Does the federal district court have jurisdiction to dismiss the complaint for lack of subject matter jurisdiction?

1 Viewed another way, the district court could not properly have dismissed the complaint for lack of subject matter jurisdiction. Where federal jurisdiction is based on an allegation that a federal statute has been violated, dismissal for want of jurisdiction is appropriate only where the federal claim is insubstantial or frivolous. Bell v. Hood, 327 U.S. at 682-83; Black v. Payne, 591 F.2d at 86, n. 1. That is not the case here. As we discuss infra, whether the scheme offered by Hiawatha is a security is a rather close question which turns on issues of material fact.