Article III of the Constitution included within the judicial power cases “arising under” the Constitution, federal laws, and treaties – otherwise known as federal question jurisdiction. Although Congress did not grant the federal courts general federal question jurisdiction until 1875, it did occasionally create limited federal question jurisdiction in specific areas. In 1824, the Supreme Court was called upon to interpret the scope of the “arising under” language in Article III for the first time when it decided whether Congress had the constitutional authority to permit the Bank of the United States to sue and be sued in the U.S. circuit courts. The Court interpreted the meaning  of “arising under” broadly in this case, holding that the Bank’s federal charter, without which the Bank could not exist or operate, was a potential “ingredient” of the case even if the case turned on the interpretation of state law. As a result, every case involving the Bank was one “arising under” the laws of the United States and was a proper subject of federal court jurisdiction. The holding did not apply to cases in which Congress had not made a specific grant of federal question jurisdiction, but did serve as authority supporting the exercise of federal court jurisdiction over other federally owned or created corporations.

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Cases that Shaped the Federal Courts: Osborn v. Bank of the United States (1824)