With this background, let’s return to Engle’s case from p. 63. Several of the categories in Article III, §2 might give a federal court constitutional authority to hear this case. Federal subject matter jurisdiction may be proper if Engle is “diverse” from (that is, a citizen of a different state than) Consolidated. Article III, §2 also provides federal courts the constitutional authority to hear Engle’s case if it arises under a federal statute or under the federal Constitution. If her case doesn’t fit into one of these two cubbyholes in Article III, §2, it appears that Engle will have to sue in state court: Remember the general premise that if a power is not granted to the federal government under the Constitution, it remains with the states.
These two categories of federal subject matter jurisdiction—cases that arise under federal law and cases “between citizens of different states” (diversity cases)—are by far the most common types of civil cases filed in federal court. This chapter will focus on the first category, which I shall refer to as “arising-under jurisdiction.” The next chapter will tackle diversity.
Article III, §2 authorizes federal courts to hear cases “arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority.” This provision obviously authorizes federal courts to hear at least some claims that involve federal constitutional issues or federal statutes, but the trick is to determine which claims that grand phrase, “arising under” federal law, includes. Does it authorize federal jurisdiction over a case that involves federal law in any way, or some more limited set of cases? Here are some examples that illustrate the problem:
Federal law lurks in each of these cases in one way or another. In the first case, Engle has actually brought suit under a federal statute. In the second, she sues on the state contract claim, but Consolidated has asserted a defense involving federal law. In the third example, Engle sues on a state law bad faith dismissal claim, but tries to establish the defendant’s bad faith by showing that it required her to violate federal law. In the last, federal law is only vaguely relevant, if at all. Examples like these illustrate that the courts need to develop some working standards to determine when a case that somehow involves federal law “arises under” federal law.