Kaiser v. Memorial Blood Center of Minneapolis, Inc.

• Decision Date: 20 June 1991
• Docket Number: No. 89-5533,89-5533
• Citation: 938 F.2d 90
• Parties: Patty C. KAISER and James Kaiser, Appellants, v. MEMORIAL BLOOD CENTER OF MINNEAPOLIS, INCORPORATED; and American Red Cross, a Minnesota corporation, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 90

938 F.2d 90

60 USLW 2107

Patty C. KAISER and James Kaiser, Appellants, v. MEMORIAL BLOOD CENTER OF MINNEAPOLIS, INCORPORATED; and American Red Cross, a Minnesota corporation, Appellees.

No. 89-5533.

United States Court of Appeals Eighth Circuit.

Submitted Sept. 12, 1990.

Decided April 10, 1991.

Ordered Published June 20, 1991.

Sharon Van Dyck, Minneapolis, Minn., for appellants.

Kay Nord Hunt, Minneapolis, Minn., and Louis Bograd, Washington, D.C. (William Studer and Patrick Diamond, St. Paul, Minn., Bruce Chadwick, Marie O'Connell and Karen Lipton, Washington, D.C., on brief), for appellees.

McMILLIAN and BOWMAN, Circuit Judges, and BRIGHT, Senior Circuit Judge.

ORDER FOR CERTIFICATION

McMILLIAN, Circuit Judge.

This appeal involves application of Minnesota statutes of limitations in a new context. Plaintiffs Patty C. Kaiser and James Kaiser, wife and husband, appeal from a final order entered in the District Court ¹ for the District of Minnesota granting summary judgment in favor of defendants Memorial Blood Center of Minneapolis, Inc. (Memorial), and the American Red Cross (Red Cross). Kaiser v. Memorial Blood Center of Minneapolis, Inc., 721 F.Supp. 1073 (D.Minn.1989). For reversal, plaintiffs raise jurisdiction and statute of limitations issues. Because federal jurisdiction is a threshold issue, it was necessary to resolve that issue, and we hold that there is federal jurisdiction pursuant to the Red Cross charter. However, for the reasons discussed below, we have decided to certify certain questions to the Minnesota Supreme Court, pursuant to the Minnesota certification provisions, Minn.Stat.Ann. Sec. 480.061 (West Supp.1990).

BACKGROUND FACTS

The historical facts are not in dispute, and the following factual statement is taken in large part from the district court's orders. The Kaisers are Minnesota residents. Dr. Jeffrey McCullough is the director of blood services for the St. Paul Region of the Red Cross. He is a licensed physician and he is certified in the specialty of clinical pathology and in the subspecialty of blood banking. The St. Paul Region employs five other licensed physicians. These physicians advise other doctors about transfusions and supervise the nurses and other medical personnel who collect and screen the blood and blood components.

Memorial is licensed by the Food and Drug Administration, the Centers for Disease Control and the Health Care Finance Administration. Its director, Dr. Herbert F. Polesky, is a licensed physician who, like Dr. McCullough, is certified in the specialty of clinical pathology and the subspecialty of blood banking. Memorial employs nurses and laboratory technicians to perform the various procedures required in blood banking.

On November 4, 1984, Patty Kaiser underwent surgery at a local hospital. After surgery she experienced internal bleeding and received two units of packed red blood cells on November 8, 1984. The blood components used in her transfusion had been collected by the St. Paul Region of the Red Cross. The Red Cross sent the units to During the spring of 1987 Patty Kaiser saw a television program that advised persons who had received blood transfusions to be tested for the human immunodeficiency virus (HIV). HIV causes acquired immune deficiency syndrome (AIDS). She had her blood tested and on April 7, 1987, she was told that she was HIV-positive.

Memorial which reconfirmed the blood group and type and stored them until their delivery to the hospital. Patty Kaiser recovered from the surgery and was released from the hospital on November 12, 1984.

DISTRICT COURT PROCEEDINGS

On September 1, 1988, plaintiffs filed this negligence action in state court against Memorial and the Red Cross alleging that Patty Kaiser had contracted HIV as a result of the blood transfusion she received on November 8, 1984. They alleged that Memorial and the Red Cross knew about AIDS and therefore had a duty to protect the recipients of blood and blood products from that threat. Plaintiffs alleged Memorial and the Red Cross should have accepted only donors at low risk for AIDS, screened blood collected for HIV, and warned other members of the medical profession and the general public about the risk of AIDS transmission through blood and blood products. The Red Cross removed the case to federal district court on the grounds that the Red Cross charter, 36 U.S.C. Sec. 2, conferred federal subject matter jurisdiction. Plaintiffs sought remand on the grounds that the charter merely gave the Red Cross the capacity to litigate. The district court denied the motion to remand, holding that the Red Cross charter did confer federal subject matter jurisdiction. Kaiser v. Memorial Blood Center of Minneapolis, Inc., 724 F.Supp. 1255, 1256 (1989), citing Anonymous Blood Recipient v. Sinai Hospital, 692 F.Supp. 730 (E.D.Mich.1988).

The Red Cross then moved for summary judgment on the grounds that, for statute of limitations purposes, independent blood banks are "health care professionals" and, as such, negligence actions against them are governed by the two-year statute of limitations set forth in Minn.Stat.Ann. Sec. 541.07(1) (West Supp.1990). Memorial joined the motion for summary judgment filed by the Red Cross and also moved for summary judgment on the grounds that it was not negligent because it had complied with all blood banking industry regulations and standards in effect in 1984. Plaintiffs opposed the motions for summary judgment. The district court held that the two-year statute of limitations for medical malpractice actions, Minn.Stat.Ann. Sec. 541.07(1), was applicable to plaintiffs' action against the Red Cross and Memorial. 721 F.Supp. at 1075-76. The district court also held that the two-year statute of limitations was not tolled by the special discovery exception adopted by the Minnesota Supreme Court in DeCosse v. Armstrong Cork Co., 319 N.W.2d 45, 52 (Minn.1982) (banc), for asbestos-related wrongful death actions. 721 F.Supp. at 1077. The district court granted summary judgment in favor of the Red Cross and Memorial on statute of limitations grounds, and this appeal followed.

ORIGINAL FEDERAL JURISDICTION

The threshold issue is federal jurisdiction. "[E]very federal appellate court has a special obligation to 'satisfy itself not only of its own jurisdiction, but also that of the lower courts in a cause under review,' even though the parties are prepared to concede it." Alumax Mill Products, Inc. v. Congress Financial Corp., 912 F.2d 996, 1002 (8th Cir.1990) (citation omitted); see Lewis v. Windsor Door Co., 926 F.2d 729, 731 (8th Cir.1991). Plaintiffs first argue the district court erred in holding that the Red Cross charter granting it the power to sue and be sued in state and federal courts conferred original federal jurisdiction and that the Red Cross was thus entitled to remove their action to federal court under 28 U.S.C. Sec. 1441(a). In plaintiffs' view, the Red Cross charter language only granted the Red Cross the capacity to litigate and did not grant original federal jurisdiction. More than twenty district courts have decided this precise issue, and they have split almost evenly. Compare Roche v. American Red Cross, 680 F.Supp. 449 (D.Mass.1988) (holding no federal jurisdiction), with We also find Judge Gilmore's analysis persuasive. The landmark case on the construction of "sue and be sued" clauses is Osborn v. President, Directors and Co. of the Bank of the United States, 22 U.S. (9 Wheat.) 738, 6 L.Ed. 204 (1824). The national bank charter gave the bank the right to "sue and be sued ... in all state courts having competent jurisdiction, and in any circuit court in the United States." The Supreme Court, per Chief Justice Marshall, held that this language was a congressional grant of federal jurisdiction in all cases in which the national bank was a party. Id. at 817-18. But cf. Bankers Trust Co. v. Texas & Pacific Ry., 241 U.S. 295, 302-06, 36 S.Ct. 569, 569-71, 60 L.Ed. 1010 (1916) (holding similar railroad...