Lightfoot v. Cendant Mortgage Corp, 580 U.S. 82

Fannie Mae’s charter grants it 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)).
Homeowners Hollis-Arrington and Lightfoot sued in state court alleging defects in refinancing, foreclosure, and sale; Fannie Mae removed the case to federal court relying on its sue-and-be-sued clause.
The District Court denied remand and later entered judgment for defendants; the Ninth Circuit affirmed, reading American Nat. Red Cross v. S. G. to require that an express reference to federal courts in a charter confers federal jurisdiction.
The Supreme Court granted certiorari to decide whether Fannie Mae’s sue-and-be-sued clause itself supplies federal subject-matter jurisdiction for suits involving Fannie Mae.
The core textual distinction: unlike clauses previously found to confer federal jurisdiction, Fannie Mae’s clause adds the qualification “court of competent jurisdiction.”

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Fannie Mae’s sue-and-be-sued clause confers federal subject-matter jurisdiction	Fannie Mae: clause grants federal jurisdiction because it expressly mentions federal courts	Lightfoot: clause does not supply federal subject-matter jurisdiction; it permits suit only in courts that already have subject-matter jurisdiction	The clause does not confer federal subject-matter jurisdiction; it allows suit in any state or federal court that already has competent jurisdiction
Meaning and effect of the phrase “court of competent jurisdiction”	Lightfoot: phrase refers to an existing source of subject-matter jurisdiction, so clause is capacity-conferring only	Fannie Mae: phrase could mean personal jurisdiction, venue, general jurisdiction, or be overridden by express mention of federal courts	Court: “court of competent jurisdiction” naturally refers to a court with subject-matter jurisdiction (and may encompass personal-jurisdiction requirements), so the clause looks to an outside source of jurisdiction rather than creating it

Bank of United States v. Deveaux, 5 U.S. (1 Cranch) 61 (1809) (general sue-and-be-sued language does not imply federal jurisdiction)
Osborn v. Bank of United States, 22 U.S. (9 Wheat.) 738 (1824) (charter language expressly naming federal courts can confer federal jurisdiction)
Bankers Trust Co. v. Texas & Pacific R. Co., 241 U.S. 295 (1916) (general language to sue in courts nationwide is capacity-conferring, not a grant of federal jurisdiction)
D’Oench, Duhme & Co. v. Federal Deposit Ins. Corp., 315 U.S. 447 (1942) (sue-and-be-sued clause treated as source of federal jurisdiction for the FDIC)
American Nat. Red Cross v. S. G., 505 U.S. 247 (1992) (synthesized prior cases: a charter’s sue-and-be-sued clause may confer federal jurisdiction only if it specifically and unqualifiedly names federal courts)
Ex parte Phenix Ins. Co., 118 U.S. 610 (1886) (statutory phrase “court of competent jurisdiction” looks to preexisting jurisdictional rules)