Seventh Circuit Decision Holds Court Lacked Subject Matter Jurisdiction over a Legal Malpractice Lawsuit Stemming from Representation in a Federal Criminal Case
Judge Posner of the United States Seventh Circuit Court of Appeals recently authored an opinion on a novel issue stemming out of a legal malpractice case. The Seventh Circuit found that the district court lacked subject matter jurisdiction over a lawsuit alleging legal malpractice in a federal criminal case, Hays v. Bryan Cave LLP. Mr. Hays filed his lawsuit in the Illinois state courts charging his former lawyers and their law firm who represented him in a federal criminal case (in which Mr. Hays was convicted) with legal malpractice under Illinois common law. The lawyers then removed the case to the federal district court claiming the case really arose under federal law because the resolution of a malpractice claim growing out of a defense of a federal criminal case would “require a substantial evaluation of applicable federal law” – specifically an evaluation of the meaning and scope of the federal criminal statutes used to convict Mr. Hays (which is what the district court held when it refused to remand the case back to state court). Judge Posner noted in his decision that the Seventh Circuit could not find a reported decision actually ruling on this matter before. The Court then postulated that while it is true that if federal law creates a claim on which the plaintiff is suing, the plaintiff cannot abrogate the defendant’s right of removal by “artful pleading” (for example: if a suit is filed in state court charging a defendant with a breach of his fiduciary duty, and the defendant is an ERISA fiduciary, the case is removable to federal court even if the complaint fails to mention the word ERISA), that is not the case here because nothing in federal law prevents a disappointed litigant in a federal case from suing his lawyer under a states malpractice law. Posner went on to explain that even though issues regarding the meaning of federal criminal statutes most likely will come up in the malpractice case, there is nothing unusual about a state court having to decide issues that arise under the law of other jurisdictions.