Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing
Supreme Court of the United States · 2005 · Civil Procedure
545 U.S. 308 (2005)
Updated
Civil ProcedureFederal Question JurisdictionRemoval28 U.S.C. § 133128 U.S.C. § 1441embedded federal issuearising under jurisdictionstate-law claims
Facts
The IRS seized Grable's Michigan property in 1994 to satisfy a federal tax delinquency and gave Grable actual notice by certified mail before selling the property to Darue. Grable also received notice of the sale but did not redeem the property within the 180-day statutory period, after which the Government gave Darue a quitclaim deed. Five years later, Grable brought a state quiet title action claiming Darue's title was invalid because the IRS had not given seizure notice in the exact manner required by 26 U.S.C. § 6335(a). Grable argued that the statute required personal service rather than certified mail.
Issue
Whether the absence of a federal cause of action to challenge title obtained at a federal tax sale bars removal of a state quiet title action between nondiverse parties when the claim necessarily turns on a disputed issue of federal tax law. More broadly, whether § 1331 covers a state-law claim that embeds a substantial and disputed federal issue.
Rule
A federal court may exercise § 1331 jurisdiction over a state-law claim when the claim necessarily raises a stated federal issue, the federal issue is actually disputed and substantial, and federal jurisdiction may be exercised without disturbing any congressionally approved balance of federal and state judicial responsibilities. The absence of a federal private right of action is relevant to this inquiry but is not dispositive.
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One of 10 multiple-choice questions for this case. Pick an answer to see why.
In Tulsa, Owen Mercer sued Lark Basin Holdings in Oklahoma state court to quiet title to farmland that Lark Basin had purchased at a sale conducted by a federal agency to satisfy Owen's federal debt. Owen's complaint alleged that the deed was void because the agency failed to give notice in the manner required by a federal statute, and both parties agreed that the meaning of that statute was the only issue in the case.
If Lark Basin removes, is federal-question jurisdiction most likely proper?
Explanation. A state-law claim may arise under federal law when it necessarily raises a stated federal issue, actually disputed and substantial, that a federal forum may entertain without disturbing the congressionally approved balance of judicial responsibilities. Here, the quiet title theory makes the meaning of the federal notice statute an essential element, the issue is actually disputed, and this kind of case is sufficiently rare that federal jurisdiction would have only a microscopic effect on the state-federal division of labor.