Federal question problem set: explanations

Instructions: Unless otherwise indicated, assume that all matters take place in federal court. You may further assume that Paul and Debbie are both citizens of Florida. Unless the question expressly indicates, assume that all questions stand on their own. Do not look at the explanations until you have completed the problem set.

Question 1: Concurrent federal questions.

May a suit for federal trademark infringement be filed in state court? See 28 U.S.C. § 1338(a).

Discussion: Yes. Most federal causes of action are both original to federal courts (meaning that federal district courts have federal question subject-matter jurisdiction over them) and provide concurrent jurisdiction (meaning that state courts can hear lawsuits alleging those suits as well). A federal trademark infringement claim can be heard in either federal court or state court. Now how 28 U.S.C. § 1338(a)’s language regarding exclusivity does not mention federal trademark suits.

Question 2: Exclusive federal questions.

May a complaint for patent infringement be filed in state court?

Discussion: No. Some federal causes of action are exclusive to federal courts, meaning that they cannot be the basis for a state-court complaint. As stated in 28 U.S.C. § 1338(a), “No State court shall have jurisdiction over any claim for relief arising under any Act of Congress relating to patents, plant variety protection, or copyrights.” What if the patent claim is asserted as a counterclaim? See question 5.

Question 3. No diversity?

Paul (Florida) sues Debbie (Florida) in Florida federal court for copyright infringement. Paul seeks statutory damages of $750. Debbie moves to dismiss for lack of subject matter jurisdiction. Should the court grant the motion?

Discussion: No. Copyright infringement is a federal cause of action and therefore gives rise to federal question jurisdiction. See 28 U.S.C. §§ 1331, 1338(a). The lack of diversity jurisdiction is a red herring: diversity of jurisdiction is not needed here.

Question 4. Well pleaded-complaint I: federal defense.

For purposes of this question, assume that there is a federal law – The TV Chef Protection Act (“TCPA”) – that gives a defense of immunity from suits in tort to television chefs who provide recipes on television shows such as those on the Food Network. Debbie is a famous chef and the host of her own TV show on the Food Network. Paul decides to prepare a recipe from Debbie’s show for chicken cacciatore. Unfortunately, Paul gets food poisoning because the recipe gave a too-low suggested temperature for the cooking of the chicken. Soon afterwards, Paul sues Debbie in federal court, alleging that Debbie’s recipe negligently listed a too-low temperature for cooking of chicken. Paul further alleges that the TCPA does not provide Debbie with immunity, and further, that it is an unconstitutional exercise of Congress’ powers under the Commerce Clause. Does the federal court have subject-matter jurisdiction?

Discussion: No. Paul is alleging a state-law cause of action and is anticipating that Debbie will assert the TCPA as a defense to her conduct. Even though it is nearly certain that Debbie will do so, the “well-pleaded complaint” rule requires that the court analyze federal question jurisdiction by looking only to the claim that is being made by Paul. Here, Paul’s claim is for common-law negligence. No federal question jurisdiction exists. See Mottley.

Question 5. Well-pleaded complaint II: counterclaim.

Paul sues Debbie in state court asserting a claim for breach of contract. Debbie counterclaims for federal patent infringement. May the state court hear the entire case?

Discussion: No. The state court can hear the breach of contract claim, but amended section 1338 prevents state courts from hearing the patent counterclaim. (See explanation for question # 2.) A fix to section 1338 and the creation of section 1454 (both done in 2011) permits the removal of the case by either party, and avoids the application of the well-pleaded complaint rule, which normally only measures federal SMJ by the plaintiff’s complaint. Assuming that claim and counterclaim are sufficiently related, upon removal the federal court would have original federal question jurisdiction over the federal patent counterclaim, and have supplemental jurisdiction over the breach of contract claim. See 28 U.S.C. § 1454(d).

Question 6. Well-pleaded complaint III: declaratory judgment.

Paul (who runs a popular file-sharing service at http://www.SoSueMeMP3.com) receives a “nastygram” (a cease-and-desist letter) from Debbie, who claims that Paul’s website infringes her many copyrighted songs. Paul sues Debbie in federal court seeking a declaratory judgment that Paul is not infringing Debbie’s copyrights. Is there federal question jurisdiction over Paul’s suit?

Discussion: Yes. The Declaratory Judgment Act, 28 U.S.C. § 2201, permits a potential defendant (here, Paul) to sue first, seeking a declaration of the parties’ rights. In analyzing the well-pleaded complaint rule, the court “will ask whether, absent the availability of declaratory relief, the case could have [been] brought in federal court.” Moore’s Federal Practice – Civil § 103.44. Thus, there is federal question jurisdiction only when the declaratory judgment defendant’s coercive action would itself be within federal jurisdiction. Ask yourself, if Debbie sued on Paul’s declaratory judgment claim, would a federal question be presented? Here, Debbie’s hypothetical coercive action seeking relief against Paul would be copyright infringement seeking an injunction or damages. And that’s a federal cause of action. Therefore, Paul’s declaratory judgment suit itself gives rise to federal question jurisdiction.

Question 7. Scope of statutory versus Article III jurisdiction.

If the anticipated federal defense in Mottley did not support original federal district court jurisdiction under 28 U.S.C. § 1331, how could the Supreme Court decide the merits of the federal defense in a later appeal of the same dispute from state court?

Discussion: Two reasons. First, Article III federal question “arising under” jurisdiction is broader than its statutory counterpart in section 1331. (The same is true for diversity jurisdiction.) It’s so broad that in the Osborn case, the Supreme Court upheld a statute that gave federal courts jurisdiction over any action to which the Bank of the United States was a party. Marshall stated that because the Bank was a federal creation, the issue of its ability to sue might arise as an “original ingredient in every cause.” Thus, Article III is very broad. Because of the breadth of Constitutional “arising under” jurisdiction, the Supreme Court’s statutory power to hear cases from state courts under 28 U.S.C. § 1257 is broader than a federal district court’s “arising under” jurisdiction under 28 U.S.C. § 1331. Thus, although the federal district court in Mottley lacked jurisdiction to decide a state-law case with a federal defense, the Supreme Court could later hear the appeal of that same action after it was decided by state courts. Ultimately, however, the Mottleys lost again in their second case before the Supreme Court, this time on the merits.

Question 8. FQ: federal statutory cause of action.

Paul (Florida) sues Debbie (Florida), a police officer, for beating him up. He files suit for deprivation of his civil rights under 42 U.S.C. § 1983, which permits suits against state actors who deprive somebody of their constitutional rights while acting under color of state law. Debbie argues that federal jurisdiction is inappropriate because battery is a state-law cause of action and Paul is merely trying to clothe his battery claim as a federal question. Is Debbie right?

Discussion: No. One way of determining whether a claim “arises under” federal law for purposes of 28 U.S.C. § 1331 is to look to the “Holmes” test enunciated by Justice Holmes in American Well Works (also known as the “Well Works” or “creation” test). As Holmes stated, “A suit arises under the law that creates the cause of action.” Here, Congress created a federal cause of action: 42 U.S.C. § 1983, which creates a cause of action for plaintiffs to sue state actors who violate the plaintiff’s rights under the Constitution or other federal laws. Note that Paul could have joined in his suit a state-law battery cause of action, which would be permitted as supplemental jurisdiction under 28 U.S.C. § 1367.

Question 9. FQ: federal implied (or common law) right of action.

Paul becomes sick after drinking wine made by Debbie, a local winemaker. Paul sues Debbie in federal court under a federal regulatory statute that provides labeling requirements for wine. Paul’s complaint admits that the regulatory statute does not contain an express right of action, but nonetheless alleges that a private federal right of action should be inferred from the statute. Paul further alleges that Debbie’s wines failed to meet the standard of the regulatory statute and that her violation makes Debbie liable to Paul for his damages. Debbie argues that no federal court has ever implied a private right of action under this statute and that the federal court should therefore dismiss for lack of subject-matter jurisdiction. What should the court do?

Discussion: The court has jurisdiction to determine whether the regulatory statute implies a private federal right of action. (As with personal jurisdiction, a court always has “jurisdiction” to determine its subject-matter jurisdiction.) The difference between this hypo and the previous hypo, is that in the previous question, Congress provided an express cause of action. Here, Congress did not provide an express cause of action, but an implied federal right of action arising from a federal statute is itself a federal question. Moreover, if the court determines that a private federal right of action exists, then that cause of action – an implied federal right of action – satisfies the Holmes test because that suit would arise under federal law.

Question 10. FQ: state-law claim with federal ingredients.

For purposes of this question, assume that the Supreme Court has previously held that the federal regulatory statute discussed in the previous question does not provide an implied federal right of action. Paul becomes sick after drinking wine made by Debbie, a local winemaker. Paul sues Debbie for negligence under state law in state court. Paul’s complaint alleges that a federal regulatory statute provides the requirements for wine labels and that Debbie’s wines did not meet this standard. He alleges that the federal regulatory statute provides the element of duty for his state-law negligence claim and that violation of that duty was negligence per se. Debbie removes on the basis of a federal question. Paul moves to remand, arguing that his cause of action does not arise under federal law. What should the court do?

Discussion: I will leave this one for you to analyze. Here’s some comments on the framework. Note that the Holmes test isn’t satisfied here: the law that created the cause of action here was state law and not federal law. Nonetheless, for Paul to prevail in his state negligence claim, he must prove a proposition of federal law, namely the duty that he incorporated into his state negligence claim by reference to federal law – i.e., that Debbie was subject to a duty defined by a federal regulatory statute. The Supreme Court has decided a number of cases on the matter of embedded federal issues, with seemingly inconsistent results. (Compare Smith, Merrell Dow). However, the 2005 case of Grable enunciated a helpful test to determine when a state-created claim with an embedded federal issue will be deemed to “arise under” federal law for purposes of federal question jurisdiction. First, the case should necessarily raise a federal issue. Second, the federal issue should be actually disputed. Third, the federal issue should be substantial (and as further clarified in Gunn v. Minton, the issue should be substantial to the federal system as a whole, and not merely substantial to the parties). Finally, exercising federal jurisdiction should not disturb “any congressionally approved balance of federal and state judicial responsibilities.” Regarding Merrell Dow, the Court noted that an absence of a federal private right of action is relevant to, but not dispositive of, the “sensitive judgments about congressional intent” that the third factor examines.

Revised Aug. 24, 2016