01-408 Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc.

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The Federal Circuit’s jurisdiction is fixed with reference to that of the district court, 28 U.S. C. sec.1295(a)(1), and turns on whether the action is one “arising under” federal patent law, sec.1338(a).

Because sec.1338(a) uses the same operative language as sec.1331, which confers general federal-question jurisdiction, the well-pleaded-complaint rule governing whether a case arises under sec.1331 also governs whether a case arises under sec.1338(a). As adapted to sec.1338(a), the rule provides that whether a case arises under patent law is determined by what appears in the plaintiff’s well pleaded complaint. Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 809. Because petitioner’s well pleaded complaint asserted no claim arising under patent law, the Federal Circuit erred in asserting jurisdiction over this appeal.

The well-pleaded-complaint rule does not allow a counterclaim to serve as the basis for a district court’s “arising under” jurisdiction. To rule otherwise would contravene the face-of-the-complaint principle set forth in this Court’s prior cases, see, e.g., Caterpillar Inc. v. Williams, 482 U.S. 386, 392, and the longstanding policies furthered by that principle: It would leave acceptance or rejection of a state forum to the master of the counterclaim rather than to the plaintiff; it would radically expand the class of removable cases; and it would undermine the clarity and ease of administration of the well-pleaded-complaint doctrine.

13 Fed. Appx. 961, vacated and remanded.

Local effect:

The decision is consistent with current Seventh Circuit law. FDIC v. Elefant, 790 F.2d 661 (7th Cir.1986).

Scalia, J.; Stevens, J., concurring; Ginsburg, J., concurring.