(Slip Opinion) OCTOBER TERM, 2016 1 

Syllabus 

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader. 

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. 

SUPREME COURT OF THE UNITED STATES 

Syllabus 

LIGHTFOOT ET AL. v. CENDANT MORTGAGE CORP., 

DBA PHH MORTGAGE, ET AL. 

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR 

THE NINTH CIRCUIT 

No. 14–1055. Argued November 8, 2016—Decided January 18, 2017 

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. 

Held: Fannie Mae’s sue-and-be-sued clause does not grant federal

courts jurisdiction over all cases involving Fannie Mae. Pp. 6–16.

(a) This Court has addressed the jurisdictional reach of sue-and-besued clauses in five federal charters. Three clauses were held to 

grant jurisdiction—Osborn v. Bank of United States, 9 Wheat. 738; 

D’Oench, Duhme & Co. v. FDIC, 315 U. S. 447; American Nat. Red 

Cross v. S. G., 505 U. S. 247—while two were found wanting—Bank 

of United States v. Deveaux, 5 Cranch 61; Bankers Trust Co. v. Texas 

& Pacific R. Co., 241 U. S. 295. Describing the earlier decisions as 

this Court’s “best efforts at divining congressional intent retrospec-
 

2 LIGHTFOOT v. CENDANT MORTGAGE CORP. 

Syllabus 

tively,” 505 U. S., at 252, the Court in Red Cross concluded that those 

decisions “support the rule that a congressional charter’s ‘sue and be

sued’ provision may be read to confer federal court jurisdiction if, but 

only if, it specifically mentions the federal courts,” id., at 255. 

In specifically mentioning the federal courts, Fannie Mae’s sueand-be-sued clause resembles the three clauses this Court has held 

confer jurisdiction. But unlike those clauses, Fannie Mae’s clause 

adds the qualification “any court of competent jurisdiction,” 12 

U. S. C. §1723a(a). Thus, the outcome here turns on the meaning of 

“court of competent jurisdiction.” 

A court of competent jurisdiction is a court with the power to adjudicate the case before it, Black’s Law Dictionary 431, and a court’s 

subject-matter jurisdiction defines its power to hear cases, see Steel 

Co. v. Citizens for Better Environment, 523 U. S. 83, 89. It follows 

that a court of competent jurisdiction is a court with a grant of subject-matter jurisdiction covering the case before it. This Court has 

understood that phrase as a reference to a court with an existing

source of subject-matter jurisdiction. See, e.g., Ex parte Phenix Ins. 

Co., 118 U. S. 610. On this understanding, Fannie Mae’s sue-and-besued clause is most naturally read not to grant federal courts subjectmatter jurisdiction over all cases involving Fannie Mae but to permit

suit in any state or federal court already endowed with subjectmatter jurisdiction. 

Red Cross does not require a different result. It did not set out a 

rule that an express reference to the federal courts suffices to make a

sue-and-be-sued clause a grant of federal jurisdiction. Rather, it restated “the basic rule” of Deveaux and Osborn that a sue-and-be-sued 

clause conferring only a general right to sue does not grant jurisdiction to the federal courts. 505 U. S., at 253. Pp. 6–11.

(b) Fannie Mae’s arguments against reading its sue-and-be-sued

clause as merely capacity conferring are unpersuasive. Its alternative readings of “court of competent jurisdiction” are premised on the

already rejected reading of Red Cross. The prior construction canon

of statutory interpretation does not apply because none of the cases 

on which Fannie Mae relies suggest that Congress in 1954 would

have surveyed the jurisprudential landscape and necessarily concluded that the courts had already settled the question whether a 

sue-and-be-sued clause containing the phrase “court of competent jurisdiction” confers jurisdiction on the federal courts. Finally, Fannie 

Mae’s appeals to congressional purpose do not call into question the

plain text reading of its sue-and-be-sued clause. Pp. 11–16. 

769 F. 3d 681, reversed. 

SOTOMAYOR, J., delivered the opinion for a unanimous Court. 
 

 

_________________ 

_________________ 

 

Cite as: 580 U. S. ____ (2017) 1 

Opinion of the Court 

NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to

notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order

that corrections may be made before the preliminary print goes to press. 

SUPREME COURT OF THE UNITED STATES 

No. 14–1055 

CRYSTAL MONIQUE LIGHTFOOT, ET AL., PETITIONERS v. CENDANT MORTGAGE CORPORATION, DBA PHH MORTGAGE ET AL. 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

APPEALS FOR THE NINTH CIRCUIT
 

[January 18, 2017]

 JUSTICE SOTOMAYOR delivered the opinion of the Court. 

The corporate charter of the Federal National Mortgage

Association, known as Fannie Mae, authorizes Fannie 

Mae “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). This case presents the question 

whether this sue-and-be-sued clause grants federal district courts jurisdiction over cases involving Fannie Mae. 

We hold that it does not. 

I 

A 

During the Great Depression, the Federal Government

worked to stabilize and strengthen the residential mortgage market. Among other things, it took steps to increase liquidity (reasonably available funding) in the 

mortgage market. These efforts included the creation of 

the Federal Home Loan Banks, which provide credit to

member institutions to finance affordable housing and 

economic development projects, and the Federal Housing 

Administration (FHA), which insures residential mort-
 

 

2 LIGHTFOOT v. CENDANT MORTGAGE CORP. 

Opinion of the Court 

gages. See Dept. of Housing and Urban Development, Background and History of the Federal National Mortgage

Association 1–7, A4 (1966). 

Also as part of these efforts, Title III of the National 

Housing Act (1934 Act) authorized the Administrator of 

the newly created FHA to establish “national mortgage 

associations” that could “purchase and sell [certain] first 

mortgages and such other first liens” and “borrow money

for such purposes.” §301(a), 48 Stat. 1252–1253. The 

associations were endowed with certain powers, including

the power to “sue and be sued, complain and defend, in 

any court of law or equity, State or Federal.” §301(c), id., 

at 1253. 

In 1938, the FHA Administrator exercised that authority and chartered the Federal National Mortgage Association. Avoiding a mouthful of an acronym (FNMA), it went 

by Fannie Mae. See, e.g., Washington Post, July 14, 1940, 

p. P2 (“‘Fanny May’”); N. Y. Times, Mar. 23, 1950, p. 48

(“‘Fannie Mae’”). As originally chartered, Fannie Mae 

was wholly owned by the Federal Government and had 

three objectives: to “establish a market for [FHA-insured]

first mortgages” covering new housing construction, to

“facilitate the construction and financing of economically

sound rental housing projects,” and to “make [the bonds it

issued] available to . . . investors.” Fed. Nat. Mortgage

Assn. Information Regarding the Activities of the Assn. 1 

(Circular No. 1, 1938).

Fannie Mae was rechartered in 1954. Housing Act of

1954 (1954 Act), §201, 68 Stat. 613. No longer wholly 

Government owned, Fannie Mae had mixed ownership:

Private shareholders held its common stock and the Department of the Treasury held its preferred stock. The 

1954 Act required the Secretary of the Treasury to allow 

Fannie Mae to repurchase that stock. See id., at 613–615. 

It expected that Fannie Mae would repurchase all of its

preferred stock and that legislation would then be enacted 
 

Cite as: 580 U. S. ____ (2017) 3 

Opinion of the Court 

to turn Fannie Mae over to the private stockholders. 

From then on, Fannie Mae’s duties would “be carried out 

by a privately owned and privately financed corporation.” 

Id., at 615. Along with these structural changes, the 1954 

Act replaced Fannie Mae’s initial set of powers with a 

more detailed list. In doing so, it revised the sue-and-besued clause to give Fannie Mae the power “to sue and to

be sued, and to complain and to defend, in any court of 

competent jurisdiction, State or Federal.” Id., at 620. 

In 1968, Fannie Mae became fully privately owned and 

relinquished part of its portfolio to its new spinoff, the 

Government National Mortgage Association (known as 

Ginnie Mae). See Housing and Urban Development Act of 

1968 (1968 Act), 82 Stat. 536. Fannie Mae “continue[d] to

operate the secondary market operations” but became “a

Government-sponsored private corporation.” 12 U. S. C. 

§1716b. Ginnie Mae “remain[ed] in the Government” and 

took over “the special assistance functions and management and liquidating functions.” Ibid. Ginnie Mae received the same set of powers as Fannie Mae. See 

§1723(a); see also 1968 Act, §802(z), 82 Stat. 540 (minor 

revisions to §1723a(a)).

This general structure remains in place. Fannie Mae 

continues to participate in the secondary mortgage market. It purchases mortgages that meet its eligibility criteria,

packages them into mortgage-backed securities, and sells

those securities to investors, and it invests in mortgagebacked securities itself. One of those mortgage purchases 

led to Fannie Mae’s entanglement in this case. 

B 

Beverly Ann Hollis-Arrington refinanced her mortgage

with Cendant Mortgage Corporation (Cendant) in the

summer of 1999. Fannie Mae then bought the mortgage, 

while Cendant continued to service it. Unable to make her 

payments, Hollis-Arrington pursued a forbearance ar-
 

 

 

4 LIGHTFOOT v. CENDANT MORTGAGE CORP. 

Opinion of the Court 

rangement with Cendant. No agreement materialized,

and the home entered foreclosure. Around this time, 

Cendant repurchased the mortgage from Fannie Mae

because it did not meet Fannie Mae’s credit standards. 

To stave off the foreclosure, Hollis-Arrington and her 

daughter, Crystal Lightfoot, pursued bankruptcy and 

transferred the property between themselves. These efforts failed, and the home was sold at a trustee’s sale in 

2001. The two then took to the courts to try to undo the 

foreclosure and sale. 

After two unsuccessful federal suits, the pair filed this

suit in state court. They alleged that deficiencies in the 

refinancing, foreclosure, and sale of their home entitled 

them to relief against Fannie Mae. Their claims against

other defendants are not relevant here. 

Fannie Mae removed the case to federal court under 28 

U. S. C. §1441(a), which permits a defendant to remove

from state to federal court “any civil action” over which the 

federal district courts “have original jurisdiction.” It relied 

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. 

The District Court then dismissed the claims against

Fannie Mae on claim preclusion grounds. After a series of 

motions, rulings, and appeals not related to the issue

here, the District Court entered final judgment. HollisArrington and Lightfoot immediately moved to set aside

the judgment under Federal Rule of Civil Procedure 60(b), 

alleging “fraud upon the court.” App. 95–110. The District Court denied the motion. 

The Ninth Circuit affirmed the dismissal of the case and 

the denial of the Rule 60(b) motion. 465 Fed. Appx. 668 

(2012). After Hollis-Arrington and Lightfoot sought rehearing, the Ninth Circuit withdrew its opinion and ordered briefing on the question whether the District Court

had jurisdiction over the case under Fannie Mae’s sue-
 

 

Cite as: 580 U. S. ____ (2017) 5 

Opinion of the Court 

and-be-sued clause. 769 F. 3d 681, 682–683 (2014). 

A divided panel affirmed the District Court’s judgment.

The majority relied on American Nat. Red Cross v. S. G., 

505 U. S. 247 (1992). It read that decision to have established a “rule [that] resolves this case”: When a sue-andbe-sued clause in a federal charter expressly authorizes

suit in federal courts, it confers jurisdiction on the federal 

courts. 769 F. 3d, at 684. The dissent instead read Red 

Cross as setting out only a “‘default rule’” that provides a

“starting point for [the] analysis.” 769 F. 3d, at 692 (opinion of Stein, J.). It read “any court of competent jurisdiction” in Fannie Mae’s sue-and-be-sued clause to overcome 

that default rule by requiring an independent source for 

jurisdiction in cases involving Fannie Mae. Ibid. 

Two Circuits have likewise concluded that the language 

in Fannie Mae’s sue-and-be-sued clause grants jurisdiction 

to federal courts. See Federal Home Loan Bank of Boston 

v. Moody’s Corp., 821 F. 3d 102 (CA1 2016) (Federal Home 

Loan Bank of Boston’s identical sue-and-be-sued clause); 

Pirelli Armstrong Tire Corp. Retiree Medical Benefits 

Trust ex rel. Fed. Nat. Mortgage Assn. v. Raines, 534 F. 3d 

779 (CADC 2008) (Fannie Mae’s sue-and-be-sued clause).

Four Circuits have disagreed, finding that similar language did not grant jurisdiction. See Western Securities 

Co. v. Derwinski, 937 F. 2d 1276 (CA7 1991) (Under 38

U. S. C. §1820(a)(1) (1988 ed.), Secretary of Veterans 

Affairs’ authority to “sue and be sued . . . in any court of

competent jurisdiction, State or Federal”); C. H. Sanders 

Co. v. BHAP Housing Development Fund Co., 903 F. 2d 

114 (CA2 1990) (Under 12 U. S. C. §1702 (1988 ed.), Secretary of Housing and Urban Development’s authority “in 

his official capacity, to sue and be sued in any court of

competent jurisdiction, State or Federal”); Industrial 

Indemnity, Inc. v. Landrieu, 615 F. 2d 644 (CA5 1980) (per 

curiam) (similar); Lindy v. Lynn, 501 F. 2d 1367 (CA3 

1974) (similar). 
 

 

 

6 LIGHTFOOT v. CENDANT MORTGAGE CORP. 

Opinion of the Court 

We granted certiorari, 579 U. S. ___ (2016), and now 

reverse. 

II 

Fannie Mae’s sue-and-be-sued clause authorizes it “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). As in other federal corporate charters,

this language serves the uncontroversial function of clarifying Fannie Mae’s capacity to bring suit and to be sued. 

See Bank of United States v. Deveaux, 5 Cranch 61, 85–86 

(1809). The question here is whether Fannie Mae’s sueand-be-sued clause goes further and grants federal courts

jurisdiction over all cases involving Fannie Mae. 

A 

In answering this question, “we do not face a clean

slate.” Red Cross, 505 U. S., at 252. This Court has addressed the jurisdictional reach of sue-and-be-sued clauses 

in five federal charters. Three clauses were held to grant 

jurisdiction, while two were found wanting.

The first discussion of sue-and-be-sued clauses came in 

a pair of opinions by Chief Justice Marshall. The charter 

of the first Bank of the United States allowed it “ ‘to sue 

and be sued, plead and be impleaded, answer and be

answered, defend and be defended, in courts of record, or 

any other place whatsoever.’” Deveaux, 5 Cranch, at 85. 

Another provision allowed suits in federal court against 

certain bank officials, suggesting “the right to sue does not 

imply a right to sue in the courts of the union, unless it be 

expressed.” Id., at 86. In light of this language, the Court

held that the first Bank of the United States had “no right

. . . to sue in the federal courts.” Ibid. The Court concluded that the second Bank of the United States was not 

similarly disabled. Its charter allowed it “‘to sue and be 

sued, plead and be impleaded, answer and be answered, 
Cite as: 580 U. S. ____ (2017) 7 

Opinion of the Court 

defend and be defended, in all State Courts having competent jurisdiction, and in any Circuit Court of the United

States.’” Osborn v. Bank of United States, 9 Wheat. 738, 

817 (1824). The Court took from Deveaux “that a general 

capacity in the Bank to sue, without mentioning the 

Courts of the Union, may not give a right to sue in those 

Courts.” 9 Wheat., at 818. By contrast, the second Bank’s

charter did grant jurisdiction to the federal circuit courts

because it used “words expressly conferring a right to sue

in those Courts.” Ibid. 

A mortgage dispute between a railroad and its creditor

led to the next consideration of this issue. The Texas and 

Pacific Railway Company’s federal charter authorized it

“‘to sue and be sued, plead and be impleaded, defend and 

be defended, in all courts of law and equity within the 

United States.’” Bankers Trust Co. v. Texas & Pacific R. 

Co., 241 U. S. 295, 302 (1916). This Court held that the 

clause had “the same generality and natural import as” 

the clause in Deveaux. 241 U. S., at 304. Thus, “all that 

was intended was to render this corporation capable of 

suing and being sued by its corporate name in any court

. . . whose jurisdiction as otherwise competently defined 

was adequate to the occasion.” Id., at 303. 

Another lending dispute, involving defaulted bonds, led 

to the next statement on this issue. The Federal Deposit

Insurance Corporation’s (FDIC) sue-and-be-sued clause

authorized it “[t]o sue and be sued, complain and defend,

in any court of law or equity, State or Federal.” 12 

U. S. C. §264(j) (1940 ed.). In D’Oench, Duhme & Co. v. 

FDIC, 315 U. S. 447, 455 (1942), this Court held that

federal jurisdiction over the case was based on the FDIC’s

sue-and-be-sued clause. See Red Cross, 505 U. S., at 254 

(expressing no “doubt that the Court held federal jurisdiction to rest on the” sue-and-be-sued clause). 

This Court’s most recent discussion of a sue-and-be-sued 

clause came in Red Cross, which involved a state-law tort 
 

 

8 LIGHTFOOT v. CENDANT MORTGAGE CORP. 

Opinion of the Court 

suit related to a contaminated blood transfusion. It described the previous quartet of decisions as reflecting this

Court’s “best efforts at divining congressional intent retrospectively,” efforts that had put “Congress on prospective

notice of the language necessary and sufficient to confer

jurisdiction.” Id., at 252. Those decisions “support the 

rule that a congressional charter’s ‘sue and be sued’ provision may be read to confer federal court jurisdiction if, but 

only if, it specifically mentions the federal courts.” Id., at 

255. Under that rule, the Court explained, the result was

“clear.” Id., at 257. The Red Cross’ sue-and-be-sued 

clause, which permits it to “sue and be sued in courts of

law and equity, State or Federal, within the jurisdiction of 

the United States,” 36 U. S. C. §300105(a)(5), confers 

jurisdiction. Red Cross, 505 U. S., at 257. “In expressly

authorizing [suits] in federal courts, using language . . . in

all relevant respects identical to [the clause in D’Oench] on

which [the Court] based a holding of federal jurisdiction

just five years before [its enactment], the provision extends beyond a mere grant of general corporate capacity to

sue, and suffices to confer federal jurisdiction.” Ibid. 

Armed with these earlier cases, as synthesized by Red 

Cross, we turn to the sue-and-be-sued clause at issue here. 

B 

Fannie Mae’s sue-and-be-sued clause resembles the 

clauses this Court has held confer jurisdiction in one 

important respect. In authorizing Fannie Mae “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), it “specifically mentions the federal courts.” 

Red Cross, 505 U. S., at 255. This mention of the federal 

courts means that Fannie Mae’s charter clears a hurdle 

that the clauses in Deveaux and Bankers Trust did not. 

But Fannie Mae’s clause differs in a material respect 

from the three clauses the Court has held sufficient to 
 

Cite as: 580 U. S. ____ (2017) 9 

Opinion of the Court 

grant federal jurisdiction. Those clauses referred to suits 

in the federal courts without qualification. In contrast, 

Fannie Mae’s sue-and-be-sued clause refers to “any court 

of competent jurisdiction, State or Federal.” §1723a(a)

(emphasis added). Because this sue-and-be-sued clause is 

not “in all relevant respects identical” to a clause already

held to grant federal jurisdiction, Red Cross, 505 U. S., at 

257, this case cannot be resolved by a simple comparison. 

The outcome instead turns on the meaning of “court of 

competent jurisdiction” in Fannie Mae’s sue-and-be-sued 

clause. 

A court of competent jurisdiction is a court with the

power to adjudicate the case before it. See Black’s Law 

Dictionary 431 (10th ed. 2014) (“[a] court that has the

power and authority to do a particular act; one recognized

by law as possessing the right to adjudicate a controversy”). And a court’s subject-matter jurisdiction defines

its power to hear cases. See Steel Co. v. Citizens for Better 

Environment, 523 U. S. 83, 89 (1998) (Subject-matter 

jurisdiction is “the courts’ statutory or constitutional

power to adjudicate the case” (emphasis deleted)); Wachovia Bank, N. A. v. Schmidt, 546 U. S. 303, 316 (2006) 

(“Subject-matter jurisdiction . . . concerns a court’s competence to adjudicate a particular category of cases”). It 

follows that a court of competent jurisdiction is a court

with a grant of subject-matter jurisdiction covering the 

case before it. Cf. Pennoyer v. Neff, 95 U. S. 714, 733 

(1878) (“[T]here must be a tribunal competent by its constitution—that is, by the law of its creation—to pass upon

the subject-matter of the suit”). 

As a result, this Court has understood the phrase “court 

of competent jurisdiction” as a reference to a court with an

existing source of subject-matter jurisdiction. Ex parte 

Phenix Ins. Co., 118 U. S. 610 (1886), provides an example. 

There, the Court explained that a statute “providing for 

the transfer to a trustee of the interest of the owner in the 
 

10 LIGHTFOOT v. CENDANT MORTGAGE CORP. 

Opinion of the Court 

vessel and freight, provides only that the trustee may ‘be 

appointed by any court of competent jurisdiction,’ leaving

the question of such competency to depend on other provisions of law.” Id., at 617. See also Shoshone Mining Co. v. 

Rutter, 177 U. S. 505, 506–507 (1900) (statute authorizing

suit “‘in a court of competent jurisdiction’ . . . unquestionably meant that the competency of the court should be

determined by rules theretofore prescribed in respect to 

the jurisdiction of the Federal courts”). Califano v. Sanders, 430 U. S. 99 (1977), provides another. It held that §10

of the Administrative Procedure Act, codified in 5 U. S. C. 

§§701–704, did not contain “an implied grant of subjectmatter jurisdiction to review agency actions.” 430 U. S., at

105. In noting that “the actual text . . . nowhere contains

an explicit grant of jurisdiction,” the Court pointed to two 

clauses requiring “judicial review . . . to proceed ‘in a court 

specified by statute’ or ‘in a court of competent jurisdiction’” and stated that both “seem to look to outside sources 

of jurisdictional authority.” Id., at 105–106, and n. 6. 

On this understanding, Fannie Mae’s sue-and-be-sued 

clause is most naturally read not to grant federal courts 

subject-matter jurisdiction over all cases involving Fannie 

Mae. In authorizing Fannie Mae to sue and be sued “in 

any court of competent jurisdiction, State or Federal,” it

permits suit in any state or federal court already endowed

with subject-matter jurisdiction over the suit. 

C 

Red Cross does not require a different result. Some, 

including the lower courts here, have understood it to set 

out a rule that an express reference to the federal courts

suffices to make a sue-and-be-sued clause a grant of federal jurisdiction. Red Cross contains no such rule. 

By its own terms, the rule Red Cross restates is “the 

basic rule” drawn in Deveaux and Osborn that a sue-andbe-sued clause conferring only a general right to sue does 
Cite as: 580 U. S. ____ (2017) 11 

Opinion of the Court 

not grant jurisdiction to the federal courts. Red Cross, 505 

U. S., at 253. Each mention of a “rule” refers back to this 

principle. See id., at 255 (reading this Court’s sue-and-besued clause cases to “support the rule that a . . . ‘sue and 

be sued’ provision may be read to confer federal court 

jurisdiction if, but only if, it specifically mentions the 

federal courts” (emphasis added)); id., at 256 (Bankers 

Trust applied “the rule thus established” to hold that the 

railroad’s sue-and-be-sued clause did not confer jurisdiction); 505 U. S., at 257 (finding the result “clear” under the

“rule established in these cases” because the charter “expressly authoriz[es]” suits in federal courts in a clause “in 

all relevant respects identical” to one already found to

confer jurisdiction).

True enough, the dissent thought Red Cross established 

a broad rule. See 505 U. S., at 271–272 (opinion of Scalia, 

J.) (describing Red Cross as announcing a “rule . . . that 

any grant of a general capacity to sue with mention of 

federal courts will suffice to confer jurisdiction” (emphasis

deleted)). The certainty of the dissent may explain the 

lower court decisions adopting a broader reading of Red 

Cross. But Red Cross itself establishes no such rule. And 

such a rule is hard to square with the opinion’s thorough

consideration of the contrary arguments based in text,

purpose, and legislative history. See id., at 258–263. 

 Nothing in Red Cross suggests that courts should ignore 

“the ordinary sense of the language used,” id., at 263, 

when confronted with a federal charter’s sue-and-be-sued 

clause that expressly references the federal courts, but

only those that are courts “of competent jurisdiction.” 

III 

Fannie Mae, preferring to be in federal court, raises

several arguments against reading its sue-and-besued clause as merely capacity conferring. None are 

persuasive. 
 

 

 

12 LIGHTFOOT v. CENDANT MORTGAGE CORP. 

Opinion of the Court 

A 

Fannie Mae first offers several alternative readings of 

“court of competent jurisdiction.” It suggests that the

phrase might refer to a court with personal jurisdiction 

over the parties before it, a court of proper venue, or a 

court of general, rather than specialized, jurisdiction.

Brief for Respondents 41–45.

At bottom, Fannie Mae’s efforts on this front are premised on the reading of Red Cross rejected above. In its 

view, an express reference to the federal courts suffices to 

confer subject-matter jurisdiction on federal courts. It 

sees its only remaining task as explaining why that would 

not render “court of competent jurisdiction” superfluous.

See Tr. of Oral Arg. 29–30. But the fact that a sue-and-besued clause references the federal courts does not resolve 

the jurisdictional question. Thus, arguments as to why 

the phrase “court of competent jurisdiction” could still

have meaning if it does not carry its ordinary meaning are 

beside the point.

Moreover, even if the phrase carries additional meaning,

that would not further Fannie Mae’s argument. Take its 

suggestion that a “court of competent jurisdiction” is a

court with personal jurisdiction. A court must have the 

power to decide the claim before it (subject-matter jurisdiction) and power over the parties before it (personal 

jurisdiction) before it can resolve a case. See Ruhrgas AG 

v. Marathon Oil Co., 526 U. S. 574, 583–585 (1999). Recognizing as much, this Court has stated that the phrase

“court of competent jurisdiction,” while “usually used to

refer to subject-matter jurisdiction, has also been used on 

occasion to refer to a court’s jurisdiction over the defendant’s person.” United States v. Morton, 467 U. S. 822, 828 

(1984) (footnote omitted). See also Blackmar v. Guerre, 

342 U. S. 512, 516 (1952). But nothing in Fannie Mae’s 

sue-and-be-sued clause suggests that the reference to

“court of competent jurisdiction” refers only to a court with 
Cite as: 580 U. S. ____ (2017) 13 

Opinion of the Court 

personal jurisdiction over the parties before it. At most 

then, this point might support reading the phrase to refer

to both subject-matter and personal jurisdiction. That 

does not help Fannie Mae. So long as the sue-and-be-sued

clause refers to an outside source of subject-matter jurisdiction, it does not confer subject-matter jurisdiction. 

B 

Fannie Mae next claims that, by the time its sue-and-besued clause was enacted in 1954, courts had interpreted 

provisions containing the phrase “court of competent

jurisdiction” to grant jurisdiction and that Congress was

entitled to rely on those interpretations. This argument

invokes the prior construction canon of statutory interpretation. The canon teaches that if courts have settled the 

meaning of an existing provision, the enactment of a new 

provision that mirrors the existing statutory text indicates, as a general matter, that the new provision has that 

same meaning. See Bragdon v. Abbott, 524 U. S. 624, 645 

(1998).

Fannie Mae points to cases discussing three types of 

statutory provisions that, in its view, show that the phrase

“court of competent jurisdiction” had acquired a settled

meaning by 1954.

The first pair addresses the FHA’s sue-and-be-sued

clause. See 12 U. S. C. §1702 (“sue and be sued in any 

court of competent jurisdiction, State or Federal”). Two 

Court of Appeals decisions in the 1940’s concluded that the

FHA sue-and-be-sued clause overrode the general rule, 

today found in 28 U. S. C. §§1346(a)(2), 1491, that monetary claims against the United States exceeding $10,000

must be brought in the Court of Federal Claims, rather 

than the federal district courts. See Ferguson v. Union 

Nat. Bank of Clarksburg, 126 F. 2d 753, 755–757 (CA4 

1942); George H. Evans & Co. v. United States, 169 F. 2d 

500, 502 (CA3 1948). These courts did not state that their 
 

 

14 LIGHTFOOT v. CENDANT MORTGAGE CORP. 

Opinion of the Court 

jurisdiction was founded on the sue-and-be-sued clause, as

opposed to statutes governing the original jurisdiction of 

the federal district courts. See, e.g., 28 U. S. C. §41(a) 

(1946 ed.). Thus, even assuming that two appellate court

cases can “‘settle’” an issue, A. Scalia & B. Garner, Reading Law 325 (2012), these two cases did not because they 

did not speak to the question here.

The second set of cases addresses provisions authorizing 

suit for a violation of a statute. One arose under the Fair 

Labor Standards Act of 1938, which authorizes employees 

to sue for violations of the Act in “any . . . court of competent jurisdiction.” §6(d)(1), 88 Stat. 61, 29 U. S. C. §216(b). 

This Court, in its description of the facts, stated that

“[j]urisdiction of the action was conferred by . . . 28 

U. S. C. §41(8), and . . . 29 U. S. C. §216(b).” Williams v. 

Jacksonville Terminal Co., 315 U. S. 386, 390 (1942). This 

brief, ambiguous statement did not settle the meaning of 

§216(b), and thus did not settle the meaning of the phrase 

“court of competent jurisdiction.” The other cases in this 

set dealt with the Housing and Rent Act of 1947. As 

enacted, the statute permitted suit in “any Federal, State,

or Territorial court of competent jurisdiction.” §206(b), 61 

Stat. 199. Some courts read §206 not to confer jurisdiction

and instead assessed their jurisdiction under the federalquestion jurisdiction statute. See, e.g., Schuman v. 

Greenberg, 100 F. Supp. 187, 189 (NJ 1951) (collecting 

cases). At the time, that statute carried an amount-incontroversy requirement, 28 U. S. C. §41(1) (1946 ed.), and 

so some cases were dismissed or remanded to state court 

for lack of federal jurisdiction. Congress later amended

§206 to permit suit “in any Federal court of competent 

jurisdiction regardless of the amount involved.” Defense 

Production Act Amendments of 1951, §204, 65 Stat. 147.

Congress’ elimination of the amount-in-controversy requirement suggests, if anything, it understood that “court 

of competent jurisdiction” could be read to require an 
 

 

Cite as: 580 U. S. ____ (2017) 15 

Opinion of the Court 

outside source of jurisdiction.

The third set of cases interpreted provisions making

federal jurisdiction over certain causes of action exclusive.

Brief for Respondents 36–37. Those cases confirm that the 

provisions require suit to be brought in federal courts but

do not discuss the basis for federal jurisdiction.

In sum, none of the cases on which Fannie Mae relies 

suggest that Congress in 1954 would have surveyed the 

jurisprudential landscape and necessarily concluded that 

the courts had already settled the question whether a sueand-be-sued clause containing the phrase “court of competent jurisdiction” confers jurisdiction on the federal courts. 

C 

Fannie Mae ends with an appeal to congressional purpose, or, more accurately, a lack of congressional purpose. 

It argues that its original sue-and-be-sued clause, enacted in 1934, granted jurisdiction to federal courts and 

that there is no indication that Congress wanted to change

the status quo in 1954. The addition in 1954 of “court of 

competent jurisdiction,” a phrase that, as discussed, carries a clear meaning, means that the current sue-and-besued clause does not confer jurisdiction. An indication 

whether that meaning was understood as a change from

the 1934 Act is not required.*

Fannie Mae next points to its sibling rival, the Federal

Home Loan Mortgage Corporation, known as Freddie Mac.

The two share parallel authority to compete in the second-

—————— 

*The legislative history of the 1934 Act provides some reason to

question Fannie Mae’s premise about Congress’ view of the status quo

under the 1934 Act. During debate on this provision, Senator Logan

asked Senator Bulkley, the chair of the subcommittee with authority

over the bill, about the original sue-and-be-sued clause. Senator 

Bulkley explained that it merely conferred a capacity to sue and be

sued “and [did] not confe[r] a right to go into a Federal court where it

would not otherwise exist.” 78 Cong. Rec. 12008 (1934). 
 

 

 

 

 

16 LIGHTFOOT v. CENDANT MORTGAGE CORP. 

Opinion of the Court 

ary mortgage market. Compare 12 U. S. C. §§1717(b)(2)–

(6) (Fannie Mae) with §1454(a) (Freddie Mac). Suits 

involving Freddie Mac may be brought in federal court.

See §1452(c) (“to sue and be sued, complain and defend, in

any State, Federal, or other court”); §1452(f) (providing

that Freddie Mac is a federal agency under 28 U. S. C. 

§§1345, 1442, that civil actions to which Freddie Mac is a

party arise under federal law, and that Freddie Mac may

remove cases to federal district court before trial). 

Fannie Mae argues there is no good reason to think that

Congress gave Freddie Mac fuller access to the federal

courts than it has. Leaving aside the clear textual indications suggesting Congress did just that, a plausible reason

does exist. In 1970, when Freddie Mac’s sue-and-be-sued 

clause and related jurisdictional provisions were enacted, 

Freddie Mac was a Government-owned corporation. See 

Emergency Home Finance Act of 1970, §304(a), 84 Stat.

454. Fannie Mae, on the other hand, had already transitioned into a privately owned corporation. Fannie Mae’s 

argument on this front, moreover, contains a deeper flaw.

The doors to federal court remain open to Fannie Mae 

through diversity and federal-question jurisdiction. Fannie Mae provides no reason to think that in other cases,

involving only state-law claims, access to the federal

courts gives Freddie Mac an unintended competitive advantage over Fannie Mae that Congress would have wanted

to avoid. Indeed, the usual assumption is that state courts

are up to the task of adjudicating their own laws. Cf. 

Gulf Offshore Co. v. Mobil Oil Corp., 453 U. S. 473, 483– 

484 (1981). 

IV 

The judgment of the Ninth Circuit is reversed. 

It is so ordered.