To bring a case under the Constitution of laws of the United States, a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of plaintiff's cause of action. The right or immunity must be such that it will be supported if the Constitution or laws of the United States are given one construction or effect, and defeated if they receive another. A genuine and present controversy, not merely a possible or conjectural one, must exist with reference thereto and the controversy must be disclosed upon the face of the complaint, unaided by the answer or by the petition for removal. The complaint itself will not avail as a basis of jurisdiction insofar as it goes beyond a statement of plaintiff's cause of action and anticipates or replies to a probable defense.
Respondent national bank took over the assets and obligations of an insolvent national bank. Petitioner state tax collector filed suit in the state court to collect taxes owed by the insolvent bank. Respondent filed to remove the cause to a federal district court and the state court issued the order. The district court dismissed the complaint after a trial on the merits, and the lower appellate court affirmed by overruling petitioner's objection that the cause was triable in a state court. On review, the Court reversed the dismissal and remitted the cause to the district court with instructions to remand to the state court.
Did the federal court have jurisdiction over the matter?
The court found that the case did not arise under the Constitution or the laws of the United States since no right or immunity created by the Constitution or laws of the United States was an essential element to the cause of action. The controversy had to be present, not merely possible or conjectural, and must have been disclosed on the face of the complaint, unaided by an answer or petition for removal. The Court noted that not every question of federal law emerging in a suit was proof that a federal law was the basis of the suit.