state court jurisdiction

The Supreme Court held 5-4 in Artis v. District of Columbia that “tolled” under 28 U.S.C 1367(d) means suspended or that the clock is stopped. The State and Local Legal Center (SLLC) filed an amicus brief arguing in favor of a different definition of “tolled.” Justice Ginsburg cited to the SLLC brief once in her majority opinion. Justice Gorsuch cited to it or discussed it four times in his dissenting opinion.   

A year after the fact, Stephanie Artis sued the District of Columbia in federal district court bringing a number of federal and state law claims related to her termination as a health inspector. It took the federal court over two and a half years to rule on her claims. It dismissed her sole federal claim and declined to exercise jurisdiction over her remaining state law claims.

28 U.S.C 1367(d) states that statutes of limitations for state law claims pending in federal court shall be “tolled” for a period of 30 days after they are dismissed (unless state law provides a longer tolling period).

Merrill Lynch v. Manning is a victory for state courts. It’s just complicated to explain how.

Per a general federal court jurisdiction statute, Section 1331, federal courts have jurisdiction over all civil lawsuits “arising under” federal law. Section 27 of the Securities Exchange Act provides federal court jurisdiction for all suits “brought to enforce” the Exchange Act.  

In Merrill Lynch v. Manning the Supreme Court held that “arising under” and “brought to enforce” mean the same thing. If a lawsuit, involving violating securities law, such as the one in this case, only includes state law claims that don’t necessarily raise federal issues that lawsuit doesn’t “arise under” federal law. Per the Court’s opinion it also therefore isn’t “brought to enforce” the Exchange Act and must be heard in state court.