American National Red Cross v. S.G

In American National Red Cross v. S.G., 505 U.S. 247, 112 S.Ct. 2465, 120 L.Ed.2d 201 (1992), a husband and wife, who claimed that the wife had contracted acquired immune deficiency syndrome (AIDS) from a transfusion of contaminated blood the Red Cross supplied, filed a state law tort action against the Red Cross in New Hampshire state court. The Red Cross removed the action to federal district court on the ground that its charter contained a "sue and be sued" clause that conferred original federal jurisdiction over suits involving the Red Cross. The district court denied a motion to remand the case to state court on the ground that the "sue and be sued" provision conferred original federal jurisdiction. On interlocutory appeal, the United States Court of Appeals for the First Circuit concluded that the "sue and be sued" provision did not confer original federal jurisdiction, and reversed the district court. The Supreme Court reversed the court of appeals's decision. The Court drew a distinction between "sue and be sued" clauses that specifically referenced the federal courts and those that do not. In American National Red Cross, Justice Scalia drew a distinction between "sue and be sued" clauses that merely confer capacity to be sued in federal courts and "sue and be sued" clauses that confer both capacity and jurisdiction. 505 U.S. at 112 S.Ct. at 2476 (Scalia, J., dissenting). Justice Scalia was of the opinion that the "sue and be sued" clause at issue in American National Red Cross "merely establishes that the Red Cross is a juridical person." American National Red Cross, 505 U.S. at 112 S.Ct. at 2476 (Scalia, J., dissenting). Two factors led Justice Scalia to conclude that the "sue and be sued" provision at issue in American National Red Cross did not confer federal court jurisdiction. First, he asserted that the statute's general reference to the "federal courts" was too broad to confer subject matter jurisdiction on the federal courts. American National Red Cross, 505 U.S. at 112 S.Ct. at 2477 (Scalia, J., dissenting). If the statute had mentioned "a particular federal court," Justice Scalia believed a stronger argument could be made that Congress intended to confer subject matter jurisdiction upon the federal courts. See American National Red Cross, 505 U.S. at 112 S.Ct. at 2477 (Scalia, J., dissenting). Second, Justice Scalia objected to the fact that the statute in American National Red Cross did not distinguish between federal courts and state courts. American National Red Cross, 505 U.S. at 112 S.Ct. at 2477 (Scalia, J., dissenting). According to Justice Scalia, the American National Red Cross charter's parallel treatment of federal and state courts undermined a jurisdictional reading of the statute because a federal entity could not file an action in state court without first "establishing the independent basis of jurisdiction appropriate under state law." American National Red Cross, 505 U.S. at 112 S.Ct. at 2477 (Scalia, J., dissenting) Section 1082, however, addresses both of the concerns enumerated by Justice Scalia in his dissent in American National Red Cross. Section 1082(a)(2) allows the Secretary to "sue and be sued ... in any district court of the United States." Congress therefore has clearly indicated the particular federal court it sought to confer jurisdiction upon. See American National Red Cross, 505 U.S. at 112 S.Ct. at 2477 (Scalia, J., dissenting). Additionally, section 1082(a)(2) allows the Secretary to "sue and be sued in any court of record of a state having general jurisdiction....". Congress, therefore, has acknowledged that the Secretary may not file a state court action without establishing "the independent basis of jurisdiction appropriate under state law." See American National Red Cross, 505 U.S. at 112 S.Ct. at 2477 (Scalia, J., dissenting).