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In the title of his influential article, “The Federal ‘Question’ in the District Courts,” Professor Paul Mishkin reminded us that the phrase “federal question” is a misnomer as a description of the “arising under” jurisdiction of the district courts. The purpose of the “arising under” jurisdiction of the district courts is not solely, or even primarily, to resolve disputed questions of federal law, but to provide a hospitable forum for the vindication of federal rights. Such rights can be frustrated by an inhospitable forum not just through the misinterpretation of federal law, but through misinterpretation of state law or through biased fact-finding. For this reason, Professor Mishkin acknowledged that, in place of the term “federal question,” “[a]ccuracy . . . would be better served by some such term as ‘federal claim.”‘

Although this was a central insight of the part of Professor Mishkin’s article discussing the scope of the statutory grant of federal “arising under” jurisdiction,it is also the key to understanding the proper scope of the “arising under” clause of Article III. The failure to keep this point in mind explains much of the broad, controversial language in Osborn v. Bank of the United States, language that the Supreme Court and commentators have subsequently hesitated to embrace. Had the Court viewed Osborn as a “federal claim” case, it could have upheld the statute in somewhat narrower terms. More recently, in Verlinden v. Central Bank of Nigeria, in considering the validity of a statute conferring jurisdiction over cases brought by aliens against foreign states, the Court adhered to Osborn’s “federal question” paradigm but distanced itself from its “remote possibility” test. It upheld the statute on the theory that every case that the statute permitted to be adjudicated in the federal courts involved an actual question of federal law, namely, whether the foreign state was entitled to immunity under the standards of the Foreign Sovereign Immunities Act (FSIA). This holding is unsatisfying because, under the statute, there is no need for the court to consider any question of foreign sovereign immunity if the defendant appears but does not raise an immunity defense. A “federal claim” analysis would have yielded a more persuasive rationale for upholding the statute.

Part I of this Article explains why the “federal question” analysis in Osborn is unpersuasive, and how a “federal claim” analysis would have provided a more convincing, and narrower, rationale for the holding. Part II explains why the Court’s “federal question” analysis in Verlinden is similarly unpersuasive and how a “federal claim” analysis would once again have produced a more convincing decision. Part III explores the outer boundaries of federal claim theory. I conclude that federal claim analysis supports a congressional grant of jurisdiction over any class of cases over which Congress has legislative power. Congress may confer jurisdiction over such cases by creating a federal claim that adopts or incorporates as federal law whatever state or foreign law would otherwise govern the dispute. The effective scope of Congress’s power under the adoption approach would be the same as under Professor Wechsler’s version of protective jurisdiction. Professor Wechsler was right to claim that the greater power to confer jurisdiction by displacing state law includes the lesser power to confer jurisdiction without displacing state law. Federal claim analysis shows that Congress may confer jurisdiction over claims it creates in order to make available a more (or less) hospitable forum for the adjudication of such claims. That justification for conferring jurisdiction is also compelling when the federal claim that Congress has created is to be resolved by reference to federal law that does not differ in content from the state or foreign law that would otherwise apply.

Publication Citation

95 Cal. L. Rev. 1731-1774 (2007)