Louis & Nash. Rr v. West. Un. Tel. Co.

Background

A telegraph company sued a railroad to get the right to use the railroad’s right of way, bridges, and property for telegraph lines. The telegraph company amended its complaint to say it had accepted an 1866 Act of Congress. The case moved from state court to federal court, went to trial, and a jury awarded the right to the telegraph company; the verdict and judgment were later affirmed by the federal appeals court.

Reasoning

The main question the Court addressed was whether the federal courts had the power to decide this case. The petition argued that referring to the 1866 federal statute created a federal question. The Court explained that the underlying right asserted was created by a Louisiana statute allowing state expropriation, so the suit really arose under state law even if the state law looked to a federal act. The Court also noted that the 1866 Act did not itself grant power of eminent domain, and previous decisions showed it was only permissive. Because the suit was based on state law, the federal courts did not get jurisdiction from the federal statute reference, and the Supreme Court dismissed the writ of error for lack of federal jurisdiction.

Real world impact

This ruling means claims founded on state expropriation laws remain matters for state law even when they refer to a federal statute. It limits when parties can convert a state-law dispute into a federal case simply by mentioning a federal law. The judgment below stands and federal review was ended.

Dissents or concurrances

Two Justices, McKenna and Lamar, disagreed and dissented from the dismissal.