## Facts

- The IRS seized Grable & Sons Metal Products, Inc.’s Michigan real property in 1994 to satisfy a federal tax delinquency.
- The IRS sent Grable notice of the seizure and sale by certified mail; Grable received actual notice.
- After the redemption period expired, the property was sold at a federal tax sale to Darue Engineering & Manufacturing, which received a quitclaim deed from the federal government.
- Five years later, Grable filed a Michigan state-court quiet title action alleging the sale was invalid because the IRS did not comply with 26 U.S.C. § 6335(a)’s notice requirements.
- Grable argued § 6335(a) required personal service (or leaving notice at the owner’s abode or business) and that certified mail was insufficient, rendering Darue’s title defective.
- Darue removed the case to federal district court under 28 U.S.C. § 1331, asserting the quiet title claim necessarily required interpretation of the federal tax-notice statute.
- The district court denied remand and granted summary judgment to Darue, concluding the notice was legally sufficient and title valid.
- Grable appealed the denial of remand and the summary judgment.

## Issues

1. Whether a state-law quiet title action “arises under” federal law for 28 U.S.C. § 1331 when the claim necessarily turns on the meaning of a disputed federal tax-notice provision, despite the absence of a federal cause of action.
2. Whether the IRS’s use of certified mail satisfied 26 U.S.C. § 6335(a)’s notice requirement for seizure and sale, such that the tax sale and Darue’s title were valid.

## Decision

- The Sixth Circuit affirmed the denial of remand, holding federal-question jurisdiction existed because the quiet title claim necessarily raised an actually disputed and substantial issue of federal law and federal jurisdiction would not disrupt the federal-state allocation of judicial responsibility.
- The Sixth Circuit affirmed summary judgment for Darue, holding the IRS’s certified-mail notice complied with § 6335(a) and the tax sale conveyed valid title.

## Legal Principles

- A state-law claim may fall within § 1331 when it necessarily raises a stated federal issue that is actually disputed and substantial, and when exercising federal jurisdiction is consistent with Congress’s intended division of labor between state and federal courts.
- The absence of a federal private right of action is relevant but not dispositive to § 1331 jurisdiction over a state-law claim containing an embedded federal issue.
- Federal jurisdiction is less likely to be appropriate when recognizing it would invite large numbers of routine, fact-bound state claims into federal court; it is more likely when the embedded issue is a focused question of federal law with limited systemic docket impact.
- In disputes over federal tax sales, the federal government has a strong interest in uniform interpretation of federal tax-notice requirements and in stable title for purchasers, supporting a federal forum when the statutory meaning is the central disputed question.
- Where § 6335(a) notice is legally sufficient and actual notice is undisputed, a quiet title challenge premised on defective IRS notice fails and the purchaser’s title stands.

## Conclusion

The Sixth Circuit held that removal was proper because Grable’s state quiet title claim turned on a contested and substantial question of federal tax law whose resolution in federal court would not materially shift ordinary state-court business into federal court, and it further held the IRS’s certified-mail notice satisfied § 6335(a), validating the tax sale and Darue’s title.


Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 377 F.3d 592 (6th Cir. 2004)