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CRS Annotated Constitution

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Corporations Chartered by Congress.—In Osborn v. Bank of the United States,680 Chief Justice Marshall seized upon the authorization for the Bank to sue and be sued as a grant by Congress to the federal courts of jurisdiction in all cases to which the bank[p.718]was a party.681 Consequently, upon enactment of the 1875 law, the door was open to other federally chartered corporations to seek relief in federal courts. This opportunity was made actual when the Court in the Pacific Railroad Removal Cases682 held that tort actions against railroads with federal charters could be removed to federal courts solely on the basis of federal incorporation. In a series of acts, Congress deprived national banks of the right to sue in federal court solely on the basis of federal incorporation in 1882,683 deprived railroads holding federal charters of this right in 1915,684 and finally in 1925 removed from federal jurisdiction all suits brought by federally chartered corporations on the sole basis of such incorporation, except where the United States holds at least half of the stock.685

Federal Questions Resulting from Special Jurisdictional Grants.—In the Labor–Management Relations Act of 1947, Congress authorized federal courts to entertain suits for violation of collective bargaining agreements without respect to the amount in controversy or the citizenship of the parties.686 Although it is likely that Congress meant no more than that labor unions could be suable in law or equity, in distinction from the usual rule, the Court construed the grant of jurisdiction to be more than procedural and to empower federal courts to apply substantive federal law, divined and fashioned from the policy of national labor laws, in such suits.687 State courts are not disabled from hearing actions brought[p.719]under the section,688 but they must apply federal law.689 Developments under this section illustrate the substantive importance of many jurisdictional grants and indicate how the workload of the federal courts may be increased by unexpected interpretations of such grants.690

Civil Rights Act Jurisdiction.—Perhaps the most important of the special federal question jurisdictional statutes is that conferring jurisdiction on federal district courts to hear suits challenging the deprivation under color of state law or custom of any right, privilege, or immunity secured by the Constitution or by any act of Congress providing for equal rights.691 Because it contains no[p.720]jurisdictional amount provision692 (while the general federal question statute until recently did)693 and because the Court has held inapplicable the judicially–created requirement that a litigant exhaust his state remedies before bringing federal action,694 the statute has been heavily utilized, resulting in a formidable caseload, by plaintiffs attacking racial discrimination, malapportionment and suffrage restrictions, illegal and unconstitutional police practices, state restrictions on access to welfare and other public assistance, and a variety of other state and local governmental practices.695 Congress has encouraged utilization of the two statutes by providing for attorneys’ fees under Sec. 1983696 and by enacting related and specialized complementary statutes.697 The Court in recent years has generally interpreted Sec. 1983 and its jurisdictional statute broadly, but it has also sought to restrict to some extent the kinds[p.721]of claims that may be brought in federal courts.698 It should be noted that Sec. 1983 and Sec. 1343(3) need not always go together, inasmuch as Sec. 1983 actions may be brought in state courts.699


680 9 Wheat. (22 U.S.) 738 (1824).
681 The First Bank could not sue because it was not so authorized. Bank of the United States v. Deveaux, 5 Cr. (9 U.S.) 61 (1809). The language, which Marshall interpreted as conveying jurisdiction, was long construed simply to give a party the right to sue and be sued without itself creating jurisdiction,. Bankers Trust Co. v. Texas & P. Ry. Co., 241 U.S. 295 (1916), but in American National Red Cross v. S. G., 112Ct.2465 (1992), a 5–to–4 decision, the Court held that when a federal statutory charter expressly mentions the federal courts in its “sue and be sued” provision the charter creates original federal–question jurisdiction as well, although a general authorization to sue and be sued in courts of general jurisdiction, including federal courts, without expressly mentioning them, does not confer jurisdiction.
682 115 U.S. 1 (1885).
683 Sec. 4, 22 Stat. 162 .
684 Sec. 5, 38 Stat. 803 .
685 See 28 U.S.C. Sec. 1349 .
686 Sec. 301, 61 Stat. 156 (1947), 29 U.S.C. Sec. 185 .
687 Textile Workers Union v. Lincoln Mills, 353 U.S. 448 (1957). Earlier the Court had given the section a restricted reading in Assn. of Westinghouse Salaried Employees v. Westinghouse Electric Corp., 348 U.S. 437 (1955), at least in part because of constitutional doubts that Sec. 301 cases in the absence of diversity of citizenship presented a federal question sufficient for federal jurisdiction. Id., 449–452, 459–461 (opinion of Justice Frankfurter). In Lincoln Mills, supra, the Court resolved this difficulty by ruling that federal law was at issue in Sec. 301 suits and thus cases arising under Sec. 301 presented federal questions. 353 U.S., 457. The particular holding of Westinghouse, that no jurisdiction exists under Sec. 301 for suits to enforce personal rights of employees claiming unpaid wages, was overturned in Smith v. Evening News Assn., 371 U.S. 195 (1962).
688 Charles Dowd Box Co. v. Courtney, 368 U.S. 502 (1962).
689 Local 174, Teamsters v. Lucas Flour Co., 369 U.S. 95 (1962). State law is not, however, to be totally disregarded. “State law, if compatible with the purpose of Sec. 301, may be resorted to in order to find the rule that will best effectuate the federal policy. . . . Any state law applied, however, will be absorbed as federal law and will not be an independent source of private rights.” Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 457 (1957).
690 For example, when federal regulatory statutes create new duties without explicitly creating private federal remedies for their violation, the readiness or unreadiness of the federal courts to infer private causes of action is highly significant. While inference is an acceptable means of judicial enforcement of statutes, e.g., Texas & Pacific R. Co. v. Rigsby, 241 U.S. 33 (1916), the Court began broadly to construe statutes to infer private actions only with J.I. Case Co. v. Boak, 377 U.S. 426 (1964). See Cort v. Ash, 422 U.S. 66 (1975). More recently, influenced by a separation of powers critique of implication by Justice Powell, the Court drew back and asserted it will imply an action only in instances of fairly clear congressional intent. Cannon v. University of Chicago, 441 U.S. 677 (1979); California v. Sierra Club, 451 U.S. 287 (1981); Middlesex County Sewerage Auth. v. National Sea Clammers Assn., 453 U.S. 1 (1981); Merrill, Lynch v. Curran, 456 U.S. 353 (1982); Thompson v. Thompson, 484 U.S. 174 (1988); Karahalios v. National Federation of Federal Employees, 489 U.S. 527 (1989).
The Court appeared more ready to infer private causes of action for constitutional violations, Bivens v. Six Unknown Named Agents, 403 U.S. 388 (1971); Davis v. Passman, 442 U.S. 228 (1979); Carlson v. Green, 446 U.S. 14 (1980), but it has retreated here as well, hesitating to find implied actions. E.g., Chappell v. Wallace, 462 U.S. 296 (1983); Bush v. Lucas, 462 U.S. 367 (1983); Schweiker v. Chilicki, 487 U.S. 412 (1988). “Federal common law” may exist in a number of areas where federal interests are involved and federal courts may take cognizance of such suits under their “arising under” jurisdiction. E.g., Illinois v. Milwaukee, 406 U.S. 91 (1972); International Paper Co. v. Ouellette, 479 U.S. 481 (1987). And see County of Oneida v. Oneida Indian Nation, 470 U.S. 226, 236–240 (1985); National Farmers Union Ins. Cos. v. Crow Tribe, 471 U.S. 845 (1985). The Court is, however, somewhat wary of finding “federal common law” in the absence of some congressional authorization to formulate substantive rules, Texas Industries v. Radcliff Materials, 451 U.S. 630 (1981), and Congress may always statutorily displace the judicially created law. City of Milwaukee v. Illiniois, 451 U.S. 304 (1981). Finally, federal courts have federal question jurisdiction of claims created by state law if there exists an important necessity for an interpretation of an act of Congress. Smith v. Kansas City Title & Trust Co., 255 U.S. 180 (1921).
691 28 U.S.C. Sec. 1343 (3). The cause of action to which this jurisdictional grant applies is 42 U.S.C. Sec. 1983 , making liable and subject to other redress any person who, acting under color of state law, deprives any person of any rights, privileges, or immunities secured by the Constitution and laws of the United States. For discussion of the history and development of these two statutes, see Monroe v. Pape, 365 U.S. 167 (1961); Lynch v. Household Finance Corp., 405 U.S. 538 (1972); Monell v. New York City Dept. of Social Services, 436 U.S. 658 (1978), Chapman v. Houston Welfare Rights Org., 441 U.S. 600 (1979); Maine v. Thiboutot, 448 U.S. 1 (1980). Although the two statutes originally had the same wording in respect to “the Constitution and laws of the United States,” when the substantive and jurisdictional aspects were separated and codified, Sec. 1983 retained the all–inclusive “laws” provision, while Sec. 1343(3) read “any Act of Congress providing for equal rights.” The Court has interpreted the language of the two statutes literally, so that while claims under laws of the United States need not relate to equal rights but may encompass welfare and regulatory laws, Maine v. Thiboutot, supra; but see Middlesex County Sewerage Auth. v. National Sea Clammers Assn., 453 U.S. 1 (1981), such suits if they do not spring from an act providing for equal rights may not be brought under Sec. 1343(3). Chapman v. Houston Welfare Rights Org., supra. This was important when there was a jurisdictional amount provision in the federal question statute but is of little significance today.
692 See Hague v. CIO, 307 U.S. 496 (1939). Following Hague, it was argued that only cases involving personal rights, that could not be valued in dollars, could be brought under Sec. 1343(3), and that cases involving property rights, which could be so valued, had to be brought under the federal question statute. This attempted distinction was rejected in Lynch v. Household Finance Corp., 405 U.S. 538, 546–548 (1972). On the valuation of constitutional rights, see Carey v. Piphus, 435 U.S. 247 (1978). And see Memphis Community School Dist. v. Stachura, 477 U.S. 299 (1986) (compensatory damages must be based on injury to the plaintiff, not on some abstract valuation of constitutional rights).
693 28 U.S.C. Sec. 1331 was amended in 1976 and 1980 to eliminate the jurisdictional amount requirement. P.L. 94–574, 90 Stat. 2721 ; P.L. 96–486, 94 Stat. 2369 .
694 Patsy v. Board of Regents, 457 U.S. 496 (1982). This had been the rule since at least McNeese v. Board of Education, 373 U.S. 668 (1963). See also Felder v. Casey, 487 U.S. 131 (1988) (state notice of claim statute, requiring notice and waiting period before bringing suit in state court under Sec. 1983, is preempted).
695 Thus, such notable cases as Brown v. Board of Education, 347 U.S. 483 (1954), and Baker v. Carr, 369 U.S. 186 (1962), arose under the statutes.
696 Civil Rights Attorneys’ Fees Award Act of 1976, P.L. 94– 559, 90 Stat. 2641 , amending 42 U.S.C. Sec. 1988 . See Hutto v. Finney, 437 U.S. 678 (1978); Maine v. Thiboutot, 448 U.S. 1 (1980).
697 Civil Rights of Institutionalized Persons Act, P.L. 96–247, 94 Stat. 349 (1980), 42 U.S.C. Sec. 1997 et seq.
698 E.g., Parratt v. Taylor, 451 U.S. 527 (1981); Ingraham v. Wright, 430 U.S. 651 (1977).
699 Maine v. Thiboutot, 448 U.S. 1 (1980).
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