Vicarious Liability – Private Corporations

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7^th Circuit Court of Appeals

Case Name: James Gaston v. Parthasarathi Ghosh, et al.

Case No.: 17-3618; 18-1281

Officials: EASTERBROOK, KANNE, and HAMILTON, Circuit Judges.

Focus: Vicarious Liability – Private Corporations

Iskander v. Forest Park, 690 F.2d 126 (7th Cir. 1982), holds that private corporations, when deemed to be state actors in suits under 42 U.S.C. §1983, must be treated the same as municipal corporations. This means that they are not subject to vicarious liability. See, e.g., Ashcroft v. Iqbal, 556 U.S. 662, 676–77 (2009); Monell v. New York City Department of Social Services, 436 U.S. 658, 691–94 (1978). Iqbal, Monell, and other decisions hold that municipalities and public employees may be held liable for their own decisions and policies but are not liable under the doctrine of respondeat superior for the acts, decisions, and policies of other persons, including subordinate public officials. Iskander held that the same approach applies to private corporations and their agents, to the extent that they are treated as state actors for the purpose of §1983. James Gaston asks us to overrule Iskander and hold that in litigation under §1983 a private corporation may be liable vicariously to the same extent as a private corporation in the law of torts.

One final observation. Gaston and other plaintiffs have contended that Iskander leads Wexford and similar organizations to skimp on medical care in order to enrich themselves. Wexford responds that, because it does not pay for the cost of MRI exams, surgeries, and other hospital treatment outside the prisons, it has no financial reason to withhold appropriate medical treatment. That may be true, but so far Wexford has not supplied evidence that it is true. Perhaps Wexford has contracts with hospitals providing that they will not bill it, but it has not produced them. Perhaps Illinois pays for out-of-prison treatment under the Medicaid program, but again the record lacks proof. Dr. Chmell testified that Wexford did not pay him, but the record does not reveal whether Wexford paid the University of Illinois. Gaston has lost this case for want of evidence, but the need to back up one’s contentions with evidence applies as much to Wexford as it does to any prisoner.

Affirmed

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.