Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning

(Slip Opinion) OCTOBER TERM, 2015 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

MERRILL LYNCH, PIERCE, FENNER & SMITH INC.

ET AL. v. MANNING ET AL.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE THIRD CIRCUIT

No. 14–1132. Argued December 1, 2015—Decided May 16, 2016
Respondent Greg Manning held over two million shares of stock in
Escala Group, Inc. He claims that he lost most of his investment
when the share price plummeted after petitioners, Merrill Lynch and
other financial institutions (collectively, Merrill Lynch), devalued
Escala through “naked short sales” of its stock. Unlike a typical
short sale, where a person borrows stock from a broker, sells it to a
buyer on the open market, and later purchases the same number of
shares to return to the broker, the seller in a “naked” short sale does
not borrow the stock he puts on the market, and so never delivers the
promised shares to the buyer. This practice, which can injure share-
holders by driving down a stock’s price, is regulated by the Securities
and Exchange Commission’s Regulation SHO, which prohibits short-
sellers from intentionally failing to deliver securities, thereby curbing
market manipulation.
Manning and other former Escala shareholders (collectively, Man-
ning) filed suit in New Jersey state court, alleging that Merrill
Lynch’s actions violated New Jersey law. Though Manning chose not
to bring any claims under federal securities laws or rules, his com-
plaint referred explicitly to Regulation SHO, cataloguing past accusa-
tions against Merrill Lynch for flouting its requirements and suggest-
ing that the transactions at issue had again violated the regulation.
Merrill Lynch removed the case to Federal District Court, asserting
federal jurisdiction on two grounds. First, it invoked the general fed-
eral question statute, 28 U. S. C. §1331, which grants district courts
jurisdiction of “all civil actions arising under” federal law. It also in-
voked §27 the Securities Exchange Act of 1934 (Exchange Act), which
grants federal district courts exclusive jurisdiction “of all suits in eq-
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MANNING

Syllabus

uity and actions at law brought to enforce any liability or duty creat-
ed by [the Exchange Act] or the rules or regulations thereunder.” 15
U. S. C. §78aa(a). Manning moved to remand the case to state court,
arguing that neither statute gave the federal court authority to adju-
dicate his state-law claims. The District Court denied his motion, but
the Third Circuit reversed. The court first decided that §1331 did not
confer jurisdiction, because Manning’s claims all arose under state
law and did not necessarily raise any federal issues. Nor was the
District Court the appropriate forum under §27 of the Exchange Act,
which, the court held, covers only those cases that would satisfy
§1331’s “arising under” test for general federal jurisdiction.
Held: The jurisdictional test established by §27 is the same as §1331’s
test for deciding if a case “arises under” a federal law. Pp. 4–18.
(a) Section 27’s text more readily supports this meaning than it
does the parties’ two alternatives. Merrill Lynch argues that §27’s
plain language requires an expansive rule: Any suit that either ex-
plicitly or implicitly asserts a breach of an Exchange Act duty is
“brought to enforce” that duty even if the plaintiff seeks relief solely
under state law. Under the natural reading of that text, however,
§27 confers federal jurisdiction when an action is commenced in order
to give effect to an Exchange Act requirement. The “brought to en-
force” language thus stops short of embracing any complaint that
happens to mention a duty established by the Exchange Act. Mean-
while, Manning’s far more restrictive interpretation—that a suit is
“brought to enforce” only if it is brought directly under that statute—
veers too far in the opposite direction. Instead, §27’s language is best
read to capture both suits brought under the Exchange Act and the
rare suit in which a state-law claim rises and falls on the plaintiff’s
ability to prove the violation of a federal duty. An existing jurisdic-
tional test well captures both of these classes of suits “brought to en-
force” such a duty: 28 U. S. C. §1331’s provision of federal jurisdiction
of all civil actions “arising under” federal law. Federal jurisdiction
most often attaches when federal law creates the cause of action as-
serted, but it may also attach when the state-law claim “necessarily
raise[s] a stated federal issue, actually disputed and substantial,
which a federal forum may entertain without disturbing any congres-
sionally approved balance” of federal and state power. Grable & Sons
Metal Products, Inc. v. Darue Engineering & Mfg., 545 U. S. 308, 314.
Pp. 5–10.
(b) This Court’s precedents interpreting the term “brought to en-
force” have likewise interpreted §27’s jurisdictional grant as coexten-
sive with the Court’s construction of §1331’s “arising under” stand-
ard. See Pan American, 366 U. S. 656; Matsushita Elec. Industrial
Co. v. Epstein, 516 U. S. 367. Pp. 10–14.
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Syllabus

(c) Construing §27, consistent with both text and precedent, to cov-
er suits that arise under the Exchange Act serves the goals the Court
has consistently underscored in interpreting jurisdictional statutes.
It gives due deference to the important role of state courts. And it
promotes “administrative simplicity[, which] is a major virtue in a ju-
risdictional statute.” Hertz Corp. v. Friend, 559 U. S. 77, 94. Both
judges and litigants are familiar with the “arising under” standard
and how it works, and that test generally provides ready answers to
jurisdictional questions. Pp. 14–18.
772 F. 3d 158, affirmed.

KAGAN, J., delivered the opinion of the Court, in which ROBERTS, C. J.,
and KENNEDY, GINSBURG, BREYER, and ALITO, JJ., joined. THOMAS, J.,
filed an opinion concurring in the judgment, in which SOTOMAYOR, J.,
joined.
 Cite as: 578 U. S. ____ (2016) 1

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash­
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
_________________

No. 14–1132
_________________

MERRILL LYNCH, PIERCE, FENNER & SMITH INC.,

ET AL., PETITIONERS v. GREG MANNING, ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE THIRD CIRCUIT

[May 16, 2016]

JUSTICE KAGAN delivered the opinion of the Court.
Section 27 of the Securities Exchange Act of 1934 (Ex­
change Act), 48 Stat. 992, as amended, 15 U. S. C. §78a,
et seq., grants federal district courts exclusive jurisdiction
“of all suits in equity and actions at law brought to enforce
any liability or duty created by [the Exchange Act] or the
rules or regulations thereunder.” §78aa(a). We hold today
that the jurisdictional test established by that provision is
the same as the one used to decide if a case “arises under”
a federal law. See 28 U. S. C. §1331.
I
Respondent Greg Manning held more than two million
shares of stock in Escala Group, Inc., a company traded on
the NASDAQ. Between 2006 and 2007, Escala’s share
price plummeted and Manning lost most of his invest­
ment. Manning blames petitioners, Merrill Lynch and
several other financial institutions (collectively, Merrill
Lynch), for devaluing Escala during that period through
“naked short sales” of its stock.
A typical short sale of a security is one made by a bor­
rower, rather than an owner, of stock. In such a transac­
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Opinion of the Court

tion, a person borrows stock from a broker, sells it to a
buyer on the open market, and later purchases the same
number of shares to return to the broker. The short sell­
er’s hope is that the stock price will decline between the
time he sells the borrowed shares and the time he buys
replacements to pay back his loan. If that happens, the
seller gets to pocket the difference (minus associated
transaction costs).
In a “naked” short sale, by contrast, the seller has not
borrowed (or otherwise obtained) the stock he puts on the
market, and so never delivers the promised shares to the
buyer. See “Naked” Short Selling Antifraud Rule, Securi­
ties Exchange Commission (SEC) Release No. 34–58774,
73 Fed. Reg. 61667 (2008). That practice (beyond its effect
on individual purchasers) can serve “as a tool to drive
down a company’s stock price”—which, of course, injures
shareholders like Manning. Id., at 61670. The SEC regu­
lates such short sales at the federal level: The Commis­
sion’s Regulation SHO, issued under the Exchange Act,
prohibits short sellers from intentionally failing to deliver
securities and thereby curbs market manipulation. See 17
CFR §§242.203–242.204 (2015).
In this lawsuit, Manning (joined by six other former
Escala shareholders) alleges that Merrill Lynch facilitated
and engaged in naked short sales of Escala stock, in viola­
tion of New Jersey law. His complaint asserts that Merrill
Lynch participated in “short sales at times when [it] nei­
ther possessed, nor had any intention of obtaining[,] suffi­
cient stock” to deliver to buyers. App. to Pet. for Cert. 57a,
Amended Complaint ¶39. That conduct, Manning charges,
contravened provisions of the New Jersey Racketeer
Influenced and Corrupt Organizations Act (RICO), New
Jersey Criminal Code, and New Jersey Uniform Securities
Law; it also, he adds, ran afoul of the New Jersey common
law of negligence, unjust enrichment, and interference
with contractual relations. See id., at 82a–101a, ¶¶88–
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Opinion of the Court

161. Manning chose not to bring any claims under federal
securities laws or rules. His complaint, however, referred
explicitly to Regulation SHO, both describing the purposes
of that rule and cataloguing past accusations against
Merrill Lynch for flouting its requirements. See id., at
51a–54a, ¶¶28–30; 75a–82a, ¶¶81–87. And the complaint
couched its description of the short selling at issue here in
terms suggesting that Merrill Lynch had again violated
that regulation, in addition to infringing New Jersey law.
See id., at 57a–59a, ¶¶39–43.
Manning brought his complaint in New Jersey state
court, but Merrill Lynch removed the case to Federal
District Court. See 28 U. S. C. §1441 (allowing removal of
any civil action of which federal district courts have origi­
nal jurisdiction). Merrill Lynch asserted federal jurisdic­
tion on two grounds. First, it invoked the general federal
question statute, §1331, which grants district courts juris­
diction of “all civil actions arising under” federal law.
Second, it maintained that the suit belonged in federal
court by virtue of §27 of the Exchange Act. That provision,
in relevant part, grants district courts exclusive jurisdic­
tion of “all suits in equity and actions at law brought to
enforce any liability or duty created by [the Exchange Act]
or the rules and regulations thereunder.” 15 U. S. C.
§78aa(a). Manning moved to remand the case to state
court, arguing that neither statute gave the federal court
authority to adjudicate his collection of state-law claims.
The District Court denied his motion. See No. 12–4466 (D
NJ, Mar. 18, 2013), App. to Pet. for Cert. 24a–38a.
The Court of Appeals for the Third Circuit reversed,
ordering a remand of the case to state court. See 772 F. 3d
158 (2014). The Third Circuit first decided that the fed-
eral question statute, 28 U. S. C. §1331, did not confer juris­
diction of the suit, because all Manning’s claims were
“brought under state law” and none “necessarily raised” a
federal issue. 772 F. 3d, at 161, 163. Nor, the court held,
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Opinion of the Court

did §27 of the Exchange Act make the district court the
appropriate forum. Relying on this Court’s construction of
a nearly identical jurisdictional provision, the Court of
Appeals found that §27 covers only those cases involving
the Exchange Act that would satisfy the “arising under”
test of the federal question statute. See id., at 166–167
(citing Pan American Petroleum Corp. v. Superior Court of
Del. for New Castle Cty., 366 U. S. 656 (1961)). Because
the District Court lacked jurisdiction of Manning’s suit
under §1331, so too it was not the exclusive forum under
§27.
Merrill Lynch sought this Court’s review solely as to
whether §27 commits Manning’s case to federal court. See
Pet. for Cert. i. Because of a Circuit split about that pro­
vision’s meaning,1 we granted certiorari. 576 U. S. ___
(2015). We now affirm.
II
Like the Third Circuit, we read §27 as conferring exclu­
sive federal jurisdiction of the same suits as “aris[e] un­
der” the Exchange Act pursuant to the general federal
question statute. See 28 U. S. C. §1331. The text of §27
more readily supports that meaning than it does either of
the parties’ two alternatives. This Court’s precedents
interpreting identical statutory language positively compel
that conclusion. And the construction fits with our prac­
tice of reading jurisdictional laws, so long as consistent
with their language, to respect the traditional role of state
courts in our federal system and to establish clear and
administrable rules.
——————
1 Compare 772 F. 3d 158 (CA3 2014) (case below) with Barbara v.

New York Stock Exchange, Inc., 99 F. 3d 49, 55 (CA2 1996) (construing
§27 more narrowly), Sparta Surgical Corp. v. National Assn. of Securi-
ties Dealers, Inc., 159 F. 3d 1209, 1211–1212 (CA9 1998) (construing
§27 more broadly), and Hawkins v. National Assn. of Securities Dealers,
Inc., 149 F. 3d 330, 331–332 (CA5 1998) (per curiam) (same).
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Opinion of the Court

A
Section 27, as noted earlier, provides federal district
courts with exclusive jurisdiction “of all suits in equity and
actions at law brought to enforce any liability or duty
created by [the Exchange Act] or the rules and regulations
thereunder.” 15 U. S. C. §78aa(a); see supra, at 3.2 Much
the same wording appears in nine other federal jurisdic­
tional provisions—mostly enacted, like §27, as part of New
Deal-era regulatory statutes.3
Merrill Lynch argues that the “plain, unambiguous
language” of §27 requires an expansive understanding of
its scope. Brief for Petitioners 23. Whenever (says Merrill
Lynch) a plaintiff ’s complaint either explicitly or implic-
itly “assert[s]” that “the defendant breached an Exchange
Act duty,” then the suit is “brought to enforce” that duty
and a federal court has exclusive jurisdiction. Id., at 22;
Reply Brief 10–11; see Tr. of Oral Arg. 7–8 (confirming
that such allegations need not be express). That is so,
Merrill Lynch contends, even if the plaintiff, as in this
case, brings only state-law claims in his complaint—that
is, seeks relief solely under state law. See Reply Brief 3–6.
——————
2 Section 27 also grants federal courts exclusive jurisdiction of “viola­

tions of [the Exchange Act] or the rules and regulations thereunder.”
15 U. S. C. §78aa(a). Manning argues that the “violations” language
applies only to criminal proceedings and SEC enforcement actions. See
Brief for Respondents 28. Merrill Lynch, although not conceding that
much, believes the “violations” clause irrelevant here because, in
private suits for damages, it goes no further than the “brought to
enforce” language quoted in the text. See Reply Brief 1, n. 1. Given
that both parties have thus taken the “violations” language off the
table, we do not address its meaning.
3 See Securities Act of 1933, 15 U. S. C. §77v(a); Federal Power Act of

1935, 16 U. S. C. §825p; Connally Hot Oil Act of 1935, 15 U. S. C.
§715i(c); Natural Gas Act of 1938, 15 U. S. C. §717u; Trust Indenture
Act of 1939, 15 U. S. C. §77vvv(b); Investment Company Act of 1940, 15
U. S. C. §80a–43; Investment Advisers Act of 1940, 15 U. S. C. §80b–
14(a); International Wheat Agreement Act of 1949, 7 U. S. C. §1642(e);
Interstate Land Sales Full Disclosure Act of 1968, 15 U. S. C. §1719.
6 MERRILL LYNCH, PIERCE, FENNER & SMITH INC. v.
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Opinion of the Court

And it is so, Merrill Lynch continues, even if the plaintiff
can prevail on those claims without proving that the al­
leged breach of an Exchange Act duty—here, the violation
of Regulation SHO—actually occurred. See id., at 7–13;
Tr. of Oral Arg. 3 (“[T]he words ‘brought to enforce’ [do
not focus] on what the court would necessarily have to
decide”).
But a natural reading of §27’s text does not extend so
far. “Brought” in this context means “commenced,” Black’s
Law Dictionary 254 (3d ed. 1933); “to” is a word “express­
ing purpose [or] consequence,” The Concise Oxford Dic­
tionary 1288 (1931); and “enforce” means “give force [or]
effect to,” 1 Webster’s New International Dictionary of the
English Language 725 (1927). So §27 confers federal
jurisdiction when an action is commenced in order to give
effect to an Exchange Act requirement. That language, in
emphasizing what the suit is designed to accomplish, stops
short of embracing any complaint that happens to mention
a duty established by the Exchange Act. Consider, for
example, a simple state-law action for breach of contract,
in which the plaintiff alleges, for atmospheric reasons,
that the defendant’s conduct also violated the Exchange
Act—or still less, that the defendant is a bad actor who
infringed that statute on another occasion. On Merrill
Lynch’s view, §27 would cover that suit; indeed, Merrill
Lynch points to just such incidental assertions as the basis
for federal jurisdiction here. See Brief for Petitioners 20–
21; supra, at 3. But that hypothetical suit is “brought to
enforce” state contract law, not the Exchange Act—
because the plaintiff can get all the relief he seeks just by
showing the breach of an agreement, without proving any
violation of federal securities law. The suit, that is, can
achieve all it is supposed to even if issues involving the
Exchange Act never come up.
Critiquing Merrill Lynch’s position on similar grounds,
Manning proposes a far more restrictive interpretation of
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Opinion of the Court

§27’s language—one going beyond what he needs to pre­
vail. See Brief for Respondents 27–33. According to Man­
ning, a suit is “brought to enforce” the Exchange Act’s
duties or liabilities only if it is brought directly under that
statute—that is, only if the claims it asserts (and not just
the duties it means to vindicate) are created by the Ex­
change Act. On that view, everything depends (as Justice
Holmes famously said in another jurisdictional context) on
which law “creates the cause of action.” American Well
Works Co. v. Layne & Bowler Co., 241 U. S. 257, 260
(1916). If a complaint asserts a right of action deriving
from the Exchange Act (or an associated regulation), the
suit must proceed in federal court. But if, as here, the
complaint brings only state-created claims, then the case
belongs in a state forum. And that is so, Manning claims,
even if—contrary to what the Third Circuit held below—
the success of the state claim necessarily hinges on prov­
ing that the defendant breached an Exchange Act duty.
See Brief for Respondents 31.
Manning’s view of the text’s requirements, although
better than Merrill Lynch’s, veers too far in the opposite
direction. There is no doubt, as Manning says, that a suit
asserting an Exchange Act cause of action fits within §27’s
scope: Bringing such a suit is the prototypical way of
enforcing an Exchange Act duty. But it is not the only
way. On rare occasions, as just suggested, a suit raising a
state-law claim rises or falls on the plaintiff ’s ability to
prove the violation of a federal duty. See, e.g., Grable &
Sons Metal Products, Inc. v. Darue Engineering & Mfg.,
545 U. S. 308, 314–315 (2005); Smith v. Kansas City Title
& Trust Co., 255 U. S. 180, 201 (1921). If in that manner,
a state-law action necessarily depends on a showing that
the defendant breached the Exchange Act, then that suit
could also fall within §27’s compass. Suppose, for exam­
ple, that a state statute simply makes illegal “any viola­
tion of the Exchange Act involving naked short selling.” A
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Opinion of the Court

plaintiff seeking relief under that state law must under­
take to prove, as the cornerstone of his suit, that the de­
fendant infringed a requirement of the federal statute.
(Indeed, in this hypothetical, that is the plaintiff ’s only
project.) Accordingly, his suit, even though asserting a
state-created claim, is also “brought to enforce” a duty
created by the Exchange Act.
An existing jurisdictional test well captures both classes
of suits “brought to enforce” such a duty. As noted earlier,
28 U. S. C. §1331 provides federal jurisdiction of all civil
actions “arising under” federal law. See supra, at 3. This
Court has found that statutory term satisfied in either of
two circumstances. Most directly, and most often, federal
jurisdiction attaches when federal law creates the cause of
action asserted. That set of cases is what Manning high­
lights in offering his view of §27. But even when “a claim
finds its origins” in state law, there is “a special and small
category of cases in which arising under jurisdiction still
lies.” Gunn v. Minton, 568 U. S. ___, ___ (2013) (slip op.,
at 6) (internal quotation marks omitted). As this Court
has explained, a federal court has jurisdiction of a state-
law claim if it “necessarily raise[s] a stated federal issue,
actually disputed and substantial, which a federal forum
may entertain without disturbing any congressionally
approved balance” of federal and state power. Grable, 545
U. S., at 314; see Gunn, 568 U. S., at ___ (slip op., at 6)
(framing the same standard as a four-part test). That
description typically fits cases, like those described just
above, in which a state-law cause of action is “brought to
enforce” a duty created by the Exchange Act because the
claim’s very success depends on giving effect to a federal
requirement. Accordingly, we agree with the court below
that §27’s jurisdictional test matches the one we have
formulated for §1331, as applied to cases involving the
Exchange Act. If (but only if) such a case meets the “aris­
ing under” standard, §27 commands that it go to federal
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Opinion of the Court

court.4
Merrill Lynch objects that our rule construes “completely
different language”—i.e., the phrases “arising under”
and “brought to enforce” in §1331 and §27, respectively—
“to mean exactly the same thing.” Reply Brief 7. We
cannot deny that point. But we think it far less odd than
Merrill Lynch does. After all, the test for §1331 jurisdic­
tion is not grounded in that provision’s particular phras­
ing. This Court has long read the words “arising under” in
Article III to extend quite broadly, “to all cases in which a
federal question is ‘an ingredient’ of the action.” Merrell
Dow Pharmaceuticals Inc. v. Thompson, 478 U. S. 804, 807
——————
4 The concurrence adopts a slightly different approach, placing in
federal court Exchange Act claims plus all state-law claims necessarily
raising an Exchange Act issue. See post, at 2–3 (THOMAS, J., concurring
in judgment). In other words, the concurrence would not ask, as the
“arising under” test does, whether the federal issue embedded in such a
state-law claim is also substantial, actually disputed, and capable of
resolution in federal court without disrupting the congressionally
approved federal-state balance. See post, at 6–7; Grable & Sons Metal
Products, Inc. v. Darue Engineering & Mfg., 545 U. S. 308, 314 (2005).
But this Court has not construed any jurisdictional statute, whether
using the words “brought to enforce” or “arising under” (or for that
matter, any other), to draw the concurrence’s line. For as long as we
have contemplated exercising federal jurisdiction over state-law claims
necessarily raising federal issues, we have inquired as well into whether
those issues are “really and substantially” disputed. See, e.g., Hop-
kins v. Walker, 244 U. S. 486, 489 (1917); Shulthis v. McDougal,
225 U. S. 561, 569 (1912). And similarly, we have long emphasized the
need in such circumstances to make “sensitive judgments about con­
gressional intent, judicial power, and the federal system.” Merrell Dow
Pharmaceuticals Inc. v. Thompson, 478 U. S. 804, 810 (1986). At this
late juncture, we see no virtue in trying to pull apart these intercon­
nected strands of necessity and substantiality-plus. Indeed, doing so
here—and thus creating a gap between our “brought to enforce” and
“arising under” standards—would conflict with this Court’s precedent
and undermine important goals of interpreting jurisdictional statutes.
See infra, at 10–14 (discussing our prior decisions equating the two
tests), 14–17 (highlighting the need to respect state courts and the
benefits of using a single, time-tested standard).
10 MERRILL LYNCH, PIERCE, FENNER & SMITH INC. v.
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Opinion of the Court

(1986) (quoting Osborn v. Bank of United States, 9 Wheat.
738, 823 (1824)). In the statutory context, however, we
opted to give those same words a narrower scope “in the
light of [§1331’s] history[,] the demands of reason and
coherence, and the dictates of sound judicial policy.”
Romero v. International Terminal Operating Co., 358 U. S.
354, 379 (1959). Because the resulting test does not turn
on §1331’s text, there is nothing remarkable in its fitting
as, or even more, neatly a differently worded statutory
provision.
Nor can Merrill Lynch claim that Congress’s use of the
new “brought to enforce” language in §27 shows an intent
to depart from a settled (even if linguistically ungrounded)
test for statutory “arising under” jurisdiction. That is
because no such well-defined test then existed. As we
recently noted, our caselaw construing §1331 was for
many decades—including when the Exchange Act
passed—highly “unruly.” Gunn, 568 U. S., at __ (slip op.,
at 6) (referring to the “canvas” of our old opinions as
“look[ing] like one that Jackson Pollock got to first”).
Against that muddled backdrop, it is impossible to infer
that Congress, in enacting §27, wished to depart from
what we now understand as the “arising under” standard.
B
This Court has reached the same conclusion before. In
two unrelated decisions, we addressed the “brought to
enforce” language at issue here. See Pan American, 366
U. S. 656; Matsushita Elec. Industrial Co. v. Epstein, 516
U. S. 367 (1996). Each time, we viewed that phrase as
coextensive with our construction of “arising under.”
Pan American involved §22 of the Natural Gas Act
(NGA), 15 U. S. C. §717u—an exclusive jurisdiction provi­
sion containing language materially indistinguishable
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Opinion of the Court

from §27’s.5 The case began in state court when a natural
gas purchaser sued a producer for breach of a contract
setting sale prices. Prior to the alleged breach, the pro­
ducer had filed those contractual rates with the Federal
Power Commission, as the NGA required. Relying on that
submission (which the complaint did not mention), the
producer claimed that the buyer’s suit was “brought to
enforce” a liability deriving from the NGA—i.e., a filed
rate—and so must proceed in federal court. See 366 U. S.,
at 662. This Court rejected the argument.
Our decision explained that §22’s use of the term
“brought to enforce,” rather than “arising under,” made no
difference to the jurisdictional analysis. The inquiry, we
wrote, was “not affected by want” of the language con­
tained in the federal question statute. Id., at 665, n. 2.
The “limitation[s]” associated with “arising under” juris­
diction, we continued, were “clearly implied” in §22’s
alternative phrasing. Ibid. In short, the linguistic distinc­
tion between the two jurisdictional provisions did not
extend to their meaning.
Pan American thus went on to analyze the jurisdictional
issue in the manner set out in our “arising under” prece­
dents. Federal question jurisdiction lies, the Court wrote,
only if “it appears from the face of the complaint that
determination of the suit depends upon a question of
federal law.” Id., at 663. That inquiry focuses on “the
particular claims a suitor makes” in his complaint—
meaning, whether the plaintiff seeks relief under state or
federal law. Id., at 662. In addition, the Court suggested,
a federal court could adjudicate a suit stating only a state-
law claim if it included as “an element, and an essential

——————
5 Section22 grants federal courts exclusive jurisdiction “of all suits in
equity and actions at law brought to enforce any liability or duty
created by . . . [the NGA] or any rule, regulation, or order thereunder.”
52 Stat. 833.
12 MERRILL LYNCH, PIERCE, FENNER & SMITH INC. v.
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Opinion of the Court

one,” the violation of a federal right. Id., at 663 (quoting
Gully v. First Nat. Bank in Meridian, 299 U. S. 109, 112
(1936)). With those principles of “arising under” jurisdic­
tion laid out, the Court held that §22 did not enable a
federal court to resolve the buyer’s case, because he could
prevail merely by proving breach of the contract. See 366
U. S., at 663–665. Pan American establishes, then, that
an action “brought to enforce” a duty or liability created by
a federal statute is nothing more (and nothing less) than
an action “arising under” that law.
Merrill Lynch reads Pan American more narrowly, as
holding only that §22 does not confer federal jurisdiction
when a complaint (unlike Manning’s) fails to reference
federal law at all. See Brief for Petitioners 32–33, 38. But
that argument ignores Pan American’s express statement
of equivalence between §27’s language and the federal
question statute’s: “Brought to enforce” has the same
“limitation[s]” (meaning, the same scope) as “arising un­
der.” 366 U. S., at 665, n. 2. And just as important, Mer­
rill Lynch disregards Pan American’s analytical structure:
The decision proceeds by reviewing this Court’s “arising
under” precedents, articulating the principles animating
that caselaw, and then applying those tenets to the dis­
pute at hand. Id., at 662–665. The Court thus showed (as
well as told) that “brought to enforce” jurisdiction mirrors
that of “arising under.”
As a fallback, Merrill Lynch claims that Pan American
is irrelevant here because it relied on legislative history
distinct to the NGA in finding §22’s “brought to enforce”
language coterminous with “arising under.” See Brief for
Petitioners 38–39. The premise of that argument is true
enough: In support of its holding, the Court quoted a
Committee Report describing §22 as conferring federal
jurisdiction “over cases arising under the act.” 366 U. S.,
at 665, n. 2. But we cannot accept the conclusion Merrill
Lynch draws from that statement: that courts should give
 Cite as: 578 U. S. ____ (2016) 13

Opinion of the Court

two identically worded statutory provisions, passed less
than five years apart, markedly different meanings.
Indeed, the result of Merrill Lynch’s approach is still
odder, for what of the eight other jurisdictional provisions
containing “brought to enforce” language? See n. 3, supra.
Presumably, Merrill Lynch would have courts inspect each
of their legislative histories to decide whether to read
those statutes as reproducing the “arising under” stand­
ard, adopting Merrill Lynch’s alternative view, or demand­
ing yet another jurisdictional test. We are hard pressed to
imagine a less sensible way of construing the repeated
iterations of the phrase “brought to enforce” in the juris­
dictional provisions of the Federal Code.
In any event, this Court in Matsushita addressed §27
itself, and once again equated the “brought to enforce” and
“arising under” standards. That decision arose from a
state-law action against corporate directors for breach of
fiduciary duty. The issue was whether the state court
handling the suit could approve a settlement releasing, in
addition to the state claims actually brought, potential
Exchange Act claims that §27 would have committed to
federal court. In deciding that the state court could do so,
we described §27—not once, not twice, but three times—as
conferring exclusive jurisdiction of suits “arising under”
the Exchange Act. See 516 U. S., at 380 (Section 27 “con­
fers exclusive jurisdiction upon the federal courts for suits
arising under the [Exchange] Act”); id., at 381 (Section 27
“prohibits state courts from adjudicating claims arising
under the Exchange Act”); id., at 385 (Section 27 “prohib­
it[s] state courts from exercising jurisdiction over suits
arising under the Exchange Act”) (emphases added). Over
and over, then, the Court took as a given that §27’s juris­
dictional test mimicked the one in the general federal
question statute.
And still more: The Matsushita Court thought clear that
the suit as filed—which closely resembled Manning’s in its
14 MERRILL LYNCH, PIERCE, FENNER & SMITH INC. v.
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Opinion of the Court

mix of state and federal law—fell outside §27’s grant of
exclusive jurisdiction. As just noted, the claims brought in
the Matsushita complaint sought relief for breach of a
state-law duty. But in support of those claims, the plain­
tiffs charged, much as Manning did here, that the defend­
ants’ conduct also violated federal securities laws. See 516
U. S., at 370; supra, at 2–3. We found the presence of that
accusation insufficient to trigger §27. “[T]he cause pleaded,”
we wrote, remained “a state common-law action,” 516
U. S., at 382, n. 7: Notwithstanding the potential federal
issue, the suit “was not ‘brought to enforce’ any rights or
obligations under the [Exchange] Act,” id., at 381. The
Court thus rejected the very position Merrill Lynch takes
here—i.e., that §27 precludes a state court from adjudicat­
ing any case, even if brought under state law, in which the
plaintiff asserts an Exchange Act breach.
C
Construing §27, consistent with both text and prece­
dent, to cover suits that arise under the Exchange Act
serves the goals we have consistently underscored in
interpreting jurisdictional statutes. Our reading, unlike
Merrill Lynch’s, gives due deference to the important role
of state courts in our federal system. And the standard we
adopt is more straightforward and administrable than the
alternative Merrill Lynch offers.
Out of respect for state courts, this Court has time and
again declined to construe federal jurisdictional statutes
more expansively than their language, most fairly read,
requires. We have reiterated the need to give “[d]ue re­
gard [to] the rightful independence of state govern­
ments”—and more particularly, to the power of the States
“to provide for the determination of controversies in their
courts.” Romero, 358 U. S., at 380 (quoting Healy v. Ratta,
292 U. S. 263, 270 (1934); Shamrock Oil & Gas Corp. v.
Sheets, 313 U. S. 100, 109 (1941). Our decisions, as we
 Cite as: 578 U. S. ____ (2016) 15

Opinion of the Court

once put the point, reflect a “deeply felt and traditional
reluctance . . . to expand the jurisdiction of federal courts
through a broad reading of jurisdictional statutes.”
Romero, 358 U. S., at 379.6 That interpretive stance
serves, among other things, to keep state-law actions like
Manning’s in state court, and thus to help maintain
the constitutional balance between state and federal
judiciaries.
Nor does this Court’s concern for state court preroga­
tives disappear, as Merrill Lynch suggests it should, in the
face of a statute granting exclusive federal jurisdiction.
See Brief for Petitioners 23–27. To the contrary, when a
statute mandates, rather than permits, federal jurisdic­
tion—thus depriving state courts of all ability to adjudi­
cate certain claims—our reluctance to endorse “broad
reading[s],” Romero, 358 U. S., at 379, if anything, grows
stronger. And that is especially so when, as here, the
construction offered would place in federal court actions
bringing only claims created by state law—even if those
claims might raise federal issues. To be sure, a grant of
exclusive federal jurisdiction, as Merrill Lynch reminds
us, indicates that Congress wanted “greater uniformity of
construction and more effective and expert application” of
federal law than usual. Brief for Petitioners 24 (quoting
Matsushita, 516 U. S., at 383). But “greater” and “more”
do not mean “total,” and the critical question remains how
far such a grant extends. In resolving that issue, we will
not lightly read the statute to alter the usual constitu­
tional balance, as it would by sending actions with all
state-law claims to federal court just because a complaint
references a federal duty.
——————
6 The Romero Court continued: “A reluctance which must be even

more forcefully felt when the expansion is proposed, for the first time,
eighty-three years after the jurisdiction has been conferred.” 358 U. S.,
at 379. The Exchange Act was passed a mere 82 years ago, but we
believe the point still stands.
16 MERRILL LYNCH, PIERCE, FENNER & SMITH INC. v.
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Opinion of the Court

Our precedents construing other exclusive grants of
federal jurisdiction illustrate those principles. In Pan
American, for example, we denied that a state court’s
resolution of state-law claims potentially implicating the
NGA’s meaning would “jeopardize the uniform system of
regulation” that the statute established. 366 U. S., at 665.
We reasoned that this Court’s ability to review state court
decisions of federal questions would sufficiently protect
federal interests. And similarly, in Tafflin v. Levitt, 493
U. S. 455, 464–467 (1990), we permitted state courts to
adjudicate civil RICO actions that might raise issues
about the scope of federal crimes alleged as predicate acts,
even though federal courts have exclusive jurisdiction “of
all offenses against the laws of the United States,” 18
U. S. C. §3231. There, we expressed confidence that state
courts would look to federal court interpretations of the
relevant criminal statutes. Accordingly, we saw “no signif­
icant danger of inconsistent application of federal criminal
law” and no “incompatibility with federal interests.”
Tafflin, 493 U. S., at 464–465, 467 (internal quotation
marks omitted).
So too here, when state courts, in deciding state-law
claims, address possible issues of the Exchange Act’s
meaning. Not even Merrill Lynch thinks those decisions
wholly avoidable: It admits that §27 does nothing to pre­
vent state courts from resolving Exchange Act questions
that result from defenses or counterclaims. See Brief for
Petitioners 32–33; Pan American, 366 U. S., at 664–665.
We see little difference, in terms of the uniformity-based
policies Merrill Lynch invokes, if those issues instead
appear in a complaint like Manning’s. And indeed, Con­
gress likely contemplated that some complaints intermin­
gling state and federal questions would be brought in state
court: After all, Congress specifically affirmed the capacity
of such courts to hear state-law securities actions, which
predictably raise issues coinciding, overlapping, or inter­
 Cite as: 578 U. S. ____ (2016) 17

Opinion of the Court

secting with those under the Act itself. See 15 U. S. C.
§78bb(a)(2); Matsushita, 516 U. S., at 383. So, for exam­
ple, it is hardly surprising in a suit like this one, alleging
short sales in violation of state securities law, that a plain­
tiff might say the defendant previously breached a federal
prohibition of similar conduct. See supra, at 2–3 (describ­
ing Manning’s complaint). And it is less troubling for a
state court to consider such an issue than to lose all ability
to adjudicate a suit raising only state-law causes of action.
Reading §27 in line with our §1331 caselaw also pro­
motes “administrative simplicity[, which] is a major virtue
in a jurisdictional statute.” Hertz Corp. v. Friend, 559
U. S. 77, 94 (2010). Both judges and litigants are familiar
with the “arising under” standard and how it works. For
the most part, that test provides ready answers to juris­
dictional questions. And an existing body of precedent
gives guidance whenever borderline cases crop up. See
supra, at 8–9. By contrast, no one has experience with
Merrill Lynch’s alternative standard, which would spring
out of nothing to govern suits involving not only the Ex­
change Act but up to nine other discrete spheres of federal
law. See n. 3, supra (listing statutes with “brought to
enforce” language); supra, at 12–13 (noting Merrill
Lynch’s backup claim that legislative histories might
compel different tests for different statutes). Adopting
such an untested approach, and forcing courts to toggle
back and forth between it and the “arising under” stand­
ard, would undermine consistency and predictability in
litigation. That result disserves courts and parties alike.
Making matters worse, Merrill Lynch’s rule is simple for
plaintiffs to avoid—or else, excruciating for courts to
police. Under that rule, a plaintiff electing to bring state-
law claims in state court will purge his complaint of any
references to federal securities law, so as to escape re­
moval. Such omissions, after all, will do nothing to change
the way the plaintiff can present his case at trial; they will
18 MERRILL LYNCH, PIERCE, FENNER & SMITH INC. v.
MANNING
Opinion of the Court

merely make the complaint less informative. Recognizing
the potential for that kind of avoidance, Merrill Lynch
argues that a judge should go behind the face of a com­
plaint to determine whether it is the product of “artful
pleading.” See Tr. of Oral Arg. 7 (If the plaintiffs “had just
literally whited out, deleted the references to Reg[ulation]
SHO,” the court should still understand the complaint to
allege a breach of that rule; “the fact [that the plaintiffs]
didn’t cite it wouldn’t change the fact”). We have no idea
how a court would make that judgment, and get cold
comfort from Merrill Lynch’s assurance that the question
would arise not in this case but in “the next third, fourth,
fifth case down the road.” Id., at 8. Jurisdictional tests
are built for more than a single dispute: That Merrill
Lynch’s threatens to become either a useless drafting rule
or a tortuous inquiry into artful pleading is one more good
reason to reject it.
III
Section 27 provides exclusive federal jurisdiction of the
same class of cases as “arise under” the Exchange Act for
purposes of §1331. The text of §27, most naturally read,
supports that rule. This Court has adopted the same view
in two prior cases. And that reading of the statute pro­
motes the twin goals, important in interpreting jurisdic­
tional grants, of respecting state courts and providing
administrable standards.
Our holding requires remanding Manning’s suit to state
court. The Third Circuit found that the District Court did
not have jurisdiction of Manning’s suit under §1331 be­
cause all his claims sought relief under state law and none
necessarily raised a federal issue. See supra, at 3. Merrill
Lynch did not challenge that ruling, and we therefore take
it as a given. And that means, under our decision today,
that the District Court also lacked jurisdiction under §27.
Accordingly, we affirm the judgment below.

It is so ordered.
 Cite as: 578 U. S. ____ (2016) 1

THOMAS, J., concurring in judgment

SUPREME COURT OF THE UNITED STATES
_________________

No. 14–1132
_________________

MERRILL LYNCH, PIERCE, FENNER & SMITH INC.,

ET AL., PETITIONERS v. GREG MANNING, ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE THIRD CIRCUIT

[May 16, 2016]

JUSTICE THOMAS, with whom JUSTICE SOTOMAYOR
joins, concurring in the judgment.
The Court concludes that respondents’ suit belongs in
state court because it does not satisfy the multifactor,
atextual standard that we have used to assess whether a
suit is one “arising under” federal law, 28 U. S. C. §1331.
Ante, at 18. I agree that this suit belongs in state court,
but I would rest that conclusion on the statute before us,
§27 of the Securities Exchange Act of 1934, 15 U. S. C.
§78aa. That statute does not use the phrase “arising
under” or provide a sound basis for adopting the arising-
under standard. It instead provides federal jurisdiction
where a suit is “brought to enforce” Exchange Act re­
quirements. §78aa(a). That language establishes a
straightforward test: If a complaint alleges a claim that
necessarily depends on a breach of a requirement created
by the Act, §27 confers exclusive federal jurisdiction over
that suit. Because the complaint here does not allege such
claims—and because no other statute confers federal
jurisdiction—this suit should return to state court. Ac­
cordingly, I concur in the judgment.
I
A
Section 27 provides that “[t]he district courts . . . shall
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MANNING

THOMAS, J., concurring in judgment

have exclusive jurisdiction . . . of all suits in equity and
actions at law brought to enforce any liability or duty
created by this chapter or the rules and regulations there­
under.” §78aa(a).* As the Court explains, under a “natu­
ral reading,” §27 “confers federal jurisdiction when an
action is commenced in order to give effect to an Exchange
Act requirement.” Ante, at 6; see also Webster’s New
International Dictionary of the English Language 725
(1927) (“enforce” means “give force to” or “give effect to”).
And by providing “exclusive jurisdiction” to federal district
courts over certain suits, §27 strips state courts of jurisdic­
tion over such suits.
Put differently, under §27 a suit belongs in federal court
when the complaint requires a court to enforce an Ex­
change Act duty or liability. In contrast, a suit belongs in
state court when the complaint “assert[s] purely state-law
causes of action” that do not require “binding legal deter­
minations of rights and liabilities under the Exchange
Act” or “a judgment on the merits of ” an Exchange Act
breach. Matsushita Elec. Industrial Co. v. Epstein, 516
U. S. 367, 382, 384 (1996). Such a suit is “not ‘brought to
enforce’ any rights or obligations under the Act,” and thus
does not fall within §27’s scope. Id., at 381. So §27 does
not provide federal jurisdiction over suits brought to en­
force liabilities or duties under state law or over every
case that happens to involve allegations that the Act was
violated. The provision leaves state courts with some
authority over suits involving the Act or its regulations.
The statutory context bolsters this understanding. That
context confirms that Congress reserved some authority
to state courts to adjudicate securities-law matters.

——————
* As the Court explains, the parties have not pressed us to construe
§27’s language conferring jurisdiction over “violations” of the Exchange
Act, its rules, or its regulations. See ante, at 5, n. 2. Like the Court, I
focus on §27’s “brought to enforce” language.
 Cite as: 578 U. S. ____ (2016) 3

THOMAS, J., concurring in judgment

Although the Act provides numerous federal “rights and
remedies,” it also generally preserves “all other rights and
remedies that may exist at law or in equity,” such as
claims that could be litigated in state courts of general
jurisdiction. 15 U. S. C. §78bb(a)(2). That provision shows
that “Congress plainly contemplated the possibility of dual
litigation in state and federal courts relating to securities
transactions.” Matsushita, supra, at 383. A natural read­
ing of §27’s text preserves the dual role for federal and
state courts that Congress contemplated, and it confirms
that mere allegations of Exchange Act breaches do not
alone deprive state courts of jurisdiction.
A natural reading promotes the uniform interpretation
of the federal securities laws that Congress sought to
ensure when it gave federal courts “exclusive jurisdiction”
over federal securities-law suits. §78aa(a). The textual
approach fosters uniformity because it leaves to federal
courts—which are presumptively more familiar with the
intricate federal securities laws—the task of “adjudi­
cat[ing] . . . Exchange Act claims.” Matsushita, 516 U. S.,
at 383. When state courts decide cases where the com­
plaint pleads only state-law claims and do not resolve the
merits of Exchange Act rights or liabilities, they are not
“trespass[ing] upon the exclusive territory of the federal
courts.” Id., at 382.
The statutory text and structure thus support a
straightforward test: Section 27 confers federal jurisdic­
tion over a case if the complaint alleges claims that neces­
sarily depend on establishing a breach of an Exchange Act
requirement.
B
The Third Circuit was correct to remand this suit to
state court. Respondents’ complaint does not seek “to
enforce any liability or duty created by” the Exchange Act
or its regulations. §78aa(a).
4 MERRILL LYNCH, PIERCE, FENNER & SMITH INC. v.
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THOMAS, J., concurring in judgment

Although respondents’ complaint alleges at different
places that petitioners violated the Exchange Act or its
regulations, the complaint does not bring claims requiring
enforcement of the Exchange Act or its regulations. The
complaint instead brings 10 state-law causes of action that
seek to enforce duties and liabilities created by state law.
Count 2 alleges that petitioners violated state law by
investing money derived from racketeering. See App. to
Pet. for Cert. 91a–93a, Amended Complaint ¶¶114–122
(citing N. J. Stat. Ann. §2C:41–2a (West 2005)). Counts 3
through 9 allege standard state-law contract and tort
claims: unjust enrichment, unlawful interference with
economic advantage, tortious interference with contract­
ual relations, unlawful interference with contractual rela­
tions, third-party-beneficiary claims, breach of the cove­
nant of good faith and fair dealing, and negligence. See
App. to Pet. for Cert. 93a–101a, Amended Complaint
¶¶123–158. Count 10 pleads a freestanding claim for
punitive and exemplary damages. See id., at 101a,
Amended Complaint ¶¶159–161. None of these claims
requires a court to “enforce”—to give effect to—a require­
ment created by the Act, thus, §27 does not confer federal
jurisdiction over them.
Count 1 presents a closer call, but it too does not trigger
federal jurisdiction. That count pleads that petitioners
violated a state law that makes it unlawful for a person to
participate in a racketeering enterprise. Id., at 82a–90a,
Amended Complaint ¶¶88–113 (citing N. J. Stat. Ann.
§2C:41–2c). The alleged racketeering includes violating
the New Jersey Uniform Securities Law (through fraud,
deception, and misappropriation), committing “theft by
taking” under state law, and committing “theft by decep­
tion” under state law. App. to Pet. for Cert. 82a–90a,
Amended Complaint ¶¶88–113. Respondents allege that
“[t]he SEC has expressly noted that naked short selling
involves the omission of a material fact” as part of their
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THOMAS, J., concurring in judgment

state-law securities fraud allegation. Id., at 85a, Amended
Complaint ¶100. Vindicating that claim would not require
the enforcement of a federal duty or liability. New Jersey
law encompasses fraudulent conduct that does not neces­
sarily rest on a violation of federal law or regulation. See,
e.g., §49:3–49(e)(1) (West 2001) (fraud and deceit include
“[a]ny misrepresentation by word, conduct or in any man­
ner of any material fact, either present or past, and any
omission to disclose any such fact”); see App. to Pet. for
Cert. 84a–86a (invoking §49:3–49 et seq.). So although
Count 1 refers to the Securities and Exchange Commis­
sion’s view about naked short selling, that count does not
require respondents to establish a violation of federal
securities law to prevail on their fraud claim. Because
respondents’ cause of action in Count 1 seeks to enforce
duties and liabilities created by state law and does not
necessarily depend on the breach of an Exchange Act duty
or liability, §27 does not provide federal jurisdiction over
that claim.
II
Although the Court acknowledges the “natural reading”
of §27, ante, at 6, it holds that §27 adopts the jurisdic­
tional test that this Court uses to evaluate federal-question
jurisdiction under 28 U. S. C. §1331. See ante, at 8–10;
see also ante, at 10–18. Federal courts have the power to
review cases “arising under” federal law, §1331, including
those in which the complaint brings state-law claims that
“necessarily raise a stated federal issue, actually disputed
and substantial, which a federal forum may entertain
without disturbing any congressionally approved balance
of federal and state judicial responsibilities.” Grable &
Sons Metal Products, Inc. v. Darue Engineering & Mfg.,
545 U. S. 308, 314 (2005). The Court wrongly equates the
phrase “arising under” in §1331 with the phrase “brought
to enforce” in §27, and interprets the latter to require that
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THOMAS, J., concurring in judgment

a case raising state-law claims “mee[t] the ‘arising under’
standard” for that case to proceed in federal court. Ante,
at 8; see ante, at 8–9. None of the Court’s rationales for
adopting that rule is persuasive.
A
The Court first argues that “it is impossible to infer that
Congress, in enacting §27, wished to depart from what we
now understand as the ‘arising under’ standard” because
there was no “well-defined test” to depart from. Ante, at
10. The Court’s case law construing §1331, the Court
explains, “was for many decades—including when the
Exchange Act passed—highly unruly.” Ibid. (internal
quotation marks omitted).
But when Congress enacts a statute that uses different
language from a prior statute, we normally presume that
Congress did so to convey a different meaning. See, e.g.,
Crawford v. Burke, 195 U. S. 176, 190 (1904) (explaining
that “a change in phraseology creates a presumption of a
change in intent” and that “Congress would not have used
such different language [in two statutes] without thereby
intending a change of meaning”). Given what we know
about §1331, that presumption has force here. Our §1331
case law was, as the Court notes, “highly unruly” when the
Exchange Act was enacted in 1934. Given the importance
of clarity in jurisdictional statutes, see Hertz Corp. v.
Friend, 559 U. S. 77, 94 (2010), it is quite a stretch to infer
that Congress wished to embrace such an unpredictable
test.
That is especially true given that §27 does not use words
supporting the convoluted arising-under standard. Sec­
tion 27 does not ask (for example) whether a federal issue
is substantial or whether a ruling on that issue will upset
the congressionally approved balance of federal and state
power. Indeed, §1331 itself does not even use words sup­
porting the arising-under standard. See ante, at 10 (ac­
 Cite as: 578 U. S. ____ (2016) 7

THOMAS, J., concurring in judgment

knowledging that the arising-under standard “does not
turn on §1331’s text”). Rather, the Court has refused to
give full effect to §1331’s “broa[d] phras[ing]” and has
instead “continuously construed and limited” that provi­
sion based on extratextual considerations, such as “his­
tory,” “the demands of reason and coherence,” and “sound
judicial policy.” Romero v. International Terminal Operat-
ing Co., 358 U. S. 354, 379 (1959). Faced with a plain and
focused text like §27, however, we should not rely on such
considerations. And importing factors from our §1331
arising-under jurisprudence—such as a substantiality
requirement and a federal-state balance requirement—
risks narrowing the class of cases that Congress meant to
cover with §27’s plain text. For these reasons, it is unwise
to read into §27 a decision to adopt the arising-under
standard.
B
The Court next relies on two prior decisions—Pan Amer-
ican Petroleum Corp. v. Superior Court of Del. for New
Castle Cty., 366 U. S. 656 (1961), and Matsushita, 516
U. S. 367. See ante, at 10–14. Neither case justifies the
Court’s decision to apply the arising-under standard to
§27.
In Pan American, the Court held that Delaware state
courts had jurisdiction over state-law contract claims that
arose from contracts for the sale of natural gas. 366 U. S.,
at 662–665. The Court reached that decision even though
a provision of the Natural Gas Act provided exclusive
federal jurisdiction over suits “ ‘brought to enforce any
liability or duty created by’ ” that Act. Id., at 662 (quoting
statute). Pan American lends some support to the Court’s
view today. It applied the Court’s arising-under prece­
dents and “explained that [the Natural Gas Act’s] use of
the term ‘brought to enforce,’ rather than ‘arising under,’
made no difference to the jurisdictional analysis.” Ante, at
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THOMAS, J., concurring in judgment

11; see Pan American, supra, at 665, n. 2; see also ante, at
10–13.
But Pan American does not require the Court to engraft
the arising-under standard onto §27. Pan American did
not carefully analyze the Natural Gas Act’s text or assess
the contemporary meaning of the central phrase “brought
to enforce.” Instead, the Court relied on legislative his­
tory, reasoning that “authoritative [congressional] Commit­
tee Reports” implied a limitation on the Natural Gas Act’s
jurisdictional text. 366 U. S., at 665, n. 2. That reasoning
does not warrant our respect. That is especially true
because Pan American’s holding is consistent with the
Natural Gas Act’s “brought to enforce” language. The
complaint in that case did not “asser[t]” any “right . . .
under the Natural Gas Act” and instead asked the court to
adjudicate standard state-law “contract or quasi-contract”
claims. Id., at 663, 664. The Court’s disposition in Pan
American rests as comfortably on the statutory text as it
does on the arising-under standard.
Matsushita provides even less support for the Court’s
holding today. In that case the Court held that Delaware
courts could issue a judgment approving a settlement
releasing securities-law claims even though the settlement
released claims that were (by virtue of §27) “solely within
the jurisdiction of the federal courts.” 516 U. S., at 375;
see id., at 370–372. The Court explained that, “[w]hile §27
prohibits state courts from adjudicating claims arising
under the Exchange Act, it does not prohibit state courts
from approving the release of Exchange Act claims in the
settlement of suits over which they have properly exer­
cised jurisdiction, i.e., suits arising under state law or
under federal law for which there is concurrent jurisdic­
tion.” Id., at 381. Because the complaint in that case
“assert[ed] purely state-law causes of action” and the state
courts did not issue “a judgment on the merits of the
[exclusively federal] claims,” §27 did not deprive state
 Cite as: 578 U. S. ____ (2016) 9

THOMAS, J., concurring in judgment

courts of jurisdiction. Id., at 382.
The Court relies on Matsushita because in that case we
three times “described” §27 “as conferring exclusive juris­
diction of suits ‘arising under’ the Exchange Act.” Ante, at
13 (citing 516 U. S., at 380, 381, 385). But Matsushita did
not decide whether §27 adopts the arising-under standard,
so its passing use of the phrase “arising under” cannot
bear the weight that the Court now places on it. To be
sure, Matsushita does support the Court’s judgment today:
Matsushita emphasized that state courts could adjudicate
a suit involving securities-law issues where the complaint
“assert[ed] purely state-law causes of action” and did not
require the state courts to issue “binding legal determina­
tions of rights and liabilities under the Exchange Act” or
“a judgment on the merits of ” an Exchange Act breach.
Id., at 382, 384. But those statements are more consistent
with §27’s text than they are with the arising-under
standard. See supra, at 2–3 (invoking Matsushita).
C
Finally, the Court argues that its interpretation “serves
the goals” that our precedents have “consistently under­
scored in interpreting jurisdictional statutes”—affording
proper deference to state courts and promoting admin­
istrable jurisdictional rules. Ante, at 14; see ante, at 14–
18. But hewing to §27’s text serves these goals as well as
or better than does adopting the arising-under standard.
First, the text-based view preserves state courts’ author­
ity to adjudicate numerous securities-law claims and
provide relief consistent with the Exchange Act’s design.
See supra, at 1–3. As explained above, that view places all
of respondents’ state-law causes of action in state court.
See supra, at 3–5. The text-based view thus “decline[s] to
construe [a] federal jurisdictional statut[e] more expan­
sively than [its] language, most fairly read, requires.”
Ante, at 14.
10 MERRILL LYNCH, PIERCE, FENNER & SMITH INC. v.
MANNING
THOMAS, J., concurring in judgment

Second, the textual test is also more administrable than
the arising-under standard. The arising-under standard
“is anything but clear.” Grable, 545 U. S., at 321
(THOMAS, J., concurring). The standard involves numer­
ous judgments about matters of degree that are not read­
ily susceptible to bright lines. As noted, to satisfy that
standard, a state-law claim must raise a federal issue that
is (among other things) “actually disputed,” is “substan­
tial,” and will not “distur[b]” a congressionally approved
federal-state “balance.” Id., at 314 (opinion of Court). The
standard “calls for a ‘common-sense accommodation of
judgment to [the] kaleidoscopic situations’ that present a
federal issue, in ‘a selective process which picks the sub­
stantial causes out of the web and lays the other ones
aside.’ ” Id., at 313 (quoting Gully v. First Nat. Bank in
Meridian, 299 U. S. 109, 117–118 (1936)). The arising-
under standard may be many things, but it is not one that
consistently “provides ready answers” to hard jurisdic­
tional questions. Ante, at 17. The text-based view promises
better. I would adopt that view and apply it here.
* * *

For these reasons, I concur in the judgment.