F I L E D

United States Court of Appeals

Tenth Circuit

March 14, 2006

Elisabeth A. Shumaker

Clerk of Court

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

WARREN D. NICODEMUS, Trustee

of the Warren D. Nicodemus Living

Trust dated August 5, 1999 and JOHN

N. MORRIS, NORMA B. MORRIS,

and JOHN H. BELL IRON

MOUNTAIN RANCH COMPANY, on

behalf of themselves and all others

similarly situated,

Plaintiffs - Appellees,

v.

UNION PACIFIC CORPORATION, a

Utah corporation, and UNION

PACIFIC RAILROAD COMPANY, a

Delaware corporation,

Defendants - Appellants,

and

SPRINT COMMUNICATIONS

COMPANY, L.P.; QWEST

COMMUNICATIONS

CORPORATION; LEVEL 3

COMMUNICATIONS LLC; WILTEL

COMMUNICATIONS, LLC; RAILS

TO TRAILS CONSERVANCY,

Amici Curiae.

Nos. 02-8016, 02-8017
*After examining the briefs and the appellate record, this three-judge panel

has determined unanimously that oral argument would not be of material

assistance in the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th

Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument.

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APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF WYOMING

(D. Ct. Nos. 01-CV-009-J & 01-CV-099-J)

Submitted on the briefs:*

Joseph Rebein, Shook, Hardy & Bacon, L.L.P., Kansas City, Missouri; Ron

Bodinson, Jason E. Pepe, Bill J. Hays, and Chelsi K. Hayden, Shook, Hardy &

Bacon, L.L.P., Overland Park, Kansas; and Stephen R. McAllister, University of

Kansas School of Law, Lawrence, Kansas, for Defendants-Appellants.

John B. Massopust, Zelle, Hofmann, Voelbel, Mason & Gette, LLP, Minneapolis,

Minnesota; Catherine M. Colinvaux, Zelle, Hofmann, Voelbel, Mason & Gette,

LLP, Waltham, Massachusetts; Kim D. Cannon, Davis & Cannon, Sheridan,

Wyoming; and Jordan Lewis, Siegel, Brill, Greupner, Duffy & Foster, Milwaukee,

Wisconsin, for Plaintiffs-Appellees.

J. Emmett Logan, Stinson Morrison Hecker LLP, Kansas City, Missouri, John F.

Daum, O’Melveny & Myers, LLP, Los Angeles, California, Joseph E. Jones,

Fraser Stryker Vaughn Meusey Olson Boyer & Bloch, Omaha, Nebraska, and J.

Kevin Hayes, Hall, Estill, Hardwick, Gable, Golden & Nelson, Tulsa, Oklahoma,

filed and Amici Curiae brief for Sprint, Qwest, Level 3, and Wiltel, on behalf of

Appellants.

Andrea Ferster, Rails to Trails Conservancy, Washington, D.C., and Charles H.

Montange, Seattle, Washington, filed an Amicus Curiae brief for Rails to Trails

Conservancy, on behalf of Appellee.

Before TACHA, Chief Circuit Judge, ANDERSON, and EBEL, Circuit Judges.
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TACHA, Chief Circuit Judge.

This case has led a somewhat tortured existence in the federal courts. The

Plaintiffs-Appellees, who are Wyoming landowners, originally filed suit in the

District of Wyoming in 2001 alleging various state law claims including trespass,

unjust enrichment, and slander of title against Defendants-Appellants Union

Pacific Corporation and Union Pacific Railroad Company (“Union Pacific”). On

December 6, 2001, the District Court sua sponte dismissed Plaintiffs’ causes of

action for lack of subject matter jurisdiction under either 28 U.S.C. §§ 1331 or

1332. Despite the fact that it ostensibly prevailed, Union Pacific filed a motion

under Fed. R. Civ. P. 59(e) requesting the District Court to alter or amend its

ruling that it lacked subject matter jurisdiction under § 1331. The District Court

denied the motion. 

Union Pacific then appealed the ruling to this Court. This panel affirmed,

concluding that federal-question jurisdiction over state law claims existed only

when Congress provided a federal cause of action or intended to provide a federal

forum for resolution of the dispute. Nicodemus v. Union Pac. Corp., 318 F.3d

1231, 1238 (10th Cir. 2003) (“Nicodemus I”) (citing Merrell Dow Pharm., Inc. v.

Thompson, 478 U.S. 804, 814 (1986)). Union Pacific sought rehearing en banc,

which was granted on April 22, 2003. 
1We note that though both parties now agree that the District Court had

jurisdiction—Plaintiffs suggest diversity jurisdiction is proper while Union

Pacific suggests federal-question jurisdiction is proper—we must nevertheless

find jurisdiction as it “cannot be conferred upon a federal court by consent,

(continued...)

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Before the en banc argument took place, however, the parties filed a joint

motion asking that the appellate proceedings be abated pending the outcome of

class action settlement proceedings in the Seventh Circuit that might moot the

issues on appeal. On August 19, 2003, this Court granted the motion. Two years

later, in 2005, the Seventh Circuit vacated the nationwide class certification, see

Smith v. Sprint Commc’ns Co., 387 F.3d 612 (7th Cir. 2004), cert. denied, 125 S.

Ct. 2939 (2005), and thus the settlement proceedings that could have mooted the

rehearing en banc fell through. The parties then advised this Court that they were

ready to proceed with the previously scheduled rehearing. 

In the interim, the Supreme Court issued its decisions in Grable & Sons

Metal Prods., Inc. v. Darue Eng’g & Mfg., 125 S. Ct. 2363 (2005) and Exxon

Mobil Corp. v. Allapattah Servs., Inc., 125 S. Ct. 2611 (2005), which addressed

the important jurisdictional questions at issue in this case. In response to these

cases, Plaintiffs filed a motion requesting this Court to reconsider its decision to

rehear the case en banc. Plaintiffs asked this Court to reinstate the panel’s

opinion on federal-question jurisdiction, but to remand to the District Court on

the basis that diversity jurisdiction existed.1

 Union Pacific opposed the motion. 
1

(...continued)

inaction or stipulation.” Basso v. Utah Power & Light Co., 495 F.2d 906, 909

(10th Cir. 1974).

2We reinstate that portion of our prior opinion determining our appellate

jurisdiction over the District Court’s order dismissing the case in Union Pacific’s

favor. See Nicodemus I, 318 F.3d at 1234–1235. 

3Plaintiffs argue that the Supreme Court’s recent decision in Exxon Mobil

permits the District Court to exercise diversity jurisdiction over the dispute. The

District Court concluded, however, that Plaintiffs did not meet the amount-incontroversy requirement for diversity jurisdiction, and neither Plaintiffs nor

Union Pacific appealed that ruling. We therefore deem the issue waived. See

Tulengkey v. Gonzales, 425 F.3d 1277, 1279 n.1 (10th Cir. 2005). In any event, it

is not clear that Exxon Mobil would have any effect on Plaintiffs’ claim. In

Exxon Mobil the Court held that “where the other elements of jurisdiction are

present and at least one named plaintiff in the action satisfies the

amount-in-controversy requirement,” a federal court may exercise supplemental

jurisdiction over the claims of other plaintiffs. 125 S. Ct. at 2615. Here, the

District Court concluded that no plaintiff could meet the amount-in-controversy

requirement. See Nicodemus v. Union Pac. Corp., 204 F.R.D. 479, 488 n.7 (D.

Wyo. 2001). 

-5-

We vacated our decision to rehear the case en banc and referred the case back to

the original panel to consider the effect of Grable & Sons and Exxon Mobil on the

outcome of the proceedings. We take jurisdiction under 12 U.S.C. § 12912 and, in

light of Grable & Sons,

3

 we now REVERSE. 

I. BACKGROUND

District courts have “original jurisdiction of all civil actions arising under

the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. “A

case arises under federal law if its ‘well-pleaded complaint establishes either that

federal law creates the cause of action or that the plaintiff’s right to relief
4There is one exception to the well-pleaded complaint rule: complete

preemption. In Metropolitan Life Ins. Co. v. Taylor, the Supreme Court

recognized that “Congress may so completely preempt a particular area that any

civil complaint raising this select group of claims is necessarily federal in

character.” 481 U.S. 58, 63-64 (1987). This exception is not implicated in this

case. 

-6-

necessarily depends on resolution of a substantial question of federal law.’” 

Morris v. City of Hobart, 39 F.3d 1105, 1111 (10th Cir. 1994) (quoting 

Franchise Tax Board v. Constr. Laborers Vacation Trust, 463 U.S. 1, 27-28

(1983). Thus, even though a plaintiff asserts only claims under state law, federalquestion jurisdiction may be appropriate if the state-law claims implicate

significant federal issues. 

Over the last century, several principles have developed that guide federal

courts in determining whether they have jurisdiction over a state-law claim. First,

the well-pleaded complaint rule requires that “the federal question giving rise to

jurisdiction must appear on the face of the complaint.”4

 Karnes v. Boeing Co.,

335 F.3d 1189, 1192 (10th Cir. 2003). This rule “makes the plaintiff the master

of the claim; he or she may avoid federal jurisdiction by exclusive reliance on

state law.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). 

The well-pleaded complaint rule also means that federal-question

jurisdiction may not be predicated on a defense that raises federal issues. Merrell

Dow, 478 U.S. at 808. Therefore, a “plaintiff’s anticipation of a defense based on
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federal law is not enough to make the case ‘arise under’ federal law[;] [n]or is a

defendant’s assertion of a defense based on federal law . . . a proper basis for

removal.” Schmeling v. NORDAM, 97 F.3d 1336, 1339 (10th Cir. 1996). Further,

a plaintiff may not circumvent federal jurisdiction by omitting federal issues that

are essential to his or her claim. See id. at 1345 n.2. 

Even if a federal question appears on the face of a well-pleaded complaint,

federal jurisdiction is not automatic. It is by now axiomatic that “federal

jurisdiction demands not only a contested federal issue, but a substantial one,

indicating a serious federal interest in claiming the advantages thought to be

inherent in a federal forum.” Grable & Sons, 125 S. Ct. at 2367. Finally, 

even when the state action discloses a contested and substantial federal

question, the exercise of federal jurisdiction is subject to a possible veto. 

For the federal issue will ultimately qualify for a federal forum only if

federal jurisdiction is consistent with congressional judgment about the

sound division of labor between state and federal courts governing the

application of § 1331. 

Id. 

In Merrell Dow, the Court was confronted with a typical negligence action

in which the plaintiffs alleged that the defendant drug manufacturer’s violation of

a Food Drug and Cosmetic Act (“FDCA”) labeling provision raised a rebuttable

presumption of negligence. 478 U.S. at 805–06. Since Congress did not include

a private remedy for misbranding violations under that provision of the FDCA,

the Court concluded that Congress implied that “the presence of a claimed
-8-

violation of the statute as an element of a state cause of action is insufficiently

‘substantial’ to confer federal-question jurisdiction.” Id. at 814. 

After the Court’s decision in Merrell Dow, the circuits were divided over

the precise effect the case had on federal jurisdiction over state-law claims. 

Several circuits, including this one, required a finding of a federal cause of action

to support the assertion of federal-question jurisdiction over state-law claims. 

See, e.g., Nicodemus I, 318 F.3d at 1238; Zubi v. AT&T Corp., 219 F.3d 220, 223

n.5 (3d Cir. 2000); Seinfeld v. Austen, 39 F.3d 761, 764 (7th Cir. 1994). These

courts relied on broad language in Merrell Dow suggesting that “[i]n the absence

of a federal private right of action ‘it would flout congressional intent to provide

a private federal remedy for the violation of the federal statute . . . [and] it would

similarly flout, or at least undermine, congressional intent to conclude that the

federal courts might nevertheless exercise federal-question jurisdiction.’”

Nicodemus I, 318 F.3d at 1237 (quoting Merrell Dow, 478 U.S. at 812)

(alterations in original). In Grable & Sons, the Court granted certiorari to address

this jurisdictional question. 125 S. Ct. at 2366. 

The Court clarified that Merrell Dow cannot be read “as overturning

decades of precedent . . . and converting a federal cause of action from a

sufficient condition for federal-question jurisdiction into a necessary one.” Id. at

2369–70 (footnote omitted). Rather, the absence of a private right of action is
5The Court acknowledged that Merrell Dow characterized the absence of a

private right of action as a consideration in the assessment of substantiality, see

Grable & Sons, 125 S. Ct. at 2370, but it explained that the “primary importance”

of this factor as an ingredient in the delicate determination of “Congress’s

conception of the scope of [federal-question] jurisdiction,” was that allowing

jurisdiction when Congress had not intended a private right of action would have

seriously disrupted the balance of labor between state and federal courts, see id. 

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“relevant to, but not dispositive of, the ‘sensitive judgments about congressional

intent’ that § 1331 requires.” Id. at 2370. It further explained that in Merrell

Dow, the absence of a federal private right of action was fatal because “exercising

federal jurisdiction over a state misbranding action would have attracted a horde

of original filings and removal cases raising other state claims with embedded

federal issues.” Id. In this way, Merrell Dow is consistent with the Court’s prior

holdings because it was based in part on a determination of “Congress’s intended

division of labor between state and federal courts.”

5

 Id. at 2371. The Court then

reaffirmed its prior holdings, stating that the question is whether the “state-law

claim necessarily raise[s] a stated federal issue, actually disputed and substantial,

which a federal forum may entertain without disturbing any congressionally

approved balance of federal and state judicial responsibilities.” Id. at 2368. 

With this framework in mind, we turn to the facts of this case. 

II. DISCUSSION

A. Facts

Plaintiffs in this case are Wyoming landowners. Union Pacific was granted
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railroad rights-of-way over Plaintiffs’ property under numerous federal land-grant

statutes, which dated from 1852 to 1875. The dispute between the parties arose

when Union Pacific entered into agreements with various telecommunications

providers in which Union Pacific “licensed” to them the right to install and

maintain fiber-optic cables in the rights-of-way over Plaintiffs’ land. Union

Pacific receives revenue from these license agreements. 

Plaintiffs filed suit in the District of Wyoming, alleging Union Pacific’s

actions exceeded the scope of Union Pacific’s rights under the federal land-grant

statute. They claimed that though Union Pacific has an undisputed right to

conduct railroad operations along the right of way, Plaintiffs retain the servient

tenement in the underlying land for all other purposes. Mr. Nicodemus, as trustee

for property owned by the Warren D. Nicodemus Living Trust, sought various

forms of relief, including: (1) damages for trespass; (2) damages for unjust

enrichment; (3) an accounting and disgorgement of rents and profits; (4) a

permanent injunction preventing Union Pacific from further conveying any

claimed interest in the land; and (5) a declaratory judgment establishing, inter

alia, that Union Pacific’s interest in the land is limited to that use necessary for

the operation of a railroad. The Morris plaintiffs, including John H. Bell Iron

Mountain Ranch Company, advanced similar claims, and in addition, requested

the following: (1) damages for slander of title; (2) damages for inverse
6

In Nicodemus I, we assumed without deciding that Plaintiffs’ claims

satisfied the well-pleaded complaint rule, see 318 F.3d at 1236, but acknowledged

that for “at least some of plaintiffs’ claims, we might need to consider Union

Pacific’s rights as part of plaintiffs’ prime facie case, to determine the extent to

which Union Pacific’s right-of-way circumscribe plaintiffs’ fee interests,” id. at

1236 n.5. 

7We note that we have previously construed Union Pacific’s rights under

section 2 of the Pacific Railroad Act of 1862, involving Mr. Nicodemus’s land, as

“the grant of the right-of- way, and . . . [not a] convey[ance] [of] title to the

servient estate underlying the right-of-way.” Energy Transp. Sys., Inc. v. Union

Pac. R.R. Co., 606 F.2d 934, 937 (10th Cir. 1979). 

-11-

condemnation; and (3) an injunction requiring Union Pacific to remove the

existing fiber optic cables. 

B. Federal-Question Jurisdiction

Our starting point is to determine whether the well-pleaded complaint raises

a disputed issue of federal law, the resolution of which is necessary to grant the

relief Plaintiffs seek.6

 Plaintiffs’ claims are founded in state law, but, as

discussed above, a plaintiff may not circumvent federal jurisdiction by omitting

federal issues that are essential to his or her claim. See Schmeling, 97 F.3d at

1345 n.2. All of Plaintiffs’ claims hinge on whether Union Pacific’s use of the

right-of-way has exceeded the purpose for which it was granted.7

 Cf. Markstein v.

Countryside I, LLC, 77 P.3d 389, 398 (Wyo. 2003) (“An easement is defined as

‘an interest in land which entitles the easement holder to a limited use or

enjoyment over another person’s property.’” (quoting Restatement of Property §

450(a) (1944)). To construe the scope of a right-of-way easement, a court must
-12-

look to the language of the easement to determine the intent of the parties. Id.;

see also Edgcomb v. Lower Valley Power and Light, Inc., 922 P.2d 850, 854

(Wyo. 1996) (stating that when an easement is obtained pursuant to a grant, the

extent of the right depends upon the language of the grant). Thus, the first step in

resolving the claims against Union Pacific requires a court to look at the vehicle

by which Union Pacific obtained the right-of-way—in this case, the federal-land

grant statutes.

Plaintiffs argue, however, that the federal issue only arises as a defense to

their claims and thus it is an inappropriate basis on which to assume federalquestion jurisdiction. On the contrary, to prove their action for unjust

enrichment, for example, Plaintiffs must show not only that Union Pacific was

enriched, but that “the underlying circumstances, as between the two parties, . . .

[is] such that the enrichment is unjust.” Landeis v. Nelson, 808 P.2d 216, 218

(Wyo. 1991). Plaintiffs’ specific allegations of unjust enrichment are derived not

from the alleged trespass, but from misuse of the right-of-way. The Morrises’

complaint states that Union Pacific was unjustly enriched by its “unlawful use and

occupancy of . . . plaintiffs’ . . . land and the retention of rents and other

compensation arising from the unlawful use and occupancy of the right-of-way.”

Appx. 66. The Nicodemuses allege that “under the laws of the United States” the

right-of-way is for railroad purposes and Union Pacific “has no ownership or
8

If any one claim within Plaintiffs’ complaint supports federal question

jurisdiction, a federal court may assert jurisdiction over all the claims, including

any alleged state-law claims, arising from the same core of operative facts. See

28 U.S.C. § 1367; City of Chicago v. International College of Surgeons, 522 U.S.

156, 164 (1997). We also note, however, that the Morris plaintiffs’ slander of

title claim necessarily raises a disputed federal issue. In Wyoming, slander of

title is defined as “a false and malicious statement made in disparagement of a

person’s title to real or personal property, or of some right of his causing him

special damage.” Sannerud v. Brantz, 879 P.2d 341, 344 (Wyo. 1994). To prove

that Union Pacific’s asserted right to the property is false the Morrises will have

to prove that it has exceeded the scope of the right-of-way. See, e.g., Hopkins v.

Walker, 244 U.S. 486, 490 (1917) (action to remove cloud on title raises federal

issue because “invalidity of the instrument or record sought to be eliminated as a

cloud upon the title are essential parts of the plaintiff’s cause of action”). 

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possessory interest in or right to exercise dominion and control over these rights

of way beyond that which is necessary for the operation of a railroad.” Appx. 42. 

The complaint further alleges that Union Pacific has “[w]rongfully claim[ed] an

ownership or possessory interest . . . beyond that which is necessary for the

limited purpose of operating a railroad over the lands on which [it] currently . . .

has a right-of-way . . . .” Appx. 43. Finally it states that by licensing to

telecommunications companies the right to bury fiber optic cables, it has

“unlawful[ly] use[d] and occup[ied] their land,” depriving them of the “rents

[and] profits.” To prove that Union Pacific acted unlawfully, Plaintiffs must

establish that the right-of-way prohibited the use to which it was put. The federal

issue, therefore, arises in Plaintiffs’ case-in-chief, not by way of defense.8

 See

Drawhorn v. Qwest Commc’ns Int’l, Inc., 121 F. Supp. 2d 554, 564 (E.D. Tex.
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2000) (plaintiffs must prove as part of case-in-chief that the railroads had no right

to grant easements to telecommunications company to lay fiber optic cables on

property); Browning v. MCI WorldCom Network Servs., 2002 WL 500584 (D.

Kan. 2002) (unpublished) (same); In re AT&T Fiber Optic Cable Installation

Litigation, 2001 WL 1397295 (S.D. Ind. 2001) (unpublished) (same); see also

Grable &Sons, 125 S. Ct. 2363 (quiet title action required plaintiff to prove that

he was not given proper notice of seizure under federal statute); Kan. Pac. Ry.

Co. v. Atchison, Topeka & Santa Fe R.R. Co., 112 U.S. 414 (1884) (quiet title

action depends on construction given to federal land grant statutes); Municipality

of San Juan v. Corporacion Para El Fomento Economico De La Ciudad Capital,

415 F.3d 145 (1st Cir. 2005) (taking jurisdiction over breach of contract action

when breach depended on construction of federal law). 

The presence of a federal issue, however, is not necessarily “a password

opening federal courts to any state action embracing a point of federal law.” 

Grable & Sons, 125 S. Ct. at 2368. Instead, we next ask whether the federal issue

is one that is “actually disputed and substantial, [and] which a federal forum may

entertain without disturbing any congressionally approved balance of federal and

state judicial responsibilities.” Id. As an initial matter, it is clear that the federal

question is actually disputed. In fact, construction of the federal land grant

appears to be the only legal or factual issue contested in the case. Next, in
9Under the Abandoned Railroad Right of Way Act, 43 U.S.C. § 912,

enacted in 1922, land given by the United States for use as a railroad right-of-way

in which the United States retained a right of reverter under N. Pac. Ry. Co. v.

Townsend, 190 U.S. 267 (1903), must be turned into a public highway within one

year of the railroad company’s abandonment or be given to adjacent landowners. 

Subsequently, Congress enacted the National Trails System Improvement Act of

1988, 16 U.S.C. § 1248(c), under which those lands not converted to public

highways within one year of abandonment revert back to the United States, not

(continued...)

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determining whether the federal question is a substantial one, courts should

inquire into whether resolution of the issue in federal court would benefit from

“the advantages thought to be inherent in a federal forum.” Id. at 2367. A case

should be dismissed for want of a substantial federal question only when the

federal issue is “(1) wholly insubstantial or obviously frivolous, (2) foreclosed by

prior cases which have settled the issue one way or another, or (3) so patently

without merit as to require no meaningful consideration.” Wiley v. Nat’l

Collegiate Athletic Ass’n, 612 F.2d 473, 477 (10th Cir. 1979) (citing Hagans v.

Lavine, 415 U.S. 528, 539–41 (1974)). 

Union Pacific argues that there is a substantial federal interest in the

railroad rights-of-way held by Union Pacific. In support of this contention, it

notes the following: (1) the federal government’s subsidization of the

construction of a transcontinental railroad through the rights-of-way grants; (2)

the federal government’s limited right of reverter in the railroad rights-of-way,

see 16 U.S.C. § 1248(c);9 and (3) the applicability of federal common law in
9

(...continued)

adjacent private landowners. For a general overview of this statutory scheme, see

Mauler v. Bayfield County, 309 F.3d 997, 999 (7th Cir. 2002).

-16-

construing the federal land-grant statutes, see N. Pac. Ry. Co. v. Townsend, 190

U.S. 267, 270–71 (1903) (“‘The courts of the United States will construe the

grants of the general government without reference to the rules of construction

adopted by the states for their grants. . . .’”).

We agree that the contested interpretation of the federal land-grant statutes

as between these parties involves a substantial federal issue. Indeed, we

acknowledged that these were “considerable federal interests” in Nicodemus I. 

 318 F.3d at 1237. The statutes at issue granted to Union Pacific the right to

construct a railroad and telegraph line in order to “secure the safe and speedy

transportation of the mails, troops, munitions of war, and the public stores” to the

West. See, e.g., Act of July 1, 1862, ch. 120, § 3, 12 Stat. 489. Under

subsequently enacted statutes, the United States has a reversionary interest in the

lands when no longer used for their designated purposes. See 43 U.S.C. §§ 912,

913 and 16 U.S.C. § 1248(c). Thus, the government has a direct interest in the

determination of property rights granted to the railroad. See Grable & Sons, 125

S. Ct. at 2368 (federal issue is substantial because “[t]he Government . . . has a

direct interest in the availability of a federal forum to vindicate its own

administrative action, and [because] buyers (as well as tax delinquents) may find
-17-

it valuable to come before judges used to federal tax matters”). Moreover, federal

common law applies to resolve the dispute. Though the existence of a federal

cause of action would have provided additional evidence relevant to our calculus,

see id. at 2370, it is not dispositive, especially since Congress did not grant to

federal courts original jurisdiction over federal-question cases until 1875, see

Judiciary Act of 1875, §§ 1, 2, 18 Stat. 470.

Finally, we are confident that providing a federal forum for the resolution

of this issue will not disrupt “the sound division of labor between state and

federal courts.” We acknowledge that the type of property dispute at issue has

been the recent subject of several proposed class actions. See, e.g., Smith, 387

F.3d 612; Isaacs v. Sprint Corp., 261 F.3d 679 (7th Cir. 2001). It will

nonetheless be the rare state trespass and unjust enrichment case that so uniquely

turns on a critical matter of federal law. Thus, federal jurisdiction to resolve

genuine disagreement over the scope of a right granted to the railroads pursuant to

federal law “will portend only a microscopic effect on the federal-state division

of labor.” Grable & Sons, 125 S. Ct. at 2368. 

In sum, “[g]iven the absence of threatening structural consequences” and

the importance for the availability for a federal forum, “there is no good reason to

shirk from federal jurisdiction over the dispositive and contested federal issue at

the heart of [this] state-law . . . claim.” Id. at 2371. 
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III. CONCLUSION

For the foregoing reasons, the judgment of the District Court dismissing the

action for lack of subject matter jurisdiction is REVERSED.