Federal Question Jurisdiction and Justice Holmes

INTRODUCTION A recurring issue in the study of federal courts is what cases arise under federal law for purposes of [section] 1331. (1) The general rule is clear enough. The federal issue must arise on the face of the plaintiff's well-pleaded complaint. There are two categories of such cases. One consists in causes of action created by the Constitution or federal law, such as rights of action under the antitrust laws. Another category comprises state causes of action with substantial and contested federal ingredients. The late Paul Bator referred to these categories respectively as "Proposition A" and "Proposition B" cases, terminology that was incorporated into the third edition of Hart & Wechsler's federal courts text. (2) Proposition B cases, even if not without defenders, (3) have always been considered more problematic than Proposition A cases. In American Well Works Co. v. Layne & Bowler Co,, (4) Justice Holmes famously stated, "A suit arises under the law that creates the cause of action." (5) And in Smith v. Kansas City Title & Trust Co., (6) he dissented from the Court's opinion allowing federal jurisdiction over a state law fiduciary duty claim raising a federal constitutional issue. (7) Nearly fifty years ago, Judge Henry Friendly reinforced Holmes' position by referring to the majority opinion in Smith as a novelty--a "path-breaking opinion." (8) Friendly's view continues to have currency among modern scholars who treat Proposition B as both historically and currently idiosyncratic. (9) What is more, the modern reemphasis on the value of rules--particularly important in the jurisdictional context--has suggested to many that, perhaps, it is time to inter Proposition B altogether. (10) The Supreme Court's decision in Merrell Dow Pharmaceuticals, Inc. v. Thompson (11) seemed to indicate the end was near--at least for state causes of action incorporating federal statutory (as distinguished from constitutional) standards of care. (12) But the Court could not seem to pull the plug. In Grable & Sons Metal Products Inc. v. Darue Engineering & Manufacturing, (13) the Court allowed federal question removal of a state quiet title action that sought to undo a federal tax sale for failure to meet federal statutory notice requirements. (14) This Article, by looking at the history of federal question jurisdiction, seeks to shed light on the persistence of Proposition B. Current [section] 1331 descended from the Judiciary Act of 1875, which provided for jurisdiction over cases "arising under the Constitution or laws of the United States." (15) For clues as to what contemporaries might have seen the 1875 statute as addressing, this Article looks at the pre-1875 application of provisions granting federal court jurisdiction for cases "arising under" particular sets of congressional laws, such as the revenue and patent laws. It also looks to the pre-1875 use of diversity jurisdiction as a means for raising federal constitutional issues. In addition, it evaluates early use of the 1875 Act. This history suggests that Proposition B cases were perhaps the paradigm "arising under" cases. Holmes' attempt to exclude Proposition B cases from federal courts represented a break with the past--one that perhaps resulted from his predictivist legal philosophy. What is more, it is uncertain whether Holmes' test represented the clear rule it is supposed to embody. While the historical and Holmesian support for excising Proposition B cases from federal court may be weaker than many suppose, there may be other reasons for limiting Proposition B cases' access to federal courts. Rules for allocating jurisdiction are desirable. In addition, judicial and congressional assumptions that federal law will be enforced through general or state law remedies have faded--particularly for federal statutory law. We briefly sketch a possible resolution in the distinction arguably suggested by Merrell Dow--excluding Proposition B actions based on statutes while including those based on the Constitution. …