Legal Commentary

Before my current video evidence fascination, the focus of my procedure scholarship had been the distinction between subject matter jurisdiction and substantive merits in federal question cases. I have tried to construct arguments for clear distinctions between them, where jurisdiction should not be affected by the ultimate validity of the claim under substantive federal law. In particular, my argument was that merits (and not jurisdiction) turns on the question "who can sue who for what conduct and what remedy." We also can put it in Hohfeldian terms--merits alone turn on whether the applicable law imposes a duty on defendants and grants rights to plaintiffs as to some conduct. Thus, when a plaintiff's claim fails because the applicable federal law does not reach and regulate the actors and/or conduct at issue based on the facts and evidence adduced, that claim fails on its merits, not for want of subject matter jurisdiction.

So I continue to be disheartened by cases such as In re DRAM Antitrust Litigation from the Ninth Circuit, where the court found that the FTAIA was not satisfied in the factual situation at issue, then dismissed for lack of subject matter jurisdiction, rather than for failure to state a claim or summary judgment.

The Sherman Antitrust Act and the Foreign Trade Antitrust Improvements Act ("FTAIA") is a central example that I have used in several articles on this subject. The Sherman Act prohibits contracts in restraint of trade affecting commerce. Under the FTAIA (enacted in 1982), contracts and agreements in restraint of purely foreign trade are excluded from the Sherman Act's coverage (i.e., are not prohibited by the Sherman Act), unless they have a direct and foreseeable affect on non-foreign interstate commerce. So if a claim is brought based on restraint of foreign trade and the plaintiff cannot prove a direct and foreseeable affect on non-foreign interstate commerce, the plaintiff loses. But, and here is the key, the plaintiff loses because the substantive federal law was not violated by the conduct and actors at issue--the claim failed on the merits. The plaintiff could not sue this defendant for this conduct. The plaintiff had no right under substantive federal law to be free from purely foreign restraints of trade and the defendant had not duty under substantive federal law to refrain from conduct that imposed a purely foreign restraint of trade.

But the plaintiff does not lose because the court lacked subject matter jurisdiction, because the relevant jurisdictional statutes were satisfied. After all, the court had jurisdiction for any claims arising under the laws of the United States or, more particularly, claims arising under laws regulating commerce. This claim did arise under the Sherman Act, in that the plaintiff brought a claim into court seeking relief on a claim that existed by virtue of federal law and was made possible by federal law. That the claim failed under the statute (because some element was not satisfied on the facts) should not affect jurisdiction Indeed, if the failure of the plaintiff's claim deprives the court of jurisdiction in the type FTAIA case at issue here, then every failure of a federal statutory or constitutional claim must become a jurisdictional defeat--which no one ever has said is the case.

Interestingly, Judge Noonan concurred (agreeing to a jurisdictional dismissal), but captured the merits/jurisdiction line. He wrote "[I]s has been the judgment of Congress and the Supreme Court that the economic interests of consumers outside the United States are normally not something that American law is intended to protect." Exactly. Substantive federal antitrust law does not protect those economic interests--it does not grant consumers outside the U.S. rights against foreign conduct. This is all about the reach of substantive federal law; it has nothing to do with the adjudicative authority of federal courts.

It all seems so simple, but the courts keep missing it. Maybe that is how law professors stay in business.