Grable & Sons Metal Products v. Darue Engineering
Citation: 545 U.S. 308 (2005)
Facts
The IRS seized Grable’s Michigan real property for failure to pay tax and sold it to Darue. Federal law required that notice of the seizure be given to the owner in a specified way. Grable brought a quiet title action in state court, claiming the IRS had not given proper notice under federal law. Darue removed to federal court asserting federal question jurisdiction.
Issue
Does a state law quiet title claim that necessarily turns on an interpretation of a federal statutory provision arise under federal law for purposes of 28 U.S.C. § 1331?
Holding
Yes. The Supreme Court held that federal question jurisdiction exists because the case necessarily raised a disputed federal issue (the meaning of the federal notice statute), and exercising jurisdiction was consistent with congressional judgment and the balance of federal-state judicial responsibilities.
Rule
A state law claim “arises under” federal law for § 1331 purposes when: (1) the plaintiff’s right to relief necessarily depends on resolution of a substantial question of federal law; (2) the federal issue is actually disputed and substantial; and (3) federal jurisdiction will not disturb any congressionally approved balance of federal and state judicial responsibilities.
Significance
Grable is the modern synthesis of the “substantial federal question” doctrine (tracing back to Smith v. Kansas City Title & Trust). It provides the framework for embedded federal question jurisdiction, distinct from the well-pleaded complaint rule, and is frequently tested alongside Mottley.