Summary
This D.C. Circuit opinion reverses a district court's exercise of federal question jurisdiction over a dispute between alumni and Howard University regarding changes to the university's governing bylaws. The appellate court held that the suit did not arise under federal law merely because the university holds a congressional charter, nor did it present a substantial, disputed federal issue under the Grable test. Consequently, the case was remanded with instructions to dismiss for lack of subject matter jurisdiction.
Topics
Practice areas
Questions Presented
- Whether the Alumni's state-law claims arose under federal law for purposes of 28 U.S.C. § 1331 because Howard was federally chartered or because the internal-affairs doctrine required application of federal law.
- Whether the claims necessarily raised an actually disputed and substantial federal issue capable of resolution in federal court without disrupting the federal-state balance under Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing.
- Whether the District Court therefore had subject-matter jurisdiction over the removed action.
Holdings
- The action did not arise under federal law. Howard's federal charter did not automatically convert suits against the University into federal-question cases, its sue-and-be-sued provision did not specifically mention federal courts, and the internal-affairs doctrine did not require application of federal common law or create a jurisdictional basis for removal.
- The claims did not satisfy Grable because they did not necessarily raise an actually disputed and substantial federal issue. Any federal charter issue was, at most, raised in a defense and was not actually disputed in the manner required for federal-question jurisdiction.
Key quotations
“We hold that the District Court erred in exercising jurisdiction over the case because it neither arises under federal law nor presents a significant, disputed federal issue under Grable.” (123 F.4th at 1345)
“The internal affairs doctrine is a conflict-of-laws principle recognizing that a corporation’s internal affairs should not be subject to regulation by more than one jurisdiction.” (123 F.4th at 1347)
“We therefore reverse and remand to the District Court with instructions to dismiss this case without prejudice for lack of subject matter jurisdiction.” (123 F.4th at 1353)
Factual background
Howard University was established by congressional charter, which vested governance in a board of trustees and directed the Board to enact bylaws consistent with federal law. The Board's preexisting bylaws provided procedures for meetings, bylaw amendments, and election of alumni trustees. During the COVID-19 pandemic, the Governance Committee Chair unilaterally suspended elections for affiliate trustees, and the Board later amended the bylaws to eliminate affiliate-trustee positions after only two alumni trustees remained. The Alumni claimed that these actions violated the bylaws and fiduciary duties and sought declaratory relief.
Procedural history
The Alumni sued Howard University and its Board of Trustees in D.C. Superior Court for declaratory and fiduciary-duty relief concerning the suspension of affiliate-trustee elections and elimination of affiliate-trustee positions. Howard removed the case based on federal-question jurisdiction tied to Howard's federal charter. The District Court denied remand, then dismissed the amended complaint under Rule 12(b)(6). The D.C. Circuit held that federal subject-matter jurisdiction was lacking and ordered dismissal without prejudice.
Remand instructions
Reverse the District Court's judgment and remand with instructions to dismiss the case without prejudice for lack of subject-matter jurisdiction.