Lightfoot v. Cendant Mortgage Corp.

U.S. Sup. Ct.;
14-1055

The Federal National Mortgage Association (Fannie Mae) is a federally chartered corporation that participates in the secondary mortgage market. By statute, Fannie Mae has the power “to sue and to be sued, and to complain and to defend, in any court of competent jurisdiction, State or Federal.” 12 U. S. C. §1723a(a). When petitioners Beverly Ann Hollis-Arrington and her daughter Crystal Lightfoot filed suit in state court alleging deficiencies in the refinancing, foreclosure, and sale of their home, Fannie Mae removed the case to federal court, relying on its sue-and-be-sued clause as the basis for jurisdiction. The District Court denied a motion to remand the case to state court and later entered judgment against petitioners. The Ninth Circuit affirmed. In concluding that the District Court had jurisdiction under Fannie Mae’s sue-and-be-sued clause, the court relied on American Nat. Red Cross v. S. G., 505 U. S. 247, which it read as establishing a rule that when a sue-and-be-sued clause in a federal charter expressly authorizes suit in federal court, it confers jurisdiction on the federal courts.