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20. Should the state court hear the case?
A plaintiff has sued a defendant in a court of the state in which both parties reside. The plaintiff alleges only a cause of action arising under a federal statute, although state law provides a similar cause of action. The federal statute provides that claims under the statute can be brought in any court of competent jurisdiction. The statute has not yet been interpreted by any federal court.
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C is correct. State courts may exercise jurisdiction over federal causes of action assuming there have been no explicit or implied restrictions that mandate the case be brought in federal court. In this case, there is no indication that the state court cannot properly hear the federal claim brought by the plaintiff, and a state court may not discriminate against a case simply because it arises under federal law. Therefore, the state court should hear the case.
A is incorrect. This is a misstatement of the law. The U.S. Supreme Court has held that state courts may exercise jurisdiction over cases arising under federal law unless there has been some implied or explicit restriction from Congress that such causes be heard only in federal court. See, e.g., Yellow Freight Sys., Inc. v. Donnelly, 494 U.S. 820 (1990).
B is incorrect. This is also a misstatement of the law. State courts may hear cases arising under federal law even if a federal court has not previously decided the issue.
D is incorrect. This answer reaches the correct answer with the wrong reasoning. In this case, there is no diversity among the parties because they are from the same state. However, there is federal subject-matter jurisdiction via federal question jurisdiction because the case turns on an issue governed by a federal statute.