Lightfoot v Cendant Mortgage Corporation

Lightfoot sought review of the 9th Circuit decision that Fannie Mae, one of the defendants in this case, can remove all cases against it to federal court under the sue and be sued clause in its charter. The Court unanimously reversed. Resolving a circuit split on the issue, the Court held that the “sue and be sued’ clause in Fannie Mae’s charter did not grant federal jurisdiction because it allows suit in any court of competent jurisdiction and thus, under Court precedent, there must be an independent basis for federal jurisdiction over a lawsuit. It held that no Court precedent requires a different outcome particularly as none of the prior cases involving “courts of competent jurisdiction” clauses before the chartering statute was passed in 1954 dealt with the issue of exclusive federal jurisdiction under such a clause and the provisions concerning Freddie Mac either did the same thing as the sue and be sued language here or granted exclusive jurisdiction as Freddie Mac was still a government controlled entity.