Fed Q - Stat Dimension Part 2

Question 1

Merrell Dow Pharmaceuticals Inc v. Thompson

Answer 1

• 1986
• pl sues for negligence, birth defects - alleged drug mislabeled under FDCA
• majority (Stevens) held no fed ct q b/c no private right of action under FDCA
• “importance” of the fed q at issue matters for Stevens
• also cast doubt on Smith

Question 2

Removal

Answer 2

• proper if plaintiffs’ claim could originally have been brought in federal court

Question 3

Grable & Sons Metal Prods., Inc. v. Darue Eng. & Mfg - Facts

Answer 3

• 2005
• state law cause of action in the case = quiet title action (want land title changed by county clerk because Grable says he’s the legit owner/title transfer was not legit)
• Grable’s property had been seized by IRS, which provided notice before selling it
• Fed issue embedded in state cause of action = Grable says he didn’t receive proper notice of the sale because was not personally served in the manner required by 26 U.S.C. §6335, but rather received notice via certified mail
• if no proper notice (fed issue b/c required by fed statute), IRS taking/selling his land wasn’t legit -> impacts quiet title action (state law cause of action)
• Darue removed the case to fed ct as presenting a federal question b/c the title claim depended on an interpretation of federal tax law

Question 4

Grable - Category of Cases

Answer 4

• says normally fed q cases deal w/ pls pleading COAs created by fed law
• BUT Grable deals w/ 2nd category - “in certain cases federal question jurisdiction will lie over state-law claims that implicate significant federal issues”
  -> acknowledges turns on juris - “doctrine captures the commonsense notion that a federal court ought to be able to hear claims recognized under state law that nonetheless turn on substantial questions of federal law, and thus justify resort to the experience, solicitude, and hope of uniformity that a federal forum offers on federal issues”

Question 5

Grable - Reference to Merrill and Franchise Tax Board

Answer 5

• “It has in fact become a constant refrain in such cases that federal jurisdiction demands not only a contested federal issue, but a substantial one, indicating a serious federal interest in claiming the advantages thought to be inherent in a federal forum.” E.g., Merrell Dow; Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal.

Question 6

Grable - Discretion

Answer 6

• acknowledges in one point in its reasoning that, even when there’s a “contested and substantial federal question”, fed ct can decide not to exercise juris
• “even when the state action discloses a contested and substantial federal question, the exercise of federal jurisdiction is subject to a possible veto. For the federal issue will ultimately qualify for a federal forum only if federal jurisdiction is consistent with congressional judgment about the sound division of labor between state and federal courts governing the application of §1331.”
• “Franchise Tax Bd. explained that the appropriateness of a federal forum to hear an embedded issue could be evaluated only after considering the ‘welter of issues regarding the interrelation of federal and state authority and the proper management of the federal judicial system.’”
• “Because arising-under jurisdiction to hear a state-law claim always raises the possibility of upsetting the state-federal line drawn (or at least assumed) by Congress, the presence of a disputed federal issue and the ostensible importance of a federal forum are never necessarily dispositive; there must always be an assessment of any disruptive portent in exercising federal jurisdiction.”

Question 7

Grable - Rule (Quote)

Answer 7

“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”

Question 8

Grable - Breakdown of Test

Answer 8

Federal jurisdiction will lie over a state claim if federal issue is:

1) Necessarily raised
2) Actually disputed
3) Substantial
4) Capable of resolution in federal court without disrupting the federal-state balance approved by Congres

Question 9

Grable - Test Applied to Facts of Case

Answer 9

• holds there IS a fed q
• fed issue is necessarily raised in G’s complaint (it’s the basis of his quiet title action as framed under the state pleading rules)
• fed q appears to be the only issue actually in dispute
• “meaning of the federal tax provision is an important issue of federal law that sensibly belongs in a federal court”
• “microscopic effect” on fed-state division of labor (since very few quiet title actions will involve fed q’s)

Question 10

Grable- Merrel Dow - COA

Answer 10

• says lack of fed COA in Dow was NOT dispositive
• Prof emphasized this in class - Grable says there IS a supplemental test in addition to the COA test

Question 11

Prof’s Point About Grable COA

Answer 11

• quiet title action allows you to plead the nub of the controversy
• this is key because this means it appears on the face of a well-pleaded complaint
• note that because of this, there are very few Grable cases (since most causes of action don’t allow you to plead the nub of the controversy)

Question 12

What would happen if states changed pleading rules to more frequently require pleading the nub of the controversy?

Answer 12

• Prof’s q
• would mean Grable q’s would arise more frequently (since more things would involve fed q’s on the face of the complaint)
• BUT you’d still need to meet the Grable test to get into fed ct

Question 13

Prof’s 3 Ways to Cure Fed Q Juris

Answer 13

• fed cause of action only (she doesn’t like this as much though)
• overrule Skelly (would mean could turn on fed law for declaratory judgment
• allow defendant to remove on defendant’s case

Question 14

Empire Healthchoice Assurance, Inc v. McVeigh - Facts

Answer 14

• this is the case where provider is seeking to recoup from estate of fed employee
• q of whether Federal Employees Health Benefits Act of 1959 (FEHBA) provides fed ct juris

Question 15

McVeigh - Ruling

Answer 15

• NO fed issue
• fed law didn’t create the claim
• AND Grable argument failed

Question 16

McVeigh - Reasoning

Answer 16

• reimbursement claim not triggered by action of any fed dept or agency, just settlement of personal-injury action in state ct
• q is fact-bound + situation-specific (vs. Grable’s q of pure law that would’ve applied to many cases)
• acknowledges US interests in health policies for fed workers, but then says not really enough to warrant making this a fed claim - contract + tort at the heart of it

Question 17

Gunn v. Minton - Issue

Answer 17

• federal courts have exclusive jurisdiction over cases arising under any Act of Congress relating to patents – they’re trying to figure out whether a state claim alleging legal malpractice in the handling of a patent case must be brought in federal court

Question 18

Gunn - Facts

Answer 18

• 2013
• Minton files malpractice suit against his lawyers, claiming they botched his patent infringement case (says they should’ve brought up an “experimental use” arg earlier)
• Minton claims his malpractice suit arose out of federal patent law and therefore the Texas court didn’t have subject matter jurisdiction

Question 19

Gunn - Holding

Answer 19

• no fed jur – Minton’s legal malpractice claim does not “arise under” federal patent law because it is a state legal malpractice claim with insufficient significance in the context of broader patent law to establish federal

Question 20

Gunn - Other Grable Factors

Answer 20

• WOULD necessarily require fed patent q resolved (determination of validity of “experimental use” arg wrt his case)
• also “actually disputed” (parties don’t agree whether or not it would’ve prevailed)
• 4th req not met b/c sub import not met (states have significant interests, vs comparatively low for fed)

Question 21

Gunn - Substantial Federal Issue

Answer 21

• issue important to him, but not the fed system -> NOT substantial

“The substantiality inquiry under Grable looks instead to the importance of the issue to the federal system as a whole”

• emphasized backward nature of his case - resolution of the issue in malpractice won’t actually have impact on patent law

Question 22

Beneficial National Bank v. Anderson - Facts

Answer 22

• 2003
• Respondents secured loans from pet nat bank -> filed state-ct suit against bank + two other pets, seeking damages on the theory, among others, that the bank’s interest rates violated “the common law usury doctrine” and an Alabama usury statute.
• complaint did not refer to any federal law.
• pets removed the case to fed ct, asserting National Bank Act governs the interest rate that a national bank may charge, see 12 U. S. C. § 85, that the rates charged to respondents complied with § 85, that § 86 provides the exclusive remedies available against a national bank charging excessive interest, and that respondents’ action was therefore one “arising under” federal law that could be removed under 28 U. S. C. § 1441.

-

Question 23

Beneficial National Bank - Holding

Answer 23

• Respondents’ cause of action arose only under federal law and could, therefore, be removed under § 1441.

Question 24

Beneficial National Bank - Preemption

Answer 24

• preemption acts as an exception to the rule that potential defenses don’t provide basis for removal
• if a fed statute completely preempts a cause of action, you can remove
  -> this is the case when fed stat at issue (particularly Labor Management Relations Act and ERISA) provides exclusive COA for claim asserted and sets forth procedures + remedies governing the COA

Question 25

Beneficial - Possibilities for Removal

Answer 25

*When Congress expressly so provides, such as in the price-Anderson Act
*Or when the fed statute wholly displaces the state-law cause of action through complete preemption

Question 26

Beneficial - National Bank Act

Answer 26

• q = whether Nat Bank Act provides exclusive COA for usury claims against nat banks -> because it IS exclusive, removal ok
• §85 sets substantive limits on interest rates nat banks can charge + preempts common law/state statutory claims from determining compliant rates = usurious -> THIS DEFENSE NOT ENOUGH
• §86 - prescribes remedies avail to those charged higher rates + procedures governing such claims -> EXCLUSIVE COA FOR USURY -> REMOVAL OK

Question 27

Beneficial - Scalia

Answer 27

• dissent
• he’s primarily concerned with violation of the well-pleaded complaint rule

Question 28

Avco Corp. v. Machinists -Facts

Answer 28

• 1968
• employer wanted to enforce “no-strike” clause in collective bargaining agreement -> filed in state ct b/c Sinclair (SCOTUS 1962) said fed cts couldn’t have juris over suits seeking injunctions against striking
• BUT union wanted to remove -> argued under Lincoln Mills, fed common law governed interpretation of labor contracts

Question 29

Avco - Ruling

Answer 29

• txtbook cites this as “the origin of the preemption rule” applied in the Nat Bank case
• since action based on § 301 of Labor Management Relations Act, controlled by fed substantive law, even though brought in a state court
• therefore, “clear that the claim under this collective bargaining agreement is one arising under the ‘laws of the United States’” w/in meaning of removal statute + w/in original jurisdiction of dist ct
• seems to say issue of relief doesn’t matter b/c it’s separate from q of jurisdiction

Question 30

Civ Pro Rule 12(h)(3)

Answer 30

• says court must dismiss whenever it appears lacks subject matter jurisdiction
• means if appellate ct notices at any point dist ct lacked jur, obliged to order dismissal for lack of jur + can’t reach merits

Question 31

Steel Co v. Citizens for a Better Env

Answer 31

• 1998
• Scalia criticizes the approach of several courts of appeal proceeding immediately to the merits despite jurisdictional objections (“doctrine of hypothetical jurisdiction”)
  -> not ok, violates sep of powers, advisory opinion
• Breyer disagreed - Con doesn’t impose a required “order of operations”

Question 32

Ruhrgas AG v. Marathon Oil Co

Answer 32

• 1999
• Ginsburg
• “no unyielding jurisdictional hierarchy” wrt in personam jurisdiction and subject matter jurisdiction

Question 33

Sinochem International v. Malaysia International Shipping

Answer 33

• 2007
• Ginsburg
• fine to decide forum non conveniens before subject matter jurisdiction where smj = difficult to determine

Question 34

Pendant Jurisdiction

Answer 34

• stretches federal court’s authority over a federal claim to encompass a state law claim arising under the same facts

Question 35

United Mineworkers v. Gibbs

Answer 35

• sets out pendant jurisdiction - “common nucleus of operative fact”
• “exists whenever there is a claim satisfying the federal question element of federal subject matter jurisdiction and there is a second state claim related to the federal one such that the entire action before the court comprises but one constitutional “case””
• “state and federal claims must arise from a common nucleus of operative fact” – if the relationship is such that without consideration of state vs federal, plaintiff would be expected to try them all together in one judicial proceeding, then, assuming substantiality of federal issues, federal courts can hear the whole

Question 36

Gibbs - Discretion

Answer 36

• just because court can exercise pendent jurisdiction doesn’t mean it must – it’s discretionary, not a plaintiff’s right
• Considerations of judicial economy, fairness to litigants, and convenience
  -Should avoid needless federal decisions of state law
• dismiss state claims if they “substantially predominate” (book seems to indicate can dismiss state claims w/o prej in this instance + leave for state ct)

Question 37

Pendent Party Jurisdiction

Answer 37

• hybrid of pendent jurisdiction and ancillary jurisdiction

Question 38

Finley v United States

Answer 38

• 1989
• denied pendent party jur (said pendent jur didn’t extend to additional parties)
• overruled by statute - 28 USC §1367

Question 39

28 USC §1367

Answer 39

(a) deals w/ “supplemental jur” - codifies GIbbs AND says supp jur includes claims involving joinder or intervention of additional parties

Question 40

Duke Power v. Carolina Environmental Study Group

Answer 40

• 1978
• Environmental group sued Duke Power for, among other things, declaration that part of the Atomic Energy Act limiting liability for nuclear accidents is unconstitutional
• District court agreed.

Question 41

Duke Power - Ruling

Answer 41

• Burger Op
• there is fed jurisdiction
• haven’t identified a cause of action that would be the analog, but presumably it is a Bivens-like claim under the Takings Clause (government is taking their recovery away if hurt in an accident).
• It’s not clear that such a cause of action exists, but the question is sufficiently colorable and substantial to allow jurisdiction (Bell v. Hood). (Prof doesn’t like this use of Bell).

Question 42

Duke Power - Prof Field View

Answer 42

• This is Mottley.
• If not DJ case, plaintiff would sue in tort when hurt, defense would use the Act to defend, plaintiff would say that the Act is unconstitutional
• Prof thinks they forced this case to fit jur b/c they thought if they didn’t decide on constitutionality of the act, co’s would never build nuclear power plants

Question 43

Duke Power - Cause of Action

Answer 43

• says there’s a direct cause of action for this under the 5th Am + therefore falls under the general federal question statute

-cites Bell v. Hood – if you can say it with a straight face it’s not frivolous

-He’s able to infer these causes of action, but doesn’t need to decide whether they actually exist – it’s substantial enough to support the jurisdiction b/c not so patently w/o merit as to justify dismissal but further q of whether cause of action should be recognized under Con. doesn’t need to be decided here

• basically winds up saying he doesn’t need to decide whether the cause of action exists – decides to support the jurisdiction without an actual cause of action (prof says absurd, he only does this because he doesn’t want to mess up the Price Anderson Act + people understand that’s why he’s doing it)
  -Prof pointing out in Bell v Hood they said substantial enough to support juris., now we’ll decide whether it exists, vs. here Burger just decides not gonna decide whether it exists at all
  -Prof says people don’t really try to get jurisdiction out of this case, but if you could get jurisdiction this way you could get it very broadly

Question 44

Duke Power - Rehnquist

Answer 44

• says this is just Mottley
• They’re suing under NC law for damage to their property -> defendants would then give the Price Anderson Act as a response (federal response) – suit under state law w/ def response under federal
  -Prof says no one noticed this until they got to the Supreme Court – she says this is why you need “turns on” jurisdiction – it’s just so obvious that the case is all about a federal issue

Question 45

Duke Power - Constitutional Ruling

Answer 45

• reverses district court holdngs on the constitutionality of the statute at issue