# Opposition Brief — American Nat. Red Cross v. SG

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1992
- **Citation:** 505 U.S. 247

## Text

| | upreme Court, U.S.
¢? FILED
No. 91-594 _ NOVI i9gt
in The L OFFIWE OF THE CLERK

Supreme Court of the United States

_

October Term, 1991
AMERICAN NATIONAL RED CROSS,
Petitioner,
vs.
S.G. and A.E.,
Respondents.

On Petition for a Writ of Certiorari to the United States Court
of Appeals for the First Circuit

RESPONDENTS’ BRIEF IN OPPOSITION

GARY B. RICHARDSON
Counsel of Record
GILBERT UPTON
DAVID P. SLAWSKY
UPTON, SANDERS & SMITH
Attorneys for Respondents
10 Centre Street
P.O. Box 1109
Concord, New Hampshire 03302-1109
(603) 224-7791

1191
tz * NJ (908) 257-6850+(800) 3 APPEAL *NY (212) 840-4640*MA (617) 542-1114
ws.ime. OC (202) 783-7288*PA (215) 925-6500°USA (800) 5 APPEAL

i/

QUESTIONS PRESENTED
1. Whether 28 U.S.C. § 1447 (d) (which makes unreviewable
District Court orders remanding actions to the state court from
which they were removed) precludes review of this action which

has been remanded to the state court.

2. Whether the American National Red Cross’ petition for
certiorari should be denied because:

(a) The substantive issue presented is not ripe for review;

(b) The judgment of the Court of Appeals was issued
on interlocutory review;

(c) The basis for federal jurisdiction does not appear
on the face of the complaint;

(d) The issue appealed is not of sufficient importance
to warrant certiorari review; and

(e) The decision of the Court of Appeals is correct.

il

TABLE OF CONTENTS

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Reasons for Denying the Writ ........................

I.

II.

Ill.

IV.

Vi.

The District Court’s order remanding this action to
State court is unreviewable. ....................

The issue of federal juiisdiction is not yet ripe for
Geclsion Up dls Cau, « .v<cissccccuneenes

Since the judgment in the court below is interlocutory,
this Court should await a final disposition of the case
before exercising jurisdiction. ..................

This Court should deny certiorari because the basis
of Red Cross’ claim of federal jurisdiction, 36 U.S.C.
§ 2, does not appear on the face of the respondents’
well pleaded complaint. .......................

The issue raised by Red Cross is not of sufficient
importance to grant certiorari. .................

The decision of the Court of Appeals is correct.

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Page

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10

12

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Contents
Page

TABLE OF CITATIONS

Cases Cited:
American Construction Co. v. Jacksonville, T. & K.R.
eer eee eee &
American Well Works Co. v. Layne S. Bowler Co., 241 U.S.
DIE Dead bebeccecscsesecccccccccccccons 11
Anonymous Blood Recipient v. W. Beaumont Hosp., 721
F. Supp. 139 (E.D. Mich. 1989) .............5005. 17
Bowen v. Massachusetts, 487 U.S. 879 (1988) .......... 4

Brotherhood of Locomotive Firemen v. Bangor & Aroostock

EE ED CUED. oso vc cccccccccvcceces 8
Doe v. American Red Cross, 727 F. Supp. 186 (E.D. Pa.
Ee esau eestscccevecsccccccvccccces 1]
Doe v. Kerwood, No. 90-9101, Slip Op. (July 19, 1991)
een cscs vcacescccccccccces 7
D’Oench, Duhme & Co. v. Federal Deposit Insurance Corp.,
ites eseecccccccees 17, 18
Estelle v. Gamble, 429 U.S. 97 (1976) .............05.. 8
Georgia v. Rachel, 384 U.S. 780 (1966).............--. 4

Gilliard v. Mississippi, 464 U.S. 867 (1983)............. 7

iv

Contents

Page

Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473 (1981)
+eainen waited dalek e ees een ad ee eee eee eee 13
Gully v. First Nat. Bank, 299 U.S. 109 (1936) .......... ll

Hamilton-Brown Shoe Co. v. Wolf Bros. & Co., 240 U.S.
te eden cae bee eae nik 8

In re Bear River Drainage District, 267 F.2d 849 (10th Cir.
a CN bee Bg IA oe os Rk Cua TRS ew 4

In re La Providencia Development Corporation, 406 F.2d
Fy er ry ee ar ame keremn 4

Kaiser v. Memorial Blood Center of Minneapolis, 938 F.2d
Se a SEN a sv ntudddeeseaeusécousksuaeen 6, 7

Luckette v. Harris Hospital-Fort Worth, 764 F. Supp. 436
SP: Ce NG Sik cde c cdcinbadud dabnchieeetkse ct 7,11
McCray v. New York, 461 U.S. 961 (1983)............. 7

Metropolitan Casualty Ins. Co. v. Stevens, 312 U.S. 563
SE 4.500 o0ud ds adhddadesenssade Canc cedeenl 4

Middlesex Ethics Comm. v. Garden State Bar Assn., 457 U.S.
SEN Se bd bo 80 bees ca edw noe de ac ee ee 13

Oklahoma Tax Commission v. Graham, 489 U.S. 838
UU 6244045 4905bedae cas weaned dolce me bane 10

Osborn v. Bank of the United States, 22 U.S. (9 Wheat.) 738
ERR SE LAM tare 2, 3, 16,-17

Contents
Page
Rice v. Sioux City Cemetary, 349 U.S. 70 (1954)........ 12
Rose v. Lundy, 466 U.S. 509 (1982)..........: eis 13
Seedman v. U.S. Dist. Ct. for Cent. Dist. of California, 837
P.2d G13 CBtis Cle. IGGB) 2. wc cccccccccccsccccecees 4
S.G. and A.E. v. American National Red Cross, 938 F.2d
1494 (Ist Cir. July 24, 1991) ............ 3, 7, 11, 13, 16
Taylor v. Anderson, 234 U.S. 74 (1914) ............5-- 10

Thermtron Prods. Inc. v. Hermandorfer, 423 U.S. 336 (1976)

dcnuee nd td nbweeneedoes heehee ens $e00esesetet and +
United States v. Rice, 327 U.S. 742 (1946) ............. 4
Walker v. American National Red Cross, et al., No. 91-0749,

Slip Op. (D.D.C. May 10, 1991) ............0-eee- 6
Walton v. Howard University, 683 F. Supp. 826 (D.D.C.

ER APE Tere yee i4, 18
Statutes Cited:

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OR BBs bcos cdc ccvwecnaes dudavenesopeewas 14
ER Be PE ncn cc cacnctcovaseencecesengeuss 14

8D UDG. © WOOTEN 2c cc cccccccccccvccccnscscccees 18

vi

Contents
Page
MAE TEED tS ATS bsvccaehecka adsl ds cc erent 18
CEE os. os chG ch oaduuseetcotccditeter. 17
PM EE Gl Cadi cke 6% cd edW chute tiosteckalie, 10
PS 6 ooo ta Jule ee ad 2
I IE Sb dips dbadu ld séuekecveccankteusulutis: 14
WEEE 0 hh cai Sade en 6d oceNs he vuten tute 14
See SU I oo 5 cos done oecevces cece kik i, 3, 4, 5
LE ET ean Sey ares 2
IT i co eee ioc ae ee 14
IE Steak chs Guess anc un dedas tuna 2, 3, 10, 15
Rules Cited:
Federal Rules of Civil Procedure:
PR Sea ck wideand aed wave ace hc dcakwkin bette: 6
IE Sede ce Lee ce Fas Tobe ee 2a re 6, 12
RE PE pe ee Aa ete ue 14
ER AD SE pme Fe tleee ier irae kane me tae MMs 3

vil

Contents

Other Authorities Cited:

12 J. Moore, H. Bendix & B. Ringle, Moore’s Federal Practice
ee cs donc cuv eenbussnesdanedns

14A C. Wright, A. Miller & E. Cooper, Federal Practice and
Procedure § 3740 (2d ed. 1985 and Supp. 1991) ....

APPENDIX

Appendix A — Writs of Summons in the Superior Court of
the State of New Hampshire ................0....

Appendix B — Motion for Stay of Proceedings Dated August
Pi 1. te beet CRN Sete adeeneee ne aek eek ithe’ s

Appendix C — Order of the United States District Court for
the District of New Hampshire Dated September 24, 1991

gaeGceae ees oansenkcaeeeeeseeoceeseoeseseesese eae eae eeeseaec eer ese es eS

Appendix D — Slip Opinion in Walker v. American National
Red Cross Dated August 16, 1991.................

Page

la

8a

l3a

No. 91-594

In The

Supreme Court of the United States

October Term, 1991
AMERICAN NATIONAL RED CROSS,
Petitioner,
vs.
S.G. AND A.E.,
Respondents.

On Petition for a Writ of Certiorari to the United States Court
of Appeals for the First Circuit

RESPONDENTS’ BRIEF IN OPPOSITION

The respondents, S.G. and A.E., respectfully request that
this Court deny the petition for writ of certiorari seeking review
of the First Circuit’s opinion in this case. That opinion is reported
at 938 F.2d 1494 (ist Cir. 1991).

STATEMENT OF FACTS

The respondent, S.G., in August, 1984 underwent a
hysterectomy at Concord Hospital in Concord, New Hampshire.
During this operation a blood transfusion was required. This blood
was contaminated with human immunodeficiency virus (HIV) and
as a result S.G. now suffers from AIDS.

Upon discovering that she had this disease S.G. and her
husband, A.E., commenced two actions in Merrimack County
Superior Court (state court), one against Kenneth L. McKinney
(the physician who performed the operation) and the other against
U.S. Surgical Corp. (the company that manufactured and sold
the surgical stapler used by Dr. McKinney during the operation).
These suits were commenced in April and August of 1988 in the
State court and were later joined (Appendix A, 3a, 6a). As
discovery progressed, it became evident that a third party,
American National Red Cross, was responsible for furnishing the
tainted blood. On March 2, 1990, the respondents commenced
suit against Red Cross in Merrimack County Superior Court
(Appendix A, la) and this writ was accompanied by a motion
to consolidate the action with the two pending suits against Dr.
McKinney and U.S. Surgical Corp.

Before the Superior Court could rule on this motion to
consolidate, Red Cross removed the action against it to United
States District Court for the District of New Hampshire on two
grounds, (a) that the Red Cross Charter, 36 U.S.C. § 2, conferred
on federal district courts original jurisdiction over actions involving
the Red Cross, and (b) that the parties are citizens of different
States and that federal jurisdiction is appropriate under 28 U.S.C.
§ 1332(a). Respondents filed a motion to join Dr. McKinney and
U.S. Surgical Corp. and remand the entire action to Merrimack
County Superior Court pursuant to 28 U.S.C. § 1447(e). Relying
principally on Osborn v. Bank of the United States, 22 U.S. (9

Wheat.) 738 (1824), the District Court ruled that legal actions
to which the Red Cross is a party fall within the exclusive (original)
jurisdiction of the federal courts. The court also ruled that but
for this issue, it would grant plaintiff’s motion to join and remand
the case to the state court pursuant to Rule 20 of the Federal
Rules of Civil Procedure and 28 U.S.C. § 1447(d).

Upon interlocutory review, the First Circuit Court of Appeals
reversed, finding that the Red Cross Charter did not confer original
federal jurisdiction. See S.G. and A.E. v. American National Red
Cross, 938 F.2d 1494 (Ist Cir. July 24, 1991). On August 13,
1991 the First Circuit denied petitioner’s motion for a stay of
the mandate, and remanded the action to the District Court. On
September 24, 1991, the District Court reaffirmed its prior order
joining the two non-diverse defendants (Dr. McKinney and United
States Surgical Corporation) and remanded the case to Merrimack
County Superior Court (Appendix C, 15a).

Following that remand Red Cross also petitioned this Court
for a stay of the mandate of the Court of Appeals which was
denied by Justice Souter on September 30, 1991. Presently before
this Court is the Red Cross petition for writ of certiorari which
seeks another determination of whether 36 U.S.C. § 2 vests federal
courts with original jurisdiction over actions involving the Red
Cross.

REASONS FOR DENYING THE WRIT
I.

THE DISTRICT COURT’S ORDER REMANDING THIS
ACTION TO STATE COURT IS UNREVIEWABLE.

28 U.S.C. § 1447(d) provides in relevant part that, ‘‘An order
remanding a case to the State court from which it was removed

is not reviewable on appeal or otherwise. . . . ’’' See Thermtron
Prods. Inc. v. Hermandorfer, 423 U.S. 336, 343 (1976) (District
Court’s decision to remand action that was removed
“‘improvidently and without jurisdiction’? is unreviewable):
Seedman v. U.S. Dist. Ct. for Cent. Dist. of California, 837 F .2d
413 (9th Cir. 1988) (per curiam) (remand order returns case to
State courts, and federal court has no power to retrieve it). See
generally, 14A C. Wright, A. Miller & E. Cooper, Federal Practice
and Procedure § 3740 (2d ed. 1985 and Supp. 1991); 12 J. Moore,
H. Bendix & B. Ringle, Moore’s Federal Practice 4 507.01 (2d
ed. 1990). Such orders were made unreviewable primarily because
Congress intended to bar prolonged litigation over questions of
the District Court’s jurisdiction. United States v. Rice, 327 U.S.
742, 751 (1946) (‘*Congress, by the adoption of these provisions,
as thus construed, established the policy of not permitting
interruption of the litigation of the merits of a removal cause
by prolonged litigation of questions of jurisdiction of the district
court to which the cause is removed.’’). See also, Metropolitan
Casualty Ins. Co. v. Stevens, 312 U.S. 563, 568-569 (1941); In
re La Providencia Development Corporation, 406 F.2d 251 (lst
Cir. 1969); Jn re Bear River Drainage District, 267 F.2d 849, 851
(10th Cir. 1959). This concern is reflected in Justice Scalia’s recent
observation that ‘‘({njothing is more wasteful than litigation about
where to litigate.’” Bowen v. Massachusetts, 487 U.S. 879, 930
(1988) (dissenting opinion).

|. Prior to 1875, a remand order was regarded as a nonfinal order reviewable
by mandamus but not by appeal. In 1875, Congress provided for review **by
the Supreme Court on writ of error or appeal, as the case may be.’’ Twelve
years later, Congress barred any such review. Georgia v. Rachel, 384 U.S. 780,
786 n.6 (1966). Until its amendment in 1964, the statutory bar prohibited review
of a remand order ‘‘on appeal or otherwise’’ in cases removed pursuant to any
statute. With an exception not pertinent to the instant case, the modern version
of the statutory bar, 28 U.S.C. § 1447(d), absolutely prohibits appellate review
of remand orders.

Although ignoring the issue in its petition for certiorari, the
Red Cross has previously conceded the validity of this argument.
In support of its motion in District Court for a stay of proceedings
pending appeal, the Red Cross asserted:

Because this Court has previously announced
how it would resolve the joinder and diversity issues
(Order of June 19, 1990 at 4, modifying Order
of May 24, 1991), the Red Cross is concerned that
without a stay of proceedings, this Court may
immediately resolve the diversity issue and remand
the action to state court. Such a remand (o State
court would foreclose the Red Cross from
appealing the charter issue to the United States
Supreme Court, because an order to remand is
unappealable under the circumstances of this case.
See 28 U.S.C. § 1447(d).

(Emphasis added) (Appendix B, 9a, 10a). The District Court did
resolve the diversity and joinder issues and it thereafter issued
an order remanding the case to state court. As the Red Cross
recognized, it is now precluded by operation of 28 U.S.C.
§ 1447(d) from pursuing the instant appeal.

The concerns announced by Congress in enacting § 1447(d)
and by Justice Scalia in the Bowen case are well illustrated by
the Red Cross’ evasive maneuvering in the instant action. Almost
two years after this action was initiated, the Red Cross continues
to avoid trial by repeatedly challenging the state court’s ability
to adjudicate a matter involving allegations of common law
negligence. There is no question that the related actions against
Dr. McKinney and United States Surgical will be decided in the
Merrimack County Superior Court. There is no reason to believe
that the Superior Court would not fairly adjudicate respondents’
claims against the Red Cross. There is also no good reason for

the Red Cross to fear state court jurisdiction.

The Red Cross’ attempt to obtain review of the District
Court’s unreviewable order should be summarily rejected.

THE ISSUE OF FEDERAL JURISDICTION IS NOT YET
RIPE FOR DECISION BY THIS COURT.

Rule 10 of the Rules of the Supreme Court states that review
on writ of certiorari is available to resolve a conflict between
decisions rendered by different courts of appeals. As Rule 10.1
makes clear, however, such review is not a matter of right but
of judicial discretion.

Until the last six months, the jurisdictional issue raised by
the Red Cross had only been considered by federal district courts.
Approximately half of those courts concluded that federal courts
have original jurisdiction over actions involving the Red Cross.
Only two courts of appeals have as yet addressed the issue.

In Kaiser v. Memorial Blood Center of Minneapolis, 938 F.2d
90 (8th Cir. 1991), the Eighth Circuit ruled that the ‘‘sue and
be sued’’ clause in the Red Cross charter creates original federal
jurisdiction. The Kaiser court’s discussion of the issue, however,
is exceedingly brief. The two paragraphs devoted to this issue
contain very little exposition of the reasoning behind its ruling.
Two recent federal district courts that have had occasion to address
the jurisdictional question presented have expressly found Kaiser
unpersuasive. See Walker v. American National Red Cross, et
al., No. 91-0749, Slip Op. (D.D.C. May 10, 1991) (Revercomb,
J.) (holding that the Red Cross’ charter does not create original
federal jurisdiction: ‘‘The opinion of the United States Court of
Appeals for the Eighth Circuit, Kaiser v. Memorial Blood Center,

supra, which does not state the reasons for its conclusions, does
not persuade this court otherwise.’’) (Appendix D, 21a) and
Luckett v. Harris Hospital-Fort Worth, 764 F. Supp. 436 (N.D.
Tex. 1991) (finding Kaiser unpersuasive and noting that the Kaiser
order was primarily concerned with certifying questions to the
Minnesota Supreme Court).

In contrast to the Kaiser decision, the First Circuit has given
the jurisdictional issue presented a searching and painstaking
analysis, and has fully set forth the reasons for and the reasoning
behind, its conclusions. See S.G. and A.E., 938 F.2d 1494 (lst
Cir. 1991). It may well be that the First Circuit decision, once
it has had full circulation and analysis will lead to greater
uniformity in the decisions which follow so that the present conflict
will gradually resolve itself. :

Even if the First Circuit decision does not gain wide
acceptance, there is another compelling reason why consideration
of the issue at this time is premature. This Court has often followed
the policy that it will allow the lower courts an opportunity for
further study and analysis before offering a resolution to a conflict
between Circuits. See McCray v. New York, 461 U.S. 961, 963
(1983) and Gilliard v. Mississippi, 464 U.S. 867 (1983) (Marshall
J. dissenting). This approach is particularly appropriate in this
case for two reasons. First, only one Circuit Court decision has
given this issue searching and definitive analysis. Second, as
pointed out by the Red Cross in its petition for certiorari, the
Fifth Circuit has recently accepted the issue on interlocutory appeal
in Doe v. Kerwood, No. 90-9101, Slip Op. (July 19, 1991). The
Fifth Circuit decision may indicate a trend toward uniformity on
this issue. At the very least, the Fifth Circuit’s decision should
provide this Court with considerably greater illumination and
exposition of the issue than it now has.

SINCE THE JUDGMENT IN THE COURT BELOW IS
INTERLOCUTORY, THIS COURT SHOULD AWAIT A
FINAL DISPOSITION OF THE CASE BEFORE EXERCISING
JURISDICTION.

This Court has long followed a policy of not entertaining
petitions for certiorari in interlocutory appeals unless the case
presents some extraordinary issue. In American Construction Co.
v. Jacksonville, T. & K.R. Co., 184 U.S. 372, 384 (1893), this
Court stated that it ‘‘should not issue a writ of certiorari to review
a decree of the circuit court of appeals on appeal from an
interlocutory order, unless it is necessary to prevent extraordinary
inconvenience and embarrassment in the conduct of the cause.”’
In a later case, Hamilton-Brown Shoe Co. v. Wolf Bros. & Co.,
240 U.S. 251, 258 (1916), this Court stated that certiorari
jurisdiction is ‘to be exercised sparingly, and only in cases of
peculiar gravity and general importance, or in order to secure
uniformity of decision . . . . And except in extraordinary cases,
the writ is not issued until final decree.’’ The lack of finality of
the judgment below, without more, may furnish sufficient ground
for denial of the application. See Brotherhood of Locomotive
Firemen v. Bangor & Aroostock R. Co., 389 U.S. 327, 328 (1967)
and Estelle v. Gamble, 429 U.S. 97, 115 (1976) (Stevens, J.
dissenting) (referring to ‘‘the Court’s normal practice of denying
interlocutory review’’).

Rather than ‘‘prevent{ing] extraordinary inconvenience and
embarrassment’”’ in the conduct of this case, the granting of this
petition will inflict extraordinary harm on the respondents.
Respondent S.G. is dying of AIDS. She should not be required
to wait indefinitely for a resolution of her suit against the Red
Cross. She commenced her suit in April, 1990 and for the last
year and a half the parties, at the instance of the Red Cross, have

been litigating about where to litigate, rather than litigating the
merits of her case. The granting of this petition will probably
delay the resolution of this jurisdictional issue for another year.
S.G. deserves a better fate from the legal system than a two-and-
a-half year delay.of her case, while Red Cross wrangles over the
proper forum for her case.

The prejudice to the respondents is not difficult to show.
Because of the jurisdictional dispute, discovery is now on hold
and the respondents have been unable to obtain the identity of
the donor, whether he is still living and whether he would have
given blood had the Red Cross followed proper donor screening
procedures. Further delay will make it difficult, if not impossible,
to get the answers to these and many other vital and pertinent
questions.

In addition, it is difficult to understand why Red Cross will
experience extraordinary inconvenience or embarrassment if the
interlocutory petition is denied. The case will simply proceed to
trial in state court along with the other two defendants. State
courts have presided over approximately twenty similar cases. See
Petition for Certiorari, pp. 11-12 (and cases cited therein). There
is no claim by the Red Cross that it did not receive fair treatment
in those cases. To the contrary, justice may have been better served
since all concerned parties were before the same forum at the
same time.

Finally, it is entirely possible that if this case proceeds to
trial on the merits in state court a result may be produced (such
as settlement) which will make it unnecessary for this Court to
address the issue.

10

IV.

THIS COURT SHOULD DENY CERTIORARI BECAUSE
THE BASIS OF RED CROSS’ CLAIM OF FEDERAL
JURISDICTION, 36 U.S.C. § 2, DOES NOT APPEAR ON THE
FACE OF THE RESPONDENTS’ WELL PLEADED
COMPLAINT.

The claim of the respondents against Red Cross arises out
of the common law of the State of New Hampshire. Their
complaint alleges that the Red Cross negligently failed to properly
screen blood donors and as a consequence the respondent, S.G.,
became infected with the HIV virus, and now suffers from AIDS.
There is no mention in the respondents’ complaint of the Red
Cross Charter or 36 U.S.C. § 2.

Red Cross claims federal jurisdiction under the provision in
its charter (36 U.S.C. § 2) that provides that the Red Cross shall
have ‘‘the power to sue and be sued in courts of law and equity,
State or federal, within the jurisdiction of the United States.’’
This is a congressionally enacted statute and Red Cross contends
that it falls within the purview of 28 U.S.C. § 1331 which confers
on district courts ‘‘original jurisdiction of all civil actions arising
under the Constitution, laws, or treaties of the United States.”’

However the presence or absence of federal question
jurisdiction is governed by the ‘‘well pleaded complaint’’ rule.
Whether a case is one arising under federal law in the sense of
the jurisdictional statute must be determined by what necessarily
appears in the plaintiff’s statement of his own claim in the bill
or declaration, unaided by anything alleged in anticipation or
avoidance of defenses which it is thought the defendant may
interpose. Taylor v. Anderson, 234 U.S. 74 (1914), Oklahoma
Tax Commission v. Graham, 489 U.S. 838 (1989). Moreover ‘‘to
bring a case within the statute, a right or immunity created by

11

the Constitution or laws of the United States must be an element,
and an essential one, of the plaintiff’s cause of action.’’ Gully
v. First Nat. Bank, 299 U.S. 109, 112 (1936). The vast majority
of cases which fall under federal question jurisdiction are covered
by Justice Holmes’ statement that a ‘‘suit arises under the law
that creates the cause of action.’’ American Well Works Co. v.
Layne S. Bowler Co., 241 U.S. 257, 260 (1916).

In the suit of S.G. and A.E. against Red Cross, the ‘‘sue
and be sued clause’’ in the Red Cross Charter is not an essential
element of the respondents’ state law claim, and there is no reason
or justification for it to appear in their complaint. Therefore this
Court should deny federal question jurisdiction on the basis of
this very salutary rule.’ This is a case arising under state law,
and it is quite appropriate that a state forum should resolve it.
As the court said in Doe v. American Red Cross, 727 F. Supp.
186, 192 (E.D. Pa. 1989): |

The thrust of Congressional policy since 1925 has
been to limit federal-question jurisdiction of cases
not involving government instrumentalities to those
situations in which the governing law is federal.
The policy is a sound one. It respects the balance
of authority between state and federal courts which
is an essential ingredient of the federal system.

See also, Luckett v. Harris Hospital-Fort Worth, supra at 441.

2. This issue was raised in the lower court but not addressed by its opinion
because its ruling on the charter issue disposed of the case. S.G. v. American
National Red Cross, supra at 1496.

12

Vv.

THE ISSUE RAISED BY RED CROSS IS NOT OF
SUFFICIENT IMPORTANCE TO GRANT CERTIORARI.

Rule 10.1 of the Supreme Court Rules provides that ‘‘[a]
petition for a writ of certiorari will be granted only when there
are special and important reasons therefor.’’ In Rice v. Sioux
City Cemetery, 349 U.S. 70, 74 (1954) this Court defined in a
general way the phrase ‘‘special and important’’.

A federal question raised by a petitioner may be
‘“‘of substance’ in the sense that, abstractly
considered, it may present an_ intellectually
interesting and solid problem. But this Court does
not sit to satisfy a scholarly interest in such issues.
Nor does it sit for the benefit of the particular
litigants. .. . ‘*Special and important reasons’’
imply a reach beyond the academic or the episodic.

No doubt the issue presented by Red Cross has academic
appeal as it raises the question of whether a decision rendered
by Chief Justice wiarshall in 1824 should be used to determine
the meaning of a statute enacted in 1947. However this issue is
much more important to tne Red Cross, and to the parties who
have claims against it, than to the general public.

Whether the cases — now totalling about 40 — are tried in
federal court or state court, they will eventually proceed to
judgment, and presumably justice will be done. Citizens of the
State of New Hampshire will sit on this case whether it is tried
in federal or state court, and it is difficult to perceive how Red
Cross will suffer more bias in state court than federal court.
(Compare the prejudice to the plaintiffs of having to try their
case twice with the possibility of inconsistent verdicts since all

13

defendants will not be present in either forum.) Each forum is
equally competent to dispose of the issues in this case.

Red Cross suggests that it will promote uniformity to have
certain federal questions—such as whether it can be subjected
to a jury trial or punitive damages — determined in a federal
court. However, this Court has frequently recognized that state
courts are quite competent to entertain federal claims and litigation
over federal rights. See Gulf Offshore Co. v. Mobil Oil Corp,
453 U.S. 473, 477-478 (1981); Rose v. Lundy, 466 U.S. 509, 518
(1982); Middlesex Ethics Comm. v. Garden State Bar Assn., 457
U.S. 423, 437 (1982). As for uniformity, if the question is an
easy one, it is likely that uniformity will be achieved whether a
federal or state forum decides it; if it is a difficult one, as in this
case, the courts will disagree, whether the issue is decided
exclusively in a federal or state forum, or in both forums.

Red Cross’ argument also ignores the fact that these claims
arise under state tort law rather than federal law, and uniformity
under differing state tort systems may be impossible to achieve.
As the First Circuit observed, ‘‘We note, however, that a grant
of original federal jurisdiction over cases involving the Red Cross
would not lead to increased uniformity in the determination of
that organization’s liability in HIV cases. The tort law of the forum
state would provide the rule of decision for the case, whether
it is brought in state or federal court.’’ S.G. v. American Nat.
Red Cross, supra at 1501.

Red Cross also suggests that a federal forum is necessary
to insulate it from ‘‘local or regional needs or prejudices’’ which
may exert undue pressure on it. While it is possible such needs
and pressures exist, it is also likely that the motives of Red Cross
in seeking a federal forum are more mundane and tactical than
the achievement of uniformity and insulation from local prejudice.
In almost all of the suits against Red Cross, if not all, there are

14

multiple defendants. When Red Cross removes a case to federal
court, the other defendants are often left behind in state court,
thereby forcing the plaintiff to try his case twice in two different
forums. This puts the Red Cross in a position to cast blame on
the absent defendants when the cases are tried in federal court.

Red Cross has attempted to broaden the issue to include the
charters of the Department of Housing and Urban Development
(12 U.S.C. § 1702), the Pension Benefit Guarantee Corporation
(29 U.S.C. § 1302) and the Federal National Mortgage Association
and Government National Mortgage Association (12 U.S.C.
§ 1723a(a)), each of which has a ‘*‘sue and be sued”’ clause similar
to, but not the same as the Red Cross. It should be noted that
this language in each charter falls within an enumeration of the
powers of the corporation; thus it is more likely a grant of capacity
to litigate than a grant of jurisdiction. Cf. Federal Rules of Civil
Procedure 17(b). Also, it is significant that each of these charters
relates to a corporation under the control of the United States
or an agency of the United States. Under 28 U.S.C. § 1349 the
district courts are granted jurisdiction over corporations under
the control of the United States, and under 28 U.S.C. § 1345
district courts are granted jurisdiction over agencies of the United
States which commence civil actions. The Red Cross, in contrast,
is a private charitable corporation which is neither controlled by
nor an agency of the United States. See Walton v. Howard
University, 683 F. Supp 826, 831-2 (D.D.C. 1987). Therefore,
Red Cross’ reliance on these charters is clearly misplaced. It is
unlikely that the decision of the First Circuit in this case had any
effect whatever on these substantially distinct charters, as Congress
had already granted each corporation a separate basis of
jurisdiction under Sections 1345 and 1349. In short, Red Cross’
Charter should be analyzed in the light of its own language and
legislative history, rather than resorting to charters of federal
agencies and instrumentalities quite different in nature and
purpose.

15

Finally the respondents submit that the most appropriate
solution to the problem confronting the Red Cross is a legislative
one. If Congress intended to confer federal jurisdiction over suits
against the Red Cross, then the Charter was ineptly drafted. As
the First Circuit observed, ‘‘{If] modern demands now require
conferring federal jurisdiction over Red Cross cases, the Congress
has plenary power to act.’’ Rather than seek a judicial solution
to its problem, with all the attendant expenditure of scarce judicial
resources, Red Cross should present its problem without further
delay to Congress. In the past Congress has often demonstrated
its capacity to cut such Gordian Knots.

VI.

THE DECISION OF THE COURT OF APPEALS IS
CORRECT.

Red Cross asserts that its charter (36 U.S.C. § 2) creates
original federal jurisdiction which entitles Red Cross to remove
to federal court actions to which it is a party. Section 2 in pertinent
part reads as follows:

2 Name of Corporation; Powers

The name of the corporation shall be ‘The
American National Red Cross’’ and bythatname ~—
it shall have perpetual succession, with the power

to sue and be sued in courts of law and equity,
State and Federal within the jurisdiction of the
United States.

(Emphasis added).

As stated above, the district courts have about evenly divided
over whether this clause is a special grant of federal jurisdiction,

16

allowing Red Cross access to federal court in all cases. The reason
for this split is obvious; the charter does not clearly and
unambiguously grant federal jurisdiction to the Red Cross. Federal
jurisdiction can only be found by implication and by looking at
other corporate charters. Courts which have ruled against Red
Cross have interpreted the ‘‘sue and be sued”’ clause as a grant
of capacity to litigate, since it appears in an enumeration of
corporate powers. These courts have reasoned that if Congress
wishes to directly confer jurisdiction it usually does so expressly
in a separate clause.

Red Cross acknowledges the general rule that a sue and be
sued clause does not normally confer jurisdiction; however, Red
Cross argues that an exception to this rule exists where Congress
has specifically referred to capacity to sue and be sued in the federal
courts.

In particular, Red Cross relies on the case of Osborn v. Bank
of the United States, 22 U.S. (9 Wheat.) 738 (1824) where the
Supreme Court ruled that the bank’s charter, which allowed it
to “‘sue and be sued ... in all courts having competent
jurisdiction, and in any Circuit Court of the United States’’ was
a congressional grant of federal jurisdiction in all cases to which
the Bank was a party. The First Circuit noted in its decision below
that the language of the bank’s charter was different from that
of Red Cross and could legitimately be construed to grant original
federal jurisdiction whereas the Red Cross Charter treats state
and federal courts in a parallel fashion, and on the basis of its
language cannot be deemed to have expanded the jurisdiction of
federal courts. S.G. v. American Nat. Red Cross, supra at 1498.

Attempting to discern congressional intent in 1947 from the
language used in a bank charter in 1824 is open to serious question.
As one court commented, ‘‘[Osborn] interpreted a different federal
charter, a charter from a different era, with a different purpose,

17

set in a different context.’” Anonymous Blood Recipient v. W.
Beaumont Hosp., 721 F. Supp. 139, 143 (E.D. Mich. 1989).

Since Osborn only one case has arisen in which this Court
has construed similar language. D’Oench, Duhme & Co. v. Federal
Deposit Insurance Corp., 315 U.S. 447 (1942). In that case this
Court construed 17 U.S.C. § 264(j) to confer federal jurisdiction
over the FDIC. That section authorized the FDIC ‘‘to sue or be
sued in any court of law or equity; State or Fedeval,’’ and further
provided that ‘‘all suits of a civil nature at common law or equity
shall be deemed to arise under the law of the United States.”’
This latter language clearly distinguishes the FDIC charter from
the Red Cross charter. Thus the bank and FDIC charters are clearly
distinguishable from the Red Cross charter both as to the language
used and the context in which each was adopted.

Red Cross also contends that the legislative history of its
charter shows an intent to confer federal jurisdiction on the Red
Cross. The charter was amended in 1947 with the addition of
the words ‘‘State or Federal’’ so that it reads ‘‘with the power
to sue and be sued in courts of law and equity, State or Federal,
within the jurisdiction of the United States.’’ This change was
urged by the Harriman Committee, a Red Cross advisory
committee, and was derived in particular from Recommendation
22 of its report, which reads as follows:

Recommendation No. 22. The Charter should
make it clear that the Red Cross can sue and be
sued in the Federal Courts.

The present Charter gives the Red Cross the
power ‘to sue and be sued in courts of law and
equity within the jurisdiction of the United States.’
The Red Cross has in several instances sued in the
federal Courts, and its powers in this respect have

18

not been questioned. However, in view of the
limited nature of the jurisdiction of the Federal
Courts it seems desirable that this right be clearly
stated in the Charter.

This language does not automatically confer original
jurisdiction on federal courts. Rather it permits the Red Cross
to sue and be sued in federal court if there is independent federal
question jurisdiction or diversity jurisdiction. It is likely that the
intent of the amendment was to make it clear that the Red Cross,
a federally created corporation, could sue in diversity in federal
court. See Walton v. Howard University, 683 F. Supp. 826, 829
(D.D.C. 1987).

Finally, as the First Circuit observed, Congress, prior to and
during the time the Red Cross charter was adopted, was using
explicit and specific language to confer federal jurisdiction over
other federally created corporations. See Federal Crop Insurance
Corporation, (7 U.S.C. § 1506) (‘‘jurisdiction is hereby conferred
upon such district courts to determine controversies’’); The
Commodity Credit Corporation, (15 U.S.C. § 714) (‘‘the district
courts of the United States shall have exclusive original jurisdiction
.. . Of all suits brought by and against the Corporation,’’) and
Federal Deposit Insurance Corporation, (12 U.S.C. § 1819(b)(2))
(‘‘all suits . . . to which the corporation is a party shall be deemed
to arise under the laws of the United States’’). No comparable
language appears in the Red Cross charter and the conclusion
is inescapable that Congress, by the language used in the Red
Cross Charter, did not intend to confer original federal jurisdiction
over actions involving the Red Cross.

19

CONCLUSION

For these reasons, the petition for writ of certiorari should
be denied.

Respectfully submitted

GARY B. RICHARDSON
Counsel of Record

GILBERT UPTON

DAVID P. SLAWSKY
UPTON, SANDERS & SMITH
Attorneys for Respondents

10 Centre Street

P.O. Box 1109

Concord, NH 03302-1109

(603) 224-7791

la

APPENDIX A — WRITS OF SUMMONS IN THE SUPERIOR
COURT OF THE STATE OF NEW HAMPSHIRE

THE STATE OF NEW HAMPSHIRE
MERRIMACK, SS. SUPERIOR COURT
WRIT OF SUMMONS

Susan Gladstone and Arthur Ellison
59 Rumford St.
Concord, NH 03301

American Red Cross Blood Services
Vermont-New Hampshire Region, a Division of American Red
Cross, a federally chartered non-profit association having a place

of business at 425 Reservoir Ave., Manchester, NH 03105

To the Sheriff of any County or his Deputy

WE COMMAND YOU TO SUMMON the defendant, American
Red Cross Blood Service Vermont-New Hampshire Region, a
Division of American Red Cross

if to be found in your precinct, to appear at the SUPERIOR
COURT at Concord in said County of Merrimack, on the first
Tuesday of April 1990, to answer to Susan Gladstone and Arthur
Ellison

IN A PLEA OF THE CASE for that on or about August
22, 1984 and prior thereto the defendant, American Red Cross
Blood Services Vermont-New Hampshire Region, a Division of
American Red Cross, was engaged in the business of acquiring

2a

Appendix A

and selling blood and blood products to health care providers
for transfusion to patients; that the defendant had a duty to screen
blood donors to prevent persons in certain high risk groups from
donating blood which the defendant knew or should have known
involved risk of transmission of th H.I.V. virus to persons such
as the piaintiff; the defendant was negligent in failing to properly
screen blood donors and on or about August 1, 1984 procured
blood from a donor who was infected with the H.1.V. virus; the
infected blood was supplied to the Concord Hospital in Concord,
New Hampshire and on August 22, 1984 transfused to the plaintiff;
that as a result, the plaintiff became infected with the H.I.V. virus
and currently is suffering from the Acquired Immune Deficiency
Syndrome (A.1.D.S.) which has caused her loss of enjoyment of
life, loss of probable life expency, extreme mental anguish and
past, present and future pain and suffering, medical costs, loss
of earning capacity and loss of wages, all to her damage, as she
Says, greatly in excess of the jurisdictional minimum requirements
of the Superior Court, together with interest and costs.

Witness, Richard P. Dunfey, Esquire, the 2nd day of Mar. A.D.
1990

Susan Gladstone and Arthur Ellison

by their attorneys

UPTON, SANDERS & SMITH Indorser
By Gary B. Richardson

10 Centre St., Box 1109, Concord, NH 03302-1109

Marshall A. Buttrick
Clerk

3a

Appendix A
THE STATE OF NEW HAMPSHIRE
RIMACK, SS. SUPERIOR COURT
WRIT OF SUMMONS
Susan Gladstone and Arthur Ellison

both of 59 Rumford Street
Condord, N.H. 03301

Vv.

Carol Leonard-McKinney, Administratrix of the Estate of Kenneth
L. McKinney, Jr., M.D. of Hopkinton Rd., Hopkinton, N.H.

and

Kenneth L. McKinney, Jr., M.D. Professional Association, a
professional association having a place of business at 33 Warren
Street, Concord, N.H. 03301

To the Sheriff of any County or his Deputy
We Command You To Summon

if to be found in your precinct, to appear at the SUPERIOR
COURT at Concord in said County of Merrimac, on the first
Tuesday of April 1988, to answer to

COUNT |

In a plea of the case for that at all times relevant to this
complaint Kenneth L. McKinney, M.D. (hereinafter ‘‘McKinney’’)
was licensed to practice medicine in the State of New Hampshire,

4a

Appendix A

held tumself out as a specialist in the areas of obstetrics and
gynecology, and acted as an employee, officer and director of
Kenneth L. McKinney, Jr., M.D., Professional Association; that
in August of 1984 the plaintiff, Susan Gladstone, employed
McKinney to treat her for a fibroid tumor in her uterus and to
perform a hysterectomy; that in endeavoring to perform said
hysterectomy McKinney did not exercise the due care ordinarily
exercised by other gynecologists in his profession in that he failed
to adequately tie off the blood vessels to the uterus, failed to
inform the plaintiff of the risks of such a procedure such as a
contaminated blood transfusion and failed to take adequate
precautions to avoid those risks; that as a proximate result, the
plaintiff, Susan Gladstone, suffered severe abdominal bleeding
which required a second operation and blood transfusions; that
the blood received by Susan Gladstone was contaminated with
the virus associated with Acquired Immune Deficiency Syndrome
(A.1.D.S.) and Susan Gladstone has developed symptoms
consistent with said disease; that as a further result, Susan
Gladstone has suffered loss of enjoyment of life, loss of probable
life expectancy, extreme mental anguish and past, present and
future pain and suffering, medical costs, loss of earning capacity
and loss of wages all to her damage as she says greatly in excess
of the jurisdictional minimum requirements of the Superior Court
together with interest and costs.

COUNT II

In a plea of the case for that Arthur Ellison is the husband
of Susan Gladstone having been married to her on June 8, 1973
and they are the parents of two children, Jerome, age 11, and
Anna, age 8; that as a result of the injuries sustained by Susan
Gladstone, as alleged in Count I, Arthur Ellison has suffered the
loss of the enjoyment of his wife’s companionship, consortium
and family relationship all to his damage as he says in excess of

Sa

Appendix A

the jurisdictional minimum requirements cf the Superior Court
together with interest and costs.

COUNT III

In a plea of the case for that the allegations of Counts | &
Il are realleged and incorporated by reference; that the plaintiffs
did not become aware that Susan Gladstone had received
contaminated blood until August of 1986; that between August
of 1984 and August of 1986 the plaintiffs engaged in sexual
intercourse; that as a result Arthur Ellison has been exposed to
the A.I.D.S. virus although it has not yet been positively
determined whether or not Arthur Ellison has contracted A.1.D.S.;
however at the very least the exposure to A.I.D.S. has caused
Arthur Ellison extreme mental anguish and emotional distress as
approximate result of the defendant’s negligence all to his damage
as he says in excess of the jurisdictional minimum requirements
of the Superior Court together with interest and costs.

6a

Appendix A
THE STATE OF NEW HAMPSHIRE
MERRIMACK. SS. SUPERIOR COURT
WRIT OF SUMMONS

Susan Gladstone and Arthur Ellison
59 Rumford Street
Concord, NH 03301

Auto Suture Company, a Division of United States Surgical
Corporation, a New York Corporation having a business address
of 150 Glover Avenue, Norwalk, Conn. 06856

To the Sheriff of any County or his Deputy
We Command You To Summon

if to be found in your precinct, to appear at the SUPERIOR
COURT at Concord in said County of Merrimack, on the first
Tuesday of August 1988.

COUNT I — Products Liability

In a plea of the law for that on or about August 22, 1984
and prior thereto the defendant, Auto Suture Company, a division
of United States Surgical Corporation, was engaged in the business
of selling surgical staplers; that on said date a surgical stapler
sold by the defendant was used by Kenneth L. McKinney, Jr.,
M.D. during a hysterectomy performed on the plaintiff, Susan
Gladstone; that said stapler was in a defective condition
unreasonably dangerous to the plaintiff Susan Gladstone in that
the device failed to adequately ligate the blood vessels, the device

7a

Appendix A

was sold without adequate warnings to the patient and instructions
to the physician and the device was sold for use without ensuring
that the physician using it had training in its use; that at the time
of its use said stapler was without substantial change in the
condition in which it was sold; that as such the defendant is legally
responsible for the damages thereby caused; that as a result of
the inadequate ligation of the blood vessels the plaintiff, Susan
Gladstone, sufered severe abdominal bleeding which required a
second operation and blood transfusions; that the blood received
by Susan Gladstone was contaminated with the virus associated
with Acquired Immune Deficiency Syndrome (A.1.D.S.) and Susan
Gladstone has developed symptoms consistent with said disease;
that as a further result, Susan Gladstone has suffered loss of
enjoyment of life, loss of probable life expectancy, extreme mental
anguish and past, present and future pain and suffering, medical
costs, loss of earning capacity and loss of wages all to her damage
as she says greatly in excess of the jurisdictional minimum
requirements of the Superior Court together with interest and costs.

COUNT II — Negligence

In a plea of the case for the allegations of Count I are realleged
and incorporated by reference; that the failure to give adequate
warnings to the patient and instructions to the physician in the
use of the surgical stapler and the failure to ensure that the
physician using said device was trained in its use was negligent
and violated a duty of ordinary care owed to the plaintiff, Susan
Gladstone, suffered the damages described in Count I all to her
damage as she says together with interest and costs in an amount
greatly in excess of the jurisdictional minimum requirements of
the Superior Court.

8a

APPENDIX B — MOTION FOR STAY OF PROCEEDINGS
DATED AUGUST 16, 1991

UNITED STATES DISTRICT COURT
FOR THE
DISTRICT OF NEW HAMPSHIRE

Civil Action
No. C.90-145-D

S.G. and A.E.,
Plaintiffs
We

American National Red Cross (sued herein under the name
‘*American Red-Cross Blood Services Vermont-New Hampshire
Region, a Division of American Red Cross’’),

Defendant

DEFENDANT’S MOTION FOR STAY OF PROCEEDINGS
PENDING APPEAL TO UNITED STATES SUPREME COURT

The American National Red Cross (‘‘Red Cross’’), defendant,
moves this Court for a stay of further proceedings in this case,
to permit the Red Cross to petition the United States Supreme
Court for a writ of certiorari to resolve what is now a split in
United States Courts of Appeals as to whether the Red Cross’s
congressional charter confers original federal jurisdiction on
actions involving the Red Cross. Unless such a Stay is granted,
the issue may be mooted by remand of the case to New Hampshire
Superior Court, thereby depriving the Red Cross of the opportunity
to present the issue to the United States Supreme Court. In support

9a

Appendix B
of this Motion, the Red Cross states as follows:

1. On July 24, 1991, the United States Court of Appeals
for the First Circuit reversed the ruling of this Court that 36 U.S.C.
§ 2 confers original federal jurisdiction on actions involving the
Red Cross, a decision which is contrary to the decision reached
by the United States Court of Appeals for the Eighth Circuit.
Compare S.G. & A.E. v. American National Red Cross, No.
90-1873 (Ist Cir., July 24, 1991) with Kaiser v. Memorial Blood
Center, No. 89-5533 (8th Cir., April 10, 1991). In addition, the
First Circuit remanded S.G. & A.E. to this Court to determine
whether joinder of nondiverse parties is appropriate so as to
destroy diversity, the other basis for federal jurisdiction, and thus
require remand to the state court. S.G. & A.E., slip op. at 2, 19.

2. The Red Cross moved the First Circuit for a stay of its
mandate pursuant to Federal Rule of Appellate Procedure 41 to
assure that the Red Cross would have time to petition the Supreme
Court for a writ of certiorari. Appellee’s Motion for stay of
Mandate, August 9, 1991 (attached). On August 13, 1991, the
First Circuit declined to enter a stay, apparently because the matter
was being remanded to this Court for further proceedings on the
issue of joinder and diversity, and because the Red Cross would
have the opportunity to seek a stay of such further proceedings
from this Court.

3. Because this Court has previously announced how it would
resolve the joinder and diversity issues (Order of June 19, 1990
at 4, modifying Order of May 24, 1991), the Red Cross is
concerned that without a stay of proceedings, this Court may
immediately resolve the diversity issue and remand the action to
state court. Such a remand to state court would foreclose the Red
Cross from appealing the charter issue to the United States

10a

Appendix B

Supreme Court, because an order to remand is unappealable under
the circumstances of this case. See 28 U.S.C. § 1447(d).

4. At a minimum, the Red Cross believes the joinder and
remand issue should be briefed in light of the Supreme Court’s
recent decision, Freeport-McMoRan, Inc. et al. v. K.N. Energy,
Inc., 111 S. Ct. 858, 860 (Feb. 19, 1991), which holds that
‘*[d]iversity jurisdiction, once established, is not defeated by the
addition of a nondiverse party to the action.”’ Although Freeport-
McMoRan does not deal specifically with removal issues under
28 U.S.C. § 1447(e), the court does cite with approval an earlier
Supreme Court decision which held that jurisdiction is not
‘‘defeated by the intervention, by leave of court, of a party whose
presence is not essential to a decision of the controversy between
the original parties .. . .”” (Emphasis added.) Accordingly, it
would appear that 28 U.S.C. § 1447(e) is not to be applied to
permit joinder and remand except where the party to be joined
is indispensable. This construction is also consistent with the
legislative history of 1447(e), which provides that **[jJoinder
coupled with remand may be more attractive than either dismissal
under Civil Rule 19(b) or denial of joinder.”” H.R. REP. No.
889, 100th Cong., 2d Sess. 72-73, reprinted in 1988 U.S. Code
Cong. & Ad. News, 5982, 6033. (Rule 19(d) deals specifically with
indispensable parties.)

5. The Red Cross represents to this Court that it is in the
process of preparing a petition for certiorari to the Supreme Court
and intends to file the petition promptly, so that the Supreme
Court will have the opportunity to decide whether to grant the
petition within this calendar year.

6. As this Court held in its Order of June 19, 1990, the issue
of whether the Red Cross charter confers Original federal

lla

Appendix B

jurisdiction to permit removal is *‘one of those ‘rare cases’ which
cry out’’ for appellate resolution. Moreover, the First Circuit
recognized ‘‘the importance of the jurisdictional issue presented,
especially in light of the increasing litigation concerning the
transmission of HIV virus through the transfusion of tainted
blood.” S.G. & A.E., slip op. at 1. While reaching a conclusion
different from that of the Eighth Circuit, the First Circuit
acknowledged that ‘‘[t}his is not to say that the question whether
Congress intended to convert all Red Cross cases into federal
question cases when it amended the Red Cross Charter is easily
decided.’’ Jd. at 18.

7. Numerous courts throughout the country are continuing
to face this jurisdictional issue, and they continue to reach
divergent decisions. It would be especially regrettable if Supreme
Court review were to be frustrated by remand of the action to
state court before the Supreme Court could be given the
opportunity to determine the issue definitively.

WHEREFORE, the American National Red Cross
respectfully moves this Court to stay further proceedings in the
case to permit the Red Cross to file a timely petition in the United
States Supreme Court for a writ of certiorari and to permit the
Supreme Court to take appropriate action on the petition. In the
event this Court is not inclined to stay proceedings, the Red Cross
moves, in the alternative, for seven days’ advance notice to permit
it to seek emergency relief from the Supreme Court. Alternative
proposed Orders are attached.

The Red Cross has made a good faith attempt, pursuant to
Local Rule 11(c), to obtain concurrence of the plaintiffs in the
relief sought by this Motion, but has been unable to obtain such
concurrence. As the present Motion is addressed to the Court’s

12a

Appendix B

discretion, no memorandum with citations of supporting
authorities is being submitted.

AMERICAN NATIONAL RED
CROSS

By Its Attorneys,

SULLOWAY HOLLIS & SODEN

By s/Irvin Gordon

Irvin D. Gordon (0962)
9 Capitol Street
Concord, NH 03302-1256
(603) 224-2341

DATE: August 16, 1991

l3a

APPENDIX C — ORDER OF THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF NEW
HAMPSHIRE DATED SEPTEMBER 24, 1991

UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEW HAMPSHIRE

Civil No. 90-145-D

Susan Gladstone;
Arthur Ellison

American National Red Cross
ORDER

On July 24, 1991, the Court of Appeals, acting on
interlocutory appeal, reversed and remanded with respect to this
court’s order of May 24, 1990. Document no. 10. S.G. & A.E.
v. American Nat’! Red Cross, No. 90-1873 (ist Cir. July 24, 1991)
In such order, this court had held that 36 U.S.C. § 2 vested
exclusive jurisdiction in actions to which American Red Cross
(‘*Red Cross’’) is a party in federal courts. The mandate of the
court of appeals issued on August 21, 1991.'

In the interim, however, Red Cross moved the court for a
stay of proceedings pending a petition for certiorari to the Supreme
Court of the United States. Document no. 23. Alternatively, Red
Cross sought a stay by this court of seven days to allow it to

1. The mandate was here received on August 22, 1991.

l4a

Appendix C
apply to a justice of the Supreme Court for such relief.’

Simultaneously, plaintiffs filed their second motion to join
parties and remand this matter to state court. Document no. 24.

Under the provisions of 28 U.S.C. § 2101(f), a stay pending
an application for certiorari to the Supreme Court ‘‘may be granted
by a judge of the court rendering the judgment or decree or by
a justice of the Supreme Court... .’’ The courts which have
considered this statute have ruled that it vests authority to grant
a stay in the court of appeals or a justice of the Supreme Court.
In re Stumes, 681 F.2d 524, 525 (8th Cir. 1982); Gander v. FMC
Corp., 733 F. Supp. 1346, 1347 (E.D. Mo. 1990) (and cases therein
cited). The district court is without jurisdiction to grant a stay
of execution of its judgment pending a defendant’s application
for certiorari. Jd. Red Cross has moved for a stay from the court
of appeals, but this motion has been denied. Inasmuch as this
court lacks jurisdiction to grant the relief of a stay, the motion
of Red Cross seeking such relief must also be and is herewith
denied.

With respect to the plaintiffs’ second motion, it is true that,
were it not for the jurisdictional issues raised by 36 U.S.C. § 2,
this court had previously ruled, upon balancing the requisite
factors, that it would grant joinder and order remand. Document
no. 10, at 4-6. The court perceives no changes in circumstances
which require it to reconsider such ruling, and, accordingly, it

2. The proposed petition for certiorari is grounded on a dispute between
circuits. As noted in S.G. & A.E. v. American Nat’! Red Cross, supra, slip
op. at 5, 6, the Eighth Circuit has held that the ‘‘sue and be sued’”’ language
in 36 U.S.C. § 2 vests original federal jurisdiction over Red Cross. See Kaiser
v. Memorial Blood Center, No. 89-5533 (8th Cir. Apr. 10, 1991).

15a

Appendix C

herewith grants the second motion for joinder and remand.
Accordingly, pursuant to the mandate of the court of appeals,
joinder of parties is granted, and this case is herewith remanded
to the Superior Court of Merrimack County, New Hampshire.

SO ORDERED.

s/ Shane Devine

Chief Judge
United States District Court

September 24, 1991
ce: Gary B. Richardson, Esq.

Irvin D. Gordon, Esq.
Bruce M. Chadwick, Esq.

16a

APPENDIX D—SLIP OPINION IN WALKER V. AMERICAN
NATIONAL RED CROSS DATED AUGUST 16, 1991

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

Civil Action No. 91-0749
Judge George H. Revercomb

BESSIE WALKER, Personal Representative of the estate of
TANYA M. TAYLOR,

Plaintiff,

AMERICAN NATIONAL RED CROSS, et al.,
Defendants.
MEMORANDUM AND ORDER

The plaintiff, Bessie Walker, alleges that the decedent, Tanya
Taylor, contracted Acquired Immune Deficiency Syndrome
(‘‘AIDS’’) as the result of receiving a blood transfusion that was
contaminated with the human immundeficiency virus (“‘HIV’’).
The plaintiff alleges that the defendant, the American National
Red Cross, was negligent in its testing and screening of blood
received by Ms. Taylor. The plaintiff filed suit in the Superior
Court of the District of Columbia on March 1, 1990 and the
American Red Cross filed a notice of removal in this court on
April 10, 1991.

The plaintiff filed a motion to remarid the case to the Superior
Court, the defendant filed an opposition as well as a supplement

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to its Opposition, and argument was heard on the motion on May
10, 1991.

Under the removal statute, 28 U.S.C. § 1441(a), this case
would be properly removed to this Court if it would have original
jurisdiction over the action. The defendant argues that the Red
Cross Charter, 36 U.S.C. § 2 (1988) confers federal jurisdiction
in all cases involving the Red Cross. 36 U.S.C. § 2 states that
the Red Cross shall have ‘‘the power to sue and be sued in courts
of law and equity, State or Federal, within the jurisdiction of
the United States. . .”’ The plaintiff argues that this language
does not create original jurisdiction, but is merely a grant of
corporate power.

The courts have been split on this issue of whether Congress
intended that 36 U.S.C. § 2 create original jurisdiction in the
federal courts. Judges Penn and Harold Greene of this Court have
held that 36 U.S.C. § 2 does not confer original jurisdiction in
the federal courts for actions to which the Red Cross is a party. '
~ On the other hand, the United States Court of Appeals for the
Eighth Circuit, in the first appellate decision addressing this issue,
held that the clause does grant federal jurisdiction. Kaiser v.
Memorial Blood Center, No. 89-5533, slip op. (8th Cir. Apr. 11,
1991).?

1. See Walton v. Howard University, 638 F. Supp. 826 (D.D.C. 1987);
Okoro v. Children’s Hospital, No. 87-2114 (D.D.C. July 12, 1988); Ray v.
American. National Red Cross, Civil Action No. 90-1882, slip op. (D.D.C. Oct.
19, 1990); Boutar v. American National Red Cross and American Red Cross,
Civil Action No. 90-3155, slip op. (D.D.C. April 9, 1991).

2. In addition, both parties have cited numerous cases that support their
positions. The courts are almost evenly split on this issue.

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Appendix D

The Supreme Court has considered whether sue and be sued
language confers federal jurisdiction. In Bank of the United States
v. Deveaux, 9 U.S. 61 (1809), the Supreme Court held that the
language ‘‘sue and be sued, plead and be impleaded, answer and
be answered, defend and de defended, in courts of record, or
any other place whatsoever. . .’’ was insufficient to create federal
jurisdiction. In Osborn v. Bank of the United States, 22 U.S.
738, 817 (1824), the Supreme Court held that the language ‘‘to
sue and be sued, .. . in all state courts having competent
jurisdiction, and in any circuit court of the United States”’ explicitly
granted jurisdiction in the circuit courts to hear any case in which
the bank was a party. The Court stated that ‘‘general words, which
are usual in all acts of incorporation, gave only a general capacity
to sue, not a particular privilege to sue in the courts of the United
States.’’ Jd. Continuing this rationale in Bankers Trust Co. v.
Texas and Pac. Ry., 241 U.S. 295 (1916), the Court found that
the statute, which stated ‘‘shall be able to sue and be sued. . .
in all courts of law and equity within the United States,’’ did
not intend to confer jurisdiction upon any court.

In 1942, the Supreme Court in D’Oench, Duhme & Co. v.
Federal Deposit Insurance Corp., 315 U.S. 447 (1942), allowed
the F.D.1.C. to sue in federal court pursuant to the corporation’s
charter, 12 U.S.C. § 1829. The defendants argue that the language
in this charter, ‘‘sue or be sued in any court of law or equity,
State or Federal,’’ is almost identical to the language in the Red
Cross charter. However, the F.D.1.C. charter contains subsequent
language, referenced by the Supreme Court in D’Oench, 315 U.S.
at 455, which expressly confers federal jurisdiction on the F.D.1.C.
12 U.S.C. § 1819 (1935) provided:

‘‘To sue and be sued, complain and defend, in
any court of law or equity, State or Federal. All

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Appendix D

suits of a civil nature at common law or in equity
to which the Corporation shall be a party shall
be deemed to arise under the laws of the United
States, and the United States district courts shall
have original jurisdiction thereof, without regard
to the amount in controversy; and the Corporation
may .. remove any such action, suit, or
proceeding from a State court to the United States
district court.’”’

It is this subsequent language that creates the right to removal
to federal court of actions against the F.D.1.C.* Thus, it is obvious
that Congress knew how to create original jurisdiction in the
F.D.1.C. in 1935. Yet, Congress did not specifically include this
type of language in the Red Cross charter’s amendment in 1947.
Absent similar language specifically conferring federal jurisdiction
upon the Red Cross, the Court finds that 36 U.S.C. § 2 was merely
a grant of corporate authority and not an explicit creation of
federal jurisdiction.

3. 12 U.S.C. § 1819 presently reads:

(b 2A). . . all suits of a civil nature at common law
or in equity to which the Corporation, in any Capacity, is
a party shall be deemed to arise under the laws of the United
States.

(b)(2)(B) . . the Corporation may . . . remove any
action, suit, Or proceeding from a State court to the
appropriate United States district court.

Section D of the statute specifies actions in which the FDIC would not
have federal jurisdiction.

4. See Jeanne, et al. v. The Hawkes Hospital of Mt. Carmel, et al., No.
C-2-87-509 (S.C. Ohio 1988).

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Appendix D

The defendants argue that the subsequent language in the
F.D.I.C. charter was not necessary to confer jurisdiction and that
the language used in Osborn should be considered to be the
minimum language required. However, the Court finds that the
language used in the Red Cross charter does not even meet the
minimum requirements of Osborn. At the time the charter in
Osborn was written, circuit courts of the United States were the
federal courts of original jurisdiction and the charter stated that
the bank shall be able to sue and be sued ‘‘in any circuit court
of the United States.’’ Unlike the charter in Osborn, the Red Cross
charter does not specify that the Red Cross shall be able to sue
or be sued in federal courts of original jurisdiction. If the Court
interpreted the Red Cross charter as the defendant suggests it
should, the Red Cross would also be permitted to sue or be sued
in the Supreme Court, a Circuit Court of Appeals, or the Claims
Court, which are federal courts of law and equity.* The Court
refuses to adopt this interpretation.

The defendant also urges the Court to rely on legislative
history that it asserts supports a finding that 36 U.S.C. § 2 confers
federal jurisdiction. Specifically, the defendant cites to a report
by a Red Cross advisory committee, the ‘Harriman Committee.”’
S. Rep. No. 38, 80th Cong., Ist Sess. 1 (1947); H.R. Rep. No.
337, 80th Cong., Ist Sess. 6 (1947). However, contrary to the
defendant’s assertion, Recommendation No. 22 does not make
clear that the purpose of the clause was to confer original
jurisdiction upon the Red Cross solely as a result of this statute.
Instead, the recommendation simply reiterates the power of the
Red Cross as a corporation to sue and be sued, similar to any
other litigant, in the federal courts if federal jurisdiction applies,

5. See Boutar v. American Red Cross, No. 90-3155 (D.D.C. April 9, 1991).

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Appendix D

such as in the instance of diversity or the presence of a federal
question.

In addition, as pointed out by the court in Walton v. Howard
University, 683 F. Supp. 826, 829 (D.D.C. 1987), the Senate
hearing on the charter amendments does not indicate that the
committee intended to grant original federal jurisdiction for suits
involving the Red Cross. See American National Red Cross:
Hearing on S. 591 Before the Senate Comm. on Foreign Relations,
80th Cong., Ist Sess. 7-11 (1947). Instead, the discussion centered
on the issue of whether the provision actually limited the corporate
powers of the Red Cross by not giving it the ability to litigate
in foreign courts.

Based upon the foregoing reasons, the Court finds that 36
U.S.C. § 2 is merely a grant of corporate power. It does not
explicitly confer federal jurisdiction upon the Red Cross as is
required under Osborn. At the time the amendment was added,
Congress was well aware of the subsequent language referred to
in D’Oench, which explicitly conferred federal jurisdiction upon
the F.D.1.C. Congress chose not to use this language. Therefore,
this Court agrees with Judge Penn and Judge Harold Greene that
Original jurisdiction is not conferred on the Red Cross by means
of its charter. The opinion from the United States Court of Appeals
for the Eighth Circuit, Kaiser v. Memorial Blood Center, supra,
which does not state the reasons for its conclusions, does not
persuade this Court otherwise.

it is therefore ORDERED that the Motion to Remand is
GRANTED.

Dated: May 10, 1991

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Appendix D

s/ George H. Revercomb
George H. Revercomb
United States District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0196%3A03. Public record. Not legal advice.