Boring: State Tax Law in Federal Court

Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg.

Grable had his property siezed because he owed federal taxes. He was notified by mail, but now argues (5 years later) that the federal tax law requires that notice be “given by the Secretary to the owner of the property [or] left at his usual place of abode or business,” and that this requires the Secretary to personally deliver the notice. But the only question here is whether it should be heard in federal or state court, because the case turns on a federal matter in a state action.

A unanimous court said: "A federal court ought to be able to hear claims recognized under state law that nonetheless turn on substantial questions of federal law, and thus justify resort to the experience, solicitude, and hope of uniformity that a federal forum offers on federal issues."

Justice Thomas, in a concurring opinion, states that at some other time he may be willing to adopt a different view, one set out by Justice Holmes, which limits jurisdiction "to cases in which federal law creates the cause of action [on the face of] the plaintiff’s complaint."

UPDATE 08/30/06: It's funny, but this is one of the first cases mentioned in my classes at law school as a landmark-earth-shattering case (Civil Procedure). It is so important because it upset a general understanding that the court had previously adopted a hard and fast rule saying that these sorts of cases were out, and had disposed of the kind of weighing and balancing in the rule mentioned here.