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OSBORN v. BANK OF THE UNITED STATES 9 Wheaton 738 (1824)

On its constitutional merits, Osborn was a replay of MCCULLOCH V. MARYLAND (1819). Ohio had sought to drive out the congressionally chartered bank by taxing its branches $50,000 each and by seizing money from its vaults. The bank sued the state auditor in a federal court for recovery of the money. The state argued that the ELEVENTH AMENDMENT barred the court from taking JURISDICTION, but, on APPEAL to the Supreme Court, Chief Justice JOHN MARSHALL concluded that the amendment applied only when the state was named as a party defendant—a position abandoned by the Court in later decisions. (See EX PARTE YOUNG.) On the principles of McCulloch, the auditor was liable for his TRESPASS.

Osborn's lasting doctrinal contribution was its sweeping definition of congressional power under Article III to confer FEDERAL QUESTION JURISDICTION on the federal courts. Marshall's view, which remains good law, was that cases "arising under" the Constitution, or federal laws, or treaties included—for purposes of defining congressional power to confer jurisdiction—any case in which federal law might potentially be dispositive. It made no difference that federal law was not implicated in the bank's complaint for trespass; the arguable invalidity of the bank's charter might possibly be raised as a defense to such an action. Although similar words ("arises under") are used in the statutes defining federal question jurisdiction, they have been interpreted more narrowly. Osborn thus defines congressional power, not its exercise.

The Osborn decision heightened the vehemence of state denunciations of the Court's judicial nationalism and even of its appellate jurisdiction. President ANDREW JACKSON'S veto of the bank bill of 1832 probably reflected the prevailing belief—despite McCulloch and Osborn—that Congress had no constitutional authority to charter a corporation.