A case “arises under” federal law for the purposes of Article III jurisdiction if federal law forms any ingredient of the original cause of action, even if that federal issue is not ultimately dispositive.

Facts:

Ohio passed a law taxing the Bank of the United States and authorized the state treasurer to seize funds from the Bank. The Bank, chartered by Congress, sued the state treasurer in federal court to recover the money. The question was whether the federal court had jurisdiction, given that the Bank was asserting what appeared to be a state-law claim (conversion/trespass).

Issue:

Does a case “arise under” federal law within the meaning of Article III of the Constitution when the plaintiff’s right to sue is granted by a federal statute?

Holding:

Yes. A case arises under federal law for Article III purposes if any federal issue forms part (an "ingredient") of the cause of action, even if the federal issue is not dispositive. Chief Justice Marshall interpreted the “arising under” language of Article III broadly, reasoning that so long as a federal question forms any component of the original cause of action, the case is constitutionally eligible for federal jurisdiction—even if state law also plays a role or the federal issue is not ultimately determinative. The case arises under federal law because the Bank’s right to sue was grounded in a federal statute enacted by Congress.

🧠 1. This is the broadest possible view of “arising under” jurisdiction.

Osborn tells us how far Article III can stretch: if a federal statute is part of the plaintiff’s claim—even just the authority to sue—that’s enough for federal jurisdiction under the Constitution. Think of it as the constitutional ceiling.

⚖️ 2. It explains why Congress can give federal courts jurisdiction over federally chartered entities.

This case justifies statutes that give federal courts jurisdiction in cases involving federal agencies, federally chartered banks, or federally funded programs. If Congress creates the right or entity, Congress can let federal courts hear cases involving them.

🔍 3. It's broader than § 1331 — and that matters.

Osborn helps you see the difference between constitutional and statutory jurisdiction. A case may be valid under Article III (Osborn) but still not qualify under § 1331 (Mottley). Your professor wants you to understand how jurisdiction exists on two levels: constitutional power vs. congressional grant.

🧪 How You Might Be Tested:

You might get a question like:

“A federally chartered bank sues in federal court under a state-law claim. Does the case arise under federal law?”

You’ll need to apply Osborn to explain that Article III jurisdiction exists—but then pivot to whether § 1331 has also been satisfied.

✅ Hypo 1: Federal Court Has Jurisdiction (Osborn Applies)

Facts:
The National Green Energy Bank, created by federal statute, sues a state official in federal court for trespass and to recover property. The official entered one of its offices and took solar panel prototypes, claiming state environmental enforcement powers.

Result:
Federal court has jurisdiction.

Why?
Under Osborn, because the bank was created by federal law and its right to sue is based on a federal statute, the case arises under federal law for Article III purposes, even if the actual claim sounds like a state-law tort.

❌ Hypo 2: No Jurisdiction Under § 1331 (Though Maybe Article III Is Satisfied)

Facts:
A private property owner sues a local contractor in federal court for breach of contract, citing a federal housing regulation as part of the background facts. The complaint is otherwise based entirely on state contract law.

Result:
No federal jurisdiction under § 1331.

Why?
Even if you could stretch and say the case touches on federal law, the claim does not arise under federal law on the face of the complaint. Under § 1331, this fails the well-pleaded complaint rule (Mottley).
Osborn might permit jurisdiction as a matter of constitutional power, but Congress has not granted jurisdiction here via § 1331.