finding jurisdiction under § 1331 when plaintiff brought quiet title action that turned on a federal tax provision: "[the meaning of the federal tax provision] appears to be the only legal and factual issue contested in the case. [It] is an important issue of federal law that sensibly belongs in a federal court .... [B]ecause it will be the rare state title case that raises a contested matter of federal law, federal jurisdiction to resolve genuine disagreement over federal tax title provisions will portend only a microscopic effect on the federal-state division of labor.”
How later courts described this case
- finding jurisdiction under § 1331 when plaintiff brought quiet title action that turned on a federal tax provision: "[the meaning of the federal tax provision] appears to be the only legal and factual issue contested in the case. [It] is an important issue of federal law that sensibly belongs in a federal court .... [B]ecause it will be the rare state title case that raises a contested matter of federal law, federal jurisdiction to resolve genuine disagreement over federal tax title provisions will portend only a microscopic effect on the federal-state division of labor.”
- explaining that the court has not “treated ‘federal issue’ as a password opening federal courts to any state action embracing a point of federal law. Instead, the question is, does a state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities”
- explaining that the Supreme Court in Merrell Dow thought it entirely unlikely that “Congress, having made no provision for a federal cause of action, would have meant to welcome any state- law tort implicating federal law ‘solely because the violation of the federal statute is said to [create] a rebuttable presumption [of negligence] . . . under state law’” (quoting Merrell Dow, 478 U.S. at 811–12)
- holding that the “test for jurisdiction over federal issues embedded in state-law claims between nondiverse parties” is whether “state-law claim[s] necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities”
Written by the judges who cited it.
Distinguished
Distinguished by Bowler v. AlliedBarton Security Services, LLC, 123 F. Supp. 3d 1152 (2015)
Likewise, Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005), upon which Defendant also relies, is distinguishable because it involved a contested federal issue regarding, the validity of the Internal Revenue Service’s tax lien, and that issue was substantial; in.the matter under consideration there is no substantial federal issue.
The opinion
Justice Thomas,
concurring.
The Court faithfully applies our precedents interpreting 28 U. S. C. § 1331 to authorize federal-court jurisdiction over some cases in which state law creates the cause of action but requires determination of an issue of federal law, e. g., Smith v. Kansas City Title & Trust Co., 255 U. S. 180 (1921); Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U. S. 804 (1986). In this case, no one has asked us to overrule those precedents and adopt the rule Justice Holmes set forth in American Well Works Co. v. Layne & Bowler Co., 241 U. S. 257 (1916), limiting § 1331 jurisdiction to cases in which federal law creates the cause of action pleaded on the face of the plaintiff’s complaint. Id., at 260. In an appropriate case, and perhaps with the benefit of better evidence as to the original meaning of § 1331’s text, I would be willing to consider that course. *
*321 Jurisdictional rules should be clear. Whatever the virtues of the Smith standard, it is anything but clear. Ante, at 313 (the standard “calls for a ‘common-sense accommodation of judgment to [the] kaleidoscopic situations’ that present a federal issue, in ‘a selective process which picks the substantial causes out of the web and lays the other ones aside’” (quoting Gully v. First Nat. Bank in Meridian, 299 U. S. 109, 117-118 (1936))); ante, at 314 (“[T]he question is, does a state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities”); ante, at 317, 318 (“‘[D]eterminations about federal jurisdiction require sensitive judgments about congressional intent, judicial power, and the federal system’ ”; “the absence of a federal private right of action [is] evidence relevant to, but not dispositive of, the ‘sensitive judgments about congressional intent’ that § 1331 requires” (quoting Merrell Dow, supra, at 810 )).
Whatever the vices of the American Well Works rule, it is clear. Moreover, it accounts for the “ ‘vast majority’ ” of cases that come within §1331 under our current case law, Merrell Dow, supra, at 808 (quoting Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U. S. 1, 9 (1983))—further indication that trying to sort out which cases fall within the smaller Smith category may not be worth the effort it entails. See R. Fallon, D. Meltzer, & D. Shapiro, Hart and Wechsler’s The Federal *322 Courts and the Federal System 885-886 (5th ed. 2003). Accordingly, I would be willing in appropriate circumstances to reconsider our interpretation of § 1331.
This Court has long construed the scope of the statutory grant of federal-question jurisdiction more narrowly than the scope of the constitutional grant of such jurisdiction. See Merrell Dow Pharmaceuticals *321 Inc. v. Thompson, 478 U. S. 804, 807-808 (1986). I assume for present purposes that this distinction is proper — that is, that the language of 28 U. S. C. § 1331 , “[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States” (emphasis added), is narrower than the language of Art. III, § 2, cl. 1, of the Constitution, “[t]he judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority ...” (emphasis added).