Brief Fact Summary.
Mottley (Plaintiff) brought an action in federal court because its main defense was based on federal law.
Synopsis of Rule of Law.
An anticipated defense to an action that is based on federal law is not sufficient to confer federal jurisdiction.
In Freeland v. Heron each party insisted that the burden was with the other; but the language of the court was: When one merchant sends an account-current to another residing in a different country, between whom are mutual dealings, and he keeps it two years without making any objections, it shall be deemed a stated account, and his silence and acquiescence shall bind him, at least so far as to cast the onus probandi on him.View Full Point of Law
Louisville & Nashville Railroad Co. (Defendant) agreed to give Mottley (Plaintiff) free lifetime railroad passes as part of a personal injury settlement. Congress enacted legislation in 1906, which, among other things, forbade railroads from giving free passes. Defendant stopped providing free passes to Plaintiff, who brought an action for specific performance in federal court. The court of appeals entered an order of specific performance, and Defendant petitioned for certiorari.
Is an anticipated defense to an action based on federal law sufficient to confer federal jurisdiction?
(Moody, J.) No. An anticipated defense to an action that is based on federal law is not sufficient to confer federal jurisdiction. For federal question jurisdiction to exist, an action must “arise under” the Constitution or federal law. It seems apparent that this refers to the cause of action asserted by the plaintiff, not any possible defense asserted by the defendant. Federal question jurisdiction did not exist. In this case, Mottley’s (Plaintiff) cause of action was based on state contract law and had no federal aspect. Therefore, Louisville’s (Defendant) anticipated federal-law defense did not in itself confer federal jurisdiction. Reversed and dismissed.
Jurisdiction is the one defense that is never waived. In this particular lawsuit, the issue was never addressed in the courts below and not by the parties at the Supreme Court level. The Court raised the issue sua sponte. This situation presents a possible trap for an unwary plaintiff attorney who may find his federal case dismissed for lack of jurisdiction years after he has filed it, and after the statute of limitations has run for filing in state court.