a. Facts-
Δ is a railroad company that hurt Π. Because of this hurt, Δ agreed to give
free rail passes to Π for life, so long as a suit is not brought against Δ. Π
agreed. Some years later, Δ stopped giving the passes. Π brought suit in
federal Ct to resolve the dispute. Δ claims that an act of Congress prohibits
that giving of free passes or free transportation.
i.
b. Procedural
History- Circuit Ct found for Π, Δ appealed, US Sup Ct remanded to lower Ct
ordering lower Ct to dismiss for want of subject matter Jx
c. Issue-
Whether Π can sue in federal Ct over a breach of contract when the only
relation the suit has to the Const is the Δ’s anticipated defense (Congress
forbids free passes)
d. Holding-
No, Π CANNOT sue in federal Ct when the only relation to Π’s claim is the
anticipated defense of the Δ
i.
Congress is the one who allegedly
violated due process
e. Rule-
A federal question is one way to establish federal subject matter Jx. However,
the federal question MUST be stated in the Π’s complaint…NOT in the Δ’s
anticipated defense
f. Rationale-
i.
To allege a Δ’s defense then make an
answer to it before the Δ has the opportunity to itself plead or prove its own
defense is inconsistent with any known rule of pleading and improper
g. Notes-
i.
Any Federal entity is subject to Federal
Jx
1. EXCEPTION
to “well pleaded complaint” rule: Even if a Federal entity is sued for strictly
State laws…the complaint still must be filed in Federal court
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