Innovative Fibers LLC, et al. v. Parker O'Neil Wideman, et al.

When the legislature has prescribed that an agency, not a court, should exercise jurisdiction over a particular dispute, a court faced with such a dispute should decide for itself at the outset whether to entertain the suit and, if not, should promptly dismiss it. That is the rule when a federal court encounters a federal-law claim that Congress has channeled to agency review. And that is the rule when a state court encounters a state-law claim that the state legislature has entrusted to a state agency. But when a federal court encounters a state-law claim, the rule is the subject of a circuit split. Some circuits hold that the court should dismiss for lack of jurisdiction. But other circuits hold that a state-law jurisdictional problem is actually just a merits issue that can defy early resolution. The division stems from tension between two lines of this Court’s precedent. This Court has long held that state law can “limit[] the power of federal district courts to entertain suits in diversity cases,” Angel v. Bullington, 330 U.S. 183, 192 (1947)—thus justifying a jurisdiction-based dismissal. But this Court has also treated state-law jurisdictional provisions as merits defenses that should be decided by a jury in federal court even if a judge would have decided them in state court. See Byrd v. Blue Ridge Rural Elec. Co-op., Inc., 356 U.S. 525 (1958). The question presented is: When state law vests a state agency with exclusive jurisdiction over a claim, should a federal court decide for itself at the outset whether to dismiss the claim?