## Facts

- Fannie Mae is a federally chartered corporation whose charter authorizes it “to sue and to be sued ... in any court of competent jurisdiction, State or Federal.”
- Beverly Hollis-Arrington refinanced a mortgage with Cendant Mortgage Corporation; the mortgage was later sold to Fannie Mae.
- After default, foreclosure proceedings occurred and the home was sold.
- Petitioners previously sued in federal court alleging wrongdoing related to mortgage lending and foreclosure; that action was dismissed and the dismissal was affirmed on appeal.
- Petitioners later filed a new, state-law lawsuit in California state court concerning the refinancing, foreclosure, and sale.
- Fannie Mae removed the case to federal court, asserting that its charter’s sue-and-be-sued clause supplied federal subject-matter jurisdiction.

## Issues

1. Whether Fannie Mae’s charter authorization to sue and be sued “in any court of competent jurisdiction, State or Federal” independently grants original federal subject-matter jurisdiction for any case involving Fannie Mae.
2. Whether removal to federal court is proper when the only asserted basis for federal jurisdiction is Fannie Mae’s presence as a party under that charter clause.

## Decision

- The Supreme Court unanimously reversed the Ninth Circuit.
- The Court held that Fannie Mae’s sue-and-be-sued clause does not itself confer federal subject-matter jurisdiction.
- The phrase “court of competent jurisdiction” presupposes an independent jurisdictional basis (such as federal-question or diversity jurisdiction).
- Because the charter clause was not a standalone ground for jurisdiction, removal could not be sustained on that theory.

## Legal Principles

- A sue-and-be-sued clause allowing suit “in any court of competent jurisdiction, State or Federal” is not a grant of federal jurisdiction; it permits suit only in courts that already have subject-matter jurisdiction from another source.
- Statutory language should be read to give effect to all terms; treating “of competent jurisdiction” as meaningless is disfavored.
- Charter wording matters: clauses expressly referencing federal courts may confer federal jurisdiction only when they lack limiting language that requires preexisting jurisdiction.

## Conclusion

The Court held that Fannie Mae’s charter permits it to litigate in state or federal courts that already possess subject-matter jurisdiction, but the charter does not itself open a federal forum for every case involving Fannie Mae; removal therefore requires an independent jurisdictional basis.


Lightfoot v. Cendant Mortg. Corp., 580 U.S. 82 (2017)