Where diversity jurisdiction is lacking, removal to federal court typically requires the removed case to assert a federal cause of action. An exception exists, however, where removal is proper if the state cause of action asserted involves a substantial federal issue.

In a previous article, “Substantial Federal Questions Keep State Law Claims in Federal Court,” we discussed Judge Jesse M. Furman of the U.S. District Court for the Southern District of New York’s decision in New York v. Arm or Ally, 644 F.Supp.3d 70 (S.D.N.Y. 2022), in which Judge Furman applied the substantial federal issue doctrine to retain jurisdiction over a lawsuit brought by the state of New York asserting only state law claims. Furman found that the federal issue raised in Arm or Ally—whether the products at issue were “firearms” or “component parts” of firearms within the meaning of federal law—was both substantial and capable of resolution in federal court without disrupting the federal-state balance approved by Congress.