Judicial Review of Internal Policy Decisions of Private Nonprofit Hospitals: A Common Law Approach

Abstract

AbstractInternal policy decisions of private nonprofit hospitals can have a powerful impact. For example, the denial of medical staff privileges to a physician can limit his income and perhaps damage his reputation. The rejection of a prospective father’s request to assist his wife in the hospital’s delivery room during childbirth deprives the couple of the opportunity to share one of life’s most profound experiences.Plaintiffs aggrieved by, and seeking to challenge, a policy decision of a private nonprofit hospital often turn instinctively to the fourteenth amendment to the U.S. Constitution for a remedy, hoping to prove (1) “state action” by the hospital and (2) violation of the constitutional rights of the plaintiff. Currently, suggests the author, such an approach is likely to be of limited usefulness. As an alternative, the plaintiff may be able to marshall a common law challenge based on the argument that the hospital, although privately owned, is “affected with a public interest”—that is, it is sufficiently “public” in nature and function that it has a common law duty to serve the public fairly and reasonably, a duty enforceable in a state court. Courts that characterize private nonprofit hospitals as enterprises affected with a public interest (as many courts currently do) will review the challenged hospital policy decision and will decide whether or not, on balance, it was “procedurally fair” and “substantively rational.” This common law approach to judicial review, whose roots are deep in medieval English law, will have a bright future if state courts are willing to heed their common law heritage.