Fen v. Philips Elecs. N. Am., 2015 U.S. Dist. LEXIS 18342 (E.D. Ky. Feb. 13, 2015):

District courts "have original jurisdiction of all civil actions arising [*9]  under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331 (emphasis added). A claim is said to 'arise under' federal law if a federal question is "presented on the face of the plaintiff's properly pleaded complaint." Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987); Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 808 (1986). "It is not enough that the plaintiff alleges some anticipated defense to his cause of action, and asserts that the defense is invalidated by some provision of the Constitution of the United States." Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152 (1908).

In the vast majority of federal question cases, this "well-pleaded complaint rule" is easily satisfied because federal law actually creates the cause of action. Merrell Dow, 478 U.S. at 808-809. However, a case may also 'arise under' federal law "'where the vindication of a right under state law necessarily turn[s] on some construction of federal law.'" Id. (quoting Franchise Tax Board v. Constr. Laborers Vacation Trust, 463 U.S. 1, 9 (1983)). Stated another way, it must "'appear[ ] that some substantial, disputed question of federal law is a necessary element of one of the well-pleaded state claims.'" Id. (quoting Franchise Tax Bd., 463 U.S. at 13). The "mere presence of a federal issue in a state cause of action does not automatically confer federal question jurisdiction." Id.

If the state claim incorporates a federal standard for which there is no private right of action, the inquiry becomes more difficult. [*10]  In Merrell Dow v. Thompson, the Supreme Court of the United States considered whether a state negligence action, based in part on a pharmaceutical company's alleged violations of the FDCA, gave rise to federal question jurisdiction. 478 U.S. at 804. The Court answered this question in the negative, reasoning that "the congressional determination that there should be no federal remedy for the violation of this federal statute is tantamount to a congressional conclusion that the presence of a claimed violation of the statute as an element of a state cause of action is insufficiently 'substantial to confer federal question jurisdiction.'" Id. at 814.

Over the next twenty years, a circuit split developed as to whether Merrell Dow "always requires a federal cause of action as a condition for exercising federal-question jurisdiction," prompting the Court to revisit its federal question analysis. Grable & Sons Metal Prod., Inc. v. Darue Eng'g & Mfg. 545 U.S. 308, 311-12 (2005). In Grable, the Court considered "whether want of a federal cause of action to try claims of title to land obtained at a federal tax sale precludes removal to federal court of a state action with nondiverse parties raising a disputed issue of federal title law." Id. at 310. This time, the Court found that the case warranted federal [*11]  jurisdiction because "Grable has premised its superior title claim on a failure by the IRS to give it adequate notice, as defined by federal law." Id. at 314-15. The notice question was not only a necessary element of Grable's state quiet title action, but also a substantial and disputed federal issue, as the parties disagreed on the meaning of 'notice' for purposes of federal tax law. Id. The Court further reasoned that it was possible to entertain the case "without disturbing any congressionally approved balance of federal and state judicial responsibilities" because so few state quiet title actions involve contested issues of federal law. Id. at 315.

The Court then turned its attention to Merrell Dow, clarifying that the case "should be read in its entirety as treating the absence of a federal private right of action as evidence relevant to, but not dispositive of the 'sensitive judgments about congressional intent' that § 1331 requires." Id. at 318. The absence of a private right of action became important in Merrell Dow "when the Court treated the combination of no federal cause of action and no preemption of state remedies for misbranding as an important clue to Congress's conception of the scope of jurisdiction [*12]  to be exercised under § 1331." Id. Under the circumstances presented in Merrell Dow, the exercise of jurisdiction would have effectively opened the floodgates, "[f]or if the federal labeling standard without a federal cause of action could get a state claim into federal court, so could any other federal standard without a federal cause of action." Id. By contrast, "jurisdiction over actions like Grable's would not materially affect, or threaten to affect, the normal currents of litigation." Id. at 319.