9 Wheat. (22 U.S.) 738 (1824), argued 10–11 March 1824, decided 19 March 1824 by vote of 6 to 1; Marshall for the Court, Johnson in dissent. Originating in a challenge to the constitutionality of the Bank of the United States, Osborn produced an elaborate statement by Chief Justice John Marshall concerning the jurisdiction of federal courts. In 1819, Ohio imposed a prohibitive tax on branches of the Bank of the United States. Defying a federal injunction against its collection, Ralph Osborn, the state auditor, ordered his agents to seize the money and deposit it in the state treasury. The bank sued Osborn in federal circuit court for return of the money and prevailed. On appeal by Osborn, the Supreme Court affirmed the judgment; its decision in McCulloch v. Maryland (1819) had upheld the constitutionality of the bank and inhibited the states’ power to tax federal instrumentalities.
At issue in Osborn was an unconstitutional state tax levied on a federal corporation. The Constitution extends federal judicial power to all cases “arising under” the Constitution, laws, and treaties of the United States. Marshall, however, used the case to proclaim federal jurisdiction over every case involving the bank, even those seemingly raising only questions of state law. Basing federal jurisdiction on the bare possibility of federal question, Marshall generously construed congressional power to confer jurisdiction, a proposition that Justice William Johnson, writing in dissent, thought risked federalizing too many questions. A further jurisdictional issue concerned the Eleventh Amendment, which restricted suits against states. Although Osborn was acting on behalf of his state, the Court held that he could not assert its immunity from suit, a proposition later reaffirmed in Ex parteYoung (1908).
John V. Orth