The IRS seized P's property to satisfy P's tax delinquency. IRS then sold the property to D.
P did not exercise its right to redeem the property within 180 days of the sale even though P was given notice of the sale through certified mail.
5 years later, P brought a quiet title action against D and claimed that P was not notified in the exact manner required by federal statute. (personal service v. certified mail)
D removed the case to Federal District Court as presenting a federal question because the claim of title depended on the interpretation of the notice statute in federal law.
P sought to remand the case to state court. District Court denied and granted summary judgment to D.
Procedural History:
Circuit Court found proper federal-question jurisdiction, summary judgment for D.
6th Cir COA affirmed, found proper federal-question jurisdiction, summary judgment for D.
SCOTUS affirmed, found proper federal-question jurisdiction.
Issues:
How can a claim involving a cause of action not started by a federal statute be tried in federal court under federal-question jurisdiction?
Holding/Rule:
A claim that doesn't follow the "creation test" can be tried in federal court if the court decides that the state law claim necessarily raises a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.
Reasoning:
Federal-question jurisdiction is usually invoked by Ps pleading a cause of action created by federal law. However, federal-question jurisdiction can also arise over state-law claims that implicate significant federal issues.
Smith held that a state-law claim could give rise to federal-question jurisdiction so long as it appears from the complaint that the right to relief depends upon the construction or application of federal law.
There is not a single, precise, all-embracing test for jurisdiction over federal issues embedded in state-law claims between non-diverse parties.
Whether P was given notice within the meaning of the federal statute is an essential element of the quiet title claim. It is the only issue in the case.
The government has a strong interest in the prompt and certain collection of delinquent taxes; the government thus has a direct interest in the availability of a federal forum to vindicate its own administrative action.
