A MODIFIED THEORY OF THE LAW OF FEDERAL COURTS: THE CASE OF ARISING-UNDER JURISDICTION
Simona Grossi(fn*)
To my Civil Procedure Team 2012-2013
Abstract: This Article examines and evaluates the legal process method as a perspective from which to assess the law of federal courts. It then offers a modified approach to legal process that encompasses the full range of considerations that ought to inform modern judicial decision-making in this context. With that modified approach in mind, the article describes and critiques the Supreme Court's statutory arising-under jurisprudence, both as originally developed and as currently practiced. The article shows that while the Court's early "arising-under" jurisprudence was founded on durable principles and on the reasoned application of those principles, more recent decisions by the Court have strayed from that approach in service of a more mechanical jurisprudence. This approach seems to be premised more on case-management concerns than on the congressionally endorsed value of providing a federal forum for the interpretation and application of federal law. The article ends by examining the Court's decision in Gunn v. Minton. As the article explains, Gunn offered the Court an opportunity to redirect the arising-under analysis back toward a perspective that would more closely reflect the legitimate and enduring principles of federal question jurisdiction. The Court, however, missed that opportunity and instead endorsed a mechanical, four-part test as a substitute for reasoned analysis.
INTRODUCTION ................................................................................ 962
I. TOWARD A THEORY OF FEDERAL JURISDICTION .......... 965
A. Legal Process and Beyond ................................................. 966
B. Classic Legal Process Theory ............................................. 966
1. Institutional Settlement ................................................. 967
2. Anti-Formalism ............................................................ 968
3. Rule of Law .................................................................. 969
4. Reasoned Elaboration ................................................... 969
5. Neutral Principles ......................................................... 969
C. Criticism of the Classic Theory .......................................... 970
D. Legal Process and the Law of Federal Courts .................... 973
E. Modified Model of Legal Process ...................................... 975
F. A Claim-Centered, Fundamental Principles Approach to Arising-Under Jurisdiction ................................................. 976
II. GULLY REDISCOVERED .......................................................... 983
III. THE MECHANICAL APPROACH TO ARISING-UNDER JURISDICTION ........................................................................... 987
A. Franchise Tax Board v. Construction Laborers Vacation Trust ................................................................................... 987
B. Merrell Dow Pharmaceuticals Inc. v. Thompson ............... 991
C. Christianson v. Colt Industries Operating Corp. . ............... 995
D. Grable and Sons Metal Products, Inc. v. Darue Engineering and Manufacturing ............................................ 997
E. Empire Healthchoice Assurance, Inc. v. McVeigh .......... 1000
F. Grable and Empire in the Lower Federal Courts .............. 1002
IV. GUNN V. MINTON: A CASE STUDY ...................................... 1004
V. GUNN THROUGH THE UNIFIED CLAIM-CENTERED APPROACH ............................................................................... 1009
VI. THE SUPREME COURT'S MECHANICAL SOLUTION IN GUNN ......................................................................................... 1013
VII. CONCLUDING REMARKS ..................................................... 1018
INTRODUCTION
On February 20, 2013, the Supreme Court announced its decision in Gunn v. Minton.(fn1) There the Court revisited the scope of the federal courts' statutory "arising-under" jurisdiction in the context of a legal malpractice suit premised on alleged attorney errors committed in a prior patent litigation.(fn2) The significance of the decision transcends the specific context in which it arose. Although Gunn involved patent law arising-under jurisdiction, 28 U.S.C. § 1338,(fn3) that jurisdictional standard is interpreted in precisely the same manner as the similarly worded § 1331 standard.(fn4) Hence, the decision in Gunn applies to a full range of federal question cases in which a federal issue is embedded in a state-law claim. In addition, and of equal importance, an assessment of Gunn and the law of arising-under jurisdiction provides an opportunity to revisit and reexamine the theoretical foundation of the law of federal courts.(fn5)
The Gunn opinion was highly anticipated by the legal community because three decades of prior decisions by the Court had generated considerable confusion as to the scope of arising-under jurisdiction. This was particularly so in cases where the jurisdictionally relevant federal ingredient was embedded in a state law claim-so called "federal ingredient" cases. Some commentators hoped that the Court would adopt the Holmes "creation test"(fn6) as the exclusive measure of arising-under jurisdiction.(fn7) Others hoped for a clarification of the federal-ingredient test.(fn8) Still others, like this author, hoped that the Court would redirect the jurisdictional analysis back to the fundamental principles that once animated the Court's arising-under jurisprudence.(fn9)
With the decision now in hand, everyone should be disappointed. The Court did little to clarify the underlying doctrine and virtually nothing to develop a coherent theoretical approach to jurisdictional questions. As I will show, Gunn runs afoul of foundational theoretical principles at the heart of the law of federal courts(fn10) and retains the Court's misdirected jurisdictional focus on an untenable distinction between what constitutes a cause of action and what constitutes an enforceable right.
The specific jurisdictional issue in Gunn focused on what had come to be known as the third and fourth prongs of the "Grable test,"(fn11) a four-part test(fn12) designed to measure the scope of federal-ingredient jurisdiction. Thus, the critical questions in Gunn were whether the federal ingredient embedded in the plaintiff's state-law claim was substantial(fn13)-the third prong-and whether the exercise of jurisdiction over that claim would upset the congressionally mandated balance between federal and state courts(fn14)-the fourth prong. Lower courts considering Grable's four-part test had been struggling with the interpretation and application of both of these prongs. Some had adopted detailed and highly technical doctrinal tests that led to counterintuitive results where jurisdiction was denied over concededly "significant" federal questions.(fn15) Others had adopted a more conceptual approach, seemingly designed to apply the Grable test and, at the same time, avoid that test's obvious strictures.(fn16) Some lower courts actually confessed that the jurisdictional determination was subjective and speculative and that, under similar circumstances, different judges might reach different conclusions.(fn17) While the Gunn Court did address the third and fourth prongs of the Grable test, it did little other than endorse its previous iterations of those elements, providing neither a defense for them nor a principled method through which they might be applied in the future. Thus, much of the confusion over federal jurisdictional standards that preceded Gunn remains unresolved, and will remain so until the Court adopts a principled, theoretically grounded approach to federal question jurisdiction.
In Part I.A, I revisit and critique the philosophy of the legal process school as applicable to the specific context of federal courts, and I offer a modified approach to the school's foundational method. In Part I.B, I identify the core principles at the heart of arising-under jurisdiction and suggest an analytical model that is premised on those principles and capable of yielding predictable, nonsubjective conclusions. In Part II, I offer Justice Cardozo's opinion in Gully v. First National Bank(fn18) as an exemplar of the theoretical and analytical model developed in Part I. Part III examines more recent arising-under cases and shows that, beginning in the 1980s, Gully's approach to jurisdiction was abandoned and replaced by a maze of increasingly complex doctrinal tests that are inconsistent with the fundamental principles that animated Gully. Part IV presents a case study of Gunn v. Minton,(fn19) describing the basic controversy and the lower courts' decisions. In Part V, I offer a Gully-based solution to the arising-under issue in Gunn, and in Part VI, I present and critique the Supreme Court's resolution of the same case. Finally, in Part VII, I offer concluding remarks regarding the future direction of federal question jurisdiction.
I. TOWARD A THEORY OF FEDERAL JURISDICTION
Gunn offered the Supreme Court an opportunity to return to Gully's principled approach or, at the very least, to provide a comprehensible map that would assist lower federal courts in navigating the current doctrinal maze. The Court, regrettably...
