Lightfoot v. Cendant Mortgage Corporation

Summarized by:

  • Court: U.S. Supreme Court Certiorari Granted
  • Area(s) of Law: Civil Procedure
  • Date Filed: June 28, 2016
  • Case #: 14-1055
  • Judge(s)/Court Below: 769 F.3d 681 (9th Cir. 2014)
  • Full Text Opinion

Whether a congressional charter authorizing an entity to “sue and be sued…in any court of competent jurisdiction, state or federal” confers federal subject matter jurisdiction?

Petitioners sued congressional charter Fannie Mae (Respondents) in state court on similar or identical claims previously adjudicated in federal court. Respondents removed the case to federal district court, and the claims were dismissed as barred by res judicata and collateral estoppel. The Ninth Circuit affirmed. The Supreme Court ruled in American National Red Cross v. S.G. (1992) that claims by or against a chartered entity, are conferred federal question jurisdiction pursuant to the charter’s “sue-and-be-sued” clause, if it mentions the federal courts. Fannie Mae’s “sue-or-be-sued clause” states: Fannie Mae can “sue and be sued . . . in any court of competent jurisdiction, State or Federal.” 12 U.S.C. §1723a(a). Petitioner argues that the Ninth Circuit’s holding and Red Cross are inconsistent with Supreme Court precedent that congressional charters “sue-and-be-sued” provisions must specify the federal courts as original jurisdiction to confer federal subject matter jurisdiction, because “any court of competent jurisdiction” modifies “State or Federal.” Petitioner asserts that the modification, and legislative history, provide that the lawsuit be raised in the court with independent subject matter jurisdiction, federal or state, and federal question is not presumed.

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