The IRS seized property owned by Grable and gave Grable notice by certified mail before selling the property to Darue. Grable sued in state court, claiming Darue's title was invalid because federal law required the IRS to give Grable notice of the sale by personal service, not certified mail. Darue removed the case to federal disctrict court, arguing that the case presented a federal question because Grable's claim depended on an interpretation of federal tax law. The district court agreed and ruled for Darue. The Sixth Circuit affirmed the decision.
Did a case involving the interpretation of federal tax law belong in federal court and not the state court where it was filed?
Yes. In a unanimous opinion delivered by Justice David Souter, the Court held that the case involved a federal question and could thus be removed to federal court. Federal-questions jurisdiction, the Court reasoned, lay over some state-law claims that implicated significant federal issues. In this case, the national interest in providing a federal forum for federal tax litigation warranted moving the case to federal court.
Decisions
Decision: 9 votes for Darue Engineering, 0 vote(s) against Legal provision: Internal Revenue Code
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Full Opinion by Justice David H. Souter
