Exxon Mobil Corp. v. Saudi Basic Industries Corp.

• Citation: 544 U.S. 280
• Decision Date: 30 March 2005
• Docket Number: No. 03-1696.,03-1696.
• Parties: EXXON MOBIL CORP. ET AL. v. SAUDI BASIC INDUSTRIES CORP.
• Court: United States Supreme Court

544 U.S. 280

EXXON MOBIL CORP. ET AL. v. SAUDI BASIC INDUSTRIES CORP.

No. 03-1696.

Supreme Court of United States.

Argued February 23, 2005.

Decided March 30, 2005.

The Rooker-Feldman doctrine, at issue in this case, has been applied by this Court only twice, in Rooker v. Fidelity Trust Co., 263 U. S. 413, and in District of Columbia Court of Appeals v. Feldman, 460 U. S. 462. In Rooker, plaintiffs previously defeated in state court filed suit in a Federal District Court alleging that the adverse state-court judgment was unconstitutional and asking that it be declared "null and void." 263 U. S., at 414-415. Noting preliminarily that the state court had acted within its jurisdiction, this Court explained that if the state-court decision was wrong, "that did not make the judgment void, but merely left it open to reversal or modification in an appropriate and timely appellate proceeding." Id., at 415. Federal district courts, Rooker recognized, are empowered to exercise only original, not appellate, jurisdictions. Id., at 416. Because Congress has empowered this Court alone to exercise appellate authority "to reverse or modify" a state-court judgment, ibid., the Court affirmed a decree dismissing the federal suit for lack of jurisdiction, id., at 415, 417. In Feldman, two plaintiffs brought federal-court actions after the District of Columbia's highest court denied their petitions to waive a court Rule requiring D. C. bar applicants to have graduated from an accredited law school. Recalling Rooker, this Court observed that the District Court lacked authority to review a final judicial determination of the D. C. high court because such review "can be obtained only in this Court." 460 U. S., at 476. Concluding that the D. C. court's proceedings applying the accreditation Rule to the plaintiffs were "judicial in nature," id., at 479-482, this Court ruled that the Federal District Court lacked subject-matter jurisdiction, id., at 482. However, concluding also that, in promulgating the bar admission Rule, the D. C. court had acted legislatively, not judicially, id., at 485-486, this Court held that 28 U. S. C. § 1257 did not bar the District Court from addressing the validity of the Rule itself, so long as the plaintiffs did not seek review of the Rule's application in a particular case, 460 U. S., at 486. Since Feldman, this Court has never applied Rooker-Feldman to dismiss an action for want of jurisdiction. However, the lower federal courts have variously interpreted the Rooker-Feldman doctrine to extend far beyond the contours of the Rooker and Feldman cases, overriding Congress' conferral of federal-court jurisdiction concurrent with jurisdiction exercised by state courts, and superseding the ordinary application of preclusion law under 28 U. S. C. § 1738.

In this case, two subsidiaries of petitioner Exxon Mobil Corporation formed joint ventures with respondent Saudi Basic Industries Corp. (SABIC) to produce polyethylene in Saudi Arabia. When a dispute arose over royalties that SABIC had charged the joint ventures, SABIC preemptively sued the two subsidiaries in a Delaware state court, seeking a declaratory judgment that the royalties were proper. ExxonMobil and the subsidiaries then countersued in the Federal District Court, alleging that SABIC overcharged them. Before the state-court trial, which ultimately yielded a jury verdict of over $400 million for the ExxonMobil subsidiaries, the District Court denied SABIC's motion to dismiss the federal suit. On interlocutory appeal, over eight months after the state-court jury verdict, the Third Circuit, on its own motion, raised the question whether subject-matter jurisdiction over the federal suit failed under the Rooker-Feldman doctrine because ExxonMobil's claims had already been litigated in state court. The court did not question the District Court's subject-matter jurisdiction at the suit's outset, but held that federal jurisdiction terminated when the Delaware court entered judgment on the jury verdict.

Held: The Rooker-Feldman doctrine is confined to cases of the kind from which it acquired its name: cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the federal district court proceedings commenced and inviting district court review and rejection of those judgments. Rooker-Feldman does not otherwise override or supplant preclusion doctrine or augment the circumscribed doctrines allowing federal courts to stay or dismiss proceedings in deference to state-court actions. Pp. 291-294.

(a) Rooker and Feldman exhibit the limited circumstances in which this Court's appellate jurisdiction over state-court judgments, § 1257, precludes a federal district court from exercising subject-matter jurisdiction in an action it would otherwise be empowered to adjudicate under a congressional grant of authority. In both cases, the plaintiffs, alleging federal-question jurisdiction, called upon the District Court to overturn an injurious state-court judgment. Because § 1257, as long interpreted, vests authority to review a state-court judgment solely in this Court, e. g., Feldman, 460 U. S., at 476, the District Courts lacked subject-matter jurisdiction, see, e. g., Verizon Md. Inc. v. Public Serv. Comm'n of Md., 535 U. S. 635, 644, n. 3. When there is parallel state and federal litigation, Rooker-Feldman is not triggered simply by the entry of judgment in state court. See, e. g., McClellan v. Carland, 217 U. S. 268, 282. Comity or abstention doctrines may, in various circumstances, permit or require the federal court to stay or dismiss the federal action in favor of the state-court litigation. See, e. g., Colorado River Water Conservation Dist. v. United States, 424 U. S. 800. But neither Rooker nor Feldman supports the notion that properly invoked concurrent jurisdiction vanishes if a state court reaches judgment on the same or a related question while the case remains sub judice in a federal court. Disposition of the federal action, once the state-court adjudication is complete, would be governed by preclusion law. Under 28 U. S. C. § 1738, federal courts must "give the same preclusive effect to a state-court judgment as another court of that State would give." Parsons Steel, Inc. v. First Alabama Bank, 474 U. S. 518, 523. Preclusion is not a jurisdictional matter. See Fed. Rule Civ. Proc. 8(c). In parallel litigation, a federal court may be bound to recognize the claim-and issue-preclusive effects of a state-court judgment, but federal jurisdiction over an action does not terminate automatically on the entry of judgment in the state court. Nor does § 1257 stop a district court from exercising subject-matter jurisdiction simply because a party attempts to litigate in federal court a matter previously litigated in state court. If a federal plaintiff presents an independent claim, even one that denies a state court's legal conclusion in a case to which the plaintiff was a party, there is jurisdiction, and state law determines whether the defendant prevails under preclusion principles. Pp. 291-293.

(b) The Rooker-Feldman doctrine does not preclude the federal court from proceeding in this case. ExxonMobil has not repaired to federal court to undo the Delaware judgment in its favor, but appears to have filed its federal-court suit (only two weeks after SABIC filed in Delaware and well before any judgment in state court) to protect itself in the event it lost in state court on grounds (such as the state statute of limitations) that might not preclude relief in the federal venue. Rooker-Feldman did not prevent the District Court from exercising jurisdiction when ExxonMobil filed the federal action, and it did not emerge to vanquish jurisdiction after ExxonMobil prevailed in the Delaware courts. The Third Circuit misperceived the narrow ground occupied by Rooker-Feldman, and consequently erred in ordering the federal action dismissed. Pp. 293-294.

364 F. 3d 102, reversed and remanded.

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

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT.

Gregory S. Coleman argued the cause for petitioners. With him on the briefs were Christian J. Ward, James W. Quinn, David Lender, and Andrew S. Pollis.

Gregory A. Castanias argued the cause for respondent. With him on the briefs were Lawrence D. Rosenberg, William K. Shirey II, and Kenneth R. Adamo.^*

JUSTICE GINSBURG delivered the opinion of the Court.

This case concerns what has come to be known as the Rooker-Feldman doctrine, applied by this Court only twice, first in Rooker v. Fidelity Trust Co., 263 U. S. 413 (1923), then, 60 years later, in District of Columbia Court of Appeals v. Feldman, 460 U. S. 462 (1983). Variously interpreted in the lower courts, the doctrine has sometimes been construed to extend far beyond the contours of the Rooker and Feldman cases, overriding Congress' conferral of federal-court jurisdiction concurrent with jurisdiction exercised by state courts, and superseding the ordinary application of preclusion law pursuant to 28 U. S. C. § 1738. See, e. g., Moccio v. New York State Office of Court Admin., 95 F. 3d 195, 199-200 (CA2 1996).

Rooker was a suit commenced in Federal District Court to have a judgment of a state court, adverse to the federal court plaintiffs, "declared null and void." 263 U. S., at 414. In Feldman, parties unsuccessful in the District of Columbia Court of Appeals (the District's highest court) commenced a federal-court action against the very court that had rejected their applications. Holding the federal suits impermissible, we emphasized that appellate jurisdiction to reverse or modify a state-court judgment is lodged, initially by § 25 of the Judiciary Act of 1789, 1 Stat. 85, and now by 28 U. S. C. § 1257, exclusively in this Court. Federal district courts, we noted, are empowered to exercise original, not appellate, jurisdiction. Plaintiffs in ...