Dispute

Defendant Darue Engineering & Manufacturing purchased property seized from plaintiff Grable & Sons Metal Products, Inc. by the IRS to satisfy tax delinquency. Five years later, plaintiff sued for title in state court alleging that the notice provided by the IRS did not satisfy federal law. Defendant removed to federal court to address the federal question, and SCOTUS granted certiorari on the jurisdictional issue.

Questions of law

When no federal cause of action exists for a claim which nonetheless turns on a disputed issue of federal law, may the case be removed to federal court?

Conclusions

The question asked by the court is whether the state-law claim necessarily raises a stated federal issue which is both disputed and substantial and which a federal court may entertain without disturbing congressional boundaries placed on it. The court held that the notice required by federal statute was an essential element of its claim and the meaning of the federal statute was actually in dispute, and therefore it was appropriate to grant jurisdiction. The court also found that the government had an interest in determining uniform answers to such questions, particularly when they could impact government action.