As compensation for injuries sustained while riding on the Railroad, the Railroad gave the Mottleys free annual rail passes for life, evidenced by a written agreement. When the railroad stopped providing the free rail passes, the Mottleys brought an action in federal court, seeking specific performance of the agreement. The court entered judgment for the Mottleys, and the Railroad appealed. According to the Mottleys’ complaint, the failure of the Railroad to issue the passed was due to an Act of Congress that prohibited free transportation passes.
A suit “arises under” the federal laws or Constitution only when the plaintiff’s statement of his own cause of action shows that it is based on those laws or Constitution.
The Mottleys (husband and wife) were injured riding on the Louisville & Nashville Railroad. As compensation of their injuries, they received free annual rail passes for life, evidenced by a written agreement between the parties. After complying with the agreement for over 30 years, the Railroad ceased performance. The Mottleys sued the Railroad in federal court, seeking specific performance of the free rail pass agreement. According to the Mottleys’ complaint, the Railroad ceased performance due to an Act of Congress that prohibited free transportation passes; the Mottleys allaged that the Act was either inapplicable in this case or violated the federal Constitution. The court entered judgment for the Mottleys. The Railroad appealed.
Did the federal court have jurisdiction to entertain this proceeding?
No. There was no basis for federal jurisdiction; federal jurisdiction cannot be based on an anticipated defense to plaintiff’s cause of action and plaintiff’s assertion that the defense is invalidated by a provision of the federal Constitution.
The Supreme Court, and not the parties, raised the issue of subject matter jurisdiction. The Court acknowledged its independent duty to see that the federal courts’ jurisdiction was not exceeded. The Court then reasoned that subject matter jurisdiction was lacking because federal jurisdiction could not be based on the Mottleys’ contract claim. The complaint’s statement of the Railroad’s defense (a federal Act that prohibited free transportation passes) and the Mottleys’ answer to this defense (that the Act was unconstitutional) did not provide a basis for federal jurisdiction.