Court Opinion

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Opinions of the United
1995 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

2-15-1995

Marcella v Brandywine Hosp
Precedential or Non-Precedential:

Docket 94-1691

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"Marcella v Brandywine Hosp" (1995). 1995 Decisions. Paper 51.
http://digitalcommons.law.villanova.edu/thirdcircuit_1995/51

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                 UNITED STATES COURT OF APPEALS
                     FOR THE THIRD CIRCUIT
                          ____________

                          No. 94-1691
                          ___________

          CAROL MARCELLA; TIMOTHY MARCELLA; TIMOTHY
          MARCELLA, as Natural Guardian for DAMON
          MARCELLA; TIMOTHY MARCELLA as Natural
          Guardian for ERIC MARCELLA,

                         Carol Marcella and Timothy Marcella,

                         husband and wife, Appellants.

                               v.

          BRANDYWINE HOSPITAL; C.T. McCHESNEY, M.D.;
          J.R. MONASTERIO, M.D.; DR. JOSE CABRIA; DR.
          JOHN CAGGIANO; AMERICAN RED CROSS; PENN
          JERSEY AMERICAN RED CROSS REGIONAL BLOOD
          SERVICE; WILLIAM C. SHERWOOD, M.D.,

                                          Appellees
                          ___________

          APPEAL FROM THE UNITED STATES DISTRICT COURT
            FOR THE EASTERN DISTRICT OF PENNSYLVANIA
                   (D.C. Civ. No. 92-cv-04207)
                           ___________

                    Argued December 20, 1994

     Before:   GREENBERG, SAROKIN, and WEIS, Circuit Judges

                    Filed February 15, l995
                           ___________

Robert J. O'Shea, Jr., Esquire (ARGUED)
George W. Howard, III, Esquire
David E. Brenner, Esquire
Richard P. Hackman, Esquire
Charles A. Klein, Esquire
Michael A. Cancelliere, Jr., Esquire
GEORGE W. HOWARD, III, P.C.
1608 Walnut Street, Suite 1700
Philadelphia, PA 19103
Attorneys for Appellants

William J. O'Brien, Esquire
John A. Guernsey, Esquire
Howard M. Klein, Esquire
Patricia M. Hamill, Esquire
CONRAD O'BRIEN GELLMAN & ROHN, P.C.
1515 Market Street, 16th Floor
Philadelphia, PA 19102-1916

Jacqueline R. Denning, Esquire (ARGUED)
David P. Gersch, Esquire
Salley D. Rainey, Esquire
ARNOLD & PORTER
1200 New Hampshire Ave., N.W.
Washington, D.C. 20036

Edward L. Wolf, Esquire
Acting General Counsel
AMERICAN RED CROSS
17th & D Streets, N.W.
Washington, D.C. 20006

Attorneys for Appellees

                           ___________

                       OPINION OF THE COURT
                           ___________

Weis, Circuit Judge.

          This is a negligence suit growing out of a transfusion

of contaminated blood collected by the Red Cross through its

volunteer donor program.   After a bench trial, the district court

entered judgment in favor of the Red Cross.   In this appeal, we

hold that the Red Cross is not clothed with governmental immunity

and therefore the plaintiff's request for a jury trial should

have been granted.   Accordingly, the case must be remanded for a

new trial.   We concur with the district court's determination
that the donor of the blood may be required to testify, but under

conditions that protect his anonymity.

          Plaintiff, Carol Marcella, was infected with HIV as a

result of a blood transfusion she received at Brandywine Hospital

on February 5, 1985, in the course of emergency treatment for

injuries sustained in an automobile accident.    Her condition has

deteriorated to the point that it is inevitable she will soon

develop full blown AIDS.   The blood had been donated through the

Red Cross on January 29, 1985 by a homosexual male who was HIV+.

He gave blood again on June 8, 1985.     At that time, the Red Cross

performed an ELIZA test, which can determine whether a blood

sample is contaminated by HIV.   That test did not receive

approval from the Food and Drug Administration until March 1985

and was not available at the time of Marcella's transfusion.

Through a "look back" program, the Red Cross discovered that she

had received infected blood.

          The complaint filed in the Common Pleas Court of

Chester County, Pennsylvania, on July 14, 1988 named as

defendants the hospital, the physicians who had treated

plaintiff, and the American Red Cross.    Plaintiff1 did not ask

for a jury trial, but the doctors and the Brandywine Hospital did

file such demands.

          The case was removed to the United States District

Court for the Eastern District of Pennsylvania, and the hospital

1
 . For simplicity's sake, we will refer only to Carol Marcella
as plaintiff. The suit was also filed on behalf of her husband
and minor children.
renewed its demand for a jury trial.   None of the other parties

did so.   The case was docketed in the district court as a jury

trial.    Shortly before the case was scheduled for trial, the Red

Cross filed a motion "[t]o confirm that this was a nonjury

trial."   Plaintiff opposed the motion on the basis that she was

entitled to the benefit of the jury trial demand filed by the

hospital and doctors in the state court.

           The district court ordered that the negligence counts

against the hospital (the claims against the doctors having been

dismissed) would be tried to a jury, but that the plaintiff's

claim against the Red Cross would be decided in a bench trial.

The court then severed the claims and proceeded first on the one

against the Red Cross.

           Before trial, the plaintiff's request for a discovery

deposition of the donor of the contaminated blood was denied,

although he was required to answer interrogatories.   After

proceeding for several days in the nonjury trial, the district

judge arranged to take the testimony of the donor, under

conditions that would assure his anonymity.

           In its findings of fact and conclusions of law, the

court decided that the Red Cross' policy of ascertaining

potential sources of contaminated blood by submitting

questionnaires to voluntary donors was faulty.   The judge

determined that the Red Cross was "properly chargeable with

negligence for the unreasonable turgidity of its instructional

materials" as well as for using outdated questionnaires when the

donor first gave blood in January 1985.
          However, because the donor again gave blood in June

1985, despite the questionnaires having been clarified,2 the

court decided that the negligence of the Red Cross was not a

causative factor.   "Donor X would not have been prevented from

giving blood on January 29, 1985, even if the defendant had

dotted all the `i's' and crossed all the `t's.'"   Judgment was

therefore entered for the Red Cross.   Subsequently, summary

judgment was entered in favor of the hospital.

          The plaintiff has appealed only the judgment in favor

of the Red Cross asserting:   (1) that she was improperly denied

the right to a jury trial; (2) that the court's analysis of the

evidence was faulty; and (3) that some of the evidence about the

donation on June 8, 1985 was inadmissible.3

                                I.

          The evidence in this case would sustain the district

court's finding that the Red Cross did not cause Marcella's harm.

The judge, as factfinder, evaluated the demeanor, education and

2
 . Among other screening procedures, a brochure was given by the
Red Cross to the donor in January 1985. It did not contain the
guidelines on exclusion of high-risk groups recommended by the
Public Health Service in December 1984. That guideline defined
the high-risk group as homosexual and bi-sexual "[m]ales who have
had sex with more than one male since 1979." Instead, the Red
Cross brochure described the high-risk group as "[s]exually
active homosexual or bisexual men with multiple partners (more
than one)." However, the new guideline had been incorporated
into the materials given to the donor when he again gave blood in
June 1985.
3
 . We have reviewed the plaintiff's contention that the
admission of certain evidence was erroneous and conclude that it
lacks merit.
sophistication of the donor to determine that he would have

persisted in giving blood even if the correct instruction had

been given at the January donation.     The credibility evaluations

of the donor were essential to the factual findings derived from

his testimony.

          However, a jury could properly make different

credibility and causation determinations that would lead it to

assess liability against The Red Cross.     Consequently, the record

is not sufficient to establish the crucial facts as a matter of

law and we would be compelled to reverse a directed verdict in a

jury trial based on these facts.      See Amoco Oil Co. v. Torcomian,

722 F.2d 1099, 1100-01 (3d Cir. 1983); EEOC v. Corry Jamestown

Corp., 719 F.2d 1219, 1225 (3d Cir. 1983) (Denial of trial by

jury is reversible error unless a directed verdict would have

been appropriate).   Consequently, if the district court erred in

denying the plaintiff a jury, the case must be remanded for a new

trial.

                                II.

          The preliminary question, therefore, is whether

plaintiff is entitled to a jury trial.     The issue is not a simple

one, and the district courts that have considered the point are

divided in their rulings.4   No Court of Appeals has considered

the point in a published opinion.

4
 . In the following published opinions, district courts have
permitted jury trials against the Red Cross: Doe v. American
Nat'l Red Cross, 847 F. Supp. 643, 647 (W.D. Wis. 1994); Doe v.
American Red Cross, 845 F. Supp. 1152 (S.D.W.V. 1994) (Red Cross
also subject to punitive damages). Other opinions have denied
the right to jury trials against the Red Cross: Berman v.
           The collection and distribution of human blood for

medical purposes is a commercial operation on the part of the Red

Cross and other entities that operate blood banks.   The nature of

the enterprise and the identity of the supplier are matters to be

considered in deciding whether an injured party has a right to a

jury trial in a claim based on negligence.

           The Red Cross contends that it is a federal

instrumentality that shares governmental immunity to trial by

jury.   It is clear that the federal government itself is not

subject to trial by jury unless it specifically consents.

Lehman, Sec'y of Navy v. Nakshian, 453 U.S. 156, 160-61 (1981).

The question here is whether, in this respect, the Red Cross is

to be treated as part of the federal government.

           The American Red Cross is a unique organization.     It

was chartered by Congress as a federal corporation in 1905.     36

U.S.C. § 1-15.   Its chief purpose at that time was to serve as

(..continued)
American Nat'l Red Cross, 834 F. Supp. 286 (N.D. Ind. 1993);
Johnson v. Hospital of Medical College of Pennsylvania, 826 F.
Supp. 942 (E.D. Pa. 1993); Barton v. American Red Cross, 826 F.
Supp. 412 (M.D. Ala. 1993), aff'd without op., 1994 U.S.App.
Lexis 35582 (11th Cir. Dec. 16, 1994). Barton was appealed after
the district court granted summary judgment to the Red Cross.
Thus, the Eleventh Circuit's summary affirmance did not reach the
jury trial question.

          Interestingly, all the cited cases arose after the
Supreme Court's decision in American Nat'l Red Cross v. S.G., 112
S. Ct. 2465 (1992). In Bentz v. American Red Cross, 932 F.2d 958
(3d Cir. 1991), we summarily affirmed a jury verdict against the
Red Cross. The Red Cross never raised the immunity issue at
either the trial or the appellate level.
the agency in this country to monitor and implement the

requirements of the Geneva Convention applicable to the care of

the sick, wounded, and prisoners in time of war.   Later, the

scope of its activity was expanded to include service to victims

of natural disasters.

          The national Red Cross is designed to work in

conjunction with societies in other nations and with the

International Red Cross.   Emphasizing that its prestige and

usefulness is based on neutrality, the Chairman of the American

Red Cross commented in 1946, "[t]o preserve this vital principle

intact, the International Red Cross Committee has always

maintained that the national societies, while cooperating closely

and cordially with their own governments and with other agencies,

should at the same time remain independent."   Hon. Basil

O'Connor, Annual Report of the American National Red Cross

Corporation for 1946, at 19, reprinted in Wesley A. Sturges, The

Legal Status of the Red Cross, 56 Mich. L. Rev. 1, 12     n.30

(1957), cited in Irwin Mem. Blood Bank of the San Francisco

Medical Soc'y v. American Nat'l Red Cross, 640 F.2d 1051, 1057

(9th Cir. 1981).

          Close cooperation with government is essential to the

work of the Red Cross.   A perception that the organization is

independent and neutral is equally vital.   The Red Cross charter

provisions reflect an attempt to reconcile these objectives.

          Some control by the federal government is demonstrated

by a provision empowering the President of the United States to

appoint eight of the fifty members of the Red Cross Board of
Governors and to designate one of them to be its presiding

officer.   36 U.S.C. § 5.   The other seven appointees must be

officials of various departments and agencies of the federal

government, including at least one from the Armed Forces.     Thirty

governors are selected by the local chapters, and twelve are

selected by the Board as members-at-large.     Id.

           An annual financial statement must be submitted to the

Secretary of Defense, who audits the report at the expense of the

Red Cross and forwards it to Congress.    Id. §§ 6-7.   The federal

government furnishes a building in Washington, D.C. for the

organization's headquarters which, however, is responsible for

maintenance.    Id. § 13.

           Commissioned officers of the Army, Navy and Air Force

may be detailed for duty with the Red Cross.     10 U.S.C. § 711a.

It is given the privilege of purchasing supplies from the Armed

Forces, id. §§ 4624-4625, 9624-9625, borrowing certain equipment,

id. § 2542, and using government buildings for storing supplies.

Id. § 2670.    Red Cross employees, in some circumstances, may be

furnished meals and quarters while on duty serving the Armed

Forces.    However, in this connection, "employees of the American

National Red Cross may not be considered as employees of the

United States."    Id. § 2602.
           The independence of the Red Cross is demonstrated in

that its employees are not federal employees, its activities are

supported primarily by private sources,5 and its day-to-day

5
.   The Red Cross blood collection service, which is not
activities are directed by the organization itself, not the

government.

          The charter also provides that the Red Cross has "the

power 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. § 2.   In American Nat'l Red Cross v. S.G., 112 S. Ct. 2465

(1992), the Supreme Court held that this provision authorized the

Red Cross to remove actions pending against it in state court to

federal district court, and that provides the jurisdictional

basis in the case before us.

          The Supreme Court has also held that the Red Cross is

not subject to state taxation.   In Department of Employment v.

United States, 385 U.S. 355, 359-360 (1966), the opinion referred

to the Red Cross as "virtually . . . an arm of the government,"

but pointed out:

          "In those respects in which the Red Cross

          differs from the usual government agency --

          e.g., in that its employees are not employees

(..continued)
mentioned in its charter, provides an important part of its
revenues. In 1985, blood services provided 60.5% of the Red
Cross' total revenues. Annual Report of the American Red Cross
for 1985. In the most recent statement, "biomedial services"
provided 77% of revenues. Annual Financial Report for 1993-1994.
Interestingly, 62% of Red Cross' expenses were devoted to
providing blood services, while only 5% were attributed to
providing services to the Armed Forces. Id.

    American Red Cross' blood services division maintains
financial and managerial independence from its divisions which
perform chartered activities, and generates significant "excess
revenues." Doe v. American Nat'l Red Cross, 845 F. Supp. 1152,
1153 n.4 (S.D.W.V. 1994).
           of the United States, and that government

           officials do not direct its everyday affairs

           -- the Red Cross is like other institutions

           -- e.g., national banks -- whose status as

          tax-immune instrumentalities of the United

          States is beyond dispute."

Id. at 160; see also Federal Land Bank v. Priddy, 295 U.S. 229,

235 (1935) ("Immunity of corporate government agencies from suit

and judicial process . . . is less readily implied than immunity

from taxation"); United States v. City of Spokane, 918 F.2d 84,

87-88 (9th Cir. 1990).

           Irwin held that, although referred to in the tax cases

as "an agency" or "instrumentality," the Red Cross is not "an

agency" of the federal government for purposes of the Freedom of

Information Act.   That statute defines "agency" as including,

among others, a "Government corporation" and a "Government

controlled corporation."   5 U.S.C. § 552(f).   Finding that the

structure, activities and purposes of the Red Cross demonstrated

that the organization was not subject to substantial federal

control or supervision, Irwin held that it was not "an agency."
The Court also noted legislative history that referred to such

entities as the Tennessee Valley Authority and Amtrak as

governmental units to be covered by the Freedom of Information

Act. 640 F.2d at 1054.

           The status of a federal "agency" or "instrumentality"

as it might affect its amenability to a jury trial on a tort

claim has received little appellate consideration.      In Young v.
United States Postal Serv., 869 F.2d 158, 159 (2d Cir. 1989) (per

curiam), the Court of Appeals held that the "sue and be sued"

clause in the Postal Service charter did not expose it to a jury

trial on an employee's claim of wrongful discharge.

           The Young Court noted that the "sue and be sued" clause

waived the sovereign immunity of the Postal Service to the extent

that prejudgment interest could be recovered in a Title VII

action against it.   Id. (citing Loeffler v. Frank, 486 U.S. 549

(1988)).   The Court also observed that some federal agencies are

subject to liability for costs, garnishment and attachment

proceedings.    Id. (citing Reconstruction Finance Corp. v. J.G.

Menihan Corp., 312 U.S. 81 (1941); Federal Housing Admin., Region

No. 4 v. Burr, 309 U.S. 242 (1940)).    Nevertheless, Young

decided, "the party being sued is still the federal government,"

and the Postal Service charter did not contain language granting

a jury trial.   Id. at 159.   Although not mentioned in Young, it

is of some relevance that the Postal Service charter makes it

subject to the Federal Tort Claims Act, 26 U.S.C. § 2680, which

does not permit jury trials of personal injury claims.

           In Hanna v. Federal Land Bank Ass'n of S. Ill., 903
F.2d 1159, 1162 (7th Cir. 1990), the Court of Appeals for the

Seventh Circuit found that a plaintiff was entitled to a jury

trial in an age discrimination suit against entities having less

ties with the government than does the Postal Service.    The

defendants, Production Credit Associations and Federal Land Bank

Associations, were "federally chartered instrumentalit[ies] of

the United States," and had been given the power to "sue and be
sued."   12 U.S.C. §§ 2071, 2073, 2091, 2093.          The Hanna Court

found that the defendants were not "federal agencies per se"

because Congress' intention was that the land banks and credit

associations were to be owned and operated by farmers rather than

the federal government.     Hanna, 903 F.2d at 1162.    Therefore, the

defendants were "private employers without sufficient

governmental involvement to constitute federal agencies exempt

from jury trials."    Id.   It is worthy of note that land banks are

immune from state and local taxes.     Federal Land Bank v. Board of

County Comm'rs, 368 U.S. 146 (1961).

           It may be seen that decisional law establishes that the

"sue and be sued" clause, without more, does not resolve the

question before us.

           In many of the opinions discussing the status of

agencies or instrumentalities, the courts, by implication, extend

the shield of sovereign immunity of the government itself to

insulate some of the entities it created.     It may, however, be

more realistic to approach the issue by inquiring into the

attributes of sovereign immunity that Congress affirmatively

intended to grant "instrumentalities" and "federally chartered

corporations" when it created those entities.     See Reconstruction
Fin. Corp. v. J.G. Menihan Corp.     312 U.S. 81, 84 (1941).

          In FDIC v. Meyer, 114 S. Ct. 996 (1994), the Supreme

Court held that agencies authorized to "sue and be sued" are

presumed to have fully waived sovereign immunity absent a

           "clea[r] show[ing] that certain types of

           suits are not consistent with the statutory
          or constitutional scheme, that an implied

          restriction of the general authority is

          necessary to avoid grave interference with

          the performance of a governmental function,

          or that for other reasons it was plainly the

          purpose of Congress to use the `sue and be

          sued' clause in a narrow sense."

Id. at 1003 (internal quotation omitted).

          An example of a narrow usage of the "sue and be sued"

clause is in the statute creating the Postal Service.    Clearly,

the Service retained some of the attributes it held earlier as an

undoubted part of government.    The ban against jury trials of

personal injury suits is such an instance.    By contrast, the

statute creating the land bank system established new entities

rather than altering the status of a former government

organization.    That statute reflected no intent to give the

government control over day-to-day operations.

          In FHA v. Burr, 309 U.S. 242, 245 (1940), the Court

held that "the words `sue and be sued' in their normal

connotation embrace all civil process incident to the

commencement or continuance of legal proceedings."    In Loeffler
v. Frank, 486 U.S. 549 (1988), the Court described the clause as

including "the natural and appropriate incidents of legal

proceedings."    Id. at 555 (quoting Reconstruction Fin. Corp., 312
U.S. at 85).    Such "incidents" as garnishment and execution

(Burr), prejudgment interest (Loeffler), costs (Menihan), and
civil penalties (Commonwealth of Pa. Dep't of Envtl. Resources v.
United States Postal Service, 13 F.3d 62 (3d Cir. 1993)), have

been found applicable in actions against federally created

entities.

            Those "incidents," however, differ in kind and quality

with entitlement to a jury trial and it does not follow that the

method of trial is necessarily included within the scope of the

"sue and be sued" clause.    A nonjury trial, after all, does

provide civil process to resolve disputes and provides the

additional remedies of garnishment, prejudgment interest and

costs.   Moreover, the fear has often been expressed that juries

would award excessive sums against the Government, a factor

absent from the other "incidents" that have been found to be

encompassed by the "sue and be sued" clause.

            The role of the organization and the extent to which it

carries out purely governmental activity have some relevance.

Those circumstances can be significant in determining whether

jury trials would be inconsistent with the statutory scheme, or

would gravely interfere with the performance of a governmental

function.

            Federally chartered corporations vary widely in the

degree to which they assume basic governmental tasks.    Charters

that include "sue and be sued" clauses and that require annual

reports to Congress have been granted to such diverse

organizations as the Boy Scouts of America, the American Legion,

Ladies of the Grand Army of the Republic, the National Safety

Council, and The Foundation of the Federal Bar Association.
Although such organizations undoubtedly have worthy objectives,

they would not seem to require sovereign immunity.

          The Red Cross is not given wholesale governmental

immunity simply by virtue of its federal charter.    But a relevant

inquiry is whether, despite the lack of specific references to

jury trials in its charter, the Red Cross is so deeply involved

in the government that a prohibition may be implied as if the

United States itself were the party.   In our view, such a

relationship does not exist.

          The Red Cross sometimes works in a context in which it

seems to be almost "an arm of the government."   Nevertheless, the

federal government does not manage the day-to-day activities of

the organization, does not provide the funds to support its

activities, and does not employ or grant civil service benefits

to its workers.   In addition, to properly fulfill its role as one

of the participants in international Red Cross activities and to

enforce the provisions of the Geneva Convention, the Red Cross

must be independent of the United States government.    In weighing

all of these factors and considering analogous decisional law, we

are persuaded that the American Red Cross does not share

sovereign immunity with the United States such that jury trials

in personal injury suits would be inconsistent with, or interfere

with, the role outlined in the organization's charter.6

6
 . One district court remarked, "ARC has elected to participate
and compete with private corporations in the blood services
industry . . . [and] [a]s a full-fledged industry participant
. . . should be subject to jury trial . . . ." Doe, 845 F.
Supp. at 1153 n.4 (S.D. W.V. 1994).
Accordingly, we hold that parties in litigation of this nature

against the Red Cross are entitled to a trial by jury.

                               III.

          Having concluded that the Red Cross' status is no bar,

we must consider whether plaintiff waived her rights because she

did not specifically request a jury trial.   As noted earlier, the

plaintiff's complaint in state court requested a nonjury trial,7

but the hospital and doctors defendants did demand a jury.

          Federal Rule of Civil Procedure 81(c) provides that, in

cases removed to the district court, a party who made a demand

for a jury trial in accordance with state law need not repeat the

request after removal.   The Rule further provides:

          "If state law applicable in the court from

          which the case is removed does not require

          the parties to make express demands in order

          to claim trial by jury, they need not make

          demands after removal unless the court

          directs that they do so . . . ."

          Plaintiff's position is that under Pennsylvania law, if

any party requests a jury trial, all other parties may rely upon

that demand.   A request for jury trial may not be withdrawn

without the consent of all parties who have appeared in the

7
 . Plaintiff's counsel assertedly did so in order to escape
paying a jury fee, in the expectation that the defendant hospital
would -- as it did -- ask for a jury trial. Such a practice
borders on "gamesmanship" that might expose a lawyer to severe
criticism if it were important that a plaintiff receive a jury
trial.
action.   Pa. R. Civ. P. 1007.1(c).   "[T]he Rule apparently seeks

to protect the rights of those parties who did not make the

demand for jury trial . . . ."    McFarlane v. Hickman, 492 A.2d
740, 743 (Pa. Super. Ct. 1985).    See also Recht v. City of

Pittsburgh, 545 A.2d 450, 452 (Pa. Commw. Ct. 1988) ("where the

circumstances indicate the possibility of reliance, any doubts

should be resolved in favor of allowing a jury trial").

            At the time of removal, the plaintiff's right to a jury

trial had been perfected, and appropriately, the case was

docketed in the district court as a jury case.    Not until

approximately ten months after removal did the Red Cross file its

motion to reclassify the case as nonjury.

            The Red Cross argues that the issues between it and the

plaintiff differ from those raised in the claims against the

hospital.   Relying on Fed. R. Civ. P. 38(d) and Rosen v. Dick,

639 F.2d 82, 91-96 (2d Cir. 1980), the Red Cross contends that

plaintiff is entitled to rely on a jury trial demand only as to

the issues between her and the hospital.    However, Fed. R. Civ.

P. 38(d) applies to cases originally filed in the district court.

Rule 81(c) governs removal cases, and it carries over the valid

demand in the state court to the federal proceedings.8
8
 . We observe also, but find no reason to discuss, the fact that
co-counsel for plaintiff filed his appearance in the state court
sometime after the suit was commenced and included on the
praecipe a demand for a jury trial. The praecipe apparently was
filed in the Court of Common Pleas within the time specified in
Pa. R. Civ. P. 1007.1(a), which provides that a written demand
for a jury trial may be filed and served not later than twenty
days after service of the last permissible pleading. "The demand
shall be made by endorsement on a pleading or by a separate
writing." Id. The Red Cross contends that plaintiff's co-
          We conclude therefore that the district court erred in

denying the plaintiff the right to a jury trial.   The case must

therefore be remanded for a new trial.

                               IV.

          We must also consider whether testimony and discovery

of a blood donor is subject to privilege.   A substantial amount

of case law has been developed over whether such discovery should

be permitted.   Courts have weighed potential adverse effects to

the blood collection system and donors' privacy interests against

the necessity of such testimony to recovery by victims of

contaminated blood.9

(..continued)
counsel's appearance was never served. In addition, there is
some question whether the demand was otherwise valid inasmuch as
a praecipe is not considered to be a pleading.
9
 . See e.g., Watson v. Lowcountry Red Cross, 974 F.2d 482 (4th
Cir. 1992); Coleman v. American Red Cross, 979 F.2d 1135 (6th
Cir. 1992) (per curiam); Diabo v. Baystate Medical Ctr., 147
F.R.D. 6 (D. Mass. 1993); Sampson v. American Nat'l Red Cross,
139 F.R.D. 95 (N.D. Tex. 1991); Borzillieri v. American Nat'l Red
Cross, 139 F.R.D. 284 (W.D.N.Y. 1991); Bradway v. American Nat'l
Red Cross, 132 F.R.D. 78 (N.D. Ga. 1990); Boutte v. Blood Sys.,
Inc., 127 F.R.D. 122 (W.D. La. 1989); Doe v. American Red Cross
Blood Servs., S.C. Region, 125 F.R.D. 646 (D.S.C. 1989); Mason v.
Regional Medical Ctr. of Hopkins County, 121 F.R.D. 300 (W.D. Ky.
1988); Doe v. Puget Sound Blood Ctr., 819 P.2d 370 (Wash. 1991)
(en banc); Most v. Tulane Medical Ctr., 576 So. 2d 1387 (La.
1991); Snyder v. Mekhjian, 582 A.2d 307, 315 (N.J. Super. Ct.
A.D. 1990), aff'd, 593 A.2d 318 (N.J. 1991); Belle Bonfils
Memorial Blood Ctr. v. District Court, 763 P.2d 1003 (Colo. 1988)
(en banc); Doe v. University of Cincinnati, 538 N.E.2d 419 (Oh.
Ct. App. 1988); Rasmussen v. South Florida Blood Serv., Inc., 500
So. 2d 533 (Fla. 1987); Krygier v. Airweld, Inc., 520 N.Y.S.2d 475
(N.Y. Sup.Ct. 1987); Tarrant County Hosp. Dist. v. Hughes, 734
S.W.2d 675 (Tex. Ct. App. 1987).

    See also, Amy K. Johnson, Note, Watson v. Lowcountry Red
Cross: The Fourth Circuit Speaks on Discovery Rights in Blood
Transfusion Litigation, 71 N.C. L. Rev. 2084 (1993); Ann M.
          The case before us is brought under the law of

Pennsylvania.   Because the Supreme Court of that state has ruled

on the privacy issue of donors and established a conditional

privilege, we will follow its lead.     See Fed. R. Evid. 501 (in

civil actions, where state law supplies the rule of decision as

to claims or defenses, the privilege of a witness is determined

by state law); see also Earl C. Dudley, Jr., Federalism and

Federal Rule of Evidence 501:     Privilege and Vertical Choice of

Law, 82 Geo. L.J. 1781 (1994).

          In Stenger v. Lehigh Valley Hosp. Ctr., 609 A.2d 796

(Pa. 1992), the state Supreme Court determined that the

Pennsylvania Constitution provides a right of privacy that

includes a right to be left alone, but that is not absolute.         In

blood contamination cases, that right must be balanced against

victims' need to establish their claims and against the state's

interest in preserving the integrity of the volunteer blood

donation system.   Id. at 802.    The Court determined that the

proper balancing of the various interests weighed in favor of

permitting discovery, but on the condition that the identity of

the donor not be disclosed.      Id. at 803.   Moreover, the court

decided that its approach was consistent with Pennsylvania's

(..continued)
LoGerfo, Note, Protecting Donor Privacy in AIDS Related Blood
Bank Litigation -- Doe v. Puget Sound Blood Center, 117 Wash.2d
772, 819 P.2d 370 (1991), 67 Wash. L. Rev. 981 (1992); Peter B.
Kunin, Note, Transfusion-Related AIDS Litigation: Permitting
Limited Discovery from Blood Donors in Single Donor Cases, 76
Cornell L. Rev. 927 (1992).
Confidentiality of HIV-Related Information Act, 35 P.S. §§ 7601-

7612.

          We will follow the Supreme Court of Pennsylvania's

resolution of the issue and are confident that there is adequate

flexibility in the Federal Rules of Civil Procedure to allow

discovery while still preserving the donor's anonymity.     We also

agree with the district court's comment that a deposition or

other discovery in cases of this nature should be conducted under

judicial supervision.

                                  V.

          Because the case must be retried, we believe it

appropriate to comment further on the somewhat novel discovery

issue present here.     It is obvious that discovery from the donor

who supplied the contaminated blood would provide relevant

information on the negligence issues in the case.    The state

court judge, before removal, conferred with the parties and,

apparently out of concern for privacy interests of the donor, it

was decided to submit interrogatories to preserve his anonymity.

Before that approach could be implemented, the case was removed

to the district court, where the parties again agreed to that

general procedure.

          After responses to the interrogatories were received,

plaintiff moved to compel a discovery deposition of the donor.

The Red Cross objected, and the district court denied plaintiff's

motion on the grounds that

          "(1) request is untimely [filed on the last day set for

          discovery];
          (2) no genuine need has been shown;

          (3) privacy interests of donor; [and],

          (4) previous agreement has been adhered to."

          Discovery matters of this nature are discretionary with

the trial court and would not ordinarily be the subject of

discussion on appeal.   However, events at the trial demonstrate

that the district judge may wish to reconsider his previous

ruling and permit the parties to take the discovery deposition of

the donor.

          After several days of testimony during the bench trial,

the district judge stated to counsel, "I am increasingly

persuaded that there is no way to have a really fair and

objective determination of some of the issues in this case

without having the testimony of Donor X under oath at some point.

. . . It seems to me if on no other issue than causation, that is

a crucial bit of evidence."   The judge, however, believed it

would be inappropriate to have a discovery deposition at that

time and that it would be preferable to have the testimony taken

under judicial supervision.

          After some further discussion, the lawyers and the

court agreed that each of the parties would submit questions to

the judge, who would propound them to the donor in chambers, in

counsels' presence.   The lawyers were permitted to suggest

additional questions as the testimony unfolded and would be

permitted to cross-examine if they perceived a need.     Counsel for

plaintiff did not suggest additional questions to the judge after

the initial interrogation, but Red Cross' lawyer did.    However,
plaintiff now asserts that a discovery deposition should have

been permitted.

          Circumstances have changed since the initial denial of

the plaintiff's request for the donor's discovery deposition.

The testimonial procedure used during the bench trial was no

doubt adequate for a sophisticated fact-finder like the able and

experienced district judge to make the crucial findings of

credibility.   However, this case must now be tried to a jury and

the parties will be required to reckon with the believability of

the donor because the critical events occurred more than ten

years ago.   Moreover, because a human tendency to deny or attempt

to excuse conduct that created disastrous consequences to a

victim is not uncommon, a more extensive interrogation probably

will be necessary.   A wide-ranging discovery deposition most

likely would be of great assistance to both parties and would

improve the presentation to be made at trial.

          In these circumstances, we believe that the trial judge

should grant the request for a discovery deposition subject to

judicial supervision -- perhaps in the presence of a magistrate

judge or the trial judge himself -- but under conditions assuring

the donor anonymity and placing transcripts under seal if that

appears to be necessary.   We see no reason why the donor could

not be called to testify at trial under appropriate conditions.10

10
 . It occurs to us that it would be possible to protect the
donor's anonymity at trial by displaying his photograph to the
panel from which the jury will ultimately be selected. Before
the usual voir dire questioning began and before the nature of
the case was disclosed, the venire would be asked, without any
reference to the donor's name or role, if any of them recognized
                              VI.

          The judgment of the district court will be reversed,

and the case will be remanded for a new trial.

(..continued)
the individual. This procedure would probably prevent the
unlikely, but possible, situation where the trial might have
proceeded for some time before a juror might recognize the donor
when he is called to testify. This is merely a suggestion and we
do not wish to limit the trial court's use of other measures that
may be appropriate.