In the case of Louisville and Nashville Railroad Company v. Mottley in 1908, the U.S. Supreme Court established a principle known as "well-pleaded complaint rule" for federal jurisdiction based on federal question grounds. The plaintiffs, the Mottleys, were injured in a train accident and received lifetime railroad passes from Louisville & Nashville Railroad Co., but later these passes were revoked due to an act of Congress prohibiting free transportation for passengers. The Mottleys sued under breach of contract arguing that this law did not apply to their situation because it was part of their settlement agreement before the law came into effect. However, they filed suit in Federal court claiming that it involved interpretation of Federal laws (the Act). The Supreme Court ruled against them stating that even though a defense may raise a federal question or involve interpretation/application of federal laws; unless plaintiff's cause itself arises directly under existing Federal Laws or Constitution - there is no ground for invoking Federal Jurisdiction.

In the dissenting opinion for Louisville and Nashville Railroad Company v. Mottley, Justice Harlan argued that the majority's interpretation of jurisdiction was too narrow. He believed that federal courts should have jurisdiction over cases where a federal question is raised in anticipation of a defense, not just when it appears on the face of a well-pleaded complaint. In this case, he thought that because the contract at issue involved an act of Congress (the Federal Employers Liability Act), there was indeed a substantial federal question present even though it arose as part of an anticipated defense rather than directly from Mottleys' claim itself. Thus, contrary to majority’s view which dismissed the case due to lack of subject-matter jurisdiction under diversity or federal-question grounds; Harlan contended that such dismissal deprived parties like Mottleys their right to litigate in Federal Courts despite having valid claims involving significant issues related to acts passed by Congress.