                 FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

QUALITY LOAN SERVICE CORP.,           
                        Petitioner,
                v.
24702 PALLAS WAY, MISSION
VIEJO, CA 92691, All Claimants to
Surplus Funds After Trustee’s Sale           No. 08-56181
of Real Property Located at,                    D.C. No.
                      Respondent,
                                         2:07-cv-07128-CAS-
               and                               VBK
MARK V. FRANZEN; DEBRA A.                      OPINION
FRANZEN,
            Claimants-Appellants,
               and
UNITED STATES OF AMERICA,
               Claimant-Appellee.
                                      
       Appeal from the United States District Court
           for the Central District of California
       Christina A. Snyder, District Judge, Presiding

                 Argued and Submitted
          August 30, 2010—Pasadena, California

                   Filed March 24, 2011

           Before: Alex Kozinski, Chief Judge,
      Diarmuid F. O’Scannlain and Ronald M. Gould,
                     Circuit Judges.

              Opinion by Judge O’Scannlain

                           3991
                      FRANZEN v. UNITED STATES                        3995
                              COUNSEL

David P. Pruett, Carroll, Kelly, Trotter, Franzen & McKenna,
Long Beach, California, argued the cause for the appellants
and filed briefs.

John Schumann, Attorney, Tax Division, Department of Jus-
tice, Washington, D.C., argued the cause for the appellee and
filed a brief. With him on the brief were John A. DiCicco,
Acting Assistant Attorney General, and Thomas J. Clark,
Attorney, Tax Division, Department of Justice, Washington,
D.C.; and Thomas P. O’Brien, United States Attorney, Cen-
tral District of California, Los Angeles, California.


                               OPINION

O’SCANNLAIN, Circuit Judge:

   We must determine the priorities of federal tax liens and a
state-law lien in this dispute over surplus proceeds from a
nonjudicial foreclosure sale.

                                     I

                                    A

   In 1999, Ted and Karen Chapin executed a deed of trust
secured by real property located at 24702 Pallas Way, Mis-
sion Viejo, California (“subject property”). Quality Loan Ser-
vice Corporation (“Quality”) was named the trustee.

   Between January 2001 and April 2005, the Internal Reve-
nue Service (“IRS”) recorded in the Orange County Clerk-
Recorder Department eight tax liens totaling $182,554.50 on
the subject property due to Ted Chapin’s failure to pay federal
taxes.1 In June 2005, Mark and Debra Franzen recorded in the
  1
    “If any person liable to pay any tax neglects or refuses to pay the same
after demand, the amount . . . shall be a lien in favor of the United States
3996                   FRANZEN v. UNITED STATES
Orange County Clerk-Recorder Department an abstract of
judgment against Ted Chapin for $100,000, creating a judg-
ment lien on the subject property.2

   After the Chapins defaulted on the deed of trust, Quality
sold the subject property in a nonjudicial foreclosure sale in
October 2006. The sales price was $570,000, resulting in sur-
plus proceeds of $233,942.15. In an effort to distribute this
sum, Quality identified twenty-seven junior liens on the sub-
ject property, including the IRS liens and the Franzens’ judg-
ment lien, and determined their order of priority. After
Quality notified the lienholders of the surplus proceeds and
order of priority, the Franzens disputed the prioritization of
the liens.

                                      B

   To resolve the priority dispute, Quality filed a “petition and
declaration regarding unresolved claims” in the Orange
County Superior Court on August 23, 2007, pursuant to Cali-
fornia Civil Code section 2924j(c). Quality deposited
$230,439.56 with the superior court, having deducted its
expenses and fees from the surplus proceeds. The day prior to
filing the declaration, Quality sent potential claimants notice
of its intent to deposit the funds in the superior court. See Cal.
Civ. Code § 2924j(d). The notice specified, in bold print, “[I]f
you claim an interest to the funds to be deposited you must
file a claim with the court within thirty (30) days from the
date of this notice.”

upon all property and rights to property, whether real or personal, belong-
ing to such person.” I.R.C. § 6321. Such lien “shall arise at the time the
assessment is made and shall continue until the liability . . . is satisfied or
becomes unenforceable by reason of lapse of time.” Id. § 6322.
   2
     “[A] judgment lien on real property is created . . . by recording an
abstract of a money judgment with the county recorder.” Cal. Civ. Proc.
Code § 697.310(a). Such lien “attaches to all interests in real property in
the county where the lien is created.” Id. § 697.340(a).
                   FRANZEN v. UNITED STATES                 3997
   The Franzens filed a claim for $123,233.85 on September
21, 2007. The superior court held a hearing on October 2,
2007, and determined that Quality had not exercised due dili-
gence in attempting to determine the priority of the claims.
The court continued the hearing to November 6, 2007 to
allow Quality to submit an additional declaration regarding
due diligence. On October 22, 2007, the IRS filed a claim for
$265,501.73.

   On October 31, 2007, before the superior court hearing was
scheduled to take place, the United States removed the action
to the United States District Court for the Central District of
California. The Franzens filed a motion to remand, which was
denied by the district court. The United States and the Fran-
zens filed cross-motions for summary judgment on the issue
of the priority of the competing claims to the surplus pro-
ceeds. The district court granted the United States’ motion
and denied the Franzens’ motion. This appeal timely fol-
lowed.

                               II

  The Franzens first contend that the district court erred in
denying their motion to remand.

                               A

   [1] The United States invoked 28 U.S.C. § 1444 as its
basis for removing the action. Section 1444 provides that
“[a]ny action brought under section 2410 of this title against
the United States in any State court may be removed by the
United States.” 28 U.S.C. § 1444. Section 2410, in turn, pro-
vides that “the United States may be named a party in any
civil action or suit . . . in any State court having jurisdiction
of the subject matter[ ] . . . of interpleader . . . with respect
to[ ] real or personal property on which the United States has
or claims a mortgage or other lien.” Id. § 2410(a).
3998                  FRANZEN v. UNITED STATES
   The Franzens argue that the action was not an interpleader
within the meaning of section 2410 and, hence, not removable
under section 1444. The Franzens focus on the fact that Cali-
fornia Civil Code section 2924j distinguishes between filing
a “declaration” and an “interpleader.”3 Because Quality filed
a “declaration,” the Franzens reason that the action could not
have been an “interpleader.”

   Whether an action is removable, however, “turns on the
meaning of the removal statute and not upon the characteriza-
tion of the suit or the parties to it by state statutes.” Shamrock
Oil & Gas Corp. v. Sheets, 313 U.S. 100, 104 (1941). The
nomenclature in California Civil Code section 2924j is there-
fore irrelevant to our inquiry; the question is whether the
action initiated by Quality was an “interpleader” within the
meaning of the removal statute.

   We find instructive the approach of the Fifth Circuit in
Hussain v. Boston Old Colony Insurance Co., 311 F.3d 623
(5th Cir. 2002). There, the court held that a state court action
was an interpleader within the meaning of section 2410
because “the substantive posture of the parties mirrored the
substance of an action in interpleader,” even if “the motion
practice of the parties did not use the same labels as actions
taken to initiate an interpleader proceeding.” Id. at 633.

   [2] Interpleader developed as an equitable remedy to avoid
“the risk of loss ensuing from the demands in separate suits
of rival claimants to the same debt or legal duty.” Texas v.
Florida, 306 U.S. 398, 405 (1939). In a traditional action in
interpleader, “the plaintiff asserted no interest in the debt or
fund, the amount of which he placed at the disposal of the
  3
    For example, subsection (b) provides that if the trustee has failed to
determine the priority of claims, the trustee may either (1) file a declara-
tion of the unresolved claims and deposit the funds with the clerk of court
pursuant to subsection (c), or (2) file an interpleader action pursuant to
subsection (e). Cal. Civ. Code § 2924j(b).
                  FRANZEN v. UNITED STATES                     3999
court and asked that the rival claimants be required to settle
in the equity suit the ownership of the claim among them-
selves.” Id. at 406. Hence, the Hussain court held that when
a state court action brought together several parties with com-
peting claims to a fund possessed by a disinterested stake-
holder, the action was an interpleader within the meaning of
section 2410, notwithstanding that the action was not called
an interpleader in the state court, and the funds were never
deposited with the court. 311 F.3d at 633-34.

   [3] Here, Quality disclaimed any interest in the surplus
proceeds, deposited them with the state court, and petitioned
the court to resolve the competing claims. Even if California
law does not denote this procedure an “interpleader,” it was
functionally equivalent to an action in interpleader and there-
fore was an interpleader within the meaning of section 2410.
Consequently, the action was removable pursuant to section
1444.

                               B

   [4] The Franzens also contend that the United States failed
to remove the action within the thirty-day window provided
under 28 U.S.C. § 1446(b).

  Section 1446(b) provides, in relevant part:

    The notice of removal of a civil action or proceeding
    shall be filed within thirty days after the receipt by
    the defendant, through service or otherwise, of a
    copy of the initial pleading setting forth the claim for
    relief upon which such action or proceeding is based,
    or within thirty days after the service of summons
    upon the defendant if such initial pleading has then
    been filed in court and is not required to be served
    on the defendant, whichever period is shorter.

28 U.S.C. § 1446(b). The Supreme Court has explained that
“a named defendant’s time to remove is triggered by simulta-
4000                  FRANZEN v. UNITED STATES
neous service of the summons and complaint, or receipt of the
complaint, ‘through service or otherwise,’ after and apart
from service of the summons, but not by mere receipt of the
complaint unattended by any formal service.” Murphy Bros.
v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347-48 (1999)
(emphasis added). Consequently, actual notice of the action is
insufficient; rather, the defendant must be “notified of the
action, and brought under a court’s authority, by formal pro-
cess,” before the removal period begins to run. Id. at 347.

   [5] The procedural requirements for “actions in the State
courts” that “involv[e] liens arising under the internal revenue
laws” are set forth in 28 U.S.C. § 2410(b).4 Section 2410(b)
provides that “service upon the United States shall be made
by serving the process of the court with a copy of the com-
plaint upon the United States attorney for the district in which
the action is brought” (or upon his designee) and “by sending
copies of the process and complaint, by registered mail, or by
certified mail, to the Attorney General of the United States at
Washington, District of Columbia.” Quality indisputably
failed to comply with these requirements when it mailed a
notice of the action to the IRS office in Laguna Niguel and
later e-mailed a notice of the action to the United States Attor-
ney’s Office for the Central District of California. Because
these steps were insufficient to constitute the formal process
prescribed in section 2410(b), they did not start the removal
clock, regardless of whether they provided the United States
with actual notice of the action.5 Consequently, the notice of
removal was not untimely.
  4
     The Franzens contend that service of process on the United States is
governed by California procedural rules. We disagree because 28 U.S.C.
§ 2410(b) preempts those rules in interpleader actions in which the United
States is a defendant. See U.S. Const. art. VI, cl. 2; cf. Volkswagenwerk
Aktiengesellschaft v. Schlunk, 486 U.S. 694, 699 (1988) (“By virtue of the
Supremacy Clause, the [Hague Service] Convention pre-empts inconsis-
tent methods of service prescribed by state law in all cases to which it
applies.” (citation omitted)).
   5
     That Quality failed properly to serve the United States did not vitiate
the United States’ waiver of sovereign immunity. As the Supreme Court
                      FRANZEN v. UNITED STATES                        4001
                                    III

  The Franzens also contend that the district court erred in
granting the United States’ motion for summary judgment.

                                    A

   The Franzens argue that because the United States failed to
file a claim to the surplus proceeds “within 30 days from the
date of the notice” of Quality’s intent to deposit the surplus
funds in the superior court, Cal. Civ. Code § 2924j(d), the
Franzens’ lien has priority over the tax liens. We disagree.

   [6] First, the United States was not required to file a claim
within thirty days of the notice. In any state court interpleader
involving property on which the United States claims a lien,
“the United States may appear and answer, plead or demur
within sixty days” after being served in the manner prescribed
by federal law. 28 U.S.C. § 2410(b) (emphasis added). The
federal statute providing for a sixty-day period preempts the
state statute to the extent the latter is inconsistent. See United
States v. John Hancock Mut. Life Ins. Co., 364 U.S. 301,
304-05 (1960). Moreover, as we have already determined, the
notice mailed by Quality was not served pursuant to the
requirements of section 2410(b). Consequently, the claim was
not untimely.6

has explained, “the manner and timing of serving process” on the United
States “are generally nonjurisdictional matters of ‘procedure’ ” that do not
condition the waiver of sovereign immunity. Henderson v. United States,
517 U.S. 654, 656 (1996).
   6
     Even if the defective service on August 22, 2007 were sufficient to
trigger the sixty-day period under section 2410(b), the claim filed by the
United States on October 22, 2007 would still be timely. The sixtieth day,
October 21, 2007, was a Sunday, allowing the United States to file the
claim the next business day, Monday, October 22, 2007. See Union Nat’l
Bank of Wichita v. Lamb, 337 U.S. 38, 40-41 (1949); United States v. Cia
Luz Stearica, 181 F.2d 695, 696 (9th Cir. 1950); accord Cal. R. Ct.
1.10(a).
4002                   FRANZEN v. UNITED STATES
   [7] Second, the priority of a federal tax lien does not
depend on the vagaries of when the United States files a claim
in state court relative to a competing claimant. See Texaco,
Inc. v. Ponsoldt, 118 F.3d 1367, 1370 (9th Cir. 1997) (“As the
entire point of an interpleader action is to resolve then com-
peting rights and claims, it makes perfect sense that the action
itself cannot be used as a vehicle for further jockeying for
claim position.”). Rather, “[t]he priority of claims to the res
in an interpleader action must normally be determined at the
time the action is initiated, and cannot be altered by events
after the interpleader fund becomes viable.” Id. at 1371. The
precise timing of the claims filed in the state court action
therefore has no bearing on the priority question.

                                     B

   Finally, the Franzens argue that federal law does not govern
whether the federal tax liens had priority over their judgment
lien. Again, we disagree.

   [8] “[F]ederal law governs the relative priority of federal
tax liens and state-created liens.” Aquilino v. United States,
363 U.S. 509, 514 n.5 (1960) (emphasis added); see also Bus.
Title Corp. v. Div. of Labor Law Enforcement, 553 P.2d 614,
618 (Cal. 1976) (“It is now well settled and indeed beyond
argument that federal law rather than state law determines the
priority of competing liens where one of them is a tax lien
asserted by the United States.”). “Absent provision to the con-
trary, priority for purposes of federal law is governed by the
common-law principle that ‘the first in time is the first in
right.’ ”7 United States v. McDermott, 507 U.S. 447, 449
(1993) (quoting United States v. City of New Britain, 347 U.S.
81, 85 (1954) (internal quotation marks omitted)).
  7
    We note that state law is identical to federal law in this respect. See
DMC, Inc. v. Downey Sav. & Loan Ass’n, 120 Cal. Rptr. 2d 761, 765 (Ct.
App. 2002) (“In California, lien priority is determined by the ‘first in time,
first in right’ approach.” (citing Cal. Civ. Code § 2897)).
                       FRANZEN v. UNITED STATES                          4003
   [9] “As a general rule, a lien in favor of the United States
is not disturbed by a nonjudicial sale of the property.” White-
side v. United States, 833 F.2d 820, 822 (9th Cir. 1987) (cit-
ing I.R.C. § 7425(b)). “There is an exception, however, if the
IRS is given notice of the sale in accordance with IRS regula-
tions.” Id. (citing I.R.C. § 7425(c)(1)).8 “A nonjudicial sale of
property is made ‘subject to and without disturbing’ federal
tax liens if (1) the federal tax liens were filed more than 30
days before the sale, and (2) notice of the sale is not given to
the IRS in accordance with § 7425(c)(1).” Orme v. United
States, 269 F.3d 991, 994 (9th Cir. 2001) (quoting I.R.C.
§ 7425(b)(1)) (emphasis added).

   [10] Here, the United States’ tax liens on the subject prop-
erty were “first in time” relative to the Franzens’ judgment
lien, which was recorded after the last tax lien was recorded.9
The federal tax liens were filed more than thirty days before
the nonjudicial foreclosure sale, and there is no evidence in
the record that the IRS received notice of the sale at least
twenty-five days prior to the sale pursuant to section
7425(c)(1).10 Accordingly, the federal tax liens survived the
foreclosure sale and attached to the surplus proceeds. See
Phelps v. United States, 421 U.S. 330, 334-35 (1975). The
Franzens’ judgment lien also survived the sale, attaching to
the surplus proceeds and remaining junior to the United
   8
     Such notice must be given “in writing, by registered or certified mail
or by personal service, not less than 25 days prior to such sale.” I.R.C.
§ 7425(c)(1); Treas. Reg. § 301.7425-3.
   9
     The United States properly filed notices of its tax liens in the office of
the recorder of Orange County. See I.R.C. § 6323(a); Cal. Civ. Proc. Code
§ 2101(b).
   10
      The Franzens argue that a notice sent by Quality to the IRS after the
sale pursuant to California Civil Code section 2924j(a) satisfied the
requirements of section 7425(c)(1). We disagree. Section 7425(c)(1)
makes clear that notice must be provided at least twenty-five days before
the sale. Moreover, the notice must be “in accordance with regulations
prescribed by the Secretary [of the Treasury].” I.R.C. § 7425(c)(1); see
also Treas. Reg. § 301.7425-3(a), (d). The state-law notice did not suffice.
4004                  FRANZEN v. UNITED STATES
States’ liens. See Caito v. United Cal. Bank, 576 P.2d 466,
469 (Cal. 1978) (“Following a foreclosure sale and satisfac-
tion of the obligation of the creditor who forecloses, subordi-
nate liens against the foreclosed property attach to the surplus
proceeds in order of their priority.”). Because the federal tax
liens had priority over the Franzens’ judgment lien at the time
the action commenced, the district court properly granted
summary judgment in favor of the United States.11

                                   IV

     For the foregoing reasons, the judgment of the district court
is

     AFFIRMED.12




     11
      We decline to consider the Franzens’ belated challenge to the amounts
claimed by the United States, raised for the first time in the reply brief.
See United States v. 191.07 Acres of Land, 482 F.3d 1132, 1137 n.2 (9th
Cir. 2007).
   12
      The Franzens’ motion for judicial notice is GRANTED.
