Exxon Mobil Corp. v. Saudi Basic Ind. Corp

544 U.S. 280 (2005)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

Exxon Mobil (P) formed joint ventures with Saudi Basic Industries Corp. (D) to produce polyethylene in Saudi Arabia. The parties began to dispute royalties that D had charged the joint ventures for sublicenses to a polyethylene manufacturing method. D preemptively sued P in Delaware Superior Court in July 2000, seeking a declaratory judgment that the royalty charges were proper under the joint venture agreements. P and its subsidiaries countersued D in the United States District Court for the District of New Jersey, alleging that D overcharged the joint ventures for the sublicenses. P invoked subject matter jurisdiction in the New Jersey action under 28 U.S.C. § 1330 which authorizes district courts to adjudicate actions against foreign states. P answered D's state court complaint, asserting as counterclaims the same claims P had made in the federal suit in New Jersey. The jury returned a verdict of over $400 million in favor of P. D appealed the judgment entered on the verdict to the Delaware Supreme Court. D moved to dismiss the federal suit, alleging, inter alia, immunity under the Foreign Sovereign Immunities Act of 1976, 28 U.S.C. § 1602 et seq. (2000 ed. and Supp. II). The Federal District Court denied D's motion to dismiss. D took an interlocutory appeal, and the Court of Appeals heard argument in December 2003, over eight months after the state court jury verdict. The Court of Appeals, sua sponte raised the question whether 'subject matter jurisdiction over this case falls under the Rooker-Feldman doctrine because P's claims have already been litigated in state court.' The court rejected P's argument that Rooker-Feldman could not apply because P filed its federal complaint well before the state court judgment. The only relevant consideration, the court stated, 'is whether the state judgment precedes a federal judgment on the same claims.' Once P's claims had been litigated to a judgment in state court, the Court of Appeals held, Rooker-Feldman 'precluded [the] federal district court from proceeding.' P was not seeking to overturn the state court judgment as it won. Nevertheless, the Court of Appeals hypothesized that if D won on appeal in Delaware, P would be endeavoring in the federal action to 'invalidate' the state court judgment, 'the very situation,' the court concluded, 'contemplated by Rooker-Feldman's 'inextricably intertwined' bar.' The Supreme Court granted certiorari.