Exxon Corporation v. Hunt

United States Court of Appeals for the Third Circuit · 1982 · Corporations

683 F.2d 69 (1982)

Updated August 22, 2026

CorporationsFederal jurisdictionState taxationPreemptionDeclaratory judgmentarising underwell-pleaded complaintfederal defense

Facts

New Jersey's Spill Compensation and Control Act imposed a barrel tax on owners or operators of major facilities for hazardous substances to finance a state spill compensation fund. After Congress enacted the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, plaintiffs contended that section 114(c) of that federal statute prohibited New Jersey from requiring them to contribute to the state fund. Plaintiffs sought a federal declaratory judgment that the state tax was preempted and also sought a refund of taxes collected after the federal statute took effect. They asserted jurisdiction under the general federal-question statute and the Superfund Act's provision granting district courts exclusive original jurisdiction over controversies arising under that Act.

Issue

Whether a federal district court had subject-matter jurisdiction over plaintiffs' declaratory and refund action challenging a New Jersey tax on the ground that the Superfund Act preempted it. Also, whether the Superfund Act's exclusive-jurisdiction provision displaced state-court authority so that the Tax Injunction Act would not apply.

Rule

A declaratory judgment complaint does not arise under federal law when the federal issue asserted is merely a defense to a state-law claim or threatened state-law enforcement action; the character of the threatened action, not the anticipated federal defense, determines federal-question jurisdiction. In addition, a federal statute granting exclusive original jurisdiction over controversies arising under that statute reaches only cases that actually arise under the statute on the face of the complaint, and the Tax Injunction Act bars federal jurisdiction over state-tax challenges where the state provides an adequate remedy.

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Lakefront Solvents, Inc., which operates in Toledo, Ohio, receives notice that Michigan plans to assess a state chemical-storage levy against it for products shipped into Detroit. Before any state proceeding begins, the company files in federal district court seeking a declaration that a federal environmental statute bars Michigan from imposing the levy.

Does the federal district court have federal-question jurisdiction under 28 U.S.C. § 1331?

Explanation. The suit does not arise under federal law on the face of the complaint when the federal issue is merely an anticipated defense to a threatened state-law action. In declaratory actions, the character of the threatened coercive action controls. Because the threatened action here is state tax enforcement, the company cannot create § 1331 jurisdiction by pleading federal preemption in advance. (Derived from Exxon Corporation v. Hunt (1982).)