Doe v. American National Red Cross

845 F. Supp. 1152, 1994 U.S. Dist. LEXIS 3006, 1994 WL 71491
CourtDistrict Court, S.D. West Virginia
DecidedFebruary 25, 1994
DocketCiv. A. 2:92-1061
StatusPublished
Cited by8 cases

This text of 845 F. Supp. 1152 (Doe v. American National Red Cross) is published on Counsel Stack Legal Research, covering District Court, S.D. West Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Doe v. American National Red Cross, 845 F. Supp. 1152, 1994 U.S. Dist. LEXIS 3006, 1994 WL 71491 (S.D.W. Va. 1994).

Opinion

MEMORANDUM OPINION AND ORDER

HADEN, Chief Judge.

Pending is a motion to strike plaintiffs’ jury demand and for judgment on the pleadings as to plaintiffs’ demand for punitive damages, filed by Defendant American National Red Cross (“ARC”). Plaintiffs brought this state-law tort action against ARC in the Circuit Court of Kanawha County, West Virginia, alleging inter alia that Plaintiff Jason Doe, an infant, was infected with the Human Immunodeficiency Virus (“HIV”) by a transfusion during surgery of contaminated blood supplied by ARC. Defendants removed the action to this Court based on American National Red Cross v. S.G., — U.S. -, 112 S.Ct. 2465, 120 L.Ed.2d 201 (1992), where the Supreme Court held the “sue and be sued” clause in ARC’s charter 1 confers federal jurisdiction over cases involving ARC. Id. at-, 112 S.Ct. at 2472.

ARC contends that although Congress permits it to “sue and be sued,” the corporation’s status as an “instrumentality of the United States” cloaks it in sovereign immunity and shields it from jury trials and punitive *1153 damages. 2 A number of district courts have agreed with ARC’s analysis. E.g., Berman v. American National Red Cross, 834 F.Supp. 286, 291-92 (N.D.Ind.1993); Johnson v. Hosp. of Medical College of Pa., 826 F.Supp. 942, 945 (E.D.Pa.1993); Barton v. American Red Cross, 826 F.Supp. 412, 415 (M.D.Ala,1993). 3 This Court does not. For reasons that follow, the Court DENIES ARC’s motion.

I.

ARC’s contention it shares the shield of sovereign immunity is grounded largely on Lehman v. Nakshian, 453 U.S. 156, 101 S.Ct. 2698, 69 L.Ed.2d 548 (1980). The Lehman Court restated the longstanding principle that the Seventh Amendment right to trial by jury does not apply in actions against the federal government, and held the United States, as sovereign, waives its immunity from jury trial only where such a waiver is “unequivocally expressed” as a term of the government’s consent to be sued. Id. at 160-61, 101 S.Ct. at 2701-02.

ARC employs the Lehman decision, as did the courts in Berman, Johnson, and Barton, as the foundation for its conclusion that the “sue and be sued” provision in ARC’s charter does not completely waive ARC’s sovereign immunity; ARC argues that because its “sue and be sued” clause contains no specific and unequivocal waiver of immunity from trial by jury and punitive damages, it is immune by virtue of residual immunity from all but “those things necessary to commence and maintain a legal proceeding to permit full compensation.” Barton, 826 F.Supp. at 414-15.

This analysis of Lehman derives primarily from the decision in Young v. United States Postal Service, 698 F.Supp. 1139 (S.D.N.Y. 1988). In Young, the court struck the jury demand of a former postal clerk in a wrongful discharge action against the postal service, holding based on Lehman that because the postal.service’s “sue and be sued” clause does not mention a jury trial, Congress did not “affirmatively and unambiguously” provide for such a right. The Second Circuit later denied plaintiff’s petition for mandamus on the jury trial issue “for substantially the reasons stated in Judge Carter’s comprehensive opinion____” In re Young, 869 F.2d 158, 159 (2d Cir.1989).

The Barton and Johnson courts relied on Young en route to their conclusion that ARC’s “sue and be sued” provision left intact enough sovereign immunity to protect the corporation from jury trial. Barton, 826 F.Supp. at 414-15; Johnson, 826 F.Supp. at 944-45. The Berman court also referenced Young, as well as Barton and Johnson. Berman, 834 F.Supp. at 290, 292. No other court has cited Young in a published opinion.

II.

The Court need not quarrel with ARC’s claimed status as a quasi-governmental entity. 4 The Supreme Court in Dept. of Employ *1154 ment v. United States, 385 U.S. 355, 359-60, 87 S.Ct. 464, 467-68, 17 L.Ed.2d 414 (1966), noted that “both the President and the Congress have recognized and acted in reliance upon the Red Cross’ status virtually as an arm of the Government.” In that decision, the Court concluded “[although there is no simple test for ascertaining whether an institution is so closely related to governmental activity to become a tax-immune instrumentality, the Red Cross is clearly such an instrumentality.” 5 Id. at 358-59, 87 S.Ct. at 466-67. More recently, in American National Red Cross v. S.G., — U.S.-, 112 S.Ct. 2465, 120 L.Ed.2d 201 (1992), a case similar factually to this one, the Court held the “sue and be sued” clause in ARC’s charter “confers original jurisdiction on federal courts over all cases to which the Red Cross is a party, with the consequence that the organization is thereby authorized to removal from state to federal court of any state-law action it is defending.” Id. at-, 112 S.Ct. at 2467.

The issue before the Court is narrow: is the right to jury trial and to assert punitive damages encompassed within the “sue and be sued” provision in ARC’s charter? The issues are of first impression in this District and Circuit.

The Supreme Court has interpreted “sue and be sued” clauses on numerous occasions. In Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381, 59 S.Ct. 516, 83 L.Ed. 784 (1939), the seminal case, the Court addressed whether a subsidiary corporation established by the Reconstruction Finance Corporation (“RFC”), itself a federally chartered corporation, was shielded from suit by sovereign immunity.

RFC’s congressional charter included a “sue and be sued” clause similar to that in ARC’s charter. The Court held that even though Congress did not include in legislation authorizing RFC to incorporate subsidiaries a provision permitting the subsidiaries to sue and be sued, Congress’ firm practice of allowing federally chartered corporations to sue and be sued “reveals a definite attitude on the part of Congress which should be given hospitable scope.” Id. at 391, 59 S.Ct. at 519.

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Cite This Page — Counsel Stack

Bluebook (online)
845 F. Supp. 1152, 1994 U.S. Dist. LEXIS 3006, 1994 WL 71491, Counsel Stack Legal Research, https://law.counselstack.com/opinion/doe-v-american-national-red-cross-wvsd-1994.