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Federal Court Has No Jurisdiction In Suit to Interpret State Law
Description Bank filed a preemptive claim to have a state banking statute declared unenforceable as in conflict with federal banking law. Because the state statute had not been interpreted as to the possible source of conflict, the appeals court held that federal district court did not have jurisdiction to hear the matter, which should be litigated at the state level prior to such action.
Topic Court Procedure
Key Words Subject Matter Jurisdiction; Preemptive Claim
C A S E   S U M M A R Y
Facts Fleet, a federally-chartered bank, sued the Connecticut Banking Commissioner, seeking a declaration that Connecticut statutes regulating ATMs did not prohibit Fleet from imposing a surcharge on non-customers who used Fleet ATMs. Fleet sought an injunction barring the state from interfering with its imposition of a user fee, contending that would conflict with federal law. Federal district court held for Fleet; Connecticut appealed.
Decision Reversed. "The issue is whether subject matter jurisdiction ... is available for a complaint seeking declaratory and injunctive relief against a state officer ... that alleges (a) that state law does not prohibit the action the defendants assert the plaintiff may not take and (b) that state law, if construed to prohibit the plaintiff's conduct, is preempted by federal law." The federal district court lacked subject matter jurisdiction. "Fleet's suit not only seeks to litigate the meaning of state law and, only if unsuccessful, a preemptive claim, but it also amounts to a preemptive strike, obliging the state defendants to pursue their state law claim in federal court, instead of the state court forum they might prefer."
Citation Fleet Bank, N.A. v. Burke, 160 F.3d 883 (2nd Cir., 1998)

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