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Chicago, City of v. International College of Surgeons

Citation: 28 ELR 20612
No. 96-910, 118 S. Ct. 523/(U.S., 12/15/1997)

The U.S. Supreme Court holds that a case containing claims that local administrative action violates federal law, but also containing state-law claims for on-the-record review of the administrative findings, can be removed to federal district court. The city of Chicago removed to federal court a law suit filed by the owner of historic buildings in Chicago, Illinois, who was denied permission by the Commission on Chicago Historical and Architectural Landmarks to demolish the buildings' interiors. The Seventh Circuit remanded the case to state court, concluding that the district court was without jurisdiction.

The Court first holds that the district court properly exercised federal question jurisdiction over the federal claims in the owner's complaints and properly recognized that it could exercise supplemental jurisdiction over the state-law claims. There is no question that the owner's state court complaints raised a number of issues of federal law in the form of various federal constitutional challenges to the Landmarks and Designation Ordinances and to the manner in which the Commission conducted the administrative proceedings. By raising several claims that arise under federal law, the owner subjected itself to the possibility that the city would remove the case to the federal courts. Once the case was removed, the district court had original jurisdiction over the owner's claims arising under federal law and, thus, could exercise supplemental jurisdiction over the accompanying state-law claims so long as they constitute claims that form part of the same case or controversy. The Court finds that they do form part of the same case or controversy because they are legal claims, in the sense that the term generally is used in this context to denote a judicially cognizable cause-of-action. Moreover, the state and federal claims derive from a common nucleus of operative fact.

The Court rejects the owner's assertion that a claim that calls for deferential judicial review of a state administrative determination does not constitute a civil action of which the district courts of the United States have original jurisdiction under 28 U.S.C. § 1441(a). The owner's reasoning starts with an erroneous premise. Because this is a federal question case, the relevant inquiry is not whether the state claims for on-the-record review of the Commission's decisions are civil actions within the original jurisdiction of a district court. Rather, the district court's original jurisdiction derives from the owner's federal claims, not its state-law claims. Those federal claims suffice to make the actions civil actions within the original jurisdiction of the district courts for purposes of removal. Having thus established federal jurisdiction, the relevant inquiry respecting the accompanying state claims is whether they fall within a district court's supplemental jurisdiction, not its original jurisdiction. The Court also rejects the owner's argument that a claim involving deferential review of a local administrative decision can never constitute a claim so related to claims within a district court's original jurisdiction that it forms part of the same case or controversy for purposes of supplemental jurisdiction. Nothing in the text of 28 U.S.C. § 1367(a) indicates an exception to supplemental jurisdiction for claims that require on-the-record review of a state or local administrative determination. Nor do the decisions relied on by the owner require that the Court read an equivalent exception into the statute.

The Court then holds that depending on a host of factors, including the circumstances of the particular case, the nature of the state-law claims, the character of the governing state law, and the relationship between the state and federal claims, district courts have discretion to exercise jurisdiction over supplemental state-law claims. The Court further holds that district courts may also be obligated not to decide state-law claims where one of the abstention doctrines applies. The Court then remands the case for a determination of whether the abstention principles required the district court to decline to exercise supplemental jurisdiction.

Justices Ginsburg and Stevens, dissenting, would affirm the Seventh Circuit's opinion. No Act of Congress adverts to and authorizes any cross-system appeal from state or local administrative agency to lower federal court. Until now, federal habeas corpus proceedings were the closest the judicial system has come to having cross-system appellate review. But in habeas corpus proceedings, the court exercises original, not appellate, jurisdiction. The majority casts aside the critical difference between fresh first instance proceedings not tied to a record made by a tribunal lower in the hierarchy, and on-the-record substantial evidence review, which cannot fairly be described as anything but appellate in character. In addition, the majority opinion jeopardizes the strong interest courts of the state have in controlling the actions of local as well as state agencies.

[Counsel not available at this printing.]

Before Rehnquist, Scalia, Kennedy, Souter, Thomas, and Breyer, JJ.