordingly, measuring section 65-4929(b)s silence in relation to state action
liability against the statutes stated intent to establish state action immunity while
establishing no further duties, we find that mere application of the term state official to
health care providers that undertake risk management and peer review is not
determinative of a section 1983 claim.
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Conner also argues that the regulatory scheme implemented by the KRMA
mandated the risk management and peer review process utilized by SRHC in denying
Conners reapplication. Specifically, Conner contends that through the KRMA, the state
influences and in fact delegates the duties of risk management and peer review to health
care providers.
The Supreme Court has noted that [w]hat is fairly attributable is a matter of
normative judgment, and the criteria lack rigid simplicity. Brentwood Acad. v.
Tennessee Secondary Sch. Athletic Assn, 531 U.S. 288, 295, 121 S.Ct. 924, 930 (2001).
As a result, we have recognized that we must take a fairly flexible approach in
determining if state action exists. See Gallagher v. Neil Young Freedom Concert., 49
F.3d 1442, 1447 (10th Cir. 1995). In fact, the Supreme Court has developed, and we have
utilized, a variety of approaches to assist in determining if state action exists. See id.
(discussing the close nexus, symbiotic relationship, joint action, and public function
tests). While these tests illustrate that fair attribution can be present absent direct
government involvement, the hallmark remains fair attribution. Accordingly, every
successful section 1983 claim against a nominally private entity must allege state
involvement so pervasive that the challenged action can be said to be fairly attributable to
the state, whether that involvement is effectuated through state coercion, state influence,
state reliance, or delegation of state power. See Blum v. Yaretsky, 457 U.S. 991, 1004,
102 S.Ct. 2777, 2786 (1982).
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Such involvement is not present by virtue of the state regulatory scheme in

question. While the KRMA sets out fairly extensive regulations in relation to risk
management programs and reporting requirements, it does not develop a system for health
care providers to implement with respect to their peer review functions. Specifically,
Section 65-4922 of the KRMA provides guidelines that medical care facilities must
establish risk management programs and submit to the department of health and
environment their risk management plan for approval. Section 65-4923 of the KRMA
establishes requirements for reporting acts by health care providers that fall below the
applicable standard of care or may be grounds for disciplinary action. However, at no
point does the KRMA mandate or even suggest peer review procedures for medical care
facilities to implement. Rather, section 65-4929(a) merely states peer review pursuant to
K.S.A. 65-4915 and amendments thereto effectuate this policy [for providing and
regulating certain aspects of health care delivery in order to protect the publics general
health]. Section 65-4915 provides, inter alia, [p]eer review means any of the
following functions: . . . (D) evaluate the qualifications, competence and performance of
the providers of health care or to act upon matters relating to the discipline of any
individual provider of health care . . . . Although this language illustrates that peer
review is important to the underlying policy of the KRMA, nowhere does the Act indicate
state involvement in the process used by health care providers.
Kansas Administrative Regulations section 28-34-6a also includes provisions
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relating to medical staff admission. Section 28-34-6a provides in pertinent part:

Each hospital shall maintain an organized medical staff. Admission to the
staff and clinical privileges associated with membership shall be granted by
the governing authority through a mechanism which evaluates each
members qualifications to engage in that members area of clinical
practice.
In relation to the necessary qualifications for admission to the staff, section 28-34-6a
provides various factors including certification, fellowship, membership on a specialty
board or society, or the completion of a general practice residency. However, the section
clearly provides that membership decisions cannot be made solely on one of these factors.
Such provisions are hardly coercive.
Even if these provisions were not so limited, we have previously recognized that
government funding and regulation of an ostensibly private organization, in the absence
of other factors, is insufficient to establish government action. Gilmore v. Salt Lake
Cmty. Action Program, 710 F.2d 632, 635 (10th Cir. 1983). In fact, under circumstances
similar to the case at bar where a private entity has been pervasively regulated by the
state, state action will not be found absent evidence of state influence, involvement, or
control over the personnel decisions which are subject to challenge. McDonald v.
Eastern Wyoming Mental Health Center, 941 F.2d 1115, 1118 (10th Cir. 1991).
Therefore, it is clear that these regulations alone do not suffice to support a finding of
state action.
Ultimately, we agree with the district courts determination that Conners action
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should not survive a Rule 12(b)(6) motion for dismissal because the power to revoke staff
privileges and make other personnel decisions have not traditionally been held by the
state. In this context, we find the Fifth Circuits holding in Wong v. Stripling, 881 F.2d
200 (5th Cir. 1989), persuasive. In Wong, the plaintiff, a member of the medical staff of
the defendant private hospital, had his medical privileges revoked. On appeal, the doctor
argued that his dismissal constituted state action due to comprehensive regulation of
revocation, restriction, or suspension of staff privileges in Mississippi hospitals. The
Fifth Circuit disagreed and held that private hospitals had at common law a right to
revoke the staff privileges of physicians for good cause. Id. at 202. The Fifth Circuit
further concluded that the legislation in question simply authorizes action which is
already legal, and requires only that the hospital comply with its own bylaws in making
staffing decisions. Id.
Similar to the defendant hospital in Wong, SRHCs power to deny reappointment
of staff privileges existed before the Kansas regulatory scheme was promulgated.
Additionally, neither section 65-4929 nor section 28-34-6a impose upon medical facilities
any further requirements than those contained within their own bylaws. In fact, as noted
above, section 28-34-6a specifically provides:
After considering medical staff recommendations, the governing body shall
affirm, deny or modify each recommendation for appointment to the
medical staff and the granting of clinical privileges to any practitioner.
Formal application for membership and for granting of clinical privileges
shall follow established procedures set forth in the bylaws, rules and
regulations of the medical staff.
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Therefore, the power to affirm, deny or modify an appointment or reappointment lies

squarely on the governing body of the medical facility. Consequently, the denial of
Conners application for reappointment cannot be fairly attributable to the state.
AFFIRMED.
Entered for the Court
Tom Stagg
District Judge

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