For many years, the State of Hawaii has maintained a leprosarium on the Kalaupapa peninsula on the island of Molokai. Beginning in the late 1940's, Hawaii has also maintained a residential facility of just over 11 acres at Hale Mohalu near Pearl City, Oahu. This facility was established in order to enable those leprosy patients who were in need of more sophisticated medical care than was available at Kalaupapa, to live near Honolulu hospitals where expensive equipment and better medical care was available.1 The Hale Mohalu facility was originally established on federal land. The United States, in return for a commitment by the State of Hawaii to provide care for the state's leoprosy sufferers, conveyed the land to the state, subject to a twenty-one-year maintenance condition.2 Hawaii nevertheless failed to maintain the facility over the years, permitting it to deteriorate to some extent. The federal government, however, did not utilize its right to require maintenance. On March 23, 1977, the United States' right of entry expired and Hawaii's title to Hale Mohalu became a fee simple absolute. Shortly thereafter, the state began proceedings to close the facility and move its residential and medical support services to Leahi Hospital in Honolulu.

A number of the facility's residents, in appreciation of the residential nature of Hale Mohalu with its private or semi-private living quarters and easy access to friends and family, chose to remain. Over the last decade, advances in medical science have enabled physicians to treat leprosy patients through outpatient services. As a result, the inpatient residents remaining at Hale Mohalu were among the more elderly, afflicted, and crippled of the leprosy population.

On January 26, 1978, the Hale Mohalu facility was officially closed. In recognition of the continued residence of those patients who had decided to remain, the state provided water, electric power, telephone service, food, medical care, and supplies until September 1, 1978, when all these services were terminated. On September 5, a number of those patients still at Hale Mohalu filed the instant suit and a temporary restraining order was entered compelling the state to restore all services. On September 21, 1978, a federal district court denied appellant's motion for a preliminary injunction and dismissed their complaint for lack of standing and for failure to state a claim upon which relief may be granted.

On appeal, appellants raise a number of issues, most of which are without substantial merit. Appellants, however, do raise the possibility that they have a property interest in the form of a legitimate entitlement to continued medical care and residence facilities at the Hale Mohalu leprosarium, which interest may not be deprived without due process. We find the record inadequate to determine whether such an entitlement exists. If it does, certain due process protections, such as a pre-termination hearing, may be required. Consequently, we remand for further proceedings.

* Appellants claim an interest in receiving medical care at the Hale Mohalu facility. This interest may be a property interest protected by the due process clause of the Fifth Amendment if it is more than a "unilateral expectation." Board of Regents v. Roth, 408 U.S. 564, 577, 92 S. Ct. 2701, 2709, 33 L. Ed. 2d 548 (1972). "(T)here must exist rules or understandings which allow the claimant's expectations to be characterized as 'a legitimate claim of entitlement' to (the benefit)." Stretten v. Wadsworth Veterans Hospital, 537 F.2d 361, 366 (9th Cir. 1976) (quoting Board of Regents v. Roth, 408 U.S. 564, 577, 92 S. Ct. 2701, 2709, 33 L. Ed. 2d 548 (1972)). "The source of legitimate claims of entitlement is not the Constitution but rather the acts of the sovereign, state or federal, manifested in legislation, rules, or customs." Moore v. Johnson, 582 F.2d 1228, 1233 (9th Cir. 1978). See also Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1, 9, 98 S. Ct. 1554, 56 L. Ed. 2d 30 (1978).

Appellants' claim is narrow they assert an entitlement to continued operation of the Hale Mohalu leprosarium. There are two possible sources for this claim. First, appellants contend that the Hale Mohalu facility qualifies as a Medicaid "intermediate care facility" within the meaning of 42 C.F.R. § 449.10(b)(15) (1977).3 If the appellants are correct in their assertion, then, under the patient transfer regulations for such facilities, a patient may not be transferred except for "medical reasons or for his welfare or that of other patients, or for nonpayment of his stay."4 Administrators of intermediate care facilities do not, therefore, have the power to arbitrarily transfer patients for any reason. Under these regulations, patients at such facilities would have a "legitimate entitlement to continued residency at the (facility) of (their) choice." Klein v. Califano, 586 F.2d 250, 258 (3d Cir. 1978).

From the record as it now stands, it is impossible to determine whether Hale Mohalu is, in fact, an intermediate care facility which is subject to the Medicaid regulations. If it is an intermediate care facility, however, the appellants are entitled to a fact-finding hearing as to the cause of their transfer. See Klein v. Califano, supra, at 258-59.

An alternative basis for appellant's claim to an entitlement may derive from Hawaii state law and from the hardship which a transfer may impose on Hale Mohalu patients. The state has statutorily conferred upon leprosy patients an entitlement to treatment at some state leprosarium.5 Another state statute, however, grants the Hawaii Health Department the unrestricted power to prescribe the place of treatment.6 Taken together, these statutes appear to authorize patient transfers "at will" and therefore the Hale Mohalu residents would enjoy no more than a "unilateral expectation" to continued services at that facility. However, while appellants may have no entitlement to services at Hale Mohalu under Hawaii statutory law, appellant's entitlement to treatment at some facility requires a measure of due process protection which may not have been provided in this case.

Under the two-part test of Board of Regents v. Roth, supra, and Goldberg v. Kelly, 397 U.S. 254, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970), once an entitlement to threatened services or benefits is established, it then becomes necessary to determine what process is due. The cases have recognized that when the deprivation of some government benefit would operate so as to impose severe hardship upon individuals with an entitlement to that benefit, due process protection in the form of a pretermination hearing may be required. See Goldberg v. Kelly, supra at 260-62, 90 S. Ct. at 1016-17. Here, there is no doubt that the appellants are entitled to care provided by the state. The state may not act so as to reduce these services to the point of imperiling life or imposing other severe hardship without affording the recipients a pretermination hearing. See Mathews v. Eldridge, 424 U.S. 319, 340, 96 S. Ct. 893, 905, 47 L. Ed. 2d 18 (1976); Goldberg v. Kelly, supra, 397 U.S. 1016-18 at 260-63; Curlott v. Campbell, 598 F.2d 1175, 1181 (9th Cir. 1979).

In the present case, transferring the Hale Mohalu patients to Leahi Hospital may work such a reduction in benefits. There has been considerable judicial and scientific recognition of the phenomenon known as "transfer trauma." See Bracco v. Lackner, 462 F. Supp. 436, 444-45 (N.D.Cal.1978); Klein v. Mathews, 430 F. Supp. 1005, 1009-10 (D.N.J.1977); Burchette v. Dumpson, 387 F. Supp. 812, 819 (E.D.N.Y.1974). Transfer trauma is characterized by physical and emotional deterioration as well as by increased rates of mortality. "The basic principle of the phenomenon is the recognition that the transfer of geriatric patients to any unfamiliar surroundings produces an increased rate of morbidity and mortality." Bracco v. Lackner, supra at 445. The degree to which this phenomenon is applicable to the leprosy patients presently resisting transfer from Hale Mohalu to Leahi Hospital is unclear on this record. To the extent, however, that transfer trauma is a possible result of the state's decision to relocate the Hale Mohalu patients, relocation may constitute a deprivation cognizable under the due process clause. See Klein v. Mathews, supra at 1010. Cf. Moore v. Johnson, 582 F.2d 1228, 1234 (9th Cir. 1978) (no pretermination hearing required when complaint failed to allege "inhumane and harsh" means of relocating Veterans Administration Hospital patients).

Upon establishing their right to due process protection, appellants become entitled to a hearing. It has been suggested, however, that any requirement for a hearing has already been satisfied. The State Health Planning and Development Agency apparently held a hearing before Hale Mohalu was officially closed. The record is too sketchy, however, for this court to determine the extent to which the appellants were represented, adequacy of the notice given, or the adequacy of the hearing itself. It is therefore necessary to remand this case to the district court. On remand, the court should hold hearings designed to ascertain whether the plaintiffs have an entitlement to services at Hale Mohalu arising from either the Medicaid regulations or from the possibility that transfer of Hale Mohalu services to Leahi Hospital could impose a severe hardship on the plaintiffs. If such an entitlement exists, then the adequacy of the hearing already held must be ascertained, and any hearings necessary to afford appellants due process should be held. The case is remanded for further proceedings consistent with this opinion.