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December 29, 1989


Louis H. Pollak, United States District Judge.

The opinion of the court was delivered by: POLLAK

Jane Doe and her husband, John Doe, brought suit in the Philadelphia Court of Common Pleas against Thomas Jefferson Hospital, the Cardeza Foundation (an "entity established for the purpose of providing medical care and service and who through their physicians and/or staff rendered treatment and care to Jane Doe"), two physicians who treated Ms. Doe at Thomas Jefferson Hospital, and the Red Cross. *fn1" Jane and John Doe's complaint alleges that on November 14, 1984, at Thomas Jefferson Hospital, (1) Ms. Doe gave birth to a baby boy by caesarean section; (2) Ms. Doe received two blood transfusions, one before and one in the course of the delivery; (3) in 1987, Ms. Doe was diagnosed as having AIDS; (4) Ms. Doe "contracted AIDS solely and exclusively from the blood she received at Thomas Jefferson Hospital prior to and during her surgery;" (5) the Red Cross was the supplier of the contaminated blood; and (6) Jane and John Doe are, on a variety of legal theories, entitled to damages for injuries each has suffered because of the negligent acts and omissions of the several defendants.

 Contending that the lawsuit is one falling within the original jurisdiction of federal district courts, the Red Cross, a federally-chartered corporation domiciled in Washington, D.C., has (with the consent of all the other defendants) removed the suit to this court. Urging that federal courts are without jurisdiction of a case of this kind, the plaintiffs have moved, pursuant to 28 U.S.C. § 1447(c), that the case be remanded to Common Pleas.


 Red Cross' contention that this is a removable lawsuit is not based on diversity of citizenship: although there is diversity as between the Washington-based Red Cross and the Does, who are Pennsylvanians, the defendants other than the Red Cross are also Pennsylvanians. See Strawbridge v. Curtiss, 7 U.S. 267, 3 Cranch 267, 2 L. Ed. 435 (1806). Nor is the Red Cross contending that any of the plaintiffs' substantive claims is a cause of action embodying some element of federal law: to the contrary, the torts alleged are unalloyedly Pennsylvania torts. What the Red Cross is relying on is a phrase in the Red Cross Act, the 1905 statute, amended in 1947, which chartered the Red Cross and delineated its powers. The crucial phrase appears in the opening clause of 36 U.S.C. § 2:

The name of this corporation shall be "The American National Red Cross," and by that name it shall have perpetual succession, 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 very issue -- the removability to a federal district court of a suit against the Red Cross arising out of a transfusion of allegedly AIDS-infected blood -- has been addressed in fifteen other cases. Eight motions to remand have been granted; seven have been denied. *fn2"


 If Congress so intends, it apparently has power to vest in federal district courts, and other courts established pursuant to Article III of the Constitution, jurisdiction over any case to which the Red Cross, or any other federally chartered corporation, is a party, without regard to the nature of the case. Such a case would be deemed cognizable by a federal court as one "arising under this Constitution, [and] the laws of the United States," within the meaning of Article III. The line of authority for supposing that such a grant of jurisdiction would pass constitutional muster traces back to Chief Justice Marshall's opinion for the Supreme Court in Osborn v. United States.3

 In Osborn, Marshall, in 1824, sustained the authority of an Ohio federal circuit court to entertain a suit brought by the Second Bank of the United States to enjoin the Auditor of Ohio from levying on Bank assets to collect a tax imposed in alleged contravention of the Bank immunity from state taxation that Marshall had announced five years earlier in McCulloch v. Maryland.4 When Osborn was decided, the district and circuit courts were not vested with any general federal-question jurisdiction; *fn5" in the absence of a particular statutory provision linking federal jurisdiction to a particular litigant or category of issues, federal questions usually did not get into federal courts except on writs of error to the Supreme Court from the highest courts of the states, *fn6" as in McCulloch. Marshall, in Osborn, keyed the circuit court's federal-question jurisdiction to a provision in the Bank's charter giving the Bank authority "to sue and be sued, plead and be impleaded, answer and be answered, defend and be defended, in all state courts having competent jurisdiction, and in any circuit court of the United States." Because this language -- unlike the "sue and be sued" language in the charter of the First Bank of the United States, construed by Marshall in Bank of the United States v. Deveaux7 -- expressly referred to the federal courts ("every circuit court of the United States"), Marshall concluded that Congress had intended the charter provision to be jurisdictional: ". . . it would be difficult," he said, "to substitute other terms which would be more direct and appropriate for the purpose." *fn8" Having drawn the inference -- an arguable inference, to be sure, but hardly an overwhelming one -- that the charter language was meant to confer jurisdiction, Marshall undertook to demonstrate that any case involving the Bank was a federal-question case: "Take the case of a contract, which is put as the strongest case against the bank. When a bank sues, the first question which presents itself, and which lies at the foundation of the case, is, has this legal entity a right to sue? Has it a right to come, not into this court particularly, but into any court? This depends on a law of the United States. The next question is, has this being a right to make this particular contract? . . . . The case arises emphatically under the law; the act of congress is its foundation. The contract could never have been made, but under the authority of that act. . . . That other questions may also arise, as the execution of the contract, or its performance, cannot change the case, or give it any other origin than the charter of incorporation." *fn9"

 Marshall's construction of Article III was spacious -- far broader than the case before him -- but it surely was so intended, and hence it has never been thought to be dismissible as dictum. *fn10" To the contrary, the Court in the fullness of time built upon Osborn, extending it beyond Marshall's own horizon, with the result that, early in this century, Congress felt called on to curtail an extension of federal jurisdiction for which there seemed no warrant in sound judicial administration. The story is well told in a perceptive article written over half a century ago:

The opinion was an achievement characteristic of Marshall. If the Act did permit the Bank to sue in the courts of the United States, the specific case before the Court was clearly one arising under the Constitution because the plaintiff invoked a constitutional right which was alleged to have been violated by the defendant. No more had to be decided to dispose of the actual case. But Marshall was apparently anxious to establish the validity of a grant of federal jurisdiction in any suits by or against the Bank on ordinary commercial transactions. This concern is easily understandable. The Government was interested as an owner in the Bank and the Bank was performing governmental service. Moreover, the Bank was the object of great popular hatred and of measures of reprisal by many state legislatures. It was sadly in need of a federal haven for its litigation. The doctrinal channel leading to that haven was quite obvious, once discovered. Whatever the claim it made, a suit by the Bank raised a federal question; for in any suit, the capacity of the Bank to sue, its capacity to contract or to own property, was an issue to be decided or assumed in the Bank's favor. These ever-present federal questions were sufficient to sustain constitutionality, once it was decided that Congress did grant jurisdiction of that scope. They were sufficient to tinge any case by the Bank with federal color so as to enable a federal court to deal with all its "questions of fact or law."
In the Pacific Railroad Removal Cases [115 U.S. 1, 5 S. Ct. 1113, 29 L. Ed. 319], decided in 1885, the Court applied the doctrine to what may seem to be a similar situation abstractly, but certainly not practically. The suits were ordinary actions for personal injuries against a railroad incorporated under a federal act. The railroad was permitted to invoke federal jurisdiction, by removal, because, as in the Osborn case, the federal act giving the railroad legal life and capacities was at the foundation of any suit by or against it. The railroad was owned privately. It was performing no governmental functions. There was no comparable need of a federal forum. The issue was not whether under the Constitution Congress was authorized to grant federal jurisdiction to a federal corporation by a special act which was taken to have granted it. The issue was, rather, whether in a general grant of federal jurisdiction, by the Act of 1875, in cases arising under the laws of the United States, Congress included the special case of litigation by federal corporations actually involving no disputed federal claim. The decision in these Cases in ...

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