Hurn and the Cause-of-Action Test

Hurn and the Cause-of-Action Test

Hurn v. Oursler, decided in 1933, supplied the rule for companion state claims until Gibbs recast the question.¹ The plaintiffs owned a copyrighted play, "The Evil Hour," and sued the owners of a rival play, "The Spider." Instead of producing the plaintiffs' play, the defendants had altered their own by adding a staged spiritualistic seance, certain incidental business and effects, and portions of "The Evil Hour." The complaint charged copyright infringement and, on the same alleged conduct, unfair business practices and unfair competition.² The parties were citizens of the same state, so the unfair competition theory had no jurisdictional basis of its own. The question was whether the substantial infringement claim could bring it along.

The district court found that "The Spider" did not infringe, and it dismissed the unfair competition theory for want of jurisdiction. The Supreme Court began by confirming that the court had jurisdiction in the first place. The infringement allegations presented a federal question that was "not plainly unsubstantial," so the federal court's jurisdiction was rightly upheld and the infringement claim was properly disposed of on the merits.³ Jurisdiction turns on whether the federal claim is substantial enough to present a federal question, and who wins is decided afterward. A plaintiff who loses a substantial federal claim has therefore lost on the merits, and the court never lacked power to decide it.⁴

The Court then turned to the companion claim and drew a line between "a case where two distinct grounds in support of a single cause of action are alleged, one only of which presents a federal question, and a case where two separate and distinct causes of action are alleged, one only of which is federal in character."⁵ In the first situation, when the federal question is not plainly wanting in substance, the federal court may keep the case and decide it on the non-federal ground even though the federal ground is not established. In the second situation it may not decide the non-federal cause of action.⁶ Which situation a complaint presents depends on how many rights were violated, because a cause of action, the Court said, "does not consist of facts, but of the unlawful violation of a right which the facts show."⁷ Many facts that together violate one right make a single cause of action, however many labels the pleader attaches to them.

Two ideas stand behind the line. The first explains why the court may keep a related ground. Gibbs observed that Hurn's citation of Baltimore S. S. Co. showed the Court regarding the policies of judicial economy and fairness to parties, which are reflected in res judicata doctrine, as strong counsel for a rule letting federal courts dispose of the state claims as well as the federal ones.⁸ Sending the unfair competition theory elsewhere would have meant a second lawsuit over one wrong. The second idea explains why the court may not keep an unrelated claim. A federal court is without judicial power to entertain a cause of action outside its jurisdiction merely because that cause of action has been joined in the complaint with one that is within it.⁹

The copyrighted play shows the first situation at work. The Court found that the infringement and unfair competition claims "so precisely rest upon identical facts as to be little more than the equivalent of different epithets to characterize the same group of circumstances." The bill alleged the violation of a single right, the right to protection of the copyrighted play, and the injunction sought was meant to end an essentially single wrong.¹⁰ The infringement claim was substantial, so the federal court could reach the unfair competition ground. The finding of no infringement also negated every allegation on which that ground depended, and the Court modified the decree to show a dismissal on the merits rather than for want of jurisdiction.¹¹

The bill as amended also set out facts alleged to violate a second right, the right to protection of the uncopyrighted play. That right arose under general law, rested on no federal ground, and was wholly independent of the copyright claim. It was a separate and distinct cause of action, "entirely outside the federal jurisdiction and subject to dismissal at any stage of the case," and the district court was right to dismiss it for want of jurisdiction.¹² One lawsuit thus produced a merits dismissal of one unfair competition claim and a jurisdictional dismissal of another, and the only variable was which right each claim vindicated.

The test did not last, because it rested on a label with no stable meaning. Gibbs noted that Hurn was decided before the Federal Rules unified law and equity, when the meaning of "cause of action" was a subject of serious dispute and the phrase might "mean one thing for one purpose and something different for another."¹³ The Hurn Court itself disclaimed any hard and fast test for what constitutes a cause of action.¹⁴ A test that depends on counting violated rights invites different counts from different judges on identical facts.

Gibbs called that limited approach "unnecessarily grudging" and shifted the inquiry from a label to the relationship between the claims. Judicial power exists whenever there is a claim arising under the Constitution, laws, or treaties of the United States and the relationship between that claim and the state claim permits the conclusion that the entire action comprises but one constitutional "case." The federal claim must also have substance sufficient to confer subject matter jurisdiction.¹⁵ Hurn is therefore background, and the test for a modern problem comes from Gibbs and § 1367(a), developed in the sections that follow. What survives from Hurn is its pair of threshold points: a substantial federal claim supports jurisdiction whether or not it wins, and a loss on the merits is a different event from a lack of power.