Am. Nat'l Red Cross v. S. G. - 505 U.S. 247, 112 S. Ct. 2465 (1992)

Rule:

The Red Cross Charter's "sue and be sued" provision should be read to confer federal jurisdiction. In expressly authorizing the organization to sue and be sued in federal courts. The provision extends beyond a mere grant of general corporate capacity to sue, and suffices to confer federal jurisdiction.

Facts:

The "sue and be sued" provision (36 USCS 2) of the federal corporate charter of the American National Red Cross--as amended in 1947 by the addition of the words "State or Federal"--authorizes the Red Cross to "sue and be sued in courts of law and equity, State or Federal, within the jurisdiction of the United States." A husband and wife, who claimed that the wife had contracted Acquired Immune Deficiency Syndrome (AIDS) from a transfusion of contaminated blood supplied by the Red Cross, brought a state-law tort action against the Red Cross in the Superior Court of Merrimack County, New Hampshire. The Red Cross, however, invoked 28 USCS 1441 to remove the suit to the United States District Court for the District of New Hampshire, and alleged federal jurisdiction on grounds including a claim that the Red Cross' "sue and be sued" provision conferred original federal jurisdiction over suits involving the Red Cross. The District Court, in denying a motion to remand the case to state court, expressed the view that the "sue and be sued" provision conferred original federal jurisdiction. On interlocutory appeal, the United States Court of Appeals for the First Circuit, in reversing, expressed the view that the "sue and be sued" provision did not confer original federal jurisdiction 

Issue:

Does Red Cross’ charter's "sue and be sued" provision confer original federal-court jurisdiction?

Answer:

Yes.

Conclusion:

The United States Supreme Court reversed and read the Red Cross Charter's "sue and be sued" provision to confer federal jurisdiction. In expressly authorizing the organization to sue and be sued in federal courts, the provision extended beyond a mere grant of general corporate capacity to sue, and was sufficient to confer federal jurisdiction.