Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing

After Smith and Moore, the law of what we now call the Smith-Grable exception was unclear, and lower federal courts struggled.

The Supreme Court made matters worse, far worse, in a case called Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804 (1986).  In Merrell Dow, the plaintiffs argued that a federal statute, although it did not say so explicitly, created an "implied" cause of action that they could use to sue the defendant, a drug company.  The plaintiffs also asserted state law causes of action.  The plaintiffs said that there was arising under jurisdiction because (i) the federal statute's implied cause of action was a real federal cause of action, so they could proceed under a Mottley theory, and, in the alternative, (ii) there was a federal issue embedded within their state causes of action, so this case was like Smith.  The Supreme Court spent pages upon pages rejecting the plaintiffs' first assertion, meaning that it held that the federal statute did NOT create an implied cause of action.  So far, fine: the plaintiffs' theory (i) of arising under jurisdiction does not work.  But then the Supreme Court wrote a lot of words that appeared to say the following:  the fact that the federal statute did not create an implied cause of action meant also that the Smith exception (what we now call the "Smith-Grable" exception) did not apply, so the plaintiffs' theory (ii) also could not work.

That caused the lower courts a lot of confusion.  Can you figure out why?  Here's a hint:  Isn't it always true when a plaintiff tries to use the Smith-Grable exception that the plaintiff lacks a federally created cause of action?

The result was a bit of a mess.  The Supreme Court tried to clean up the mess in this case, Grable.  Notice that in the opinion below, the Supreme Court attempts to do a repair job on Merrell Dow.