Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U.S. 308 (2005)
Primary Holding
The national interest in providing a federal forum for federal tax litigation is sufficiently substantial to support the exercise of federal question jurisdiction over a state action involving a disputed issue of federal title law, even in the absence of a federal cause of action.
In the case of Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, a company tried to reclaim property that was sold by the IRS due to unpaid taxes. The Supreme Court decided that even though the company didn't have a specific federal law to back its claim, the case could still be heard in federal court because it involved important federal tax issues. This ruling is significant for consumers because it means that if a state legal issue involves federal law, they can seek justice in federal court, which can provide a more consistent and fair resolution for cases that affect their rights. This case is relevant if someone is dealing with property disputes or tax issues that may involve federal laws.
AI-generated plain-language summary to help you understand this case
Grable & Sons Metal Products, Inc. owed a tax debt to the IRS. In order to satisfy the debt, the IRS seized property that Grable owned and provided notice to Grable by certified mail. The IRS then sold the property to Darue Engineering & Manufacturing. Although it received the notice, Grable brought a claim in state court on the grounds that the IRS should have provided notice through personal service rather than certified mail. It alleged that this violation of federal law meant that Darue's title to the property was invalid. Darue removed the case to federal court on the basis that it presented a federal question related to the interpretation of federal tax law.
Whether the lack of a federal cause of action to try claims of title to land obtained at a federal tax sale precludes removal to federal court of a state action with non-diverse parties raising a disputed issue of federal title law.
The judgment is reversed and remanded.
Federal question jurisdiction was appropriate here because the interests of the federal government are implicated by the federal tax law, and there should be a federal form for this type of litigation.
- Court
- Supreme Court
- Decision Date
- April 18, 2005
- Jurisdiction
- federal
- Case Type
- landmark
- Majority Author
- Souter
- Damages Awarded
- N/A
- Data Quality
- high
Jones v. Flowers, 547 U.S. 220 (2006)
Consumer WonBefore a state can take property and sell it for unpaid taxes, the Due Process Clause of the Fourteenth Amendment requires the government to take additional reasonable steps to provide notice when a mailed notice is returned undelivered.
EC Term of Years Trust v. United States, 550 U.S. 429 (2007)
Consumer LostA trust cannot challenge an IRS levy on its property through a tax refund action if it has missed the statutory filing deadline for contesting the levy under 26 U.S.C. §7426(a)(1).
John R. Sand & Gravel Co. v. United States, 552 U.S. 130 (2008)
Consumer LostA court must consider the timeliness of a lawsuit filed in the Court of Federal Claims, even if the government waives the issue, due to the special statute of limitations that governs claims in that court.
Lincoln Property Co. v. Roch, 546 U.S. 81 (2005)
Consumer LostDefendants may remove a civil action from state court to federal court based on diversity of citizenship if there is complete diversity between all named plaintiffs and all named defendants, and no defendant is a citizen of the forum State; it is not the responsibility of the named defendants to prove the nonexistence of a potential defendant whose presence would destroy diversity.