Civil Procedure – Subject Matter Jurisdiction Practice Test

Federal jurisdiction over state-law claims is found only if a federal question is presented in the plaintiff’s own complaint. The well-pleaded complaint rule requires that the federal issue appear on the face of the plaintiff’s complaint; it cannot be created by looking at the defendant’s defenses or counterclaims alone. There is a narrow exception, the Grable embedded-issue exception, where a state-law claim contains a substantial, actually disputed federal issue that is necessary to resolve the claim and can be resolved in federal court without disturbing the balance between state and federal courts. So the best answer is that the federal issue must appear in the plaintiff’s complaint; defenses or counterclaims alone do not create jurisdiction unless a Grable-type embedded federal issue exists.