Question

Arch Technologies, Inc. is incorporated in Oregon, with its principal place of business in

California. It sues Sullivan Castings Corporation (incorporated in Delaware with its principal
place of business in Oregon) in federal court under a federal statute barring deceptive
commercial practices in interstate commerce. It claims losses of $500,000. It also claims that
Sullivan's conduct constitutes an unfair business practice under an Oregon statute, and seeks
punitive damages on the state law claim. Oregon courts have never decided whether punitive
damages may be awarded under its business practices statute. The federal judge wants to
decline jurisdiction over the unfair business practices claim, since the governing law is unclear
and the Oregon courts can provide a "surer footed" reading of the statute. What should the
judge do?
a-The court should dismiss the state law claim
b-The court should remand the state law claim to the Oregon state courts.
c-The court should dismiss the entire case
d-The court should keep both claims, because it must exercise jurisdiction over both

Answer 1

The federal judge should exercise jurisdiction over the federal claim due to federal statute and diversity of citizenship but has discretion to dismiss the state law claim allowing Oregon state courts to interpret their statute.

Step-by-step explanation:

The question pertains to the issue of a federal judge's discretion regarding whether or not to decline jurisdiction over a state law claim with unclear legal precedent in a case where federal jurisdiction is established. Federal courts have the authority to hear cases that involve federal statutes or interstate commerce, as well as those that fall under the diversity of citizenship criterion, as in this scenario.Main answer: Although federal courts have jurisdiction to hear all claims brought to them when there is both a federal question and diversity of citizenship, they may also decline to exercise jurisdiction over state law claims using the doctrine of supplemental jurisdiction, particularly when the state law is unclear and undetermined on critical issues, as in this case. Here, the federal statute barring deceptive commercial practices in interstate commerce clearly places the case within the purview of the federal court, and considering the diversity of citizenship involved with a claim greater than $75,000, federal jurisdiction is established. However, regarding the unresolved state law claim, the judge can reasonably choose to dismiss the state law claim (Option A), allowing the state court to address the issue where more expertise on state law is present.In conclusion, the judge should exercise discretion to maintain jurisdiction over the federal claim due to the appropriate authority and clear federal interest but can dismiss the state claim to let the Oregon state courts provide a more definitive interpretation of their own statutes.