Federal Questions and Federal Cases

JURISDICTION OVER CASES ARISING UNDER FEDERAL LAW: THE CONSTITUTIONAL SCOPE

The Supreme Court has long taken an expansive view of the “arising under” language in Article III, §2. In Osborn v. Bank of the United States, 22 U.S. 738 (1824), Chief Justice Marshall, who advocated a strong national government, held that a case arises under federal law—as that phrase is used in Article III, §2—if

the title or right set up by the party, may be defeated by one construction of the constitution or law of the United States, and sustained by the opposite construction. We think, then, that when a question to which the judicial power of the Union is extended by the constitution, forms an ingredient of the original cause, it is in the power of Congress to give [the lower federal courts] jurisdiction of that cause, although other questions of fact or law may be involved in it.

22 U.S. at 822-823.

Under the broad holding in Osborn, the federal court could clearly hear the first case above, since the federal statute is the source of the substantive right Engle claims. Jurisdiction under this “federal ingredient” approach would also extend to the second case, in which Engle sues under state contract law, but Consolidated claims as a defense that it was required to discharge her under a federal statute. The validity of this defense will clearly be an “ingredient” of the case, although that ingredient is injected by the defendant, not the plaintiff.[5] The third case would arguably also come within this broad “ingredient” approach to arising-under jurisdiction. Although Engle has sued under state tort law, in order to prove her bad faith dismissal claim she will have to show that she was fired because of her refusal to violate federal regulations. Thus, proving her state law contract claim will require her to show that the accounting practices she refused to adopt would violate federal law.