Facts of the Case

Plaintiffs filed two state-law tort actions in New Hampshire state courts, alleging that one of them had contracted AIDS from a transfusion of contaminated blood during surgery. The second action was brought against the Red Cross after plaintiffs discovered that it had supplied the tainted blood. Before the state court could decide a motion to consolidate the cases, the Red Cross invoked the federal removal statute, 28 U.S.C. Section 1441, to remove the second suit to federal court. The district court rejected the plaintiffs' motion to remand the case to state court, holding that the Red Cross' charter provision allowing it to "sue and be sued in courts of law and equity, State or Federal, within the jurisdiction of the United States," 36 U.S.C. Section 2, conferred original jurisdiction on the federal district court.

Question

Does the "sue and be sued" provision in the Red Cross' charter confer original jurisdiction on federal courts over all cases to which the Red Cross is a party?

Conclusion

Yes. A congressional charter's "sue and be sued" provision confers federal-court jurisdiction if, but only if, it specifically mentions the federal courts. The Red Cross Charter provision does specifically mention the federal courts. This holding leaves the jurisdiction of the federal courts well within the Article III limits, because the Court has consistently held that Article III's "arising under" jurisdiction is broad enough to authorize Congress to confer federal-court jurisdiction over actions involving federally chartered corporations.