Luckett v. Harris Hospital-Fort Worth

Citation764 F. Supp. 436
Decision Date21 June 1991
Docket NumberNo. Civ. A. 4-91-124-A.,Civ. A. 4-91-124-A.
PartiesJames O. LUCKETT, Janice Luckett, Individually and in behalf of their minor daughter, Jania Luckett, Plaintiffs, v. HARRIS HOSPITAL-FORT WORTH, et al., Defendants.
CourtUnited States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Texas

Lowell Edward Dushman, Jack A. Friedman, Dushman & Friedman, P.C., Fort Worth, Tex., for plaintiffs.

Rod Patterson, Cantey & Hanger, Fort Worth, Tex., Billie Ballangee, Cowles & Thompson, Dallas, Tex., Maxine M. Harrington, Gould Broude & Nelson, Fort Worth, Tex., James Bruce Warren, Sharla J. Frost, Andrea M. Johnson, Holtzman & Urquhart, Houston, Tex., Bruce M. Chadwick, Mary B. De Rosa, Arnold & Porter, Edward Wolf, Associate General Counsel, Washington, D.C., for defendants.

MEMORANDUM OPINION AND ORDER

McBRYDE, District Judge.

Came on to be considered the above-styled and numbered action. Having examined the record as a whole, the court has concluded that, for the reasons stated below, this action should be remanded to the state court from which it was removed.

I. Background

After commencing this action in state court on December 11, 1990, plaintiffs, James O. Luckett and Janice Luckett, individually and in behalf of their minor daughter, Jania Luckett, filed their second amended original petition on January 17, 1991, naming as defendants, American Red Cross Blood Services — Red River Region, American Red Cross National Headquarters (collectively referred to as the "Red Cross"), Harris Hospital-Fort Worth, Carter Blood Center, James Watts, M.D., and Gulf Coast Regional Blood Center. Plaintiffs allege that defendants negligently gave Janice Luckett and her minor daughter, Jania Luckett, blood contaminated with the Human Immunodeficiency Virus ("HIV").1 Thereafter, on February 19, 1991, the Red Cross filed a notice of removal alleging that federal subject matter jurisdiction exists pursuant to 36 U.S.C. § 2 and, therefore, the Red Cross is entitled to remove this action under 28 U.S.C. § 1441. On April 25, 1991, the court, after reviewing the record sua sponte, allowed the parties to submit memoranda addressing the issue of subject matter jurisdiction. Submissions were filed on behalf of the Red Cross and plaintiffs. The court notes that diversity jurisdiction does not exist nor does this case present a substantive federal question.

II. Lack of Subject Matter Jurisdiction

Subject matter jurisdiction is the legal authority of a court to hear and decide a particular type of case. Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction over the subject matter, it must decline to exercise jurisdiction. Fed.R.Civ.P. 12(h). Furthermore, inasmuch as federal courts are courts of limited jurisdiction, Owens Equipment & Erection Co. v. Kroger, 437 U.S. 365, 374, 98 S.Ct. 2396, 2403, 57 L.Ed.2d 274 (1978), there is a presumption against federal court jurisdiction. See McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936). The party seeking to invoke federal jurisdiction has the burden of proof to demonstrate that subject matter jurisdiction does exist. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 37, 66 L.Ed. 144 (1921); McNutt, 298 U.S. at 189, 56 S.Ct. at 785. With these principles in mind, the court turns to a consideration of the jurisdiction issue.

Subject matter jurisdiction of this court is premised on 36 U.S.C. § 2, which provides in relevant part:

§ 2. Name of corporation; powers
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;....

The Red Cross maintains that by virtue of this clause "federal subject matter jurisdiction is conferred upon the Red Cross." See Notice of Removal, ¶ 4. Consequently, the question before the court is whether 36 U.S.C. § 2 in fact confers on the court subject matter jurisdiction in this action within the meaning of 28 U.S.C. § 1441.2

After examining 36 U.S.C. § 2 and the context within which it is found,3 the court, noting its concurrence with those courts which have previously found that § 2 does not confer federal jurisdiction, see, e.g., Anonymous Blood Recipient v. William Beaumont Hosp., 721 F.Supp. 139 (E.D. Mich.1989), holds that § 2 confers only the general capacity to litigate, rather than to confer an exceptional or privileged jurisdiction. The interpretation that the "sue and be sued" clause4 of 36 U.S.C. § 2 bestows only the capacity to litigate is consistent with the context within which the clause is found.5 As the context indicates, Congress was concerned with the creation and operating procedures of the Red Cross as a corporation, not the expansion of federal court jurisdiction. 36 U.S.C. § 1 et seq.

In support of its argument that 36 U.S.C. § 2 confers federal jurisdiction, the Red Cross points to the fact that the original language of § 2"sue and be sued in courts of law and equity within the jurisdiction of the United States" — was amended in 1947 so that the words "State or Federal" were inserted after "courts of law and equity."6 To bolster its reading of the 1947 amendment, the Red Cross refers to Recommendation No. 22 of the Report of the Advisory Committee on Organization (the "Harriman Committee"), which provides:

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

Recommendation No. 22 of the Report of the Advisory Committee on Organization, pp. 35-36 (June 11, 1946); see also S.Rep. No. 38, 80th Cong., 1st Sess. 1 (1947); H.R. Rep. No. 337 80th Cong., 1st Sess. 6 (1947), reprinted in 1947 U.S.Code Cong.Serv. 1028. Contrary to what the Red Cross maintains, the language of Recommendation No. 22 is ambiguous at best as to whether the 1947 amendment was intended by Congress to confer federal jurisdiction. See Collins v. American Red Cross, 724 F.Supp. 353, 357 (E.D.Pa.1989). As discussed below, Congress, at the time of the 1947 amendment, clearly knew how to specifically provide for the conferral of federal jurisdiction.

If the purpose of the amended "sue and be sued" clause had been to take suits by and against the Red Cross out of the usual jurisdictional restrictions, it is reasonable to assume that Congress would have expressed that purpose by specific language. Cf. Bankers Trust Co. v. Texas & Pac. Ry., 241 U.S. 295, 303, 36 S.Ct. 569, 570, 60 L.Ed. 1010 (1916). Particularly instructive on this point is the legislation amending the charter of the Federal Crop Insurance Corporation ("FCIC"), which was enacted by the same Congress that amended the "sue and be sued" clause of the Red Cross charter in 1947. Congress provided that the FCIC "may sue and be sued in its corporate name in any court of record of a State having general jurisdiction, or in any United States district court, and jurisdiction is hereby conferred upon such district court to determine such controversies without regard to the amount in controversy."7 The court deems it most improbable that Congress would utilize language such as that in 36 U.S.C. § 2 in order to confer federal jurisdiction in Red Cross cases, and then, almost simultaneously, use specific language to confer federal jurisdiction in FCIC cases.

Another example of specific language utilized by Congress to confer federal jurisdiction is found in the Federal Deposit Insurance Corporation ("FDIC") charter, which is dealt with in D'Oench, Duhme & Co. v. Federal Deposit Insurance Corporation, 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956 (1942). In D'Oench, jurisdiction was premised on 12 U.S.C. § 264(j),8 which authorized the FDIC to sue or be sued "in any court of law or equity, State or Federal."9 Some courts have said that the "sue and be sued" clause of § 264(j) conferred subject matter jurisdiction on federal courts. See, e.g., C.H. v. American Red Cross, 684 F.Supp. 1018, 1024 (E.D.Mo. 1987). However, the FDIC charter goes much further. In addition to giving the FDIC the right to sue and be sued, Congress expressly provided that "all 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...."10 The Red Cross attempts to minimize, as it has in other cases, see, e.g., Collins v. American Red Cross, 724 F.Supp. 353, 356 (E.D. Pa.1989), the specific language utilized by Congress to confer federal jurisdiction in the FDIC charter by arguing that the Supreme Court in D'Oench "relegated that provision to a footnote." Such rationale is unpersuasive to say the least.

Courts have relied on Osborn v. Bank of the United States, 22 U.S. (9 Wheat.) 738, 6 L.Ed. 204 (1824), in the process of holding that a "sue and be sued" clause, such as that in 36 U.S.C. § 2, confers subject matter jurisdiction on district courts. See, e.g., Anonymous Blood Recipient v. Sinai Hosp., 692 F.Supp. 730, 733 (E.D.Mich. 1988); C.H. v. American Red Cross, 684 F.Supp. 1018, 1024-25 (E.D.Mo.1987). In Osborn, the United States Supreme Court found that Congress conferred original federal jurisdiction by utilizing a provision similar to the one mentioned above in the charter of the Second Bank of the United States.11Osborn, 22 U.S. at 818. Osborn is distinguishable from the case at bar inasmuch as it interpreted a different federal charter from another era, within its own context....

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