Writing for the Court, Justice William Moody explained that jurisdiction must be determined based on the plaintiff’s statement of their own cause of action in their original complaint, not based on anticipated defenses. Explaining 28 U.S.C. §1331, which governs federal question jurisdiction, Justice Moody wrote, “It is the settled interpretation of these words, as used in this statute, conferring jurisdiction, that a suit arises under the Constitution and laws of the United States only when the plaintiff’s statement of his own cause of action shows that it is based upon those laws or that Constitution.”

Since the plaintiff’s claim was based on the enforcement of a contract and didn’t arise under the Constitution or a federal law, Justice Moody determined that the federal question only arose as an anticipated defense in the case. Therefore, since there was no federal issue stated by the plaintiff to support their claim and there was no diversity of citizenship, the case was dismissed for lack of jurisdiction.