Doe v. American Nat. Red Cross

• Decision Date: 30 March 1994
• Docket Number: No. 91-C-0897-C.,91-C-0897-C.
• Citation: 847 F. Supp. 643
• Parties: Jane DOE, individually and as Administratrix of the Estate of John Doe, Plaintiff, v. The AMERICAN NATIONAL RED CROSS, a corporation, Defendant.
• Court: U.S. District Court — Western District of Wisconsin

847 F. Supp. 643

Jane DOE, individually and as Administratrix of the Estate of John Doe, Plaintiff, v. The AMERICAN NATIONAL RED CROSS, a corporation, Defendant.

No. 91-C-0897-C.

United States District Court, W.D. Wisconsin.

March 30, 1994.

Joseph D. Becker, Sauer, Becker, Flanagan & Lynch, La Crosse, WI, for John and Jane Doe, and State of Wis. Health Benefit Plan.

Donald K. Schott, Quarles & Brady, Madison, WI, for the American Nat. Red Cross.

OPINION AND ORDER

CRABB, Chief Judge.

This is a civil action in which plaintiff is suing for actual and punitive damages resulting allegedly from defendant's negligence in the screening of donors and donated blood. Plaintiff alleges that her husband contracted the Human Immunodeficiency Virus on December 27, 1983, after receiving a post-surgical transfusion of donated blood supplied by defendant. Diversity jurisdiction is present. 28 U.S.C. § 1332.

In an earlier order, I determined that the Supreme Court of Wisconsin would find defendant a health care provider, against whom a suit must be brought within three years of the date of injury or within one year of the date of discovery of the injury. I dismissed the suit on defendant's motion for summary judgment because the time for filing a suit against a health care provider had expired before plaintiff brought this action. 796 F.Supp. 395. On appeal, the Court of Appeals for the Seventh Circuit certified the question of the characterization of defendant to the Supreme Court of Wisconsin, 976 F.2d 372, which found that defendant was not a health care provider under Wisconsin law. 176 Wis.2d 610, 500 N.W.2d 264. On November 22, 1993, the court of appeals reversed the grant of summary judgment and remanded the case to this court for further proceedings. 9 F.3d 1293. The case is before the court on defendant's motions 1) for judgment on the pleadings with respect to plaintiff's demand for punitive damages; 2) to strike plaintiff's demand for trial by jury; and 3) for summary judgment on the ground that the case is barred by the applicable statute of limitations.

Defendant contends that although it is a federal instrumentality, authorized by Congress to sue and be sued, it has sovereign immunity from both punitive damages and trial by jury. I conclude that defendant misconstrues the scope of the waiver of its immunity and that it has failed to show either that having to try this case to a jury would be a "grave interference" with the performance of its governmental functions or that Congress intended to narrow the waiver of defendant's immunity. However, I conclude that subjecting defendant to an award of punitive damages would interfere unduly with defendant's ability to carry out its governmental functions. Also, I conclude that defendant is not entitled to summary judgment on its claim that the applicable statute of limitations has run. Plaintiff's suit was filed timely under Wisconsin law, which supplies the applicable statute of limitations.

Motions to Strike and for Judgment on the Pleadings

I begin with the undisputed proposition that defendant is an instrumentality of the United States. "Both the President and the Congress have recognized and acted in reliance upon the Red Cross' status virtually as an arm of the Government." Department of Employment v. United States, 385 U.S. 355, 359-60, 87 S.Ct. 464, 467, 17 L.Ed.2d 414 (1966). The corporation is chartered by the United States, 36 U.S.C. § 1; its head and seven of its governors are chosen by the President of the United States, 36 U.S.C. § 5; its budget is audited by the Department of Defense, 36 U.S.C. §§ 6 and 7; it occupies a building built for it and owned by the United States, 36 U.S.C. § 13; and it enjoys immunity from state and city taxes, Department of Employment, 385 U.S. 355, 87 S.Ct. 464, 17 L.Ed.2d 414; United States v. Spokane, 918 F.2d 84 (9th Cir.1990). Defendant was given the authority "to sue and be sued in courts of law and equity within the jurisdiction of the United States" in 1905. Act of Jan. 5, 1905, ch. 23, § 2, 33 Stat. 600. See American National Red Cross v. S.G., ___ U.S. ___, ___, 112 S.Ct. 2465, 2468, 120 L.Ed.2d 201 (1992).

The parties agree that the enactment of the sue and be sued clause waived defendant's sovereign immunity. They disagree solely as to the extent of the waiver. Plaintiff contends that the waiver was complete; defendant contends that the waiver operates only to waive defendant's immunity from the "natural and appropriate incidents of legal proceedings," Loeffler v. Frank, 486 U.S. 549, 555, 108 S.Ct. 1965, 1969, 100 L.Ed.2d 549 (1988), which do not include the right to a jury trial or an award of punitive damages. According to defendant, the natural and appropriate incidents of legal proceedings "include only those things necessary to commence and maintain a legal proceeding to permit full compensation." Barton v. American Red Cross, 826 F.Supp. 412, 414-15 (M.D.Ala.1993).

Defendant relies on Lehman v. Nakshian, 453 U.S. 156, 168, 101 S.Ct. 2698, 2705, 69 L.Ed.2d 548 (1981), for the proposition that whenever Congress waives sovereign immunity from suit, the United States and its instrumentalities remain immune from other aspects of civil proceedings, such as jury trials and punitive damages, unless Congress waives this special immunity "affirmatively and unambiguously." But Lehman did not hold that waiver through a sue and be sued clause is the same kind of waiver as the United States has effected for itself and its agencies in specific instances, such as in the Federal Tort Claims Act, the extension to federal employees of the remedies of Title VII or the Age Discrimination in Employment Act. In Lehman, the Supreme Court held that plaintiffs did not have the right to a jury trial in age discrimination suits brought against the Department of the Navy. The Court found it determinative that Congress had made no explicit provision for jury trial in the age discrimination legislation; if Congress waives the government's immunity from suit, the plaintiffs have a right to a jury trial "only where that right is one of `the terms of the Government's consent to be sued.'" Id. (quoting United States v. Testan, 424 U.S. 392, 399, 96 S.Ct. 948, 953, 47 L.Ed.2d 114 (1976)). The Court added that when Congress waives the sovereign immunity of the United States, "it has almost always conditioned that waiver upon a plaintiff's relinquishing any claim to a jury trial." Id. at 161, 101 S.Ct. at 2702.

By contrast, the Court has described the waiver of sovereign immunity effected by a sue and be sued clause as a waiver that

"should be liberally construed.... If the general authority to `sue and be sued' is to be delimited by implied exceptions, it must be clearly shown that certain types of suits are not consistent with the statutory or constitutional scheme, that an implied restriction of the general authority is necessary to avoid grave interference with the performance of the governmental function, or that for other reasons it was plainly the purpose of Congress to use the `sue and be sued' clause in a narrow sense."

Loeffler v. Frank, 486 U.S. 549, 554, 108 S.Ct. 1965, 1969, 100 L.Ed.2d 549 (1988) (quoting Federal Housing Admin. v. Burr, 309 U.S. 242, 245, 60 S.Ct. 488, 490, 84 L.Ed. 724 (1940)). In a series of decisions, the Court has held that federal instrumentalities similar to the Red Cross with authority to sue and be sued are subject to such incidents of suit as prejudgment interest, Loeffler v. Frank, 486 U.S. 549, 108 S.Ct. 1965; are required to honor garnishment orders issued by state courts, FHA v. Burr, 309 U.S. 242, 60 S.Ct. 488; are required to withhold delinquent state taxes from their employees' salaries and are subject to state administrative proceedings, Franchise Tax Board of California v. USPS, 467 U.S. 512, 104 S.Ct. 2549; are subject to suits in tort, Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381, 59 S.Ct. 516, 83 L.Ed. 784 (1939); are responsible for court costs in the same manner as any private litigant, Reconstruction Finance Corp. v. J.G. Menihan Corp., 312 U.S. 81, 61 S.Ct. 485, 85 L.Ed. 595 (1941), and are not immune from claims of equitable estoppel, Portmann v. United States, 674 F.2d 1155, 1167-69 (7th Cir.1982).

The federal courts have considered the specific question of the availability of jury trials in suits against federal instrumentalities in only a handful of published decisions. The results are mixed. In various actions against the Tennessee Valley Authority, one court has held that a right to jury trial exists in a suit over a contract dispute in the absence of any showing that Congress intended to deny the complaining party this right, Algernon Blair Industrial Contractors, Inc. v. TVA, 552 F.Supp. 972, 973-74 (M.D.Ala. 1982), while another district court has held to the contrary. Jones-Hailey v. Corporation of TVA, 660 F.Supp. 551, 553 (E.D.Tenn. 1987). In a suit against the United States Postal Service, the Court of Appeals for the Second Circuit denied a motion for a writ of mandamus brought by the plaintiff to require the district court to grant her request for a jury in her wrongful discharge suit against the postal service for reinstatement and back pay. In re Young, 869 F.2d 158 (2d Cir. 1989) (per curiam). The district court had held that a jury trial was not available in suits against the postal service in the absence of a showing that the Postal Reorganization Act, Act of Aug. 12, 1970, Pub.L. No. 91-375, 84 Stat. 719, codified at 39 U.S.C. § 101, had conferred such a right "clearly and unequivocally." Young v. United States Postal Service, 698 F.Supp. 1139, 1143 (S.D.N.Y.1988) (quoting Griffin v. United States Postal Service, 635 F.Supp. 190 (N.D.Ga.1986)). (The court did not discuss whether plaintiff's demand for purely equitable relief would have entitled her to a jury in any event.) In a suit against the Federal Land Bank Association, the...