Citation. 545 U.S. 308 (2005)
Brief Fact Summary.
Petitioner brought a quiet tile action in state court against Respondent for property claimed and sold by the Internal Revenue Service. Respondent had the case removed.
Synopsis of Rule of Law.
State law claims can be removed under federal question jurisdiction when they implicate significant federal issues, unless removing the case would disrupt the division of labor between state and federal courts.
The Internal Revenue Service (IRS) seized Grable & Sons’ (Petitioner) property to satisfy tax delinquency and sold the property to Darue Engineering (Respondent). Five years later, Petitioner brought a quiet title action in state court to reclaim the property, claiming the IRS failed to properly notify them of the seizure as required by federal law 26 U.S.C. § 6335. Respondent removed the claim, arguing the claim should have been brought under federal question jurisdiction.
Does a case involving no federal cause of action, but that nevertheless implicates federal tax law, belong in federal court and not the state court where it was filed?
Yes, the case can be removed to federal court. The decision of the Court of Appeals is affirmed.
Justice Thomas agreed that precedent permits courts to remove cases involving issues of federal law. Under a different set of facts he would be willing, however, to consider a more narrow interpretation that limits federal question jurisdiction to federal causes of action.
The Court determined that removal was proper because Petitioner’s claim turned on the interpretation of 26 U.S.C. § 6335. Federal courts have a strong interest in the law of tax collection, and this was a rare enough overlap between state and federal law so as not to impede on the courts’ division of labor. Contrary to Petitioner’s argument, this holding was consistent with the precedent set by Merrell Dow v. Thompson.