The Constitution provides that federal courts have the power to hear cases that arise under the Constitution, laws, or treaties of the United States. Congress has granted this jurisdiction to federal district courts in Title 28 of the United States Code. The question of whether a case arises under a federal law is often clouded when a case involves issues with the application of both state and federal law. If a case primarily involves an issue of state law, but it also involves a remote federal issue, then the federal court is not the proper forum, and the case will be dismissed or remanded to state court. However, if a case involves important issues of both state and federal law, Congress permits a federal court, with some exceptions, to invoke supplemental jurisdiction to hear both the state claim and the federal claim in the same case.
Federal question jurisdiction must be based on the complaint of the plaintiff, not on the possibility of a federal defense. This limitation stems from the famous 1908 case of Louisville & Nashville Railroad v. Mottley, where the plaintiff anticipated a federal defense to a state law contract case. The Supreme Court held that the plaintiff’s cause of action stated in the complaint must be based on federal law. This limitation is called the well-pleaded complaint rule. Since nothing prohibits state courts from hearing cases involving federal laws, federal courts are not required to hear all cases that involve federal laws.