Holmes Rule
The Holmes Rule, also known as the Holmes Test, states that a suit arises under the law that creates the cause of action. The rule is named for Justice Oliver Wendell Holmes, Jr., who articulated it in American Well Works Co. v. Layne & Bowler Co. (1916).
The Holmes Rule is an interpretation of 28 USC §1331. §1331 grants federal courts subject matter jurisdiction over “all civil actions arising under the Constitution, laws, or treaties of the United States.” Under the Holmes Rule, §1331 only encompasses claims created by federal law, because only those claims arise under federal law.
The modern federal question doctrine does not strictly follow the Holmes Rule. While §1331 is still interpreted to cover claims created by federal law, courts now understand §1331 to also cover some claims created by state law. For example, in Grable & Sons Metal Products v. Darue Engineering and Manufacturing (2005), the Supreme Court stated that §1331 extends to state-law cases which contain a substantial, contested federal issue, and where exercise of federal jurisdiction would be “consistent with congressional judgment about the sound division of labor between state and federal courts governing §1331’s application.”
[Last reviewed in June of 2025 by the Wex Definitions Team]
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