Stanley Waleski v. Montgomery, McCracken, Walker & Rhoads, LLP, et al.

In Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998), this Court rightly denounced the practice among certain federal courts of “assuming” jurisdiction, explaining that the “statutory and (especially) constitutional elements of jurisdiction are an essential ingredient of separation and equilibration of powers” that must be addressed first before reaching the merits of a case. Id. at 101. Since Steel Co., however, the Second Circuit and some other circuits have interpreted this to mean that they may assume the “statutory” element of subject matter jurisdiction, as distinguished from Article III (“constitutional”) jurisdiction, and proceed to decide a case on the merits. The Eleventh Circuit rule is to the contrary, resulting in a circuit split and an inconsistent approach among the circuits regarding the scope of Steel Co.’s directive. In the present case, the Second Circuit sidestepped an admittedly “difficult” question of subject matter jurisdiction and simply assumed “hypothetical jurisdiction” under 28 U.S.C. §§ 1334(b) and 157(a) to dismiss the case on the merits of Pennsylvania state law. Petitioner submits that the concept of presuming “hypothetical jurisdiction” so as to permit dismissal of state law claims between same-state parties on state law grounds is antithetical to the nation’s jurisprudence. The question presented is, therefore: Whether a federal court may assume “hypothetical” subject matter jurisdiction to reach a decision on issues of state law against the party challenging the court’s jurisdiction, when the very issue presented on appeal is that of federal subject matter jurisdiction.