Jurisdiction over Cases “Arising under” Federal Law

INTRODUCTION

Our first three chapters dealt with personal jurisdiction—the power of a court to require a defendant from outside the state to defend a lawsuit in that state. Now we turn to subject matter jurisdiction, a separate, additional requirement for a court to hear a case. Suppose, for example, that Engle wishes to sue her employer, Consolidated Packing Corporation, after she is fired from her job for reporting acts of fraud committed by Consolidated officers to federal authorities. She needs to choose a court that has personal jurisdiction over Consolidated for her claim, but she must also choose one that can hear the type of lawsuit she plans to file against Consolidated.

To understand the principles governing subject matter jurisdiction in American courts, we have to start with those courts themselves. The United States Constitution created a system of divided sovereignty, in which the states and the national or “federal” government share power. Not only is legislative power split between the two levels of government, but the judicial power is as well. Thus, in every state there is a state court system and a branch of the federal court system. Some cases must be brought in the state courts. Others (though not many) must be brought in federal court. And still others may be filed in either court system. The trick is to know which ones go where, and that depends on which court has “subject matter jurisdiction” over the case, that is, the power to hear the particular type of case the plaintiff plans to file.

Let’s start with the reach of subject matter jurisdiction in the state courts. Every state defines the types of cases its courts may hear in its constitution or by statute (or both), and all states have conferred very broad subject matter jurisdiction on their courts. That isn’t particularly surprising: Plaintiffs generally prefer to sue at home, so broad jurisdiction accommodates local citizens, who, after all, elect the legislators who write jurisdictional statutes. So it’s a fair working principle that the state courts in every state have very broad jurisdiction to hear most types of cases. For example, the state courts will be able to hear garden variety tort and contract claims, property claims, divorce claims, cases involving wills and trusts, and claims under state statutes. Indeed, it is hard to think of a case arising under state law that could not be filed in some court within the state, and most cases do arise under state law.