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January 22, 2001


The opinion of the court was delivered by: Milton I. Shadur, Senior United States District Judge


This action's brief prior history in this federal court (under the rubric of Case No. 01 C 116) comprised only a serve and volley: First American National Red Cross ("Red Cross") sought to remove the case to this District Court from its place of origin in the Circuit Court of Cook County, and then this Court responded immediately with its January 8, 2001 memorandum order ("Order") that remanded the case for lack of subject matter jurisdiction. Now Red Cross has sought to return the volley by a renewed removal effort, but its attempted return is out of court (both figuratively and literally).

There is no need to repeat what this Court said in its Order directing remand — instead familiarity with the Order will be assumed. What Red Cross now seeks to do is to load onto its successful appeal in American National Red Cross v. S.G. (hereafter cited "S.G."), 505 U.S. 247 (1992), a case that dealt with a materially different scenario, more baggage than the majority opinion in S.G. will carry. Although Red Cross' effort is moderately ingenious, it simply does not survive analysis.

On this second time around, Red Cross tries to find a federal jurisdictional hook in the underscored portion of this excerpt from 16 Moore's Federal Practice ("Moore's") § 107.11[1][b], at 107-31:

The better view, consistent with the principle that removal jurisdiction is to be strictly construed, is that third-party claims are not removable, because only a party defending against claims asserted by a plaintiff ought to be able to remove. If the original defendant had no right to remove, or chose not to, an ancillary defendant should not be permitted to remove, absent express statutory authority.

And having pointed to that phrase, Red Cross then attempts to call to its aid some caselaw that confirms the removability of state court lawsuits by certain third-party defendants: Resolution Trust Corporation ("RTC") and foreign states.

But that attempt does not withstand examination, because Red Cross' position is substantively different from that of RTC or a foreign state in a material (that is, outcome-determinative) way. In that respect it is critical to note that 36 U.S.C. § 300105(a)(5), the portion of the congressional enactment incorporating Red Cross that deals with its power to engage in litigation, says only this:

(a) The corporation may —

(5) sue and be sued in courts of law and equity, State or Federal, within the jurisdiction of the United States. . . .

And S.G. addressed only the question whether that enactment alone was enough to confer original jurisdiction on the federal courts — a question that was answered in the affirmative by five Members of the Court and negatively by the four dissenting Justices.

But what Red Cross glosses over here (or, more accurately, prefers to ignore entirely) is that in S.G. Red Cross specifically looked to the general removal statute, 28 U.S.C. § 1441,*fn1 as the sole predicate for bringing the case from the state court where it had been filed into the federal court (see 505 U.S. at 249). And of course the reason that Red Cross had to do so was that not a word in the Title 36 enactment that gives legal life to Red Cross speaks directly to the subject of removal: Instead the potential for Red Cross' removal of any state court lawsuit into the federal system is a consequence flowing from the fact that the S.G. majority found that all litigation in which Red Cross is involved is "federal question" litigation (and is hence within the purview of Section 1331). Because the authority of federal courts to hear cases derives solely from Congress, and because the quoted "sue and be sued" provision is totally silent the subject of removal, it is necessary to look elsewhere for the source of federal judicial power in the removal context — and as S.G. itself demonstrates (for, it does not discuss the subject in any other respect), "elsewhere" has to be Section 1441(a), which grants "the defendant or the defendants" the right of removal of "any civil action brought in a State court of which the district courts of the United States have original jurisdiction."*fn2

That line of analysis, as well as what it teaches for the present case, contrasts sharply (and decisively) with what is presented by each of the examples to which Red Cross' counsel has sought to point as purported parallels. Unlike the silence of 36 U.S.C. § 300105(a) — and of any other portion of Title 36 — on the subject of removal by Red Cross, Congress has expressly conferred on both RTC and all foreign states — in so many words — the universal right to remove any actions to which they are made parties (12 U.S.C. § 1441a(l)(1) as to RTC, and Section 1441(d) as to foreign states). Again, nothing in the "sue and be sued" provision that was addressed in S.G. and that was there held to be a fount of federal jurisdiction for actions in which Red Cross was a defendant says anything of the sort.

Indeed, Moore's § 107.11[1][b] — in a portion that has not been quoted by Red Cross — says:

Further, special removal statutes (see ยง 107.15) may provide an independent basis for a third-party ...

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