Brief Fact Summary. Plaintiffs, citizens of Kentucky, sued Defendant, a Kentucky corporation, in federal court for breach of contract. The complaint stated that this breach was due to Congress passing a certain statute and that the statute did not apply to Plaintiffs situation and that it violated the Fifth Amendment to the U.S. Constitution. Defendant moved to dismiss, arguing that the federal court did not have jurisdiction because none of the issues in Plaintiffs’ complaint “arose” under federal law.
Synopsis of Rule of Law. Under the well-pleaded complaint rule, if the facts alleged in a complaint do not demonstrate an issue involving federal law pertaining to the plaintiff’s right to a cause of action, there is no question of federal law and the federal courts do not have federal question jurisdiction. An anticipated defense is not part of the plaintiff’s case and thus cannot be a basis for federal question jurisdiction.
Issue. Does an anticipated defense contained in the plaintiff’s complaint that the plaintiff’s cause of action is not valid under the Constitution or laws under the United States establish subject matter jurisdiction in federal court based on a claim “arising from” federal law?
Held. No. Reversed and remitted with instructions to dismiss the case.
The jurisdictional issue at hand is based on the federal statute giving jurisdiction for claims “arising” under federal law (or federal question jurisdiction) and not the United States Constitution.
Federal question jurisdiction gives original jurisdiction only in civil actions arising under the Constitution, laws, or treaties of the United States. An anticipated defense in a well-pleaded complaint does not give rise to federal question jurisdiction because it does not arise under federal law.
Discussion. This case articulates the well-pleaded complaint rule. Plaintiffs cannot raise anticipated defenses as a means of invoking jurisdiction. Plaintiffs must demonstrate that the cause itself arose from federal law.