Labor & Employment Law Daily Wrap Up, COVERAGE, LIABILITY—5th Cir.: Hospital’s COVID policy application was not an action under the color of state law, (Jan 22, 2025)

By Jody Coultas, J.D.

A hospital could not be held liable for constitutional violations for terminating a doctor’s privileges that did not conform to its COVID-19 vaccination policy.

The U.S. Court of Appeals in New Orleans affirmed the dismissal of a gastroenterologist’s suit against his former employer, holding that the doctor was unable to show that a hospital within the Houston Methodist hospital system violated his civil rights by terminating his privileges after he refused to receive the COVID-19 vaccine. The hospital denied the gastroenterologist’s religious exemption request, and ultimately terminated his employment. The district court found, and the appellate court agreed, that that the hospital was not acting under color of state law when it suspended and terminated the doctor’s privileges. Houston Methodist’s actions were private conduct and excluded from the reach of 42 U.S.C. § 1983 (Julapalli v. Boom, No. 24-20276 (5th Cir. Jan. 14, 2025)).

The gastroenterologist had staff privileges at Houston Methodist The Woodlands Hospital, a hospital within the Houston Methodist system. In April 2021, the hospital issued a COVID-19 vaccination policy and notified medical staff members that individuals who did not receive the COVID-19 vaccine and who had not been approved for an exemption would be subject to automatic suspension of clinical privileges. The hospital denied the gastroenterologist’s request for a religious exemption, and suspended his privileges. The gastroenterologist, after being terminated, sued the hospital and others alleging violations of the Free Exercise Clause of the First Amendment, the Equal Protection Clause, the Substantive Due Process Clause, and the Procedural Due Process Clause. The gastroenterologist also brought a claim under the Health Care Quality Improvement Act (HCQIA).

A magistrate judge recommended dismissal, finding that the hospital did not perform state action and did not act under color of state law by implementing the COVID-19 vaccination policy. The court also concluded that the gastroenterologist’s HCQIA claim failed because the statute does not create a private right of action. A district judge adopted the Amended Memorandum and Recommendation and granted Houston Methodist’s motion to dismiss. The gastroenterologist appealed the dismissal of the § 1983 claims.

Color of state law. Houston Methodist did not act under color of state law when it suspended and terminated the doctor’s privileges, the court held. The primary conduct at issue was the denial of a religious exemption in violation of § 1983 and other constitutional rights. To determine whether a private actor acted “under color of state law,” the critical inquiry is whether the alleged infringement of federal rights can be fairly attributable to the State. Regardless of whether the alleged deprivation was the denial of the requested religious exemption or the suspension and termination of his medical privileges, the challenge was directed at Houston Methodist’s enforcement of its internal policies. Enforcement of the hospital’s vaccination policy was private conduct that was not fairly attributable to the State. Private conduct, no matter how discriminatory or wrongful, is excluded from § 1983’s reach.

The fact that Houston Methodist’s vaccine policy was consistent with the Texas Administrative Code’s generally applicable requirement that health care facilities “develop, implement, and enforce a policy and procedures to protect its patients from vaccine preventable diseases,” such as COVID-19, legal compliance with the Code did not transform Houston Methodist’s independent enforcement of its internal policy into state action.

Judge: Higginson, S.

Attorneys: Venodhar Julapalli, pro se. Daniel F. Patton (Scott Patton, PC) for Marc L. Boom, Robert A. Phillips and H. Dirk Sostman.

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