Federal question jurisdiction and Justice Holmes.

Author:Woolhandler, Ann


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. (16)


    1. Hart and Sacks

      In his famous 1954 article, The Relations Between State and Federal Law, Henry Hart stated:

      [L]egal problems repeatedly fail to come wrapped up in neat packages marked "all-federal" or "all-state." ... The complexities thus created are greatly enhanced by the circumstance, of enormous significance in American federalism, that state courts are regularly employed for the enforcement of federally-created rights ... while federal courts are employed for the enforcement of state-created rights.... In so enforcing substantive rights and duties created by the other system, each of the two systems of courts employs its own rules of procedure and to some extent its own remedial concepts. To the problems of disentangling federal substantive law from state substantive law are thus added problems of disentangling substantive law, state or federal as the case may be, from federal or state procedural and remedial law. (17) Hart's discussion appears to be informed by a distinction between remedial rights and duties on the one hand, and primary rights and duties on the other. In The Legal Process, Hart and Albert Sacks explained that a primary duty is "an authoritatively recognized obligation ... not to do something, or to do it, or to do it if at all only in a prescribed way." (18) A primary duty is often one with respect to others, who have primary rights. For example, a person may have a primary duty not to cause injury to the property of another, who has a primary right.

      When a person breaches a primary duty, his breach "may or may not give rise, by operation of law," to a remedial duty--a duty to provide a remedy to the person whose primary rights were violated and who now has a remedial right. (19) Remedial rights take the form of remedial rights of action. (20) Thus the person whose primary right not to be injured by another was violated may have a tort action--a remedial right--against the violator.

      Although primary rights and duties often have corresponding remedial rights and duties, Hart and Sacks saw the concepts as sufficiently separate that one could not merely reason back from remedial rights to primary rights. (21) For example, a remedial duty may be merely "to do what you were supposed to do in the first place," (22) such as paying required wage rates under the Fair Labor Standards Act. (23) On the other hand, the addition of an equal amount of liquidated damages under the Act does not match the primary duty. In addition, a private party may have primary rights for which only government officials have remedial rights. (24)

    2. Predecessors to Hart and Sacks

      Hart and Sacks' terminology was somewhat familiar to nineteenth century lawyers, and the distinction would play a role in Holmes' thought (as discussed more fully below). (25) John Austin referred to primary rights and to sanctioning (or secondary) rights, which were consequences of violations of primary rights. (26) For Austin the command of the sovereign backed by "[b] Ping liable to evil ... if I comply not" was the source of all legal duties and rights. (27) He therefore stated, "In strictness, my own terms, 'primary and secondary rights and duties,' do not represent a logical distinction. For a primary right or duty is not of itself a right or duty, without the secondary right or duty by which it is sustained; and e converso." (28) Austin nevertheless found the distinction between primary and sanctioning rights useful for systematizing law. (29)

      In the latter half of the nineteenth century, John Norton Pomeroy, in his treatises Remedies and Remedial Rights and Equity Jurisprudence, adverted to the primary/sanctioning terminology, but preferred primary/remedial. (30) He used these concepts, among other things, to address whether equity merely provided additional remedial rights for the same primary rights as those vindicated at common law or instead vindicated additional primary rights. (31) Pomeroy's treatises helped to give the terminology some currency in American cases and legal thought. (32)

      While useful for positivists such as Austin, the primary/remedial distinction also corresponded to the preexisting, nonpositivist common law distinction between right and remedy. Nineteenth century lawyers and judges often saw traditional rights of property and person, as well as rights to have contracts performed, as existing apart from the remedies that might enforce them. Courts therefore frequently treated statutes of limitations on bringing common law actions as affecting merely the remedy and not the right, such that a time-barred action might be brought if the statute of limitations were repealed. (33) Similarly, legislatures could retroactively validate ultra vires municipal bonds, "by clothing them with forms which are essential to their enforcement, but not to their existence." (34)

      Using these concepts, Proposition B cases may be characterized as those in which at least part of the primary duties being enforced are federal (and are properly alleged in the complaint), but the remedial rights take the forms of state law. For example, a state law action to remove a cloud on title might determine which of two rivial claimants had better title from the federal government. (35) Because the history of Proposition B cases starts in the pre-Erie world, we also consider general common law actions in federal courts that enforced federal primary rights as within the ambit of potential Proposition B cases. For example, we include general law assumpsit actions to determine if federal customs officials were entitled to exact duties on particular goods. It is appropriate to see such general law actions raising federal statutory and constitutional issues as Proposition B predecessors because the Court itself distinguished such nonstatutory actions from causes of action that federal statutes explicitly created. (36) Post-Erie, the Court would...

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